The Bureaucratic Boondoggle of Bidenomics
The Biden revolution is gathering momentum. Biden has announced his so-called infrastructure plan. Biden proffers this $2 trillion plan as the solution to all America’s woes. It is really a very tall order and Biden leaves no doubt that this plan is a centerpiece of his presidency.
Discussions in mass media call this plan the infrastructure plan, which is a bit of a misnomer. If this plan is about the infrastructure, its definition of infrastructure is much broader than what most economists and lay people think infrastructure is. The plan is about a lot more than roads and bridges. As the plan proudly declares, it is “an investment in America that will create millions of good jobs, rebuild our country’s infrastructure, and position the United States to out-compete China”; it “will invest in America in a way we have not invested since we built the interstate highways and won the Space Race.” The plan talks about everything: from repairing roads and bridges, advancing American manufacturing, reversing climate change, addressing America’s energy needs, taxation, redistribution of wealth, union building, improving housing and education, and much, much else.
Reactions to the plan have been predictable. There is no end to accolades showered on Biden and his plan by the liberal media. Major liberal outlets compare Biden to Roosevelt, and very favorably for Biden. One piece in the New York Times opines that just as “F.D.R. seized the opportunity to reinvigorate and redefine antitrust, Biden is confronting a moment that we may not see for another half-century.” In an effusive rhapsodizing of Biden and Roosevelt, another contributor writes: “Franklin Delano Roosevelt and Joseph Robinette Biden Jr. could be a couplet. With a few breaks and the skillful execution of what seems to be a smart legislative strategy, President Biden is poised to match F.D.R.’s stunning debut in office . . . Whatever the future holds, Mr. Biden and Mr. Roosevelt are now fused in history by the size and breadth of their progressive ambitions.” Many liberal media outlets portray Biden as “a crusader for the poor and the middling classes.” Despite some criticism, the superlative praise bestowed on Biden and his plan depicts the introduction of the plan as nothing short the second coming of the messiah.
The response from the right was much more muted. Republican critics bring attention to the fact that Biden’s bill includes items that are not relevant to infrastructure, that its overall spending is not justified, and that the intention to fund it by raising taxes poses a serious danger to the American economy. The Hill describes the plan as “bad politics that is destined to fail.” New York Post points out that Biden’s infrastructure plan “spends more on building unions than roads and bridges.” Numerous critics in the corporate world call the plan wasteful and inefficient, although some of the richest people in the world, including George Soros, wholeheartedly support Biden’s initiative.
The partisan noise that permeates discussions of the plan is confusing. Impartial assessments will help to cut through this noise and to gain an objective view of the substantive significance of this plan.
The first thing to say about the plan is that it offers a really broad definition of infrastructure. In Biden’s use the term “infrastructure” includes much more than roads and bridges. In fact, according to some estimates, only about 20% of the money requested for the plan will go to what many Americans associate with infrastructure—that is, bridges, dams, and roads.
The comparison of the Biden plan with the New Deal is misleading. The infrastructure projects implemented during the New Deal built the network of highways that connected different parts of the country, dams and power stations that provided energy for manufacturing industries, water projects that benefited American agricultural production, and much, much else. In a word, the New Deal has created a new and more powerful level of organization of infrastructure; it created a lot of new wealth. By contrast, Biden’s plan talks only about fixing and improving the existing infrastructure, not expanding it. Indeed, the implementation of this plan will provide jobs and increase consumption. But it will not create a qualitatively new level of infrastructural organization. No new wealth will be created.
Biden’s infrastructure bill doubles as his climate bill. It plans to spend huge amounts of money to combat the problem of climate change. In order to solve a problem, one needs to understand its cause. Climate change remains a problematic issue. This is not to say that climate change does not exist. This is merely to say that we are not clear about its cause and, consequently, about the way we can approach this problem. As a result, there is no clear strategy for addressing this problem. Should we resist climate change or should we adapt to it? These are important questions that still remain unresolved.
Climate changed many times in the past and humans were not the source of these changes. It may very well be that humans are not the only or even the most important cause of climate change. Ocean bacteria, for example, release massive amounts of CO2 into the atmosphere. We need a broad discussion and a comprehensive analysis of climate change, not political slogans and quick fixes.
Biden’s plan rests on the assumption that humans—more specifically, energy production and use—are the source of climate change. As all assumptions go, this one also represents a hunch, not a foundational proposition that has passed the test of rational justification and empirical verification. As a result of this assumption, the plan recommends cutting the production of fossil fuel, shifting to other energy sources, and reducing energy consumption.
All sources of energy are finite. As finite, they depreciate. The solution of the energy problem requires new sources of energy. In order to gain access to new sources, we need to create new levels of organization that offer new possibilities and provide access to new sources.
Sunlight and wind are not new sources of energy. Humans used them for a very long time. In other words, Biden’s plan does not tap into new sources. The inevitable conclusion is that no new levels of organization are being created. Indeed, the technology of using solar and wind energy has changed and is more efficient. However, more efficient harvesting does not make these sources of energy new or more reliable than fossil fuel. There is a big question whether solar and wind energy will be sufficient to meet the energy needs of our civilization.
The shift to electric cars is more of a gimmick than a solution. We will need to provide energy for major manufacturing sectors of our economy. Besides, electric cars also require energy that needs to be produced.
Biden plans to terminate completely the production and use of fossil fuels. The extraction of fossil fuel is a huge part of our economy. Biden’s radical step in cutting fossil fuel will undoubtedly affect our economy as a whole. It will open a huge gap that both solar and wind power are unlikely to fill. The termination of the production of fossil fuel will have a huge effect on employment and the economy in general. No matter how advanced the technology for harvesting solar and wind energy may be, it still has its shortcomings. Its servicing is expensive. Devices used in this technology are hard to recycle. Finally, they also produce detrimental effects for the environment. Wind turbines, for example, kill birds.
Redistribution of wealth is another major component of Biden’s plan. There is no question that the gap between the rich and the poor has been growing steadily for a long time. Biden promises to stop it.
Again, in order to solve a problem, one needs to understand its cause. Otherwise, one may very well end up treating symptoms rather than causes; the cure may prove to be worse than the disease.
There is a reason why wealth has been flowing to the rich. The rich are not the reason why this has been happening; they are merely a symptom and a result of this process. The real reason is the fact that our economy is wasteful and inefficient.
Economies are primarily about creation of wealth. In order to be efficient, economy must always create new wealth—that is the primary condition for sustaining economy. No matter how rich our economy is, its wealth is still finite. In order to produce new wealth, our economy must constantly create new and more powerful levels of organization that offer new possibilities; it must constantly evolve. If the economy does not evolve and does not create new wealth, it becomes wasteful and sustains losses. Waste destroys wealth. If wealth is destroyed, there is less of it that goes around. Waste means that economy does not use available resources efficiently. Running a wasteful economy is merely increasing wastage.
An inefficient economy is less productive. A decline in productivity leads to growth of unemployment and poverty. That is exactly what has been happening in America. That is the main reason why the money is flowing toward those who are still involved in production and away from those who are increasingly displaced from production.
The way out of this conundrum is not to attack the rich. They way out is to solve the problem of growth and make our economy use its resources—of which human resources are the most important–to the fullest extent possible. Redistribution of wealth does not address the underlying causes of poverty; it merely exacerbates their effects, making the rich richer and the poor poorer. The inefficient economy caters mostly to the rich because that is where the money is and less to the poor.
Our economic practice remains elitist and does not use efficiently its most important resource—the human capacity to create. It tends to exclude people from economic production. The key to economic success these days is to grab a dominant economic position and then use it to steer the existing wealth your way, rather than produce anything new. Individuals like George Soros, for example, do not create new wealth. Their speculations and shorting merely move money in ways beneficial to them personally without creating new possibilities. The inefficiency of our economy results in the redistribution of wealth that benefits the rich.
The way out of this conundrum is to end reliance on elitism and domination in our economic practice. Our practice must aim at universal inclusion and empowerment of all members of society and the use of their productive capacities to the fullest extent possible. Providing a small fixed income to stay idle, as many on the left propose to do, does not address the problem of poverty. This policy will not bridge the gap between the rich and the poor; it will only make it grow. The solution lies in the increasing emphasis on creativity and productivity. The new practice will benefit all. As a result of this practice, all of us, including the rich, may start measuring wealth by the realization of our creative capacities, rather than by the amount of money in our bank account.
Finally, the union building that Biden promotes in his plan is not going to contribute to the solution of the problem of growth. It is not going to improve the situation for American workers. This “union building” appears to be rather self-serving as a way to build a constituency to support Biden’s policies.
He primary goal of Bidenomics is not creation of new wealth. It is about domination and control. Bidenomics is not anything new. It is not anything like the New Deal. Rather, it is the logical continuation of the preceding policies, including the policies of the Obama administration. Biden’s plan represents a variety of neo-liberalism that dominated this country and the world during the last two decades. Neo-liberalism is an ideology and l practice based on the alliance between bureaucratic and business elites. As all other forms of elite rule, this bureaucratic scheme has only one goal: to dominate the country and to rule it in the interests of the elites.
Gennady Shkliarevsky is Professor Emeritus of History at Bard College.