Biden’s vision for America and the world

President Biden’s State of the Union message was a really crucial one for his reelection bid. The majority consensus is that he passed the test with flying colors. He was aggressive, articulate and did not look like someone who was too old to be president.

Most of his speech was focused on domestic issues, border security, pharmaceutical prices and the cost of housing. There were some issues that he brought up, however, that seems to me were lessons we could learn here in the Philippines. For example, he said: “Tonight I want to talk about the future of possibilities that we can build together. A future where the days of trickle-down economics are over and the wealthy and biggest corporations no longer get all the breaks. I grew up in a home where not a lot trickled down on my Dad’s kitchen table.”

Trickle-down economics believes that the best approach is the economic approach advocated by traditional economists that preaches that the real economic goal is economic growth or GDP growth. This assumes that when the economy gets bigger and the rich get richer, the wealth of the rich will start trickling down to benefit the poor. The hard lesson we have learned over the past few decades is that this does not happen. The rich get richer and instead of the poor benefitting, the rich simply become wealthier and keep their riches for themselves and their family.

Today, less than a 100 people have the same wealth as the bottom 50 percent of the world’s population. This means that a hundred persons own as much wealth as the 3.5 billion to 4 billion persons in the world. A few years ago, I started writing about income inequality and that trickle-down economics does not work. Pope Francis was perhaps the first international personality who said that trickle-down economics does not work.

To this day, significant sectors of the business community oppose giving ordinary laborers a minimum wage equal to a living wage, the wage needed for a family of five to live a decent life with enough income for the basic necessities of food, shelter, clothing, education, health care. This is based on their belief that the best way to help the poor is to first ensure that companies are allowed to maximize profitability, in the belief that this increase of business profitability will benefit the poor.

This belief is again trickle-down in a different language. It has not worked and President Biden has said that “the days of trickle-down economics are over.”

When I started writing about this topic a few years ago, I was accused of being a socialist and being anti-capitalist. But I persisted in writing about this topic of income inequality and that trickle-down economics never worked. In fact, even recently, I have been accused of writing on this topic too often.

It is good to know that in the United States, the concept of democratic socialism started by Bernie Sanders and Alexandria Ocasio-Cortez have begun to take hold. Since even President Joe Biden has obviously become a democratic socialist, perhaps even my friends in the business sector will finally agree with me that the days of trickle-down economics are finally over and the time has come for the issue of income inequality must take precedence over GDP growth.

In his speech, President Biden also said: “And now it is my goal to cut the federal deficit $3 trillion more by making big corporations and the very wealthy finally pay their fair share. Look, I am a capitalist. If you want to make a million bucks, great.  Just pay your fair share in taxes. A fair tax code is how we invest in the things that make a country great – health care, education, defense and more.”

Biden pointed out that 55 of the biggest companies in America make $40 billion in profits and paid zero in federal income taxes. Then he said that there are 1,000 billionaires in America whose average federal tax rate is only 8.2 percent. That is far less than what the vast majority of Americans pay. He said: “No billionaire should pay a lower tax rate than a teacher, a sanitation worker, a nurse.” He has proposed a minimum tax of 25 percent for billionaires.

Another proposal Biden makes that might be applicable here is his announcement of cutting down credit card late fees from $32 to $8, which he calls junk fees. In the Philippines, somebody from the Management Association of the Philippines wrote me that credit card companies charge oppressive late payment fees of 8.5 percent of average daily balance. Perhaps this is an issue that our new finance secretary can look into.

Towards the end of his speech, Biden talked about America and China. He asserts that America wants competition with China but not conflict. He adds that America is in a stronger position to win the competition for the 21st century against China. “We are standing up against China’s unfair economic practices. And standing up for peace and stability across the Taiwan Strait. I have revitalized our partnerships and alliances in the Pacific.”

Even with Biden’s strong stand against China, I would have liked to hear him specifically mention stability in the West Philippine Sea and the South China Sea as he did for the Taiwan Strait.

It was a momentous speech that presented a future vision for Americans by a person who strongly believes in freedom and democracy.