In 1979, Paul Volcker, the head of the Federal Reserve Bank, raised interest rates to nearly 20 per cent. In doing so, he engineered a deep recession to squeeze inflation out of the economy and discipline labor. A year later Ronald Reagan, the newly elected Republican President, complemented Volcker’s actions by slashing government spending, attacking the labor movement, and assailing the movements for equality. Together their actions upended the prevailing model of profit accumulation and political governance – Social Keynesianism – and ushered in a new regime – neoliberalism, unfettered globalization, and financialization – that both parties, in different ways, adjusted their politics to. No less significantly, their actions threw any opposition within and beyond the state on the defensive.
Four decades later that regime of accumulation and governance, thanks to its own economic and political contradictions – none bigger than the Great Recession of 2007 – and a changing terrain of struggle, is hanging by a few threads. Whether 2021 will mark the moment when those threads completely unravel isn’t a certainty, but the sustained actions of the Biden administration and the political coalition that elected him could be the coup de grace to this anti-popular economic and political regime.