Biden: Centrists and far-right propaganda | Business

Anyone paying attention to the Obama years knew that Republicans would also try to weaken Democratic presidencies. Some of the actions of the Republican Party – notably, the efforts of governors like Ron DeSantis and Greg Abbott to prevent an effective response to a deadly pandemic – have scandalized even skeptics. Still, a Republican attempt to derail President Joe Biden was predictable, as much as that might hurt the rest of the country.

More surprising, at least to me, has been the self-destructive behavior of the centrist Democrats, a term I prefer to “moderates,” because it’s hard to see what’s moderate in demanding that Biden abandon such popular policies as taxing the big boys. companies and lower drug prices. By now it seems perfectly possible that a handful of die-hard Democrats will tear down the entire Biden program; And yes, it is the centrists who are having a tantrum, while the progressives are behaving like adults. What is motivating the sabotage squad? Part of the answer, I would say, lies in the fact that they have internalized the decades of economic propaganda of the right to such an extent that their reaction to any proposal to improve the lives of citizens is to think that it must be unfeasible and unaffordable.

Of course, this is not the whole story. We certainly shouldn’t underestimate the influence of money: both wealthy donors and Big Pharma have been shamelessly flaunting their strength. And we shouldn’t discount the importance of simple inability to calculate: $ 3.5 billion sounds like a lot of money, and it shouldn’t be taken for granted that politicians understand (or think their voters understand) that this is a proposed expense over the long run. in a decade, not in a single year. It would be equivalent to just over 1% of GDP in that period, and would continue to leave total public spending well below the level it reaches in other rich democracies. It also overlooks the fact that the true cost, after net savings and new revenue, would be well below $ 3.5 billion.

And some politicians seem to fall victim to the mistaken notion that only spending on “physical” infrastructure, such as roads and bridges, can be seen as an investment in the future of the country. That is, they are not up-to-date with the growing body of evidence showing the high economic returns to spending on people, especially spending to lift children out of poverty. Still, I am often surprised when I hear politicians and pundits who do not consider themselves part of the conservative movement selling economic accounts that are little more than right-wing propaganda, but have been repeated so many times that many who should be better informed accept them as fact. tried.

For example, I often hear that runaway spending and budget deficits caused stagflation in the 1970s. In fact, throughout that decade, federal debt declined as a share of GDP (and then skyrocketed during Ron’s tenure). Reagan). As far as we understand the stagflation of the 1970s, it appears to have been caused by the combination of the oil crisis and ineffective monetary policy. The fact that there was a large government had nothing to do with it.

At times I also hear, even centrists, attribute the recovery of the American economy to Reagan’s tax cuts. The truth is that, in the decades after those reductions, most Americans fared worse than in the corresponding period before; the post-Reagan bonanza was in fact limited to a small number of the wealthy.

Finally, it is astonishing how many people believe that European economies with high social spending are seriously harmed by reduced incentives to work. It is true that in the 1980s and 1990s, much of the continent seemed to suffer from “eurosclerosis” – persistently high unemployment, even in periods of economic expansion. But that was long ago. Today, countries with generous welfare states often have a better performing labor market than the United States.

Let’s look at the example of Denmark, which Fox Business has once compared to Venezuela. Indeed, if there was any truth to the right-wing dogma, Denmark should be an economic hovel. It has a social expenditure much higher than that of the United States; two-thirds of its workers are unionized, and the unions are so powerful that they forced McDonald’s to pay their workers $ 22 an hour.

But the truth is that working-age Danes are more likely than their American counterparts to be employed. It is true that real GDP per capita is a bit lower in Denmark, but this is mainly because, unlike the United States, it is not a country without holidays; in fact, Danes take time off.

The point is, as far as I know, these troublesome Democratic centrists are blinded by an economic narrative deliberately created to block progress and justify massive inequality. And so they assume that Biden’s program – which is a fairly modest effort to address our country’s real problems – is somehow irresponsible and threatens the future of the nation.

I would encourage you to reconsider your premises. Biden’s proposed spending is not irresponsible and would not hurt growth. On the contrary, it would be deeply irresponsible not to invest in both people and cement, and when we look at the evidence, instead of repeating the dogma of the right, we see that the Biden program is indeed growth friendly.

Paul Krugman He is a Nobel Prize in Economics. © The New York Times, 2021. News Clips translation