like social democracy, though not necessarily to socialism. Progressives and social democrats believe that the Democratic Party, at the presidential level, has mistakenly embraced corporate and Wall Street-friendly policies since the Clinton years, if not before. They criticize President Obama for insufficiently breaking with neoliberal modes of political-economic governance, and for supporting domestic political-economic policies that, in their view, are inadequate for resolving the economic crises he inherited. In their view too many Democrats have bought into the discourse of austerity and deficit reduction promoted by corporations and conservatives. Two Nobel Prize in Economics winners, Paul Krugman and Joseph Stiglitz, have in recent years moved from mainstream positions to strongly critical and progressive perspectives, essentially social democratic in nature, on the U.S. political economy, even if they more typically call themselves liberal, progressive or Keynesian. Robert Kuttner characterizes their public roles this the most prestigious economic dissenters of this era, Joseph Stiglitz and Paul Krugman way: “As form a category of two: astonishingly prescient, widely read, and largely ignored by those in After briefly defining social democracy, I will describe Krugman and recent power.” Stiglitz’s critical analyses of the U.S. political economy and show how their views overlap with an emerging body of analysis and proposals by academics, activists, and think tanks about how to move the U.S. in more progressive directions. Finally I will analyze the meaning of President reelection in 2012 and ensuing battles over the fiscal cliff and budget sequestration Obama’s from the standpoint of the social democratic critique of neoliberalism and austerity economics. Social Democracy Twentieth century European social democracy has a complex history and is intimately involved with the creation of modern welfare states after World War II. In general social democracy is a reformist strategy on the left that eschews a systematic break with capitalism. For political
like social democracy, though not necessarily to socialism. Progressives and social democrats believe that the Democratic Party, at the presidential level, has mistakenly embraced corporate and Wall Street-friendly policies since the Clinton years, if not before. They criticize President Obama for insufficiently breaking with neoliberal modes of political-economic governance, and for supporting domestic political-economic policies that, in their view, are inadequate for resolving the economic crises he inherited. In their view too many Democrats have bought into the discourse of austerity and deficit reduction promoted by corporations and conservatives. Two Nobel Prize in Economics winners, Paul Krugman and Joseph Stiglitz, have in recent years moved from mainstream positions to strongly critical and progressive perspectives, essentially social democratic in nature, on the U.S. political economy, even if they more typically call themselves liberal, progressive or Keynesian. Robert Kuttner characterizes their public roles this way: “As the most prestigious economic dissenters of this era, Joseph Stiglitz and Paul Krugman form a category of two: astonishingly prescient, widely read, and largely ignored by those in power.” After briefly defining social democracy, I will describe Krugman and Stiglitz’s recent critical analyses of the U.S. political economy and show how their views overlap with an emerging body of analysis and proposals by academics, activists, and think tanks about how to move the U.S. in more progressive directions. Finally I will analyze the meaning of President Obama’s reelection in 2012 and ensuing battles over the fiscal cliff and budget sequestration from the standpoint of the social democratic critique of neoliberalism and austerity economics. Social Democracy Twentieth century European social democracy has a complex history and is intimately involved with the creation of modern welfare states after World War II. In general social democracy is a reformist strategy on the left that eschews a systematic break with capitalism. For political
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