The economic doctrines of Clinton, Bush, and Obama were all fundamentally neoliberal, reflecting an implicit belief in the trickle down economy. But things started to move in a more neo-populist and nationalist direction with Trump, and those changes crystallized under Biden.

While Trump was tougher on his protectionism, Biden nonetheless pursues similar, inward-looking nationalist trade policies.

He maintained the Trump administration’s tariffs on China and other countries, and introduced stricter “buy American” procurement policies, as well as industrial policies to relocate major manufacturing sectors.

Equally important, the broader Sino-US decoupling and the race for dominance in the commerce, technology, data, information, and industries of the future continued.


Likewise, although Biden has not formally followed Trump in demanding a weaker dollar and intimidating the Fed to finance the large budget deficits created by his policies, his administration has also adopted measures that require closer cooperation from the federal government. Fed.

Indeed, the United States has entered a de facto, if not de jure, state of permanent debt monetization – a policy that began under Trump and Fed Chairman Jerome Powell.

According to this arrangement, if inflation were to rise moderately, the Fed would have to adopt a policy of benign neglect, as the alternative – strict anti-inflationary monetary policy – would trigger a stock market crash and severe recession. This change in the Fed’s position represents another sudden departure from the period 1991-2016.

Moreover, given America’s large twin deficits, the Biden administration has given up on pursuing a strong dollar policy. While he is not in favor of a weaker greenback as openly as Trump, he certainly wouldn’t mind a currency change that could restore the competitiveness of the United States and reduce the country’s growing trade deficit. .

To reverse income and wealth inequalities, Biden favors large direct transfers and lower taxes for workers, the unemployed, partially employed and left behind. Again, this is a policy that began under Trump, with the US $ 2 trillion CARES Act on Aid, Relief and Economic Security (CARES) and the Stimulus Bill. of 900 billion US dollars which was adopted in December 2020.

Under Biden, the United States adopted another $ 1.9 trillion stimulus package and is now considering $ 4 trillion in additional spending on infrastructure, broadly defined.

While Biden lobbies for more progressive taxation than Trump, his administration’s ability to raise taxes is limited. So, as under Trump, large budget deficits will again be funded primarily by debt that the Fed will be forced to monetize over time.

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