Biden Investment In Middle Class, Break With 45 Yrs of Neoliberalism Could Create Big Economic Boom

[appalachiablue]

- 'Biden's break from neoliberalism to invest in the middle class could create 'the mother of all economic booms,'- Business Insider, May 8, 2021. - Paul Constant, Nick Hanauer & David Goldstein spoke with economic commentator Anusar Farooqui who says we could soon see a "once-in-a-century realignment" of how the global economy works. - Excerpts:

In the piece, Hanauer says, Farooqui "argues that the Biden administration is making a really profound break with the last 45 years of neoliberalism, and that that break is going to create probably the biggest economic boom in collective memory, probably since the '60s." If Farooqui is right, the consequences of that boom would be world-changing. Hanauer explained that it would "absolutely create the kind of broad-based growth and benefits that should both transform the economy and also potentially transform politics, which is an even more important achievement."
The pandemic's economic impact: Farooqui says that it's now common knowledge that we've seen a slowdown in growth and an increase in income inequality in the decades since the broad global adoption of trickle-down economics as the dominant economic theory.

"What I think has happened, which is the main thesis in that essay," he explained, "is that elites in the U.S. today, and technocrats in particular, have come to the conclusion that the only way to stop the political instability which was revealed in 2016 is to restore broad-based growth," in the form of huge public investments in infrastructure, in support programs, and in policies that will broadly improve the lives of the American people. "Public investment has been declining, and is really low by historical standards," Farooqui said. So now, the Biden administration needs to show positive economic progress in a way that can be empirically proven. In other words, the Biden administration wants you to be able to see big improvements to the American middle class with your own eyes after the next infrastructure bills have passed - and before next year's midterm elections.

Biden's approach to the economy: The fact that President Biden, who was largely very mainstream throughout his career in the Senate, happens to be the messenger for this economic theory, Farooqui said, is "very pleasantly shocking, I must confess." So what has happened to the economy to bring Biden around to this idea of investing deeply in everyday Americans? Farooqui believes that the last 40 years of neoliberal constraints on the economy, in the form of deregulation and tax cuts, have basically hamstrung global economic growth by taking power away from the sectors of the economy that actually produces things. "All of the great industrial firms are responsible for the mid-century productivity growth" of the 20th century, he said. That productivity was "responsible for the growth of the American working class and the achievement of middle class standards that was the envy of the world."

.. Rather than creating products and services that appealed to customers, the sole purpose of every large company became a devotion to increasing shareholder value, creating an "hourglass economy" in which "income growth stalls for the bulk of the population" while wealthy shareholders and CEOs increase their fortunes exponentially. Goldstein asked, "are you implying we could have had an economic boom all along over the past 45 years? None of the dislocation, none of the inequality, none of the slow growth was necessary or unavoidable, had we not had this swing towards neoliberalism?" "Absolutely," Farooqui said. "I'm absolutely certain of that. For example, the Fed could have always run the economy really hot. That could have meant that low-skilled workers' wages, middle-skilled workers' wages, people with high school degrees - their wages would have grown at the same rate as college graduates' salaries, and professional class salaries, which have exploded." Many pundits have predicted that we're on the verge of a once-in-a-lifetime economic boom.
But Farooqui's claims take that idea one step further: He argues that we could potentially see a once-in-a-century realignment that wipes out the old thinking and sets the table for a new understanding of how the global economy works...

More, https://www.businessinsider.com/biden-us-economy-economic-post-middle-class-investing-2021-5
________________

- Nick Hanauer, https://en.wikipedia.org/wiki/Nick_Hanauer

- Anusar Farooqui, https://www.researchgate.net/profile/Anusar-Farooqui

[cstanleytech]

1. Its been pretty clear that the idea that cutting taxes for the wealthy would end up spreading down

to the average person has been a complete and utter failure.
All that it meant is that the wealthy simply accumulated more and more wealth and it has done jack shit for helping the average person earning enough to make a better life for themselves and their families.

[quakerboy]

2. I feel like thats been clear to most of us at the ground level

Ive not been at all clear that virtually anyone in the mid or upper levels of politics understood it though

[Probatim]

8. I'm 99% certain those at the top of the republican party understand this.

You can't have an oligarchy if you have a stable and healthy middle class - so they fund tax breaks with our future.

[PETRUS]

3. I have such mixed feelings about this.

On the one hand, the neoliberal paradigm has done immense harm, and I'm glad to see an apparent turn away from it. The economic policies of the Biden administration would likely improve a lot of U.S. lives in the near term.

On the other hand, the article predicts an economic boom as a result of these policies, which is probably an accurate forecast given other aspects of how our economy is structured. The problem with this is that the U.S. and other rich countries already produce and consume way too much, it's just that the goods and services are maldistributed. The material footprint of the U.S. is 32 tonnes per capita. This is more than three times higher than what is generally considered sustainable, and far higher than what it takes to provide people with decent lives (there are countries with comparable stats on health/life expectancy and literacy/education with far lower material footprints, GDP, and carbon emissions). We need to abandon the growth paradigm. Questions about sustainability and limits to growth aren't just theoretical problems to ponder, they're a reality we're bumping up against right now. We're already disrupting the climate and other natural systems and are on track to do enough ecological damage to cause widespread social collapse and unimaginable human suffering. We need to stop.

[Phoenix61]

4. The article doesn't say where the growth will occur.

If it’s in green technology that would solve a lot of the issues we are facing now. Roofing tiles that are solar collectors. Sewage treatment facilities that are powered by the methane gas produced from the raw sewage. Sidewalks that are solar collects that power street lights. The possibilities are endless.

[PETRUS]

5. Aggregate growth is a problem no matter what.

I hear you about "green" technology, and I think investments there are appropriate and that growth in specific areas could be good - as long as other areas contract. Rising GDP always results in higher material throughput and higher energy demands. Our material throughput is already way higher than it should be, and it's not plausible for us to transition away from fossil fuels quickly enough if we have to meet current (and rising) energy demands.

[Phoenix61]

6. It wasn't plausible for us to go to the moon but we did.

Technological advances were made that made it possible. “Rising GDP always results in higher material throughput and higher energy demands” is an assumption based on the past. It’s the same belief system that said we couldn’t get to the moon because of vacuum tubes. We have no way of knowing what will be the next big technological breakthrough.

[PETRUS]

7. You've ventured into theoretial possibilities.

In and of itself, that's fine. And as I've suggested, it's worth pursuing research into such technology. It is, however, a gamble with potentially catastrophic consequences. Putting all of our hopes in the technology-might-save-us basked strikes me as irresponsible.