Biden and the decline of the “neoliberal” era


You will create the strongest and most resilient, Innovative economy in the world. “It’s not a plan to be manipulated by the parties,” Biden said of the legislation he proposed on Wednesday. “It’s a one-time investment in every generation in America unlike anything we’ve seen or done since we built the Interstate Highway System.”

Biden is sure to face an uphill battle in Congress, with Republicans and even moderate Democrats wary of a ballooning US deficit and the potential for mounting inflationary pressures. But the sweep of his ambition is staggering and can, Left-wing commentator Robert Kutner has argued, Represents a shift in the Democrats from decades of being the “neoliberal party on Wall Street.”

Historians and politicians are already comparing ambition to [Franklin D.] Roosevelt’s New Deal or Lyndon Johnson Program for Great Society, ” The Guardian columnist Will Hutton He wrote with envy from across the pond. “In British terms, it is as if an incoming Labor government has pledged to spend £ 500 billion over the next decade with a focus on abandoned Britain in all its guises – genuine commitments to settlement, racial equality, net zero, and becoming a scientific superpower.”

“Radical reforms – reversing the prevailing policy trend of the past four decades – must be put on the table,” I noticed the Financial Times editorial last year, Which in itself was quite a statement given how much the publication’s wealthy readership had benefited from this earlier political trend. Governments must accept a more active role in the economy. They should view public services as investments, not liabilities, and look for ways to make labor markets less insecure. ”

To help offset the high cost of his infrastructure and career plans, Biden suggested Big tax increases for corporations and the wealthy. Although this will Confronting political resistance From corporate lobbyists, it’s an easier step now than it was when Biden became Vice President. The epidemic has demonstrated the need for even the most government to not intervene to strengthen the social safety net and to abandon long-standing concerns about deficits and inherent biases towards austerity.

“Put simply, the American economy over the past four decades has been much tougher and more unequal than the super-rich capitalists or wealthy suburbanites need,” Eric Levitz wrote from New York Magazine. “In fact, even the Western European-style welfare state (and its associated tax rates) does not conflict with the enlightened material interests of the upper middle class; only the wealthy can be confident that they will never need social insurance.”

This is the rhetoric echoed by the International Monetary Fund, an institution long seen as the embodiment of neoliberalism. Ahead of its annual meetings this week, it released a report calling for advanced economies To use stricter taxes To help offset the costs of the pandemic. This includes higher taxes on corporate profits, inheritance, property and other measures that Republicans in Washington routinely insist will harm the national interest.

“Many countries can rely more on property and inheritance taxes,” Three economists wrote at the International Monetary Fund, Arguing that narrowing inequality within societies is important for social cohesion. “Countries can also raise the progressive tax level because some governments have room to raise higher marginal personal income tax rates, while others can focus on removing loopholes in capital income taxes.”

Biden’s apparent abandonment of the legacy of neoliberalism may also extend to trade policy. It is unclear to what extent the new administration might actually deviate from the more protectionist path set by its nationalist predecessor. When asked during a congressional hearing whether the goal of a trade agreement between the two countries should be to eliminate tariffs and trade barriers, Katherine Tay, the Biden-appointed US trade representative, objected.

“Maybe if you asked me this question five or 10 years ago, I would tend to answer yes,” Tai said. But she said that the experience of the past few years, including the pandemic emergency and the hostility of trade wars for the Trump administration, led her to believe that “our trade policies must be accurate, and they must take into account all the lessons we have learned, many of them very painful, from our recent history “.

“Everyone who was involved in business or government in the 1980s or 1990s saw some of the promises of globalization being fulfilled, but a lot of the damage was unexpectedly wider, deeper, and deeper,” Dell.) He told the New York Times Earlier this year. “[Biden] We think we need to change direction in trade. “

Right now, Biden stands at the head of the US economy driving the Western world out of the pandemic. Amidst the steady progress in vaccinations against the Coronavirus, the US economy is gaining so much strength that its gains will not remain at home, My colleague David Lynch wrote. “This year, demand for goods and services is expected to extend beyond the borders of the United States, making the United States the largest single contributor to global growth for the first time since 2005, according to Oxford Economics.”

Thanks in large part to the stimulus bill, the United States will help add roughly 1.5 percent to the global economic growth rate this year, according to the Organization for Economic Cooperation and Development. By the end of next year, global output is expected to be about $ 3 trillion larger than what would have happened in the absence of new US spending.

“The fact that there is a large stimulus in the United States will boost global GDP and boost exports from the eurozone,” European Central Bank chief economist Philip Lin To CNBC last week, Adding that Biden’s new spending “will be an important driver of the global economy.”

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