Wednesday, September 16, 2020

Three Musts for the Biden Economic Plan

1. Talk about it more.

2. Go big

3. Go fast

It does seem like in the process of presenting himself as a sane alternative to Trump and reacting to his various daily outrages, Biden's economic plan is getting a bit lost. That's not so good because it really does need to be front and center with the groundwork laid for fast, effective action once he gets into office. Three articles attack these three points.

1. Talk about it more.

John Cassidy on The New Yorker site:

"As the Democratic Party increasingly becomes the party of highly educated voters who are horrified by Trump’s daily outrages, it also needs to attract working-class voters who perhaps don’t follow politics as closely. I’m talking about working-class Black voters in places like Philadelphia and Milwaukee, working-class Hispanic voters in places like Florida and Nevada, and working-class white voters in places like western Pennsylvania, Michigan, and Wisconsin.

Members of the working class have borne the brunt of wage stagnation, globalization, technological change, the private health-care system, and, most recently, the coronavirus pandemic. “They are looking for a leader who will make big changes in health care, fight for working people over big business, and unite the country to defeat the current economic and public-health crisis,” Stan Greenberg, the veteran Democratic pollster, wrote in an article for The American Prospect, last week. In this passage, Greenberg was referring specifically to white working-class voters, whom he has been studying in focus groups and through surveys. But he pointed out that economic concerns and anger at the political establishment also runs “deep into the Democratic base of Blacks, Hispanics, unmarried women, and millennials, too.”...

Biden gave a series of speeches back in July in which he laid out his economic agenda. And last week, in Dunmore, Pennsylvania, he unveiled a series of proposals to boost American manufacturing. But in this addled news climate, policy proposals rarely get the coverage they deserve in the venues that most voters rely on—television and online-news feeds. To break through the cacophony of Trump noise, Biden, Harris, and other Democrats need to be out there every day ballyhooing their spending plans, as well as other proposals that wouldn’t affect the federal budget but that would boost the budgets of working families.

The Biden-Harris ticket wants to guarantee all Americans twelve weeks of paid medical and family leave. It would increase the national minimum wage to fifteen dollars an hour, which would have a big impact on low-paid workers in places like Pennsylvania and Texas, where the hourly minimum is currently just $7.25; in Florida, where its $8.56; and in Ohio, where its $8.70. Biden’s agenda includes an expansion of home and community-based care for the elderly, and provisions to insure that, as the number of caregivers increases, they are well-paid and have the right to join a labor union. He has also vowed to strengthen labor laws and unions more broadly. Among other things, he supports the Protecting the Right to Organize Act, which the Democrat-controlled House of Representatives passed in 2019. Legislative changes of this type would take a while to have a macroeconomic impact. Over time, though, restoring some of the bargaining power that workers have lost in recent decades could help raise wages and reduce inequality."

2. Go big.

One critical danger Biden will face if he gets into office is going too small on his plans. They'll be plenty of pressure on him to scale back his plans, be responsible, don't blow up the deficit, etc. That would be a big, big mistake, as the Obama administration found out. From an article by Ben White on Politico:

"President Barack Obama entered the White House in 2009 during a brutal recession, quickly pushed through a sizable stimulus package and then spent the next several years realizing it wasn’t nearly big enough.

Joe Biden is determined not to have the same regrets if he wins.

The Democratic nominee and former vice president is surrounding himself with a more aggressive cadre of economic advisers who lean toward the liberal wing of the party, one that has itself moved significantly to the left since 2009 and shed most of its concern with appeasing budget hawks and Wall Street bankers who tend to worry about soaring deficits....

“The idea that the U.S. faces any major risk from our debt burden is simply wrong,” said Dean Baker, senior economist at the Center for Economic Policy and Research and a frequent critic of the size of Obama’s 2009 stimulus bill. “If for some reason private investors became more reluctant to hold U.S. debt, the Fed could simply step in and buy it. If the U.S. is struggling to recover from this recession, there is no reason to be concerned about running large deficits.”

Baker added that he was pleased for the most part with the makeup of Biden’s economic advisory team and suggested that any stimulus bill should be around 4 to 5 percent of annual GDP or around $1 trillion per year.

“As a group these people are pretty progressive and at the very least they will have his ear. Whether they carry the day in arguments or not who knows,” Baker said. “But Biden was there under Obama and I think he recognizes what is universally recognized among Democrats that they made a really big mistake in not getting more.”...

“People recognize that we are going to need a significant magnitude of investment,” said [Jake] Sullivan, Biden’s policy adviser. “That’s not to say the GOP wouldn’t try and resist, and all of a sudden put on their green eyeshades again on spending. But the realities today, in terms of what can be invested to get back to full employment, are just different than they were back in 2009.”

3. Go fast.

This is much more important thank people think and could well determine whether the Democrats (and the country) sink or swim after the election. My old friend Harold Meyerson does a great job explaining why in an article on The American Prospect site.

"At first glance, both the Roosevelt and Obama precedents appear to offer the same lesson: Increased federal spending that creates jobs is the way to climb out of a catastrophic economic hole. At second glance, however, the two presidents’ policies differ significantly. Each initially sought to revive the economy by investing in long-overdue projects: Roosevelt in dams and other power-generating projects to create long-term improvements in the economies of the South and the West; Obama in clean energy and other new infrastructure investments that would downsize America’s immense carbon footprint.

Both these initiatives, however, took time to put in place; neither generated a large number of jobs very quickly. Six months into his presidency, Roosevelt realized this, and transferred some of his stimulus funding to basic construction and maintenance projects that generated nearly four million jobs in the subsequent four months (this in a nation of just 125 million people). The Obama administration, by contrast, never found a way to generate employment swiftly, save through providing funds to state and local governments to keep public employees on the job. This divergence in economic policy led to a divergence in political power. In the midterm election that followed FDR’s success in job creation, the Democrats actually increased their numbers in Congress—one of just two times the party of a newly elected president has won midterm gains. In the midterm election of 2010, however, the Democrats lost both houses of Congress (including a modern record loss of 63 seats in the House), and to this day have yet to regain both in the same session.

Like Roosevelt and Obama, Joe Biden has put forth ambitious, progressive plans to increase investment and employment in ways that would produce permanent changes in the nation’s economy. His plans for infrastructure investment, greening the economy, and boosting the caregiving sector for children and seniors are versions of ideas that had been incubating for years in liberal think tanks and activist groups. Each plan, if funded at the levels that Biden has called for, would boost aggregate employment over time. Whether they boost employment quickly enough to significantly reduce the nation’s massive level of unemployment, however, depends on Biden and the Democrats’ ability to proceed with Rooseveltian speed. That, in turn, will likely determine whether the Democrats’ hold on power and policymaking is a long-term endeavor or a two-year blip that paves the way for the next Trump....

The [New Deal Civil Works Administration] began operations on November 9 and, working with governors and mayors (and in 1933, not even Republican politicians turned down federally funded job projects), had put 4.3 million unemployed Americans to work by the following February on 180,000 small-scale projects. That 4.3 million amounted to 3.4 percent of the nation’s population of 125 million; an equivalent percentage of today’s population would come to 11.2 million. Most of the jobs created required only the use of shovels and pickaxes; the CWA’s workers paved airport runways and the roads connecting farms to market, built playgrounds, and constructed or made improvements to 40,000 schools.

The CWA was conceived as a one-winter-only emergency project, but in 1935, it was reconceived as the Works Progress Administration, which through the remainder of the decade employed millions more on kindred projects.

COULD A BIDEN administration create a 21st-century equivalent of the CWA? It would, of course, have to deal with the high levels of unemployment by enacting the $600 weekly federal supplement to unemployment insurance that the Trump administration and congressional Republicans have refused to renew. But it will be no less urgent—economically and politically—to lower the unemployment rate with federally funded jobs.

A number of Obama veterans have recognized the need to create jobs more quickly this time around. Writing in The Nation, Pollin, who worked with the Department of Transportation on the green investments in the Obama stimulus, noted that this time, “we need to identify the subgroup of green investment projects that can realistically roll into action at scale within a matter of months. One good example would be to undertake energy-efficient retrofits of all public and commercial buildings … The administrative issues around mounting such projects could begin today. The on-site work could then begin on the first day that it is safe to do so.”

In his study for the Sierra Club, Pollin estimates that the Biden plan’s suggested funding for retrofitting buildings would create 757,000 jobs per year—and of all the 11.6 million jobs that Pollin estimates the Biden plan could create, those retrofitting jobs are perhaps the first that an Obama administration could successfully create. That’s both a lot of jobs and nowhere near enough, given the staggering levels of joblessness a Democratic administration is sure to inherit.

The severity of that problem should require the administration to cut much of the red tape that would slow down its job creation. One way to do that would be to put some of those new jobs directly on the federal payroll, rather than send funds to the states to establish the very same job-creating projects, for which they’d have to constantly check with the feds to ensure that they were meeting the federal criteria. The CWA and WPA worked with state and local governments to identify needs and get sign-offs, but by reserving for themselves the role of direct employer, they sped the process along.

Another time-saver would be to shorten some of the good-government processes that delay projects’ implementation. There’d be no small irony, I acknowledge, in limiting the time prescribed for an environmental-impact report on a clean-energy project, but that may be what the administration needs to do to pull the economy back from the abyss—and to ensure that clean energy isn’t short-circuited by the right wing returning to power in two or four years.

What all this means is that the Biden campaign’s policy wing, and the liberal infrastructure that has helped inform it, needs to be working now not only on policies that will create a more thriving and egalitarian economy, but on those which can be made to thrive in the shortest amount of time. That’s no easy task, but one that both the economy and the nation’s political future demand."

https://www.newyorker.com/…/broadcasting-joe-bidens-economi…

https://prospect.org/…/heres-how-joe-biden-could-revive-th…/

https://www.politico.com/…/biden-economics-obama-stimulus-4…

POLITICO.COM
The former vice president surrounds himself with a cadre of left-leaning economic advisers, a reflection of a policy approach seen as more progressive than during the last recession.

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