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Economic Challenges and Policy Directions in the Biden Era

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The incoming U.S. presidential election is an issue of major global concern; this is because the winner will not only affect domestic affairs in the United States, but will also determine the relationship between the U.S. and the rest of the world. A follow-up study of the ANBOUND 100+ Team shows that six key states, including Florida and Pennsylvania, will decide the fate of Donald Trump in this election as Donald Trump’s polls are at a disadvantage. The statistics indicate that unless some black swan event completely reverses the trend, it is unlikely for Trump to be reelected, while Joe Biden has a higher probability of becoming the 46th President of the United States.

In the event that the Biden era does come, it will undoubtedly bring about a host of changes in the U.S. foreign policy, geopolitical competition, the participation of the U.S. in global multilateral issues, and U.S.-China relations. In a previous analysis concerning U.S.-China relations in the Biden era, ANBOUND points out that the Biden administration will adjust the Trump administration’s extreme policies in multiple ways. During the presidentship of Trump, U.S.-China relations were basically determined by Trump alone. Should Biden become the next POTUS, even if the tough and antagonistic nature of the U.S. against China remains unchanged, it will still lead to a more regular and predictable framework, and we might see the slowdown or even the halt of the U.S.-China trade war.

For the global market, what matters the most is the economic policies that would be implemented in the Biden era and their impact on the world economy, hence the emergence of what is touted as “Bidenomics”. What economic challenges will the Biden era face? What are his priorities in the economy? To answer these, The Economist has recently listed several important issues that Biden needs to pay attention to in one of its feature articles.

First of all, Biden needs to pass a huge “recovery” bill in Congress. Some market analysts estimate that the United States needs US$ 2 trillion to US$ 3 trillion, which includes short-term stimulus funds to support unemployment insurance and help state governments and other local governments to cope with the budget hole. Biden also needs to provide grants or loans to small businesses that have not received as much aid as large firms. Other than that, it would also be necessary for Biden to ease tensions with China to appease the market. If vaccines for the novel coronavirus are out, Biden will need to adopt a co-operative attitude rather than a transactional approach in diplomatic relations. This will make it easier to share vaccines globally while facilitating the reopening of borders and the restoration of trade.

Biden’s economic recovery bill also needs to target those “build back better” projects, such as the United States’ underinvestment in large-scale infrastructure projects (the average American bridge’s age is 43 years). These are not only long-term issues that the United States needs to resolve, but they should also be Biden’s priorities. Scientific research investment is also an important aspect. The U.S. government’s investment in research and development (R&D) needs to be increased. R&D in the United States accounted for more than 1.5% of GDP in 1960 and has now fallen to a mere 0.7%. The Biden administration will need more R&D investment in technology and renewable energy. Biden would also want to undo Trump’s immigration policy that hurts the competitiveness of the United States, and to improve the living standards and social mobility of the middle class. This means that the United States must invest more in education, health, and housing. In addition, the United States needs to raise the minimum hourly wage to US$ 15. Currently, 17 million Americans earn less than the minimum wage.

In order to support the above-mentioned spending plans, Biden may need to increase taxes and reform fiscal policies. Assuming that the aforementioned spending plans can been acted, the combined annual public expenditure growth is equivalent to 3% of GDP. To this end, Biden needs to raise taxes to cover about half of the approved expenditures and impose higher taxes on businesses and the wealthy. Studies have shown that Biden’s tax increase policy may reduce the after-tax profits of companies by as much as 12%, while the income of the top 1% of the rich may drop by as much as 14%. In order to maintain financial sustainability, Biden will also be unable to escape the practice of expanding the deficit. Research by the Congressional Budget Office shows that public debt will reach nearly 200% of GDP by 2050. There seems to be no reason to worry in the short term, because interest rates in the United States are close to zero and the Fed is buying government debt. However, in the long run, the U.S.’ ever-expanding debt will eventually damage America’s national strength.

Some analysts believe that if the next POTUS can overcome this long-term challenge, the United States will greatly benefit from it. This means that the United States will begin to establish a consensus on stronger fiscal constraints based on welfare spending and sustainable taxation. However, researchers at ANBOUND believe that with the current U.S. economic model, it may be difficult to get rid of the expansion of debt issuance and the increase of deficits.

If Biden wins the election, a guaranteed change would be the adjustments in trade policies. The smooth operation of international trade is the most profound and typical manifestation of globalization, and Trump has alienated the U.S., causing the country to be criticized by the world. Biden on the other hand, has a record of supporting free trade. Although he will not immediately abolish the tariffs imposed by the United States, he needs to reduce U.S. trade protectionism, as well as establish and manage a new framework for economic relations with China.

Biden will also need to return to multilateral co-operation on issues such as global climate change. He has previously demonstrated his strong will in this regard, saying that he would return to the Paris Agreement on the first day after taking office. The global climate issue is a rare multilateral issue that transcends ideological and geopolitical disputes, and China is beginning to play an increasingly important role in it, whereas the European allies of the United States attach greater importance to multilateral cooperation on global climate issues. If the Biden administration wants to reverse the Trump administration’s extreme practices, it would need to be take a cooperative stance regarding global climate change as soon as possible.

Final analysis conclusion:

The results for the U.S. election will soon be announced. Judging from the polls so far, it is most likely that Biden will emerge victoriously. If Biden is to be in charge of the White House, we will witness the emergence of “Bidenomics”. The main problems and key challenges “Bidenomics” faces will determine the direction of Biden’s future policies to a considerable extent, which will also go on to affect the rest of the world.

Mr. He Jun takes the roles as Partner, Director of China Macro-Economic Research Team and Senior Researcher. His research field covers China’s macro-economy, energy industry and public policy

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Why are some Muslims, from India to the U.S Voting against their Natural Allies

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Recent national elections in the U.S. and regional elections in India have presented an interesting conundrum. The numbers show that some Muslims, are voting in a counter-intuitive fashion. Given the rise of Islamophobia and right-wing religious nationalism, both in the U.S. and in India, one would surmise that Muslims would vote overwhelmingly to the left of center. But both, in India and in the U.S., many Muslims have however chosen to send a message to the center-left – your sympathetic rhetoric and your verbal condemnations of Islamophobia is not enough, we want to see concrete policies that improve our political and economic conditions. Neither the promises of Joe Biden, nor the fear of Hindu-nationalism is influencing their vote. These Muslims are, for sure, in a minority albeit a growing one. Politicians on the center-left may ignore them at their own peril.

In the U.S.

In the U.S., President-Elect Joe Biden’s campaign outreach to Muslims went far beyond that of any presidential candidate in the past. Biden’s campaign had a manifesto for American Muslims and a designated outreach person. Biden spoke at Muslim conventions and even quoted from Islamic scripture. He dropped an “inshallah” in the debates. Biden promised to end the so called ‘Muslim-Ban’ on day one and has repeatedly condemned Islamophobia. Biden spoke up for Uyghur Muslims in China and Kashmiris in India and has opposed the annexation of West Bank. He has promised to resume relations with the Palestinians and restore aid to them. Even Imran Khan, the PM of Pakistan, a self-proclaimed champion of Muslims, does not have such an impressive pro-Muslim curriculum vitae, he has repeatedly refused to speak up for the Uyghurs.

While a majority of American Muslims campaigned very aggressively for the Biden-Harris ticket and raised millions of dollars for the Democrats, the exit polls indicate that only 69% of American Muslims voted for them. On the face value that is a huge win, but if you look at in comparison to the past it is troubling. Despite the fact that Biden went far beyond any other candidate in his outreach to Muslims, and the Islamophobia of President Trump is well documented, Biden has garnered the least percentage of votes by a Democratic presidential candidate in the last four elections according to exit polls conducted by the Council on American Islamic Relations.
 A possible explanation for this relatively weak performance is that, for some Muslims his “iron-clad” support for Israel and his willingness to work with pro-Hindutva operatives in the U.S., make his opposition to Islamophobia sound less credible.  Words are not enough. If his electoral promises do not actually translate into actual policies, one can expect further decline in Muslim support for Democrats. American Muslims are a rapidly growing and politically engaged community that is over represented in swing states.

A closer reading of the exit polls suggest that things are worse than they seem. The exit polls show that while 17% American Muslims voted for Trump (up from 13% in 2016), 11% declined to reveal who they voted for. It is possible that they lean heavily towards Trump, hence the secrecy. That would mean that in spite of all his Islamophobic rhetoric, Trump may have doubled his support among American Muslims. One Trump supporter told me he voted for Trump because Trump did not invade a single Muslim country in four years unlike Biden who supported the invasion of Iraq.  

YearCandidateMuslim Vote
2008Barack Obama88%
2012Barack Obama85%
2016Hillary Clinton74%
2020Joe Biden69%

In Bihar

The recent elections in Bihar has an interesting story to tell. The state is clearly polarizing as most gains have been made by parties on the extremities. Prime minister Modi’s right-wing Bhartiya Janata Party (BJP) went from winning 53 wins in the 2015 elections to winning 74 of the 243 seats in 2020. A significant swing in favor of Hindutva ideology. The Communist Party (CPI-ML) gained 9 seats, it had 3 seats in 2015 to 12 seats in 2020. The communist parties combined had a 400% increase, they went from 4 to 16 seats. The parties in decline are the so-called secular centrist parties. The Rastriya Janata Dal (RJD) which is the biggest single party in the state lost five seats (80-75) and the Indian National Congress (INC), the grand old party of India, also lost ground (27-19).

Clearly the secular center is shrinking. The biggest surprise of the elections was the performance of Asaduddin Owaisi’s All Indian MajlisIttehadul Muslimeen (AIMIM), a Muslim party, which in the past five years has gone from 0-5 seats. The Majlis won in predominantly Muslim area of Seemanchal and is being accused by commentators of stealing the secular vote away from secular parties. Some are describing Majlis as BJP’s B-Team.

It is interesting that now in Indian politics, the code for Muslim vote is ‘the secular vote’. Indian Muslims are now the last line of defense for the rather rapidly shriveling secular space. The criticism of Owaisi and the Majlis for denting the prospects of secular parties in Bihar is both misplaced and inaccurate.  The question that is important is not why Owaisi’s Majlis, a party historically based in Hyderabad (South India) is contesting elections so far in the North of India. The key question is why are Muslims in Bihar voting for Majlis? A party that has no record of governance in their region.

In a speech months before the elections, Owaisi predicted a tectonic shift in Seemanchal’s politics and he said that it was coming because of the profound injustices and inequities that plague Muslims of that region. If secular parties that have governed the state for decades had delivered good governance to Muslims, Owaisi would have stayed at home.

Muslim Disillusionment

Muslims are increasingly disillusioned by secular and left politicians. Islamophobia was on the rise even before Trump became President and 37% of American Muslims, pre-covid pandemic, were found hovering near the poverty line. There is much discontent. I think just as 17-25% American Muslims voted for Trump rejecting the centrist politics of Democrats – many Muslims in Bihar too are frustrated by the failure of secular parties to improve their material condition. The region of Bihar where Owaisi’s party won five seats is the poorest and infrastructurally the least developed area of the state. Voting for secular parties for decades did not help them much. They have been voting without hope. They too are tired of the lip service.

Muslims of Bihar are fortunate that they have an alternative in Majlis and they are able to reject both Indian secularists and Hindu nationalists unlike some American Muslims who feel that they are stuck between Republicans who are Islamophobic and Democrats who promise much but deliver little. The minority of Muslims who appear to be voting counter intuitively, seemingly against their own interests, either for Donald Trump in the U.S. or the Majlis in Bihar, are clearly sending a signal to secular politicians – do not take our vote for granted, you need to earn our vote.

The center-left may be a natural ally of Muslims, but if it does not deliver for Muslims, they may lose their vote in ever increasing numbers.

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Which Coronavirus Policies Succeed, And Which Fail: N.Y. Times Analysis Confirms Mine

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According to an analysis by and in the New York Times on November 18th, which is headlined “States That Imposed Few Restrictions Now Have the Worst Outbreaks”, “Coronavirus cases are rising in almost every U.S. state. But the surge is worst now in places where leaders neglected to keep up forceful virus containment efforts or failed to implement basic measures like mask mandates in the first place, according to a New York Times analysis of data from the University of Oxford.”

At Strategic Culture, on May 21, I had published my own analysis, which was based upon tracking the data globally and within countries, and within the various states of the United States, which analysis concluded that countries (and states) which apply the least-stringent regulations in order to keep as low as possible the spread of the virus are failing the most to contain or limit that spread. I labelled those the “libertarian” countries, and I noted that what I called the “socialist” countries — the nations which were the most strictly imposing scientifically confirmed regulations in order to keep those numbers down — were having the best success at limiting the spread of this virus. My study was global, and its headline was “Ideology and Coronavirus”. Unlike the Times article, I was forthright about the ideological implications of the coronavirus data — because those implications are vastly important. (The handling of this pandemic is providing reams of data that test the effectiveness of the various locales’ predominant ideology at dealing with a global life-or-death years-long public-health emergency in regions throughout the world. This is like a global laboratory experiment testing the two opposite ideologies: libertarianism, which is against government regulation, versus socialism, which applies government regulation. No government is purely one or the other, but those are the two poles.)

The analysis in the Times article shows a chart, and represents on it almost all of the states, as dots that indicate both the amount of regulation which has been applied, and the lowness of the infection-rate which has resulted; and, at the upper left corner on it, are the two Dakotas, as “Weak recent containment measures and many cases,” while at the bottom rightmost corner is Hawaii as “Strict measures and fewer cases.”

The Times chart is showing, only locally within the United States, during just the past few weeks, what my analyses had shown, regarding not only the international and longer-term data, but also within the United States itself and recently, not only longer-term and internationally. One of my articles, on November 1st and titled “The Highest Covid-Infection-Rate States”, showed the infection-rate for all 50 states, and noted that, “In 2016, the top 17 [the states with the highest rates of this infection in 2020] voted for Trump, and the bottom 5 voted for Clinton. All but 3 of the top 24 voted for Trump, but from numbers 25 to 45, there was a political mixture. The highest infection-rate state, North Dakota, has a Covid-19 infection-rate that is 14.6 times higher than the lowest Covid-19 infection-rate state, Vermont.” Of course, the Republican Party (Trump’s Party) is the more libertarian Party, and the Democratic Party (Clinton’s Party) is the more socialist (though actually just as totalitarian) of the two Parties. (Both Parties represent only their billionaires, who also own and control the media; and this is the way that America’s aristocracy controls the Government. For example, the very pro-Democratic-Party website PoliticalWire quoted from and linked to the NYT’s article, but always fails to include any of mine, because I am critical against both Parties. Truly independent news-media are almost non-existent in the United States.)

Whereas the Times’s chart of “Avg. new cases per 100,000” failed to include Vermont, Vermont is the state that has, for the longest time, been among the best three on not only cases per million but also deaths per million, from this virus, and substantially better even than Hawaii, and both states are among the two or three that in recent decades have been the strongest for Democratic candidates, and the weakest for Republican candidates. However, Vermont especially is politically independent, and, so, it has a Republican Governor, Phil Scott, whose record on containing this virus has been the best in the nation; and he was just re-elected in a landslide, 69% of the votes (largely because of this terrific record). Right now, however, the number of daily new cases has shot up suddenly about fivefold in just the past week; so, Phil Scott’s record is in jeopardy. If that surge quickly ends, then he could become the strongest Republican to run against Kamala Harris or Joe Biden in 2024. He would not only receive almost all Republican votes (since that’s his Party), but also at least a third of Democratic votes, and almost all independent votes. However, this doesn’t necessarily mean that he would be the likeliest to win the Republican nomination, because (just as is true about the Democratic Party) that Party’s billionaires will be making that choice. (It was blatantly true also with regard to Biden and Harris.) This epidemic will be a major political challenge both in 2022 and in 2024. Anyone who wants to see Governor Scott’s press conferences regarding this crisis, so as to know precisely what his coronavirus-policies have been, can see them here. His November 20th press conference is here. He and his governing team receive and answer there many intelligent questions, so that the policies which have led to the best results in America are amply explained there.

On November 16th in South Dakota (and then repeated nationally on National Public Radio on November 20th), reporter Seth Tupper headlined “Two States, Different Paths: Vermont Keeps Virus Low While Rivaling SD’s Economy” and provided a thorough report, including graphs of infection-rates over time, comparing two states, South Dakota, which has the nation’s second-highest infection-rate (after only North Dakota’s 9%) of 7.8%, versus Vermont, which has the nation’s lowest infection-rate, of only 0.5% — one-fifteenth as high. Tupper explained the different policies that the Governors of those two states had applied, and how those policies produced vastly different results for the infection-rates and the death-rates in their states’ populations, but only moderately higher increase in unemployment in Vermont than in South Dakota, which at the peak in April had reached 16% unemployment in Vermont, versus only 10% peak in South Dakota; and, by the time of August, both states had nearly identical low unemployment-rates. Whereas the death-rates from the disease soared around a thousand fold, between April and November, in South Dakota, the death-rate remained virtually flat, almost no increase, in Vermont, throughout that entire period. However, both states were now experiencing soaring infection-rates during the current, second, wave of the epidemic.

Author’s note: first posted at Strategic Culture

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Trump’s Election Shenanigans Pale Before The Threats From Melting Polar Glaciers

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Despite Joe Biden exceeding the magic number of 270 that guarantees a majority in the electoral college, President Donald Trump has not conceded.  Does he have a plan to overturn the wishes of the electorate? 

According to Trump he did not lose, he was cheated out of a legitimate win by voter fraud and ballot stuffing.  Accordingly, he has filed lawsuits in those critical states with narrow margins of victory for Biden — so far without tangible success — to block certification of the vote and persuade Republican legislatures to overturn the state vote as fraudulent and award the electoral votes to him. 

Trump’s window of action is narrowing.  A major target state was Michigan with 20 electoral votes.  However, Democratic Governor Gretchen Whitmer has now certified Biden’s victory meaning he should get its electoral votes. 

While Trump’s shenanigans continue, the world faces a real danger of melting ice sheets and glaciers.  A long term denier of global warming, Mr. Trump now accepts it but believes the earth will right itself without any effort by humans. 

Scientists meanwhile are particularly concerned with the Florida-sized Thwaites glacier in the Antarctic.  Its collapse they fear could destabilize surrounding glaciers eventually causing catastrophic global sea level rises measured not in inches but feet. 

The glacier rises 60 to 75 feet above water across its 75 mile face.  Remembering that 90 percent of it is under gives some notion of the quantity of ice.  The Nathaniel B. Palmer research vessel is conducting a survey this winter for the first time as part of a five-year international research program to learn just how fast the glacier is melting and how much it might be adding to rising seas. 

The problem is the shape of the glacier under the water and the warming waters eating away that core while the ice on top gets thicker and thicker as the glacier retreats inland.  At some point the glacier is likely to collapse of its own weight into the ocean.  Scientists who have modeled the scenario fear the process is unstoppable once it starts.  Worse it puts much of the West Antarctic ice sheet at risk of following it into the sea.  Any wonder then that Thwaites is also known as the Doomsday glacier. 

At the other pole the Greenland ice sheet had a record-breaking 2019, shedding the most ice since 1948 — an estimated 532 billion tons.  It of course increases coastal flooding along the eastern seaboard particularly the Carolinas and Florida.  Fortunately for the residents, the 2020 melt from Greenland, while well above the 1981 to 2010 average, was lower than recent years particularly 2019.

Donald Trump does not believe he lost the election and he does not believe in global warming.  Christmas is just around the corner and it’s reassuring to know he believes in Santa Claus . . . and the tooth fairy.

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