Opinion: Biden’s infrastructure plan must look to the future, not wrap itself in a nostalgic view of past American greatness

CAMBRIDGE, Mass. (Project Syndicate)—President Joe Biden’s $2 trillion infrastructure plan is likely to be a watershed moment for the American economy, clearly signaling that the neoliberal era, with its belief that markets work best and are best left alone, is behind us. But while neoliberalism may be dead, it is less clear what will replace it.

The challenges that the United States and other advanced economies face today are fundamentally different from those they faced in the early decades of the 20th century. Those earlier challenges gave rise to the New Deal and the welfare state. Today’s problems—climate change, the disruption of labor markets due to new technologies, and hyper-globalization—require new solutions.

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We need a new economic vision, not nostalgia for a mythicized age of widely shared prosperity at home and global supremacy abroad.

On climate change, Biden’s plan falls short of the Green New Deal advocated by progressive Democrats such as Rep. Alexandria Ocasio-Cortez. But it contains significant investments in a green economy, such as supporting markets for electric vehicles and other programs to cut carbon-dioxide emissions, making it the largest federal effort ever to curb greenhouse-gases.

Economics is different from an arms race. A strong U.S. economy should not be a threat to China, just as Chinese economic growth need not threaten America.

On jobs, the plan aims to expand employment offering good pay and benefits, focusing, in addition to infrastructure, on manufacturing and the growing and essential care economy.

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The role of government

New ways of thinking about the role of government are as important as new priorities. Many commentators have framed Biden’s infrastructure plan as a return to big government. But the package is spread over eight years, will raise public spending by only 1 percentage point of gross domestic product, and is projected to pay for itself eventually.

A boost in public investment in infrastructure, the green transition, and job creation is long overdue. Even if the plan were nothing more than a big public investment push financed by taxes on large corporations, it would do a lot of good for the U.S. economy.

We need a new economic vision, not nostalgia for a mythicized age of widely shared prosperity at home and global supremacy abroad.

But Biden’s plan can be much more. It could fundamentally reshape the government’s role in the economy and how that role is perceived.

Traditional skepticism about government’s economic role is rooted in the belief that private markets, driven by the profit motive, are efficient, while governments are wasteful. But the excesses of private markets in recent decades—the rise of monopolies, the follies of private finance, extreme concentration of income, and rising economic insecurity—have taken the shine off the private sector.

At the same time, it is better understood today that in a complex economy characterized by so much uncertainty, top-down regulation is unlikely to work. Regardless of the specific domain—promoting green technologies, developing new institutional arrangements for home-care workers, deepening domestic supply chains for high-tech manufacturing, or building on successful workforce development programs—government collaboration with nongovernmental actors will be essential.

If it succeeds, the example it sets of markets and governments acting as complements, not substitutes—demonstrating that each works better when the other pulls its weight—could be its most important and enduring legacy.

In all these areas, the government will have to work with markets and private businesses, as well as other stakeholders such as unions and community groups. New models of governance will be required to ensure public objectives are pursued with the full participation of those actors who have the knowledge and capacity to achieve them. The government will have to become a trusted partner; and it will have to trust other social actors in turn.

In the past, each excessive swing in the state-market balance has eventually prompted an excessive swing in the opposite direction. The Biden plan can break this cycle. If it succeeds, the example it sets of markets and governments acting as complements, not substitutes—demonstrating that each works better when the other pulls its weight—could be its most important and enduring legacy.

Biden’s unhelpful framing

In this regard, it is unhelpful to view the Biden plan as a way to restore America’s competitive position in the world, especially vis-à-vis China. Unfortunately, Biden himself is guilty of this framing. The package will “put us in a position to win the global competition with China in the coming years,” he recently argued.

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It may be politically tempting to market the infrastructure plan in this fashion. In an earlier era, the prevailing fear that the U.S. was losing its edge to the Soviet Union in ballistic missiles and in the space race helped catalyze a national technological mobilization.

But there is much less reason for fearmongering today. It is unlikely to buy much Republican support for the plan, given the intensity of partisan polarization. And it diverts attention from the real action: if the plan increases incomes and opportunities for ordinary Americans, as it should, it will have been worth doing, regardless of the effects on America’s geopolitical status.

Moreover, economics is different from an arms race. A strong U.S. economy should not be a threat to China, just as Chinese economic growth need not threaten America. Biden’s framing is damaging insofar as it turns good economics at home into an instrument of aggressive, zero-sum policies abroad. Can we blame China if it tightens restrictions on U.S. corporations as a defensive measure against the Biden plan?

The plan could transform the U.S. and set an important example for other developed countries to follow. But to achieve its potential, it must avoid misleading state-versus-market dichotomies and outdated Cold War tropes. Only by leaving behind the models of the past can it chart a new vision for the future.

This commentary was published with permission of Project SyndicateBiden Must Fix the Future, Not the Past.

Dani Rodrik, professor of international political economy at Harvard University’s John F. Kennedy School of Government, is the author of “Straight Talk on Trade: Ideas for a Sane World Economy.”

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Selma woman struggles to keep lights on while waiting for state assistance ::

— Countless North Carolinians have taken a financial hit during the coronavirus pandemic, and nearly 40,000 have asked the state for help covering their rent and utility bills.

The Housing Opportunities and Prevention of Evictions, or HOPE, program provides up to six months of rent and utility relief to people financially hurt by the pandemic. The application period closed Wednesday, but many applicants are still waiting for help.

A Selma woman who lost her job in the restaurant industry in May because of the pandemic said Wednesday that her lights have been turned off twice in two weeks.

“I got two small children in here with medical conditions. We can’t afford to have our lights and water turned off,” said the woman, who didn’t want to be identified.

After paying rent, she’s left with $200 a month from her unemployment checks, which has kept her electric bill teetering on a negative balance.

“Right now, I have $7.91 on my lights [account], which is only probably going to take me until tomorrow or Friday,” she said. “What am I do to do? I called Salvation Army, I called different churches, and nobody seems to have funds and stuff for lights. I am really running out of options.”

The woman said she’s been waiting for about a month for money through the HOPE program. Program managers didn’t provide information on the average wait time for people seeking assistance, but they did say payments have started to be issued directly to landlords and utility providers.

Community Action Inc., which handles HOPE applications in Johnston County, hasn’t formally approved her application for assistance. But a letter from the program states that she met the eligibility criteria, adding that “you may also present this letter to your utility provider to notify them that you are pursuing assistance.”

Selma’s Electric Department turned her lights off anyway, she said.

“You didn’t even consider to say, ‘OK, we will work with her a little while longer, or if the payment gets too far into the negative, we will cut it off then,'” she said. “But to be negative $10 to $12 and you are literally cutting my lights off? It’s not right.”

Selma Interim Town Manager Rhonda Sommer confirmed Community Action is working to find the woman help, but in a statement, she said, “When we receive a ‘pledge to pay’ on an account, we will gladly process it.”

“I am literally living day by day right now with lights and water,” the woman said, noting that she’s been borrowing money from relatives to help keep the lights on. “I know I can not be the only one in this same situation.”

She said she just hopes the HOPE assistance comes before her family is in the dark yet again.

“It’s been a real struggle for me to keep my bills and stuff paid, but now I am to the point where all my savings is gone,” she said.

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