The new Biden administration is facing the worst economic crisis the US has seen since the Great Depression, a global pandemic, and rising social tensions. In the first 100 days, they have ramped up vaccination efforts, passed the American Rescue Plan, proposed an Infrastructure Plan and more. Following Trump, the bar for the highest seat in the country was set very low, but much of the media is already lauding President Biden as comparable to Franklin D. Roosevelt. How much of this is justified and how much of it is overblown?
Prof Wolff first addressed the similarities and differences between Biden and FDR. He says they are similar in that they both were centrists who then went farther than expected after taking office, “but nothing Mr Biden is proposing has the scope, the size and the social impact of what Roosevelt did.”
In particular, Prof Wolff points to the difference in their approaches to taxation. In order to pay for his incredible new programs, FDR proposed a 100% tax rate on income above $28,000, which is comparable to about $400,000 today. This rate was negotiated down to 94%. In contrast, Biden is proposing increasing income tax to only half of what it was before Trump slashed it in 2017. “Compare a 94% top rate to the current 39 or 39.5% top rate. They're not even close… Comparing Mr Biden to Mr Roosevelt is crazy.”
But what is the potential for Biden to become more like FDR, and to propose much more progressive programs? “The questions of how far a president will or will not go have very little to do with the individual or, for that matter, the political party. What makes the thing happen or not are the larger social conditions that force certain courses of action, and block others.”
However, Prof Wolff argues that the lesson of the New Deal goes largely unlearned, and the Biden administration seems poised to repeat it. “You can't stop with a good proposal to spend money, and you can't stop with a good proposal to tax those who have it. Because if you don't change the structure of this system even the things you accomplish will become temporary, and will be undone, because you haven't taken that last step because you were afraid to do so.”
Prof Wolff then turned to foreign policy and described three instances that make it clear to him that the United States is losing its dominance of the global stage: the case of the Russian/German gas pipeline, the case of vaccine patent suspension, and other countries’ perception of our withdrawal from Afghanistan.Finishing the lecture, Prof Wolff asked the question, in this period of decline of US American Capitalism, who is rising? “When it comes to a powerful capitalist competitor of the United States, China is it, and that changes everything.”
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