Socialist Worker

Biden’s economic shift boosts bosses

by Alex Callinicos
Issue No. 2751

Joe Biden campaigning for presidency in North Charleston

Joe Biden campaigning for presidency in North Charleston (Pic: stingrayschuller/flickr)


Joe Biden, a veteran Democratic Party politician, was generally seen as the continuity candidate when he ran successfully for the presidency of the United States. “Continuity” here means with the previous Democratic administrations of Bill Clinton and Barack Obama.

They used Washington’s muscle to promote neoliberalism globally and to maintain US hegemony. And certainly Biden’s cabinet is packed full of veterans of these administrations, including many hawks who thought Obama was too reluctant to take military action. Biden is indeed pursuing business as usual in, for example, slapping more sanctions on Russia. But he is also deviating from the Clinton-Obama template.

Most obviously, he has announced he will pull US troops out of Afghanistan before the 20th anniversary of the 9/11 attacks. Resistance from the Pentagon stopped Obama or indeed Donald Trump from taking this step.

But the most significant shift is in economic strategy. Biden has followed up his $1.9 trillion “American Rescue Plan”— extra spending financed by borrowing— by announcing a $2 trillion “American Jobs Plan.”

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One commentator tweeted, “The era of ‘the era of big government is over’ is over”, 40 years after Ronald Reagan opened it. In an interview with the New York Times, Brian Deese, director of Biden’s National Economic Council, outlined three changes since Obama took office that led to this shift.

The first is climate change, which is driving the infrastructure programme.

Secondly, Deese says, “Our economy is becoming more unequal.” This is interesting because neither Clinton nor Obama gave the impression of caring much about neoliberal policies widening inequality This shift probably partly reflects the impact of Bernie Sanders, left-wing Congresswomen such as Alexandria Ocasio-Cortez, and their young supporters in pulling Democrats such as Biden leftwards.

But it is also a response to the polarisation of US society under Trump. Biden says, “The plan prioritises addressing long-standing and persistent racial injustice. The plan targets 40 percent of the benefits of climate and clean infrastructure investments to disadvantaged communities.”

Competitors

Thirdly, according to Deese, “China is in a very different place than it was a decade ago. We are in a different place vis-à-vis our international competitors.

“And my openness to more targeted efforts to try to build domestic industrial-strength … has increased, because I think we are not operating on a level playing field.

“There’s not a market-based solution to try to address some of the big weaknesses that we’re seeing open up in our economy when we’re dealing with competitors like China that are not operating on market-based terms.”

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This makes it clear that Biden aims to use state intervention to revamp US imperialism in the face of China, which Deese calls “the ascendant economic and military power in the world”. Biden says the infrastructure plan “will unify and mobilise the country to meet the great challenges of our time, the climate crisis and the ambitions of an autocratic China.”

But Trump clashed with the US’s most important ally, the European Union. One major issue has been European proposals to impose digital taxes on the giant US IT corporations, the so-called FAANGs (Facebook, Amazon, Apple, Netflix, and Google).

Trump defended them, as had Obama before him because the FAANGs are the most profitable sector of US capitalism. But they are also blatant and massive tax avoiders.

Biden has now proposed an international agreement on a uniform 21 percent global corporation tax. This would reduce the drain of US corporate profits to tax havens such as southern Ireland and thus generate the revenue needed to finance the infrastructure programme.

However it may also reduce European pressure for digital taxes, and therefore make it easier for Washington to bridge together Western capitalism against Chinese competition.

It’s a very open question whether any of this will work.

The economic historian Adam Tooze, who has been exploring the ideological shift in Washington, thinks the eight-year infrastructure plan is too modest to have the necessary impact. But it looks as if we may have underestimated Biden’s ambition.


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