Biden Must Fix the Future, Not the Past
The US administration's proposed $2 trillion infrastructure package could transform the US and set an important example for other developed countries to follow. But to achieve its potential, the plan must avoid misleading state-versus-market dichotomies and outdated Cold War tropes.
CAMBRIDGE – 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 twentieth 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. 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 Representative 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. 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.