Did We Just Experience a Break in the Neoliberal Consensus?

Joe Weisenthal (0:10)

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Joe Weisenthal.

Tracy Alloway (0:16)

And I'm Tracy Alloway.

Joe Weisenthal (0:18)

Tracy, you know, one of the big things, big themes, I think, that has, especially in the last year, pervaded our episodes, is really just this idea of like the 40-year trend, more or less starting in the early Volcker years, years of declining rates, monetary policy dominant, and the question now is, are we at some sort of turn in the direction of the economy? Some meaningful, sustained change in how we approach economic policy?

Tracy Alloway (0:46)

Yeah, I guess the low rates aspect of it is still up for debate, but certainly we have seen this talk of a handoff from monetary policy to fiscal policy. There seems to be a lot more room in certainly the US political landscape to actually talk about things that the government could do on this front in a way that got stamped out much, much more quickly in earlier years, I think.

Joe Weisenthal (1:13)

Yeah, I think that's exactly right. I mean, like we look back at this period and think so many of these discussions, they really do come back to politics, political choices, and whether something is in the air, something in the water or something fundamental is shifting such that we can sort of break out of the old expectations about what government can and can't do, how much it can really spend, and whether that will really produce a policy shift that would meaningfully change things. Maybe it would meaningfully result in higher rates, maybe result in higher inflation, maybe result in higher sustained wages, fuller employment, and so forth.

All kinds of questions like that, and so we seem to be at a moment where a lot of these questions, a lot of stuff that seemed impossible suddenly seemed possible.

Tracy Alloway (2:06)

Yeah, there's also an aspect of this that I think often gets missed, which is, you know, people talk about the possibility of the government doing more or being more involved in economic policy and things like that. And they always frame it like before the government wasn't involved at all. But of course, the current system, even, you know, even if you categorize it as liberal or light touch, or however you want to put it, was devised by the government. Like the actual economic system that we have in place was made through political choices. And so there's a possibility that political choices can change and we can get something different.

Joe Weisenthal (2:44)

Yeah, I think that's that's basically 100% right. Like people have this idea, okay, there's some sort of state of economic neutrality where the government is hands off, and other government will intervene in some way.

But of course, that setup that we had then or the setup that we have right now is also just the result of perhaps a different set of policy choices.

And those political choices are, of course, subject to change. And I think it's potentially happening right now. I should note it's very important. We're recording this March 9th around 6pm. There is scheduled to be a vote tomorrow. And hopefully that happens only so that we don't have to rerecord this intro. But, you know, the House is scheduled to pass this $1.9 trillion stimulus that the Senate passed just this weekend, which really does open up this question of are we going to do fiscal policy in a way the likes of which we haven't seen?

Tracy Alloway (3:44)

Yeah, I think that's fair. Yeah.

Joe Weisenthal (3:47)

So the question really is, are we at a turn here? We have two great guests that I'm very excited to speak to, and they'll help us think through the current policy stance and the history and so forth. We're going to be speaking with Skanda Amarnath. He's the research director at Employ America, as well as Mike Konczal. He's the director at the Roosevelt Institute, and he is the author of a new book, Freedom from the Market, America's Fight to Liberate Itself from the Grip of the Invisible Hand. So very excited to get his perspective.

And I thought about this discussion and that we should have this discussion actually back in January, because there was a tweet from Skanda.

And he asked this question, which is essentially, are we at some structural break from neoliberalism in some way? Are we at this trend break? And that really is the key question. Did something just turn? So let's just start with that. We'll try to answer that right off the bat. Are we at the structural break? So Mike and Skanda, thank you so much for joining us.