It hasn’t happened yet — tanking financial markets and the crashing economy that Trump and his Republicans had predicted would surely come with a Biden victory.
As of this writing, financial markets are hovering at all-time highs. There was a brief glitch last week when Biden suggested that corporations and the nation’s wealthiest should pay higher taxes to help bear the costs of improved infrastructure that the nation desperately needs. Heaven forbid — an outside chance that corporations and wealthy individuals that have profited during this pandemic might cough up a few of those bucks. It was enough to interrupt the bull market, however briefly.
But reason took over the next day and markets resumed their climb, demonstrating once again that short term markets tend to overshoot. Timing short term market fluctuations is a fool’s game.
The economy and financial markets historically have done as well or better under Democratic administrations than Republican administrations. One can debate whether this is causation, or simply correlation. But the myth persists that Republicans are better for financial markets despite reality to the contrary. The so-called “liberal media” has been of absolutely no help to dispel this Republican-inspired myth.
Although related, financial markets are not the real economy. With the successful increase in vaccinations and gradual opening up of the economy, employment has been increasing along with national growth. Further encouraging signs include pent-up demand. The more fortunate people have actually increased their savings as activities such as travel and dining out have been restricted. Those fortunate people are ready and waiting to spend some of those dollars. Demand for housing and vehicles are high.
There remain economic challenges aplenty. The dangerous inequality of income and wealth has been exacerbated by the pandemic. Far too many people are struggling to pay their bills.
The COVID-19 relief bills under both the Trump and Biden administrations — the latter opposed by Republican lawmakers — have surely been significant in getting through this pandemic.
While that legislation was intended and designed to enable people to get through the pandemic, it is time to look ahead. This nation desperately needs to upgrade infrastructure, broadly defined. In addition to increased economic efficiency, it would significantly increase employment, especially jobs not requiring a four year college degree.
With existing challenges facing the Biden administration, and his desire to “go-big,” some historians surmise that Biden has the opportunity to be transformational, after the fashion of FDR and LBJ. Okay, perhaps not rivaling FDR and LBJ, but surely more transformational than any president since those two giants of history.
FDR remains the towering figure of the 20th century as he guided the Nation through the Great Depression and led it through WWII. His programs including financial reforms and Social Security remain influential to this day.
LBJ was responsible for the most significant civil rights legislation since Abraham Lincoln. He built on the momentum created by the Kennedys. But it is highly doubtful that either JFK, or RFK had he become president, could have persuaded white Southern Democrats to get the 1964 Civil Rights Act and the 1965 Voting Rights Act through congress and to the president’s desk for signature.
And where would this nation be without Medicare — not just seniors, but their kids and grandkids who are relieved from financial pressure to care for their elders, even as they struggle enough to pay their own bills, educate their kids, and save for their own retirement. It took the persuasive power of LBJ to get the job done.
While other presidents of the 20th and 21st centuries have left their marks, FDR and LBJ stand out as having been truly transformational. Can Joe Biden, long held to be some combination of too moderate, too conventional, too error-prone, and now, too old, and even too far left, to be transformational, with big achievements of lasting effect to his credit?
Who could have predicted in 1937 that the freshman southern Democrat from the Texas Hill Country would decades later become such a towering figure regarding Civil Rights?
In politics, as in life itself, challenges are largely a matter of time and circumstance. Success depends largely on the right person at the right time. Joe Biden has endured a great deal of personal tragedy that has given him remarkable empathy. He has made his share of mistakes and questionable calls throughout his political career. But he has learned from them. He now has power and opportunity to use it.
During the 2020 presidential campaign Biden was facing near certain defeat. It was South Carolina Congressman, Jim Clyburn, who practically single handedly turned the primary in Biden’s favor, and sent him on to victory. Georgia’s Stacy Abrams was largely responsible for the shocking victory of two Democratic senators that, with VP Kamala Harris, gives Biden a razor-thin senate majority and a fighting chance for significant achievement.
With a severely divided nation still emerging from this devastating pandemic the challenges are many. Biden has learned from his mistakes, and he has obviously decided to “go big,” first with the COVID-19 Relief Bill that was passed with no Republican support and, now, with a gigantic infrastructure bill that, as presently constituted, will receive no Republican support.
Both FDR and LBJ had advantages that Biden does not, namely substantial Democratic majorities compared to today’s razor-thin majority. But it must be recalled that those previous Democratic majorities consisted of a combination of northern liberals and conservative southern Democrats. Neither FDR nor LBJ could count on their support just because they were Democrats. For example, it took tough negotiations and LBJ’s mastery of the senate to pass civil rights legislation, even with Democratic majorities.
Like LBJ, Biden is a creature of the Senate, and knows how it works. But today’s Republicans are vastly different from Republicans of the past. And Biden cannot afford to lose a single Democratic vote to pass legislation.
Can Biden be transformational? He cannot count on Republican assistance. He will need the backing of the public and every congressional Democrat.
If successful, history will honor his legacy.
— John Waelti of Monroe, a retired professor of economics, can be reached at jjwaelti1@tds.net. His column appears Saturdays in the Monroe Times.
