Joe Biden has surprised friends and foes. He was seen during the election as a cautious centrist, whose Trump-imposed nickname "Sleepy Joe" captured a sense that America might elect a time-server, a cautious, safe 78-year-old to allow the country recover from the previous administration. But the US president has instead proved, within scarcely two months, to be an energetic and ambitious progressive who has begun to reshape the US, specifically the role of the state in a fundamental rebalancing of the market economy. Comparisons with Lyndon Johnson's 1960s Big Society and Franklin D Roosevelt's New Deal programmes are already being made.
That ambition may have been necessitated by the coronavirus crisis, but its eye-watering scope has gone far beyond the immediate demands of recovery. Biden wants the €1.6 trillion pandemic economic stimulus bill passed by Congress to be followed by an infrastructure and education package of €2.5 trillion. To pay for that, he wants sweeping tax reform, aiming at raising as much as €2 trillion over 15 years. That includes bumping the corporate tax rate to 28 per cent from 21 per cent, imposing a strict minimum tax on global profits and, Ireland notes nervously, cracking down on companies that move profits offshore.
Congress’s debate over what Republicans see as overreach and creeping socialism has focussed on evolving definitions of “infrastructure”. Their leader, Senator Mitch McConnell, has railed at a “Trojan horse”. “It’s called infrastructure. But inside the Trojan horse is going to be more borrowed money and massive tax increases.”
The right cries foul at Biden’s redefinition of economic assets to encompass anything that support and enable economic activity – with or without an economic return. But it makes opposing popular Biden programmes that bit more difficult.
In the New Deal era policymakers sparred over whether universal access to electricity was necessary public infrastructure. And in a fast-changing economy, it is difficult even for Republicans to argue that broadband access, electric car charging stations, or care facilities for the old are not essential enablers of economic efficiency and growth.
Economics must serve politics, not the other way round. Biden’s administration is defined by the fear that the government isn’t doing enough, not that it’s doing too much, as commentator Joe Klein observes. Taking the long view, “Biden’s audacity…. must be measured against the dismal results of the politics of inaction,” Philip Stephens argues in the Financial Times. “Democracy is under siege because its elites have allowed unfettered markets to ride roughshod over the postwar social contract, leaving voters trapped in a lethal equilibrium of low growth and rising inequality.” Europe’s leaders need to take note.