What a difference a year makes. In the spring of 2021, Joe Biden was seeking to further expand government spending with both direct aid to the population and long-term investment, aiming to have an impact in line with former presidents such as Franklin Roosevelt and Lyndon Johnson. He had de facto embraced the marked turn, that had emerged during Donald Trump’s presidency, away from the free market, limited government policies of the globalization era. This entailed a greater role for the state in the economy – accelerated in particular by the COVID-19 pandemic – and an incipient return of industrial policy. Growth was strong and there was an expectation that inflation would be transitory, as supply chain problems provoked by pandemic interruptions were gradually worked out.
Today, the scenario looks quite different. The Biden administration’s expansive agenda made it to the bipartisan hard infrastructure bill, but no further, coming up against opposition from both Republicans and a few centrist Democrats. Inflation has accelerated, contributing not only to a significant drop in the President’s approval rating, but also providing fodder for critics of the government’s recent spending spree. To top it all off, Russia’s invasion of Ukraine has introduced a new element of disruption that is likely to drag down global growth, and reinforce the sense of uncertainty regarding the future.
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June 1, 2022
English, Notizie