Joe Biden arrived at the White House at a pivotal moment in American history. We had become a country divided into two nations, one highly educated and wealthy and the other left behind. Economic gaps have further exacerbated cultural and social gaps, creating an atmosphere of intense polarization, cultural hostility, alienation, bitterness and resentment.
As president, Biden mainly had economic levers to try to overcome this cold civil war. He defended three gigantic pieces of legislation to create a more egalitarian, fairer and more united society: the Covid revival bill, the infrastructure bill and what has become Build Back Better, to invest in human infrastructure .
All of these bills were drafted to channel money to areas of the country that were less educated, less wealthy, left behind. Adam Hersh, visiting economist at the Economic Policy Institute, predicts that more than 80% of the new jobs created by the infrastructure plan will not require a college degree.
These gigantic proposals were daring efforts. Some found them too daring. Economist Larry Summers thought the stimulus package, for example, was too big. This could over-stimulate the economy and lead to inflation.
Larry is one of the smartest people I have ever known and someone I truly admire. If I were an economist, I might have agreed with him. But I am a journalist with a sociological bent. For more than a decade, I have covered a country that is economically, socially and morally disintegrating. I figured that one way to reverse this was to energize the economy and create white-hot labor markets that would push wages up to their lowest point. If inflation was a by-product, so be it. The compromise is worth it to avoid a national rupture.
Biden’s $ 1.9 trillion stimulus package was passed and was a huge success. It has heated the global economy. The Conference Board predicts that real GDP growth will be around 5% this quarter. The unemployment rate is going down. Retail sales are exploding. About two-thirds of Americans believe their household finances are good.
Best of all, the benefits flow to people at the lower end of the education and income ladder. In the first month of payments alone, the stimulus bill’s expanded child tax credit lifted three million American children out of poverty. Compensation for hourly workers in the leisure and hospitality industry jumped 13% in August from a year earlier. In June, there were more non-farm job offers than there had been at any time in American history. Workers have enormous power these days.
The infrastructure bill Biden just signed will boost American productivity for years to come. As Morgan Stanley’s Ellen Zentner recently told The Economist, it’s a rule of thumb that spending an additional $ 100 billion annually on infrastructure could increase growth by about a tenth of a percentage point, which is important in an economy the size of ours. Federal infrastructure spending will account for almost as much of annual GDP as the average level during Franklin Roosevelt’s New Deal.
But Summers was right. The stimulus – along with all the supply chain disruptions and labor shortages inevitable upon exiting a pandemic – have boosted inflation. Additionally, Americans are exhausted from a pandemic that never seems to end.
And they attack the Democrats. A recent ABC News / Washington Post poll found voters now prefer Republican congressional candidates in their own districts by 51% to 41%. This is the GOP’s biggest advance since this poll began asking the question 40 years ago.
If presidencies were judged on short-term popularity, Biden’s effort would look pretty bad. But it is a terrible measure. First-term presidents almost always see their party getting hammered in their mid-term after taking office. This is especially true if the president has achieved great things. Michigan state political scientist Matt Grossmann has looked at popular voting trends in the House since 1953. Often, when Presidents succeed in pushing important laws – Republicans and Democrats alike – voters have turned around. against the president’s party. Look, to take a recent example, how Obamacare preceded a Democratic bombing in 2010. People are wary of change. Success mobilizes the opposition. It is often only in retrospect that these policies become popular and even sacred.
Presidents are judged by history, not by the distraction and exhaustion of the moment. Did the person in the Oval Office address the central issue at hand? The Biden administration passes this test. Of course, there have been failures, the shameful withdrawal from Afghanistan, the refusal to renounce the excesses of the cultural left. But this administration will be judged according to whether it has reduced inequalities, widened opportunities, created the material basis for greater national unity.
It’s doing that.
My fear is not that the Democrats will lose the midterms – it will have been worth it. I’m afraid the Democrats in Congress will do some fantastic policies like the temporary expanded child tax credit to make the budget numbers look good. If they do, future Republican majorities will simply let these policies expire.
If that happens, it will all have been in vain. Democrats will have squandered what has truly been a historic set of achievements. Voters can judge Democrats harshly next November, but if they act forcefully, history will judge them well.