Bloomberg Businessweek-Europe Edition January 25, 2021 (The Year Ahead)

Each issue of Businessweek features in-depth perspectives on the financial markets, industries, trends, technology and people guiding the economy. Draw upon Businessweek's timely incisive analysis to help you make better decisions about your career, your business, and your personal investments.

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10 min
help is on the way but the world still needs a shot in the arm!

As the coronavirus spread beyond China last spring, forecasters abruptly added two percentage points to their growth predictions for 2021. It was as if they had turned into a chorus of red-headed Orphan Annies singing, “I love ya, tomorrow.” Their upgrades didn’t signify optimism, though. They were a consequence of the downturn the forecasters were expecting for 2020. With a deep recession as the new baseline, the partial rebound they anticipated would represent a big year-over-year percentage increase in output. And here we are. Covid-19 is claiming more lives than ever, and vaccines are rolling out more slowly than expected, so economic activity this year will track well below its pre-pandemic trajectory. But because it won’t be as depressed as last year, on paper 2021 will look like a blockbuster. Bloomberg Economics…

4 min
economics&politics what can biden get through congress?

The surprise victories of Democrats in the two Georgia runoffs in early January handed their party the narrowest possible control of the U.S. Senate: a 50-50 split, with Vice President Kamala Harris—who under the Constitution is also president of the Senate—acting as tiebreaker. Because both houses of Congress are now in Democratic hands, President Biden will have more latitude to enact his agenda. In the short term, some of his agenda items may be delayed by the Senate impeachment trial of his predecessor, which will consume much of the chamber’s attention. But the Democrats’ one-vote majority will make an enormous difference to the president achieving his policy goals. With Chuck Schumer of New York as Senate majority leader, displacing Republican leader Mitch McConnell of Kentucky, Democrats will set the schedule, deciding…

2 min
the whiff of trump

In federal departments across Washington and in the warrens of the West Wing, the question hung in the air in mid-January: Will the Trump name stick? Among those left at the end of the administration—following the storming of the U.S. Capitol by Trump supporters on Jan. 6—there was worry about a lingering stain from working for the first U.S. president to be impeached twice. Interviews with experts and people inside the White House reveal a two-pronged reality: Top officials will likely come out just fine, but some junior staffers will struggle. Those already wealthy, such as former Secretary of the Treasury Steven Mnuchin and former Secretary of Commerce Wilbur Ross, don’t have to worry. The nation may have cleaved itself into a red America and a blue America, but connections and money still…

3 min
a new deal for workers

FEDERAL MINIMUM WAGE The $1.9 billion economic relief plan Biden unveiled on Jan. 14 calls for boosting the federal minimum wage to $15 an hour from the current $7.25. If successful, it would be the first increase enacted since 2007. More than half of U.S. states already have wage minimums above the federal floor. Still, Republicans and a few Democrats in Congress are sure to resist going to $15, arguing it will increase costs for businesses at a time when many are fighting to survive. Proponents say the increase would lower the poverty rate, which jumped by 2.4 percentage points from June to November as the effects of the first round of stimulus dissipated. CHILD CARE By forcing many day-care centers to close, the pandemic helped wipe out five years of gains in…

4 min
ones to watch

ter. Republic made a career ther profile as an independent-minded senator willing to deal. While most Republicans swallowed their frustration with Donald Trump, Murkowski often criticized him and should also be willing to buck party sentiment and cut deals with the Biden White House. She has less to fear from her party’s right flank than most: Beaten in her 2010 primary by a Tea Party challenger, Murkowski ran as a write-in candidate in the general election—and won. —Joshua Green GEORGE FORSYTH Candidate for the presidency of Peru Forsyth, 38, is leading polls for Peru’s presidential election on April 11. He was a goalkeeper for a top Peruvian soccer club before being elected councilman for a populous Lima district in 2010. In a brief stint as district mayor, he earned a reputation for being…

5 min
big government is back in europe

French Finance Minister Bruno Le Maire had just recovered from Covid-19 in October when he faced a familiar adversary at a parliamentary hearing. The government, a leftist legislator told him, needed to bring industry and jobs back to France and was being naive about global trade and the benefit of free markets. “There are a number of points on which I agree with you—Covid must have unblocked something in me,” Le Maire quipped, citing massive spending on job support, a push for carbon border taxes, and the huge sums earmarked for state aid to encourage domestic investment. “Everyone is able to change their beliefs and ideas to respond to the very particular crisis we are in.” EU countries are using stimulus to equip their economies for a post-pandemic future Le Maire, a frequent…