ABSTRACT
The recent Great Recession and its recovery process shed light on income inequality and economic injustice built into American public policies. The progenitors of these policies were neoliberal scholars, including Milton Friedman and his colleagues in the Chicago School of Economics. Neoliberal economists supported the trickle-down effects and supply-side economics. Their major doctrines include a free market, flexible labor market, financial deregulations, and easy domestic and international capital flow through financial deregulations (Chang, 2010). These academic discourses became translated into public policies in the late 1970s and were fully adopted in the early 1980s with the election of Ronald Reagan as the 40th president of the United States. In his inaugural speech, Reagan proclaimed that “government is not the solution to our problem; government is the problem,” and that the growth of government should be reversed (1981, pp. 1-2). To cure the economic ills of the time, such as high inflation and unemployment rates, “removing the roadblocks that have slowed our economy and reduced productivity” was delineated as one of the top priorities during his presidency. It did not take long for him to remove the roadblocks by implementing deregulations through public policies and his executive powers. Even after his presidency, the neoliberals’ agendas were promoted as the president’s legacy and have continued to this date. The primary goal of this writing is to establish connections between those policies and the expansion of consumer credits as a quasi-welfare system in the United States. As there are wide ranges of deregulation policies, financial deregulations are the focus of the connection. It is equally as important in this chapter to suggest a solution to the social injustice contributed to by the neoliberal public policies.
