(Bloomberg Opinion) — Joe Biden has been elected to be the next President of the United States. Now he’ll have to get creative.
When the President-elect takes office, he’ll confront the country’s two most acute challenges: an ongoing Covid-19 pandemic and the economic damage it’s wrought. But he’ll have an uphill battle to enact the sort of bold policy agenda that many supporters were hoping for.
Barring a January surprise in Georgia’s runoff election, Republicans are likely to retain control of the Senate, denying Biden the unified control of government that his predecessors enjoyed when they came into office. With traditional relief and stimulus measures limited by opposition party intransigence, Biden might still be able to pass policies designed to resuscitate the stricken service sector directly.
The U.S. economy has bounced rapidly back since April, but only partially. Employment has only recovered about halfway to where it was before Covid-19 struck, giving it the shape of a reverse square-root sign:
Lower-wage employees, who tend to work at the local services businesses most deeply impacted by the virus, are suffering more.
The economy is being afflicted by two simultaneous maladies. The first is continued fear of the virus, now in the middle of a devastating third wave. Fear, more than lockdowns, has kept Americans shut inside their homes, reluctant to take the risk of going out to shop or eat. That in turn gives rise to the second problem of decreased demand, which filters through the entire economy.
Fear of the virus will eventually be reduced by vaccines, which may become available in early 2021. A national program of testing and contact tracing — which President Donald Trump long resisted — would also help speed Covid-19 on its way, and should be a priority for the incoming administration. But even when the virus is gone, the economy is likely to remain depressed for awhile, as the overhang of unemployment works its way out of the system.
Bold relief measures, of the type that sustained Americans through the pandemic’s dark early days, probably won’t be forthcoming given the GOP Senate’s inevitable turn towards austerity. The same is true of traditional fiscal stimulus, such as a burst of infrastructure spending, that might help boost demand back to normal levels. But there might be a chance for more targeted measures to help the sectors of the economy that Covid-19 has hurt the most — local services.
Restaurants, shops, and other establishments that cater in person to customers have gone bust in large numbers. After the threat of the virus has passed, the U.S. government might try to resuscitate local economies by subsidizing new shops to fill the empty storefronts that now dot America’s urban landscape. Some of these new establishments would be run by the same owners whose businesses went under during the pandemic, while others would be run by enterprising newcomers. But all would be able to draw on the local pool of unemployed, most of whom were working in these same types of businesses in 2019.
Subsidizing new local businesses would accomplish several goals at once. It would put people back to work at jobs they know how to do, and start pumping demand through the ecosystems of local economies. It would help prevent cities’ commercial retail space from being riddled with unsightly boarded-up vacancies — a blight that hurts viable businesses next door. And it would help sustain and preserve the small business class.
This last aspect might make local business formation subsidies attractive to Republicans in the Senate; small businesspeople are a reliable Republican constituency. Additionally, this policy would be highly targeted; the subsidies could last only until a town’s existing commercial vacancies had been mostly filled, limiting the cost of the program and avoiding the appearance of handing out money at random.
Strict free-market adherents might worry that this plan would delay or prevent needed transformation in the U.S.’s industrial mix. The pandemic has shifted demand from local services to e-commerce; people are watching Netflix instead of going to movie theaters, and ordering things off of Amazon instead of buying them in stores. Some will question whether reversing that shift should be an economic priority.
But the benefit of quickly and cheaply resuscitating local U.S. economies far outweighs the danger of slightly delaying the evolution to a more online future. In fact, local business formation subsidies will simply accelerate a move that’s already in place; new business filings have been above trend since August, as entrepreneurs take advantage of cheap rents and labor. The local economy is restoring itself already — it could just use a push to get the job done faster.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Noah Smith is a Bloomberg Opinion columnist. He was an assistant professor of finance at Stony Brook University, and he blogs at Noahpinion.
©2020 Bloomberg L.P.
Tunisians protest as COVID surges, economy suffers | Coronavirus pandemic News – Al Jazeera English
Police used pepper spray on protesters in Tunis who threw stones and demanded Prime Minister Hichem Mechichi quit, parliament be dissolved.
Police and protesters have clashed in several Tunisian cities as demonstrators demanding the government step down after a spike in COVID-19 cases that has aggravated economic troubles attacked offices of Ennahda, the biggest party in parliament.
In Tunis on Sunday, police used pepper spray against protesters who threw stones and shouted slogans demanding that Prime Minister Hichem Mechichi quit and parliament be dissolved.
Witnesses said protesters stormed or tried to storm Ennahda offices in Monastir, Sfax, El Kef and Sousse, while in Touzeur they set fire to the party’s local headquarters.
The protests raise pressure on a fragile government that is enmeshed in a political struggle with President Kais Saied, who is trying to avert a looming fiscal crisis amid a weeks-long spike in COVID-19 cases and increased death rates.
The pandemic has hit Tunisia as it struggles to lift an economy that has suffered since its 2011 revolution, undermining public support for democracy as unemployment surged and state services declined.
“Our patience has run out … there are no solutions for the unemployed,” Nourredine Selmi, 28, a jobless protester, told Reuters news agency. “They cannot control the epidemic … They can’t give us vaccines.”
Last week, Mechichi sacked the health minister after chaotic scenes at walk-in vaccination centres during the Muslim Eid al-Adha holiday, where large crowds queued for inadequate supplies of vaccine.
The ministry said earlier this month that Tunisia’s health system had “collapsed” under the weight of the pandemic, which has caused more than 17,000 deaths in a population of about 12 million.
After a year of wrangling with Mechichi and the leader of Ennahda, Rached Ghannouchi, who is also parliament speaker, President Saied declared the army would take over the pandemic response.
Some analysts saw the move by Saied as an attempt to expand his powers beyond the foreign and military role assigned to the president in the 2014 constitution.
Government paralysis could derail efforts to negotiate an International Monetary Fund loan seen as crucial to stabilising state finances but which could also involve spending cuts that would aggravate economic pain for ordinary people.
Biden Faces Fresh Challenges on Covid-19, Economy – The Wall Street Journal
WASHINGTON—President Biden took office with the goals of overcoming the coronavirus pandemic, spurring economic growth and winning legislative approval for trillions in new spending.
Six months in, all three of his major objectives are being tested.
Covid-19 cases and hospitalizations are on the rise, spurred by the Delta variant and vaccine resistance from a slice of the population. Concerns over the spread of the pandemic have caused some turbulence in the financial markets and consumer prices are ticking up, prompting warnings about long-term inflation. A bipartisan infrastructure deal and a broader Democratic spending bill remain deep in negotiations and a long way from Mr. Biden’s desk.
During a cabinet meeting last week, the president in his public remarks highlighted his work so far but acknowledged some of the current pressure points. “I know it seems like a constant uphill climb…we’re making progress, but we’ve got a way to go yet,” Mr. Biden said of the vaccination effort.
He emphasized the need for “constant vigilance” against the virus, asserted that his economic program would “generate significant continued economic growth” and defended his infrastructure and antipoverty legislative plans as popular.
Since Mr. Biden took office, more than three million jobs have been created and nearly 60% of American adults are now fully vaccinated. When he reached an agreement with Republicans in June on a bipartisan framework for a roughly $1 trillion infrastructure proposal, he said it showed that bipartisanship was possible.
Now, Mr. Biden appears to be moving into a more challenging phase of his presidency. A Gallup poll released Friday put Mr. Biden’s job approval at 50%, the lowest mark since he took office. He is trying to convince skeptics—many of whom don’t support him politically—to get vaccines. He is seeking to ease public worries about price increases. And after investing much time in a bipartisan framework on infrastructure reached with Republican and Democratic senators, the White House now must help steer the bill to the finish line.
A new poll from ABC News/Ipsos released Sunday found that 45% of Americans were optimistic about the direction of the country—a drop from 64% expressing optimism in the spring.
Republicans say Mr. Biden’s policies will damage the economy. House Minority Leader Kevin McCarthy (R., Calif.) tweeted recently that “the Democrats’ inflation is destroying Americans’ hope for financial security.” And Senate Minority Leader Mitch McConnell (R., Ky.) has taken to calling the spending plans a “reckless tax and spending spree.”
Mr. Biden’s allies note that part of governing is dealing with the unexpected, and they give him credit for managing the pandemic and pushing his agenda in a divided Congress.
“All presidents have to deal with these external factors that just careen into their presidency,” said Sen. Ed Markey (D., Mass.). “But on this big agenda which he has for infrastructure and for family, he’s right on pace.”
The White House continues to express optimism. White House senior adviser Anita Dunn briefed Democratic lawmakers Thursday about the president’s economic plans, with a slideshow that emphasized the administration’s arguments that the agenda will boost jobs and help working families, including polling data showing the popularity of the initiatives.
But the White House acknowledges the depth of Mr. Biden’s challenges. “He has a lot on his plate, and he is fully focused on all of it. And so we just keep pressing on,” senior adviser Mike Donilon said during a briefing call with reporters.
On vaccinations, the White House has been on the defensive in recent days as cases rise again after having fallen earlier in the year, and amid news of breakthrough infections at the White House and the Capitol. The country still hasn’t quite reached Mr. Biden’s goal, initially set for July 4, of reaching 70% of Americans with at least one dose of the Covid-19 vaccine. So far, over 68% of adults aged 18 and older have received one shot and nearly 60% have been fully vaccinated.
Mr. Biden has been asked repeatedly whether mask guidelines should be reconsidered. Some local governments have reimposed masking rules as the spread of the highly contagious Delta variant drives up cases in every state in the country.
Budget reconciliation may offer Democrats a way to sidestep some partisan gridlock and advance President Biden’s policy objectives. WSJ explains how the process works and why divisions in the party could scuttle the process. Photo Illustration: Carlos Waters / WSJ
The Wall Street Journal Interactive Edition
Before a meeting at the White House on Thursday, he said the administration would follow the scientific advice. He repeated his argument that the current situation is a “pandemic among the non-vaccinated,” adding that the vaccinated were protected against infection in most cases, and from serious illness if they do contract the virus.
Mr. Biden has also tussled with
over the social media company’s role in policing misinformation about Covid-19 and vaccines.
William Galston, a former aide to President Bill Clinton, said the president faced risks if he wasn’t able to meet his public goals.
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“Expectations have been raised,” he said. “If those expectations are dashed, my fear is there could be a reaction.”
White House officials have long said the pandemic and economy are intertwined, and success in vaccinations would bolster job growth. The president has delivered remarks at the start of each month to highlight the rebound in hiring—with employers adding an average of about 600,000 jobs a month since the start of his presidency.
But the turbulence and polls showing growing concern over inflation have prompted Mr. Biden to push back against critics who say his spending policies, and pursuit of tax increases, are the wrong economic prescription.
He has acknowledged inflation in the short term but asserted that it won’t be a long-term issue for Americans—a message that could become difficult to maintain if consumers continue to face higher prices in the coming months.
“People are paying more for everything—when they can get it. If there’s one thing Americans don’t like doing, it’s standing in lines and paying more for something,” said
a Virginia-based Republican strategist. Virginia holds a gubernatorial election in November that could serve as an early test of Mr. Biden’s political strength.
The White House views Mr. Biden’s legislative agenda as the best way to position Democrats in next year’s midterms. Mr. Biden notched an early victory with the passage of a $1.9 trillion Covid-19 relief law during his first 100 days and has used executive action to overturn many actions taken by former President Donald Trump.
Enacting the next major planks of his agenda rests on whether he can secure support for a roughly $1 trillion infrastructure package and a separate $3.5 trillion measure to fund projects to address climate change and provide access to education and affordable child care. Each will test Mr. Biden’s deal-making skills: The first package would need the support of at least 10 Republicans to advance in the Senate, while the second will require unanimous Democratic support to make it through the chamber.
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