American Institute for Economic Research, April 29, 2021
A Grim Reaper Speaks
But the speech looked as sparsely attended as a Biden campaign rally or perhaps a Saturday morning Kiwanis breakfast in Hogstooth, Arkansas. As Rep. Thomas Massie (R-KY) quipped, “If Biden is going to take credit for vaccines and defeating the virus, why is he speaking to a practically empty chamber with everyone except him wearing a mask?”
A Washington Post headline aptly summarized Biden’s message last night: “Government is good.” Biden portrayed himself as the heroic conqueror of Covid and quoted a nurse who told him: “Every [vaccination] shot is giving a dose of hope.” Shots had a redemptive effect in part because people were terrified after Biden repeatedly vastly exaggerated the number of Covid fatalities during his presidential campaign. Biden got a two-fer: first he fanned irrational fears to win the presidency, and then he got credit when dread subsided thanks in part to a vaccine program propelled by the Trump administration.
Like an astute career politician, Biden found other fears to fan. He told Congress, “One hundred days ago, America’s house was on fire.” Biden described the January 6 clash at the Capitol between Trump supporters and police as “the worst attack on our democracy since the Civil War” that was “an existential crisis—a test of whether our democracy could survive.” Biden rhapsodized: “We have stared into an abyss of insurrection and autocracy.” As a recent Inspector General report concluded, Capitol Police and other officials did a dreadful job of preparing for and responding to angry protestors, some of whom became violent and damaged property. Biden’s attempt to exploit that ruckus to railroad a domestic terrorism law through Congress seems to be faltering.
The only unifying thread in Biden’s spiel was that it was written by the same White House speechwriting team. Biden boasted that the economy would grow by 6% this year – but insisted that a massive new jobs program was necessary. Biden claimed that extending schooling would greatly benefit children at the same time that his administration continues to undermine parents’ efforts to get public schools reopened five days a week.
Biden talked of crises being opportunities, and he is working hard to see how many more trillions of dollars of government spending he can squeeze out of the Covid emergency. A Washington Post headline captured the administration’s presumptions: “Biden’s big bet: That he can remake economy with no bad side effects” such as “less incentive to work.” But the extension of bonus payments for unemployment recipients is already whipsawing the labor market as employers find no applicants. There are plenty of warning signs that inflation could be readying to rocket. It is unclear if Biden’s team assumes that federal debt can be piled up forever with no consequence or merely with no catastrophes until after the next election.
After rattling off a long wish list of vast expansions of handouts and other programs, Biden assured listeners everything could be financed “without increasing deficits.” Biden portrayed tax boosts on “corporate America and the wealthiest 1% of Americans,” along with closing “loopholes,” as a cornucopia to finance all of House Speaker Nancy Pelosi’s fantasies. But the real windfall may be from Biden’s plan to vastly increase the IRS budget to set agents loose squeezing affluent people and corporations across the nation. As Slate reported, “Biden wants to fund a massive upgrade to the American welfare state by making the IRS great at audits again.” IRS crackdowns will be in lieu of reforming the tax code to make it less mind-boggling if not hellishly confusing. A Politico headline summarized the speech: “Biden embraces his inner Robin Hood.” Biden never explained how forcibly transferring money from private owners to the federal treasury would magically create “millions of jobs.”
Biden is capitalizing on public opinion which seems to have become increasingly oblivious to government failures. In 2015, 47 percent of Americans thought government should do more to solve problems. By last summer, that number had leaped to 57%. The poll showed only “39 percent said government is doing too many things best left to businesses and individuals.” With “cancel culture” run amok these days, perhaps the most surprising victim is all recollections of past political abuses and government failures in U.S. history.
Instead, boundless faith in rulers – at least progressive ones – is the order of the day. A 2017 tweet by Sen. Chris Murphy (D-CT) perfectly captured the spirit of Biden’s expansive proposals: “There is no anxiety or sadness or fear you feel right now that cannot be cured by political action.” Biden portrayed government spending as a panacea for practically anything that ails America. In a pitch for more spending for the National Institutes for Health, Biden declared, “Let’s end cancer as we know it. It’s within our power … to do it!” Congressional Democrats applauded almost as fervently as they had a dozen years earlier when President Barack Obama announced that he was launching “a new effort… seeking a cure for cancer in our time.”
Biden portrayed his presidency thus far as a resurrection of political faith: “In our first 100 Days together, we have acted to restore the people’s faith in our democracy to deliver… real results people can see and feel in their own lives.” He stressed that his Americans Families Plan Puts “up to $7,200 in your pocket” – reminiscent of Biden’s earlier boasting about the Covid stimulus checks shotgunned out. Handouts legitimize democracy and somehow prove that our system is better than any other form of government. But Biden’s derisive comments on autocratic regimes last night did not deter him from issuing a blizzard of executive order decrees in his first months in office.
Biden wrapped up his long speech with an FDR theme: “It’s time we remembered that We the People are the government. You and I. Not some force in a distant capital. Not some powerful force we have no control over.” But the Capitol where Biden spoke was walled off by fences and surrounded by thousands of National Guard troops. Until recently, those fences were topped by razor wire that made the “Temple of Democracy” look like a Beirut bunker. For Biden’s speech, roads were closed and few people were allowed to get anywhere near the president or his entourage. But at least commoners were permitted to watch the television broadcast of the Great Leader boasting how he had saved them.
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