The pandemic is far from under control. The economy remains sluggish. The stock market is soaring. How is it that speculation is at its height when whole swathes of activity remain paralyzed and we have weeks of restrictions / confinement before seeing clearly? This decorrelation may be surprising, but it is not exceptional. The economy is lived day by day. The markets are projected. They are betting, in this case, on the post-covid, the return to good fortune of companies that will emerge from the crisis more sharper. After the recession which plagued the world, it is the bet of a very vigorous recovery. The astonishing vitality of the United States, where growth of 10% is expected this year, and a return to full employment next year, announces, in fact, a bright future… at least for investors. That said, the current market euphoria isn’t limited to Wall Street. It is global. At a time when France is inaugurating its major vaccinodromes, the CAC 40 is flirting with its 2007 record and, since January, the Parisian index has even had the luxury of beating the Dow Jones and the pan-European Stoxx 600 index.
Biden wants companies to pay for the crisis
While Europe is groping and France lowers its growth forecast to 5%, America vaccinates hard, does not fear widening already abysmal deficits and relaunching everything: after Trump’s 3 trillion Biden’s “whatever it takes” translates into a $ 1.9 trillion plan, followed by a massive $ 2.2 trillion infrastructure project. All financed by the FED. Through monetary creation. The markets were worried about this headlong rush, interest rates trembled. But the money that floods Western economies is a joy to scholarship holders. Are they deaf or resigned? Biden’s plan to make US companies pay for the crisis by raising corporate taxes from 21% to 28% delights Europeans who advocate planetary tax harmonization and hunt billions in Gafam’s profits. But, in addition to penalizing the equity markets, this doctrine is at odds with the neoliberal ideology which, since Reagan, has made investors’ honey by reducing taxes to boost business.
Europe and France lagging behind
Biden assumes. He wants the most resilient, strongest and most innovative economy in the world: it’s his own “make America great again”. With his tax revolution, he therefore intends to finance the bill for the recovery. With the stimulus bazooka, assert the leadership of the United States vis-à-vis China. If the over-indebted post-covid world therefore excites scholarship holders so much, it could also lead to a new economic cycle, directly resulting from the first world health and scientific war of the 21st century. At the end of 2022, the GDP of the United States will be six points above that of 2019. In Europe and France, it will have grown by only one point. As Germany blocks European recovery, the gap widens dangerously. The strength of the American response and the Biden plan places us in front of a historical responsibility, observes Emmanuel Macron lucidly. We can not say it better.
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