From Reaganomics to Bidenism?

Could Joe Biden’s big package be the start of a whole new paradigm of economic policy making?

 

Biden´s $1.9 trillion relief bill approved by the Congress last Wednesday easily represents one of the largest stimulus packages in American history. It is a package thought for the low- and middle-income classes and includes a miscellaneous of direct payments, extended unemployment benefits, funding for schools and childcare services, aids to state and local governments, funding directed at helping the response to the pandemic, among other measures.

This is a lot of money in itself. But, is there more behind? Will Joe Biden once be seen as the one who, through such package, has pushed the button for a whole new economic paradigm? Yes, says Washington Post columnist E.J. Dionne Jr. in a piece pointing out that Biden´s plans oppose those of the Reagan era that went into a whole different direction.

After little more than 50 days into office, Biden has already gained the approval of the Congress on some major decisions and announced further measures. The $1.9 trillion rescue plan is certainly his flagship victory and his massive vaccination plan is already on track to exceed its initial target, but Biden is already working on his For the People Act aiming at regulating the chaotic and asymmetric US electoral system and has expressively spoken in favor of the need to strengthen unions and facilitate their formation inside companies – a workers´ tool that has been progressively weakened since Ronald Reagan started his war against them in 1981. Besides, his $ 1,9 trillion bill will mostly benefit the bottom 40 percent.

Are these steps a clear sign that we are entering what E.J. Dionne Jr. calls “Bidenism”? The almost two trillion dollars relief bill seems to be gathering also the approval of lower-income Republicans hinting to how big the need for a decisive government action was. The old trickle down rhetoric hailed during the Reagan era – revived by Trump with his Corporate tax cuts and criticized even by Pope Francis a few months ago – has clearly waned under a Biden who´s growth objectives seem to stand on the restoration of aggregate demand, that is helping low- and middle-class Americans rebuild their purchasing power. History teaches us that whether Biden´s actions will be a turning point, the beginning of a new era of American politics or not, ultimately depends on the fruits of such policies.

 

 

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