Why Joe Biden must go big


While the US tries to clear away the unwarranted obstacles and delays President Donald Trump is putting in the way of Joe Biden’s transition, we are also waiting to see what sort of presidency the Biden administration will be. Will it rise to the occasion of three confluent crises: the acute emergency of the pandemic, the chronic challenge of economic and political polarisation that had brought Trump to power in the first place, and climate change? Or will it be a repeat of the Obama administration, in which Biden served as vice-president, and do some good but fall far short of the hopes and expectations put in it?

The Biden-Harris platform is nothing if not ambitious. It has a good claim on being the most progressive policy programme of a main-party presidential candidate ever, even if it does not go as far as the Democratic party’s left wing would like.

And several commentators argue that Biden is a late-blooming radical. “Biden is no FDR, you say? Well, FDR wasn’t 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 programmes when the times demand it. Franklin Foer finds “a trail of evidence that suggests the sincerity of his transformational ambitions and a plausible plan for actualizing them”. If it is up to him, then, the signs are that Biden will govern in the mould of Franklin D Roosevelt.

But there is a big question mark over whether Biden will be able to do anything all that ambitious. If Republicans retain their Senate majority, this will put great constraints on how much Biden can do. Adam Tooze warns that Biden faces “an uphill political battle [against] formidable foes . . . the GOP in Congress”. Neil Irwin agrees, and thinks the unlikelihood of a large fiscal stimulus means “the Biden economy could be the same long slog as the Obama economy”.

But, as my colleague Rana Foroohar argues, there is a lot Biden would be able to do even without control of both houses of Congress: he can use executive orders to change many Trump policies, deploy unused money from the earlier pandemic fiscal support package, and — an idea I find particularly powerful and underused — reserve government contracts to companies that adopt his policy preferences on such things as the $15 minimum wage. In an op-ed, Elizabeth Warren lists a number of further steps Biden could take on his own authority, such as cancelling student debt, lowering drug prices through compulsory licensing and insulating the executive from corporate lobbying.

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We should also point out that, unlike the presidential election, the election of the next Congress is, in fact, not yet finished. Georgia’s two Senate seats are headed for a runoff election in early January because no candidate cleared the required 50 per cent threshold in last week’s vote. If the Democrats win these seats, they will prevail in a 50-50 Senate thanks to Kamala Harris’s tie-breaking vote when she becomes vice-president. Many find this unlikely. But there is simply no knowing how the extreme importance of the race, or reactions to Trump’s putschy obstructionism, will affect support for either party. It seems as possible that the Democrats could pull it off as not.

So if Biden has the will, and plausibly the means, to pursue an ambitious New Deal-style programme, the question is: should he? And the answer must surely be yes. Nothing short of a New Deal-style political and economic project, to found a new economic social contract, can overcome the polarisation we have allowed to grow in western countries (which also hinders our ability to address such generational challenges as climate change). Nowhere is this more true than in the US.

The last election makes this clear. Last week I had a first stab at (admittedly unreliable) exit poll data, and found signs that the electorate was rebalancing — becoming less lopsided — within demographic voting groups, but becoming more polarised between different types of places. Since then, my data colleagues John Burn-Murdoch and Christine Zhang’s much more thorough must-read analysis has corroborated this. As their chart, reproduced below, shows, more and more US counties are dominated by voting for one or the other party, and ever fewer show roughly balanced partisanship.

Chart showing the hollowing out of American politics: America continues to grow more polarised by place, with fewer evenly contested areas and ever more ultra-partisan counties

And which types of places vote which way? The Brookings Institution’s Mark Muro and his team tell us: Trump won more than 2,400 smaller, more rural and economically less dynamic counties, while Biden won less than 500 counties, but they were bigger, more urban and metropolitan and included the nation’s economic powerhouses. As their chart (below) strikingly illustrates, Democratic-majority places generate 70 per cent of US gross domestic product and Republican-majority ones only 30 per cent — an even greater skew than in 2016. A county-level study by the New York Times’s Upshot column adds to this analysis by showing that counties under greater economic pressure were more loyal to Trump than relatively thriving ones.

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This, as the Brookings researchers point out, means that Democrats and Republicans in Washington represent very different economies, and thus very different economic and policy preferences. This self-evidently makes compromise harder and contributes to political polarisation, which can only get worse unless economic polarisation can be overcome.

That is why it is so important for Biden to go big. He — and the US — needs nothing less than to tie America back together again economically; a task also facing most other rich countries for which US leadership would be an invaluable help. The good news is that the transformational measures required for this stand a better chance of benefiting everyone than an incremental approach would do.

Before the election, the economists of Moody’s Analytics modelled the effects of the two candidates’ promised economic programmes. Growth and employment would be larger with Biden and a Democratic Congress than with Trump and the GOP, but not only that — corporate profits would be larger too. The reason is not just that stronger fiscal stimulus would accelerate short-term growth, but also that the supply side would expand more because of Biden’s promised spending on infrastructure, and because the paid family leave he wants to fund would increase labour force participation.

It is urgent that all sides of the US political spectrum accept the election results and smooth the path to the transition of power. But it is equally urgent that all sides of the economic spectrum recognise that they have more in common — even economically — than what divides them.

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Other readables

  • A fascinating new paper in Nature overlays mobile phone-derived mobility data with coronavirus cases in big US cities to estimate where infections spread. The model, which accurately matches the overall local infection rates, presents two highly important findings for policy. First, some types of places are much more important for spreading infection than others, with the riskiest being restaurants, fitness centres, bars, hotels and religious establishments. Second, the degree to which mobility is reduced is at least as important in containing the contagion than how early it is reduced, suggesting lockdowns have to be strict to be effective. 

  • Meanwhile, Norwegian researchers have categorised actual infections among economically active people in Norway by the kind of work they do, to get at which activities contribute most to contagion. They find that in the first wave, health workers and transport workers (taxi, bus and tram drivers) had the highest risk of infection. In the second wave, in contrast, the riskiest jobs were bartenders, waiters and food service counter attendants, as well as taxi drivers and travel stewards. Importantly, teachers faced little more risk than the average worker.

Numbers news

  • The European Commission has downgraded its economic forecasts for next year, as the second wave of the Covid-19 pandemic will hit growth in Europe’s economies. Economics commissioner Paolo Gentiloni told the FT the EU may have to keep its fiscal rules suspended into 2022.

Bar chart of Forecast change in GDP (%) showing Pandemic's economic hit will be unevenly spread in Europe



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