The economic dimension of the new president is important because he wants to strengthen the middle class, the one which has been weakened by globalization but which is, according to Joe Biden, the great strength of America. He also wants the United States to be able to continue to play an important role in the world order. If he is very attentive to relations with China, he wants a multilateral world, which means returning to the Paris climate agreement and the need for Americans to be powerful enough to define the pace. of this new balance. But the world has changed since he left the White House, China has become more powerful.
Joe Biden won the US presidential elections. Beyond the claims that Donald Trump could still make, the two main questions relate to the possibility of a majority for the President-elect in Congress and to the answers that Joe Biden brings to the economy and in particular to the positioning of the America in the world.
The political balance will be known on January 5
Politically, the key element is the balance of Congress with the determination of majorities in the Senate and the House of Representatives. For the latter, the Democrats lead by far with 215 seats against 196 for the Republicans and an absolute majority at 218. In the last term, the Democrats had 232 seats against 197 for the Republicans. It is likely that the majority is weaker. In the Senate, Republicans held a majority of 53 out of 100 on the eve of the renewal of 35 seats (12 Democrats and 23 Republicans). For the moment the partial results give 48 seats for each party. There are still 4 seats to be filled. Those of North Carolina and Alaska are more inclined towards the Republicans according to the results which are still provisional. For Georgia, which has 2 seats to renew, the situation is special since to be elected a candidate must have more than 50% in the first round. If not, and this is not the case in the current election, a second round is scheduled for January 5. The balance of the Senate and Congress will not be known until this date.
An economic policy for the middle classes
Joe Biden’s economic program is three-dimensional.
The first is that of the return of Social Security for all (Kamala Harris, the VP will take care of it. It is on this point that she attacked Joe Biden in the first debate. She found the proposal of the now president insufficient to be satisfactory).
The second point is that of the fight against inequalities. I mentioned part of this dimension in the Yesterday to Today issue of November 6. I mentioned in particular the opposition between Republicans, who are more individualists, and Democrats who are more favorable to collective choices. This requires in particular a tax review to avoid a marginal rate that is too low for the richest Americans (Saez and Zucman show that the marginal rate for the highest incomes is at a historic low and compared to lower incomes. Beyond these elements, Joe Biden wants to make a considerable effort on education in order to strive for more equal opportunities. This is part of his program to return to democracy in the United States.
The third dimension is that of the place of the United States in the world. In an article published in March / April 2020 in the journal Foreign Affairs, the one who was only a candidate for the Democratic primaries insisted on 3 aspects.
The first is that for the American economy to regain its size, many efforts must be made. The world is competitive and the US economy must be too. For that to happen, it needs to be stronger and this requires public investment and education. We perceive in the words of Joe Biden, the analysis of Branko Milanovic who indicated in a series of articles and in a book that the middle class of developed countries had been penalized by the rise in power of emerging countries. Joe Biden therefore emphasizes the need to strengthen the middle class which has been and will remain, according to him, at the heart of American power in the long term. To withstand international competition, the USA must itself be strong in its own market. Joe Biden also conditions the negotiations of trade agreements on this condition in order to be able to negotiate under the best conditions. Free trade is the norm, but not under any conditions.
Part of Joe Biden’s article is devoted to China. The new American president is as suspicious as his predecessor on the question of relations with China. This reflects all the dimensions already mentioned when discussing the interactions between the two countries. There is an economic dimension, that of world leadership, that of technology where the Americans are sometimes ahead and the political dimension since China in this area is a challenge for the USA. Indeed, the country which holds the economic and political leadership determines the pace which takes shape in the world. On this point and unlike Donald Trump, Joe Biden is ready to make an alliance with the other advanced countries for against the Middle Empire.
Joe Biden wishes to restore a multilateral dimension to American international relations. He wants, from the first day of his mandate, to reinstate the Paris agreement on the climate with the objective of having in the United States emissions net to 0. He also wishes to give back to NATO the place which was his in order to to reestablish an existing balance which has been greatly disturbed.
Joe Biden’s message is that the world cannot be left on its own but must be organized. The United States has a major role to play in defining the new balance, which must be multilateral. In the USA, to be strong enough internally to be able to determine the pace of the world in the future. The world is multilateral and progress depends on individual effort and not on the desire to weaken one’s competitor.
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