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Last November, Mayor Adams proposed a massive $6 billion cut to city funding. He scapegoated immigrants forcibly trafficked to New York City by the governors of Texas and Florida, blaming a budget deficit on expenses tied to their arrival. This month, he was forced to reverse course, restoring several services and programs he had cut. Among others, the city’s Independent Budget Office and the City Council had projected budget surpluses this fiscal year rather than the deficit claimed by the administration.
Adams is only the latest in a long line of what are called “neoliberal” politicians who use real or imagined budget deficits to push for austerity, privatization, outsourcing, layoffs, pay cuts, cutbacks and new or higher fees for public services blamed on immigrants or greedy unions.
These policies are commonly combined with cutting taxes on the rich and corporations, sweetheart contracts with private contractors to run public services and deregulation of corporations. Alongside these cuts for social needs is increased funding for some of the most unpopular parts of government such as policing, prisons, the military and generous subsidies for corporations.
Combining cutbacks for services that actually help people in favor of expanding government services for businesses is the essence of neoliberalism. It’s often called “socialism for the rich and capitalism for the working class.”
The word neoliberal is based on the prefix “neo,” or “variation of,” and the root “liberalism” in the classic sense of unregulated and unsupervised capitalism. Since the early 1970s neoliberalism has become the primary economic policy that governs the planet. In the U.S. it is embraced by Democrats and Republicans alike. Around the world politicians and political parties from the right to left push it.
Many unions also fall for it by accepting the premise that budget cuts and layoffs of some workers are needed to preserve jobs for the rest of us. In the private sector, many unions buy the lie that tax cuts for the rich and corporations will keep them from going out of business so we can be rehired later when they are profitable again.
Neoliberalism has become so embedded in our thinking that we accept these policies as common sense although few people have ever heard the term outside of a college classroom.
Decades of our unions caving in to demands for cuts, layoffs and other givebacks have emboldened the attacks. There no longer even needs to be a deficit to justify the attacks. Many politicians invoke neoliberal policy today even when they have a budget surplus.
We went on strike at the California State University system last week when administrators walked out of bargaining claiming the university system could not afford our demands. The total cost for meeting our demands is a few hundred million dollars. The system has a rapidly growing $12 billion surplus, which it banks rather than spending it on our students or workers who teach and care for them.
It’s the same logic for why Adams wants to move retirees out of Medicare into a privatized benefits program. These programs were created in 2003 when Republicans pushed through privatization and Democrats have since supported them.
Neoliberalism is a strategy for attacking organized workers. The first neoliberal, Chile’s General Augusto Pinochet, used it after he overthrew, with U.S. backing, the democratic socialist president Salvador Allende on September 11, 1973. As dictator, he dismantled the state-owned industries and destroyed the powerful working class with assassinations, disappearances and torture. Neoliberalism spread north when President Ronald Reagan fired air traffic controllers when they walked out on a wildcat strike in 1981 and British prime minister Margaret Thatcher used it to crush a miner’s strike in 1984.
Perhaps the most honest explanation of neoliberalism was given by Alan Greenspan, the then-chairman of the Federal Reserve who served during four presidential administrations. Greenspan told the Senate Finance Committee in 1978, “Let us remember that the basic purpose of any tax cut program in today's environment is to reduce the momentum of expenditure growth by restraining the amount of revenue available” In short, tax cuts reduce revenues which cause deficits that can be used to justify cuts, layoffs and privatization.
President George W. Bush put it even more clearly when he said “I've learned that if you leave cookies out on a plate, they always get eaten.”
Greenspan and Bush were advocating a neoliberal strategy for shrinking government when it serves people’s demands. We heard all the excuses before: “Sorry, we just can’t afford it.” “We need to cut the budget, layoff workers and privatize because we don’t have the money to pay for it anymore.”
Neoliberals do not like to expand or create new programs because once they are started they are hard to abolish like Social Security and Medicare. Most people want government to do things to make our lives better. Neoliberals only want to serve capitalism.
Moving public services into the private sector empowers governments to evade the union contract. Workers lose seniority, due process rights, decent pay, benefits and pensions, and their union. And by cutting services, the working class is forced to pay more out of pocket for the same or reduced services, which reduces our real incomes.
That’s why many say public universities like CUNY and the CSU are no longer publicly owned but publicly supported. Most of the cost of public education is paid by students and their families in rising tuition, fees and class sizes.
Neoliberal policy is “management by stress” that uses precarious working conditions to stimulate anxiety and insecurity. Workers worried about surviving shut up, obey and work harder for the same or worse pay. It is a strategy for intensifying our exploitation.
Next time you hear a politician or boss crying poverty you’ll know they are invoking neoliberalism.
The best strategy to beat neoliberalism is to demand more pay for less work and not back down. The recent strikes by the United Auto Workers, Hollywood and Kaiser nurses and therapists and the threat of a walkout by Teamsters at UPS all rejected the neoliberal strategy in the private sector. The Rutgers and University of California UAW graduate student strikes did the same. Strikes by nonprofit workers such in several NYC area hospitals last year that resulted in higher pay and more staffing raises the costs of privatization.
These are the strategies defeating neoliberalism. It’s long past time for the rest of our unions to catch up.
Robert Ovetz is a precarious university lecturer with three jobs. He is also the editor of "Workers' Inquiry and Global Class Struggle," co-editor of the forthcoming "Real World Labor (Vol. 4)" and the author of "When Workers Shot Back" and "We the Elites: Why the US Constitution Serves the Few." Follow him at @OvetzRobert
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