Neoliberalism is Back!

The realignment gets realigned

It took very little time following Barack Obama’s election victory 16 years ago for the new president to begin jettisoning the populist promises he had run on and start showing his true colors. Just three weeks after Election Day, he announced his intention to appoint Timothy Geithner as Treasury Secretary. Geithner was confirmed less than a week after the inauguration.

Geithner, who was the President and CEO of the New York Federal Reserve before he joined Obama’s cabinet, was an ambassador for Wall Street and barely pretended not to be. Recall that this was 2009, the year following the start of the global financial collapse. The selection of a Treasury Secretary was perhaps the most consequential of all of Obama’s cabinet choices, on par with choosing a Secretary of Defense at the height of the Iraq War. Obama was sending a comforting message to Wall Street at the moment when he could have mobilized public anger at the banks to build an entirely new architecture of financial oversight and accountability, something of FDR-level proportions. For the next eight years, Obama would govern as a corporate-friendly centrist technocrat, following the counsel of such champions of financial deregulation as Larry Summers and his mentor, former Clinton Treasury Secretary Robert Rubin. He would scoff at the idea of holding the top bankers criminally liable for their role in causing the global financial meltdown, and would administer and champion the bank bailouts.

Now we see history repeating itself. Like Obama’s Hope and Change, Trump’s Make America Great Again agenda was always something of a reflection of whatever its most ardent supporters wanted it to be. To populists, it was the heralding of a new conservatism founded on working-class nationalism and industrial policy. Its anti-elite aesthetics, they hoped, expressed an actual commitment to the welfare of American workers and a real contempt for a corrupt and ossified political and corporate establishment.

That was before Elon Musk emerged as easily the most consequential and energetic figure in the administration to date. That’s not to say that Trump didn’t warn us; DOGE’s mission and Musk’s leadership of it was one of his central campaign promises. But there were ways of explaining away the gaping contradiction between this promise and the populist spirit of Trump’s campaign. One was by assuming it was little more than just another instance of Trump’s famously transactional practice of politics; Musk gave him his support and a lot of money, and in return got himself a title and a vanity project in the new administration. Another was to regard DOGE as Trump’s well-earned counteroffensive against the “Deep State.” He had been openly undermined in his first term by his own middle management. Why shouldn’t he make it a priority to root out those who sought to sabotage him?

In fact, those probably were among Trump’s reasons for creating the new initiative. But Musk has his own purposes, and if you believe for a second that they have anything to do with empowering workers and taking down the corporate oligarchy, then you’re in the same boat as those who continued to believe Obama’s empty promises even as he turned over the keys of his administration to the clique of executives at Citibank, JPMorganChase, and Goldman Sachs.