He was called ‘Sleepy Joe’, the man who campaigned from his basement in Delaware, said few memorables and mainly presented himself as the anti-Trump. A decent person who could seldom be caught with an inspiring thought and resembled a gurgling senior rather than the passionate leader liberal democracy needed in its fight against authoritarian populism.
But in his first hundred days, 78-year-old Joe Biden turns out to be an energetic and radical heaven-stormer. He piloted an economic recovery package worth 1.9 trillion (1900 billion) dollars through Congress, with which he wants to combat child poverty, among other things. Last week, he presented an equally ambitious $ 3 trillion plan to improve US infrastructure. To be able to finance this, he wants to tax rich Americans and companies more heavily. To prevent those companies from establishing themselves elsewhere, he proposes a global tax on companies.
The International Monetary Fund (IMF) expressed a strong support for the plan, as did Italian Prime Minister Draghi. In the Organization for Economic Co-operation and Development (OECD), the rich countries have been talking about such a global tax for about ten years, without much result. But with Biden’s proposal, talks now seem to be gaining momentum. This might end a race to the bottom in which countries try to attract international companies with the lowest possible taxes.
Thus, under Joe Biden, American capitalism is taking a new turn, with higher taxes and an active state pursuing greater social justice. “Old men in a hurry are a good thing,” said left-wing economist James Galbraith The New Yorker. In the Financial Times columnist Philip Stephens praised the audacity of the American president. All over the world, authoritarian populism is gaining traction as elites in liberal democracies have allowed rampant markets to trample the post-war social contract and increase social inequality, Stephens said. Many liberal Democratic politicians worry about this, but at least Joe Biden is taking action. Whatever his experiment turns out, Biden has come up with the answer. Democracy flourishes when the system works for everyone, ”Stephens writes.
Example for Europe
Europe should take this as an example, says Stephens. While Biden goes all out, European politicians like Angela Merkel are only taking defensive baby steps. French President Macron also called on Biden to follow Biden’s example, to prevent Europe from falling behind the US. “We are too slow, too complex, too entangled in our own bureaucracies,” Macron said.
This criticism is not entirely justified. The EUR 750 billion European recovery fund is dwarfed by Joe Biden’s billions, but on top of that, Member States have thrown out their proverbial thrift to keep their own economies afloat. Since the start of the pandemic, the European Commission has approved 3 trillion euros in state aid, national money for companies in danger of falling. Half of that money was spent by Germany.
Break with neoliberal ideology
Nevertheless, Biden’s course will affect Europe, given the economic strength, political influence and cultural aura of the US. Joe Biden breaks with a neoliberal ideology that has dominated the Western world since President Reagan took office in 1981: belief in the free market, deregulation, modest government, a culture of individual responsibility and competition. As Europe was inspired by Reagan at the time, it can now be guided by Biden, who is emerging not only as an anti-Trump, but also as an anti-Reagan. The fight against climate change is also gaining momentum now that it is once again supported by the US.
There is one big doubt, however: will Biden manage to permanently change America’s track? His majority in Congress is so minimal that it is difficult to get controversial proposals, such as a tax increase, through the Senate. In addition, the US remains a deeply divided country. Biden’s course undoubtedly reflects the zeitgeist, but there is another zeitgeist, that of Donald Trump. The zeitgeist of a white population that is afraid of losing its traditionally dominant position and is mobilized by the Republicans in an unremitting cultural struggle. Just this week, Trump called for a boycott of Coca Cola because the company had spoken out against laws in Georgia that make it more difficult for black voters in particular to vote. Loyal fans immediately promised to drink Pepsi from now on.
A big gamble
Joe Biden takes a gamble. In 2008, President Obama sustained the economy with a massive bailout package that kept banks and large corporations afloat while ordinary Americans suffered from the financial crisis. Dissatisfaction with this played a major role in Trump’s 2016 election.
This time, ordinary Americans should take advantage of government support so Biden can persuade enough voters to keep backing the Democrats. But if the economic results of his program are disappointing, the Republicans could revert to the culture war they have sparked in the meantime in 2024. Biden’s play is “noble and successful,” wrote Edward Luce in the Financial Times. “But it remains a gamble.” The outcome of this gamble is also of the utmost importance for Europe.