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Tags: China | Joe Biden | Presidential History | ostp | rd | romer | solow

Biden's Secret Plan to Beat China? Restore US to R&D Greatness

Biden's Secret Plan to Beat China? Restore US to R&D Greatness

(Korn Vitthayanukarun/Dreamstime.com)

Ralph Benko By Tuesday, 16 February 2021 01:32 PM Current | Bio | Archive

Through the political media rockets' red glare some may have missed President Biden's elevation of the White House Office of Science and Technology Policy (OSTP) to cabinet rank.

That move is potentially of capital importance.

I have, and have stated, my disputes with portions of Biden's agenda.

I attribute these aspects to his deftness at domesticating his left flank without embracing the attendant exotically quixotic policies.

Now, let's not flinch from talking about what Biden's getting right.

Biden is well attuned to the electorate's expectations. He rightly has focused on ending the pandemic and restoring the economy to vibrant health. Moreover, Biden seems cast from the same mold as Harry Truman, who used ''politician'' as a term of respect, not a pejorative.

Truman observed in a 1958 speech to the Reciprocity Club in Washington, D.C.: ''I'm proud that I'm a politician. A politician is a man who understands government, and it takes a politician to run a government. A statesman is a politician who's been dead ten or fifteen years.''

Biden clearly knows how to run a government.

Maybe future historians will even discern statesmanship. That said, let's drop the politics for a minute and focus on what matters most: economic policy.

Equitable prosperity-inducing policy is something that I actually know something about. I am a veteran of the tiny team of economic renegades called ''the supply-siders'' who worked with the late Rep. Jack Kemp, R-N.Y., to successfully vanquish stagflation and restore America to vibrant prosperity.

When the supply-side arrived in 1979, U.S. GDP, per the St. Louis Fed, was about $2.7 trillion. Now, despite the pandemic, it's around $21 trillion.

Adjusted for inflation and despite 20 years of relative stagnation, America's more than twice as rich as it was when Reagan first enacted Kemp's economic growth prescription, itself drawn from John F. Kennedy.

Reagan and Clinton excelled at equitable prosperity. Prosperity's not partisan.

So now what?

Biden signals initiatives that could be great for economic growth, ideas that conservatives who escape from their Biden Derangement Syndrome can legitimately embrace.

Stranger things have happened! (Cue theme to "The Twilight Zone.") Then-Sen. Joseph Biden, D-Del., voted for both Reagan tax rate cuts, cutting the top rate, in two stages, from 70% to 28%. Unity, anybody?

Biden's elevation of the White House OSTP signals a willingness to restore America to the position of world technological leader, reversing our faltering and threatened forfeit to China. If so, this would constitute one of the most consequential policy initiatives we've seen this century.

Consider the Fifth Commandment of Capitalism, first published in Newsmax: ''To Restore Prosperity Uncle Sam Must Fund Research and Development,'' reprised in my and William Collier's The Capitalist Manifesto and embellished in my "The Ten Commandments of Capitalism."

That commandment holds, per the Honorable Norman Augustine, ''numerous studies including those that won Robert Solow and Paul Romer Nobel Prizes in Economics, demonstrate that as much as 85% of the long-term growth in America's economy is attributable to advancements in science and technology.''

The payoffs from the successes of R&D dwarf the cost of the associated failures, including for Uncle Sam. This inconvenient truth is supported by abundant evidence, however horrifying it is to libertarians. Remember the internet!

As Christopher Mims wrote in The Wall Street Journal: ''Taxpayer-funded basic scientific research has again and again paid huge dividends to society, both in improving our quality of life and boosting our economy.

Indeed, many of the industries the U.S. dominates these days, like software, were seeded in a Silicon Valley where the U.S. government was the area's first and most important venture capitalist.

He continued: "Since the mid 1960s, the proportion of U.S. gross domestic product spent on public R&D has gone from a peak of 2% to the present figure of 0.6%, and the U.S. went from first in the world in terms of such spending to 13th. China rocketed ahead, and has done other forward-thinking things like co-locating manufacturing with its publicly funded R&D centers, allowing a direct translation of that research into new industries and millions of new jobs . . . ''

Republicans and Democrats, both, have colluded, over decades, in the slashing of federal R&D expenditures. Meanwhile, China is ''rocketing ahead.''

Biden's raising OSTP to cabinet rank, while a symbolic gesture, suggests that Biden is receptive to unleashing America's strategic R&D might.

America will flourish by beating China at the game at which America has always excelled, technological innovation, not by shooting ourselves in both feet with tariffs. Conservatives can conscientiously support Biden's impulse to stoke America's technological prowess.

Long term, America's future prosperity and power are going to be determined by whether we devote at least 2% of the federal budget to R&D. Biden demonstrates the right instincts on this, instincts that Republicans can conscientiously and enthusiastically support.

Ralph Benko, co-author of "The Capitalist Manifesto" and chairman and co-founder of "The Capitalist League," is the founder of The Prosperity Caucus and is an original Kemp-era member of the Supply Side revolution that propelled the Dow from 814 to its current heights and world GDP from $11T to $88T. He served as a deputy general counsel in the Reagan White House, has worked closely with the Congress and two cabinet agencies, and has published over a million words on politics and policy in the mainstream media, as a distinguished professional blogger, and as the author of the internationally award-winning cult classic book "The Websters' Dictionary: How to Use the Web to Transform the World." He has served as senior adviser, economics, to APIA as an advocate of the gold standard, senior counselor to the Chamber of Digital Commerce and serves as co-founder of and senior counselor to Frax.finance, a stablecoin venture. Read Ralph Benko's reports — More Here.

© 2021 Newsmax. All rights reserved.

Through the political media rockets' red glare some may have missed President Biden's elevation of the White House Office of Science and Technology Policy (OSTP) to cabinet rank. That move is potentially of capital importance.I have, and have stated, my disputes with...
ostp, rd, romer, solow
Tuesday, 16 February 2021 01:32 PM
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