With the US having officially inaugurated its new President, the rest of the world will be watching closely to see how Joe Biden navigates international relations, domestic unrest, a struggling economy, and most importantly, the rapidly worsening COVID-19 health crisis.
Alavan Business Advisory founder Alastair Newton, who spoke with the Insurance Council of New Zealand (ICNZ) in late 2020, says that Biden faces a raft of challenges in taking over the legacy left by his predecessor - and he says getting ahold of the economy and healing deep-set social divides will be crucial to his success.
“I think Biden is probably as well placed as anybody possibly could be right now to try to move in a more stable direction, but the reality is that there are a lot of structural issues in US politics, and in the way in which the system works,” Newton commented.
“It is really good to see Biden moving on COVID-19 as quickly as he is able to. But we heard Biden talking about a ‘dark winter’ in the US, and unfortunately, I think he’s right. People are going to continue to die, and this will continue to be a big, big weight on the US economy.”
Newton noted that Biden was able to do relatively little in the transition period as he did not have access to federal funds. He says that the availability of vaccines is “good news” and has led to some “euphoria” in the stock markets, though he warned that there is still a very long road ahead - particularly with the unpredictability of civil unrest constantly on the horizon.
“What we need is something close to 70% of the world’s population to be vaccinated in order to get it under control, so there’s still a long way to go,” he said.
“Businesses are assessing things carefully, they’re no doubt talking to their insurers and they will take the precautions that they think are appropriate. I think we’re going to see a lot of shop windows getting boarded up over the course of the next four years, even if don’t see any more civil unrest.”
“In short, Biden has to fix the economy,” he said. “Americans will continue to vote largely on their pocket books, and if the Republicans are able to stymy Biden’s efforts, the Democrats are in trouble come 2022.”
