Americans depend on Biden's economic team (Analysis)

Biden chooses women for White House communication 1:04

(CNN) -

Joe Biden's incoming economic team will bear the desperate hopes of millions of Americans who have lost their jobs, are facing eviction from their homes, or are starving in a monstrous COVID-19-induced recession.

But reviving growth and jobs after the pandemic may not even be the toughest challenge facing the group, led by former Federal Reserve Director Janet Yellen, whom the president-elect will formally appoint Tuesday as Secretary of the Treasury. .

Biden has made clear in his comments on the election campaign, since he was elected, and in the composition of his team, that he intends to turn around to fundamentally reorder the economy in favor of working men and women - a goal. showing great ambition but having dubious chances of success.

"This team is comprised of respected and proven innovative public servants who will help the communities hardest hit by COVID-19 and address structural inequalities in our economy," Biden said, summarizing their dual mission in a press release Monday.

Inequality, the Biden challenge

Even before the pandemic, inequalities and blocked social mobility, especially in the post-industrial heartland of the Midwest and among blue-collar workers, was a defining feature of early 21st century politics.

The sense that globalization enriched the rich but left the less well-off destitute in the wake of the Great Recession was a driving force behind the populist nationalism spurred on by President Donald Trump in his 2016 election victory.

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Biden used his own history of supporting American workers and middle-class values ​​to push swing states like Wisconsin, Pennsylvania and Michigan off Trump's electoral map on his way to the White House.

But his presidency will rise or fall based on his ability to reduce inequalities in a nation that spent the last Thanksgiving of the Trump era celebrating the Dow Jones Industrial Average hitting the all-time 30,000 mark.

This, even as long lines of people stretched out at food banks in cities from New York to Dallas because they didn't have enough to eat.

In the long run, Biden's team, after two presidencies in which inequality has expanded despite massive economic expansion that has benefited the equity-owning classes, must show that the promises to lift the middle class are Really realistic in a globalized world and they are more than just slogans launched by nostalgic politicians in the electoral campaign.

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Forge social change

The credentials of many members of Biden's new team leave little doubt that the former vice president plans to keep his promises to American workers and restore the faith of the unions that have long backed his political campaigns.

Yellen began her professional life as a labor economist and has a reputation for seeking to protect the most vulnerable from the worst economic crises.

Cecilia Rouse, chosen by Biden to chair the Council of Economic Advisers, is also a labor economist and has said she used discipline to forge social change.

In an article in

magazine

in June, Neera Tanden, whom Biden named as his budget director, wrote that the pandemic had exposed the "moral distortions" of the American economic system.

"To fix what's broken and rebuild it stronger than before, we need a new social contract for the 21st century, one that updates the New Covenant," wrote Tanden.

"It is time to rethink the relationship, the basic treatment, between the individual, the companies and our Government."

The most immediate test facing Biden's team is an already desperate economic situation that will likely be far worse when he takes office on January 20 as the pandemic rages at a fall and winter peak.

Its resurgence - the closing of many restaurants and businesses that had trouble reviving over the summer - likely means the economy will struggle to grow and unemployment will rise during the first quarter.

Immediate test

Biden is in a similar position to when Franklin Roosevelt (FDR) was newly elected and he waited months (inauguration was in March in those days) in 1932-33 to face the Great Depression while his predecessor, President Herbert Hoover - like Trump with deepening covid crisis - he was overwhelmed by the unfolding disaster under his command.

But unlike FDR, there is no expectation that Biden will succeed in passing legislation that changes the nation to end the economic storm.

At best, if Democrats can somehow win two runoff elections in Georgia in January, Biden would have a 50-50 Senate with Vice President-elect Kamala Harris to have tied votes going his way.

A Senate led by the Republican master of inertia, Sen. Mitch McConnell, is the most likely outcome, which would make it more difficult to come up with a large stimulus package.

There are already signs that the Republican Party is rediscovering its zeal for budget discipline, after four years of indulging in Trump's policies that blew up the deficit, which typically occurs during recessions, at a time of economic growth.

Even a small, short-term measure could help millions of Americans impacted by declining government support for previous stimulus packages that kept small businesses afloat, kept renters in their homes, and provided extended unemployment benefits.

'Half bread' is better than nothing

The Democratic House and the Republican Senate have for weeks been unable to agree on the size or composition of a new covid-19 aid package.

Trump's absent leadership has not helped.

The need is so acute that some Democrats have begun to tiptoe toward unusual criticism of House Speaker Nancy Pelosi, who argues that the Republican proposals do not provide the level or duration of support that Americans need.

Austan Goolsbee, a senior economic adviser to the Obama administration, told CNN's Manu Raju on Sunday that "the virus really is the boss of the economy" and that there is a risk of a double dip recession.

If they have to accept half a loaf, then they should accept half a loaf.

And then let's try to get the other half.

But right now it's really touch and go, and I wish both sides could see that, "he said.

Possible agreement?

McConnell said Monday that it was still possible that an economic deal could happen in the last days of the old Congress, though his comments could also be interpreted as more poses.

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"Let's hope our colleagues at the top of the Democratic Party can finally listen to their own members and stop blocking the multi-billion dollar common sense measures that Republicans have been ready to implement for months," said the Kentucky Republican. .

Biden has a history of striking deals with McConnell and will take office with the power attributed to a newly inaugurated president.

It will seek not only short-term help for the unemployed and closed businesses, but massive funding for states neglected by the Trump White House.

He has ambitious plans for a new test and trace system to slow down infections.

States are asking millions of dollars to deal with vaccination programs.

By the time Biden is sworn in, many American children will have been out of school for 10 months.

And education officials still lack federal help to make their eventual return to school safe.

Still, Biden will have the advantage of being able to argue before Congress that a new economic package, while desperately needed, will be a bridge to better times in the near future, thanks to the very encouraging news about the effectiveness of vaccines developed under the Trump administration.

A more hopeful future

While long months of suffering, death and financial hardship will follow, the Democrat will at least take office with the expectation that normal life can somehow resume by mid-year.

If there is an explosion of pent-up economic demand, it could enter a midterm election year that often punishes first-term presidents capable of arguing that they both beat the pandemic and saved the economy.

That's when the second most complicated part of the economic team's work will begin: an attempt to reshape an economy that all presidents in modern memory have argued is biased against the less well-off, but that none have managed to rebalance.

Given extreme short-term and long-term impediments to his program and difficult political conditions, Biden probably couldn't have chosen a better candidate than Yellen, who, if confirmed by the Senate, will be the first female Treasury Secretary.

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The former head of the Federal Reserve (FED) is respected on both sides of the Capitol, a quality that will be important in forging a new stimulus deal.

His knowledge and good relations with the FED will also be helpful in maximizing the double whammy that the Treasury and the central bank could use to revive the economy.

Yellen's nomination has also been welcomed by some progressives, an important consideration in keeping dissenting ideological groups in the Democratic Party together.

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