As always, Biden first takes digs at Trump for Covid and the pandemic-induced recession. But then he goes on to say that economic policies currently reward wealth over work. This is frankly a complete misrepresentation. Before the pandemic, worker wages, for instance, were rising faster than executive wages – a lot faster – which served to close the income inequality gap for the first time in decades. Yes, decades. Additionally, we all know the stellar unemployment figures across all groups, genders, and ethnicities. We also know the tax plan cut taxes to near or at zero for most lower income earners, while cutting out loopholes enjoyed by higher earners. So, his statement is part of a rhetoric bus that people will believe – if they don’t actually research it.
Some of Biden’s first points are to provide state and local governments with money so essential workers aren’t laid off. This is already happening – and was also in the latest GOP bill that the Dems wouldn’t let advance in the Senate this past week. But what is not happening is a federal bailout of those governments that have invested so much resource into money-losing programs and now want to use the pandemic as a vehicle for bailout. I give you free illegal immigrant healthcare and other services in places like NY and CA, who were both seriously underwater in debt PRE-Covid.
He wants to extend crisis unemployment insurance. This has already happened and is on the table with the GOP $500B bill (the Dem $3Trillion bill is dead in the senate, as it should be – it is PACKED with fluff, which I can list in another post if you like – it’s totally ridiculous).
Provide a comeback package for small business. Again – already happening. The major problem many of those are facing now, however, is they can’t get people to come back to work while unemployment payments are so high. Which Joe wants to continue. See the cycle?
He then ties the plan to other plans, like the one I blogged earlier – and goes on about “built in America” – which I agree with the premise. But then he goes off the rails with higher wages, unionization, and things like the elimination of tipped wages, which affects every table service restaurant in America, and everyone who eats in them. Having owned restaurants, I cringe at the impact that alone could have. He wants 12 weeks of paid family and medical leave – we all do. But that isn’t financially feasible for small businesses.
He then says he will reverse corporate tax rates that were cut under Trump. This, IMO, is a critical, critical error. The whole reason we lured manufacturing, jobs, and corporate revenue anchors back to the states was because of those cuts (and regulatory streamlining). Like it or not, Trump’s approach made the business climate in the states far more palatable again, and didn’t cause environmental catastrophes, or anything else the Dems warned about. Biden will reverse all of that, according to his plan.
Net out of this plan is that there are parts I like – but they are also already being done in relief packages already signed – and now we need both sides to get the next one passed so Trump doesn’t have to executive-order our way to relief where ever possible. And there are parts I think are highly detrimental to the business climate: Artificially increased wages, mandatory leave programs, elimination of some wage classes. I hate to say this, but businesses are incented today to hire disadvantaged worked like those with developmental disabilities; Biden wants to eliminate that wage class and have those folks all paid the same. Don’t get me wrong – I like the concept. But the net result, if I am a business with a hiring choice for the same wage, what choice will I make?
Bottom line – his plan will have a chilling effect on growth, and a crippling effect on continued recovery.
