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Economic Challenges and Policy Directions in the Biden Era



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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Biden’s Department of Justice: parents as domestic terrorists



In recent developments in the United States, US Attorney General, Merrick Garland, and the FBI have put under the FBI radar parents as potential domestic terrorists. You heard it right. This is now a new formal legal policy contained in memos of the Department of Justice trying to reign in parents discussions on Biden’s new school curricula. They are not going after potential outbursts but outright terrorism. 

This is an attack on freedom of speech in the sense that parents have the right to discuss and disagree with the new Biden school curricula. This is where the issue originated: parts of Biden’s new school curricula are not accepted by many parents and if they disagree, the FBI treats them now as potential domestic terrorists as a matter of policy. Apart from a First Amendment case, this is also a case for international human rights law and I reported the development to the UN Special Rapporteur on freedom of speech this week hoping to get a statement.

The Department of Justice is referring to some constitutional provision on “intimidation of views” to override and take down one of the most firmly established rights, the right to freedom of speech, in quite frankly a ridiculous interpretation. Those parents that dare to speak up against controversial parts in the new text books could be investigated for domestic terrorism. This is the most incompetent interpretation on limitations of freedom of speech I have seen in awhile. 

Garland and the FBI have totally lost their marbles. The woke discussion is not funny to me anymore. It increasingly looks like a woke tyranny that has nothing to do with rights and equality anymore but simply serves as a vehicle to empower the FBI to run wild against regular people. This lunacy needs to be stopped.

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Iran poll contains different messages for Biden and Raisi



“It’s the economy, stupid.” That is the message of a just-published survey of Iranian public opinion.

However, the substance of the message differs for newly elected hardline Iranian President Ebrahim Raisi and the Biden administration as Mr. Raisi toughens his negotiating position and the United States grapples with alternative ways of curbing the Islamic republic’s nuclear programme should the parties fail to agree on terms for the revival of the 2015 international agreement.

Iranians surveyed last month by Iran Poll and the University of Maryland’s Center for International and Security Studies were telling Mr. Raisi that they are looking to him to alleviate Iran’s economic and other problems and have little hope that a revived nuclear agreement will make the difference, given lack of trust in US and European compliance with any agreement reached.

The Iranians polled seemed in majority to endorse some form of Supreme Leader Ayatollah Ali Khamenei’s notion of a “resistance economy” as a way of blunting the impact of the US sanctions imposed by former President Donald J. Trump after he walked away from the nuclear agreement in 2018. Some 65 per cent of the responders said they favoured a self-sufficient economy; 54.2 per cent expected the economy to at least improve somewhat in the next three years.

A large number expressed confidence that Mr. Raisi would significantly lower inflation and unemployment, increase Iran’s trade with other countries, control the pandemic and root out corruption.

Meanwhile, 63 per cent suggested that Iran’s economic situation would be the same, if not better, if there were no return to the agreement and the government continued to pursue a civil nuclear programme. The figure seemed at odds with the 80 per cent who said Iran’s economic situation would improve if Iran and the United States returned to the agreement and both fulfilled their obligations under the deal.

The divergence may be a function of the fact that the poll, unsurprisingly, indicated that Iranians (64.7 per cent) had little trust in the United States living up to its commitments even though they expected the Biden administration to return to the deal (57.9 per cent). As a result, 73.1 per cent of those surveyed said Iran should not make concessions given that world powers would not live up to commitments they make in return.

At the same time, 63 per cent blamed the troubled state of the economy on domestic mismanagement rather than US sanctions. Only 34.4 per cent believed that the sanctions were the main cause of their economic difficulty. Iranians pointing the finger at the government rather than external forces was also reflected in the 60.5 per cent of those polled blaming Iran’s water shortages on mismanagement and bad policies.

The poll suggested that by emphasising domestic mismanagement, Iranians were going to judge Mr. Raisi on his success or failure in countering the debilitating effect of the sanctions even though 77.5 per cent of those surveyed said that the sanctions had a negative or somewhat negative impact on the economy.

Implicitly, Iranians were holding former Iranian President Hassan Rouhani responsible for the mismanagement given that Mr. Raisi only took office in August. Rated very favourable by 61.2 per cent of Iranians surveyed in 2015, Mr. Rouhani’s favorability dropped to 4.6 per cent in the most recent poll. By contrast, the favourable views of Mr. Raisi soared from 38.3 per cent in 2014 to 77 per cent last month. IranPoll and the Center have been conducting annual of surveys since 2014.

Mr. Raisi may have taken pleasure from that but more importantly, the poll implicitly suggested that he does not have much time to produce results before his significant public support starts to wane.

Of those polled, 66.7 per cent expected Mr. Raisi to improve Iran’s international standing, 55.7 per cent said he would be in a better position to negotiate with world powers, and 45.2 per cent predicted that he would enhance Iran’s security. Those expectations may have been to some degree validated in the public’s mind by last month’s acceptance of Iran’s application for membership in the Shanghai Cooperation Organization (SCO) that groups China, Russia, India, Pakistan and several Central Asian states.

The survey results seemed to suggest that ordinary Iranians were framing their message to the United States differently from the assessment of prominent scholars and analysts. The divergence may well be one primarily of timing but nonetheless has implications for policymaking in Washington. The message of the respondents to the poll was one of immediate impact while analysts and scholars appear to be looking at the middle term.

Without referring to the poll, Vienna-based economist and strategic consultant Bijan Khajehpour argued this week, seemingly contrary to the poll, that “mismanagement and the Covid-19 pandemic have both contributed to Iran’s poor economic performance in recent years, but it remains that US sanctions…will be the key factor in determining Iran’s future prospects.”

Mr. Khajehpour went on to say that “high inflation, capital flight and the erosion of household purchasing power alongside mismanagement of resources and the deterioration of the country’s infrastructure have the potential to spark more protests and further undermine the already faltering legitimacy of the Islamic Republic in the eyes of the public.”

No doubt, the jury is out on how Iranians respond if and when Mr. Raisi fails to live up to their expectations. If the past is any indication, Iranians have repeatedly taken to the streets at often substantial risk to liberty and life to make their discontent with government performance evident as they did with the low turnout in this year’s election that brought Mr. Raisi to power.

The risk of renewed protests was reflected in the fact that responses to various questions regarding the electoral system, the limited number of presidential candidates (because many were barred from running), and the public health system showed that it was often a slim majority at best that expressed confidence in the system.

Add to that the fact that 68 per cent of respondents to the poll said that the objectives of past protests had been a demand that officials pay greater attention to people’s problems.

Yet, at the same time, they were telling the United States that its efforts to generate pressure on Iranian leaders to moderate their nuclear and regional policies by imposing harsh sanctions had for now backfired. Iranians were backing a tougher negotiating position by the Raisi government.

Ultimately that could be a double-edged sword for Mr. Raisi. He has to prove that he can be tough on the United States and simultaneously improve the lives of ordinary Iranians. Failure to do so could have in Mr. Khajehpour’s words “unpredictable consequences.”

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Gallup: World’s Approval of U.S. Govt. Restored to Obama’s Record High



President Joseph R. Biden Jr. of the United States of America addresses the general debate of the UN General Assembly’s 76th session. UN Photo/Cia Pak

On October 19th, Gallup issued their “2021 Rating World Leaders” report and finds that “Six months into the first year of Joe Biden’s presidency, the image of U.S. leadership is largely restored in the world’s eyes. As of early August 2021, across 46 countries and territories, median approval of US leadership stood at 49%, matching the record high rating when former President Barack Obama first took office in 2009.”

Their year-by-year graph is shown of the global approval-ratings of the Governments of Germany, U.S., China, and Russia, by the populations of 44 countries, and of 2 territories (Hong Kong and Taiwan were included in their surveys because the U.S. Government wants to conquer both of those Chinese provinces, so as to weaken China). That chart clearly displays the following fact: thus far (six months into Biden’s Administration), the world viewed Biden as favorably as Obama, and far more favorably than Trump (even though Biden has been continuing almost all of Trump’s foreign policies). Apparently, the global public views Biden as being like Obama because his Party is the same as Obama’s, and his rhetoric also is similar. Though Trump’s international policies have been continued with little (if any) significant change under Biden, the world still has been viewing Biden as being like Obama (whom the world still views as having been the best world-leader during his Presidency), instead of like Trump (whom the world still views as having been the worst world-leader during his Presidency). Obama is still viewed far better than Trump, though (for example) two U.S-and-allied-banned news-sites had published, two days earlier, on the 17th, with full documentation, the major (but banned) news-report titled “First of over 200 bodies being exhumed from Lugansk mass grave. One of Obama’s atrocities.” It had been submitted to 200 news-media, and only those two published it.

Perhaps the world’s population is more swayed by rhetoric, and by Party-labels, than by a national leader’s actual policies (which, perhaps, they’ve not even known about — after all, how many know about those mass-graves?).

The Gallup surveys were done actually in 106 countries and in those two Chinese provinces that the U.S. Government wants to control, but “U.S. Leadership Approval” has, as-of yet, been calculated by Gallup only in these 46. Of the 108 total lands, 23 were in Africa, 38 in Europe (including Europe’s largest and most populous country, Russia), 30 in Asia, and 17 in “The Americas” (not including U.S., whose Government these surveys by Gallup have actually been designed to serve).

Remarkably, “While Germany and the U.S. had previously been vying for the top spot in the Americas, Germany’s leadership safely led the other countries in 2020, with a median approval rating of 50% in 2020. Russia earned higher approval ratings than China or the U.S., with a median approval rating of 41%. The U.S. and China earned similar, and far lower, approval ratings, of 34% and 32% respectively.”

Also: “Germany’s leadership continued to be the most popular in Europe, with a record-high median approval of 62% in 2020. China, Russia and the U.S. have all lost favor in Europe in recent years, and in 2020 they were all on equal footing, with approval ratings of around 20%.”

Furthermore, in Asia: “U.S. Leadership Image Still Mired at Record Lows” and these are lows that previously had been shown during the G.W. Bush and Trump Administrations; so, the U.S. Government’s rhetoric under Biden does not, at least yet, seem to be persuading Asians as much as was the case under Obama. Perhaps the Biden Administration will need to employ less-blatantly-hostile rhetoric against China than it has been using, in order to be able to get much support from Asians against China.

And, regarding Africa, “Ratings are not yet available” that are sufficient to determine whether or not, as has been shown since 2007, “the U.S. remained strongest worldwide in Africa,”or else changed up or down.

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