On September 15, 2008, a financial crisis hit the United States, specifically in Silicon Valley. The Lehman Brothers had already declared bankruptcy and the ripple effects of their fall hit the Lehman Brothers’ Wall Street counterparts. This caused the financial crisis to spread beyond Wall Street and into Silicon Valley–home to the world’s biggest tech companies.
The economic crisis saw thousands of businesses and individuals lose their savings, jobs, homes and even livelihoods. The ripple effects of the crisis were felt globally and are still evident today. In 2009, Barack Obama, then-president, vowed to put an end to the crisis and set out to revamp the US economy. Now, his Vice President, Joe Biden–who is also a presidential candidate–has pledged to take the lessons learnt from the 2008 crisis and apply them to the current COVID-19 pandemic economic crisis.
Biden has vowed to address the economic challenges facing Americans, especially during the current pandemic. He believes that the U.S. government should use this opportunity to strengthen the middle class, create new jobs, and modernize the economy. Joe Biden argues that the coronavirus pandemic has highlighted the inequalities within the U.S. economy and has called for immediate actions to ensure that Americans do not struggle through these challenging times.
One area that Joe Biden is keen on addressing is the lack of access to financial services for small businesses and underserved communities. As the former Vice President, Joe Biden is prepared to address this issue and expand access to access to credit, capital, and equity. Biden’s plan is to provide small businesses with support by expanding loan forgiveness, increasing funding for community banks and credit unions, and better capital access. It is said that about $132 billion in PPP loans have been approved for small businesses, but access to these funds proves to be quite tricky, and Black-owned businesses have faced a tougher time accessing these funds.
Biden shows a keen interest in addressing Silicon Valley’s issues, which were exposed in the 2008 financial crisis. However, what led to this crisis, and what can we learn from it? Silicon Valley relied heavily on selling and trading securities to make profits, and when these securities lost value, the banks faced losses. As firms lost their value from the crisis, the bank stocks held in their portfolios became less valuable, and the banks faced huge losses. Wall Street giants like Lehman Brothers surreptitiously held assets that were worth less than the capital investment, which led to a loss in confidence in the financial market.
To curb this, Biden calls for stronger regulations to increase transparency to prevent a similar crisis from happening. His financial plan focuses on increased regulations, which he says will help the economy grow stronger. Specifically, Biden’s plan plans to introduce a new body, which will be responsible for tackling economic inequality issues. This body will oversee all financial regulators and prevent any individual regulator from blocking progress on the economic policies advocated by the Biden administration.
Currently, inequality in Silicon Valley as a result of the crisis is still evident, with high-income earners receiving bonuses, while smaller businesses struggle to make ends meet. Biden is committed to expanding policies that tackle this inequality, reduce the wealth gap, and boost the economy.
Another issue that Joe Biden is passionate about is job creation. He agrees that job creation stimulates the economy and is critical in the fight against poverty. Biden believes that creating jobs entails making smart investments in upgrading the nation’s infrastructure to evolve with changing times. He has set out to invest $1.3 trillion in infrastructural upgrades that also include creating millions of jobs in fields such as clean energy.
He also emphasizes education, which he says is necessary for Americans to remain competitive in the changing job market. Biden’s education policy pledges to raise the minimum wage for educators, increase the number of qualified teachers, and also make community college tuition-free.
In conclusion, Joe Biden’s financial policies are designed to address the social and economic challenges facing the United States today, and he plans to learn and apply the lessons from the 2008 crisis. He emphasizes on creating policies that can help strengthen the middle class, cripple the wealth gap, and create new jobs. He vows to supervise banks and also increase transparency in trade in a bid to help tackle economic inequalities.