As President Biden reaches the 100-day mark of his first term, we can discern two prominent features of the new administration.
The first is that, when it comes to non-defense spending in the federal budget and non-defense related appointments, progressives have been pleasantly surprised. Biden’s Covid relief bill, the American Rescue Plan, included growth in a slew of social programs, from expanded unemployment insurance to a beefed-up child tax credit, direct temporary payments, and assistance for food and housing. The people advising Biden in the White House include Cecilia Rouse, Bharat Ramamurti, Jared Bernstein and Heather Boushey, who have demonstrated support for a progressive economic direction.
And, the administration has been subject to pressure from Democrats in the Senate on a variety of matters relating to foreign policy. Examples include pleas for relaxation of intellectual property rights that are hampering India’s ability to cope with an explosion of Covid-19 cases, and calls to withdraw support for Saudi Arabia’s slaughter of Yemenis. That is not to say Biden has yet to move much beyond the Obama administration, only that the pressure from Democrats is now coming from the left, not just the center.
Before Biden took office, these developments might have seemed less plausible in light of the narrowness of the Democrats’ majorities in both the House and the Senate, but that narrowness has proven to come with some offsetting influences.
Holding a razor thin majority in the Senate has promoted unity and discipline in the Democrats’ caucuses, which tend to afford centrist Democrats less leeway to perform their traditional rites of conservative independence. The fact that Republicans retain strong institutional support from the Supreme Court, Trump’s federal judges, the Electoral College and gerrymandered state legislatures has made the political stakes clear, illustrating that Democrats cannot afford to lose another election. This has helped motivate Biden’s party to undertake action that under other circumstances might have been written off as too bold or moving too fast.
Yet despite their structural advantages, it’s also the case that Republicans have weakened their position in two ways. By indulging the riotous (and deeply discrediting) demonstration at the U.S. Capitol on January 6, as well as the patently absurd noises coming out of Reps. Marjorie Taylor Greene, Lauren Boebert and their co-thinkers, the GOP has proven itself a party more interested in extremism than governing. The other self-inflicted wound is that, by indicating no interest at all in any sort of bipartisan deals on legislation, Republicans have just encouraged Democrats to go their own way. Why pretend to seek compromise with those who a) condone lunacy, or b) betray no interest in compromise?
The pretty good
The upshot for progressives in all this has been a lot of good stuff in the non-defense component of Biden’s federal budget, including the embrace of a children’s allowance, and all manner of other initiatives in the name of pandemic relief and economic stimulus, with hardly a whisper about the formerly feared specter of the national debt. Biden’s proposed budget includes increases for education, social services, science and the environment. And his infrastructure proposals, the American Jobs Plan and American Families Plan, contain a host of progressive priorities, from investments in affordable housing to paid family leave.
These shifts to the left haven’t been borne solely out of a personal transformation by Biden. Rather, tireless organizing by progressive groups outside the halls of power has helped pull the administration toward bolder action, especially on issues around climate. And a leftward tilt within the Democratic caucus on economics, led by progressives such as Sens. Bernie Sanders and Elizabeth Warren, has helped spur the administration’s openness to big spending packages.
The expansion of deficit spending tends to give rise to tight labor markets, which is the source of upward pressure on wages. I’ve argued before that this is the most important issue in public policy. What does a tight labor market look like? It looks like employers complaining about an inability to attract job applicants. It looks like bosses offering people bonuses just to show up for job interviews. Both of these dynamics are now coming into play. Workers of course need other help too, especially in the realm of union organizing rights as would be provided by the PRO Act, but this is still a very good development.
The openness to deficit spending reflects an important turn in thinking about economic policy. For those interested in the underlying, arcane theoretical issues involved, John Jay College Associate Professor of Economics Josh Mason wrote a well-regarded review of the subject. In a nutshell, the new turn in policy reflects a de-emphasis on “supply-side” factors such as labor force participation and savings, towards more attention to the “demand side,” which simply means spending by households, governments and business firms. When the economy is below full employment — and it is still way below it — more spending begets still more spending, along with employment.
My qualification to the enthusiasm on the Left is that there has yet to be a parallel revolution in economic theory. As John Maynard Keynes said in his landmark “General Theory of Employment, Interest, and Money,” economic theory from obscure scribblers eventually ends up in the mouths of those with actual responsibilities for policymaking — so it matters.
For all the welcome empirical research by economists on the minimum wage, non-competitive labor market conditions, unionization and the absence of a link between deficit spending and inflation, there is no parallel rise of a theoretical leadership. The New York Times’ columnist Paul Krugman, scourge of Bernie Sanders’ presidential campaigns, ain’t it. He is often on progressives’ side, but is usually bringing up the rear. The so-called Modern Monetary Theory is successful as an academic school of thought, but its tribunes have yet to be welcomed into the new administration. The vacuum in theoretical leadership means that in the future, we could again be plagued with the same bad arguments about the perils of deficits.
The not so good
On foreign policy, the pickings for progressives are slimmer. In a recent interview, thinker Noam Chomsky, who has a strong reputation for being right about basically everything, described the current posture of the Biden administration as “dangerous.”
Two of the most important issues now facing the country are: re-entering the nuclear deal with Iran to prevent a nuclear catastrophe, and waging a full-court press on behalf of India and under-developed countries as they struggle with the still raging pandemic.
While Biden has promised to reinstate the agreement with Iran, the administration appears to be slow walking the process, evidently for the sake of gaining some advantage. The case for pressuring Iran on “weapons of mass destruction” — shades of the Iraqi campaigns of the 1990s carried out by another Democratic president — was always fallacious. The concern was never really over any threats to use such weapons against the United States, which would lead to Iran’s annihilation — something the Iranian government could not fail to understand. Rather, it has been about curbing Iran’s political sway in the region, for the sake of Israel and other U.S. allies.
The situation in India, with the virus rapidly spreading and deaths skyrocketing, might be likened to a potential holocaust. Some might blanch at that expression, but when potentially tens of millions of lives are at risk due to policy misfeasance (Trump), malfeasance (the Modi regime), and nonfeasance (Biden), I fail to see how the language could be too strong.
Former President Trump’s protectionist instincts led him to embrace policies that hampered exports of vaccines to countries such as India.
Biden has been susceptible to Trump’s vaccine hoarding impulses as well, though he has lately shown some flexibility, allowing the shipment of certain Covid-19 treatments and materials to India. There is still much more to do in the matter of intellectual property restrictions that constrain vaccine production and distribution outside of the United States.
In our own hemisphere, the Biden administration has shown a stubborn insistence on supporting an unelected leader of Venezuela, Juan Guaido, over the democratically elected President Nicolas Maduro. Biden’s moves so far also show little sign of a thaw in relations with Cuba, displaying some retreat from the Obama administration.
Still, there are some glimmers of hope. Some action has been taken to curb Saudi Arabia’s bombardment of Yemen, though the administration could go further to stop the war. Biden announced a withdrawal of U.S. troops from Afghanistan (albeit by September). And there is the shift mentioned above in commitment to come to the aid of India, with Biden promising to deploy additional supplies to the country including therapeutics, test kits and ventilators.
When it comes to Biden’s defense budget proposal, the fact that it includes an increase means it’s a step in the wrong direction. However, an increase of 1.6% (as Biden proposes) is what advocates of non-defense spending describe as “flat funding,” i.e. given expectations of modest inflation, it amounts to little or no real increase. What’s really at issue is not a misguided increase — it’s a failure to cut the defense budget.
Then there’s the issue of immigration, where Biden has disappointed many progressives by failing to rescind all Trump-era restrictions, and not opening the border to more migrants, while also keeping the current broken system in place. We should expect more pressure on the administration to ramp up from activists in the coming months.
What lies ahead
In general, our narrow escape from the threat of a neo-fascist consolidation of power has, so far, brought greater returns than expected. It could hardly be otherwise. Democratic leaders would have to be fools to fail to realize that if they don’t deliver the goods, their party could be consigned to permanent minority status. Similar collapses at the state level would follow, and the United States would be a very different place.
For now though, we have some space to breathe, even as more fights loom. Time in this struggle is limited, so none should be wasted.
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Max B. Sawicky is a retired economist and writer in Virginia. He is a Senior Research Fellow at the Center for Economic and Policy Research.