We are entering a new development in American economics. We’ve learned a great deal in the last 20 years and U.S. economists are at their peak level in the development of a new era in creating the conditions for a standard of living for all Americans that may surpass anything heretofore seen in this country.
But the vision involves a set of details that may be difficult to achieve. After all, we almost had an insurrection, a complete overturning of our political system, because of greedy men in politics financial bosses behind them. We live in a society, approximately half of which believed a lying President. This was a man who not only denied the results of the most reviewed and certified election in our country’s history, but who also denied that the Covid-19 virus, which has killed over half a million Americans was no more lethal than the common cold, and would contain itself with little damage to citizens. Fortunately, we elected Joe Biden, but hundreds of millions of Americans had already died of the deadly virus.
Now, huge numbers of the American people have been vaccinated. Soon students will all be vaccinated. With every effort the government can make, the number of those in danger will be reduced, and “herd immunity” may take hold, making life much more livable and returning the country to normal activity.
Economics have taken a sharp turn to the Left. With the prompting of men like Bernie Sanders and women like Elizabeth Warren, America’s working class has decided that, in the richest country the world has ever known, it is time for workers to earn a living wage.
The divide that has been created by people like the Cato Institute, the Heritage Foundation and the overriding organization that funds all anti-Middle Class propaganda, the Council for National Policy, which funds ALEC functions and the State Policy Network also. These organizations, like the Koch Family, the Mercers, and hundreds, literally hundreds of Right Wing billionaires, are dedicated to promoting the Fascist/Republican politicians—the McConnells, the Ron Johnsons, the Rand Pauls, the Ted Cruzes, and the Marco Rubios—who will do their billing. Johnson has lied openly, in front of the Press about the January 6 insurrection, trying to diminish the reality of what happened and trying to whitewash former President Trump’s part in it. The Right Wing is doing whatever it can to put pressure on the Fascist/Republicans to scuttle President Biden’s economic plans for the People.
What we might call “The Biden Plan” is what might be thought of as similar to the theories and teachings of John Rawls applied to economics. Rawls would say that if you are starting over, setting up a political science project called a country, you would be best to start by thinking of the lowest common denominator, which in economics would be the blue collar worker. The basics for this individual and family would be that they be paid enough to live on. (After, of course, being trained to do a job and after having proved that they can do it.)
What does this achieve? Well, it would eliminate a great deal of poverty, and reduce the amount that society pays to assist workers who now heavily rely on society for assistance to survive. That should never be the situation in a fully functioning Capitalist society. So, the people on the Democratic side of the aisle in Congress are largely supporting a $15 per hour wage, which statistically will raise as many as 40 million people out of poverty and raise U.S. GDP commensurately.
The higher we can comfortably raise wages, the better standard of living we will have, the less reliance on government we will have and the more prosperous we will all be, at every level in society, even billionaires.
So, Bidenomics is not complicated. It is Keynesian on steroids. But contrary to the message the people receive from people like McConnell and the remaining Koch brother, Keynes was a Capitalist, heavy capitalist, whose basic point of difference with Conservatives was what to do when things go wrong. He was the farthest thing from a Socialist. As reputable a Right Wing source as Forbes Magazine has said that he was actually a Conservative, even in today’s terms. No matter what, Keynes was a confirmed Capitalist, but one who understood that for corporations to be successful, their employees must be paid a living wage.
The Bidenomics principle today, in mid-2021, is to get people back to work, to reorganize how work is transacted, based on what we learned in the crucial survival year of 2020, and to, first and foremost, get economic activity moving again. Do it by creating government underpinning that can be quickly abandoned when the economy heats up. Then let the corporations take over and compete. Oh, yes, compete! Since the Reagan era, we haven’t had a truly competitive economy. Utilities are an assembly of small networks. In many states telecommunications and Internet and cable television regularly compete with only one other service in a state. U.S. Internet is therefore, both the slowest and the most expensive in the world.
In a world dictated by the middle class, competition will be a principal source of creating employment, better wages, versatility and opportunity. The conditions in Central America have grown to be a cancer on both North and South America. Because the United States is the most economically viable option for workers—if they can cross the U.S. border and stay, we will, regardless of how strong our borders, be a lightning rod for the destitute. This means we must also find a way forward that encompasses millions of illegal immigrants and includes them into the economy, if only at the minimum level, without creating another huge mass of impoverished. It probably cannot be done, but the reality of people coming will not be replaced by wishful thinking.
If work is to be valued, then the worker must also be valued. There is a monumental task before Americans to restore faith in collective action by workers to obtain better wages and working conditions. Once a minimum wage is established on which individual families can subsist, then unions come into play to work with large corporations particularly, as is done in Europe and in Canada, to set better working conditions, improve worker efficiency, training and innovation. When workers are already earning a basic living, wage negotiations have less influence on management-labor discussions.
A worker based economy will be an expanded economy. It will undoubtedly be an economy that is highly compartmentalized, with tech categories, commercial categories, real estate categories, retail and distribution categories all expanded and, based on rapidly expanding AI and IT developments many new categories. These are all things based on consumer needs and economic growth. These expanded markets and business categories are obvious from the approach of the next four years without Fascist interference. The only thing that could change these projections are obstructions worked out by a few hundred billionaires with their Fascist/Republican partners, like McConnell, Cruz, Rubio and people like Marjorie Greene trying to obstruct in the House.
An increased wage to $15 an hour will raise the cost of a Starbucks or any product from $3.99 to something like $4.16. That is not a major obstacle to a living wage for every American. But there are benefits to higher wages. Employee retention increases with better wages, which means that the $4.000 cost of replacing fast food workers and others will be reduced. Hiring will be easier once this wage is fully implemented because there will be no waiting on a job an individual likes to see if another job, on which he or she can live, might come available. Since the turnover rate for fast food employees is something like 90% per year, the higher wage will be well worth it—once it is mandated for all fast food chains and other businesses. There will be no competitive wage advantages.
What about inflation? If Biden pours money into the ailing economy, which is not flourishing, not with so many people still out of work, won’t there be inflation. Yes. We are already in a selective inflation period because of sudden excess demand. People can get out and about. They have some savings from sitting at home. They want to buy cars, make renovations, add functions and space to their homes, and buy new homes. So the cost of commodities is growing faster than demand. But this is temporary. Naturally, the oil companies have already used speculative and regional inflation to raise gas prices. This is what happens when huge resources are in the hands of unscrupulous people. The oil billionaires, in general, who own enough of each company to appoint the boards of directors and CEOs have decided it is time to scalp the people. We now produce more oil than any country in the world, more than we need. But the oil billionaires have decided to make you pay more for gasoline. With a Fascist/Republican Senate that reports to them, there is nothing we can do at this point. Two Texas Senators will see to it that your car costs you an extra $30 to fill the tank.
Health care costs are one of the biggest expenses, if not the biggest, around which the average family must budget. Bidenomics has helped to alleviate this already by reducing some costs of signing up for the ACA if a family loses its employee-based care as a result of Covid-19 layoffs. In the long run, however, the theory of Progressive health care affordability should look more and more like Medicare.
The idea is really simple in concept and has been adopted, in one form or another, by every other advanced Western country including basically all of Western Europe. The idea is simple. We would take the money that we now pay to insurance companies both from employers and from employees, then take the money that individuals spend on private health insurance, then the money we spend on Medicare and Medicaid, and some other funds that comprise health care costs. We take all that money and we put it in one big pot. Then we start the year, and everyone gets a plastic card. You spend no money but you take that card to a hospital or a doctor and you get services. The hospital or doctor bills the big pot of money and they get paid, not always as much as they ask for, but a lot of money. Same goes for prescriptions.
At the end of the year, the health care system adds up all the costs and divides it by the number of people. The statistics tell us that the amount the big pot paid out will only be 50-75% of the money in the pot. So, at the start of the next year, the big pot will start to send you a monthly bill for your share. It will definitely be less costly than the previous system, and you will never see a bill for any procedure, just that monthly part of your payroll tax deduction. You can’ be turned down and you can’t be charged more. Otherwise there is no difference between that and what you’re doing now, no matter how good your health care plan is.
In the 1950s, people had good manufacturing jobs here, good distribution jobs, and, if you worked at a place like Sears in those days, a good retirement plan even in retailing. In those days, Reagan courted union leaders and union workers, then created a system of disbanding unions that has taken unions from 30% of the work force down to 7%, with almost no possibility, under Fascist/Republican control, of getting back to that 30% without a fight, literally street fights with corporations, to get unions back to 30%. Today, under Biden, we have the opportunity to create new manufacturing industries, with hi-tech plants, hi-tech distribution and other cost reductions that could make the U.S. the provider of many of the world’s products, but most certainly the provider of most of the U.S. domestic needs for products and services. We can become self-sufficient, with leading products in almost every product category, with manufacturing plants in almost every state.
Bidenomics is the future of Capitalism, with its face turned towards workers and stakeholders, with profitable businesses, high degrees of competition and benefits to local and national government. No government or economic system is a Valhalla. There are always difficulties, especially among those whose greed, often at no risk ever to themselves, merely inherited wealth, is unbounded. They will finance the opposition. But the traditions of equality and opportunity in our history beg for this type of Capitalism. Bidenomics, an economic system that starts with the least of us and works towards fulfillment of aspirations for all of us, should be approach we take to the future of this country.