Biden’s debut was a homage to FDR. Now he needs to learn from Reagan
2012: Biden and Clinton (PA Images)
Joe Biden is not exactly shy about the claims he is making for his multi-trillion public spending programme. Not content with name-checking Franklin Delano Roosevelt at every opportunity, the President claims to have already outdone FDR’s New Deal by creating more jobs — 1.3 million of them — in his first 100 days than anyone in history. Following this week’s triumphant address to Congress, he moved on to Georgia — a key Southern state that swung to the Democrats last November and thereby enabled him to get his measures past the Senate. Biden told a rally in Duluth: “You began to change America, you’re helping us prove that democracy can still deliver for the people. All America wants to thank you.” What he meant, of course, is that Americans should be thanking him.
Gratitude, it is true, is usually forthcoming from the beneficiaries of other people’s taxes — and the numbers in this cascade of borrowed money are indeed staggering. Following last month’s $1.9 trillion Pandemic Relief Act (already enacted) and the $2.3 trillion American Jobs Plan (still held up by Republican opposition), the President is now banging the drum for his $1.8 trillion American Families Plan. Given that he inherited a budget deficit that has doubled due to the pandemic and is now running at well over $3 billion a year, the federal debt is likely to soar during the first year of the Biden Administration to levels far beyond those incurred by FDR to overcome the Depression and the Second World War. Curiously, the President did not boast about being the biggest spender in the history of the United States.
What will this huge cheque drawn on posterity be spent on? The details are vague but the emphasis is on infrastructure and blue collar jobs. Both are, of course, popular — heaven forbid that anyone should use the word “populist”, reserved for Donald Trump and his dwindling band of brothers — but it is less clear that these packages will deliver long-term growth. They are based on demand management, the mantra of Keynesian economics which emerged as a solution to the mass unemployment of the 1930s. Critics argue that such old-fashioned policies did not work then and won’t work now. The risk is that much of this largesse will be diverted locally into “pork barrel” programmes that are more about partisan politics than the national interest.
In any case, the greatest challenge facing the US is not mass unemployment. As lockdowns are lifted and the economy reopens, the rate was already falling and is currently six per cent. This hardly compares with the jobless total in 1933, which peaked at more than 25 per cent even after the New Deal had begun to take effect. Despite years of record public spending, unemployment remained stubbornly high. It was still in double figures until Europe was engulfed by World War Two and rearmament created millions of jobs. Roosevelt’s famous “arsenal of democracy” speech came in December 1940, just after he was re-elected for an unprecedented third term. It was war, not “big government”, that ended the Depression.
Joe Biden has yet to announce a major programme of rearmament, but with the threat from China growing by the day, it is only a matter of time before he follows the example of FDR in this respect, too. However, it is a couple of more recent past Presidents who should now be drawing his attention away from yet more stimulus packages to raising productivity by supply side measures: Ronald Reagan and Bill Clinton.
Reagan was, of course, a Republican and Joe Biden was among his fiercest critics in the Senate. In 1983, as Gerard Baker reminds us, Biden responded to Reagan’s State of the Union address on behalf of the Democrats. His proposals then were exactly the same as the programme he is now putting into practice: Keynesian economics, big government and higher taxes. That programme bombed in the 1984 election, when the late Walter Mondale was trounced in 49 out of 50 states — the largest landslide in US history.
No, it was Reagan’s free market, supply side economics that turned the 1980s into a golden age of prosperity. Deregulation, privatisation (pioneered in Britain by his friend Margaret Thatcher), low taxes and new technologies created the Reagan boom. It lasted for a decade until Reagan’s successor, George Bush Senior, was punished by the electorate for breaking his promise of “no new taxes”. But Bill Clinton stole the Republicans’ clothes and, like Tony Blair in Britain, presided over another remarkable era of growth by a judicious mix of free enterprise and state intervention, then known as the Third Way.
It is this legacy — both the Reagan and the Clinton eras — that Biden should be re-examining if he wishes to be remembered with gratitude by America. His fixation on Roosevelt and the New Deal is understandable but misplaced. As a Senate veteran who has made a point of bipartisanship, and as the most geriatric President in history, he needs to prove that he is not too old a dog to learn new tricks. Joe Biden was born in 1942, when Roosevelt was still in office; he was older when he entered the White House than Reagan was when he left it. He is four years older than Bill Clinton. The 46th President could do worse than invite the 42nd to the White House — and listen to his advice.
After Biden’s address to Congress this week, Senator Tim Scott, a black Republican and a leading moderate, commented: “Our President seems like a good man, but our nation is starving for more than empty platitudes.” If Biden does not want this to be his epitaph, he needs to reach across the political divide and listen to the ideas of supply-siders, neoconservatives and classical liberals. And he needs to do it now, before the inevitable polarisation that precedes the mid-term elections turns him into a prisoner of his own party’s slogans and shibboleths. Joe Biden’s debut has been a homage to FDR. Now he needs to learn from Reagan and Clinton, too.
A Message from TheArticle
We are the only publication that’s committed to covering every angle. We have an important contribution to make, one that’s needed now more than ever, and we need your help to continue publishing throughout the pandemic. So please, make a donation.
