President Biden served 36 years as a senator from Delaware, the most corporate-friendly state in the nation. He was, by any measure, a business-friendly moderate in the Democratic Party. Then something happened.
As one observer noted, Biden was a neoliberal who became an economic nationalist because he apparently came to the conclusion that markets were broken, that power was too concentrated and workers were disempowered. The result has been a heavy dose of progressive industrial policy.
But now the torch has been passed, so will Vice President Harris follow President Biden’s lead?
The Biden-Harris administration’s frustration has been palpable. Where is the credit for bringing inflation down, for millions of new jobs, a bullish stock market, rising wages, an infrastructure bill and the lowering of prescription drug prices?
What they got was low consumer confidence, blame for rising prices and a belief that the country is in recession (it’s not).
Yet polling seems to suggest that Harris is not being blamed or credited (yet) for the Biden economic record.
In her major speech on economics in North Carolina, she called for a focus on the middle class and what she called an “opportunity economy” that would help people build wealth. Her main proposals are a reinstituted child tax credit, a variety of subsidies to promote home ownership and construction, particularly starter homes, a national law to prevent price gouging at the grocery store and — this week — a call for tax credits in support of small businesses.
Some are skeptical. The Washington Post groused about “gimmicks.”
GOP vice presidential candidate J.D. Vance has also pushed the idea of bringing back the child tax credit — which was so effective in reducing child poverty — so there would seem to be some bipartisan support for that.
Though 37 states (including Illinois) have various laws against price gouging, it is hard to find many who think that such a law would do much of anything to reduce prices in the low-margin grocery business. The proposal has often been mischaracterized as price controls.
As for the housing subsidies, some of it gets applause, but others fear ideas like a $25,000 credit for first-time home buyers will only drive up home prices. All together, these ideas might cost $2 trillion over 10 ears.
To pay for this, Harris has adopted some and tweaked other parts of President Biden’s latest budget, which calls for new taxes on the wealthy and corporations but would keep the pledge that no one making under $400,000 a year would see a tax increase. That means she would keep large chunks of former President Trump’s 2017 tax plan.
Theoretically, the new taxes would more than pay for her program. The Penn Wharton Budget Model projects that middle class taxpayers would do better under Harris than Trump by a couple of thousand dollars a year, mainly because of Trump’s proposed tariffs.
Both candidates are accusing the other of plans to cut Social Security and Medicare benefits, but both pledge to protect these entitlements as the clock ticks toward insolvency.
Talk of hard choices and bitter pills are generally not part of political campaigns from either party. Both Trump and Harris are populists who want to use the power of the federal government — just in different ways.
Harris has to battle against the memory of the pre-pandemic economy, the Fed’s historically rapid rate hikes in the spring of 2022, and a lot of nonsense about socialism/communism.
However, in judging the two candidates’ economic proposals, one has to understand that it is doubtful that either will be able to do everything that they want. But their goals tell us a great deal about their sensibilities and priorities and for whom they’ll fight.
Next: Immigration.
• Keith Peterson, of Lake Barrington, served 29 years as a press and cultural officer for the United States Information Agency and Department of State. He was chief editorial writer of the Daily Herald 1984-86. His new book “American Dreams: The Story of the Cyprus Fulbright Commission” is available from Amazon.com.