Digital technologies, while enhancing efficiencies, can exacerbate environmental degradation. AI, despite its potential to support sustainable development, is not exempt from these concerns. It is time to create a new model, to agree that the economic value of any business should only be worth the value it creates for society.
Many economic actors around the world are seeking the next generation of new business models, focused, passionate, and stubbornly determined to take advantage of digital technologies, particularly AI, to invent the next Amazon, the next Facebook, the next Google, or another current digital giant.
States, too, are heads and eyes riveted in this Digital gold rush, now AI, and exacerbate this headlong rush, dominated by the thought of economic progress in which new technologies are the Holy Grail.
The market capitalization of the top 100 global companies reached $40 trillion by the end of March 2024, marking a record level in five years. Technology giants recorded the highest growth among all companies, representing nearly one-third of this total market capitalization on their own, particularly due to the excitement surrounding AI.
Paradoxically, the more our society engages in this quest for new business models—by thinking it through the prism of new digital technologies, including those supposed to artificially augment human intelligence—the more we drift away from the invention of what could truly be a renewal of companies’ business models.
So, in this all-digital, and nowadays all-AI frenzy, while sometimes being convinced to the contrary, a succession of business creation is inexorably perpetuated, and the model is, in reality, nothing new. Companies’ business models have remained the same, built from the same reference, the same mold and the same model. This model is called “profit and loss.” And losses include more than what we may think.
Growth for growth, profit for profit, gives the illusion of value but does not create it.
Too many companies are so irresponsible that their value creation model destroys precious resources, accentuating the handicaps of our societies, financing this one-sided value on a debt to humanity, which no balance sheet recognizes, which no bank will come and claim, and which they will never reimburse.
At the heart of the value system of most businesses in the world, inherited from capitalism, this model, often relying on unsustainable consumption of the planet’s resources, has over the centuries become a source of formidable value destruction, rampant at a speed made exponential today by digital technologies which could risk being further accelerated with AI.
This model, which succeeds itself over time with the aim of creating wealth, has on the contrary, become the major cause of the blind impoverishment of what is most precious to humans—such as air or water—all the while thinking that it is innovating on itself.
Developed to its climax, it not only created irreconcilable inequalities with the right to dignity and a decent life for many human beings but also indiscriminately precipitated global pollution and the depletion of necessary natural resources for all human life on Earth, up to the critical stage of extreme and close to irreversible situations.
At its peak, there are these hegemonic platforms, by some erected as a model of entrepreneurial success, often cited as an example of this new digital economy that so many seek to imitate.
This trajectory is well-documented in the Intergovernmental Panel on Climate Change (IPCC) Special Report on Global Warming of 1.5°C, which underscores the urgent need for systemic transformation to mitigate the catastrophic impacts of climate change driven by industrial and economic activities.
There is no need for new studies to confirm that digital technologies, while enhancing efficiencies, contribute to increased energy consumption and e-waste, exacerbating environmental degradation.
AI, despite its potential to support sustainable development, is not exempt from these concerns and can both advance and hinder progress toward the United Nations Sustainable Development Goals, particularly those related to environmental sustainability.
Like generations before us, we continue to move in all possible ways in this model and to transmit it to ourselves as a hereditary disease. Amplified by the multipliers of digital technologies, now AI, not only globalization but unconscious technologization of our world allows the counterproductive effects of these anti-sustainable business models to reach record highs.
Everything happens as if all the entrepreneurial ingenuity of which humanity is capable, as if all the intelligence that characterizes human genius, had for the most part been confiscated to serve only one cause: that of more profits for more money, that of more money for more profits, that of even more profits for even more money for even more profits, in a loop, without any other priority, without any other consideration.
Other such business models, which moreover, would be made more productive and efficient with AI, are not desirable.
Growth for growth—that which does not participate in making the weakest in our societies grow—profit for profit—that which does not benefit those who need it most—in reality, gives the illusion of value, but does not create it. It creates a loss of reference, a loss of meaning, a loss of who we are, of our humanity.
Long term and short term do not turn into opposing paths as often as we like to believe.
We may think that we are on our way forward because of the rise of corporate social responsibility and sustainability trends, but we’re not there yet. All these trends and concepts change absolutely nothing to the way a company is listed on the stock exchange.
While societal pressure is rising, corporate responsibility and sustainability have emerged as a necessary condition to protect firms’ reputations but are still generally treated as a necessary expense merely because anything more is seen by many as an embezzlement on the backs of the shareholders.
It changes nothing about the way they are valued by the markets.
It changes nothing to the way a company must be run to make what defines profit.
It somehow remains a way of continuing to be stuck in this business model we know, while adding complementary societal prerogatives whose objective of really addressing them are not core to the business and have no life and death effect on the valuation of a company, because all of this stays, in the end, simply peripheral.
We also may think that it is a “David versus Goliath” type of issue, a conflict between the short term and the long term, a never-ending tension between the shareholders’ value and the stakeholders’ value, but it’s not.
The difference between long term and short term does not necessarily turn them into opposing paths. We must move beyond trade-offs. Both must become one.
As long as there will be profit, as defined in the business today, and sustainable development, apart from what defines these profits, as long as there will be value for the shareholders, as defined in the business today, and value for stakeholders, apart from what defines this value, we will not be able to build the cement of an economy at the service of the progress of our societies and humanity.
We must connect the dots looking forward; not connect them looking backward.
Yet we still lack an overall framework for guiding these efforts. However, not knowing what to do does not excuse, and should never again excuse, the act of continuing to do what we already know not to do, from now on.
Steve Jobs said, “You can’t connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future.”
He was wrong. There are those things—crucial to humanity and the world—for which we must see ahead and beforehand how the dots are connected and cannot afford to wait and see the consequences to be aware of what we have done afterward.
When it comes to value creation for the profit of the greater interest of humanity, I strongly disagree with him.
We know that all companies that do not oblige themselves to equal opportunities for career advancement for both men and women, destroy a value dear to the development of humanity, because they participate in creating a society where women and men do not have equal freedom to lead their lives, thus creating the foundations of a world where both are not equal human beings.
We know that all the companies that do not oblige themselves to be administered by a representation inspired by the diversity of the society which supplies the demand that allows them to exist, exclude many human interests, causes and considerations that are essential to the development of our societies, and develop with much greater limits, much greater handicaps, constraining and preventing progress in society.
We know that all the companies that do not oblige themselves to think, organize, and implement a supply chain of design of their products and services, taking into account a responsible and ethical use of all the resources necessary for their productions and their distributions — taking into account the social, societal, environmental and human impact at each stage of their process including the management of the end of life of the products and services they create, while ensuring an impact if not equal to zero, put to the credit and not to the debit of the future of humanity — are causing what weakens human capital, degrading our health, our well-being, and our lives, in the present and for the generations to come.
We know that all the companies that do not oblige themselves to take deliberate care, not only of the physical health, but also and especially of the mental health of their employees, are placed among the causes of a sick, deviant and dangerous society for itself, and actively contribute to the increase in accidents of life, inevitably create a fertile ground for violence in our societies, whether it be domestic, child, moral or sexual.
We know that all companies that do not oblige themselves to recruit employees by giving everyone an equal chance to get a job — and even more, that do not discriminate to favor a few to compensate for glaring injustices that divide society — fuel a system in which extreme inequality grows, extreme poverty perpetuates, and extreme temptations to break the law becomes a survival option.
From the perspective of the value creation for the profit of the greater interest of humanity, Steve was wrong: we can and we have to connect the dots looking forward because we cannot act by only connecting them looking backwards and just trust that in the future, the dots will somehow connect by chance on their own.
Inventing a new standard to define economic value is possible.
Changing the rule of what matters to define the value creation of any company by valuing its way of serving society and life in society — rather than serving the growth of growth, and the profit of profits — is possible.
This work requires a new kind of cooperation between business and the States. A cooperation where the company acts in the service of the general interest, and where the States act as an entrepreneur presiding with the intelligence of its citizens over the destiny of the common good.
For an alliance of companies and the States to produce a value that exceeds the sum of what each could bring separately whilst acting in their current sphere of comfort, each must extend its field of action to the sphere of the other. The company must take the initiative to bring the business interests closer to that of society. The state must help build the general framework of a new kind of capitalism that will guide these efforts in search of new complementary stances and measures for what should define profit.
Ethical Value
To what extent should a company implement and enforce ethical guidelines and practices across all operations to maintain trust and integrity, thereby being considered profitable?
Well-being Value
How good should the morale of a company’s employees be, should there be good working conditions, and should the management system be responsible, for a company to be considered profitable?
Health Value
How committed should a company be to promoting physical and mental health, not only within its workforce but also through its products and services, to be considered profitable?
Diversity Value
To what extent should company boards make room for diversity to be able to maximize the full potential of positive impacts that the company can bring in the society in which it grows, to be considered profitable?
Generational Value
How involved should a business be in providing employment for young people, seniors, vulnerable and disabled people to be considered profitable?
Economic Value
To what extent should a business contribute to the fight against extreme poverty and inequalities in the country where it is established to be considered profitable?
Innovation Value
How much should a business invest in the social innovation of the society of which it is a part to be considered a profitable business?
Community Value
How actively should a company engage with and contribute to the local communities in which it operates to be regarded as a socially responsible and profitable business?
Environment Value
How ethical and environmentally friendly should a company’s products and services be — from how they are made, to how they are managed at their end of life — for a business to be considered profitable?
The value businesses seek to create today determines that of tomorrow’s society.
The two most important things in any company do not appear in its balance sheet: its reputation, and its people. Henry Ford got it right in saying that, especially when it comes to the people. It is time.
In this artificial intelligence age, where more intelligence should be made accessible and available, it is of the utmost importance that we use it to build company value creation that would be that of their positive impacts on the society in which they operate and live.
It is not about what some may call social responsibility, sustainable development, or companies with purpose. It is not about philanthropy either. It is about going beyond. It is about changing our conception of what a “business model” should be.
Market capitalization is crucial from this perspective. It plays a key role in reflecting the value of a company’s societal contribution in its valuation, but it is still largely focused on the overwhelming bias toward financial performance.
It’s humanity. This is the most important thing about a company’s balance sheet.
There will be no so-called responsible, trustworthy, or accountable digital technologies—AI included—without responsible, trustworthy and accountable companies with regard to society.
There will be no human-centered AI without humane economics.
The economic value of a business should only be worth the value it creates for society.
The challenge and the urgency oblige us to surpass ourselves and to think big because the definition of the value that businesses seek to create today determines that of the society in which we will live tomorrow.
It calls for a “New Different”, where anything digital or AI must serve the greater good.
About the Author
Hamilton Mann is a Tech Executive, Digital for Good Pioneer, keynote speaker, and the originator of the concept of artificial integrity. Mann serves as the Group Vice President of Digital Marketing and Digital Transformation at Thales. He is also a Senior Lecturer at INSEAD, HEC Paris, and EDHEC Business School, and mentors at the MIT Priscilla King Gray (PKG) Center. He writes regularly for Forbes and Les Echos, and has published articles about AI and its societal implications in prominent academic, business, and policy outlets such as Stanford Social Innovation Review (SSIR), Knowledge@Wharton, Dialogue Duke Corporate Education, INSEAD Knowledge, INSEAD TECH TALK X, I by IMD and the Harvard Business Review France. He hosts The Hamilton Mann Conversation, a “Masterclass” podcast on Digital for Good. Mann was inducted into the Thinkers50 Radar as one of the 30 most prominent rising business thinkers globally for pioneering “Digital for Good”. He is the author of the book Artificial Integrity (Wiley, 2024).
The Presidential Debate That Wasn’t
By Jack Rasmus
Very little was revealed by either candidate during the debate as to how they planned to deal with the voters’ top issues of War and the Economy.
In the days immediately following the first US presidential debate between Joe Biden and Donald Trump, countless analyses have appeared. Nearly all have focused on the candidates’ delivery, less on what they said, and almost nothing about what should have been but was not said.
Trump was obviously coached by his team to tone down the personal insults, which he mostly did, and scored some policy points while making dozens of false or unverified statements in the process. Meanwhile, as the general media analysis has also gone, Biden’s delivery was a disaster. As one well known TV commentator called it: “a slow motion car accident”.
The CNN host network’s post-debate analysis panel was particularly critical. At least initially. In the post-debate commentary they offered initial assessments like: he (Biden) “seemed disoriented” and delivered “an atypically bad performance” (David Axelrod). “His candidacy has fallen” (Scott Jennings). He was “not coherent” and “real damage was done” (Abby Phillips). “He failed…No two ways about it” (Kate Bidingfield). Seasoned election commentator for CNN, John King, called Biden’s performance “dismal” and said there was now deep panic in the Democrat party. While perhaps the most liberal on the panel, Van Jones, described Biden’s delivery as “painful”, noting the debate was the ‘Con Man vs. the Old Man’ and the affair appeared as a debate between “somebody who shouldn’t be president and another who can’t do the job”.
Many of Biden’s harshest critics on the panel were long time Democrat party operatives, like Axelrod, Jones, and Bidingfield. The harshest criticism was leveled afterward by former Presidential debate moderator, Chris Wallace, author of the aforementioned quote “A car accident in slow motion”. He concluded “he sunk his campaign tonight”.
It’s clear that several of the panelists, by means of their earphones, connected during the debate with high ranking Democrat Party donors and supporters. Van Jones and Axelrod, long-time Democrat Party operatives and advisers, both referred to calls they were getting during the debate. As Axelrod admitted, “Democrat Party leaders are reacting” and in a state of panic over Biden’s performance. Jones said he even received calls well in the middle of the panel discussion, during a commercial break by CNN, in which he was ‘chewed out’ by a Biden insider for his previous panel comments.
Not surprising, as the panel discussion went on some of the panelists tried to walk back their earlier public criticism which was contributing to the ‘panic’, according to some party sources. It’s likely that some of the CNN panelists won’t be around for subsequent debates if they occur. Or at least they won’t be allowed to wear ear phones.
Anyone watching the debate and the post debate commentary might easily conclude that Trump was not all that impressive, reducing his statements and rebuttals every chance he had to the border immigration issue; or making statements like ‘he’s killing the country” and “what he has done is criminal”; or throwing out wild unsubstantiated charges declaring Biden’s policies on abortion led to doctors killing eight or nine month old newborns.
Biden debated in the dirt no less, often focusing on Trump’s infidelity affairs and, in one of his few entertaining ‘one liners’ declaring “you (Trump) have the morality of an alleycat” or “you’re a whinner”. How many times each rebutted the other by simply calling him a ‘liar’ probably set a record for presidential debates.
As presidential debates go, this time around the CNN moderators asked no trick questions—as occurred in prior presidential debates— and their questions challenged the candidates to address some serious points. But when it came to explaining their policies and proposals neither candidate performed very well. They either ignored the moderators’ questions altogether, or drifted off point, slide into another of their favorite topics, or descended into the silliest and most childish attacks on their opponent.
Poll after poll today shows American voters are most concerned about two issues: Economy and War. But anyone watching the debate got no idea what either candidate intended to do for the economy stuck in chronic inflation, interest rates, weakening job market, declining real wages, and a growing fiscal crisis marked by the past eight years of $13.3 trillion additional budget deficits and $14.9 trillion in added national debt. Since 2000 deficits and debt have been doubling every eight years and the worst eight have been the most recent, 2016-2024, under Trump and Biden.
When it came to answering the moderators’ questions on the economy, Trump ducked their questions altogether several times, used the question to slip into elaborating further on one of his favorite themes, like the border, or just answered with an off-the-wall personal accusation of Biden.
Biden did no better: he mumbled, changed his topic and sentence mid-stream, confused words, and hesitated with long pauses as if he lost his train of thought. At one point after saying the US had a thousand trillionaires, then correcting it to billionaires, he mumbled incoherently for almost a half minute, lost his thought, and ended with a topically unrelated phrase: “we finally beat Medicare”. Trump predictably jumped on it and rebutted, ‘Yes, you beat Medicare to death’.
These kind of petty, juvenile exchanges went on all during the debate. Perhaps the most pathetic, however, was late in the debate when both candidates got into a pissing match over who had the lowest golf handicap. Somehow, they then both segwayed into accusing the other being the unhealthiest. Biden charged Trump of being too fat, to which Trump replied he had taken two health tests and passed both with excellent results while Biden hadn’t taken even one.
At that point, following the golf thing, most watchers must have said to themselves: ‘what the hell are they talking about’? Then probably followed that by saying to themselves, ‘holy shit are we really in trouble’!. Yes, the USA is in trouble. Big trouble. And both the candidates aren’t really talking about it. Nor have the slightest idea what to do about it.
Which brings it all back to what the American voters wanted most to hear in the debate but didn’t—i.e. what are the two lightweights called Trump and Biden going to do about escalating War and declining Economy?
Polls consistently show voters want to know what are the candidates’ proposals for dealing with inflation, jobs, runaway annual trillion dollar US budget deficits, the $35 trillion US national debt—not to mention unaffordable housing, healthcare, child care, and student debt? And on the geopolitical front: what would either do as president about the three wars the US is involved in (Ukraine, Gaza, Red Sea)—and the fourth that is obviously being planned (Taiwan)?
Very little was revealed by either candidate during the debate as to how they planned to deal with the voters’ top issues of War and the Economy. Here’s what was not said by the candidates on the real issues of import:
The Economy
The very first question the moderators asked the candidates was the state of the US economy. Moderators noted many voters felt the economy was ‘worse off’, with groceries up 20% and home prices 30% since 2020.
Jobs
Biden ducked the inflation question and launched into a statement how great the economy was now. His main point in that regard was his claim he had created 15 million jobs since taking office. That claim, however, is a misrepresentation and a selective interpretation of government statistics that he and the Democrats have been peddling throughout the campaign.
The fact is the Covid recession of 2020 resulted in 35 million being unemployed at one time or another due to government mandated economic shutdown. When Biden took office in 2021 there were 12-13 million still jobless. The US economy began to reopen in late spring 2021. It was too early. It aborted and only began again to steadily and slowly reopen later that spring 2021. It was a couple months later in late summer 2021 when inflation began to accelerate.
Over the next two years the twelve million mandated jobless returned to the jobs they had left. But these were not new jobs Biden ‘created’. These were jobs workers ‘returned to’. Biden did not create those 12 million jobs. There were additionally some net new jobs created in addition to those ‘returned to’ over the course of Biden’s term. About 2.7 million. However, they have been mostly part time jobs not full time. Only by manipulating the numbers is Biden able to claim he created 15 million jobs.
As for the unemployment rate of 4% and Biden’s claim it’s the lowest in decades, that too is questionable. The 4% is what the US Labor Dept. calls the U-3 unemployment rate which refers only to full time workers. The government has another statistic that rarely gets reported in the mainstream media. It’s called the U-6 unemployment rate and it covers not only full time workers but part time, those who’ve given up looking for work, dropped out of the labor force altogether, and simply haven’t filed for unemployment benefits even though they’re jobless. That also official US government U-6 unemployment rate is 7.4%, not 4%; or almost twice the always reported lower U-3 number by the mainstream media.
Trump of course had no idea about these clarifications of Biden’s misleading jobs claims. Nor apparently did his advisers. So Trump simply failed to challenge Biden on these job numbers.
Inflation
The moderator’s question about why many voters don’t feel economically ‘better of’ included a reference to a basket of groceries up 20% and home prices 30% since Biden. Biden’s answer was he brought prescription drug prices down, referring to insulin prices for seniors on Medicare. Trump said he did it. Biden said he did. What ensued was a ‘he said, she said’ silly exchange. But the fact is prescription drug prices in general are going through the roof. And drug price inflation is not accurately picked up by the official US government inflation statistics. For example, he newest drugs aren’t included. Nor factored into inflation are pharmaceutical companies moving their existing drugs into higher ‘tiers’ in their formulary (list of drug prices).The most purchased drugs’ prices are raised more than average, while thousands of drugs not purchased hardly any more are not. The result is a lower average price for all drugs that the government uses in its inflation statistics.
It was at this point following the drug price inflation, only three minutes into the debate, that Biden went off the rails mumbling incoherently about several unrelated topics, going silent for loss of words, and concluding with the “we finally beat Medicare” comment.
If Trump had been prepared he could have elaborated on what’s really happening with the costs of medical services—a topic on which Biden remained silent for good reason since hospital and medical services are recently among the fastest rising services inflation.
Biden instead repeated his campaign line that more people now have medical insurance than ever before. But at what cost? And how much coverage given the higher cost? According to research by the Kaiser Family Foundation, monthly health insurance premiums for a $65k/yr median income family of four are now about $2,000/mo. ($23,968/yr); for an individual $8,435 a year. Moreover, for 51% of households the same monthly premiums have deductibles of $2k-$3k per year. The other 49% households have deductibles of $600-$900/yr. What good is medical insurance coverage if the cost of insurance is unaffordable?
The debate moderators indicated housing prices had risen 30% and asked what either candidate would do about it. Once again, Trump ducked the question altogether and went on to rail about the border, immigration, and rapes and deaths caused by terrorists and criminals at the border. Biden too ducked the question, trying to turn it into the topic of tax cuts—Trump’s and his.
Here’s why both candidates didn’t want to talk about housing costs or inflation in general:
According to the Wall St. Journal in a recent June 2024 survey, home prices have surged 50% not 30% as the moderators noted. But even that 30% is a gross underestimate. What people pay is a mortgage which includes interest charges and other fees not just a monthly principal on the price of the house. And according to the Wall St. Journal, ‘Home Monthly Mortgage Payments’ have risen 114% under Biden.
Nor are any other interest costs—in credit cards, auto loans or any other source—also factored into US inflation indexes. If they were, the government’s formal price indexes (CPI, PCE, etc.) would be much higher than publicly reported.
Rent prices follow home mortgages. But US government’s price indexes like CPI and PCE only record ‘new leases’, not renters whose landlords raised their existing rents. Then there’s the further trend of landlords adding all kinds of new monthly fees to their rents. That too is not picked up in the official inflation stats. Even so, government limited statistics still show rent increases exceeding 20% since 2021. In reality, rents have risen at least 30% and far more in some cases.
Prices for processed foods have also surged since 2019. These prices are subject to big monopolistic corporations’ price gouging. Processed foods inflation is responsible for most of the 35% rise in the most often purchased grocery goods since 2019, also according to the Journal.
Government statistics show many basic household food staples have risen significantly since 2019: Bread up 52%, Eggs 114%. Pound of chicken breast 37%. Milk 24%. And food ‘away from home’ category (restaurants, bars, etc.) is also rising faster than reported. For example, the US statistics for ‘food away from home’ don’t include the recent ratcheting up of tips charges, in some restaurants mandatory. Tip rates used to be 10%, 15% and 18% at most. Now it’s an automatic 18%, 22% or 25% to the restaurant bill. Fast food away from home, that many low income households rely upon, has fared no better. Statistics show that a ‘Big Mac’ meal is up 27% since 2019.
Transportation is the third largest weighted category in the inflation statistics. It includes the prices of autos, auto insurance, repairs, cost of a gallon of gas and other items. Car prices surged in 2021-23 and then leveled off, making the latest year stats appear tamed. But auto insurance has accelerated by more than 20% the past year alone, following auto repair services up by at least that amount. Gasoline initially accelerated in 2021-2022 due to global and domestic supply issues, then leveled off.
When prices ‘level off’ it appears the inflation has abated. But consumers remain paying the previous higher prices and that’s what they remember. Consumers remember they are now paying 38% more for a gallon of gas since Biden took office.
Despite these facts, politicians, mainstream media, and many mainstream professional economists have been spinning the message that the US economy is doing great. Inflation is under control. Unemployment low. As Biden said during the debate “The US is the greatest economy in the world”. But consumers know what they’re actually paying, workers know what they’re actually getting paid and the extra jobs they have to take on to make ends meet.
Consumers and workers have longer memories than the politicians, media and economists want them to have. They know what the inflation and job score is since 2019. And don’t care that much what the others say about the last six months or even year.
In short, the tens of millions of the roughly 130 million households in the USA know when the politicians or their mainstream economists echo chamber keep telling them ‘Oh, the economy is doing great!’ is not the reality they face.
Tax Cuts
At another point in the debate the moderators raised the question of Trump’s 2018 tax cuts and if the candidates, especially Trump, would once again support the extension of the cuts coming up in 2025. Trump totally ducked the question, except to say his tax cuts—which by the way amounted to $4.5 trillion over a decade not $1.9 trillion reported by the media—produced a massive number of jobs. That job creation of course did not occur. The tax cuts of 2018 went mostly to wealthy investors and US businesses and corporations, who then either hoarded the savings or plowed it back into financial markets or invested abroad. Very little went into investments that resulted in business expansion that created jobs.
Under Trump’s first three years before Covid hit in 2020, the Fortune 500 corporations returned more than $3.5 trillion in stock buybacks and dividend payouts to their shareholders. Under Biden it’s been closer to $4 trillion. During the debate Biden indicated he wanted to raise taxes on individuals earning more than $400k a year in income. That was blocked by Senators Manchin and Sinema of his own party, as were efforts in general to roll back Trump’s $4.5 trillion. Biden refused to pressure either of these rogue Senators the past three years. Both are now leaving the Senate. Moderators should have asked Biden, now that Manchin and Sinema will be gone, if he now will reverse the Trump tax cuts if elected.
Deficits & Debt
On the matter of the budget deficit which has been chronically running at more than $1T a year since 2019 and is expected to hit $1.9T this year, neither candidate had much to say. Trump mentioned it in general and Biden not at all. Nor did either say anything about how the accumulation of those annual deficits have created the current national debt of $35 trillion—with annual interest payments of more than $800 billion and rising.
Both candidates’ virtual silence to discuss the topics of deficit and debt likely had something to do with the fact that both of them have been responsible for record levels of deficits and debt on their watch: annual budget deficits rose $5.5T under Trump and $7.8T under Biden. The national debt accelerated an addition $7.7T under Trump and $7.2T under Biden.
It’s important to note that the record acceleration in both deficits and national debt occurred within just four years for both Trump and Biden—exceeding the levels attained over eight years in the case of both George W. Bush and Barack Obama. In short, Trump’s contribution to escalating deficits and debt were just as bad as Biden’s. No wonder neither candidate wanted to ‘go there’ and discuss the issue. Pointing fingers at the other would amount only to pointing fingers at themselves.
Meanwhile, the continuing escalation of both deficits and debt constitute a major economic issue, as the driving forces for both—tax cuts for corporations and the rich, slow growth of the economy despite massive fiscal stimulus, and chronic wars and their costs—are policies both candidates fully endorse in their actions if not their campaign rhetoric. The moderators asked both directly what would they do if elected about the trillion dollar plus annual US deficits and debt? The question was essentially ignored by both candidates.
Meanwhile, a fiscal train wreck of the US economy is emerging that will result in massive social spending cuts in 2025 and after. But no one addressed that either. The moderators didn’t even raise it.
Tariffs
Biden challenged Trump’s recently announced proposal to raise tariffs on all imports and use the revenue to eliminate the corporate income tax. He charged it would be inflationary as corporations passed on the higher costs to consumers. Trump hit back with the charge he (Biden) has been agreeing with his tariff policy by continuing his (Trump) tariffs and expanding them against China as well. But that exchange about tariffs was as far as both candidates went in discussing the increasingly unstable global economy. The subject of the state of the global economy and its consequences for the US was simply ‘several pay grades’ beyond their intellect.
Missing in the debate as well was any discussion whatsoever as to how the Biden sanctions on Russia and China have encouraged the rapid expansion of the BRICS countries which are now challenging US global economic hegemony and the role of the US dollar. Formerly five countries, since Biden’s sanctions policies the BRICS have doubled in number to 11 with 25 more applying for membership this year. Nor was it asked how the BRICS’s forthcoming new global financial structure later this year will impact the US economy in 2025 and beyond.
That growth of the BRICS and its consequences is perhaps the single most important global economic development unfolding today. However, what the BRICS expansion means for the US economy was never even raised in the debates, let alone debated.
To sum up regarding the quality of the debate on the topic of the economy, neither candidate had the capacity, or even apparently any interest, in addressing the critical economic issues the country faces. Both candidates either ducked questions by the moderators that were related to economic matters or diverted the discussion to their pet topics when the moderators raised important economic issues. In other words, neither proposed solutions to the pressing economic issues voters want to hear.
THE WARS
The same inability and/or refusal to explain how they’d deal with the deepening US involvement in the wars abroad further characterized the presidential debate.
The USA is currently mired in three wars—all of which appear to be intensifying: Ukraine, Israel in Gaza and soon perhaps Lebanon, and in the Red Sea with Yemen. Biden’s regime has been paying the bills for all, totaling at least $300 billion so far—i.e. a major cause of the US deteriorating budget deficits and national debt. The USA is also deeply involved in providing weapons in all three; and increasingly as well in manpower in the form of advisers and officers on the ground in Ukraine and Israel, and a full US navy carrier task force in the Red Sea. Direct weapons and other financial aid costs has amounted at least to $200-$250 billion; add another minimum $50 billion in Pentagon OCO (overseas contingent operations) costs.
Unfortunately, the candidates were not even asked if the US can continue to afford that level of spending; or if the returns so far have justified it.
When asked on the subject before the debate Biden’s response has been consistently that the US can afford multiple wars. As he put it: ‘What do you mean. This is the United States of America. The most powerful country the world has even seen!” His view the US can afford and fight multiple wars has been echoed by other members of his administration, like Treasury Secretary Janet Yellen. However, neither Biden or Yellen have said who will have to do with less in order to continue to pay for USA’s multiplying war involvement—which by many estimates exceeds $8 trillion in the past two decades? Where’s the money in the next four years to come from: What social programs will be cut in 2025-28 if either is elected? Whose taxes raised? Or how much more debt will have to be issued by the US Treasury on top of the US current $35 trillion national debt—the latter now projected to rise to $54 trillion by 2033 with annual interest costs well over $1 trillion/yr. payable to bondholders?
The only detailed exchange on Wars between the candidates was Afghanistan. Biden bragged “we got 100,000 out”. To which Trump retorted that US soldiers died in the retreat which was hastily and sloppily conducted, made the US look weak and somehow, per Trump, encouraged Putin to invade Ukraine.
Those remarks opened the door for Biden to jump into his favorite war subject: the Ukraine conflict. He accused Trump of giving the green light to Putin to invade—i.e. contradicting the history of events from June 2021 to February 2022 during which Biden policy was to refuse to even talk to Putin, rejected all requests to do so, and instead encouraged Zelensky in Ukraine to make increasingly provocative statements about joining NATO and intentions to militarily invade the eastern Ukraine provinces.
Trump criticized Biden’s Afghanistan pull out but never understood it as a link in the Biden decision in early 2021 to provoke war in Ukraine. The USA retreat from Afghanistan was a ‘clearing of the decks’ to prepare for war with Ukraine.
Biden’s remarks on the war in Ukraine avoided the moderator’s direct question what did he plan to do about it. Instead, Biden repeated one-liners straight out the 1970s cold war era saying “Putin is a war criminal. He wants to restore the Soviet Empire and won’t stop there”. Or “Just see what happens to Poland if Putin wins in Ukraine”. In other words, the old ‘dominoes theory’. Just as that view was the center piece of US ideology during the Vietnam war, Biden’s view of the war in Ukraine is taken from the US war justification playbook during the 1970s. The moderators’ question how would he address the US wars abroad was a non starter. Biden answered indirectly ‘he wouldn’t’. Biden policy is US can afford multiple wars which he intends to continue.
Later in the debate Biden spouted even more worn out 1970s ideology about US power. So the debate audience was treated to such statements during the debate like: “we’re needed to protect the world. We’re a powerful nation.” And then the kicker: “everybody trusts us”. Listening to Biden one gets the impression we’re half a century back in the old cold war with the USSR. Even more scary, he apparently actually believes he is?
Trump’s line of argument on Ukraine as well as Israel was as simplistic: if he were president the wars wouldn’t have happened. Somehow, he suggested, he would have been so threatening to all sides of the conflicts in Israel-Gaza and Ukraine that they would have cowered in fear of his threats and not gone to war in the first place.
So there was no need to explain what to do about them now; they simply wouldn’t have happened according to Trump.
In the case of Israel, when asked by moderators if he, Trump, supported a Palestinian state he dodged the question and instead criticized Biden for restraining Israel: “Biden’s holding Israel back. Israel wants to go. Let them go”. Trump’s animus toward Iran is well known. It is likely he wouldn’t need much encouragement to provoke a war with Iran should that latter country support its Hezbollah allies in the event of an Israel attack into Lebanon which appears increasingly imminent. Trump may be ‘softer’ on the Ukraine war but even more aggressive than Biden on a middle east one focusing on Iran. It wouldn’t be the first time a US president ended one war and, to placate the pro-war forces in the US, start up another.
On the Ukraine war Trump was, and has been, more amenable to forcing a compromise with the Russians. In the debate, and on many occasions before, his main charge against Biden is the cost of Ukraine so far, which to date is in excess of $200 billion according to Trump. So the main problem is the US is spending too much money on it. Get the Europeans to cough up more is the suggestion. In a sense, Trump’s position on Ukraine is an extension of his more general view that Europe/NATO should pay more.
To sum up Trump on the Israel and Ukraine wars: neither would have happened. He would have been tough and intervened and gotten all sides to settle beforehand. Israel is different than Ukraine, however. Iran has always been on Trump’s shit list; Russia has not. So based on his comments in the debate, if elected he would likely approve a broader war in middle east if it meant going after Iran. Which seems somewhat ironic since, in the debate, he accused Biden of war policies “driving us to World War 3”.
Biden’s view on Ukraine is apparently just to continue as is. In place of answering the moderators’ question how he might resolve the conflict, it’s clear Biden’s generalities in the debate mean let the war continue. Resolution occurs only when Russia is defeated. After all, if he’s not, the Russians will eventually march on Paris! He didn’t say Paris, but did say Poland. Dominoes again! Spending money on the wars may have been the core concern of Trump, but for Biden money is not the question. The US and NATO should spend as much of it as needed.
On Israel Biden refused to get specific. He said little if anything since the US position is to let Israel proceed in Gaza, fund whatever it asks of the US, and do what it must to prevent a further attack on Israel from other quarters or at least to contain it and prevent a wider war breaking out. However, none of this was discussed in the debate by Biden.
The other two wars—Red Sea with the Houthis and with China over Taiwan—were never raised as questions and therefore easily avoided altogether by both candidates. A simple query from the moderators might have been: ‘why is a full task force of the US Navy unable to stop the Yemenis from sinking ships and preventing two thirds of the normal flow of container shipping traffic through the Red Sea’? Or how much is it costing the US to maintain a carrier task force off the Arabian peninsula?
And then there’s biggest war in planning by the USA: against China in Taiwan. Not a word asked, and not a word said about Biden administration plans now being implemented to prepare for a war with China over Taiwan. Moderators could at least have asked about recent US admirals and generals stationed in the far east who have publicly been saying war with China was inevitable and coming by 2030?
Or the moderators might have asked: ‘why are US Marines now landing and occupying Philippine islands within view of Taiwan and elsewhere in the South China sea and training again to carry out amphibious landings?’ One can understand why Biden, the author of the pending conflict, wouldn’t want to debate such matters. Perhaps the moderators got that message before developing their lists of questions. Or maybe the questions list was vetted by the parties (which was the case in fact). But Trump limited his criticisms of Biden China policy during the debate to the topic of tariffs.
Apart from questions of War and Economy there were other glaring omissions in the debate. At one point the moderators specifically did ask each candidate what they would do about the fact 2023 was the hottest year on record? Biden said he passed legislation—presumably the Inflation Reduction Act in 2022—that subsidized businesses investing in alternative energy. But fossil fuel companies got a big piece of that Act as well. Biden also hyped his ‘climate corps’ idea. Trump ducked the question of climate change altogether, referring instead to the need for ‘clean water and clean air’. Both candidates briefly indulged in an unintelligible discussion of the Paris Climate Accords.
In other words, there was not much substantive discussion over what is in fact a 5th war underway: the war on Nature. Or rather one should say Nature’s war on us which Nature so far is winning. Neither candidate thus answered the moderators’ question about 2023 being the hottest year on record (which is another way of saying: what are you going to do to prevent the climate from warming to the 2 degrees or more tipping point to which it is on track by 2035?)
Just as the candidates failed to provide answers how they would resolve the four US wars underway or in planning, so too the 5th was brushed off and left unanswered.
About the Author
Jack Rasmus is author of the recently published book, ‘The Scourge of Neoliberalism: US Economic Policy from Reagan to Trump’, Clarity Press, 2020. He publishes at Predicting the Global Economic Crisis.