Biden Must Fix Capitalism Before It’s Too Late
OPINION:THIS ARTICLE WAS FIRST PUBLISHED ON NEWSWEEK — 1/28/21 AT 5:39 PM EST > Opinion | GameStop Shows Biden Must Fix Capitalism Before It’s Too Late
The GameStop debacle this week reminded us of President Joe Biden’s most important mission: to fix capitalism and make it work for Main Street as well as Wall Street.
By doing this he can connect with two opposing camps and become a president for all Americans. On one side he has the “social justice” wing of the Democrats, and on the other the Rust Belt Donald Trump supporters. Both groups — in the Black Lives Matter protests and the storming of the Capitol respectively — have shown their willingness to engage in civil disobedience, or worse.
But both groups ultimately want the same thing: the return of the American Dream and the restoration of true capitalism, rather than the elitism that has become entrenched in the U.S. If Biden really wants to heal and unify America, he must restore it to what it used to be: a nation of innovators, who are all given a fair shot. An economy built not on “trickle-down” but “bubble-up.”
The symptom may be anger, but the disease is lack of opportunity.
Social justice activists ask for “dismantling the system” and claim that those who benefit from the current system are “privileged.” Although this may be symbolized by race or gender, the ultimate form of privilege and power is economics. The same is true of the far-right QAnon groups. Although their anger may be directed against globalists, globalization is only a negative because it isn’t working for them.
It’s easy to see why they are angry. Ninety percent of children born in 1940 ended up in higher ranks of income distribution than their parents, while only 40 percent of those born in 1980 have managed to reach that degree. The average Americans’ purchasing power has not budged in 40 years.
Making America great again should not be about trade wars, blind nationalism, or creating short-term jobs in outdated industries. Neither should it be about starving police — the guardians of an inequitable order — of funds, or creating chaos on the streets.
What we need is to give everyone an equal opportunity to prosper. That is difficult when launching a quintessentially American mom and pop enterprise means competing with the likes of Walmart and Amazon. While big business is propped up by government policies, the mom and pop businesses are dying almost as quickly as their founders.
In 2015, Americans were far less likely to start a company than they were in the 1980s. Business collapse now outnumbers business birth for the first time since records began in the late 1970s — even though people have more tools to start and grow a business.
The profit motives that triggered globalization have critically wounded America’s car production sector, displacing a whole demographic of Rust Belt, blue-collar workers. The average white family’s wealth is almost eight times that of minorities. They all want to live in an America where hard work, innovation and grit are enough to ascend the social ladder.
But while America has stayed true to its roots of defying socialism, over the years under the umbrella of trickle-down economics, we have practiced it. We have let big corporations grow bigger and then given the money — through jobs — to the masses, rather than let individuals create their own jobs through entrepreneurship.
While the responsibility for mass economic prosperity was shifted to big corporations, their focus remained on profits and stock prices.
An image of the sign for GameStop as photographed on March 16, 2020, in Levittown, New York.BRUCE BENNETT/GETTY IMAGES
The cracks in the system have become even clearer in the past year — the GameStop debacle is just the clearest crack of them all.
While the stock market has skyrocketed and individuals like Elon Musk and Jeff Bezos have grown their wealth by billions, poverty and joblessness have impacted millions — all while Silicon Valley has had one of its highest investment years ever.
Biden has to kill the notion that innovation and its benefits are reserved for the Silicon Valley investors and take away the privilege big corporates and wealthy individuals have enjoyed as gatekeepers in charge of the trickling down of prosperity.
America — on the vocal left, the radical right and the silent middle — does not need handouts. It wants a helping hand up toward self-sufficiency.
Biden must put America first by unleashing its power of entrepreneurship and give true capitalism a fighting chance by using tax policies to provide incentives to small businesses who re-tool, retrain and automate.
He can fund this by plugging the tax loopholes for big players, and by incentivizing them to become entrepreneurial philanthropists, via giving grants to small businesses.
Rather than talking about forgiving student loans, let’s find ways for young educated entrepreneurs to turn that debt into investments for new businesses.
Let’s incentivize early-stage investors to transition from Silicon Valley type deals to more localized small businesses.
Let’s give banks and credit card companies incentives to shift funding to smaller companies, with possibly riskier profiles.
Let’s re-vitalize the funding provided by the likes of the Small Business Administration, the Defense Advanced Research Projects Agency, the National Science Foundation and others.
Let’s stop delegating America’s future to Wall Street and let’s once again bet on Main Street. It’s time to turn up the heat on the bubble-up economy and let it boil.