Wednesday, July 12, 2017

The neoliberal period, part 1

In an interview published in the New York Times last week, Noam Chomsky spoke of "the shift of both parties to the right during the neoliberal period."  There's nothing remarkable about that--I've read many similar statements--but for some reason I started wondering what you would find if you looked for evidence of a move to the right.

A reasonable basic definition of left and right (on economic issues) is that the left is in favor of direct government assistance to the poor.  One major program of assistance to the poor is food stamps (SNAP).  The figure shows real per-capita spending on food stamps (2010 dollars) between 1969 and 2016.  It was about 70% higher in 2016 than in 1981, the year Ronald Reagan became president.

As everyone knows, Bill Clinton promised to "end welfare as we know it," and in 1996 signed a bill placing restrictions on welfare.  This figure shows federal spending on AFDC/TANF from 1975 to 2011.  There has been a slight upward trend since 1981, but the population has grown too, so basically there has been little change.  It is interesting that the 1996 reform didn't have any obvious impact on spending.

Two other programs that aid poor people are the Earned Income Tax Credit and the Child Tax Credit.

Spending on both has increased greatly during the "neoliberal period" (the CTC didn't exist until 1997).  Also notice the numbers on the vertical axis--total spending on the EITC and CTC is now about four times as large as TANF.

    For disability, see this report.  Both the percent of working-age people getting disability and the average payments per recipient have increased pretty steadily since 1970.
   Spending to help the poor has increased substantially the "neoliberal period."  You could argue about whether this change should be called a move to the left in policy--declining work opportunities for less skilled people means more government assistance is needed to produce the same standard of living for the poor.  But it's not a move to the right.

  What about regulation of business?  I'll look at that in my next post.

Sources:  SNAP 

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