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The Guardian
23-06-2025
- Business
- The Guardian
As Starmer unveils his 10-year plan, here's my advice: don't fall into the Joe Biden trap
Everyone in Westminster loves American politics. They – or, I should say, we – were raised on a diet of The West Wing and closely follow the twists and turns inside the Beltway coming from American media. This obsession has an effect on the real world: what happens in the US shapes British politics. Long ago this was seen in the parallels between Bill Clinton and Tony Blair's 'third way'; and this time last year Keir Starmer's Labour party was looking to Joe Biden's Democrats. Biden went all-in on reforming the US economy. Through the Chips and Science, Infrastructure Investment and Jobs and Inflation Reduction acts, he spent billions hoping to build more at home, boost growth and grow wages. It worked. Public investment led to more than $1tn (£750bn) of private sector spending, and real wages grew by $4,000 a person, with more for the worst off. Even with the pandemic, economic growth averaged 3% a year under Biden. This is an economy the Labour government would die for and is one of the reasons it embraced its own version of Biden's plans. The industrial strategy released today is the most concrete expression of Labour's 'securonomics' that it has given in government, after Rachel Reeves unveiled the strategy in Washington in opposition. But for all Biden's economic success, the Democrats did not win the election in 2024. Immediately commentators turned on the former president's economic platform, arguing that long-term reform was a waste of time. Only one thing mattered when it came to votes: the price of eggs. Labour hasn't jettisoned its industrial strategy based on Biden's loss, despite many urging it to. But for the strategy to be successful and to last the 10 years that Labour intends it to (not the three years that the Inflation Reduction Act did) the government will need to learn from Biden's mistakes. To understand how, the Institute for Public Policy Research (IPPR), where I work, spoke to more than 40 people in Washington, including many former senior White House officials. Here are two key lessons. First, long-term reform is crucial but will always be slow. Expecting it to win votes now is a recipe for disaster. One former official put it this way: 'Industrial policy achieved its goals … but nobody cares, we delivered on stuff they didn't care about.' The problem was that even in the White House there wasn't agreement on the purpose of industrial policy. While those running the policy were trying to make long-lasting clean energy investments, it was sold to the Democratic party as the way to beat Trump. The interim effect was the same – money went to predominantly Republican districts (more because of their cheaper labour than a deliberate strategy). But building a factory, hiring people and eventually building things is a decade-long project. As one official said: '[Industrial policy] wasn't going to transform the map in two years after 50 years of deindustrialisation.' While Labour is explicit that this is a 10-year growth strategy, it can speed things up – planning reform will help. It must also address Britain's workforce shortages now, not just think about skill development in the future. Rebuilding capability inside government is also vital. The US government was engaging for the first time in facilitating the production of new, rapidly developing technologies such as clean hydrogen. Creating policies such as the hydrogen tax credit takes time and expertise. Officials in the British government are going to need to get to grips with the intricacies of 37 new high-potential subsectors. The second lesson: to give long-term policies the space to succeed, governments need a short-term economic improvement to people's lives. This is crucial: battery manufacturing projects are now being cancelled across the US because Democrats didn't win a second term to protect them. Biden's team had wanted a broader economic story that spoke to inflation. But things that would actually help – cheaper childcare or tax provisions for working-class Americans – were cut out of legislation by the Senate. This was at a time when Covid-era support was expiring. Defending the imperfect Inflation Reduction Act and championing investments rang hollow with the public, who wanted to hear about prices coming down. Labour has space to address this. The IPPR has conducted polling that tells us energy prices easily top every other economic issue as the public's economic priority. Of those surveyed, 47% said they would prefer the government to focus on lower costs even if this meant stagnant wages (something the British public is well used to), as opposed to 12% who would take a wage rise even if costs went up too. A final point is that the world is much bigger than the US and there are lessons to be learned elsewhere. In Spain, the prime minister, Pedro Sánchez, has overseen investment of €163bn (£140bn) in the green transition – but rather than relying solely on this, his government has also acted on the rising cost of housing by capping rent increases. Anthony Albanese last month won a second term in Australia for the Labor party for similar reasons. His AUS$22.7bn (£10.8bn) investment in a future made in Australia – predominantly in clean energy – came with energy bill relief, rent assistance and cheaper medicines. So rather than sitting down for another rewatch of The West Wing, perhaps it would be a better strategy to examine how similar-sized countries elsewhere have given themselves the chance to make long-term industrial strategies work. Sam Alvis is associate director at IPPR and a former political adviser to the Labour party Do you have an opinion on the issues raised in this article? 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Times
13-05-2025
- Politics
- Times
The new Pope has wellwishers flocking to greet him*
Trump Hey, this is THE DONALD texting THE POPE. Isn't that a beautiful thing? Everyone was saying that I would make the GREATEST POPE because I love the Bible, the second greatest book ever written, such a great story which I have read, and also I have the BEST taste in interior decor, everyone says so, but I've got to fix the Biden economy and stop the rest of the world treating us so unfairly and I'm running the Kennedy Center. I don't have time to pope but you will do a great job. Not as good as me but maybe, I don't know, let's see The Pope That is very gracious of you, Mr President JD Vance USA USA USA! Trump Thanks JD. Yes,
Yahoo
08-05-2025
- Business
- Yahoo
Calmes: It's all Trump's economy now
OK, I got something wrong about President Trump. On the eve of his inauguration, I wrote a column establishing, with data, how fine an economy he was inheriting; one big financial firm declared it the 'Roaring '20s.' My point was less to counter Trump's claims that President Biden had destroyed the economy, and more to offer a pre-buttal to what I expected would be Trump's efforts to steal credit for fixing what wasn't broken. Little did I (or just about anyone else) anticipate how quickly Trump would break that inheritance rather than let the good times roll. Certainly his billionaire backers banked that he wouldn't ignite a global trade war — they were just counting on him to cut their taxes and regulations. Yet even those of us who took candidate Trump at his word about 'beautiful' tariffs were stunned when he imposed self-punishing levies on just about every nation in the world and an Antarctic island of penguins. Read more: Calmes: The case that proves the U.S., under Trump, no longer stands for rule of law So now, instead of taking credit for a good economy Biden handed off, Trump is blaming him for the damage from Trump's own actions. Stock market slides, diminished 401(k)s, higher prices, negative first-quarter growth, recession warnings — all Biden's fault, says Trump. 'I think the good parts are the Trump economy and the bad parts are the Biden economy,' he said on NBC's 'Meet the Press' on Sunday. As for the purported 'good parts,' a new page on the White House website titled 'The Trump Effect' boasts that his policies 'have sparked trillions of dollars in new investment in U.S. manufacturing, technology, and infrastructure.' The Washington Post reviewed the promised investments listed on the page and found that they mostly reflected companies' regular business costs or dated to those bad ol' Biden days. In any case, it's pretty rich to have the president boasting about getting companies to invest more in the United States when his own family's businesses are on a tear investing in the Middle East and Asia. (Except for Donald Trump Jr.'s interest in a new, invitation-only Washington club; nothing says 'populist' like a half-million-dollar-plus private club fee.) Read more: Calmes: When it comes to Trump's economy, the adults have left the room On April 30, just after the government report on the economy's slowdown, Trump posted, 'Our Country will boom, but we have to get rid of the Biden 'Overhang.' …BE PATIENT!!!' He won't say how long Americans must wait, but at least past Christmas apparently. The president who's never wanted for a thing is telling America's girls to be satisfied with two dolls instead of 30. (His clueless Cabinet members chuckled at that during their recent meeting.) So, Barbie will be a casualty of Trump's trade war. Toy Assn. CEO Greg Ahearn told the New York Times that the virtual stoppage of trade with China, which makes most toys (including Barbies), is 'putting Christmas at risk.' (Now that's a war on Christmas.) Trump's dismissive quip that the dolls that are available might cost 'a couple of bucks more' is proof he knows he's lying when he says Americans don't pay for tariffs. His politically tone-deaf take on dolls should stick, right through the 2026 midterm elections in Democrats' campaign ads. It underscores why he won't get away with the Biden-blaming: The economic chaos and uncertainty that companies and consumers are enduring are too well identified with Trump and tariffs. His job-approval slump in recent polls attests to that. Read more: Calmes: The 'USA' brand was 250 years in the making. It took just 100 days to trash it Even if Trump retreats on tariffs, as he has selectively and mostly temporarily, or comes to trade deals with various countries, he is unlikely to abandon the levies altogether. This week's out-of-the-blue bombshell for new tariffs on films made outside the United States — 'a national security threat,' he insisted — is evidence of that. What's more, if Trump were to forsake tariffs, with them would go his entire economic rationale — contradictory and implausible as it is — for the 'golden age' they are supposed to usher in: with new investments, trade surpluses and revenues so great that the income tax could be repealed. No matter how often he bashes Biden, Trump will own the economic travails that are likely ahead. Parallel to the tariff follies, he and the Republican majority in Congress (remember Congress?) are now embarked on fiscal follies, turning the annual federal budget-writing process into an exercise in overreach and hubris. They're trying to write a budget that is crammed with Trump's entire legislative agenda of tax cuts and slashed spending, even calling it by Trump's own term: the One Big Beautiful Bill Act. As with tariffs, beauty is in the eye of the beholder — and the Republicans' infighting so far is not a pretty sight. Divided Republicans in the House delayed committee action this week and Senate Republicans held a retreat on Wednesday to air differences away from the Capitol. They aim to extend Trump's expiring 2017 tax cuts and to fulfill his 2024 campaign promises to end taxes on tips, overtime pay and Social Security benefits — for a cost of $9.1 trillion over 10 years, according to the nonpartisan Peter G. Peterson Foundation. That's more than Trump added to the federal debt in his first term, a record. Republicans' goal is to offset just $1.5 trillion of the lost tax revenues by cutting spending — more than half from Medicaid — even as they inflate spending for the military and border enforcement. Easy prediction: They'll fall way short and the debt will explode, again. Markets and voters won't react well. The president and his party have all the power in Washington. Which means, try as Trump might, there's no one else to blame when things go awry. @jackiekcalmes If it's in the news right now, the L.A. Times' Opinion section covers it. Sign up for our weekly opinion newsletter. This story originally appeared in Los Angeles Times.
