Budget troubles. Climate let-downs. Rising inflation. Diminished expectations. These are the inflection points of an increasingly negative Biden administration narrative. Plenty of people even within his own party seem ready to write off the president and his agenda. But I am not among them. So, in this Swamp Note, let me offer three reasons why those who still hold out hope for this presidency should not despair.
First, is the G20 agreement on a 15 per cent global minimum corporate tax, which was led by the US and in particular Treasury Secretary Janet Yellen. Yes, it’s true that the details of exactly how to tax the intellectual property and data wealth of Big Tech firms are TBD, and the deal will do more for rich countries than poorer ones. But honestly, this is a big step towards countering 40 years of economic globalisation running ahead of national politics in the developed world. The US has led a group of developed countries to put a stake in the ground around re-mooring corporate wealth and place. That’s a first step towards rebuilding trust in liberal democracy itself. It also shows that the administration can build coalitions globally.
Another win for the Biden administration this week was the rollback of the Trump-era steel and aluminium tariffs on the EU. This was good for transatlantic relations and, following the Airbus-Boeing resolution, demonstrates that Biden’s trade strategy isn’t just Trumpism with better manners. Commerce Secretary Gina Raimondo’s point about the US and Europe working together to build demand and standards around cleaner steel was a nod to the fact that ESG could become a way for the two regions to fight Chinese mercantilism. It’s also part of a larger effort to come together on standard-setting in bigger areas, like technology, and thus create a framework for the digital economy that presents an alternative to Big Tech or the autocratic Big State.
Finally, despite the disappointment from seemingly all sides on the trimmed down Biden budget proposals, it does make important strides for working families. The president campaigned on the caring economy, and the new budget would, for the first time in US history, actually create a viable public early childhood care system. Pre-school would be free for children aged three and up, as would day care at an early childhood learning centre for families earning $72,000 or up to $100,000 in expensive cities like New York and DC. Even those making up to $150,000 would get a break and pay no more than 7 per cent of their income on early childhood care. As someone who once paid about a third of my salary to a nanny, I can say this is a game changer. And if it goes through, I can’t imagine that it wouldn’t help get more working moms back into the labour force, which would in turn help curb some of the labour shortages the country is currently experiencing.
I don’t want to sound too much like a cheerleader for the administration, but turning the Titanic takes time. This administration has laid down some pretty big goals — things like shifting the very nature of the American economy to focus on income rather than asset-based growth, rolling back Robert Bork-era views about competition policy, and balancing free trade with the realities of a post-neoliberal world. These are things that will take years, not months. After all, it took 40 years to get here. Given the headwinds, I think the White House is doing about as well as any administration could in pushing these goals forward. Ed, have I done anything to make you feel more optimistic about Biden’s prospects going forward? Or is all this wishful thinking on my part?
Recommended Reading
This Wall Street Journal article on a couple that lost their life savings fighting cancer made me feel ill. No country can call itself civilised when working people with insurance can still be forced to the edge of bankruptcy just for being sick.
I’m eager to order a copy of Henry Kissinger, Eric Schmidt and Daniel Huttenlocher’s new book on AI and the future of humanity, reviewed here by our own John Thornhill.
I agreed with venture capitalist and former Zuck mentor Roger McNamee’s essay in TIME, arguing that regulating not only Facebook but surveillance capitalism itself, has become a test of our rule of law.
Edward Luce responds
Rana, I would never accuse you of wishful thinking, though I think you are pushing the boundaries of generosity. No doubt, things could always be much worse. If — and probably when — these bills pass, there will be plenty to applaud, including universal pre-K education and big new investments in renewable energy. Politically, it is far better for Biden to get these bills enacted than not — and they would help make America’s post-pandemic economy a little more broad-based. Given the 50-50 split in the Senate, it was Panglossian to expect Biden could have delivered reforms much more ambitious than this.
But some of Biden’s problems are self-made. According to two extensive surveys published over the weekend (one by ABC, the other by NBC), barely a third of Americans rate Biden as competent. That’s a dangerous warning sign for a president who ran on that quality. His approval rating is now down to 42 per cent, which is worryingly low less than a year into his presidency. Seventy-one per cent of Americans believe the country is heading in the wrong direction, including almost half of Democrats. Moreover only small minorities of Americans know what is in these two bills. That’s political malpractice. Biden has had months to sell their contents. Failure to educate the public about what he wanted to pass has made it far easier for opponents to strip the bill of its most important elements — paid family leave, lower prescription drug prices, a more progressive tax system and tougher action on climate change.
Can he turn it round? I hope so because a slide back into the Trumpian hellscape is too garish to contemplate. Which brings me to the most troubling findings of all. Clear majorities of Americans rate Republicans as better than Democrats on the economy, “getting things done”, crime, border control, inflation and national security. Democrats only poll ahead of Republicans on the pandemic, climate change and abortion. This spells Democratic loss of Congress in next year’s midterm elections and paralysis for the second half of Biden’s term. He will need to do more than pass these bills to alter that outlook.
Your feedback
And now a word from our Swampians . . .
In response to ‘That creeping sense of western dread’:
“I completely agree with Rana’s year of service idea. It seems to me much of whether one has a ‘me only’ and zero-sum mindset comes from parents and upbringing. Another way to counter this may sound quaint — a return to emphasising literacy, history and civics in elementary and junior high school, updated from decades ago when I was schooled in them. How to do this without a culture war is not easy but needs to be pushed from the top (Trump certainly did not study these things), with funding to match the rhetoric.” — Rick Soloway, New York, New York
“Isn’t a national year of service a rather middle-aged policy response, advocated mostly by those who are safe in the knowledge they are too old to be compelled to do it? I doubt the proponents be just as enthusiastic if, instead, it was at the age of 50 or 60 that people were forced to give up a year of their life for the greater good? This may also better promote a sense of civic duty in those who actually hold the levers of (economic) power.” — Michal Hain, London, England
Source: Economy - ft.com
