{"text":[[{"start":12.28,"text":"Once every generation or so, America’s social contract changes. "},{"start":16.534,"text":"After half a century in which capital has been in the driving seat, Joe Biden has a chance to tilt the advantage back to labour. "}],[{"start":23.78,"text":"Such an opportunity would have been unthinkable a year ago. "},{"start":27.134,"text":"The US left can thank the pandemic for this change in the political weather. "},{"start":30.964,"text":"Biden has so far not let the global health emergency go to waste. "},{"start":34.682,"text":"The question is whether he can build on the recently passed fiscal stimulus to shift bargaining power towards the American worker. "}],[{"start":41.64,"text":"The macro-conditions Biden faces are close to ideal. "},{"start":45.194,"text":"With the US set to reach herd immunity in the early summer thanks to its vaccination programme, growth will come roaring back as social distancing recedes. "},{"start":52.999,"text":"The coming boom will be fuelled by the release of pent-up consumer demand that has pushed America’s personal savings rate to a record high, now being lifted even higher by the latest federal stimulus. "},{"start":62.903999999999996,"text":"Growth is expected to top 6 per cent this year, according to the Federal Reserve, which will more than erase last year’s losses. "}],[{"start":70.25,"text":"The central bank’s stance is about as dovish as it can get. "},{"start":73.579,"text":"This week Jay Powell, the Fed chair, basically guaranteed that he would tolerate inflation above 2 per cent for a sustained period. "},{"start":80.559,"text":"The Fed does not expect to lift its benchmark interest rate before 2024. "},{"start":84.964,"text":"Rarely do central banks promise to keep the punch bowl filled as the party gets going. "},{"start":89.394,"text":"Biden is inheriting an optimal two-year window to spread the fruits of unchecked growth to America’s middle classes. "}],[{"start":95.55,"text":"On its own, however, a strong US rebound will not change the structure of the economy, nor do much to dent America’s acute inequality. "},{"start":103.829,"text":"Most of the income portions of the $1.9tn American Rescue Plan Act consist of one-off transfer payments and an extension to unemployment payouts. "},{"start":112.15899999999999,"text":"They will comfortably tide people over the pandemic. "},{"start":114.939,"text":"The question is what Biden can do to alter the rules of the game for the long term after the economy returns to trend growth. "}],[{"start":122.14,"text":"The starting point is to acknowledge that America’s median income stagnation is in some part the result of decisions taken by politicians. "},{"start":129.619,"text":"Until recently, the left and right agreed, as Bill Clinton once put it, that globalisation was “the economic equivalent of a force of nature”. "},{"start":137.487,"text":"It followed that there was little government could do, other than encouraging people to boost their skills, to shield Americans from the global chill winds. "}],[{"start":145.78,"text":"This was a cop out. "},{"start":147.497,"text":"Since the 1970s, Washington has done plenty to weaken the power of trade unions, cut social insurance and allow educational costs to increase beyond the reach of ordinary Americans. "},{"start":157.602,"text":"Instead of cushioning such trends, successive US administrations, including Democratic ones, leaned in further. "}],[{"start":164.86,"text":"Tony Blair, the former British prime minister, once said: “I hear people say we have to stop and debate globalisation. "},{"start":171.80200000000002,"text":"You might as well debate whether autumn should follow summer. ”"}],[{"start":175.09,"text":"Today both left and right are happy to have that debate. "},{"start":178.132,"text":"But they are nowhere near consensus. "},{"start":180.387,"text":"The Republican party tends to blame China almost exclusively for America’s middle-class struggles. "},{"start":185.717,"text":"Leftwing Democrats prefer to target America’s super-wealthy. "},{"start":189.184,"text":"Neither side focuses enough on the downward impact of technology on the price of American labour. "},{"start":194.239,"text":"The remedies for this come in three tranches: boosting US labour productivity; ensuring that workers take those gains in higher pay and benefits; and lifting support for those left behind. "}],[{"start":204.85,"text":"The first is basically the goal of Biden’s Build Back Better programme. "},{"start":208.867,"text":"He wants to pour money into green technology and broadband. "},{"start":212.197,"text":"The second involves boosting employee leverage and tackling oligopoly across the US economy. "},{"start":217.37699999999998,"text":"All three entail making the US tax system more progressive. "}],[{"start":221.87,"text":"However, each of these, particularly a $15 minimum wage, higher corporate taxes and pro-union legislation, are likely to run aground on Senate obstructionism. "},{"start":231.824,"text":"It is quite possible that Biden’s historic window will slam shut in the coming weeks. "}],[{"start":237.25,"text":"At which point he would face a choice: embrace Senate majority votes by scrapping its 60-vote filibuster, or allow the US economy to drift back to pre-pandemic rules. "},{"start":246.967,"text":"The latter would be tolerable. "},{"start":248.834,"text":"After 40 years of stagnation (barring a strong blip in the 1990s) median income grew between 2015 and 2019, mostly because of falling unemployment. "},{"start":258.452,"text":"Jason Furman, a Harvard professor and former chair of the Council of Economic Advisers, estimates that the middle class recaptured about a tenth of what it lost in those years. "},{"start":267.419,"text":"But at that rate, and assuming no recessions, it would take another 40 years to regain its share of the economy. "}],[{"start":274.15999999999997,"text":"My bet is that circumstances will push Biden down the more radical path. "},{"start":278.477,"text":"More than 70 per cent of Americans support the stimulus, including a majority of Republicans. "},{"start":283.832,"text":"Donald Trump proved two things about US politics. "},{"start":286.837,"text":"First, rightwing voters are fine with budget deficits, as long as they benefit. "},{"start":291.31699999999995,"text":"Second, they are highly receptive to cultural and racial appeals. "}],[{"start":296.02,"text":"Biden, in other words, has a chance to take the sting out of US populism with a game-changing economic agenda. "},{"start":302.56199999999995,"text":"It is a historic opening that is unlikely to come again soon. "},{"start":305.904,"text":"He must weigh that against the cost of preserving the Senate veto for a party that increasingly talks only about culture. "},{"start":311.80899999999997,"text":"As time goes on, it will seem like no choice at all. "}],[{"start":315.08,"text":""}]],"url":"https://creatives.ftacademy.cn/album/001091877-1616460545.mp3"}