By Edmund S. Phelps
NEW YORK – Commentators have offered many reasons why one should vote in November for Joe Biden, the Democratic nominee for US president. Yet the economic dimension of the election has been of little interest to pundits, and few, if any, economists speaking on the subject have bothered to highlight how the outcome bears directly on people’s welfare. But the economy is the stage on which people work in the hope of gaining personal development and the satisfaction of succeeding. It isn’t just about the money.
The economic case for Biden begins with the economic case against President Donald Trump. Consider Trump’s costly corporate tax cut. It did not deliver anything like the investment and growth he promised, and the main effect was to run up fiscal deficits in the first three years of his presidency.
Trump’s disregard for this fiscal profligacy has set a precedent for unnecessary deficits in future administrations. (Of course, the deficit incurred more recently in responding to the pandemic was unavoidable and, under the circumstances, beneficial.)
His habitual threats to American businesses have added new uncertainty to investment and trade decisions. He practices Mussolini’s doctrine of corporatism: the government as puppet master pulling the strings of puppet companies. That economic policy inhibits enterprise and innovation at a time when they are desperately needed.
Trump’s misguided crusade to reduce the harmless trade deficit has shrunk world trade, thus worsening the efficiency of resource allocation at home and abroad.
His populist rhetoric has not translated into better pay for less advantaged workers or victims of discrimination. He has sought to erase any sense of economic justice. He cares nothing about the appallingly low wage rates for those at the bottom or about the terrible living standards that these wages afford. And he has done nothing to support the eradication of statistical discrimination – racial, gender, and LGBT+. His weakening of the Affordable Care Act (Obamacare) has heavily affected people with low incomes.
Trump’s insistence that climate change is a hoax has put the world economy and the viability of the planet in further danger. He says that the wildfires ravaging the American West are the result of poor “forest management.” He has depreciated American soldiers’ heroism and sacrifice, and has no appreciation or understanding that the economy needs people’s heroism to dream up new ideas and risk investing in their development and market entry.
In attacking institutions from the FBI to the US Centers for Disease Control and Prevention, Trump is hollowing out the governmental structure. In imposing pointless obstacles that lead to trade wars, he has alienated America’s allies. In his admiration for dictators and authoritarian leaders, he is helping them to establish twenty-first-century fascism. And his chronic lying from the Office of the President undermines the people’s confidence in their government.
There are other outrages too numerous to mention. But one of the most appalling was his effort to eliminate the so-called DACA program for undocumented aliens who were brought to the US as children, who, after being raised and educated in America, now face deportation. Yet another outrage is his tactic of instilling fear of reprisals and arrest. As a result, there is a growing climate of anxiety and distrust.
Today, a great many people support Biden on these grounds and others. Trump stands in the way of the nation regaining a sense of flourishing, equity, and social harmony. But it is not clear that he could be defeated on these grounds alone. Many Americans dread a government devoted to ministering to a mélange of social groups without a thought to core matters of economic growth and job satisfaction.
But there is also a positive argument for supporting Biden.
First, Biden understands that in America there is still a crushing disparity between the wages of the seriously less-advantaged and those paid to middle-income people – and payments for single mothers do not change that. Biden, having grown up in the steelmaking region of Pennsylvania, can hardly be blind to the deprivations and pain of low-paid workers. So, if elected, we would have a president responsive to legislative initiatives for subsidies designed to pull up these workers’ meager compensation.
Biden is also attentive to the existential threat of continuing climate change. There is a vast litany of problems, such as the burning of fossil fuels causing increased levels of carbon dioxide and rising temperatures. Addressing these problems will require government intervention and international cooperation, such as that mandated by the 2015 Paris climate agreement, from which Trump withdrew the US. No one can doubt that, if elected, Biden would be eager to play a central role in the resumption of the battle against global warming.
Finally, Americans are living with the virtual stagnation of the economy since the early 1970s (interrupted for about a decade by the Information Revolution). This continuing malaise lies behind wage earners’ increased frustration over their relative standing in wage distribution – a sentiment that, more than anything else, accounted for Trump’s rise. There can be no question that a President Biden – unlike President Trump – would want to restore the economy to its former glory.
For all these reasons, it is vitally important that the people vote for the Biden-Harris ticket. Trump has gravely weakened the nation’s economy, while Biden has shown over his life that he cares about people’s chances for prosperity and rewarding lives – for achieving the American Dream.
Edmund Phelps, the 2006 Nobel laureate in economics and Director of the Center on Capitalism and Society at Columbia University, is the author of Mass Flourishing and co-author of Dynamism.