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To rebuild America, Biden should look to Asia

Bloomberg Opinion Today
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Today's Agenda

Biden Should Look Abroad for Ideas to Fix America

American leaders, in politics and business alike, have never been ashamed of learning from abroad. The founding fathers caged liberally from successful European political systems, like those of Britain, France and ancient Rome. Franklin D. Roosevelt based Social Security on foreign pension systems and turned to Briton John Maynard Keynes for economic ideas. Lyndon B. Johnson borrowed the phrase "Great Society" from another British academic, Graham Wallas, while the Ronald Reagan administration borrowed "privatization" from Margaret Thatcher. 

U.S. businesses scour the world for technology and talent: Detroit learned how to build better cars from Japan; Silicon Valley and Wall Street depend heavily on foreign-born brains. 

Now, as he contemplates how to "build back better," not only from the wreckage of the pandemic but also the decades of neglect before it, President-elect Joe Biden should also look abroad for ideas, write John Micklethwait and Adrian Woodridge.

He should start by looking to Asia. For decades, Asian countries have been building smarter and better governments in the same way that Toyota and Honda once built smarter and better cars. Just as U.S. industry (not only carmakers) copied Japan's lean manufacturing, Washington's politicians should learn from the efficient governments of Asia.

Biden should set up an office to study what works in other countries; copy the best and avoid the worst; build back better not just on the basis of American examples — where they exist — but on foreign ones, too.

The Trait Biden Shares With Trump

For all that Biden and his supporters portray the president-elect as the polar opposite of the soon-to-be-former occupant of the White House, the two men have one important thing in common, writes Karl W. Smith: a transactional approach to politics. This is no bad thing. The ideological flexibility that allowed him to build a long, successful career in the Senate will help him navigate today's highly polarized political landscape.

His cabinet nominees show he still favors pragmatism over principle: He has judiciously chosen people he knows will get through the Senate confirmation process. As Republicans and Democrats prepare to play hardball, it is essential for the incoming president to understand that the art of the legislative deal requires a calm, unruffled public image and a brass-tacks approach in private negotiations.

Trump learned the latter as a dealmaker in his business career, but he never even tried to master the former. Biden has precisely this kind of public and private demeanor — and it's why he may actually be able to deliver the pragmatism that Trump claimed to be selling.

Don't Dream It Isn't Over

When the 2008 financial crisis hit, investors dumped stocks in droves. But when the pandemic sent U.S. stocks into a tailspin in late February — pushing the S&P 500 Index into one of the steepest retreats on record — a surprisingly high proportion of investors resisted the temptation to run for the exits. A recent Dalbar report said that "the average investor's appetite for equities has remained unchanged throughout the Covid crisis." Vanguard Group found that less than 0.5% retail clients and self-directed investors in its retirement plans moved to all cash.

They have been rewarded for keeping their resolve. The market passed its pre-pandemic high in August, long before the optimistic news about vaccines.

But those who did flee in the early weeks of the coronavirus crisis now face a quandary: When to get back in? Returning to stocks now means having to reconcile themselves to having made an expensive mistake. The temptation will be to wait for another plunge, but Nir Kaissar argues that is unlikely to happen anytime soon. Chances are the markets have moved on from the pandemic, and investors should do likewise and get back in without further delay.

Telltale Charts

Electric-vehicle maker Nikola was going to do for trucks what Tesla did for cars — and its shares seemed destined for the same stratospheric heights. Allegations of deception from a short-seller (which the company has denied) sparked a sharp recalibration of Nikola's valuation and the subsequent departure of founder Trevor Milton as executive chairman. Now that  General Motors seems to have dropped plans to buy an 11% holding in the company, asks Brooke Sutherland, why would you want shares, either?

Further Reading

It's not just the pandemic, stupid. Biden's chief economic adviser should address problems that preceded the coronavirus. — Michael R. Strain

Shutting classrooms … again? Our kids are paying a huge price for the panic of policy makers. — Anjani Trivedi 

AstraZeneca's Covid-19 vaccine stumble was embarrassing, but it need not be fatal. — Sam Fazeli 

ICYMI

Iran says its top nuclear-weapons expert was killed with a remote-controlled device.

Renewables are producing a new generation of energy giants.

Lloyds has poached HSBC's Charlie Nunn to be its next CEO.

AI has solved one of biology's great challenges, potentially speeding up drug development. (h/t Scott Kominers)

Kickers

Flash! Some lightning bolts are 1,000 times brighter than normal ...

… but that's not what lit up the sky over Japan last night.

The Europeans are designing a space claw to remove a VESPA orbiting over earth.

The Formula One driver who plowed into a wall was protected by a halo.

Please send Thanksgiving leftovers and complaints to Bobby Ghosh at aghosh73@bloomberg.net.

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