Economics

L’argumentaire économique en faveur de Biden

Sep 21, 2020 Edmund S. Phelps

NEW YORK – Les commentateurs formulent de nombreuses raisons pour lesquelles il faudra au mois de novembre voter pour Joe Biden, le candidat démocrate à la présidentielle américaine. La dimension économique de l’élection semble en revanche peu intéresser ceux qui commentent, et rares sont les économistes qui se penchent sur le sujet en prenant soin de souligner combien l’issue influencera directement le bien-être économique des Américains. Or, c’est bien l’économie qui permet ou non aux citoyens d’espérer gagner en développement personnel et en satisfaction via la réussite. Elle n’est pas qu’une question d’argent.

L’argumentaire économique en faveur de Biden commence par l’argumentaire économique en défaveur du président Donald Trump. Prenons le cas des réductions d’impôts très coûteuses mises en place par Trump au profit des grandes sociétés. Ces mesures n’ont pas produit l’investissement et la croissance qui avaient été promis, avec en revanche pour effet principal le creusement des déficits budgétaires au cours des trois premières années de la présidence Trump.

La négligence de Trump à l’égard de cette dilapidation budgétaire crée un précédent, celui de possibles déficits inutiles sous les administrations futures (sachant bien entendu que le déficit enregistré plus récemment en réponse à la pandémie était inévitable, et bénéfique dans le contexte actuel).

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0 Comments on this paragraph, 26 Comments on this article

Roger Van Zanen Feb 8, 2021

The only question worth asking of any politician (Biden, Trump or anyone else) is: Are you creative? Ideology is the opposite of creativity and kicks creative thoughts to the curb. An ideologue's brain, like that of a jihadist, is incapable of creativity. All problems have a solution, but ideology is never the solution.
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Emily Andrews Sep 27, 2020

Ned Phelps makes cogent economic arguments against Trump and for Biden. I was distressed to see the number of comments above that did not understand this. For that reason, I fear that Phelps' logic will be lost on the American public.
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Janos Nagy Sep 27, 2020

Just laughable Biden and economics?
The only prosperity under biden 45 years 8 years as VP was selling out the workers and enriching China and his son with China's money.
Stronger unions? Just laughable
And most of all...Taxes are not an economic policy.
Taxes are for social economic benefits and not for income equalization.
The globalists Clinton Bush Obama/Biden created the biggest income inequality and now blame it on the capitalist system and of course on Trump
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JohnPS Gmodzel Sep 27, 2020

Not a direct comment on this article - just a question. Does this site host any contrarian writers to this point of view?
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Vincent Catalano Sep 26, 2020

I'm impressed. All the attack dogs are out conflating and connecting dots in Fox "News" style, suggesting motives and agendas of the author and those he is alleged to be beholden to. Looking for simple answers to complex problems.

I agree with all the criticisms Mr. Phelps has laid on Mr. Trump. What I would have liked to have read was a more direct analysis of what Mr. Biden's economic plan would be beyond restoring the economy to its former glory. That "former glory" was a large contributor to the rise of Trumpism.

The economic philosophy that underpins the western global economy is neoliberalism. Until a recognition that it is a central reason why its 40 year run has produced and contributed to the crises we have and, most importantly, what will replace it, we end up with suggestions and actions that do little more than fiddle around the edges and that does virtually nothing to resolve the problem of a fundamentally broken system.
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Ben Leet Sep 24, 2020

We have a workers' pay gap in the U.S., or call it severe income inequality. Biden said he'll be pro-union, and I suppose the PRO Act will be on his agenda, enabling workers to form unions and strike without losing their employment, as they could in the 1950s. He might seek to increase the Earned Income Tax Credit as well as raise the minimum to $15/hour which would affect 43 million workers, about a quarter of all workers. The Brookings Institute published "Meet the Low-Wage Workforce" showing that 1/6th of all workers earn below $7,500 a year, and then 2/6ths earn on average about $19,000. The median in 2018 was $32,838, that comprises 165 million workers, all workers, and is a Social Security Admin. data. The entire lower half earn on average less than $15,000 per year. It's hard to believe, 82 million all earning less than $32,838 with an average of $15,000, when the total national per capita "disposable income" (meaning after federal tax income) is $55,000 (a BEA (dot gov) data from Table 2.1), and per worker it's about -- $17 trillion divided by 165mn = over $100,000 per worker, average. The RAND Corporation last week published a study, "Income Trends from 1975 to 2018", and it stated that the average full-time year-round prime age worker earned $50,000 in 2018, and it could have been $92,000 had the wage growth kept pace with the total economy growth rate since 1975. Since 1975 that average grew from $42,000 to $50,000, and it could have grown from $42,000 to $92,000. Trump was going to fix that, but he hasn't and won't. It requires unions, higher minimum wage, and as a consequence the EITC boosts low income workers' income a little. Biden will try to create wage-led growth, good luck. The lower-earning 40% own almost nothing, and earn less than $20 an hour. That part of the economy needs a boost.
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Robert Davis Sep 24, 2020

Again, if the economy has been "virtually stagnant" since the 1970s, what impact did Biden have during his 8 years of VP to change this? Are there policies that he supported in the Obama administration that had an impact?
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Robert Davis Sep 24, 2020

Mr. Phelps, you fail to acknowledge that Biden was Vice President for 8 years and any achievements by him. What impact did he have in addressing the topics you discuss? While not President, what influence did he have on issues of wage, race inequality, global relations? Your article would be much more persuasive if any historical facts relating to these topics were included.
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ALAN MANAS Sep 24, 2020

When I read these articles by Phd's in economics I can only conclude that education and memorization do not teach you how to think. I was told by these "experts" that the economic policies of the Trump administration would not work. Then I was faced with global corporations building new plants and expanding manufacturing in the U.S. I was faced with black unemployment at record lows. How did this happen?

What are the economic plans of the democrats? The democrats get elected, like most politicians of both parties, by making promises that they have no idea or intention to keep. I didn't expect Trump to reduce immigration of unskilled workers into the United States. Of course, China and Singapore don't allow unregulated immigration of workers. Why is that? They must not understand how to create economic growth. The reduction of unskilled immigration was critical to creating the low black unemployment rate. Black citizens have been raped by both political parties, for different reasons, because of unskilled immigration.

I just finished a wonderful book, "Made in Germany," written in 1896, warning England of the rise of Germany and America and the coming economic fall of England due to "free trade." The strategies have not changed much. I also suggest reading "Bad Samaritans." It is free on the internet and is written by a brilliant professor of economic development at Oxford.
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Claudia Larsen Sep 23, 2020

Biden and Obama paid for the Friendship with foreign countries by indebting the US in Trade Deficit:
TOTAL US/China deficit between 2011 - 2017 - $2.36 Trillion

G7- -I 2009 - 2017 Trade imbalance.
Italy -$102,370,900,000
Germany -$527,244,500,000
France -$135,792,700,000
Canada -$306,208,100,000
Japan -$638,142,600,000
UK -$25,294,300,000
TOTAL - $1,635,052,800,000.
US Trade Deficit with Mexico
2001 - 2011 total = -$585,602,000,000.
Between 2012 - 2016 - -$359,000,000,000
That's almost 1 TRILLION DOLLARS
census.

It also displaced an estimated 682,900 U.S. jobs. Nearly all of the losses were in manufacturing.

Trump:
If this is what they plan to continue instead of this:
US Manufacturing Soars to 15-Month High: ISM August 3, 2020 Updated
The Epoch Times

Since Trump took office, the United States has added more than 10,000 new manufacturing establishments, as measured by the Quarterly Census of Employment and Wages. New York Times.

I am FROCED to vote for Trump.
- Ray Benton Sep 27, 2020
  
  Other than triggering a period of low inflation and moderation of prices for consumers, what do you think that means?
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- Janos Nagy Sep 27, 2020
  
  The estimate of some 680 thousand number of jobs killed is not even close someone forgot a zero at the and
  - Claudia Larsen Sep 27, 2020
    
    That was only a couple years after NAFTA was ratified. We're still losing jobs.
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Ted Peters Sep 23, 2020

What a surprise that someone located in NYC would criticise Trump for his tax cuts! New York's profligacy is epic and yet the quality of life there has become horrific. The NY politicians desperately need a federal bailout to pay off all the patronage they need to stay in power. What NY really needs is to go through a bankruptcy like Detroit did.
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Greg A Sep 23, 2020

"Biden knows about the crushing disparity in wages..." So if a scientist tells him to shut the economy down indefinitely, he says he'll do it. Poof everybody but the rich will be broke. Raise taxes on corporations and productive people, yeah that's the ticket! More regulations, you bet. The "scientists" recommendations are killing millions of mom and pop businesses to the benefit of corporations. Socialism has always been shown to enhance economies, hasn't it? Vote out all rats!
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j. von Hettlingen Sep 22, 2020

Edmund S. Phelps says despite Trump’s warning about Biden being “a Trojan horse for socialism,” and that Democrats were “wild-eye Marxists,” bringing chaos and socialism that would destroy the American way of life, more and more analysts believe Biden's economic proposals would create a faster growing economy, higher wages for American workers and reduce the debt compared to where the US is headed under Trump.
According to the author, “the economic case for Biden begins with the economic case against President Donald Trump. Consider Trump’s costly corporate tax cut. It did not deliver anything like the investment and growth he promised, and the main effect was to run up fiscal deficits in the first three years of his presidency.”
Trump’s sweeping tax cuts in 2017 – which the nation could not afford – had sent federal borrowing to skyrocket, leaving future administrations with trillion dollar deficits. Instead of investing in human resources and creating jobs, companies used their 2018 tax windfall to buy back shares to boost its stock price – one way corporations add value for shareholders.
His “misguided crusade to reduce the harmless trade deficit has shrunk world trade, thus worsening the efficiency of resource allocation at home and abroad.” Trump’s obsession with deficits overrides all other priorities – even national security considerations. It focuses only on America’s merchandise trade deficit while disregarding the services surplus, and it ignores that the overall US trade deficit is largely due to macroeconomic forces.
Trump’s “habitual threats to American businesses have added new uncertainty to investment and trade decisions. He practices Mussolini’s doctrine of corporatism: the government as puppet master pulling the strings of puppet companies. That economic policy inhibits enterprise and innovation at a time when they are desperately needed.” But politically he would rather emulate Russia’s system, a semi-authoritarian regime dominated by a single party, and economically, a neo-corporatist state run by oligarchs, and armed with the latest information technology.
Trump’s “populist rhetoric has not translated into better pay for less advantaged workers or victims of discrimination. He has sought to erase any sense of economic justice. He cares nothing about the appallingly low wage rates for those at the bottom or about the terrible living standards that these wages afford. And he has done nothing to support the eradication of statistical discrimination – racial, gender, and LGBT+. His weakening of the Affordable Care Act (Obamacare) has heavily affected people with low incomes.”
Meanwhile, Biden reaches out to the working class. His working-class roots make his empathy for these people more credible. He plans to focus on education, infrastructure and health care. This would significantly increase government spending, which would be financed in part by raising taxes mostly on higher-income Americans, but also by boosting wages and lowering health care costs. Biden would be likely to increase the capital gains tax for upper-income individuals.
Opponents point out that higher corporate tax rates would hurt earnings, and wealthy individuals would have less money to buy stocks if they pay more taxes. They also fear that more regulation, like potential restrictions on buybacks would have a negative impact on the stock market, due to less free cash flow as a result of higher corporate taxes. But they have forgotten that this “casino capitalism” – an economic system in which private businesses, especially banks, risk large amounts of money on investments, shares, etc. was responsible for the 2008 global financial crisis.
Since Trump has always insisted that climate change is “a hoax,” he “has put the world economy and the viability of the planet in further danger.” During his nearly four years in office, he has been more mendacious than truthful, dividing the nation with his controversial and inconsistent policies. It is no exaggeration to maintain that he is a Russian stooge, undermining America’s institutions. By lashing out at his intelligence agencies, bashing long-time allies, while siding with autocrats, he poses a threat to America’s national security and the global order it created.
No doubt Biden will seek to “restore the economy to its former glory.” For decades, Americans have been living with the virtual stagnation of the economy since the early 1970s (interrupted for about a decade by the Information Revolution). This continuing malaise lies behind wage earners’ increased frustration over their relative standing in wage distribution – a sentiment that, more than anything else, accounted for Trump’s rise.”
Yet it is a sisyphean task. Trump has inflicted much harm on the country, that it takes time to repair it. It remains to be seen how much Biden will achieve during his one-term tenure. Any discontent would only usher in a return of the Republicans in 2024, with Trumpism in their luggage.
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David Lentz Sep 22, 2020

Sadly Trump is getting control of the Supreme Court so they will throw the election to him. Then the republicans will make trump dictator. And then Trump once he has absolute power will tell the republicans he never knew them. It is so funny
Hilarious
Russia, China and USA will all have dictators for life
- Janos Nagy Sep 27, 2020
  
  But of course a good patriot king is lot better than any pretend sellout democrat like Biden
  Yes we understand that it's scary for the democrats that their mail in voting scam might not work because of the Supreme Court.
  God forbiden that election cheating is not allowed
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Nika Stadnik Sep 21, 2020

I live in another part of the world, and I wonder who the voters of America will choose this time. http://www.confiduss.com/en/jurisdictions/the-united-states/politics/
- Michael Public Sep 22, 2020
  
  You mean to say : who the voter of the swing states will chose this time.
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alex Finch Sep 21, 2020

Inequality won’t change under the Democrats. During the last 25 years, in most OECD countries, certain professions have gained much wealth and power. Doctors, lawyers, dentists, engineers, IT experts, union officials, school principals, government officials, ......the Upper 20%, They now earn more than ever before. This upper 20% control everything, but FROM THIS UPPER 20% half are Democrats and half are Republicans and each group carefully avoids stepping on the others toes. Hence, Nothing ever changes. In fact exactly this inequality is currently greater in Democrats states, where a „socialist“- Voting doctor might earn $200.000 a year.
- Michael Public Sep 22, 2020
  
  With progressive rates of taxation that socialist doctor does not take home $200 000 - far from it. If he was a capitalist he would advocate for a single rate of taxation for everyone and no spending on safety nets. The difference does not need to be in how much you earn, but in how much you are taxed and how it is spent.
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L’argumentaire économique en faveur de Biden

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