We are seeing noise on this. The present developing double health and economic crisis are changing the future direction of a potential Joe Biden presidency. The present is not just the pandemic, whose weight we are yet to fully comprehend. But we have yet to fully grasp the consequences to the economy which we humans can have more of an effect on. Joe Biden knows that his presidency will start under the weight of the worst economic crisis since the last Great Depression. In fact, it already makes the Great Recession look like a walk in the park.
His party, which still is a center-right party is starting to consider policies that are liberal in the mid-twentieth-century sense. The Neoliberal ideology of the last two generations is dead. It survived the Great Recession, will now be confined to the dustbin of history because it is no longer practical. The era of big government is back. We are in the midst of the greatest crisis in modern history. It is one pregnant with a lot of challenges, but also opportunities to remake the world.
For starters, the economic devastation is vast since we brought the global economy to a halt. economic reserves to deal with this are all but nonexistent, partially because we have developed an aversion to taxation in the United States. This problem is so severe that Jeff Bezos has paid no taxes for Amazon, and he is about to become a trillionaire. The ideological point is that he is a job producer, but he is not paying his way to maintain and expand the infrastructure his company uses.
This is troubling and we are at a moment when inequality is rife in the nation. It is at the deepest level since 1929, and this is not a coincidence. Policies under President Herbert Hoover were not unfamiliar to the modern-day Republican and some Democrats. Low taxation and no regulation is part of this economic ideology, which transfers wealth upwards, and makes the rest poor to destitute. Corporations, and their boards, continue to empty the treasury and transfer wealth upwards. This is leading to instability and is the basis for some of the anger across the land.
Most small businesses will not survive the present crisis. Partly, we are yet to hit the second wave of the virus. We will also experience local smaller rebounds that will need partial lockdowns to save lives. This is a reality that many people do not yet understand. We still hope that businesses will survive, and that includes those we love and go to regularly. They could make ir, if our government supported the people the way other governments are. This includes Universal Basic Income, which for ideological reasons the GOP is opposed to. Some in the Democratic Party are also opposed since they believe people prefer to sit at home instead of working.
The present support, somewhat generous by American standards, is teaching workers that we don’t pay them nearly enough. So we will need to also consider raising wages to living wages after the worst of the crisis has passed. This will allow people to buy stuff. Consumption is how the economy works. Though this also provides an opportunity to rethink the economy towards a more sustainable model. We need to consider how we reduce inequality and return hope to people, and make the American Dream a reality once again.
So, by the time Biden takes over the presidency we will be in the midst of a Great Depression, which will take some time to recover from. In fact, longer than the Great Recession. The economic landscape will be one of utter devastation across the nation. So far we have over 38 million unemployed and at least 42 percent of those jobs are not coming back. According to the New York Times:
“I hate to say it, but this is going to take longer and look grimmer than we thought,” Nicholas Bloom, an economist at Stanford University, said of the path to recovery.
Mr. Bloom is a co-author of an analysis that estimates 42 percent of recent layoffs will result in permanent job loss.
“Firms intend to hire these people back,” he said, referring to a recent survey of businesses by the Federal Reserve Bank of Atlanta. “But we know from the past that these aspirations often don’t turn out to be true.”
Because we are not supporting Americans the way other nations are, it will be deeper and will last longer. Ergo, the new administration will have to deal with the double whammy of a health crisis and an economic crisis.
The current administration is doing all the wrong things that will make trust harder. They are avoiding the medical steps necessary since it’s over. Also, if there are no tests, there are no sick people. Americans are letting us know they are not quite ready to go out to the stores. They would if the following was done:
- Proactive Testing to find the asymptomatic cases, up to 30 percent.
- Contact tracing.
- Isolation of those who are sick.
So what happens when Biden is sworn in? Well, the avowed centrist will have to go left, as far as the left is allowed in this country. Biden is already signaling that he understands this. They know that the range of policies needed to fix this mess were all but acceptable to the center of the party all but five weeks ago. Your evidence of this is things like statements from Biden, but also the bills that Democrats are passing in the House.
The third installment, which will likely die in the Republican Senate, is a three trillion package that includes a form of UBI. The Heroes Act still does not go fully to the extent needed, insofar as this would be a monthly payment for the duration. Other nations are doing this, but there is a discussion within the party of doing exactly this. Before the crisis this was not something even in the edges of the mainstream.
We know that Biden is looking at policies that are as radical as those of Franklin Delano Roosevelt, which was a transformative presidency. It is also a fact that FDR acted under the forces of history, and not ideology. It is starting to look like Biden is about to do the same. Why? The crisis demands it.
I fear that with the stubborn Republican Party that will seek to open the economy no matter the human cost,. Other nations are supporting their workers. This makes opening softly, or not, easier to do. It also means that their workers have money to spend on essentials, and even on some luxuries. And luxuries at this point may include a new set of headphones.
However, this will not be three years of stubborn ideological policymaking as it was after the 1929 crash. So at least that should shorten the time it takes to recover to maybe half a decade, maybe a decade. Biden will not see it through. This is a critical point. The other, we have an opportunity to remake the economy to serve all of us, not just a few. For this we will need to change our taxing policies, as well as our national spending priorities. Trump’s escape from the world stage will allow for some shifts. Perhaps that infrastructure spending will finally happen.
First things first, recovery will not happen until we either have a vaccine, or COVID burns though and survivors have immunity. How many people will die short of a vaccine is a good question, but if 1918 serves as a guide, that was about five percent of the global population. The reason why we have a question as to ho many died globally is that statistics were not carefully kept in places like China and India, or for that matter in Latin American countries. This time around we have better statistics. We are a world driven by data.
Some nations, such as Mexico, have chosen not to do widespread testing. And that is fodder for another piece since it is also ideological. The United States has not achieved the level of testing we need to be able to track disease outbreaks the way we should and we understand are needed. This also seems to be a policy from the present administration. After all, if we don’t test, we don’t get positive cases. And yes, President Donald Trump has said as much, in the lovely inarticulate way he loves to speak in.
So the new president will also have to enact solid public health measures for the nation with a single message, and I am positive Biden will listen to the experts. If the Democrats sweep the House, Senate, and White House, the funding necessary to run those policies will come. They are not just about public health. It will be a way to return some level of trust to the consumer to go out. We already have some evidence that the consumer does not have that trust to come to the stores. This is why Georgia seems to have fewer issues than we expected after its economy opened. This is not the case in Texas by the way. And after a few rebounds, or a deadly second wave, that trust will be even harder to achieve.