Biden and the Global Economy

The battle against Joe Biden’s economic agenda contains global dimensions. In essence, it is a fight against the foundations of the current global economic system, with all its deformities that affect the vast majority of the world’s population.

Biden, who has represented the center-right of his party throughout his life, is adopting today economic policies that are close to the progressive movement. In my estimation, such political decisions do not represent a progressive choice for the U.S. president. They are, instead, imposed by America’s economic reality.

Biden took office when his country was in the worst phase of the COVID-19 pandemic. This pandemic was not just a health crisis that claimed hundreds of thousands of lives and hurt America’s reputation internationally. It was also an economic crisis that was equally dangerous, as it led to the loss of millions of jobs and economic capacities in general. Such a challenge required strong intervention by government. Moreover, Biden rose to power amid a new phase of the decline of the American empire. Just as with previous empires, the excessive external expansion of the American empire far exceeded the country’s ability to bear its exorbitant cost. Consequently, America was strongly affected at home.

At a time when the U.S. was externally involved in nation building operations across the world, America’s infrastructure deteriorated more and more, affecting its competitiveness on the international economic level. All of this has exacerbated the social and economic crises that already existed in the country. Moreover, the gap in income and living standards has significantly increased, especially with the extraordinary tax cut under Donald Trump, which only benefited giant corporations and America’s wealthiest people. To crown it all, the United States has been increasingly exposed to natural disasters caused by the global climate catastrophe.

Hence, reality imposed itself on the new president. The state had to play a strong role in the economy to salvage what it could. Therefore, the government started with providing unemployment benefits on a large scale, stopping the eviction of those who could not pay their rent, seeking ways to create new jobs, modernizing infrastructure, withdrawing from international affairs, directing more spending to public services and social programs, finding realistic means to shift the U.S. economy to using alternative energy and actively seeking to confront the risks of climate change. These provisions represented the core of Biden’s legislative agenda, which he called “Build Back Better.” It includes a new federal budget that reflects those priorities, as well as an infrastructure reform bill. It is an agenda that faces fierce resistance today, not only from the Republicans in Congress, but also from the center-right wing of the Democratic Party, Biden’s party.

And that resistance, in my estimation, is against any kind of retreat from the neoliberal economic structure that is based, in its essence, on unconditional release of the market and curtailing the state’s role in supporting social programs. These projects benefit the vast majority of the middle and lower classes. This economic system took root in America and Britain in the 1980s, when the era of Ronald Reagan coincided with that of Margaret Thatcher. That system became the global economic system for the last 40 years.

So far, Biden is still sticking to that agenda, despite his willingness to scale back social programs rather than abandoning them. And the next few weeks will show whether the president will make deeper concessions, thus ending the battle with the adoption of short-term palliatives in response to a fundamental crisis. Otherwise, will his policies represent the most important real challenges to an unjust global economic order?