Neoliberalism And The Rise Of The Asset Economy

At present, income and wealth inequality in the United States has reached a level not seen since the Gilded Age. Yet, the redistributive programs initiated by the New Deal revolution produced in the decades that followed the single largest compression of the U.S. wealth/income distribution ever recorded. This thesis investigates the neoliberal/neoconservative welfare reform movement of the second half the 20th century which in essence underpins the neoliberal policy agenda and, as I argue, similarly underpins and valorizes the Trump policy agenda. This thesis comprises a political economy discussion accompanied by an econometric study, the overall structure of which is as follows: (1) An analysis of the welfare reform debates of the 1970's and 80's and the neoliberal policy agenda that emerged from them, with specific focus on the restrictive rhetorical narrative at its core. (2) A subsequently informed analysis of the present debate on welfare in America and socioeconomic conditions more generally, in an attempt to locate an identical rhetorical strategy, ultimately predicated on the maintenance of the gendered, racialized, hierarchical neoliberal status quo, at the top of which sits an increasingly shrinking fraction of elites (e.g. the so-called professional-managerial-class)-above an increasingly large and decidedly lower class. (3) A discussion of the impacts of the neoliberal fiscal policies on wealth dynamics and trends in America (i.e., the rise of the so-called 'Asset Economy'; the long-term divergence of asset prices and wages), and the potential of a similarly stratifying evolution following the advancement of Trump's agenda. (4) Finally, an empirical investigation assessing the impacts of income and wealth inequality on economic growth, looking at a panel of developed and developing countries from around the world, spanning the post-war period through 2022. The principal goal of this analysis is to assess for variation in results obtained from different measures of both inequality and growth, in several different regression types. This paper supports the view that the relationship between inequality and growth is highly contextual, operating one way under certain conditions (e.g., political/economic regime, level of development, social demography) and entirely differently in other.