When trying to predict Joe Biden’s economic agenda, one must ask: Which Joe Biden are we talking about? If it’s the Biden who, in the primary, mocked young Bernie Sanders supporters as merely children who walk around with their heads down saying “Woe is me,” then a Biden presidency looks much like an extension of the Obama years. The operating logic of Obamaism toward younger radicals is simple: You’ll grow up, as we did.
But a new Biden has emerged, one who’s promised “the most progressive administration since FDR” and has no problem cynically using the economic destruction brought on by the coronavirus and state lockdowns as an opportunity to push a radical expansion of the welfare state. Biden has become rather impressionable for a 77-year-old. It’s hard to say whether this pivot is a product of self-convincing — that is, this period of history calls for an unabashedly left-wing president — or out of fear and desperation that he’s insufficiently exciting to garner enough youth turnout to defeat President Trump in November.
When speaking to both liberals and leftists who work in policy about what a Biden presidency may look like, a collective shrug emerges. “It’s hard to say.” “There’s some good and some bad.” Much of this is out of a general acknowledgment that nobody knows who will really be making policy, and that he’s never spent much time concerned about economics to begin with. Wonks on the Left will excitedly tell you about an Elizabeth Warren or Sanders adviser who is behind Biden’s climate change plan or point to myriad left-wing think tanks whose functional purpose is to staff the next Democratic administration. For the most passionate and orthodox leftists, the standard caveats apply: Biden’s not a self-proclaimed socialist, he doesn’t believe wage labor is an unfortunate and replaceable consequence of modernity, and his industrial policy doesn’t revolve around making America the leading exporter of guillotines.
Nor does Biden’s long career provide many clues. His two self-proclaimed greatest achievements during his time in the Senate had nothing to do with the economic well-being of Americans; Biden only really became a household name after earning a position on the Senate Foreign Relations Committee. Otherwise, even during the Democratic primary, he typically championed his work on passing the Violence Against Women Act and ensuring an assault weapons ban was included in the 1994 crime bill. Biden initially generated enthusiasm among Democratic voters during his first disastrous presidential run in 1988, mostly due to his relative youth and his role in the Robert Bork Supreme Court confirmation hearings. His second disastrous run in 2008 can best be remembered by his quixotic plan to break up Iraq into ethnic enclaves.
Most plans released by a presidential candidate are typically aspirational, and, in Biden’s case, relatively scarce compared to his former competitors Sanders or Warren. At the very least, these policy proposals typically serve as a gauge of a future president’s priorities. For both Sanders and Warren, that meant bleeding billionaires to provide “free” healthcare to everyone. In the primary, Biden’s time out of office served as an asset: There were no recent bills he had to co-sponsor to feign solidarity with the most left-wing members of his party, nor has he had to vote on a piece of legislation in roughly 12 years. Attacks on his Senate record seemed archaic and irrelevant. Attacks on his time as vice president meant undermining the legacy of Barack Obama, a certain death sentence in a Democratic primary.
Biden is fond of talking about his former boss, and Democrats adore crediting the generally strong economy under Trump’s first three years in office with the policies of his predecessor. Like Obama, a President Biden could enter office inheriting a GDP contraction and catastrophic unemployment rate not seen since the Great Depression. The subsequent recovery from the 2009 crash, or lack thereof, is instructive for how Biden and his advisers/surrogates will likely set expectations for the general public.
In the wake of the Great Recession, left-leaning economists and think tankers explained the anemic economic growth throughout the Obama years as the “new normal.” Stagnation would define the next decade (at least), they claimed, barring any sort of transformational technological innovation to improve productivity radically. Some economists and public intellectuals even surmised that humanity may have simply reached a plateau there as well. Larry Summers, the former treasury secretary who now serves as an adviser to Biden, hypothesized that the United States was in danger of a decadeslong period of essentially no GDP expansion unless the economy was radically restructured. In 2011, economist Paul Krugman argued the country was doomed to a “Japan-style era of high unemployment and low growth.”
Following Trump’s election in 2016, however, the economy saw near-3% annual GDP growth and one of the tightest labor markets in recent history. Suddenly, the success of the U.S. economy was an obvious payoff from eight years of Obama’s policies. Crediting Trump for rising wages and high labor participation would be a grave error, these same individuals said. The so-called “new normal” didn’t seem so bad after all.
Despite the recent calls from members of the Left, such as Rep. Ilhan Omar, to “dismantle” the country’s “systems of oppression,” Biden will be tasked with putting people back to work and somehow salvaging the remains of the country’s businesses following a record number of bankruptcies. Nothing in Biden’s proposed plans so far suggest he will be “dismantling” anything, but instead reverting to the economic policies of the Obama era.
Much of this is attributable to a simple lack of imagination. The liberal-to-left-wing toolkit follows a simple formula of cash transfers to the poor funded by the wealthy, who often work in industries, namely finance and tech, benefiting from some form of rent seeking or regulatory capture. It’s no coincidence that the wealthy, who can afford a modest increase in income and capital gains taxes, have no problem donating to Democrats every election cycle while your average small businessman groans at the prospect of a new regulatory regime. As long as top-line growth remains consistent, no matter how mediocre it may be, Democrats are content with increasing welfare to subsidize the incomes of much of the country in place of the higher wages that a healthy economy would normally provide.
Understanding the voting base of the Democratic Party is important here as well. The new government subsidies at the top of the Democratic agenda will likely target two struggling groups in particular: black people and the professional middle class. For the former, Democrats in Congress will try to pass more funding for government-backed small-business loans and housing vouchers for minorities; they’ll pursue some form of free college and childcare for urban whites. None of these policies actually address the underlying issues facing either demographic — housing remaining overpriced in many cities or the two-income trap leading many young professionals to believe that they’re working more for less pay — but these new handouts will at least create the impression that Democrats feel their pain. Just as Obamacare did nothing to curb the rise in costs or the fundamental market inefficiencies in healthcare, these programs will mask the underlying causes of economic distress while also making them politically impossible to repeal.
For the reform-minded conservative, there are a handful of encouraging signs from Biden. Most notably, his $700 billion “buy American” program is a serious recognition that a new and comprehensive domestic industrial policy to compete with China will require significant government investment for reshoring key manufacturing supply chains. Although the price tag may make fiscal conservatives queasy, there is good reason to believe America’s lack of ability to compete in key technological sectors constitutes not just an economic crisis, but one of national security. The release of the plan was a transparent effort to beat Trump at his own game, economic nationalism, so the question of whether Biden remains sincere about stimulating domestic manufacturing remains open.
This is, after all, the same man who, in one of his first speeches on the campaign trail, downplayed the threat of China and said “they’re not competition for us.” Earlier this month, Biden’s campaign had to walk back his pledge to eliminate all of Trump’s tariffs against China. Biden’s explanation for a unilateral surrender in the current trade war was that tariffs are the “wrong way” to curb China’s growing economic dominance. True or not, Biden consistently implies that his positive relationship with Xi Jinping can help reduce tensions between the two countries and that any other disputes can be handled through international institutions such as the World Trade Organization. China, to paraphrase Biden, is a potential partner, not the threat to the West xenophobic Republicans make it out to be.
Democrats will likely only have the opportunity to pass three to four pieces of major legislation before the 2022 midterm elections. Given Biden’s self-confidence in his ability to smooth things over with world leaders, it’s safe to assume any bill that confronts China’s aggression will take a backseat to things that more readily play to his party’s base. The political capital necessary to pass a $700 billion domestic spending package could easily be spent elsewhere, such as dramatically expanding voting rights, a hyperliberal Supreme Court justice, or handing citizenship to millions of illegal aliens.
Should Democrats control both chambers of Congress and the presidency come January 2021, there will be a strong temptation to nuke the filibuster and push through every item on Rep. Alexandria Ocasio-Cortez’s wish list. To be sure, Biden will need a few symbolic and left-wing victories early on in his presidency, lest he risk a revolt within the Democratic Party. But in choosing which victories will be when, Biden decides how he wants to define his presidency. The problem with actually governing is that voters know who is responsible for the country’s decisions at the end of the day.
As his former boss quickly learned, it’s far easier to blame the opposition for the country’s economic malaise than bothering to compromise or modify your agenda. Biden, like Obama, will also benefit from a media and academic environment dedicated to defending any slow recovery as a consequence of historical forces or an obstinate Republican Party. Getting the economy back to where it was at the beginning of 2020 will be one of the hardest tasks any president in modern times has faced. The alternative is pressing for Washington, D.C., and Puerto Rico statehood or outlawing AR-15s. For Biden, the choice couldn’t be more obvious.
Joseph Simonson is a political reporter for the Washington Examiner.
