To Biden, on the economy... and FDR

These are some ideas somebody linked to the Biden administration may find helpful:

1. Use an executive order to impose a national vaccine mandate. And yes, though a national vaccine mandate would not be illegal, at least there is not a court decision expressly banning it (https://www.vox.com/22599791/covid-vaccine-mandate-legal-joe-biden-supreme-court-jacobson-massachusetts-boss-employer), because the current Supreme Court is ideologically in line with the Hughes Court of the 30s, it may struck it down anyway. Let it do so. If they do, turn that decision into one as unpopular as Lochner v. New York (1905). Use political marketing to affect the legitimacy of the Supreme Court and its decisions as out of synchronicity with the top urgent needs of the nation.

A vaccine mandate would help immensely in lines of work like teaching, restaurants, and hospitality and would help fill the empty positions in childcare, what would help women return to the workforce.

Even more important, if you issue a national vaccine mandate, people will see that you are actually trying to do something (like FDR, to whom you compared yourself repeatedly in the past) instead of watching the sad show of a president begging red Trump states to pass the vaccine mandate they won’t pass because, above everything else, they want the House. And yes, you have half of the population against vaccine mandates in the workplace (https://abcnews.go.com/Politics/vaccine-hesitancy-eases-teeth-delta-surge-poll/story?id=79791316), what is irrational (as irrational as turning their wrath against the government in 2009 but, again, FDR knew when to go against the polls about balancing the budget and, despite them, he was elected four times while you may not be reelected because your political marketing work to sell your achievements is poor in extreme. -And as we are here, where are all those seventy something measures you were going to push to reduce prices? Those could help counter inflationary expectations… if people knew they exist.), but that is also why you need a solid political marketing effort to, first, sell the problem, and, second, the solution. You can’t keep letting the same incompetent people who have turned your image and your message into a joke (Have you seen lately this page? https://www.realclearpolitics.com/epolls/other/president-biden-job-approval-7320.html) stay there. They said they had learned the lesson from the Obama years that good policy doesn’t sell by itself and yet that’s exactly what they are doing regardless of all the evidence on the contrary. Enough! Get rid of these people! You need new people or you will lose the House and, from then on, what the Tea Party did to Obama is going to look like a Boy Scout prank. That will be the end of your presidency.

And while we are still here, forget that morbid fear among Frappuccino Boys about the “embarrassment.” Learn from FDR when he acknowledged a mistake before the Bonus Army. FDR (yes, again FDR) advised to always try something; if you were wrong, to acknowledge it and try something else; but, above all, to try something. Did I mention that he was elected four times while you might not even be reelected?

2. If we lived in the model of perfect competition you wouldn’t need to read this because the labor market would’ve adjusted already. And also you wouldn’t have 8.4 million unemployed, 5 million less workers than before the pandemic, while there are millions of unopened positions and wage increases offered by employers (https://www.washingtonpost.com/business/2021/09/04/ten-million-job-openings-labor-shortage/). So, this is what you could do:

a) A massive apprenticeship program aimed at companies that hesitate at hiring workers without enough experience supported by tax incentives for workers retained at least a year under this program. It takes time for workers to develop skills or to get certifications. Scholarships for workers who want to acquire new skills through education could also help if those skills are required and approved by the employer.

b) A recurrent complaint among workers in the services industries, especially low-wage workers, is working conditions, not just wages. You can extend the tax incentive mentioned in a) to businesses who agree and adopt, with participation of their workers, improvements of worker conditions (from hours worked to safety conditions).

c) Coordination with the Fed, as the matching in the labor market takes place, to reduce the purchases of assets under the quantitative easing program. If fiscal policy is working, you won’t need to rely excessively on monetary policy. And you don’t want to risk an overheating of the economy to turn into inflationary expectations. Prices are already under enough stress because of disruptions in the supply chains, poor port infrastructure and new restrictions in Asia due to the Delta variant and the period of adjustment will be longer than previously thought, what increases the risk for the awakening of inflationary expectations. And no, not all price increases mean inflation because inflation involves a sustained increase in prices that affects relative prices and distorts the economy, not discrete price increases, even if they affect relative prices. But inflation is an irrational process that starts when (irrational) economic agents believe prices will keep rising to the point that it adopts its own inertia (That’s why deflating expectations is so painful: because you have to make sure you have killed that inertia). More, Trump’s economic message is going to aim not at the size of the $3.5 trillion social spending bill but to its effects on prices and if he can convince enough voters that the increases that affect consumers today is the effect of your social spending, it’s 2009 all over again and you will lose the House.

d) A more targeted unemployment assistance for those who are involuntarily not part of the program mentioned in a). For instance, some workers won’t be hired no matter what because they are too old but still ineligible for Social Security; or the long-term unemployed may take more time to get a new chance in the economy.

e) Counter Republican (especially Trump Republican and Manchin’s) potential resistance to this proposal by making it part of the $3.5 trillion dollar discussed right now in the Senate. Of course, that is not enough. You still have to go to the states (as FDR did) to sell your program, but this plan would give you weapons to disarm the resistance that is currently being directed against the $3.5 trillion package by big business lobbyists.

Hopefully you will imitate FDR this time. On hard issues, like isolationism, FDR knew he had to sell the problem first, educate the people to bring them to his side, before selling the solution. You haven’t even started selling the problem. A good fist step: Get rid of the Frappuccino Boys who are pillow-fighting in your administration (also Blinken on foreign policy -the invincible Afghan Army rings a bell?- and Mayorkas on immigration -the seasonal surge that was going to wane by the summer, faulty intelligence like that about smugglers pitching on social media, hiding under his bed when journalists came to ask questions, etc., etc. ring a bell?). Keeping those incompetent people in their jobs is not worth the suffering of those who are going pay the bill if you fail. and yes, FDR fired many people too. Have I mentioned that he was elected four times while you may not be even reelected?

Alfredo Bravo de Rueda