Social Values over Profits: Joe Biden and the Later New Deal

Directly inspired by Franklin D. Roosevelt, the new American president is breaking with prevailing economic dogma with plans to invest at colossal levels and a willingness to raise taxes on business and the super-rich.

The Biden team stated it like a course that could not be deviated from. “We need to act decisively and boldly.” It summarizes the same statement made by a previous White House occupant, Franklin D. Roosevelt.

On March 4, 1933, addressing a country devastated by the 1929 crash, Roosevelt set forth the contours of a plan called the New Deal, under which the United States would no longer rely only on the free market but rather, the government would be involved in the economy. Roosevelt explained, “The magnitude of the restoration of the country will depend on our ability to place social values over profits.”*

This is the heritage that Biden now claims, and it is a meme that the Nouvel Observateur takes as its own to mark this break with how the economy has been handled over the past 40 years. “The world after” as speculated during the COVID-19 pandemic and mocked by cynics of all stripes is taking shape in Washington, D.C.

In less than 100 days in office, which Biden will mark on April 30, Biden has committed trillions of dollars to the green economy, transportation and social security, funded with higher taxes on the super-rich and on business. These are all nails in the coffin of what has been called “ultra-liberalism,” “Reaganism,” “venture capitalism” or “Thatcherism,” and programs which were summarized by their principal proponent, Milton Friedman, who declared, “The market greatly reduces the field of questions to which there are political answers.”*

Breaking the Deadly Circle of ‘Always Less’

To be sure, the policy put forth by Biden is weak. Many “worlds after” have been outlined that never materialized. But Biden’s aim to raise corporate taxes from 21% to 28%, higher than any time since World War II, markedly breaks with the way rich countries have done things for 40 years.

This is the hope that countries will finally end economic competition and break the deadly circle of “always less.” Biden’s policy is already inspiring imitation, for instance, in the U.K., where Prime Minister Boris Johnson has just decided to raise corporate taxes.

It seems that everything has indeed changed in less than 100 days, and that the EU, particularly France, is trapped in the past. The EU and France have proposed only timid plans for boosting their economies, plans that pale in comparison to Biden’s. Undoubtedly, this is because France never adopted Anglo-Saxon capitalism as much as other EU countries, and therefore feels no need to follow the same path as closely; our country has always been one which favors public spending despite itself.

Biden’s proposals are nonetheless more than relevant in France, which recently lowered wealth and capital taxes and is considering the same for corporate taxes. It would be a great pity to remain forever in the past when so many errors of the past are being corrected.

*Editor’s note: Although accurately translated, the quoted remarks could not be independently verified.