Our List of the Top Ten Crises Joe Biden Will Face

by Greg Valliere, AGF Management Ltd.

IT’S A TOUGH JOB: It strikes us that Joe Biden faces far more immediate problems than most incoming presidents. Here’s our list of the Top Ten crises he faces:

1. Hospitalizations have fallen in the past week, as have new COVID cases. But fatalities will hit 400,000 today and will exceed half a million by spring, as a mutant variant rages. Biden will emphasize masks, but the real issue he needs to address is the inept rollout of vaccines.

2. Thousands of immigrants are marching north in Central America; what to do with them may give Biden his first crisis — and Republicans their first major issue in the Biden era.

3. North Korea displayed huge new missiles in a military parade this past weekend; the Kim government undoubtedly will test them in the next few months, eager to jump-start negotiations with the U.S. that could ease economic sanctions, Kim hopes.

4. Relations between the U.S. and China will stay frosty until Washington reaches a consensus with allies on an approach to Beijing. Same with Iran, where radical ayatollahs are reluctant to negotiate.

5. Friction looms with Wall Street — The nominations of Gary Gensler to head the SEC and Rohit Chopra to head the Consumer Protection Financial Bureau pleased progressives — and signaled that Wall Street will be aggressively regulated.

6. There will be tremendous friction with the fossil fuels industry. Biden will re-join the Paris Climate Accord tomorrow, and his cancellation of the Keystone Pipeline shouldn’t come as a surprise — he’s been promising to do that for the past year. Biden wants to phase out fossil fuels, and the industry will fight him furiously.

7. The budget deficit will exceed $3 trillion this year, and total U.S. debt should exceed $30 trillion by the middle of this decade. Janet Yellen knows the economy will need much more medicine — but that could push yields higher and produce a whiff of inflation.

8. Republicans and moderate Democrats, citing deficits, will balk at Biden’s first pandemic relief bill; we wrote last Friday that Biden might get no more than $1.5 trillion of his $1.9 trillion package. A second bill — even more expensive — could face a long slog.

9. Unity will prove elusive. Even among Democrats, unity will begin to unravel, with progressives pushing Biden hard to pass major tax increases and new spending. The left wanted an impeachment trial, and now it’s coming — a great distraction for Biden and his agenda.

10. Bringing the country together. Perhaps Biden’s greatest crisis will be the volatile electorate; an astonishing one-third of Americans think there was election fraud, and only 21 percent of Republicans think the election was legitimate. But there will be charges brought against the Capitol rioters, as well as Trump aides — and perhaps Trump himself. This will be a tremendously divisive issue.

YES, IT’S A VERY TOUGH JOB: Biden is a skilled negotiator with a solid Cabinet, but these crises will confront him immediately; how many can he juggle at once? He will need to spend his political capital very carefully — because the wounds from the past four years will not heal quickly.

The views expressed in this blog are those of the author and do not necessarily represent the opinions of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies.

The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The forward looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward looking statements. The information contained in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to the circumstances of the individual.

AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), AGF Investments America Inc. (AGFA), AGF Investments LLC (AGFUS) and AGF International Advisors Company Limited (AGFIA). AGFA and AGFUS are registered advisors in the U.S. AGFI is a registered as a portfolio manager across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.

About AGF Management Limited

Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.

For further information, please visit AGF.com.

©2021 AGF Management Limited. All rights reserved.

This post was first published at the AGF Perspectives Blog.