Bidenomics and American Unease

This week: conversations with Adam Tooze and Steven Pearlstein about Joe Biden’s stimulus plan. Listen today at 2 pm or anytime at our website.

We’re grappling this week with the meaning of Joe Biden’s titanic American Rescue Plan—asking where might it take us, and whether it marks a real turn in the history of inequality in the United States. Adam Tooze, historian at Columbia and author of Crashed, is sanguine about the recovery plans:

I think they’re pointed in absolutely the right direction, and I particularly like the fact there’s a family plan coming down the pike, because anyone who has attempted to raise a family knows in the United States that it’s lamentably poorly provided with affordable childcare for families. So redressing that is a key issue.

The scale is right. I mean, we’ve got to simply get used to the world that we inhabit. We have to get over our sticker shock. If the program isn’t denominated in the trillions, it’s not serious, really, especially because some of these programs are stretched out over many years, right? The CARES act and the relief programs that ran through the beginning of this year, that’s immediate money. That’s a sugar high. But the investment program, the jobs plan, and the families program are as they should be, longer term investment programs, which will stretch out over a period of time.

Yes, this is a burden that the United States taxpayers can manage, with interest rates at the levels that they currently are. What really matters is the interest payments, after all, of this debt, the debt service component of the American government budget is not rising in any kind of ominous way. And we have, in a sense, over generations, tricked ourselves by looking at the wrong number. What you’re interested in is the interest payments.

Steven Pearlstein recently retired from his post as a business and economics columnist at the Washington Post, and he left a sarcastically phrased warning about Bidenomics:

So party on, progressive dudes. Worries about debt and inflation are just so 20th-century, the figments of a now-discredited neoliberal imagination. We have entered a magical world where borrowing is costless, spending pays for itself, stocks only rise and the dollar never falls. In this economic paradise, government mandarins can fine-tune the economy to prevent inflation and unemployment, while economic, racial, environmental and social justice can be achieved without any painful trade-offs.

Okay, I exaggerate — but only slightly. I’ll be the first to admit that because of new technology and structural changes to the global economy, aspects of our economic understanding need to be updated. But those overdue correctives have been hijacked by partisans and ideologues who would have us believe that the laws of economics have been repealed.

Pearlstein joins us this week and elaborates:

There seems to now be a very fashionable feeling, particularly on the Democratic progressive side, that debt doesn’t matter at all. Inflation doesn’t matter. Debt doesn’t matter. We can take on as much as we want. The government can borrow as much as we want, spend as much as we want. The Federal Reserve can print as much as we want. The only thing that’s important is to keep maximum employment, keep maximum number of people in the workforce, and then a maximum number of those people employed. Keep the economy running hot . . . And there’s no reason why we can’t borrow and spend and print indefinitely.

But, Pearlstein says, this actually worsens inequality. He says on our show, “The greatest source of wealth inequality and with that, income inequality, particularly at the top, has been the fact that we’ve had huge inflation of one sort: inflation in the value of financial assets, which is directly attributable to cheap and plentiful money.”

Read: The Human Stain

If you’re turning to Philip Roth after our show last week with his biographer Blake Bailey, you could go to a Roth novel that evokes a familiar sort of national unease. The Human Stain is set in the Clinton years and amid Clinton scandal, and it opens with an assertion of the humanity at the center of an anxious American culture— “I myself,” observes the Roth alter-ego Nathan Zuckerman, “dreamed of a mammoth banner, draped dadaistically like a Christo wrapping from one end of the White House to the other and bearing the legend A HUMAN BEING LIVES HERE.”

Michiko Kakutani wrote, back when The Human Stain was published, “It is a book that shows how the public Zeitgeist can shape, even destroy, an individual’s life, a book that takes all of Roth’s favorite themes of identity and rebellion and generational strife and refracts them not through the narrow prism of the self but through a wide-angle lens that exposes the fissures and discontinuities of 20th-century life.

Watch: Atlantic City

For a story of American nostalgia, consider the Louis Malle movie that the Chicago Reader called “a shimmering success”: Atlantic City, with Burt Lancaster and Susan Sarandon (over at the Criterion Channel). From the Chicago Reader’s summary:

This beautifully filigreed, sensitive, and funny fable (1980) belongs to screenwriter John Guare. It continues the themes of Guare’s stage plays (The House of Blue Leaves, the brilliant Bosoms and Neglect), examining problems of connection and protection, births and rebirths, beginnings and ends, and does so with some of the most elegant dialogue ever heard in an American film.

This week’s ephemeral reading

Naomi Fry in the New Yorker about the Carter-era shenanigans of The Muppet Show. A Paul Theroux reading list at LitHub (he really should read Nostromo). Biden Ditches the Generals.

That’s all for this week, folks. Vax on!

The OS Dismal Scientists

An American conversation with global attitude, on the arts, humanities, and global affairs, hosted by Christopher Lydon.