But it’s the right thing to do. For a generation, the unfair distribution of rewards in the American economy has been our glaring weakness. It crushed the middle class and fueled the bizarro billionaire populist crusade of Donald Trump, who nearly wrecked our politics. Changing the formula so that rich people get less and everybody else gets more will be hard, but it’s necessary.
Here’s a crisp summary of the agenda for change: “Capitalism must be modified to do a better job of creating a healthier society, one that is more inclusive and creates more opportunity for more people.” That didn’t come from Biden, but from Jamie Dimon, the chief executive of JPMorgan Chase, in a 2020 article for Time magazine.
Dimon continued with language that might have been a draft of the president’s speech to Congress. He called for “meaningful changes like rebuilding our education system and providing skills training, affordable health care policies, substantial infrastructure investment, and sensible immigration reform and climate policies.”
For all the nice words from Dimon and other business leaders, it will be difficult transitioning to an economy in which the returns to labor and capital are more balanced. As digital technology accelerates business, there are increasing returns to success. The smartest and most nimble are rewarded, and the gap between business leaders and business laggards widens. Biden will be swimming against this quickening current with his progressive agenda.
A few obvious cautions: Biden should be careful that in raising taxes and enhancing the safety net, he doesn’t alter the fundamental incentives to work and succeed in a capitalist economy. As Europe’s social democracies learned in recent decades, fairness and innovation don’t always go together. Stepping back from the knife edge of “winner take all” capitalism moves a country to a safer but duller place.
As Biden presses his progressive agenda, with its focus on racial justice, he shouldn’t ignore the needs of the White, working-class voters from “flyover” states who were the backbone of Trump’s success. These Americans feel dispossessed, too. When they look at the decay of their Rust Belt cities and towns, they resent the blue-state elites who profit from technology and finance.
The soundest part of Biden’s package is the element focused on new jobs in the industries of the future. The “green economy” may sound like a left-wing cliche, but it’s a good shorthand for the sectors that are likely to experience rapid growth as climate change demands new products. These investments mustn’t get crowded out to pay for social spending that will fuel consumption for a few years but leave a hollowed-out middle class.
America needs investment in capital equipment, the smart machines that will maintain U.S. leadership in computing, communications, artificial intelligence and biotechnology. And it’s heartening that this investment is spreading more into red and purple states, as in Apple’s announcement that it’s building a new campus in North Carolina’s Raleigh-Durham area, and expanding in several U.S. locations, including Austin, Texas’s breakout as an information-technology hub.
But we need investment in human capital, too, and that’s a centerpiece of Biden’s American Families Plan. Many studies have citied America’s declining public education system as one of our biggest competitive weaknesses. Biden’s spending for universal preschool and two years of free community college will start fixing that problem.
Biden certainly didn’t look like a transformational politician as he stumbled forward during the primaries toward the general election. But he stumbled all the way to the White House, and now — with a follow-through that’s unusual in the transition from campaigning to governing — is pushing a program that, if successful, could remap U.S. politics.
Republicans in Washington will try to obstruct Biden every way they can, but he should govern over their heads and speak directly to the angry Black and White Americans who are demanding, in different words, a new formula for sharing our abundance.