Left-wing economists: Democrats, Biden helped ‘smother the American Dream’ 

A new paper from a progressive economic organization blasts former presidents Bill Clinton, Barack Obama and Joe Biden for moving jobs offshore while American factories closed.

The report by economists at the Institute for New Economic Thinking (INET) also took Republican presidents to task, but it expressed its deepest contempt for liberals.

“With Democrats in thrall to Wall Street, high tech, and other corporate interests including parts of health care, the parties have managed to smother the ‘American Dream’ of middle-class prosperity and upward social mobility,” the INET authors wrote.

The report examined the collapse of the political center in the U.S., which INET argues has led to the rise of the populist right.

The paper begins by examining the Biden administration, concluding its policies “did not structurally improve hourly wages, weekly earnings and incomes growth relative to pre-pandemic trends.”

“Bidenomics was a steady continuation of the Reagan-Bush(s)-Clinton-Obama status quo that has hardwired deep structural inequalities into America’s economic development,” said the summary of the full report, released Sept. 1.

The authors called Biden’s measures a continuation of “neoliberal” economic policies, “which prioritized inflation control over (full) employment, favored shareholders while discriminating against workers.”

The neoliberal economic policies grew out of defeats in the 1980s by Democratic presidential candidates Walter Mondale and Michael Dukakis, who backed out of promises to help workers by raising taxes and increasing spending, INET said.

The authors accused a small group of Wall Street investment bankers – Robert Rubin, Roger Altman and Larry Summers – of enriching themselves through financial deregulation while promoting fiscal austerity, free trade and globalism.

“In a wildly changing environment, the new bloc’s warnings never varied: The dangers of inflation, the need for fiscal austerity, more deregulation and the benefits of overseas investment, free trade and a strong dollar,” said the report.

The accusation about prioritizing inflation control over full employment is especially relevant because that’s the exact dilemma facing Federal Reserve policymakers, who have a dual mandate of fighting inflation and providing full employment, according to American Banker.

A growing job market, through lower interest rates, helps produce rising wages, notes the Boston Federal Reserve.

President Donald Trump has long demanded the Federal Reserve cut rates to help affordability and stimulate job growth. Now, workers are tending to agree with the president.

“While households’ inflation forecasts did not move much, their outlook on hiring and personal finances became more tenuous,” reported Reuters.

No ‘hope’ or ‘change’

INET subsequently characterized Obama’s presidency as a continuation of neoliberal economic policies, arguing that despite his promises of progressive “hope” and “change,” Obama staffed his administration with Clinton-era advisers dominated by a “uni-party” view catering to the rich.

In a speech Sept. 3, Secretary of State Marco Rubio said the move by both parties to send manufacturing jobs overseas was part of “this fantasy, really, that the whole world would become a free enterprise, democracies, and that everyone would look like us,” if every country had robust manufacturing industries.

The benefits proposed were “more profits for the company, lower costs for the consumers, and that was the way the world would work.”

“But the result of it is that it deindustrialized America,” Rubio said.

He noted the effort to build back manufacturing capacity in the U.S. won’t just be a yearslong project but will have to involve multiple administrations dedicated to bringing those jobs back.

The INET report does not mention tariffs, a key Trump policy to reshore U.S. jobs the authors say were lost because of NAFTA and other free-trade initiatives.

The INET authors, in contrast, said they think Trump administration mistakes could give Democrats a chance to fix their economic policies after the 2028 election.

“That would certainly dent, though it may not spike, the hopes a major segment in the Republican party harbors for fundamentally restructuring the American government,” read the report.

The economists at INET simply recommended many of the same policy prescriptions liberals have tried previously to reimagine the economy: higher minimum wages; higher taxation and greater fiscal redistribution; a wealth tax; strong antitrust policy; public support for unions; green industrial policy; and strict regulation of the financial sector.

Noting the first 2028 Democratic presidential primary is in South Carolina, the authors conclude by claiming Southern blacks, a key liberal constituency, could block attempts to enact INET’s proposed policy prescriptions.

“Remember who decides who the Democratic nominee is, and that is Southern Blacks,” INET quotes Democrat establishmentarian James Carville as warning the party. “And I got news for you – they’re not that liberal.”

The report concludes the party’s economic program will change regardless of whether South Carolina and Southern blacks determine the next Democratic presidential nominee.

“Great prescience is not required to see that Democratic elites and their billionaire backers now have their work cut out for them,” INET said. “The world and the Democratic base are moving on, but they are not.”