POOR OLD JO BIDEN OR POOR OLD US?

President Biden has led in Glasgow with his outreach to Beijing and an announcement on cooperation on Climate Change.  But recent US Gallup polls put his positive ratings at 42%, the second lowest yet at this point in any previous presidency.  Trump dropped to 37%.   Psephological wisdom has it that going below 50% in the ratings means losing 37 Congressional seats.  Though Biden’s immediate problem is two maverick Democrat Senators, Joe Manchin, senior Senator for West Virginia (the second poorest State in the USA) and Kyrsten Sinema of  Arizona (where Sinema is the first Democrat Senator for twenty years and where in 2020 Biden narrowly won the State’s delegation to the National Electoral College). 

Each individual Senator matters. The Democrats in the Senate are working with a 50-50 split with the Vice-President, Kamala Harris as president of the Senate, presiding over its proceedings and currently holding a tie-breaking vote.    Manchin who has considerable political funding from oil and gas companies is delaying Biden’s $1.75 trillion Build Back Better social spending and climate change bill, known as the Reconciliation Bill – whittled down in negotiations with the Republicans from $3.5 trillion and to be spent over ten years.  Sinema won’t support getting rid of the filibuster a key weapon in the hands of the Republicans who are determined to block Biden’s social and climate plans.   The Democrats have got a bi-partisan $1.2 trillion infrastructure bill through Senate, but Democrat leader Nancy Pelosi has been traded its progress in Congress against the Republicans unblocking Biden’s Reconciliation Bill for a while.  The infrastructure bill was finally passed on 5 November.  But with the US economy not rebounding fast enough, Biden is still under enormous pressure.

A core plank within traditional Republican ideology, like that of the old-style  Conservative Party here in the UK, is small State good, big State bad.  But the 2008 financial crisis and the 2019-2021 COVID pandemic proved that major government intervention in times of crisis is essential. The same is true of Climate Change if we are to contain global temperature rise at liveable levels and avoid catastrophe. This is the context in which Brandeis University Professor Robert Kuttner asks in the New York Review of Books (18 November 2021) if Biden is “ready to insist that full-on planning and explicit targeting of vital industries” is urgently needed.  Indications are that he is. 

In February, with his feet barely under his desk in the Oval Office, Biden issued Executive Order 14017 tasking the National Security Council and National Economic Council to undertake reviews of the vulnerability of the USA’s supply chains for, amongst others, semi-conductors and electric car batteries.  What he received in June was a far ranging Keynesian recipe for a replay of Roosevelt’s New Deal  coupled with a vision of ‘government led scientific advances as the main engine of growth’ following the prescription of the former Nobel Prize winning economist Joseph Schumpeter (1883-1950).  The implications of such an approach to Climate Change is not difficult to discern.  Biden is trying to marshal substantial government financial support to realise economic change in pursuit of this vision.  This is not some minor battle in the culture wars but a well-defended front manned by die-hard Republicans, a potential Stalingrad for Biden.

You could argue that getting to net-zero by 2050 will need the sort of command economy created during the Second World War.   Think of the production of Spitfires in Britain, recently celebrated in BBC documentaries.  Think of the female labour drafted onto the land and into munitions factories.  In the USA no cars for civilian use were produced between February 1942 and October 1945.   Fordist production lines were all converted to war production.  For military vehicles and aircraft then read electric cars, wind turbines, solar cells, and carbon capture technologies now.

But the thought of Boris Johnson and his clique directing a command economy doesn’t bear thinking about.  In a future planet-saving economy the alternative to a full-blown command economy could be substantial sector-specific government investment in key technologies – a route taken by several East Asian economies in the 1990s and substantial financial support for transformations in the life of the poor – taken because of the pandemic between 2019-2021 in the USA with a significant and remarkable decrease in poverty.  But the old taboos are again reasserting themselves.

Decisive action by government itself to shape their national future economic activity seemed to take second place in Glasgow.  Instead we have the impressive pledges by corporations and financial services to invest in climate friendly production aimed at reaching net-zero.  Recognition of their power and potential for good is welcome. Mark Carney, Governor of the Bank of England until 2020, recognises that it is not enough and government has to take a firm steer. But he has done an outstanding job in putting a case that Supply and Demand, the market, will direct the money where the action needs to be.   Let’s hope so.  Let’s hope against hope so.  But Adam Smith was not facing runaway climate warming.

If ever there was an issue of national security, as Biden recognised by involving his National Security Agency in his economic reviews (they are moving on to energy  in 2022), it is Climate Change.  And national security, in Republican terms a good thing, requires national planning and targeting of substantial amounts of public money to mitigate Climate Change, in Republican terms a bad thing.  Ideology is doing more than getting in the way of a bi-partisan solution.  It threatens national and global security.

Can Biden convince American voters and both Houses of Congress that half-measures are not enough, that a Republican victory, with or without Trump, spells a terrible setback that will cost lives in the USA and around the world?  Can he make a divided society understand the really important choices?   Some journalists have taken to calling him ‘Poor Old Joe’.  It’s poor old us if he doesn’t succeed.

Turning to the UK with Biden’s dilemma in mind, can the British government turn rhetoric into concrete national plans commensurate with the threat of global warming? Can it take the public with it during such a radical transformation?  These are the choices that will profoundly alter the lives of the next generation.  .  It is time to finally drop longstanding economic taboos.

See TheArticle 06/11/2021