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As Biden Moves Away from Neoliberalism, What Next?

Biden’s first speech before Congress as President was a whirlwind of populist promises to raise living conditions for the worst off sectors of U.S. society and defend American interests abroad. The plans and priorities he presented show that the Biden administration and its allies are betting on a departure from traditional neoliberal approaches to ensure that the United States can claw its way out of its current political, economic, and social crises and rebuild itself in its own image as the undisputed imperialist powerhouse of the world. 

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Biden has finally unveiled the remaining parts of his administration’s three-pronged action plan to both rebuild the United States in the wake of the pandemic and ensuing economic crisis and continue the project of restoring U.S. hegemony after the crisis of 2008. The American Families Plan and the
American Jobs Plan, sequels to the American Relief Plan passed earlier this year to combat the coronavirus, are the roadmap Biden and sectors of capital are arguing is necessary to bring stability to U.S. capitalism — reducing poverty and wealth inequality, creating jobs, and confronting climate change. Indeed, as many analysts noted first on the campaign trail and then during the first 100 days of Biden’s presidency, his proposals represent the most “progressive” plans the United States has seen in the last 30 to 40 years. In fact, his blueprint for “building back better” has been compared ad nauseam with Johnson’s Great Society and FDR’s New Deal.

This new level of investment in infrastructure and social welfare, however, is not merely about the domestic economy. These proposals are also an attempt to rebuild the legitimacy of the U.S. state on the international stage. Trump’s retreat from multilateral institutions and international alliances are gradually being rolled back with the intent of restoring the United States as “the leader of the free world” and proving that U.S. capitalist “democracy” is capable of ensuring stability.

Biden the Imperialist

Biden’s promises to “defend American interests across the board” show a renewed commitment to building and defending the imperialist apparatus of the United States and making it once again competitive among its historic allies and rivals. For instance, much of his justification for his proposals to overhaul the United States’ infrastructure and “bring jobs back to America” are directed at catching up to China and ensuring that the world’s dominant, albeit weakened, imperialist power does not fall behind other global powers that have been quicker to embrace greater social spending.

From the very beginning of his speech, Biden threatened China and Russia, echoing his rhetoric on the campaign trail. Biden is taking a harder stance against the United States’ competitors, while also reclaiming some of the careful diplomacy of the Obama era. For example, as Biden mentioned in his speech, the United States hosted the climate summit to show itself as a leader in the fight against climate change; in reality, this is in an attempt to greenwash American capitalism — the biggest polluter in the world — and press China to follow the United States in the so-called “green transition,” thereby combining a mix of diplomatic pressure and more hardline policies to slow China’s growing economy.

As predicted, a large portion of Biden’s speech was dedicated to his administration’s handling of the coronavirus pandemic. Even as more than 50,000 new cases are still being diagnosed each day, Biden claimed near-victory over Covid-19, lauding his administration’s distribution of 220 million vaccine shots in 100 days and touting the passage of the American Rescue Plan. 

Ignoring the most precarious sectors of the working class and poor, which are still being hit hard by the health and economic impacts of Covid-19 across the country, Biden painted a rosy picture of an America “ready for takeoff,” claiming, “we are working again. Dreaming again. Discovering again. Leading the world again.” He spoke of individuals saved from eviction, getting food to tables, and of sweet reunions between family members.

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Standing in stark contrast to this vision of a return to normalcy is the United States’ “vaccine nationalism,” which has enabled the coronavirus to rip through countries that have neither the access to nor the resources to obtain, produce, or distribute vaccinations. While grandparents in the United States may be “hugging their children and grandchildren” now, the people of India and Brazil do not even have the luxury of saying goodbye to their loved ones through a hospital window. India’s coronavirus cases have skyrocketed in recent months, due in no small part to the horrific response of the Modi regime, but also as a result of private patents on vaccines that create massive profits for pharmaceutical companies based in the world’s imperialist powers while restricting the rest of the world’s access to vital vaccine research. Biden said nothing about the millions of vaccines bought and hoarded by the United States so that it can play master in distributing vaccines (several of which are not approved for use in the U.S.) to its allies and those it hopes to bring closer to it in order to isolate China and Russia in the global arena. For example, the first shipment of U.S. vaccine “aid” was deployed to Mexico earlier this month to keep the flow of people and goods open between the country and ostensibly in exchange for the country’s commitment to continue on in its role as the Mexican arm of U.S. border patrol in the face of an influx of migrants to the southern border.

Biden the Domestic “Hero”

Biden’s speech and the proposals he laid out as the domestic priorities for his administration in the coming period signal a potential shift away from the neoliberal logic of ripping apart the social safety net in favor of “individual choice,” or, to be more precise, the total dominance of the markets in every aspect of life. From raising the minimum wage to pledging to cure cancer, Biden made promise after populist promise to raise the living conditions of all those forsaken by the “American Dream.” Biden spun a tale of a mythical “big government” that is capable of taking care of the people, that shows that capitalism can “self-correct” in the wake of the crises it creates, and that can mitigate the deepening antagonisms between the capitalist interests it serves and the working people who make society run. 

Of course, it remains to be seen how much of these plans Biden will be able to pass in the face of near-unanimous Republican opposition and how many provisions for working and poor people will be left on the cutting room floor. Perhaps Biden will be willing to sacrifice his commitment to “bipartisanship” to move forward with these ambitious plans through budget reconciliation, as he threatened in his speech to Congress, with the stern warning that “doing nothing is not an option.” Nevertheless, Biden’s speech to Congress shows that a sector of capital and its representatives in the state have coalesced around the idea that the social conditions and potential for class struggle produced by years of neoliberal austerity and the changing terrain of the global economy and geopolitics require certain concessions to the working class and oppressed of U.S. society.

Nowhere is this more evident than in Biden’s $1.8 trillion American Families Plan, which he laid out in detail Wednesday night. This “social infrastructure” plan would expand access to education with tuition-free community college and universal pre-K, in addition to providing funding for child care and tax credits for parents. It would also extend ACA premiums tax credits and enact nationwide paid family leave, albeit phased in over ten years. 

The plan marks a significant shift away from the United States’ long-standing commitment to placing the burden of childcare solely on the backs of working people and underfunded, overcrowded public schools. The plan for universal pre-K would put millions of working class and poor children in school; it would provide full funding for childcare for the poorest families and provide significant aid to help offset the cost of childcare for working families.

For many years, the world’s richest country has stood out among world powers in its refusal to provide even basic support to people caring for children or other loved ones. If nothing else, the stipulations in the American Families Plan show just how limited and underfunded the United States’ social programs have been for decades. The pandemic has only shed a light on the toll these policies have taken: without reliable access to childcare, tens of millions of people — the majority of them women, particularly women of color — were forced to leave their jobs in order to care for family members at home. While these attacks on working women and parents didn’t begin with the pandemic and won’t end with it either, the rate at which people permanently left the workforce is eating into capitalist profits; as the fact sheet for the American Families plan states explicitly, child care “costs the United States economy $57 billion per year in lost earnings, productivity, and revenue…lack of paid leave options cost workers $22.5 billion each year in lost wages.” The calculus is relatively simple: spend more money now to give children a place to go so that their parents and caregivers can continue to be an active part of the economy, as both laborers and consumers.

A similar logic was on display on Wednesday night in Biden’s case for passing the American Jobs Plan, which the White House announced earlier this month. “Wall Street didn’t build this country,” Biden said, making a direct appeal not only to the working class sector of the Democratic Party’s base, but also to a sector of Trump’s base in the Rust Belt and other areas left to suffer while banks and big corporations were bailed out after 2008. Targeting high unemployment rates, the infrastructure bill would create millions of new jobs in areas of the country devastated by decades of neoliberalism, resulting in more roads, bridges, and schools, as well as access to safe water for communities who have suffered the devastation of crumbling infrastructure for decades. The plan also complements Biden’s recent proposals to fight climate change, which he says will accelerate the transition to a greener economy, hence fighting climate change and promoting racial equality.

Biden’s plan to “reshape” the United States ended with an appeal to pass the George Floyd Justice in Policing Act, which the president says he wants on his desk before the first anniversary of George Floyd’s murder. The plan, which first passed the House late last year and then again in March, proposes a slew of police reforms that merely address the most egregious means by which the state enables police terror while ignoring the main demands of the anti-racist movement. This attempt to curtail the impunity with which the police (mis)treat Black and Brown people is an acknowledgment of the strength of the BLM movement and the fear it inspires in the elites. However, as Biden’s comments on the “good” cops who “serve their communities honorably” show, the darker motive behind the bills is the re-legitimatization of policing at a time when millions are calling for abolition. As Biden said, the bill’s primary goal is not to stop the systematic murder of Black and Brown people by police and other institutions of systemic racism, but rather to “rebuild trust between” — or obedience to — “law enforcement and the people they serve,” making sure that the police can continue to act as the state’s last line of defense.

Biden’s plan to “build back better” will be financed by a tax hike for the rich. Much has been made of Biden’s proposal to fund his wide-reaching infrastructure plans, which would benefit the poorest sectors of the population, with a fraction of profits of the wealthiest sectors; it has attracted the wide approval of Democrats — though not without significant exceptions — and the resounding consternation of Republicans. Meanwhile, the measure has majority support among the population, according to a recent poll by Reuters/Ipsos, which found that nearly 64% of respondents agree that the very wealthy should pay more in taxes to fund social programs. Though Biden’s proposal to raise the capital gains tax would merely restore tax rates to the 2012 rate under the Obama administration (and the Bush administration before that), this signals a reversal in the approach of a growing sector of capital — responding to shifting consciousness among the masses — that is increasingly warming to the idea that it is necessary for corporations and the rich to take a small cut in their profits now to ensure greater stability for profit making in the future.

“We have to prove democracy still works”

Announcing his plans in the days leading up to the speech before Congress, Biden said that his program will create the “most resilient, innovative economy in the world.” But if this couldn’t be accomplished during the years in which U.S. hegemony was strongest and the U.S. was the biggest superpower in the world, then why should we believe that could come true now? After failing to fully recover after the 2008 crisis, limping along towards another recession, and toppling over the cliff due to the pandemic, the conditions for U.S. hegemony are very different now than they were in the heyday of U.S. ascendency.

No one can deny the breadth of Biden’s program compared to previous U.S. policy, but anyone can argue whether it is enough. Indeed, many of the provisions in these plans merely pick up where Obama left off, filling in the gaps left by a system that made it possible for one of the richest countries in the world to have an almost 10% of poverty rate, with less economic equality than every country in Europe and as much as most of Latin America, according to World Bank estimations of the Gini Index. And Biden’s plans, despite their willingness to spend big on social programs for the worst off sectors of society, are mostly transitory in nature and predicated on the possibility of rollbacks at a later time when conditions are more stable. The money for the Child Tax Credit which is supposed to “cut child poverty in half” will run out in 2025, and the provisions for family leave won’t take full effect for ten years. So while the list of proposals in Biden’s plans do amount to the biggest series of reforms to U.S. social programs in many decades, in the end it is clear that Biden’s goal is to shore up the U.S. economy now and reestablish conditions for capitalist prosperity without fundamentally changing the structure of U.S. capitalism itself.

The progressive wing of the Democratic Party, using Jamaal Bowman as its mouthpiece on Wednesday, is saying just this: that while Biden’s plans are indeed progressive compared to Trump and his predecessors — “exceeding all expectations,” as AOC said — they “aren’t enough.” It’s true that Biden’s proposed spending on social programs pales in comparison to the $715 billion annual budget for the Pentagon and is a fraction of what progressives initially pushed for with Medicare for All and the Green New Deal. But stuck within the reformist limits of its allegiance to an imperialist party, this recently revitalized sector of the Democratic Party has already and will continue to support Biden’s plan as the lesser evil — limiting its criticisms of the plans to those of degree, not of kind, and failing to offer any class independent opposition to Biden’s plans.

Nevertheless, Biden’s plans represent a distinct shift away from decades of neoliberal austerity, admitting that unbridled capitalist profit-making coupled with unbridled attacks on the working class and poor is unsustainable. They go beyond anything Obama and his neoliberal predecessors proposed, let alone passed, during their tenure. Biden’s populist moment, coming from an old traditional Democratic establishment politician, is explained above all by these circumstances, highlighted by the capitalist crisis of 2008, which resulted in the deep political and social polarization that brought Trump to the presidency, a resurgence of class struggle in the broad sense (which had its highest moment in the rebellion against racism and police violence over the murder of George Floyd), and the emergence of novel political phenomena that taken together may foreshadow further political radicalization.

The ruling class and the Biden administration are betting on diversion and co-optation through the various bureaucracies — of the unions, of the progressive wing of the Democratic Party, and of the social movements. And above all, they are betting to restore capitalist stability by restoring faith in the state, trying to temporarily raise the living standards of certain sectors of the U.S. population and projecting a full-scale American “comeback.”. As the president put it from the floor of Congress, his goal is to “prove democracy still works. That our government still works – and can deliver for the people.” But if the last year has taught us anything, it’s that U.S. democracy has never “worked” for the majority of working-class and oppressed people. From the Senate and the Supreme Court to the systemic racism that is baked into the foundation of the U.S. state, it is clear that the only thing capitalist “democracy” delivers is continued immiseration and exploitation for the billions of working and poor people across the country and abroad. What remains to be seen, however, is whether Biden’s turn from traditional neoliberalism will be enough to bring some amount of stability back to U.S. imperialism in the domestic sphere, enough to stave of further economic calamity and suppress a growing discontent among swaths of the population with the living conditions and attacks on rights wrought by decades of neoliberalism.

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Madeleine Freeman

Madeleine is a writer and video collaborator for Left Voice. She lives in New York.

Nicolás Daneri

Nico is a writer and editor for La Izquierda Diario and a collaborator for Left Voice. He lives in Buenos Aires

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