It happened last Friday. Remember this date, the 12th of March 2021, because Joe Biden’s speech that day will be remembered as the speech of the change of economic model, the resurrection of Keynes and the second death of Margaret Thatcher – the “paradigm shift” as the American president put it.

It is not that his speech was dazzling. It was, in fact, downright clunky, but this celebration of the 1900 billion dollars that Congress had just agreed to inject into the economy was the American counterpart to the European decision to borrow together to finance a common stimulus of 750 billion euros.

Both sides of the Atlantic have now turned the Reagan-Thatcher formula of the state being “not the solution but the problem” on its head. The state has once again become the solution, and to make the shift clear, Joe Biden has also repudiated the other two dogmas of the “conservative revolution”.

“We have to continue”, he said, “to build confidence in the American people that their government can function for them and deliver… prosperity, security and opportunity for the people of this country”.

For a long time, he also said, “the theory was: cut taxes, and those at the top and the benefits they get will trickle down to everyone. Well, you saw what trickle down does”.

So let’s get back on track.

By the end of the 1970s, social welfare had yielded such results that blue-collar workers had joined the ranks of the middle classes. First imported from Sweden by Roosevelt in order to use his New Deal to counter the ravages of the crisis of 1929, the Welfare State was then developed, in the aftermath of the war, to stimulate growth by encouraging consumption. He had thus sealed a new social contract, which embodied the American dream, but as it was financed by tax redistribution, it irritated not only the wealthiest. The new middle classes also got bored of the system that had lifted them out of poverty, because it was now their taxes that paid for the aid to the poorest, most often the black sub-proletariat.

The shift of a large part of the middle classes to the Republicans and the mobilization of the wealthy in favour of lower taxes ushered in a new era, the one of the reducing the role of the state and enriching the rich, which was supposed to benefit the poorest.

This neo-liberalism has had many beneficial effects. By deregulating the economy, it has allowed the emergence of new industries and the boom in new technologies. At the same time, it has lifted hundreds of millions of Chinese people out of misery, as beneficiaries of Western production relocations and imports, but by generalising social insecurity, it has reduced the ranks of the Western middle classes, exploded inequalities and allowed the re-emergence of nationalist far-right parties.

It was the Brexit. It was Trump but, with Covid showing how the state remained the solution, Biden is rehabilitating Keynes, the master thinker of social democracy, in exactly the same way that Roosevelt tackled the “grapes of wrath” by building a consensus around his New Deal. Another America is back, Roosevelt’s America, and this aggiornamento of the United States could well herald the globalization of the “paradigm shift”.

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