April 15, 2021

The Biden Boom

Democrats are all agog that Biden was able to pass more stimulus dollars than Barack Obama. What will make a sustainable difference, though, is whether the Biden stimulus doesn’t just rescue the poor but also propels the private sector to start new companies and create more good jobs that improve productivity and sustainably boost living standards, so that we’re not just redividing the pie, but rather growing the pie.

Opinion Debate What should the Biden administration prioritize?

  • Nicholas Kristof, Opinion columnist, writes that “Biden’s proposal to establish a national pre-K and child care system would be a huge step forward for children and for working parents alike.”
  • The Editorial Board argues the president should address a tax system where “most wage earners pay their fair share while many business owners engage in blatant fraud at public expense.”
  • Veronica Escobar, a Democrat who represents El Paso, writes that “the real crisis is not at the border but outside it, and that until we address that crisis, this flow of vulnerable people seeking help at our doorstep will not end.”
  • Gail Collins, Opinion columnist, has a few questions about gun violence: “One is, what about the gun control bills? The other is, what’s with the filibuster? Is that all the Republicans know how to do?”

Despite concerns that the $1.9 trillion could drive up interest rates to levels that tank the stock market and crimp government borrowing and discretionary spending down the road, there are lots of signs that we could be headed for just such an explosion in entrepreneurship.

Consider this report from The Wall Street Journal on Friday: “After a year of economic shutdowns and other changes brought on by Covid-19, rents for Manhattan storefronts, apartments and work spaces have been marked down to their lowest prices in years. That is already bringing in new small businesses and residents, and has the potential to change the character of the city’s most-exclusive borough. … New York state as a whole saw its highest number of new businesses launched last year since 2007.”

If we do this right, Biden’s stimulus will fuel an already restructuring economy and supercharge it. With so much cheap money available, so much cheap access to high-powered computing, so many new services being digitized and so many new problems to solve, we have all the ingredients for a burst of innovation, start-ups and creative destruction.

What would Trump do if he presided over such a boom? HE’D PUT HIS NAME ON IT. That’s what Biden should do. If it comes, call it the “Biden Boom” — and celebrate entrepreneurs, capitalists, job creators, farmers and all those who work with their hands. Make clear that they all have a home in the Democratic Party, not just left-wing educated elites. That’s how you win the midterms.

Biden also needs to maximize his green aspirations. It’s not just about unleashing spending. It also about unleashing capitalism. The key to a green revolution is scale. You need a whole lot of everything — wind, solar, hydro, nuclear, batteries, efficient materials. And the only way to get that kind of scale is by leveraging the market — by getting all kinds of public-private partnerships going that reduce carbon and grow profits.

The government can catalyze these in two ways. The first is to use its buying power to drive down costs. For instance, “offshore wind used to be much more expensive than onshore wind,” explained Hal Harvey, C.E.O. of Energy Innovation, “but then the British and Danish governments stepped in to subsidize it and move it down the cost-volume curve. Now it is a huge and cost-effective resource.”

Article source: https://www.nytimes.com/2021/03/30/opinion/biden-stimulus-infrastructure.html

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