Massive rescue programs have prevented business failures and unemployment on the scale of the Great Depression, even though last year’s economic contraction was nearly as bad. The European Union agreed a €750 billion recovery fund, financed, for the first time, by EU-issued bonds. The money comes on top of national efforts. The United States Congress passed a $2.2 trillion stimulus, worth 10 percent of GDP, in March and added another $484 billion in April. An additional $900 billion in relief was included in this year’s budget.
Joe Biden, the incoming American president, wants to spend $2 trillion more over the next four years to transition the United States to a greener economy and create a public health insurance program. Corporate tax would go up from 21 to 28 percent.
In Spain, a socialist government has introduced the biggest budget in Spanish history — partly to cope with the impact of coronavirus, but also to finance digitalization, electric car and renewable energy subsidies, infrastructure and rural development. Taxes on income, sales and wealth are due to increase.
In the United Kingdom, the ruling Conservative Party is building more social housing and it might renationalize rail. Unlike during the last economic crisis, it does not propose to cut spending even though tax revenues are down.
Same in the Netherlands, where all the major parties agree the government needs to do more to reduce pollution and prevent people at the bottom of the social ladder from falling through the cracks.
I’m not opposed to more government per se. I’ve argued that the United States should imitate countries in Northern Europe to improve its public services, particularly child and health care and housing.
As if we needed more proof the Republican Party has surrendered all its principles to Donald Trump, the president is trying to ban a private company by executive fiat and the party of free enterprise is silent.
Trump may have a point on the merits. The Chinese-owned video-sharing app TikTok has a lot of problems, not in the least its vulnerability to state interference.
If you’re trying to control housing costs in your city, don’t look to Berlin for inspiration.
The German capital is due to implement a five-year, across-the-board rent freeze in March. The measure is expected to save around 340,000 tenants money during that period, but it will come at the expense of housing affordability in the long term.
The German Economic Institute in Cologne estimates that Berlin’s policy will reduce the value of some properties by more than 40 percent.
A consequence of that will be underinvestment. The BBU, a trade association of developers in the Berlin and Brandenburg region, says its members expect to reduce investments by €5.5 billion and construction by a quarter.
One of the few silver linings to last year’s presidential election in the United States was that candidates from both major parties recognized that opioid addiction should be treated as a public-health, rather than a law-enforcement, problem.
Which makes it all the more disheartening that Donald Trump is taking exactly the wrong approach to this crisis.
Politico reports that the new president believes in a “tough law-and-order approach” to arrest the rise in drug overdose deaths.
142 Americans die from opioid abuse every day. That is more than die in car accidents or from guns.
Hillary Clinton has a new plan to stop what she considers “unjustified” increases in drug prices.
Slate reports that her plan comes down to European-style price control.
As president, Clinton would create a task force of regulators with the power to decide whether price increases on old, essential medicines and devices were reasonable given product improvements and the amount of competition in the market. If not, the task force would have the power to mete out punishments to companies that were trying to profiteer, potentially with fines.
Fines would still require an act of Congress, where market-friendly Republicans are likely to retain their majority in the House of Representatives and block such penalties.
Nonetheless, as Slate puts it, “Clinton is subtly sending the message that she’s comfortable moving toward a more European system in which regulators have a direct say not just in what drug companies can charge the government, but what they can charge the rest of the public, too.”