The Financial Crisis That Spawned Austerity, Corporatized the Democratic Party and Gave the World Donald Trump 

As Donald Trump stages his own inane production of the Watergate scandal, firing the official tasked with investigating his administration as he would a contestant on “The Apprentice” and inadvertently admitting to obstruction of justice, a bill is wending its way through Congress that threatens the lives of the sick and the vulnerable. The American Health Care Act could strip more than 24 million Americans of their health insurance over the next 10 years, generating perhaps the greatest transfer of wealth from the middle and working classes to the rich in U.S. history. Its passage in the House last week represents not only a breach of the public trust but the triumph of conservative lobbying efforts for the better part of four decades. What many may not know is that its architects’ political ideology was born in one of the most liberal cities in the country, if not the world.

In 1975, New York was teetering on the brink of collapse, as deindustrialization, an exodus of affluent taxpayers and a worldwide recession left it unable to pay for the robust social services it had carefully grown and developed since World War II. The big banks, including Chase and First National City Bank (now Citigroup), were eager to lend the city money until they weren’t. At the behest of New York’s creditors, the state established an Emergency Financial Control Board, effectively removing power over the city’s budget from then-Mayor Abe Beame. As journalist and historian Kim Phillips-Fein argues in her new book, Fear City: New York’s Fiscal Crisis and the Rise of Austerity Politics, this presaged a government-wide capitulation to big business and a transformation of what it means to be not just a New Yorker but an American. “The crisis,” she writes, “saw a group of almost universally white elites remake life in a city that was becoming increasingly black and brown.

”Fear City is both an illuminating history of some of New York’s darkest years, and a book of ideas. What does a government owe its citizenry? How have we come to accept budget cuts and layoffs as the only recourse for a mounting deficit? Why is there “no alternative” to the neoliberal economic model, as Margaret Thatcher famously sloganeered in Great Britain? These questions have been made more urgent by the devastation visited upon the city of Detroit and the Commonwealth of Puerto Rico, to say nothing of the national trendlines that have accelerated since the Reagan administration. For Phillips-Fein, austerity is very much a choice, and it is our responsibility to challenge its inevitability.

Source: The Financial Crisis That Spawned Austerity, Corporatized the Democratic Party and Gave the World Donald Trump | naked capitalism

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