Biden embraces ‘Bidenomics’ in Chicago address
You know the drill. Good news for Democrats is always bad news for Democrats somehow. No accomplishment goes untarnished in the both-sides press. The real question is whether the voting public will give President Joe Biden credit for improving their lives before the 2024 election. First, they’ll need to feel it.
John Cassidy reviews some of President Joe Biden’s economic highlights for The New Yorker:
In the Build Back Better economic plan that Biden laid out during his 2020 Presidential campaign, he promised to boost investment in American manufacturing and bring back jobs that had been offshored. After entering the White House, he didn’t get his entire economic agenda through Congress. But, taken together, the new spending, tax credits, and investment subsidies that were contained in the infrastructure bill, the chips Act, and the Inflation Reduction Act amount to an ambitious new industrial policy, which aspires to strengthen American high-tech manufacturing, make the green-energy transition a reality, and create well-paying jobs. Earlier this year, I argued that Biden’s industrial initiative would ultimately be seen as his most significant policy contribution.
Although this policy has run into skepticism in some quarters, there is evidence that it’s already having a big impact. In April, the Financial Times counted “more than 75 large-scale manufacturing announcements,” containing pledges to spend more than two hundred billion dollars combined, since the passage of the chips and Inflation Reduction acts. Foreign companies like Taiwan Semiconductor Manufacturing Company and LG Energy Solution, a South Korean producer of batteries for electric vehicles, have moved to secure their place in the vast U.S. market, as have big domestic corporations, like Intel and General Motors. These manufacturing announcements are continuing, and the surge in investment and construction has become visible in aggregate economic statistics. “Inflation-adjusted construction spending in the manufacturing industry has absolutely skyrocketed since June 2022, from $90 billion to $189 billion,” the economics writer Noah Smith pointed out earlier this month, on his Substack. “Factory construction spending more than doubled in one year, after being essentially constant for decades. And it perfectly lines up with the passage of the chips Act in July 2022 and the Inflation Reduction Act in August 2022.”
Biden himself spoke in Chicago on Wednesday of ending the reign of trickle down economics that took hold during the Reagan administration. So long as the macro economy fed by tax cuts for the wealthy improved, as the business press measured it, the rest of America would benefit. But that didn’t happen. Instead, economic inequality grew to staggering heights not seen since the Gilded Age. Biden means to rebuild the economy “from the middle out and the bottom up, not the top down.”
The Wall Street Journal and Financial Times (not approvingly) have dubbed Biden’s program of renewed public investment in American infrastructure “Bidenomics.” Biden now embraces the term.
Heather Cox Richardson writes:
Central to Biden’s vision is the idea that the prosperity of the United States rests on its working people, rather than its elites. In Chicago he emphasized his administration’s focus on training and education, as well as its emphasis on the trades and unions. He also emphasized economic competition, noting that business consolidation has stifled innovation, reduced wages, made supply chains vulnerable, and raised costs for consumers.
To reduce the deficit that has exploded in the past decades and to pay for new programs, Biden reiterated the need for fair taxes on the wealthy and corporations after decades of cuts. “Big Oil made $200 billion last year and got a…$30 billion tax break,” he said, while billionaires pay an average of 8% in taxes, less than “a schoolteacher, a firefighter, or a cop.” He called for “making the tax code fair for everyone, making the wealthy and the super-wealthy and big corporations begin to pay their fair share, without raising taxes at all on the middle class.”
“We’re not going to continue down the trickle-down path as long as I’m president,” Biden said. “This is the moment we are finally going to make a break…. Here’s the simple truth about trickle-down economics: It didn’t represent the best of American capitalism, let alone America. It represented a moment where we walked away… from… how this country was built…. Bidenomics is just another way of saying: Restore the American Dream because it worked before. It’s rooted in what’s always worked best in this country: investing in America, investing in Americans. Because when we invest in our people, we strengthen the middle class, we see the economy grow. That benefits all Americans. That’s the American Dream.”
But it is not the conservative dream. While some Republicans voted for Biden’s investments, many did not. Now they want to take credit for them. Watch them try.
The Charleston Post and Courier notes, “A routine press conference on a federal grant for Charleston’s bus system put Republican U.S. Rep. Nancy Mace on the defensive after Democrats pounced that she actually voted against the bill that made it happen.”
Richardson cites Republicans Theodore Roosevelt and Abraham Lincoln who condemned an economy run for the benefit of robber barons.
In his New Nationalism speech, TR pointed back to his revered predecessor, Republican president Abraham Lincoln, who believed that the government must serve the interests of ordinary people rather than those of elite southern enslavers. When South Carolina senator James Henry Hammond told the Senate in 1858 that society was made up of “mudsills” overseen by their betters, who directed their labor and, gathering the wealth they produced, used it to advance the country, Lincoln was outraged.
Society moved forward not at the hands of a wealthy elite, he countered, but through the hard work of ordinary men who constantly innovated. A community based on the work and wisdom of farmers, he said in 1859, “will be alike independent of crowned-kings, money-kings, and land-kings.” In office, Lincoln turned the government from protecting enslavers to advancing the interests of workingmen, including government support for higher education.
The Republican Party of Lincoln and Roosevelt lost its way. Democrat FDR’s New deal built out the world’s strongest middle class until in the Reagan era the robber barons roared back.
“Bidenomics is simply a new word for a time-honored American idea,” Richardson concludes. A sound one. A popular one. An equitable one.
Now if only the voting public will take notice.
Update: Thank you, Rick.