ALEX BRUMMER: We may get a calmer and more sane presidency if Joe Biden wins the US election, but rocket fuelling growth will be more tricky
As Americans who haven’t yet voted head to the polls tomorrow they might reflect that were Donald Trump not a florid-faced buffoon who peddles half-truths he might deserve to be re-elected.
Had Trump not obsessed about the alleged misdeeds of his opponent’s son Hunter Biden, and talked economics and trade, the narrative would be far more credible. Pandemic aside, if the perennial question posed at US elections were put – are citizens better off than four years ago? – the answer would be a resounding yes.
Then came the virus. Governments must steer a delicate task between easing healthcare pressure, saving lives and preventing long-term economic damage.
Eyes on the prize: Joe Biden’s ability to deliver would depend on what happens in the Senate, currently under Republican control
Trump’s inclination is to put economic health above public health, remembering President Calvin Coolidge’s adage that the ‘business of America is business.’ The approach of Joe Biden has been to put pandemic first and second. The corollary of that is ‘never mind the economy’.
The initial US lockdown was dramatic with 22m Americans losing jobs. But the bounce back has been trampoline-like with 11m people re-employed. US output in the third quarter jumped by 7.4 per cent – the biggest quarterly rise since 1947.
The positive message from Trump, if he knew how to articulate it, is that business investment in software, R&D, equipment and buildings rose 20.3 per cent. This was not a recovery built on unfettered consumption.
Looking backwards, the Trump tax cuts proved good for corporate profits, dividends and the tax-advantaged pension funds.
Yes there were big leakages into executive bonuses and share buybacks. But until Covid jumped into the debate, there is evidence that income inequality fell more under Trump than his predecessor.
And to those who argue that Trump really doesn’t know much about the ‘art of a deal’, he did sign new trade deals with Canada, Mexico, South Korea and Japan.
As for the UK, I have always thought that a new trade deal with the US was overrated. Britain already has a big trade surplus with the US, most earned from services which get short shrift in most trade accords.
Which brings us to Biden. The centrepiece of his economic approach is passage of a second virus bailout package, an infrastructure programme and reversing Trump’s assault on Obamacare and climate change.
Biden’s ability to deliver will depend on what happens in the Senate, currently under Republican control. All spending bills originate in the House of Representatives but they have to be ratified and amended by the Senate. The Democrat dream is a blue sweep which gives them control of the 100-seat Senate as well as the House.
Democrats could add three Senate seats to their existing 47, giving an effective majority since if Biden wins the election, vice-president Kamala Harris would have the casting vote.
The odds of getting through the £1.4billion pandemic relief spending bill, if the Republicans still controlled the Senate, are slight. Moreover, the army of lobbyists in the energy states won’t want to see anything which further weakens oil and gas drillings and pipelines.
We may get a calmer and more sane presidency if Biden wins. But rocket fuelling growth will be more tricky.