This article first appeared in MarketWatch.
The President Donald Trump trails Joe Biden by a substantial margin, according to recent polls.
Trump has come up short on strategies to address COVID-19 and the crisis of confidence in our national institutions to offer all Americans a fair chance at succeeding.
On Inauguration Day, we will likely have a vaccine in hand or in sight, but a hangover and the endemic economic problems will remain. The economy will be substantial smaller in January than had the pandemic not occurred, millions will still be seeking work, and inequality will likely be worse than before.
Joe Biden would spend trillions on health care, higher education, green initiatives and other programs. Across those initiatives, he would impose aggressive preferences for women, minorities, and small businesses—the kind that history has shown to be not adequately effective at radically reducing income inequality.
He promises federal funding for pre-K education and preferences for unions—including “card check,” which would free unions of the terrible inconvenience of winning democratic representation elections.
Some of these issues need attention—health care and higher education are terribly expensive and leave too many shortchanged—but it is not clear that Biden’s program would get to the roots of those problems.
He would build on Obamacare to insure more Americans by expanding Medicaid—14 states still don’t fully participate—and raising income caps for who may qualify for subsidies when purchasing insurance on government exchanges. Biden would create a public option—federal and state-run insurance plans to compete with private carriers.
He would require drug companies to charge Americans for prescriptions no more than they charge in other high-income countries. That would impose price controls and effectively outsource the price setting to regulators in Germany and other advanced industrialized countries.
The United States spends 18% of GDP on health care and nearly 90 percent more than other high-income nations, because we pay more for virtually everything—doctor visits, hospital services and drugs.
Prescription drugs only account for about 10% of health costs. For other services, by further subsidizing insurance, his program would drive up demand and costs, and make the U.S. system even more expensive and an even greater burden on U.S. businesses competing in international markets. That’s a jobs killer.
We send too many young people to college, where many don’t acquire the critical thinking abilities necessary for professional work or few other job specific skills. Biden proposes to build out vocational programs in community colleges, offer more university tuition assistance and partially forgive student loans for those stuck in low-paying jobs
Trump’s Labor Department certified private-sector apprenticeships allow young people to earn while they learn. Graduates usually land jobs that pay more than the average starting salary of a college graduate and don’t amass college debt.
Biden’s tuition subsidies and student loan forgiveness would increase university enrollment but do little to improve the quality of curricula and reduce college graduate underemployment.
Biden wants to accelerate the transition to carbon-free cars, buildings, electricity and the like by spending $2 trillion over four years. Those goals are laudable but much of the technology is not here yet. He admits this by proposing generous allocations to uncover breakthrough technologies in energy and other R & D.
He needs something that is not possible with his antagonists in the Democratic Party—the Green New Dealers—a reasonable discussion of what is possible and how quickly.
As we learned with the development of a COVID-19 vaccine and President Barack Obama’s Solyndra follies, more money alone cannot accelerate the pace of scientific progress. Biden’s program would subsidize early adoption of inadequate technologies and 10 years from now leave the country with more green energy infrastructure that is terribly outdated and internationally uncompetitive. A more expensive fleet of vehicles, buildings and electrical grid—more jobs killers.
Biden, like European Social Democrats, makes few bows to the mandates of the marketplace, because he presides over a political party that views free markets with some considerable suspicion. It increasingly embraces the 1619 Project’s false narrative of slave-conceived capitalism and racial/gender prejudices to explain our economic system’s failures and has boundless faith in the ability of government to deliver.
Biden’s program would leave America too much like Europe—unable to grow and riddled with massive unemployment and underemployment.
