Adam Tooze on the Biden administration

For some Joe Biden has already exceeded expectations. For others his economic program is nowhere near enough to address the climate crisis and American decline.  While his Covid relief package has seen billions dispensed immediately, the Jobs Plan proposes to invest $35 billion in green R&D over eight years – less than Americans spend annually on pet food. 

So how radical is President Biden? Is there such a thing as ‘Bidenomics’?  And does the new President represent a break with the orthodoxy of Democrat predecessors such as Bill Clinton and Barack Obama?

Discussing all those questions on the UK’s Downstream with Aaron Bastani is Adam Tooze, Professor at Columbia University.

He is the author of The Deluge: The Great War, America and the Remaking of Global Order, 1916-1931; The Wages of Destruction: the Making and Breaking of the Nazi Economy and Crashed: How a Decade of Financial Crises Changed the World —all outstanding books.

The video interview runs about an hour, which is long to watch something on a computer screen, but I think it is worth taking the time.  Tooze has a wide range of information, a powerful analytical mind and a sharp tongue.  He takes a global view rather than an American view.

All this makes him interesting.  He is, possibly, a little more inclined than I am to regard politics as a clash of opinions than a struggle for power or a conflict of interests.

∞∞

Adam Tooze says the most noteworthy thing about Joe Biden and his administration is their determination to avoid the mistakes of previous Democratic administrations.

Both Bill Clinton and Barack Obama sought to establish themselves as centrists.  They proposed legislation with an eye to winning support of moderates of both parties rather than the progressive wing of their own party.

Their political strategies failed.  Republicans refused to cooperate.  Democrats lost control of the House of Representatives in Clinton’s first term and both houses of Congress in Obama’s first term.

Biden, in Tooze’s view, realizes that there is no chance of getting cooperation from Republicans.  So there is no point in watering down his program to get Republican support.

The only way he can enact his program is by uniting his party, which means that he cannot neglect the progressive wing, as Clinton and Obama did.

This explains BIden’s progressive rhetoric.  It remains to be seen whether he can unite his party, and where the balance will be struck.

Clinton and Obama sought to limit climate change through carbon pricing.  Their economic strategy to force a switch to renewable energy by gradually increasing the cost of using fossil fuels.

It never worked, according to Tooze.  The means Biden has no path forward except to adopt a version of the Green New Deal, which is massive government-backed capital investment in renewable energy.

The problem, he said, is the gap between the maximum that is politically possible and the minimum that is necessary to solve the problem.

While Biden plans to finance the American Rescue Plan by deficit spending, his Green New Deal will be financed by an increase in upper-bracket taxes, and—unfortunately, in Tooze’s opinion—will be limited by how much money he can money can be raised through tax increases.  Tooze is not sure that will be enough.

Tooze said that for the immediate future, BIden’s top priority is to avoid a Democratic party defeat in next year’s congressional elections.  This means avoiding an economic crash and avoiding a third wave of COVID infection.

On the world scene, Tooze said Biden’s problem is that he, like other Americans, finds it difficult to accept the fact that the world no longer considers the United States a leader.  Most people see the USA not as a shining example they should follow, but a problem they have to work around, he said.

More from Adam Tooze

Blog — Adam Tooze.

The Gatekeeper: Krugman’s Conversion by Adam Tooze for the London Review of Books.  About economist Paul Krugman, the New Keynesianism and the Democrats.

How the Pandemic Changed Europe, an interview of Adam Tooze for The New Yorker.

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