As the US tries to remove the unjustified obstacles and delays that President Donald Trump is putting in the way of Joe Biden’s transition, we also wait to see what kind of presidency the Biden administration will be. Will there be three confluent crises: the acute emergency of the pandemic, the chronic challenge of the economic and political polarization that brought Trump to power, and climate change? Or will it be a rerun of the Obama administration with Biden serving as vice president doing something good but falling far short of hopes and expectations?
The Biden-Harris platform is nothing if not ambitious. It claims to be the most progressive political program of a main party presidential candidate, even if it does not go as far as the left wing of the Democratic Party would like.
And several commentators argue that Biden is a late-blooming radical. “Biden is not an FDR, you say? Well, FDR wasn’t an FDR, ”says Dana Milbank, suggesting that for both the New Dealer and the President-elect, it is precisely their pragmatism that allows them to adopt radical programs when time demands. Franklin Foer finds “a trace of evidence suggesting the sincerity of his transformational ambitions and a plausible plan for their realization”. If it has his way, the signs are that Biden will rule in the form of Franklin D Roosevelt.
But there is a big question mark about whether Biden can do something this ambitious. If Republicans keep their Senate majority, it will severely limit Biden’s options. Adam Tooze warns that Biden is “facing an uphill political battle [against] formidable enemies. . . the GOP in Congress ”. Neil Irwin agrees, and believes that the improbability of a major fiscal stimulus means that “the Biden economy could be as long as the Obama economy”.
But, as my colleague Rana Foroohar argues, there is a lot Biden could do without having control of both Houses of Congress: he can use Executive Orders to change many Trump policies and use unused money from the earlier package to support the Start pandemic. and – an idea I find particularly powerful and underutilized – reserve government contracts with companies that adopt his political preferences on things like the $ 15 minimum wage. In a comment, Elizabeth Warren lists a number of other steps that Biden could take on her own responsibility, such as: For example, debt relief for students, lowering drug prices through compulsory licensing, and isolating the executive from corporate lobbying.
We should also point out that, unlike the presidential elections, the election of the next Congress is actually not yet over. The two seats of the Georgian Senate are facing runoff elections in early January, as no candidate reached the required 50 percent threshold in the vote last week. If the Democrats win these seats, thanks to Kamala Harris’ tie in a 50:50 Senate, they’ll win if she becomes Vice President. Many find this unlikely. But it is simply not known how the extreme importance of race or the reactions to Trump’s coup obstructionism will affect support from either party. It seems possible that the Democrats might not make it as though.
So if Biden has the will and plausibly the means to pursue an ambitious New Deal-style program, the question is, should he? And the answer must surely be yes. Nothing less than a New Deal style political and economic project to establish a new economic social contract can overcome the polarization we allow in Western countries (which also hinders our ability to address generational challenges such as climate change). Nowhere is this more true than in the United States.
The last elections make this clear. Last week I had an initial attempt at baseline (admittedly unreliable) survey data and found evidence that the electorate was rebalancing – becoming less one-sided – but becoming more polarized between different types of locations within the electoral demographic. Since then, the much more thorough analysis by my data colleagues John Burn-Murdoch and Christine Zhang has confirmed this. As the graph below shows, more and more US states are dominated by the election of one party or the other, and fewer and fewer show an approximately balanced bias.
And what kinds of places vote in what way? Mark Muro and his team at the Brookings Institution tell us, Trump won more than 2,400 smaller, more rural, and economically less dynamic counties, while Biden won fewer than 500 counties, but they were bigger, more urban and metropolitan, and included the country’s economic powerhouses. As the graphic (below) impressively shows, places with a Democratic majority generate 70 percent of the US gross domestic product and places with a Republican majority only 30 percent – an even larger deviation than in 2016. A study by the New York Times at the district level The column “Upshot” adds this analysis by showing that counties under greater economic pressure were more loyal to Trump than relatively thriving ones.
This means, as the Brookings researchers point out, that Democrats and Republicans in Washington represent very different economies and thus very different economic and political preferences. This, of course, complicates the compromise and contributes to political polarization, which can only worsen if economic polarization cannot be overcome.
That’s why it’s so important for Biden to make it big. He – and the US – need nothing less than to reunite America economically. A task that most other rich countries are also facing, to which the US leadership would be invaluable. The good news is that the transformation measures required to achieve this have a better chance of benefiting everyone than an incremental approach would.
Before the election, the economists at Moody’s Analytics modeled the impact of the two candidates’ promised economic programs. Growth and employment would be greater with Biden and a Democratic Congress than with Trump and the GOP, but not only that – corporate profits would also be greater. The reason is not only that a stronger fiscal stimulus would accelerate short-term growth, but also that the supply side would expand more due to Biden’s promised infrastructure spending and that the paid family vacation he wants to fund would increase labor force participation.
It is imperative that all sides of the US political spectrum accept the election results and pave the way for a change of power. It is just as urgent, however, that all sides of the economic spectrum recognize that they have more in common – also economically – than what divides them.
Other readable elements
An intriguing new paper in Nature overlays cell-phone-derived mobility data with coronavirus cases in major US cities to gauge where infections are spreading. The model, which exactly matches local infection rates, presents two extremely important outcomes for policy makers. First, some types of places are far more important for infection to spread than others, with restaurants, fitness centers, bars, hotels, and religious establishments being the riskiest. Second, the extent to which mobility is impaired is at least as important in containing contagion as the extent to which it is reduced, suggesting that barriers must be stringent to be effective.
In the meantime, Norwegian researchers have categorized the actual infections among economically active people in Norway by type of work to determine which activities are most likely to be contagious. They find that health workers and transport workers (taxi, bus, and tram drivers) were at the highest risk of infection in the first wave. In the second wave, on the other hand, bartenders, waiters and counters as well as taxi drivers and tour guides were the riskiest jobs. It is important that the teachers were hardly at any higher risk than the average worker.
The European Commission has downgraded its economic forecasts for the next year as the second wave of the Covid-19 pandemic will hit the growth of European economies. Economic Commissioner Paolo Gentiloni told the FT the EU may have to suspend its tax rules until 2022.