After the crash of 2008, Wall Street lost not its political power but its ideological force (markets are inherently good). In the context of this implosion, there was even serious talk about neoliberalism (free trade, weak financial regulation, privatization of government services) being a zombie economics. The banks and markets in the US and Europe were actually dead. They did not survive the crash. This fact is forgotten and often misunderstood. But, for a moment, think about that Colorado businessman who decided not to sell Nike products because of that company's Kaepernick Campaign.
The sneaker corporation used the image of Colin Kaepernick, the professional football star ostracized by the NFL for starting the "taking a knee" movement, to sell its products. Conservatives were outraged. One such conservative went as far as to stop selling Nike products in his 21-year-old Colorado business Prime Time Sports. This decision, however, ultimately cost him his shop. No Nike, not enough sales. But he did close business for real. It no longer exists. It's a thing of the past. The owner has to look for other ways to make a living.
According to Fortune, the businessman posted on Facebook:
PRIME TIME SPORTS is closing. All merchandise 40% OFF. Thank You for 21 mostly good years. For everybody that has offered help and support through the “Honor The Flag” memorial wall and NIKE boycott, now is your time to help me liquidate. Please do your Facebook thing with everyone you know so this can go as quickly as possible.
No bailout for the Colorado entrepreneur.
Now keep this in mind when you turn to what happened in post-2008 Wall Street crash. A good number of the banks became exactly the same as Prime Time Sports: unprofitable. But they did not close their doors. They stayed opened. They are still doing business. This is bizarre when you give it enough thought.
It is this bizarreness that has been described as zombie neoliberalism: a thing that lives with without life (and life, in capitalism, is precisely profitability). There was a moment when it seemed neoliberalism was going to continue in this monstrous (and politically unstable) condition. But Seattle, it turns out, has changed all of that. Neoliberalism has found a home in our city.
Now we have to take in what neoliberalism is. It's an idea that was formed and pushed by trans-Atlantic post-war intellectuals. The project of these academics, many employed by the University of Chicago, was to rebuild 19th century laissez faire ideology (governments not good; business doubleplusgood) after two World Wars and the market crash of 1929 left it in shambles.
No one really listened to this group until the 1960s. But their moment in the sun began with the economic crisis of the 1970s (stagflation—rising inflation without economic growth), which was popularly blamed on the New Deal/Keynesian (rising wages with rising prices) policies that where established after World War II and, in their global expression, took the form of the Bretton Woods institutions IMF, the World Bank, and tight capital controls. In the 1980s, neoliberalism came into its own and flourished in the center of American political power, the White House.
These ideas, which basically deregulated the finance sector that was (correctly) blamed for the 1929 crash, dominated US politics until 2008. But unlike 1929, the ideas did not die after the crash. There was no New Deal, no Bretton Woods, no commitment to Keynesian fiscal policies. There was instead a life after death.
The government supported bankrupt commercial banks and investments banks with public resources. Quantitative easing entered the picture as something new. But it was only a fancy way of injecting insolvent financial institutions with capital that did not come from the market but directly from the Federal Bank (a public institution). The cost of quantitative easing was an astonishing $4 trillion.
The Seattle Times editorial board’s lesson from Amazon’s bogus HQ2 process and its fit of pique in cancelling the NY part is: hey, hey, Seattle needs to be nicer to Amazon!! My take is Amazon has closed down options and needs the Seattle area for workers more than before. pic.twitter.com/6IlfSDbGQY
— Glenn Fleishman (@GlennF) February 15, 2019
New York City, once the capital of neoliberalism, became the capital of zombie neoliberalism: market ideas with no political justification, markets supported wholly by the state. (Again, think of our Colorado businessman.) The Occupy Wall Street protests of 2011 emphasized the political bankruptcy of the markets. This was the state of things until, weirdly, the head tax fiasco in Seattle.
Before this conflict—essentially between democracy and Amazon—Seattle was actually known for reviving a long-dead Keynesian (or New Deal) policy: high wages are good for capitalism. A local socialist, Kshama Sawant, even became one of the prominent figures of a movement that went national. After the head tax, however, the city's orientation changed sharply. It began to transmit a neoliberal conception of governance to the world. And, more interesting yet, the Seattle form of neoliberalism wasn't dead like Wall Street's.
At present, Seattle has a billionaire, Howard Schultz, who is running for president as, simply, a neoliberal (no Green New Deal, no new taxes, stick with what's American). And it has a corporation, Amazon, that interacts with whole cities in purely neoliberal terms (it demands tax breaks, it demands submission from democratic institutions, it says: There Is No Alternative).
As for dealing with real and deep social issues, Seattle is promoting a neoliberal solution: philanthropy.
At a time when bad news seems to dominate the headlines every day, I want to keep reminding people that life is getting better for millions in the world’s poorest countries, thanks in part to smart investments in health.
— Bill Gates (@BillGates) February 13, 2019
Rich individuals like Bill Gates have the means and the heart to address the massive social costs of capitalism. This is a holy trinity. And Seattle is its Vatican.