Neoliberalism 101: A Primer for Plattsburgh

I started this blog because a substantial blind spot is restricting the political imaginary of our local Left-wing. Thanks in large part to media imported to our area, many of us on the Left can at least see our common enemy--neoliberalism--at work far away, from Congress to distant corners of the globe. Yet, perhaps because locally produced and locally focused Left-wing media are lacking, many of us can't seem to see neoliberalism at work at home right before our eyes.

I've already defined it without naming it directly in my series on present-day urban renewal in Plattsburgh. Neoliberalism is the corporatist alliance between big business and government that aims to privatize public wealth, provide tax breaks and lax regulations to corporations and cut social spending. If you've read any of my other posts, it should be clear that Democrats as well as Republicans can be neoliberals. Even self-proclaimed progressives can be infected by neoliberal thought; it can shape what we on the Left find to be realistic or even possible. 

When we debate how Plattsburgh should use its $10M DRI award and people respond "to attract people with higher incomes to live downtown," neoliberal thinking is at work. This "practical" response resonates to a degree with almost everyone I've talked to about improving our city, even progressives who ultimately find it problematic. Yet, at a fundamental level, the response assumes that the fate of nearly six out of ten city residents who are financially distressed is set in stone or at least should be deferred to some future day that will probably never arrive. Rather than seeing $10M put to work to improve the livelihoods of people who already live in our city--for example, by focusing on successful community wealth-building strategies--it assumes the order of things is fixed and looks for help from outside. 

Worse still, this kind of thinking diverts our attention away from the fact that this unequal order, which is so pronounced in the city it has reached post-colonial levels, is actively being defended or even maintained by local governmental officials and policy-makers. For example, when Colin Read has argued against a minimum wage increase in New York altogether1 in favor of the Earned Income Tax Credit (EITC), he is borrowing from the playbook of one of the founding fathers of neoliberalism, Milton Friedman, who pioneered the idea when he called for a "negative income tax" back in 1962.  Essentially, the EITC takes the direct burden of improving the livelihoods of working class families off of business and puts it onto government; with the EITC, the government pays working class families an annual stipend so that the private sector can continue to suppress wages. When it's not paired with efforts to directly increase wages--the progressive approach2-it acts as a double subsidy, one for poor families and one for big business so that they can maintain the current order of income inequality.

In what follows, I want to tell a true story about two local officials and their failed attempt to increase inequality in our region because it lays bare neoliberalism's many hypocrisies and reveals how dangerous neoliberalism can be if it's left unrecognized and therefore unchecked at home. My hope is that this primer will make us better prepared to fight local manifestations of neoliberalism in the future.

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A year ago, around the time when the city and state were misrepresenting the public support for a mixed use development downtown that is primarily intended to provide offices for the likes of Norsk Titanium and housing for some of its better off future employees, Congress was attempting to repeal the Affordable Care Act (ACA).  People around the area were justifiably frightened. In Clinton County alone, almost 8,000 people or 10% of the population would have lost health insurance; their lives were on the verge of becoming considerably more precarious. Clinton County officials were also nervous about losing nearly $1.3M in annual funding. CVPH, a major employer in the area, was also facing serious losses.

People wanted an audience with their representative in Congress, Elise Stefanik, to explain to her what was at stake and to pressure her to change her mind. Stefanik was practically in hiding at the time. She occasionally held carefully controlled "telephone town halls" in an attempt to placate her constituents in their demand for a public forum, but most were annoyed by the ruse. People called her office, took to social media, rallied, and even held their own town halls without her in protest. Meanwhile, one of her few defenders online, Gary Douglas, who Co-Chairs the North Country Regional Economic Development Council (NCREDC) and has a big say in how tax incentives and other subsidies are doled out to large companies in the area, wrote in Stefanik's defense on her social media page:

Fortunately, Congress was never able to repeal nor replace the ACA thanks in large part to what Douglas called the "politics and campaign activities" of millions of Americans, but it wasn't for Stefanik's lack of trying.

Then, in July 2017, news broke that Stefanik added language tailor-made for Norsk Titanium to the U.S. Department of Defense Authorization bill. Douglas and Norsk's CEO asked Stefanik for the earmark in person only a few months prior, not too long after Douglas was telling Stefanik's constituents they were out of line for demanding an audience with her. Douglas said, "we put a challenging ask on her table for consideration... two months later she’s got it in the bill." This is neoliberal hypocrisy #1: neoliberalism gives corporations unfettered access to political power all while restricting it as much as possible for people (similarly, neoliberalism provides corporations with an international reach all while restricting the mobility of people).

These contrasting anecdotes reveal other neoliberal hypocrisies at work in our area. Douglas was tasked by the governor to add jobs to our region, and although he and an army of technocrats are moving mountains for Norsk Titanium to create 400 promised jobs, Douglas didn't seem to care that the horse he was backing to build upon that project was set to wreak havoc on the health care industry in the region. North Country hospitals would have lost $26M in funding per year if the ACA was repealed, putting a great many jobs in one the region's largest industries at risk (in Clinton County alone, the health care sector comprises 16% of the workforce or 5,300 jobs). This is neoliberal hypocrisy #2: Despite their stated aims of adding jobs to the North Country and lifting all boats, the truth is that neoliberalism does more to increase the power and influence of neoliberal officials than improve the overall economy.

Is it any wonder that, despite an unprecedented infusion of corporate welfare into the North Country economy via NCREDC, the North Country has lost jobs, wages haven't kept up with inflation, and the poverty rate has increased? Even the manufacturing sector in the North Country, which has received the bulk of NCREDC's attention, has lost jobs and wages haven't kept up with inflation. 

Source: NY Dept of Labor Quarterly Census of Employment and Wages

Returning to the matter at hand, it's not like Stefanik nor her supporters like Douglas can make the neoliberal case and say that health care jobs are more expendable because they are entirely reliant on bloated government spending--unlike "private sector" jobs that are supposedly self-sustaining and increase in number when the free market is allowed to function properly (see this Colin Read column for a good local example of this neoliberal ideology at work--it certainly foreshadowed his recent "hot mic" thoughts on the waning productivity of city employees quite well). Nearly every facet of Norsk Titanium's presence in Plattsburgh dispels this neoliberal myth about the self-sufficiency of the private sector and the aforementioned defense spending earmark just scratches the surface: Norsk is also propped up by a $125M taxpayer investment in exchange for the creation of a meager 400 jobs, and the public has actually assumed the risk of owning its machinery. Furthermore, Norsk is supplying parts for the aircraft industry which is a global oligopoly comprised of two major players, Boeing and Airbus, and both are heavily supported by their respective governments (both rely on innumerable defense contracts and subsidies; just counting "megadeals" totaling $50M or more alone, Boeing has received $13.5BN in taxpayer subsidies). This is neoliberal hypocrisy #3: Far from being self-sufficient, neoliberal officials are heavily propping up the "private sector" using public funding all while scaling back publicly funded social programs; the result is much more like a socialism for the 1% than an independent private sector operating within a "free marketplace". 

Lastly, although neoliberal officials often point to welfare fraud as a reason to cut social spending, and although our local press frequently publishes stories on this topic, both our local politicians and our local press are notably silent about the very real risk of corporate-welfare fraud in our region3. After all, Fort Schuyler Management Corporation, the shady state-run non-profit that allowed nearly $1BN(!) worth of the state's economic development contracts to be rigged on behalf of certain major Cuomo campaign donors under its watch, still handles public money invested in Norsk Titanium. In the aftermath of the Buffalo Billion scandal--which has resulted in six corruption cases going to trial this year--we can only hope that the voluntary reforms made by the Cuomo administration to put an end to an economic development environment that the state comptroller's office has called "ripe for corruption, bid-rigging, and kickbacks” will be enough to save our region from wasteful fraud. Unfortunately, many watchdog groups have argued that only legislative reforms will be enough eliminate the "high risk for corruption, abuse and waste," and their calls for such reforms have been repeatedly ignored. 

I remain convinced that our area is especially susceptible to corruption because nearly every politician in the area and much of our media remain infatuated by each new crony capitalist development promising the next silver bullet, even as relatively recent proposed corporate welfare projects like Laurentian have turned out to be mired in fraud, resulting in jail time. If these paragraphs come as news to you, then this is further proof that our local politicians and local media are not talking enough about the corruption risks associated with this type of development. This is neoliberal hypocrisy #4: Under neoliberalism, welfare fraud gets the lion's share of public scrutiny while corporate welfare fraud practically gets a free pass.

In sum, far from being natural or outside of politics, our city's heightened level of income inequality is actively being produced by the day-to-day actions of politicians and policymakers. When we recognize this, it is hard not to see the choice to use a substantial portion of Plattsburgh's $10M DRI grant to privatize public land, line the pockets of large developer, and "attract higher income people to live downtown" as another tragic win for neoliberalism and the current order of inequality. 




1) It is entirely possible to set a different schedule of minimum wage increases for small businesses and non-profits. In this article, Read makes it appear like this is not a possibility and invokes the plight of the small business owner under a blanket, non-targeted minimum wage increase to argue for the EITC instead--which is ironically to the benefit of big business. 

2) On top of arguing for a combination of minimum wage increases and a more robust version of the EITC, the progressive approach should also include a call for universal basic income (UBI) as increased automation results in an ever increasing population of unemployed and underemployed citizens. However, it's important to distinguish a progressive UBI, which is used in conjunction with other social welfare programs like universal healthcare, from a neoliberal UBI (such as proposed by Hayek) which is meant to replace social welfare programs and leads to its privatization (in the same manner as school choice vouchers). 

3) Of course, when the comptroller's office found several problems with Clinton County Industrial Development Agency (CCIDA) and The Development Corporation's (TDC) handling of corporate welfare programs locally, the Press Republican had to cover the matter here. But given the egregious nature  of some of the issues the comptroller uncovered (but not necessarily intentionally fraudulent like the Buffalo Billion scandal above), it is really startling to see how much of a free pass CCIDA and TDC were given in this article--the article did more to articulate their defense than anything.  

For example, the comptroller's audit found that a number of TDC administered properties were not returned to the tax rolls in a timely fashion (one property was returned to the tax rolls 4,698 days after its contractual deadline!), costing taxpayers a total of $1.7M. Given these errors and a number of other TDC errors, and given that, at the time, CCIDA and TDC leadership were intertwined when the former was supposed to monitor the latter, the audit made the following statement:

"The number and monetary value of discrepancies that we found with TDC projects could give rise to at least the appearance that TDC projects received less scrutiny because of the contractual agreement between CCIDA and TDC."

Here is the Press Republican article giving the CCIDA and TDC the last word on the matter:

"The agency in no way agrees with, nor finds any evidence of, the auditor's inference ... that because of the contractual agreement between the two entities somehow might ... (have) given rise to at least the appearance that TDC projects received less scrutiny because of the contractual agreement between the CCIDA and TDC," IDA response said. "There were several projects on the list that needed to be re-conveyed, not just TDC projects." 

It's ironic that the Press Republican didn't disclose its own intertwined relationship with TDC when publishing this article--Paul Grasso, CEO of TDC, was writing a column for the paper at the time.