Another View: Biden's economic plan cedes too much to Trump

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Former vice president Joe Biden has been laying out additions to the economic plan he'll offer to the country in November. One set of proposals looks at new public spending, jobs and manufacturing with a focus on "Made in America." This includes some smart measures and, so far, the fiscal arithmetic — what's needed and how to pay for it — looks measured and responsible. The encompassing economic message, though, is wrong.

In effect, Biden is surrendering to the man he wants to replace. His pitch tells voters that President Donald Trump's "America First" economic populism is sound in principle, and only lacking in execution. Perhaps this approach has political appeal, but that doesn't make it right. The last thing the U.S. economy needs is a more effective Trump. It needs a forthright anti-Trump.

Biden's plan does correctly identify some essential priorities. It calls for an additional $700 billion of new spending on infrastructure, innovation-centric job creation, and domestic capacity to respond to public-health emergencies. The country's needs in all three areas are urgent, and Biden is right to deplore the Trump administration's complete failure to address them.

He's right, above all, to highlight the synergies in public investments of this kind. American prosperity ultimately depends on economic productivity, and the role of public investment in driving growth has been too long neglected. High-tech manufacturing and emerging IT-driven services can create more of the good, high-wage jobs that the U.S. needs — but only if the necessary infrastructure and commitment to publicly supported research and development are in place.

The COVID-19 crisis has made it clear that resilience in the face of public-health emergencies is also vital. Lack of preparation and bungled federal management have imposed staggering losses on U.S. workers and their families. The pandemic put global supply chains under strain they weren't designed to withstand. Adequate supplies of vital equipment and materials need to be stockpiled, and the supply chains that deliver them need to be stress-tested and reinforced where necessary with new domestic capacity. Again, Biden is right about this.

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He's wrong, though, to frame these commitments as part of a backward-looking protectionist strategy — one that will have Trump's trade officials nodding in agreement. His plan is reflexively anti-trade. It tirelessly emphasizes "Buy American" in federal procurement — calling for tighter domestic-content rules, and for extending such provisions to other forms of government support, including R&D. Biden goes so far as to defend the Jones Act, a regulatory relic that mandates, at substantial cost to American producers and consumers, that only U.S.-flagged ships move cargo between U.S. ports.

The right test in all these cases is value for taxpayer dollars. Of course, supporting U.S. jobs comes into that calculation — but the jobs at issue aren't just those directly engaged in federal procurement or shielded by federal regulation. Public investment is about promoting growth and incomes across the whole economy. Rigorous cost-effective management of public investment will serve that goal better than populist mandates.

The same goes for openness to trade in general. Most voters can see that Trump's economic populism has failed - and not because it was too halfhearted. The president's reckless trade restrictions have raised prices, eroded American competitiveness, and held back the national and global economies, while undermining long-standing alliances. The right response to that kind of populist vandalism is to explain why it hasn't worked and offer voters a pro-growth alternative.

Biden has some good ideas about the pro-growth alternative, but echoing Trump's "America First" approach to trade sure isn't one of them.

— Bloomberg Opinion


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