WASHINGTON — In recent months Joseph R. Biden Jr.’s campaign developed a virtual road show to reassure executives, investment fund managers and financiers who were nervous that the Democratic candidate’s plans to increase taxes could hurt the American economic recovery.
Penny Pritzker, the billionaire former Commerce secretary under President Barack Obama, would lead off with an overview of Mr. Biden’s plans. But the worried capitalists always wanted details, and for that, Ms. Pritzker would turn over the video calls to the little-known fulcrum of the Biden campaigns economic policymaking: a 43-year-old tax and budget specialist named Ben Harris.
Mr. Biden has a sprawling and secretive orbit of economists offering him policy advice as he seeks to pacify an insurgent liberal wing of economic thinkers within the Democratic Party and the business leaders who still feel mistreated by the Obama-Biden administration. Mr. Harris, an economist who is relatively anonymous even to other economists, has taken a starring role in both efforts.
A former chief economist for Mr. Biden in the White House, Mr. Harris helped fashion a campaign agenda from the work of a small inner circle and hundreds of outside economists and sell it to the donors, executives, labor unions and activists that Mr. Biden needs behind him to win the election. He has two other jobs but works up to 50 hours a week for Mr. Biden, unpaid.
In his efforts, people in and outside of the campaign say, Mr. Harris has become a sort of policy avatar for Mr. Biden, molding new ideas into the candidate’s longstanding brand of middle-class economics and changing his sales pitch to meet his audience. Before Mr. Biden even announced his campaign, Mr. Harris was attending senior staff meetings at the vice president’s home to help develop an economic platform.
The economy will present an immediate challenge for whoever wins the presidency. The nation is rebounding from its pandemic recession, but economic indicators show that the improvement has slowed or stopped in key areas. Economists are pushing Mr. Biden to quickly rally support for the type of trillion-dollar economic stimulus plan that Congress and the White House have yet to agree on, while also pressing him to bring about the kind of economic equality that Democrats say will require a big rethinking about tax and spending policies.
Mr. Harris has helped wrap Mr. Biden’s unabashedly liberal agenda in a blanket of technocracy, assembling more than 500 detailed recommendations. In discussions with supporters and skeptics across a wide spectrum of ideology and backgrounds, Mr. Harris has helped burnish the perception that Mr. Biden is responsive to others’ concerns about his plans.
“There are things in which we are not ideologically aligned, but he has the right values,” said Darrick Hamilton, an economist who has studied racial disparities extensively. He served with Mr. Harris on a committee that brought additional liberal ideas to Mr. Biden’s platform. “Ben is persuaded by evidence. He can hear and listen.”
The economic agenda Mr. Harris helped craft includes income and investment tax increases on top earners, higher taxes for corporations and a variety of spending increases in areas like clean energy, infrastructure and higher education. While those plans remain far less aggressive than the tax-and-spending ideas of Mr. Biden’s more liberal primary campaign rivals, he has managed to avoid sharp criticism from the left-leaning economists who have pushed for historically large tax increases on corporations and the rich.
The strategy also appears to have helped Mr. Biden with a broader audience. While Mr. Biden has proposed the largest package of tax increases, in dollar terms, of any Democratic nominee, he has raked in donations from Wall Street, and some investment firm analysts project a Biden presidency driving stock markets higher, in part because of his desire to pass a large economic stimulus bill.
Mr. Harris, in conversations with business leaders, explains the details of Mr. Biden’s proposals to make the case that the candidate would help corporate America by making the economy more productive.
“Ben will go way deep in the weeds, and he has enormous patience for every question,” said, adding it gets results. “The American business executive is willing to accept higher taxes, if they will fund a plan that will work and not just expand government for government’s sake. They need to know that the programs and ideas are going to work.”
President Trump and his aides have argued the opposite — that Mr. Biden’s plan would crush American companies and the economy. In a recent television ad, the Trump campaign warns that Mr. Biden’s plan would leave “an economy in ruins.”
Mr. Harris has built his career in Washington, and in economics, around the mechanics of building policies that are data-driven and politically feasible. And he has developed a deep understanding of how Mr. Biden thinks about the economy.
Austan Goolsbee, the former chairman of Mr. Obama’s Council of Economic Advisers, who is advising Mr. Biden from the outside, calls Mr. Harris “the Biden for econ Ph.D.s.” Another longtime Biden adviser, Jared Bernstein, said Mr. Harris “knows the current platform and agenda almost better than anyone except Biden himself.”
“When I and others assert something” in campaign policy debates, Mr. Bernstein said, “we often finish the sentence with, ‘but we better ask Ben.’”
While Mr. Harris has appeared frequently as a campaign surrogate — on television, in online get-out-the-vote rallies, fund-raisers and calls with executives and labor leaders — the Biden campaign has revealed little about his role in crafting policy.
Campaign officials declined multiple requests to make Mr. Harris available for an interview with The New York Times. They would not provide an explanation for the decision, or explain why Mr. Harris has been allowed to talk about narrow policy issues during the campaign, but not his broader role.
That move is in keeping with the veil of secrecy Biden officials have attempted to keep over the campaign’s policy deliberations, including strict instructions for most outside advisers to conceal their involvement with the campaign from reporters.
Mr. Harris grew up on Bainbridge Island, Wash., a ferry ride away from Seattle, the son of divorced parents. He lived primarily with his single mother. Friends describe Mr. Harris’s childhood as middle class. The heat in his house came from a wood-burning stove. After college at Tufts University, he earned a Fulbright scholarship to Namibia.
He then rose through Washington’s think tank world, learning budget policy and economic modeling while at the Brookings Institution under the tutelage of William Gale, a renowned tax and budget modeling expert. Mr. Harris continued his economics studies and earned a doctorate from George Washington University in 2011. Mr. Gale recommended him around town. “He might be simultaneously the youngest person in the room and the adult in the room,” Mr. Gale said.
Ms. Pritzker hired Mr. Harris to advise her in 2009 in her role as a member of the President’s Economic Recovery Advisory Board, set up by Mr. Obama. . Mr. Goolsbee brought him to the White House — “a gamble” that he said paid off as Mr. Harris proved adept at synthesizing economic research and translating it quickly to policy proposals.
Mr. Harris is now the campaign’s senior economic adviser, a job that he balances with a teaching position at the Kellogg School of Management at Northwestern University and a role as the chief economist for Results for America, a nonprofit group that pushes for evidence-based policymaking.
Mr. Bernstein said Mr. Harris had brought to Mr. Biden the idea of eliminating a preferential tax treatment enjoyed by heirs, which allows the wealthy to reduce their children’s tax bills when passing assets to them at death. It is not as politically sexy as a wealth tax, but it is one of several provisions in Mr. Biden’s plans that score well in independent budget analyses.
Rich Prisinzano of the Penn Wharton Budget Model at the University of Pennsylvania, said Mr. Harris’s experience with budget models appears to have helped him develop tax plans that would raise revenue at less economic cost than the wealth taxes proposed by Mr. Biden’s former Democratic rivals, Bernie Sanders and Elizabeth Warren. “They tax the same people and the same income as Warren and Sanders, they just do it through the existing tax code,” Mr. Prisinzano said.
If Mr. Biden wins and brings Mr. Harris to the White House, those skills could help the administration craft policies that score well with congressional budget modelers, whose judgments often shape what can pass the House and Senate. Mr. Biden would also be bringing a centrist, white man — one who worries, long-term, about the buildup of the federal budget deficit. Progressives, like Mr. Hamilton, fear that such worries could constrain the Biden agenda as it moves from stimulus to bigger-picture economic policy.
Mr. Harris has spoken publicly about high deficits posing long-term risks to growth. But his most recent academic work is on a topic where he finds more agreement with the left wing of his party: He is co-editing a book on inequality in labor markets, filled with chapters on how rising corporate power has hurt workers’ wages. It might also be a blueprint for Mr. Biden’s thinking on the issue.
Brazil's economy grew 7.7% in Q3, but slower than expected – 570 News
RIO DE JANEIRO — Brazil’s economy grew 7.7% in the third quarter of the year from the previous three months, the national statistics institute reported on Thursday — the strongest quarterly result in a quarter century but less than expected following heavy stimulus spending.
It is the fastest quarterly growth since the series began in 1996 and confirmed the Brazilian economy’s exit from technical recession, characterized by two consecutive quarters of contraction. But activity hasn’t yet returned to the level seen prior to the coronavirus pandemic.
Brazil’s Economy Ministry had projected growth of 8.3% for the period, according to a bulletin relased on Nov. 17.
The expansion during July through September coincided with the payment of emergency assistance funds to more than 60 million people to mitigate the impact of the pandemic, and also with the reopening of activities in most states, where quarantine measures were relaxed.
“The data is disappointing due to the enormous fiscal stimulus that the government used for the economy to recover,” Emerson Marçal, head of the Center for Applied Macroeconomics of the Getulio Vargas Foundation in São Paulo, told The Associated Press by phone.
The emergency payment, about $10 monthly in the third quarter, helped boost retail sales and contributed to the recovery of industrial production, Marçal said. The end of the aid, tentatively scheduled for December, and the possibility of new restrictions on activity due to the surge of coronavirus cases may further compromise the speed of recovery, he added.
Brazil has confirmed more than 6.4 million coronavirus infections, with 174,000 deaths. In recent weeks, infections have risen in big cities like Sao Paulo and Rio de Janeiro. President Jair Bolsonaro has consistently argued that the economic impact of lockdowns and other measures during the pandemic would be more damaging to Brazil than COVID-19 itself.
Brazilian banks estimate a 4.5% drop in Brazilian GDP for 2020, a smaller decline than is expected in the region’s other major economies. The International Monetary Fund projects a contraction of 8.1% for the Latin American and Caribbean region, with Brazil least affected by the crisis.
Marcelo Silva De Sousa, The Associated Press
Feds' fall economic statement shortchanges climate – Corporate Knights Magazine
Canadians are going to have to wait until the next Liberal budget to get a full sense of the government’s commitment to a green recovery, though Ottawa has unveiled some key parts of the plan this fall.
Finance Minister Chrystia Freeland made a down payment on clean-energy stimulus in her fall economic statement on November 30, but the $6.64-billion package of new measures over 10 years was far smaller than some clean-energy advocates had called for.
Corporate Knights calculates that the funding announced for a climate-focused recovery plan represents only 20% of the federal investment needed to meet the government’s own commitment to reduce greenhouse gas emissions.
In the government’s first major financial update since the COVID-19 pandemic shut down the economy last March, Freeland maintained a focus on support programs for individuals and businesses.
She promised a future budget with a more robust stimulus plan worth up to $100 billion over three years. It’s uncertain how much of that will be allocated to climate-change mitigation, given competition from other post-pandemic priorities such as a national daycare program to boost women’s participation in the workforce.
The federal green recovery plan, to date, falls well short of the commitments made by more ambitious national governments, including that promised by U.S. President-elect Joe Biden, who has pledged a US$2-trillion green recovery plan, subject to Congressional approval.
Numerous groups have urged the Liberal government to match the efforts of countries in Europe and East Asia that have announced major green stimulus plans, even as some of those nations remain in the grip of the pandemic.
As part of a green recovery plan endorsed by 50 business leaders, Corporate Knights proposed a 10-year, $108-billion program that would be front loaded to ensure that Canada can re-start the economy on a greener footing that it argues will be essential to tapping into global growth markets.
In a series of virtual roundtables hosted by Corporate Knights and the Embassy of Germany in Canada this fall, speakers pointed to opportunities in areas such as deep retrofits for buildings, the emerging hydrogen economy, and potential markets for non-combustible products from the oil sands that would trap carbon rather than emitting it into the atmosphere.
Corporate Knights publisher Toby Heaps described the Liberal plan as “meek,” saying, “I think the government’s response to the pandemic shows us what an emergency response looks like, and one cannot help but notice how different that looks from their response to the climate emergency.”
In a report this fall, another group, the Task Force for a Resilient Recovery, urged the federal government to adopt a five-year, $55.4-billion plan that would allocate $27.4 billion to deep retrofits of buildings.
As of the fall update, the Liberal government has allocated $12.6 billion over 10 years to climate-related action, including $6 billion already allocated to the Canada Infrastructure Bank. That figure will climb when Freeland unleashes her stimulus budget, likely next spring. The budget, she said in her speech, “will advance our progress on climate action and promote a clean economy.”
In the mini-budget released November 30, the minister allocated $6.64 billion in three key areas, though some of that money will be spent over 10 years: $2.6 billion over seven years for home retrofits; $150 million to install electric-vehicle charging stations; and $3.9 billion to plant two billion trees, preserve wetlands and boost sustainable agriculture.
The building-retrofit plan consists of $5,000 grants, which the government hopes will be used to improve the energy efficiency – and lower carbon emissions – of 700,000 homes. Freeland said the government will also fashion a plan for low-interest loans to support more expensive, deeper retrofits.
The grants alone will be insufficient to provide enough incentive for homeowners and landlords to make the deep retrofits needed to dramatically reduce greenhouse gas emissions from buildings, which account for 17% of the country’s total, said Ralph Torrie, co-author of a Corporate Knights white paper called Building Back Better with a Green Renovation Wave.
“At a time when the urgent need is to stimulate the business and logistical innovations for implementing mass, deep retrofits, we get instead $5,000 grants for households to go it alone,” Torrie said. “This will create lost opportunities by triggering halfway measures and upgrades that fall short of what is required for an effective emergency response to climate change.”
The fall economic statement is only part of the government’s plan, with other measures either recently announced or due to be released by the end of December.
Environment Minister Jonathan Wilkinson will soon be releasing an updated climate plan, while Natural Resources Minister Seamus O’Regan will release federal strategies on hydrogen and small modular reactors.
On the hydrogen market, the federal government lags several competitors who have already announced major strategies to be suppliers of “green” hydrogen, an emissions-free source that is derived from renewable power. Australia is fast-tracking a $36-billion hydrogen plan, while Germany and France are moving full steam ahead with plans to develop industrial uses for the clean-burning fuel.
Corporate Knights has proposed that Ottawa spend $1 billion on research and development efforts over the next five years and another $8 billion over the decade to deploy hydrogen technology across the Canadian economy.
Corporate Knights also recommended that the feds provide $1.4 billion in funding over five years to help the industry commercialize lightweight carbon-fibre production as part of a “bitumen beyond combustion” strategy, but the November 30 statement lacked any sign of a plan for shifting Canadian oil and gas economics.
How does Fall Economic Statement stack up against Corporate Knights’ Building Back Better Green Recovery Plan?
Federal Contribution 2021-2030 CK BBB FES BBB % shortfall Building Back Better Homes 14656 2600 82 Building Back Better Workplaces 6000 2000 67 Greening the Grid 6700 2500 63 Building Back Better EV Uptake 11949 1650 86 Building Back Better Active Mobility 2000 – – Building Forest Natural Capital 16000 3791 76 Building Agriculture Natural Capital 6000 98 98 Natural Resources and EV Innovation 40500 – – Building Back Better Industry 4800 – – Sum for all programs (2021-30) 108605 12639 TBD
Sources: Fall Economic Statement 2020
Earlier this fall, the Build Back Better Together roundtable heard compelling evidence that economic recovery strategies that aim to return to business as usual will reignite the growth in greenhouse gas emissions, as happened after the 2008/09 recession.
If governments want to ensure that they can fund the green recovery to avert the worst impacts of the climate crisis, they’ll have to collaborate with private-sector financial institutions, another roundtable session heard.
While there is growing focus on the importance of harnessing capital markets to address climate change, government action remains critical, said Sean Kidney, CEO of the London-based Climate Bonds Initiative, an international non-governmental organization working to mobilize debt markets for climate solutions.
“It is not possible for private markets to do this. That is a total fallacy,” Kidney said. “This is not something that is going to be solved by the private market. This is something that is going to be solved by close collaboration between public and private markets.”
In her fall statement, Freeland announced support for a Sustainable Finance Action Council, which will begin work in the new year with the goal of “developing a well-functioning sustainable finance market in Canada.” Pension funds and other investors have been urging corporations in Canada to provide greater clarity around climate-change-related risks and opportunities, and experts are urging governments to show leadership.
However, Canada still lags some of its peers in terms of financial commitment to a green recovery that will fund the transition to a net-zero economy.
The government estimated that its $100-billion stimulus package would be equivalent to 3 to 4% per cent of gross domestic product, but it is unclear how that figure was calculated. Spread over three years, the spending would represent more like 2% of GDP, and only a portion of that will go to green projects.
Many of Canada’s trading peers, including Germany, France and the EU, have already earmarked 30% or more of post-pandemic stimulus for climate action.
In partnering with Corporate Knights on the Building Back Better Together virtual roundtable series this fall, German Ambassador Sabine Sparwasser said her government is committed to a strategy that focuses stimulus spending on building back better.
“We’re not going to get out of the current crisis just by giving people social benefits,” Sparwasser said during one session. “We need to invest in new technology in order to address the other crisis that is out there and is even bigger: climate change.”
Shawn McCarthy writes on sustainable finance and climate for Corporate Knights. He is also senior counsel for Sussex Strategy Group.
With the support of the Embassy of the Federal Republic of Germany in Canada.
Euro zone economy to gain momentum in 2021 on vaccine hopes: Reuters poll – The Journal Pioneer
By Richa Rebello and Manjul Paul
BENGALURU (Reuters) – The euro zone economy will contract again this quarter as renewed lockdown measures stifle activity, according to a Reuters poll which showed the bloc’s GDP would then return to pre-crisis levels within two years.
Hopes for a coronavirus vaccine and additional support from the European Central Bank this month meant quarterly growth forecasts for next year were upgraded in the poll conducted from Nov. 26-Dec. 2.
“We now assume vaccines will be rolled out in the euro zone next year and most restrictions on economic activity are lifted during Q2. As a result, GDP increases by around 5% next year, regaining its pre-COVID level in early 2022,” said Andrew Kenningham, chief Europe economist at Capital Economics.
“There are still big risks to this forecast. There could yet be a third wave of the virus, vaccine distribution could run into political or logistical problems, and governments could be slower to ease restrictions. On the other hand, the vaccines could be more effective or easier to roll out than anticipated”.
Nearly 80% of respondents, or 36 of 45, who replied to an extra question said the economy would return to pre-crisis levels within two years.
That was a major turnaround in expectations from August when more than 70% of economists said it would take two or more years to reach that level.
The wider poll showed after contracting 2.6% this quarter, the economy would grow 1.1% in the first quarter of 2021 compared with 0.8% in the last poll. It was then predicted to expand 2.0% and 1.8% in Q2 and Q3, better than median predictions of 1.8%, 1.2% in November.
On an annual basis, the economy was expected to shrink 7.4% this year, and grow 5.0% in 2021 largely unchanged from the last poll. For 2022, the growth forecast was upgraded to 3.5% from 3.1%. (Graphic: Reuters Poll: Euro zone economy and ECB monetary policy outlook, https://fingfx.thomsonreuters.com/gfx/polling/xlbvgzaxjpq/Reuters%20Poll%20-%20ECB%20and%20EZ%20outlook%20-%20December%202020.PNG)
That pick-up in growth will not filter through to inflation which was expected to remain far below the European Central Bank’s target of just below 2%, averaging 0.3% in 2020. 0.9% in 2021 and 1.3% in 2022.
Having remained in negative territory for the fourth straight month in November, inflation is likely to be a point of focus when the ECB’s Governing Council meets next week.
The ECB has launched a strategic review after years of inflation undershooting its target and nearly 80% of respondents to an extra question, or 33 of 43 economists, said the ECB would change its inflation target.
While a smaller section of poll participants commented on what the target would be, most said the ECB would allow more leeway around 2% or adopt an average inflation targeting framework, similar to the Federal Reserve’s recent policy.
“We are probably going to see something which looks a little bit similar to the Fed in the sense that this will be more of a symmetrical target. By changing to a symmetrical target, you build in a little more tolerance for higher inflation in the future,” said Elwin de Groot, head of macro strategy at Rabobank.
“This cements the idea rates will stay very low in the coming years… but the past ten years suggest these very relaxed policy settings are not sufficient to really create more growth and inflation. What you really need is a combination of monetary and fiscal policy.”
The ECB was expected to top up its pandemic-related bond purchases by 500 billion euros, at its Dec. 10 meeting, extending the programme by six months until December 2021, a Nov. 18 poll found. It was also predicted to change the terms of its targeted long-term loans to financial institutions.
(Reporting by Richa Rebello and Manjul Paul; Polling by Tushar Goenka and Hari Kishan; Editing by Jonathan Cable and Toby Chopra)
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