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Socialism: Biden’s ‘Remedy’ to Fix the Economy

Biden’s “magic formula” would generate more precarious employment and less job creation by companies

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It is not often that former U.S. ambassador to the United Nations, Nikki Haley, and Washington Post columnist Jennifer Rubin agree on anything, but they both recently admitted -despite their ideological differences- mutual reservations about Biden’s complicity with his party’s radical left.

Using a premeditated double meaning in her opinion piece, Rubin has launched this warning to web navigators: “If Biden maintains a hard line against the more Progressive elements of his party, former Republicans may find themselves surprisingly comfortable in the Democratic Party.” Haley, as usual, was more forceful: “Socialism is becoming more accepted in 2020 and is on track to become the default economic policy for Democratic politicians.”

In essence, they are both right.

Biden is not only a hostage of the radical left, which he gladly admits, but a hostage of its nonsense. Without ever reaching the White House, the Democratic leader has already committed his government to a series of socialist-style economic policies that involve enormous public spending and further curtailment of citizens’ rights.

One of the most naive ideas is that politicians are capable of solving all problems through the dialectic spell of their speeches. To give himself airs and graces as a statesman, Biden says he will reduce the number of people in prison to make them productive members of society. How nice that sounds!

Biden’s agenda is full of many slogans, but very few coherent explanations. And of course, he uses the oldest of Marxist lies: the only way to eradicate racial and gender inequalities and disparities, as well as the wage gap and the climate change crisis, is by raising taxes on the richest.

No more and no less, the same formula applied by Roosevelt with his New Deal and about which more and more economists and historians agree in affirming that it was those populist policies that eternalized the Great Depression that has come to our days.

The ‘tax the rich’ scam

Wokes love to play with people’s aspirations: “free health care for all,” “raising the national minimum wage,” “closing the gap between rich and poor.” And the more unattainable these desires are, the better they are to include in their bucket list, regardless of the economic repercussions they might have when they become a legal imperative.

During his presidential campaign, Biden announced as part of his economic program a tax increase for those earning more than $400,000 a year. Specifically, he proposed a tax increase from 37% to 39.6% for taxpayers who earn more than $1 million a year.

However, some experts have already warned that this measure will be insufficient, so the new government will be forced to increase taxes on all income to save public spending, expected to soar in the coming years. That is, the middle class will be the one that will be sacrificed the most and will have to scratch their pockets to pay for the enormous gap that will occur in public spending versus receipts.

The business sector also shows its concerns with taxation. Biden has announced that he will raise the corporate tax from 21% -the minimum rate to which Trump had lowered it in 2017- to 28%, which existed during Obama’s term. If taxes and regulatory burdens on job creators are increased -as everything seems to point out- it will make it harder for companies of all sizes to generate wealth and jobs.

Are citizens and businesses responsible for the public deficit? Of course not. The blame must be placed on gigantic administrations that live off the taxpayer’s money and that, in the case of the administrative structure that Biden is preparing, will break all kinds of records in order to comply with the battery of bills that will be proposed.

Progressive sectors are vividly annoyed when Conservatives call Joe Biden a “socialist.” But they shouldn’t. It is true that the president-elect does not openly defend state ownership of the means of production, but Biden, under the guise of a social-democratic model, manifests himself against the fundamentals of the free market and sees in class struggle -now disguised as the struggle for racial equality- a strategic instrument for carrying out far-reaching reforms in the constitutional and legal scaffolding of the nation.

This explains why what Biden wants to push in the economic arena -following Obama’s agenda- is more subtly unfair: public control of the economy even when property is nominally in private hands. In this way, his government will be able to set market price guidelines, minimum wage policies, and demonize companies when they do not meet his demands, and even introduce some symbolic limitation on international trade -China will be the target of choice in this first friendly crossfire- to “save” American jobs.

China, the great beneficiary

China is the largest beneficiary of American public debt. And it is also one of the largest suppliers of medicines. What does Biden propose in its economic program? To reduce the cost of prescription drugs to Medicare beneficiaries by authorizing the government to negotiate those prices and eliminate the rule that sets the market value of drugs, issues currently prohibited by law.

What happens when the government sets drug prices below the market price?

Large pharmaceutical companies invest huge amounts of money in research to develop new drugs. If the government sets a price that does not cover their clinical trials and production costs, there will be less research and fewer drugs to address diseases.

Those who are pushing for price limits on medicines from the Biden government are unlikely to stop to consider the consequences of such controls, much less to delve into the historical reasons why such a controversial sector has given the country such scientific prestige.

This issue, like so many others, is likely to result in new tax burdens for the population.

Almost always, the strongest supporters of price control are the greatest opponents of increased drug production. During the Obama Administration, a large part of the production of medicines was moved to China to lower its costs. Since then, the United States has been increasingly disadvantaged by the monopoly of the Communist power in the global drug supply chain. In fact, many essential ingredients for the manufacture of essential drugs come almost exclusively from Chinese factories. This has had a dangerous effect on the domestic market.

Why do pharmaceutical companies in much of the world conduct much of their research in the United States? After the incentives that allowed them to do research in their own countries were destroyed, they are now taking advantage of the patent protections here and the absence of price controls. These are the advantages that Biden now intends to take away with its pricing policy.

Another rabbit the Democratic politician has pulled out of his hat is that he will raise the national minimum wage from $7.25 to $15 an hour by 2026.

Minimum wage laws in Europe tend to be kinder than in the United States. However, unemployment rates are generally higher and more enduring, especially among younger, inexperienced, and less-skilled employees.

In contrast, blacks and Latinos in general, and especially young people, would be the most affected by Biden’s “magic formula” that would generate more precarious employment and less job creation by companies.

State interventionism creates the illusion that people get something for free but it is always in exchange for selling their will.

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