Bill Black analyzes Assistant Secretary of Treasury Brad DeLong statement that neo-liberals should get out of the way and let the left lead since coalition with Republicans did not work

Story Transcript

MARC STEINER: Welcome to The Real News Network. I’m Marc Steiner. Great to have you with us.

You know, when a leading neoliberal says it’s time for them to step back and build the lines of the left, because the left among Democrats are in the ascendancy, that past neoliberal, center-right coalitions with Republicans have not worked, and they have to try something different, it stops you in your tracks. Well, that’s exactly what Brad DeLong said, who is a UCal Berkeley economics professor, and was once the deputy assistant secretary of the Treasury for economic policy under Clinton, and calls himself a Rubin Democrat; a dyed-in-the-wool Wall Street Democrat. During that interview with Vox, he also said: “The baton rightly passes to our colleagues on our left … We are still here, but it’s not our time to lead.”.

Our guest today, Real News contributor Bill Black, who is Associate Professor of Economics and Law at University of Missouri Kansas City; former financial regulator; and author of The Best Way to Rob a Bank Is to Own One brought this to our attention. So welcome back, Bill, always good to talk with you.

BILL BLACK: Thank you.

MARC STEINER: So this is–I tell you, I was really–when you sent this yesterday, and I read it yesterday evening, I was–I did have to stop in my tracks. I mean, the thesis of this idea, that the neoliberal way of kind of resolving the crisis inside of our economy, of trying to control capitalism and its worst tendencies not working because it was a coalition of Republicans–to have him say that, say you have to move to your left, was pretty stunning.

BILL BLACK: Oh, yeah. And if you know him better, it’s even more stunning. Brad DeLong is a friend. He is one of the most prominent economists in the world, and he is one of the most read economists the world because of his famous blog, and his willingness to have a lively mind. And a lively tongue, as well, which is quite evident in this.

And he actually doesn’t say it’s time for us to form a coalition with the left. He says it’s time for us to step back and let the left lead. That’s what the baton reference is.

MARC STEINER: But what does that mean? What do you think that means, really?

BILL BLACK: Well, he actually says what it means. He says we are discredited. Our policies have failed. And they’ve failed because we’ve been conned by the Republicans. Our whole strategy was to form a consensus with some reasonable, moderately conservative Republicans. And there is no such thing. And as a result we kept on pushing farther and farther and farther to the right with our policies, so that we’re actually to the right of the Republican Party’s own representatives in Congress. And again, we’ve just basically been played by these folks. We have to stop doing that. The only legitimate entity in town is the left, the progressives. The progressives, he says, are wonderful people, whereas basically, he says, there isn’t a single elected Republican that has any integrity at the federal level. And we have to start anew.

He also says that the progressive view of the world poved to be much more true than the neoliberal. He calls himself the neoliberal shill. And in his column, he says the left’s view of the world is much more accurate than our view of the world proved to be.

BILL BLACK: So is he saying that his whole thinking about politics and the economy have changed? Or is he saying that we don’t have the answers, and we should give them a shot at the answers, and back them up with our thinking? What do you think he’s saying?

BILL BLACK: So, he’s saying two things. One, he says–and he says this flat-out–politically, we failed. We were a disaster. Everything we did was a disaster politically. Economically, he says, again, the left’s view of the world is a lot more accurate than ours was. So a number of our policies, presumably, really need to be changed, even just in terms of the economics.

Let me give you the key point. He says our view, the neoliberal, was the markets would regulate themselves. Our view, which we–you know, I’ve been arguing with him for years–is no; markets, when there’s a Gresham’s dynamic–in other words, the kind of frauds that I write and warn people about–market forces become perverse. Cheaters gain a competitive advantage, and bad ethics drives good ethics out of really any form of competition, whether that’s markets, professions, or sports. The steroids era, for example, in baseball, where you had to cheat to be able to do. Or the Tour de France, where all the winners for 20 years were cheats, doing blood doping and other drugs.

MARC STEINER: So I mean, there’s one quote that kind of sums up for me. When he wrote: “Barack Obama rolls into office with Mitt Romney’s healthcare policy, with John McCain’s climate policy, with Bill Clinton’s tax policy, and George H.W. Bush’s foreign policy. And did George H.W. Bush, did Mitt Romney, did John McCain say a single good word about anything Barack Obama ever did over the course of eight solid years? No f’n way he did not,” is what he said. Cleaned it up just a little bit. But that kind of sums up, in many ways, exactly what he was saying.

BILL BLACK: Brad DeLong is brilliant. And he writes really well. And he has, in a super short form, captured it exactly. All of Obama’s key policies were the product of very conservative views that are, on many economic fronts, literally to the right of these crazies that are the Republicans who constitute the House and the Senate. And even when they’re not to the right of the crazies, they’re way, way right, and they’re inferior. Right? The progressive policies are fundamentally superior. Market regulation is a terrible failure. It is criminogenic.

I’ll give you one example. He ends by saying wouldn’t it be a wonderful thing if we could use cap and trade to create an incentive for, you know, 20-plus million people to do the right thing? Because again, the neoliberal view is if they do the right thing they will get a profit. See? It’ll all be wonderful. They’ll all do the right thing. Except that it’s vastly easier on something like cap and trade to do the wrong thing. To lie, to commit fraud about whether you’re actually reducing the pollution, and collect the fees. And so he doesn’t realize, still, I think, that we are incentivizing not 20 million people to do the right thing, but literally 2 billion people to do the wrong thing. And you know, often that will be the result, the wrong thing.

MARC STEINER: So, two final questions here. So in this–what’s moving ahead here. Let me just posit this. So how did Democrats and the left respond to this? We’re about to see an MSNBC clip from the CPAC meeting that took place in D.C. last weekend. And this is clearly going to be part of their major attack in the coming elections. Think about this vis a vis the long road. Let’s watch this.

TED CRUZ: Look, I think there’s a technical description of what’s going on, which is that Democrats have gone bat crap crazy.

MIKE PENCE: That system is socialism.

SEBASTIAN GORKA: That is why Alexandria Ocasio-Cortez has introduced the Green New Deal. It’s a watermelon. Green on the outside. Deep, deep red communist on the inside. They want to take your pickup truck. They want to rebuild your home. They want to take away your hamburgers. This is what Stalin dreamt about but never achieved.

MARC STEINER: So clearly this is going to be part of this strategy coming forth. I’m thinking about the long road and how this fits in, because this clearly is going to be the opposition, what they’re going to start doing.

BILL BLACK: So literally, the watermelon guy, Gorka, is literally a Croatian fascist.

MARC STEINER: No question. No question.

BILL BLACK: I mean the Ustase, the pro-Hitler Croatian fascists. So progressives should take enormous comfort from Brad DeLong. He is one of the most influential economists. He wasn’t just a theorist. He actually was there designing and implementing these policies at the most senior levels of the Clinton administration. And he says they are failures. They’re political failures and they’re often economic failures. And he says the left is composed–the progressive wing of the Democratic Party–of among the best people in the world. Their policies are typically wonderful. Excellent for the world. We need to get behind them. And the idea that we should continue to listen to the New Democrats, the Wall Street Democrats, and take guidance from them, is preposterous; that they must exit the stage and the baton must pass to the progressives to take the leadership role. And that they’re doing an excellent job of that, and should continue and expand that leadership.

MARC STEINER: So, one final question for you, BIll Black. So, you’ve been in this world a long time. You know all these people.

BILL BLACK: I am old. [Laughter]

MARC STEINER: You–do you think that the Wall Street Democrats, folks who are in the investment world, along with Chuck Schumers of the world, are going to acquiesce? Not–acquiesce is the wrong word, but are actually going to take seriously what DeLong said? And this is actually take place politically? Possibly? I mean, do you think that’s real?

BILL BLACK: No, but that’s because Brad DeLong has vastly more integrity than they do. They know, however, that they’ve been conned, played, and they’re absolute fools in the game. Remember the saying in any poker game, if you don’t know within a minute of sitting in it who the fool in the game is, it’s you.

MARC STEINER: That’s exactly right. [Laughter]

BILL BLACK: These guys know they’ve been the fool for 30 years, and they have tossed our lives down the drain. Brad is willing to say it. So they know how discredited they are. And thanks to Brad DeLong for having the intellectual honesty to say it in these blunt and colorful terms. But I can tell you this has been in the making for at least eight years, where Brad DeLong, based on new facts, has been shedding his ideology, or at least changing it dramatically. And we should all use that as a lesson, as well. Just listen to the facts. Don’t go with these labels like socialism or not socialism. Is it a desirable program? And here’s the good news: Almost every poll of the public shows that the key agenda items of the progressives have strong, strong support, even among Republicans.

MARC STEINER: Well, Bill Black, thank you for bringing this to our attention yesterday, before the major media caught this, and we had a chance to talk about it with you. I appreciate you sending it up. Always appreciate talking with you. Thank you so much for all your work and for being with us today.

BILL BLACK: Thank you, and thank Brad.

MARC STEINER: Thank you, Brad. And I’m Marc Steiner here for The Real News Network. Thank you for watching. Take care.

William K. Black

William K. Black, author of The Best Way to Rob a Bank is to Own One, teaches economics and law at the University of Missouri Kansas City (UMKC). He was the Executive Director of the Institute for Fraud Prevention from 2005-2007. He has taught previously at the LBJ School of Public Affairs at the University of Texas at Austin and at Santa Clara University, where he was also the distinguished scholar in residence for insurance law and a visiting scholar at the Markkula Center for Applied Ethics.

Black was litigation director of the Federal Home Loan Bank Board, deputy director of the FSLIC, SVP and general counsel of the Federal Home Loan Bank of San Francisco, and senior deputy chief counsel, Office of Thrift Supervision. He was deputy director of the National Commission on Financial Institution Reform, Recovery and Enforcement.

Black developed the concept of "control fraud" frauds in which the CEO or head of state uses the entity as a "weapon." Control frauds cause greater financial losses than all other forms of property crime combined. He recently helped the World Bank develop anti-corruption initiatives and served as an expert for OFHEO in its enforcement action against Fannie Mae's former senior management.