There has been a spate of articles commenting on how the Biden administration's economic philosophy and policy approach marks a real paradigm shift from the neoliberal approach that has dominated both the Republican and Democratic parties since Ronald Reagan's presidency. They're not wrong. One can criticize many of the specifics of the Biden administration's approach, including in the $2 trillion American Jobs Plan, whose details have just been released. But in many ways that's beside the point--of course there are still a lot of wires handing from the ceiling on this one, just as there were on Reagan's initial forays into neoliberalism. But the decisive break represented by Reagan's approach was clear and important, as is the decisive break represented by the Biden administration's approach today.
One of the better assessments along these lines is this lengthy article in the Wall Street Journal by Jacob Schlesinger and Andrew Restuccia. Read, ponder and wonder how this all happened under the watch of a 78 year old career pol.
"President Biden envisions long-term federal spending claiming its biggest share of the American economy in decades. He wants to pay for that program in part by charging the highest-earning Americans the biggest tax rates they’ve faced in years.....
It all marks a major turning point for economic policy. The gamble underlying the agenda is a belief that government can be a primary driver for growth. It’s an attempt to recalibrate assumptions that have shaped economic policy of both parties since the 1980s: that the public sector is inherently less efficient than the private, and bureaucrats should generally defer to markets.
The administration’s sweeping plans reflect a calculation that “the risk of doing too little outweighs the risk of doing too much,” said White House National Economic Council Director Brian Deese. “We’re going to be unapologetic about that,” he said. “Government must be a powerful force for good in the lives of Americans.”....
The long-dominant paradigm Mr. Biden and aides want to change is one widely branded neoliberalism, framed by Ronald Reagan, who declared in his 1981 inaugural address that “government is not the solution to our problem; government is the problem.” He ushered in an era of tax cuts, deregulation and federal programs increasingly designed to work through market forces....
While Democrats controlled the White House for nearly half the time since then, their policies often were constrained by the core Reagan principles, in the view of many progressives. Bill Clinton tried to juggle liberal goals with a focus on balancing the budget, expanding free trade, and deregulating the financial sector. Barack Obama created a new government health program, but to the chagrin of the left, worked through private insurers. His 2009 program to fight the recession was constrained by fears of big deficits."
Yup. The times they are a-changin'.
