President Joseph Biden has some extremely smart men and women advising him on economic issues. The only one I knew even the slightest little bit personally is Janet Yellen, the secretary of the Treasury. Long ago, when I worked for the government, she was young but universally well regarded. As far as I know, she still is well regarded, although neither of us is still young, alas.
If I may say so, she is behind what I think of as a fine, even somewhat conservative, fiscal program. The Biden–Harris–Yellen plan is barely a quiver in the tectonic plates that move this Earth’s economies.
Basically, Bidenomics is Keynesianism with a goodly dose of racial pandering thrown in. This is not new. It’s not seditious, and much of it makes sense. It was generated and documented by the great English economist, John Maynard Keynes, as a way of fighting the Great Depression. Keynes said that while Adam Smith said a nation’s economy would always revert to full employment equilibrium even after a large economic blow, that might not always be true.
There might be some “rigidities” in the economic system that kept full employment equilibrium from returning. The only way to fight this problem was for government to run deficits that jacked up demand for a prolonged period. After this, the economy would return to a full employment equilibrium.
The failure of the national and world economies to revert to full employment equilibrium was only able to be fought with and by significant and continuing stimulus of demand by government deficits.
This spending would be in the form of “large” public works programs such as bridges and highways and canals.
The program did not work on anything like the scale that was needed. By the eve of Pearl Harbor, there was still roughly 15 percent unemployment, an unheard of number by today’s standards. But it bore a catchy name (“New Deal”) and was loved by the left-wing media. (At that time, as incredible as this sounds, there was still a sizable “right-wing” media.) Ever since 1933, the phrase “New Deal” has become a talisman for the Democrat Party in political campaigns and opening phases of Democrat administrations.
Now President Biden and his pals in the Democrat Party have begun their own version of the “New Deal.” This one is called the “Green New Deal,” and it emphasizes projects that move away from the use of gas, oil, and coal and instead “rely” on wind power, solar, and recycling. I put “rely” in quotes because we recently saw just how much we could “rely” on wind power in Texas when the temperatures fell and the winds died. The latest move toward a “Green New Deal” is Biden’s new infrastructure plan, named the American Jobs Plan.
This is hardly the only facet of the Biden plan that moves it far away from the FDR version. Very large amounts are listed for social programs such as buying school books, paying poor families rent subsidies, and providing “broadband” internet for people who cannot afford it on their own.
The “broadband” item is particularly laughable. In the poor sections of our cities and towns, which tend to be predominantly black and Hispanic, the children can barely add and subtract or read and write. The notion that these children will become magically proficient in reading and math by sending them images over a faster internet would be funny if otherwise sensible people were not proposing it.
The Biden New Deal will supposedly cost about $2 trillion. Somehow they arrived at this number by chance.
There are a number of questionable notions in this proposal: First, the FDR New Deal was created to greatly lessen unemployment. It did do some of that but not enough. At present, in many areas of the economy, we have a surplus of jobs. That is, without any stimulus from the federal government, we still have a shortage of workers willing to work. So … why do we need a New Deal at all? Of course, to bribe the usual suspects into continuing to vote Democrat (which probably was the purpose of the original New Deal as well).
Second, the Biden New Deal will be paid for largely by an increase in the corporate income tax rate. But corporations in America are mostly owned by the pension funds for corporations. If we raise taxes on them, their retirements will be severely jeopardized. They are already under severe pressure as immense numbers of the “Baby Boom” move into their very own golden years.
That is, raising the corporate income tax just means serious economic insecurity for pre-retirees and their families. This is the exact opposite of what the FDR New Deal supposedly aimed at.
Third, by calling for programs that opaquely are meant heavily for non-whites, the Biden New Deal ventures into racial favoritism, which we were supposedly avoiding by the entire locomotive of racial equality that has been rolling down the tracks of America for about 60 years now.
Fourth, by running up the federal budget deficit (because the Biden tax increases will not even come close to covering the whole Biden New Deal), we come closer minute by minute to the day of national bankruptcy. That will not be a happy day.
This has been a bipartisan “achievement.” The Republican “supply-side” tax cuts without regard to deficits have been large contributors to the unhappy situation.
But in the nakedness of the Biden plan to favor largely Democrat voters over GOP ones, this fiscal plan has reached a new sad level of despair.
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