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Joe Biden Is A Regular Franklin Roosevelt (New Deal Sold Separately)

"Biden firmly believes you can’t leapfrog the political reality".

When Joe Biden locked up the Democratic nomination, hopes for meaningful change in America effectively died.

In addition to a deeply ingrained aversion to “socialism” (despite most Americans being unable to define the term without reference to Venezuela), the urgency of ousting Donald Trump meant voters were arguably less inclined to go out on a limb with Bernie Sanders or Elizabeth Warren for fear of accidentally contributing to Trump’s reelection.

The idea was (and still is) that Biden is eminently electable, and has the best chance of convincing disaffected Trump voters to jump ship. Everyone knows Biden will not push an aggressively progressive agenda — he’s said as much on too many occasions to count, including during the Democratic debates. That should be a liability in a nation that desperately needs a savior, but at the current juncture, it’s an asset.

Read the point/counterpoint:

There Can Be No Change.

A Change Is Gonna Come

The sad irony is that the developments of the past four months (the pandemic, the fiscal response which entailed a partnership between the Fed and Congress to deliver trillions in stimulus, and widespread social unrest across nearly every major metropolitan area in the country) clearly made the case for Sanders.

As The New Yorker put it in late March, during the depths of the crisis, “reality has endorsed Bernie”. Below are some excerpts from that linked piece which, like almost all articles in The New Yorker, is near flawless in its execution.

When Bernie Sanders’s critics mocked his platform as just a bunch of “free stuff,” they were drawing on the past forty years of bipartisan consensus about social-welfare benefits and entitlements. They have argued, instead, that competition organized through the market insures more choices and better quality. In fact, the surreality of market logic was on clear display when, on March 13th, Donald Trump held a press conference to discuss the COVID-19 crisis with executives from Walgreens, Target, Walmart, and CVS, and a host of laboratory, research, and medical-device corporations. There were no social-service providers or educators there to discuss the immediate, overwhelming needs of the public.

The crisis is laying bare the brutality of an economy organized around production for the sake of profit and not human need. The logic that the free market knows best can be seen in the prioritization of affordability in health care as millions careen toward economic ruin. It is seen in the ways that states have been thrown into frantic competition with one another for personal protective equipment and ventilators—the equipment goes to whichever state can pay the most. It can be seen in the still criminally slow and inefficient and inconsistent testing for the virus. It is found in the multi-billion-dollar bailout of the airline industry, alongside nickel-and-dime means tests to determine which people might be eligible to receive ridiculously inadequate public assistance.

The Sanders campaign was an entry point to this discussion. It has shown public appetite, even desire, for vast spending and new programs. These desires did not translate into votes because they seemed like a risky endeavor when the consequence was four more years of Trump. But the mushrooming crisis of COVID-19 is changing the calculus. As federal officials announce new trillion-dollar aid packages daily, we can never go back to banal discussions of “How will we pay for it?” How can we not? Now is a moment to remake our society anew.

Alas, it was too late to turn back. Biden is the nominee. And no matter how many times he pays lip service to the ideals espoused by Sanders’s supporters, he will not push for meaningful change. Biden is a Beltway stalwart. A card-carrying member of America’s political establishment if ever there was one.

He may believe, deep down, that Sanders, Ocasio-Cortez, Ilhan Omar, and other progressive firebrands have it mostly right (at least when it comes to the absolute necessity of overhauling American-style capitalism before it collapses under its own weight), but his job isn’t to spearhead any revolutions. In fact, his job is the opposite of that. Biden is supposed to beat Trump, thereby rescuing American democracy, but not in heroic fashion. Rather by giving voters an easy out — a safe choice to end the madness — a chance to install a risk-free placeholder until the country can regroup and decide collectively on a path forward.

This was underscored on Wednesday evening in a Bloomberg article detailing what Biden will say in an economic speech to be delivered Thursday in Scranton, Pennsylvania.

The former vice president “will call for a moderate approach toward reviving the US economy if elected that includes spurring manufacturing and encouraging innovation, shelving for now the more ambitious proposals pushed by progressive Democrats”, Jennifer Epstein writes, citing people familiar with his plans including Jared Bernstein, who served as Biden’s chief economic adviser when he was vice president.

Ultimately, Joe “wants to get to the same place that many to his left want to get to”, Bernstein insisted. Standing in his way is his own experience with the same Washington gridlock that everyone in America despises. “Biden firmly believes that it will take an incremental path to get there and that you can’t leapfrog the political reality that he has come to know in many decades in politics”, Bernstein explained.

Only you can — leapfrog the old way of doing things, that is. We just proved it with the CARES Act, something Biden himself is acutely aware of. “The blinders have been taken off”, he told a fundraiser in April. “Because of this COVID crisis, I think people are realizing: ‘My Lord, look at what is possible'”.

Indeed. And yet, that realization isn’t expected to translate into policy prescriptions. Here’s Bloomberg with a bit more:

But most of the more progressive ideas, like the Green New Deal and other large jobs programs that also harken back to the Franklin Roosevelt policies of the Great Depression, will likely be left behind at the beginning in favor of a more step-by-step approach, the Biden campaign says.

With the moderate steps, Biden is betting that he’ll attract Republicans weary of the Trump administration along with independents, while retaining progressive support even without adopting some key plans.

There it is — the sense of entitlement again. Biden figures progressives will back him even if he presents an economic agenda that doesn’t reflect their priorities, despite having admitted, in public, that the past four months have taught us that pretty much anything is possible.

Of course, none of this is going to matter until the current occupant of the Oval Office relinquishes the keys to the castle.

There’s an argument to be made that a part of the president realizes it’s over. But individuals who display autocratic tendencies don’t generally do well with defeat.

That’s not to suggest that Trump will stage some kind of dramatic standoff at the White House if he were to lose. It’s simply to say that he is notoriously litigious, and to this day claims massive voter fraud took place in an election that he won. Viewed through that lens (which I think is an entirely realistic way to frame things), the country could be in for a rough couple of weeks in November.

“The current VIX curve has a monster kink that corresponds with the US election”, Kevin Muir, formerly head of equity derivatives at RBC Dominion, and better known for his exploits as “The Macro Tourist” notes.

“For those hedging the election, be aware – you aren’t alone. This is not a novel idea”, Kevin went on to remark, in a Wednesday letter. “Will it prove worth it? Who knows? But I hate paying up for protection”.

“It’s not difficult to envision a world in which the outcome of the election is unknown several days after the voting has been completed – this is more likely if the race is closer than it presently appears”, BMO said Wednesday, in an afternoon note. “An extended period of leadership limbo would be a bigger hit to [market] sentiment than an outright Democratic victory”.

It would also be a hit to the public’s perception of the viability of the country’s democratic process. One imagines an already agitated nation would make their frustrations known.


18 comments on “Joe Biden Is A Regular Franklin Roosevelt (New Deal Sold Separately)

  1. US politics isn’t my home turf but I would have thought that the LBJ presidency could be instructive here. An earned reputation for being a conservative political lifer provided much of the liberating momentum behind his presidency. Where he had the tailwind of the Kennedy legacy, Biden will have George Floyd and COVID. But let’s not get ahead of ourselves…

  2. Front running peak uncertainty has already started it appears.

  3. I think it is a bit of fresh air to have an Administration coming in that doesn’t have a bunch of
    aspirational programs that they never seem to be able to fulfill. In this case, we may end up
    getting someone elected who ends up doing more than they promise. I think Joe will be guided by
    the people he decides to put in his Cabinet……and maybe his VP.

  4. As much as I’d like to think Biden could reinvent himself as “Great Society” LBJ, I see nothing in his past, nothing, to suggest that such a transformation is in the offing. That’s why his VP pick is so critical.

  5. From a historical perspective, the broad definition of socialism that I use is:

    A system of governance that advocates for the democratic ownership of the means of production, distribution of goods, and allocation of services.

    One of the nice things about this definition is how easy it is to contrast with capitalism. For capitalism’s definition, simply replace “democratic” with “private” to arrive at the following:

    A system of governance that advocates for the private ownership of the means of production, distribution of goods, and allocation of services.

    One word of difference in the definition, yet two very different ideologies arise from each.

    There’s a part of me that believes if we could just get these definitions out in the open that we would progress as a society. Unfortunately, the other part of me is a realist and tends to agree with Niebuhr when he upends the arguments made by rational idealists.

    • Anonymous

      ^ this is correct

    • Democratic ownership… who is going to tell me how my company MUST determine “ means of production, distribution of goods, and allocation of services.”? Who is the ‘democratic politburo’ that I must answer too? Any inspiring links to a policy framework substantiating how your grand democratic ideal would work?

      • You misunderstand the use of the term democratic, which, I suppose, isn’t surprising given your conflation of socialism with communism. Socialism is about the employees of the company having a say in how the company operates, how it distributes profits, and how it reinvests its capital.

        There are successful socialist companies in the US today. Take a look at how companies like Ocean Spray or Blue Diamond Farms operate vs. how a company like Tyson Farms runs its operation.

        Which farmers do you think are happier?

        Your idea of some fantastical, overarching politburo making decisions for everyone fits nowhere into the idea of socialism I provided above. You should read something before you write something.

  6. It seems to me that, for the next few years, US monetary and fiscal policies will be primarily decided by the virus, not politics.

    The viral contagion rates, death rate, long term health effects (as presently understood), effectiveness of vaccines/ medical treatments and any mutations that hopefully make the virus less harmful and lethal are the issues that will drive policy.

    • Medical care should be looked upon as an infrastructure issue. A utility. Public and private integration. Our Nations response to this Pandemic has been lacking.

  7. I don’t think that is the definition of Socialism.
    Not sure who the democratic ownership refers to.
    I must say this is an excellent piece of work and I wish it were on the front page of every paper In the country.
    Thank you!

  8. I don’t really buy the “we did it in an emergency so we could do it whenever” argument. We do all kinds of poorly thought through, shortsighted things in an emergency. Often, they improve our chance of survival in the short-term even if they present long-term consequences. If I wrecked my car and plowed it into someone else’s, sure, I could put a new one–and maybe my insurance deductible to boot–on my credit card at 18% interest. Depending on my need for a car, that could be a smart decision under the circumstances. But that doesn’t mean that in the long run I’d choose it as a strategy. Even if it were advantageous in the long run, I might not consider it because it would be crowded out by all sorts of other considerations, but I might in a pinch and with an immediate need to act.

    • What if you were the one who determined the interest rate on your credit card and if you were also the one providing yourself with the credit?

      Conflating household balance sheets with the US government is the single biggest fallacy in economics. It’s not just apples to oranges, it’s apples to lawnmowers. It makes no sense.

      Bond yields are a policy variable. YCC proves that (e.g., the JGB 10-year yield is what the BoJ says it is just like 3-year yields in Australia are what the RBA says they are — you can try to challenge the BoJ and the RBA on that, but you’ll lose, because they print money). And Fed purchases absorbed a good portion of the debt issued to fund the stimulus, although the shifting mix will mean coupon issuance outstrips QE in the back half of the year.

      More broadly, though, there is no mandate that the US has to issue an interest-bearing version of the dollar (which is all bills and bonds are) to “pay for” stimulus. That is a myth. We do it to maintain a charade which, unfortunately, most Americans are still buying into.

      • I get what you’re saying, and point well-taken. Reading more about MMT here and elsewhere has converted me from a “What the hell is this?!!” skeptic to an “I’m not so sure about this…” skeptic. I wasn’t trying to make a “we’re going to debtor hell-in-a-fiscal-stimulus-handbasket” argument, although it sounds that way.

        My argument about accepting high-interest debt in times of emergency muddied the waters a bit. The broader point is that we do things in a pinch (or global pandemic) that we otherwise wouldn’t–or shouldn’t–do.

        Without debating the merits of sewing up our badly-torn safety net (I have no disagreement on that front, so there’s no argument to make), I still have this nagging intuition that printing to our heart’s content will have unintended consequences. Reading Stephanie Kelton, she often concedes that yes, there is a point at which inflation becomes a problem. Yet, I’ve never heard anyone identify the warning signs that we’re reaching that point. And, of course, once we do, it’s too late, right? Maybe someone has written on that and it’s out there, but if not, its absence is disconcerting.

        And then there’s the reality of consumer psychology. You, understandably, bemoan everyday Americans’ conflating household budgeting constraints with budgeting practices of currency-printing sovereigns. Again, no argument that this is a bad comparison. But, it also serves a function: Money is a confidence game, isn’t it? If we think it’s limited and there’s a cost to profligacy, we treat it as valuable. When we realize it isn’t and it’s not (at least if you own the printing press) will it continue to be viewed as such? To badly butcher a mixed metaphor, what happens when it’s discovered that the fiat wizard behind the curtain has no clothes on?

        Regardless, we’re heading into interesting times macro-wise. I continue to keep an open mind about MMT. I mean, we’re doing it. But I do so with a measure of skepticism. I hope what I’m driving at makes sense. If there is material out there addressing the points I raise, I’m happy to have a look.

        Enjoy your weekend.

  9. “In addition to a deeply ingrained aversion to “socialism” (despite most Americans being unable to define the term without reference to Venezuela)“

    I struggle with this in conversation with people (Americans) all the time. Funny (weird) how they believe a “leftist” ideology is the same as Soviet “communism” despite the fact that the Soviets were right extremist authoritarianist. The world has yet to see a “Communist” government that was not right wing extremist authoritarianist.

  10. Aah Bernie Sanders. He has accomplished nothing in both houses of Congress in 30+ years. Nobody can name one bill he shepharded through Congress. When he ran in 2016 and was interviewed by the Daily News, he could not name the regulators in charge of large banks- and that was his signature issue. He yells a lot. Not too friendly to women either- and definitely not a team player- his support of Hillary after the primary was tepid. So no, Bernie is not going to be the savior- at least in my view. Biden is a mianstream Democrat. His views reflect the center of the party. But the center of the party has moved. If elected, it is really up in the air what he will/can/want to get done. A lot depends on who he picks in his cabinet and most importantly is the make up of Congress. If he gets elected and gets a Republican Senate, there is not as much he can get done. If he sweeps and gets off to a fast start, there could be some really good things to come out of his election. It is too soon to crown him- he is not elected yet. And we do not really know the playing field he will have if he does succeed. But it is far too soon to write him off.

  11. The Biden strategy — tilt toward the middle–to appease moderates and attempt to attract “wavering” Republicans is perhaps the dumbest idea ever. This is a complete own goal. First, Trump is the GOP and they love him, there is little chance of defections. Second, you are betraying the energy built over the summer by the left. This is an election that is about polarization and populism–for the DEMs to win they need to tap into that. Going back to a kinder/gentler world or a normalization is a terrible strategy—Biden is having his Dukakis on a tank moment. It just proves that when the DEMs go for someone from deep in the establishment they lose and its only when they go for new and fresh that they win—Carter, Clinton- Obama.

    • There are legions of Republicans who have said they won’t vote for Trump, some of whom have come out to support Biden. And win over enough independents–who have gone screaming from Trump this time around–and you have enough votes to wrap this thing up without any Republicans on board.

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