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Biden’s first term doesn’t have to be Obama’s third

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Today's Agenda

The restoration?

Photographer: Mitchell Layton/Getty Images North America

Biden Vs. Obama

Given how often President-elect Joe Biden name-checked his former boss, President Barack Obama, on the campaign trail, and given how many Obama people are taking top jobs in Biden's White House, it's easy to expect Biden's first term will basically be a third Obama term. But they could be very different, especially if Biden learns from Obama's mistakes.

Possibly the biggest shortcoming of the Obama era was its focus on austerity at a time when the economy was still trying to climb out of the smoking crater of the financial crisis. Republicans pushed budget cuts, but Obama arguably played along too eagerly. The capable economic team Biden is putting together should be much less afraid of government spending, writes Bloomberg's editorial board. Rock-bottom interest rates really "foam the runway," as one Obama-era Treasury secretary put it, for much more fiscal stimulus.

Other Obama-era lessons are less clear-cut. The Affordable Care Act gave health insurance to millions of Americans and lowered health-care costs, but it had flaws that have been exploited by Republicans trying to dismantle it. Once the pandemic is under control, Peter Orszag writes, Biden should focus on fulfilling the ACA's promise to make America's health-care system more efficient and resilient.

Orszag was Obama's first director of the Office of Management and Budget and was easily confirmed by a Democrat-controlled Senate in 2009. Biden's choice for that job, Neera Tanden, faces a rockier road. Republicans have accused the Twitter super-user of being too partisan for the job. Jonathan Bernstein calls this criticism nonsense: With few exceptions, OMB directors have always been partisan. After all, their job involves balancing the country's budget needs with the president's political priorities. 

Another typical critique of the Obama years is that the administration failed to do enough for the working class. Fair or not, this sentiment helped President Donald Trump narrowly win the White House. Ramesh Ponnuru warns Biden risks cementing Republicans' growing image as the party of working people if he pushes such goodies for the elite as student-loan forgiveness and tax cuts for the upper middle class. Such decisions will define Biden's time in office. No pressure.

Economy May Already Be Pretty Stimulated

Of course, Biden may have the advantage of taking office with a much better economic situation than Obama inherited. Yes, the pandemic is still raging out of control, threatening to close more businesses and cost more jobs. But Nancy Pelosi and Mitch McConnell are keeping alive thin hopes of a lame-duck relief package. And Tim Duy suggests more stimulus may not even be necessary. Many households still have huge piles of savings left after months of not spending on bowling, vacations and such. Wages and salaries are actually still rising. And we're just months away from widespread Covid vaccinations.

The housing market could offer another economic lift next year, writes Conor Sen. Low inventories and the release of pent-up demand will drive prices higher and spur more construction. In the short term, this will be bad news for homebuyers. But it could also energize the rental market until prices stabilize. As long as policy makers don't take a strong economy as a cue to abruptly end the party, there's an argument 2021 will look a lot better than 2020. Then again, how could it not? Don't answer that.

Bitcoin Mania, Now With More Mania

The pandemic and economic uncertainty have been a huge boon to Bitcoin, which just crossed $20,000 per, uh, coin for the first time. John Authers maintains this still looks too much like a speculative bubble, but he acknowledges it has been a strangely resilient one.

For whatever it's worth, Wall Street banks aren't exactly rushing to get in on the Bitcoin mania, writes Lionel Laurent. But they are taking it as a cue to find their own safe alternatives to the cryptocurrency. Bitcoin may burst someday, but its legacy will linger.

Telltale Charts

There are many, many pandemic charts floating around out there. What almost all of them have in common is barely telling the real story of Covid-19. As Justin Fox notes, we have been undercounting cases since the beginning of the pandemic. Models that try to adjust for this tell a very different — and possibly hopeful — story.

Exxon Mobil (which Liam Denning writes is no longer the smartest oil major in the room) has belatedly joined the rest of its industry in cutting spending on future oil production, writes David Fickling. It has little choice, with oil demand possibly peaking and green-energy demand on the rise.

Further Reading

Pardoning Rudy Giuliani would put Trump in a whole bunch of legal jeopardy. — Noah Feldman 

GM's Nikola debacle raises questions about GM's diligence. — Tim O'Brien 

OPEC's togetherness is crumbling at an inopportune time. — Julian Lee 

The ECB giving private economist chats to banks looks unfair. — Ferdinando Giugliano 

Regulators dragging their feet on the Libor changeover are rewarding similarly slow-moving banks. — Brian Chappatta 

Retailers should made downsized Black Friday and Cyber Monday a regular thing. — Sarah Halzack 

ICYMI

Bill Barr said he sees no evidence of significant voter fraud.

Trump is basically out of options to overturn the election.

Salesforce is buying Slack.

Amazon is working on a quantum computer.

Kickers

Archaeologists discover a massive collection of prehistoric cliff paintings in the Amazon. (h/t Ellen Kominers)

Witnesses capture images of the Utah monolith being dismantled. (h/t Scott Kominers

The psychology behind "revenge bedtime procrastination."

How to buy gifts people actually want.

Note: Please send monoliths and complaints to Mark Gongloff at mgongloff1@bloomberg.net.

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