The Biden Presidency

[Stavros]

So far, Biden has done what was expected of him-

-The US will re-commit to the Paris Climate Change Agreement.
-The US will halt its exit from the WHO and return to full membership (I assume with the same level of funding as before).
-The ban on Transgendered Americans serving in the Military will end.
-The anti-Abortion restrictions linked to Foreign Aid will be lifted.
-A permit for the Keystone Pipeline has been revoked, halting the completion of this project (again!).

In new moves
-The US will join COVAX-
"a programme that pools international funds to buy vaccines and equally distribute them around the world.Trump has spurned the programme, but in its most recent Covid-relief package the US Congress reserved nearly $4bn (£2.9bn) for Gavi, the organisation that co-founded Covax, which was widely seen as intended to support the vaccine-sharing platform.
Its formal membership opens the door to more funding and direct donations of vaccines, and builds momentum for the programme and wider efforts to guarantee equal access to vaccines, treatments and technology to fight the pandemic."
https://www.theguardian.com/us-news/...vaccine-scheme

-The US will not be moving the US Embassy in Israel back to Tel-Aviv, and the Biden Admin is expected to have a colder relationship with Netanyahu (still struggling to retain his position as Prime Minister) and make some effort to re-invigorate 'peace talks' with the Palestinians.

-After Kamala Haris, another first: a Transgendered American has been appointed to an official post in the US Government -if confirmed, Rachel Levine will become Assistant Secretary for Health. While Biden has said "her "steady leadership" was needed "to get people through this pandemic."" an online publication, freebeacon, has reported-

"Biden health nominee Rachel Levine directed Pennsylvania nursing homes to accept COVID-positive patients—even as she pulled her own mother out of a longterm-care facility over pandemic concerns".
https://freebeacon.com/politics/bide...ovid-patients/

It remains to be seen if her appointment will be confirmed, but she appears to have reasons for her decisions as well as her mistakes (details are in the linnk above), and freebeacon might be campaigning aganst her- I don't know what the truth of these allegations are, so I have linked the story so others who may know can comment on it if they wish.

Going forward, the UK is anxious to begin negotiations with the US on a Trade Deal, about which I don't think the Biden team has yet made a statement. Biden is expected to make his first trip to the UK in June for the G7 summit which will be held in Cornwall at Carbis Bay, on the North Cornwall coast not far from St Ives, and lauded by the London Evening Standard-
https://www.standard.co.uk/escapist/...n-b900265.html

I wonder if he will stop off in Ireland on his way to Cornwall?

[blackchubby38]

"The US will not be moving the US Embassy in Israel back to Tel-Aviv, and the Biden Admin is expected to have a colder relationship with Netanyahu (still struggling to retain his position as Prime Minister) and make some effort to re-invigorate 'peace talks' with the Palestinians."

I don't think the US Embassy should have been moved to Jerusalem because of the religious significance of the city to the three religions that inhabited it. But what's done is done and I don't think a thing should get started where the embassy keeps moving back and forth between Tel-Aviv and Jerusalem depending on who is occupying the White House. In essence, making it a political football.

I will add this caveat though. If it does get moved, I don't think it has to be done right away. While I'm not familiar with when Netanyahu's term in office is up, I think it might better if its done when he is no longer PM.


"Biden health nominee Rachel Levine directed Pennsylvania nursing homes to accept COVID-positive patients—even as she pulled her own mother out of a longterm-care facility over pandemic concerns".

It remains to be seen if her appointment will be confirmed, but she appears to have reasons for her decisions as well as her mistakes (details are in the linnk above), and freebeacon might be campaigning aganst her- I don't know what the truth of these allegations are, so I have linked the story so others who may know can comment on it if they wish.

IF (and I can't stress those words enough) the allegations are true, then I'm not surprised because it would just be another example of someone in power saying "Do as I say, don't do as I do" and I think you can make the argument that she should withdraw her name from consideration as health nominee.

Yes you can say that she wasn't only one and the biggest culprit of ignoring federal protocols and instead mandating COVID positive patients be forced back to their nursing homes (Governor Cuomo) still has his job. You can also make the case that people in power were still figuring things out at the time.

But her reason as to why she did it: Levine claimed the decision to relocate her mother from a longterm-care facility to a hotel was made at her mother's request following multiple confirmed cases within the facility.


Is not a good enough one to give her pass. It can also be viewed by many (although I don't hold it because if I had the means I would do the same thing) as someone being privileged enough to have the means to take care of a family member.

Although if she had ability to change the mandate at the time that she relocated her mother, than by all means she didn't do anything "wrong" and should be confirmed.

[Stavros]

Thanks for your thoughts, Backchubby -I did not approve of the Embassy move, but its done, and if anything, it makes it more logical for the US to abandon a 'two-state solution' and go for a Federation in which Israeli and Palestinian citizens have equal rights, and the same four freedoms the EU has -free movement of people, goods, services, and capital, though the last one might advantage Israelis. I see no other solution unless someone can revive the 'two-state solution' and explain how it will work. I still think, even in the Federation, that the municipal boundaries of Jerusalem must be re-drawn to remove all of the Israeli Government's buidings from it, so that the politics is taken out of that city and it becomes a regional hub of inter-faith dialogue.

Netanyahu has been in Coalition with his rival Benny Gantz, but it collapsed over the failure to approve a budget so Israel has it's 4th General Election in two years in March. There is an article on it here-
https://www.dw.com/en/can-benjamin-n...ion/a-56151107

And a review of the Memorandum of Undestanding that the US and Israel signed in 2016 worth £38 billion over 10 years (mostly military) and an assessment in The Atlantic are here-
https://fas.org/sgp/crs/mideast/RL33222.pdf
https://www.theatlantic.com/internat...ry-aid/500192/

I don't expect major changes in the US-Israel relationship, but relations with Saudi Arabia could get problematic as I understand Biden intends to make public an assessment of the involvement of MBS and members of the Saudi Government in the assassination of Jamal Khashoggi.
https://www.theguardian.com/world/20...into-khashoggi

The obvious problem for Biden is Iran, both in terms of its adherence to the Nuclear Deal signed when Obama was President, and whether or not Biden can repair the damage done since then, and in terms of Saudi Arabia and Israel's anti-Iran alliance which Kushner did so much to deepen.

What Biden could do, and if he wants to help end the horrific war in the Yemen, must do, is try to create a conference or set of summit meetings which enable both Iran and Saudi Arabia to end the war in Southern Arabia. He could ban the sale of arms to Saudi Arabia, something the UK is supposed to be doing, but as a primary means of ending the war itself. A political settlement in Yemen is not impossible, but with the North and South fractured almost the same as it was when there were two Yemens, and with the Saudis intent on having 'their guy' in charge in Sana'a, that poses a major challenge -but as I say, ending the actual war must be the priority, as the Saudis cannot win this war -they fought a war with Egypt for control of the Yemen in the 1960s and lost that one- but the Iranians don't really need a client state in Yemen unless they feel threatened by SA, and a year or so ago there was even a hint that MbS realized he had made a mistake in Yemen so the possibility that Saudi Arabia and Iran meet over the negotiating table is not entirely impossible.
It would be a major boost to Biden's credentials, and also prove that Trump-style confrontation and angry rhetoric makes things worse, not better. War plus Covid is devastating Yemen, the costs of repairing that country are astronomical, but the US and the UK have been responsible for selling weapons to one side in the conflict, and cannot just walk away from it.

Summit meetings could also involve the urgent need for the US to have a coherent policy on nuclear developments in the Middle East, with specific regard to Israel, Iran, Saudi Arabia and the UAE. That's a lot to ask, but I think with a fresh team in place, and Saudi Arabia in a weaker position internationally than it has been under Trump -a financial beneficiary of their 'dollar diplomacy' in a way Biden is not-, they either get involved, or remain stuck in hugely expensive projets none of which have a positive outcome.

[filghy2]

Congress has now passed the $1.9 trillion Covid relief package, which will be the major determinant of the future prospects of the Biden administration.
https://www.vox.com/policy-and-polit...9-passes-house
https://www.politico.com/news/2021/0...timulus-474860

The design of the package has been heavily influenced by the experience under Obama in 2009, when the stimulus was widely recognised to have been too small. The consequent sluggish recovery led to the Democrats losing control of Congress in 2010, which crippled his Administration from then on.

There has been criticism that the package is too large, and not just from the usual suspects who discover government borrowing is a huge problem only when Democrats come into power. For instance, a former senior official under Clinton and Obama has warned about inflationary risks,
https://www.washingtonpost.com/opini...ovid-stimulus/

While there are some risks, there seem to be reasonable arguments for erring on the side of doing too much rather than not enough, given the implications of another sluggish recovery. The key point is that inflation risks have been overestimated consistently for most of the past 2 decades, and the Federal Reserve is actually trying to increase inflation.
https://cepr.net/excessive-stimulus-...worries-about/
https://slate.com/business/2021/02/l...ost-op-ed.html

[Stavros]

Some fair points here. I think the fundamental trajectory is that if the US emerges from the Covid pandemic by the end of 2021, mosty through the vaccinations programmes, the economy will 'bounce back' or 'grow' as consumers re-enter the market place and businesses that have survived return to health- there are already signs of growth in the last quarter of 2020.

What I am not sure about is whether or not the Obama era experienced sluggish growth because these people argue

"In a healthy economy, growth, unemployment, and inflation are in balance. Most economists agree the ideal GDP growth rate is between 2% and 3%".
https://www.thebalance.com/what-is-t...h-rate-3306017

What's wrong with 4% or even 5% growth? Perhaps you could help out here as your background in economics is superior to mine. Also, we don't yet know if or how the US is going to change as a consequence of the Covid pandemic, and how this may affect economic growth, job security, taxation, and incomes.

It is somewhat different in the UK because of the negative impact Brexit is having on the economy and so I expect the US to do much better than us over the next 12-18 months leading into the mid-terms. That said, I also think France and Germany will take longer to emerge from the pandemic with economic growth, though historically Germany performs better than France in this regard.

[filghy2]

What I am not sure about is whether or not the Obama era experienced sluggish growth because these people argue

"In a healthy economy, growth, unemployment, and inflation are in balance. Most economists agree the ideal GDP growth rate is between 2% and 3%".
https://www.thebalance.com/what-is-t...h-rate-3306017

What's wrong with 4% or even 5% growth? Perhaps you could help out here as your background in economics is superior to mine.

There are two different issues. The first is the growth rate the economy can maintain in the long run, which is what the 2-3% refers to. Once the economy is effectively at full employment its growth depends on growth in the labour force and productivity.

The second is the rate the economy can grow at when it is coming out of a recession with high unemployment, which should normally be higher until unemployment comes down.

Growth coming out of the 2008 financial crisis was slower than in most previous recoveries, which meant that unemployment had not fallen much by the time of the mid-terms. That is what they are trying to avoid this time.

[Stavros]

There are two different issues. The first is the growth rate the economy can maintain in the long run, which is what the 2-3% refers to. Once the economy is effectively at full employment its growth depends on growth in the labour force and productivity.

The second is the rate the economy can grow at when it is coming out of a recession with high unemployment, which should normally be higher until unemployment comes down.

Growth coming out of the 2008 financial crisis was slower than in most previous recoveries, which meant that unemployment had not fallen much by the time of the mid-terms. That is what they are trying to avoid this time.

Thank you for your concise thoughts. I have had to do a search on the topic and it yields lots of surveys. From some that I have read the explanations range from a tightening of fiscal regimes when the recommendation was the opposite -but where the demand for, and implementation of fiscal 'austerity' as it was called in the UK, was primarily the choice of 'Conservatve'/Republican governments (in the US also at the State level); a shrinkage of the labour market, mostly through retirement (of people like me), and the lack of aggregate demand not hiring, a particular blow for young workers; and a contraction in production owing to a slowing of demand.

Here for example, is what one survey says-

"...our historically weak recovery has been accompanied by historically deep cuts in government spending.
...The Great Recession of 2008-2009 was the worst on record since the Great Depression of the 1930s, in terms of both total decline in real GDP , and total increase in the unemployment rate between the previous peak and the beginning of the subsequent recovery. The economy was in a very deep hole in 2009, and had we spent the way we did after previous recessions, we would have experienced substantial increase in GDP since then. Instead, cuts in government spending over the last eight years have had a pernicious, negative impact on output and income, as well as on jobs and wages, which depend on the level of spending in the economy. If it weren’t for these cuts, the economy would likely be fully recovered by now, and the expansion would have equaled or exceeded the Bush recovery."

Thus:

"If government spending had increased by 33.5 percent, as it did during the Reagan recovery (1982-1990), then the Obama recovery would surely rank as one of the strongest on record. We would be enjoying true full employment and rapid GDP growth, as we did in the late 1980s."

But

"...instead of boosting spending, as is typical in a recession, Congress has abandoned fiscal policy, largely refusing to fund even normal (inflation- and population-adjusted) increases in government spending, as my colleague Josh Bivens has noted repeatedly (Josh will be releasing a paper exploring this same topic in depth in the coming weeks). Many state governments also made damaging spending cuts, and state government employment today is still below 2009 levels.
https://www.businessinsider.com/the-...16-8?r=US&IR=T

Another political assessment claims-
" We are enduring one of the slowest economic recoveries in recent history, and the pace can be entirely explained by the fiscal austerity, particularly with regard to spending, imposed by Republican policymakers, members of Congress primarily but also legislators and governors at the state level."
https://www.epi.org/publication/why-...o-is-to-blame/

A more technnical appraisal concludes-

An explanation for poor output growth needs to start with two key facts: Productivity grew substantially less than its historical growth rate, both in expansions and in general. and labor-force participation shrank an atypical and unexpected amount. Research on both topics is active today. We conclude in this paper that the large movements in both factors were in train prior to the recession, and cyclical effects contributed at most modestly to them.

https://www.princeton.edu/~mwatson/p...raft_Final.pdf

From these perspectives, and factoring in the Covid dimension, the Biden Presidency appears to have learned from the Obama experience that more is needed in terms of stimulus, indeed it is also closer to Reagan's reaction in the first term- and with control of Congress something it might achieve, though questions remain in the cases of Republican run States. The logic is clear as I suggested above with regard to the timing of the plan to show benefits as the US votes in 2022.

The danger is that borrowing continues to increase, which doesn't seem to bother you so much, but that demand and growth may not create the basis of long term growth owing to the changes to labour that Covid might force on companies.

If more people either work from home, or work from home say, 2-3 days a week, this will have a dramatic impact on transport, office rents, and the ancillary economy that supplies commuters and office workers with I assume an aggegate decline in economic activity in cities, and a corresponding decline in local and state and Federal tax revenues. I also wonder if a frenzy of consumer spending when the lockdowns end will fuel a sudden rise in inflation. Or Cities may survive by compensating for the decline in commuters by drawing in customers for shopping and entertainment -?

These thoughts also apply to the EU, and the UK where the double whammy of Covid + Brexit has resulted in a 40.7% fall in exports in one month-
https://www.theguardian.com/business...xit-uk-economy

My last thought is that this is all about the State/Government as the lead player, rather than Markets. One wonders what a Libertarian, anti-Government, market-led strategy would do to cope with the fact that as services replace manufcture, so economies become more vunerable to recessions that begin elsewhere but have such a universal impact.

But I have been accused by people who know me as being a pessimist by nature -could the next four years be better than I think they will be?

[filghy2]

But I have been accused by people who know me as being a pessimist by nature -could the next four years be better than I think they will be?

Who knows? What we do know is that growth in most economies has been lower than normal over the past decade. There is no clear consensus on cause or cures, though lack of investment seem to be the factor that is most often mentioned. Ironically, the noted economist who first raised the possibility of 'secular stagnation' is the same one who raised concerns about the US stimulus.
https://www.imf.org/external/pubs/ft...stagnation.htm

[blackchubby38]

When I first heard about this plan and read up on it numerous times, I thought $600 was a really low number to begin with and I had some right to privacy concerns. The proposed amount has now been raised to $10,000, but I still don't see how this is a good idea.

Banks slam Democrats' narrower IRS bank-account monitoring plan: 'No fundamental difference'
Dems' plan to narrow IRS reporting threshold to $10K sparks same backlash


http://www.foxbusiness.com/politics/...-irs-bank-rule

[Stavros]

When I first heard about this plan and read up on it numerous times, I thought $600 was a really low number to begin with and I had some right to privacy concerns. The proposed amount has now been raised to $10,000, but I still don't see how this is a good idea.

Banks slam Democrats' narrower IRS bank-account monitoring plan: 'No fundamental difference'
Dems' plan to narrow IRS reporting threshold to $10K sparks same backlash

I have read the link twice and still don't really understad it, must be too American for me.