Joe Biden would like you to feel good about the economy — which, by the way, is actually pretty decent at the moment. He would also like you to associate those good feelings with him. Hence what the White House is calling “Bidenomics.”
The White House has spent much of the summer laying out its theory of the case on the economy in speeches, appearances, and memos, all looking ahead to Biden’s reelection bid in 2024. The president’s message is that Bidenomics is about growing the economy “from the middle out and bottom up” instead of the top down. It’s framed in opposition to the Reagan-era trickle-down economics, which held that cutting taxes and regulations for corporations and the wealthy would spur prosperity that eventually works its way down to everyone. (It’s an approach that’s left lots of people waiting on that trickle.) Bidenomics — a name the administration has adopted, not invented — is also a departure from standard Democratic fare, at least somewhat. On the whole, it’s greater in magnitude and has more of a supply-side bent to it, being more focused on increasing the amount of stuff than on redistributing stuff, than prior Democratic regimes.
Beyond its exact contours, Bidenomics is an attempt by the president to package his approach to the economy, much of which is quite complex, in a way that — he hopes — voters can appreciate and understand. But more than a specific set of economic principles, Bidenomics seeks to create a narrative around the economy and tell a story about what’s happening in order to counter the vague sense of negativity felt by many Americans. In economics and politics, perception can be as important as reality, and Biden is trying to shape that perception.
“Being able to tell a story about the economy is important,” said Angela Hanks, chief of programs at Demos, a progressive think tank, and a former official at the Department of Labor. “It doesn’t have to be a book about the economy, but it has to be a story that people can understand and hold in their heads and connect to things that are happening in their real lives.”
Just how receptive the American public will be to Biden’s economic appeal is an open question. The way people feel about the economy is notoriously partisan — Republicans say everything’s awful when a Democrat is in the White House, and vice versa. While consumers overall are starting to feel better about the economy, they’re still bothered by high inflation, and it’s not clear that the economy’s vibes are all that great, whatever the data says. Whether tying himself to the economy will be a win for Biden is unclear, but he may not have a choice either way.
What even is Bidenomics?
Bidenomics is a made-up way to package some very real things. Legislatively, it entails items such as the American Rescue Plan, the Inflation Reduction Act, the bipartisan infrastructure bill, and the CHIPS Act. On the regulatory front, it tries to boost competition in ways big, such as antitrust enforcement, and small, like eliminating junk fees. From the bully pulpit, it is a bent that is more pro-worker and focused on specific industries.
The way the White House lays it out, at the core of Bidenomics are three pillars: making smart public investments in America, empowering and educating workers, and promoting competition. Within those pillars, Bidenomics takes big swings at change but also tackles issues at the margins, and some of it appears to be working.
“It’s a very sweeping economic agenda,” said Jared Bernstein, chair of the White House Council of Economic Advisers. “Remember, there are a lot of ways to build the economy from the middle out and the bottom up, everything from setting up a factory that wasn’t there before, frankly, standing up an industry that wasn’t there before, to making your experience at StubHub and or renting an apartment more hassle-free and less expensive. It’s very micro, and it’s very macro.”
It’s not entirely clear if Bidenomics started as a Big Theory of the Economy and What to Do About It or a term the White House has come to embrace sort of after the fact. The president has acknowledged it wasn’t exactly his term of choice — a little bit like Obamacare for the Affordable Care Act, it’s a potentially pejorative-ish moniker that the president’s team has chosen to embrace and try to spin.
“I came into office determined to change the economic direction of this country, to move from trickle-down economics to what everyone in the Wall Street Journal and Financial Times began to call ‘Bidenomics,’” the president said in a June 18 speech in Chicago. “I didn’t come up with the name.”
Biden joked he doesn’t “know what the hell [Bidenomics] is” at a separate event earlier in the month, “but it’s working,” he said.
“A sum of Bidenomics seems to be, like, taking credit for the general suite of macro data,” said Jason Furman, a Harvard economist and former top economic adviser to the Obama administration. “Outcomes are part luck, part presidential policy, partly he didn’t get half the things he wanted done.”
The economy is moving in a favorable direction. Inflation is cooling, though it’s still higher than where policymakers would like for it to be. The job market is strong, as is economic growth. The US continues to avoid a recession, and the scenario where the economy sees a soft landing — meaning it cools without dipping into negative territory — appears to be increasingly likely.
What the White House is doing is trying to showcase it, whether that be highlighting the super-fast repair of a collapsed bridge in Philadelphia or celebrating the groundbreaking on a new Intel plant in Ohio or touting the $40 billion states are getting to roll out more broadband infrastructure. The intended appeal here is supposed to be that these investments and activities will make a difference now and also for years down the line.
“It is a long-term investment in capacity. Some people call it industrial strategy; others call it industrial policy. I sometimes like to call it investment policy or supply-side policy, but what it is is this attempt to stimulate specific capacities in the economy,” said Yakov Feygin, who heads the Future of Capitalism program at the Berggruen Institute, a nonpartisan think tank. “It was a long-term investment into the supply side, not into recovering the economy overnight from a big recessionary shock.”
Bidenomics is different-ish than what you’d see from other Democratic administrations
I asked pretty much everyone I spoke to for this story whether they felt Bidenomics was really that different from run-of-the-mill Democratic politics and policy; whether it’s a break from, say, what the Obama and Clinton administrations would have done. The response, by and large, was that it isn’t some out-of-left-field philosophical shift but that it is distinct.
Joelle Gamble, deputy director of the White House National Economic Council, said she sees Bidenomics as an “evolution” of Democratic policies past. “Congressional Democrats and Democratic presidents have been fighting for middle-class Americans against trickle-down economics for decades, and now that fight is front and center for Biden,” she said. “Investing in manufacturing, investing in hollowed-out communities, really empowering workers, promoting competition.”
“I think it’s sort of 85 percent pretty standard fare for Democrats — higher taxes on the rich and corporations, more spending on infrastructure and people, more active government regulation trying to achieve a broader set of goals,” Furman said.
One thing that sets Biden’s economic approach apart is the magnitude of it. To put it simply, under the Biden administration, a ton of money is being dumped into the economy, and spending is being approved and encouraged to the tune of trillions of dollars. “If you combine the magnitudes of the Inflation Reduction Act, the CHIPS Act, and the Infrastructure Act, you have a transformational set of policies,” Bernstein said. Private spending has shot up in turn.
A hot economy is good for workers — businesses having to compete for labor means people can be pickier about the jobs they take, get better positions, and boost their pay. Wages have risen significantly for lower-wage workers and, more recently, wage gains have begun to outpace inflation for workers overall.
The White House says there’s more to Bidenomics’ benefit to workers than a strong labor market. They say that Biden is exceptionally pro-union and that the president really aims to be on workers’ side. “Markets don’t always deliver the most optimal outcomes, especially when it comes to labor markets, when there’s a lot of power for firms in the labor market,” Gamble said. “You need a counterbalance.”
Bidenomics is articulating an approach for progressive supply-side economics, which Treasury Secretary Janet Yellen has made the case for in the past. Running in contrast with the Reaganomics view of supply-side economics, meaning tax cuts and deregulation to incentivize growth, this modern progressive view seeks to increase labor supply and invest in infrastructure. It also entails the federal government putting its thumb on the scale in favor of issues such as climate and technology.
“This is the left’s supply-side argument,” Hanks said. “What does it look like to have a supply-side policy where you invest in building things and doing things and pay attention to whether you’re creating the conditions for people who have been left out to get a job? It feels, frankly, like something that in the past folks have been hesitant to try.”
To be sure, Bidenomics entails big spending on the demand side as well, specifically with the American Rescue Plan, which was passed when he came into office and meant to help the country rebuild from the pandemic. It included measures such as stimulus checks, plussed-up unemployment insurance, and an expanded child tax credit. The spending and stimulus done under the Trump administration in response to the pandemic bleeds into that, too.
“Any evaluation of Bidenomics has to recognize the scale of fiscal spending that was undertaken in response to the pandemic,” said Alex Williams, senior economist at the advocacy group Employ America. “Part of the growth resilience right now is almost certainly still from actually responding to a recession with large-scale fiscal spending and transfers.”
Some economists note that some of Bidenomics does look a little Trumpy, not only in the pandemic-related spending but also in its made-in-America bent. Europe has complained that the Inflation Reduction Act is protectionist and overly focused on boosting industries within the US. Biden has kept some of Trump’s tariffs in place. The administration has made no secret of its desire to lift up manufacturing and promote industries and jobs at home.
Michael Strain, director of economic policy studies at the American Enterprise Institute, a center-right think tank, ticked off the list of what he sees as overlap between Biden and Trump: “Lots of protectionism, spending a bunch of money to try and boost manufacturing, an embrace of industrial policy, economic nationalism.”
“[Biden] is the first president other than Trump that is pretty protectionist in their approach and has expanded ‘Buy American’ a lot,” Furman said.
Bernstein said that Biden’s approach shouldn’t be characterized as protectionist but instead is a “very intentional thrust to improve domestic production in key areas” such as electric vehicles, battery production, solar panels, and microchips. He noted that domestic production involves foreign direct investment, and that part of the Biden administration’s approach to trade is broader than perhaps under a different regime.
“For a long time, trade was viewed through a prism of will it help consumers? Full stop,” Bernstein said. “We also think that workers must be in the equation. Trade policy must reflect not only consumer welfare but worker welfare and community welfare, and hollowing out communities in the interest of consumer-oriented trade with no regard for workers, that doesn’t fit into Bidenomics.”
Biden needs a story he can tell on the economy that the American public will buy into
Polling shows that voters tend to trust Republicans over Democrats on the economy, even though historically the economy has generally done better under Democratic leadership. There’s no single reason that’s the case, but it is true that Republicans tend to have a straightforward message on the economy — slash taxes, cut the red tape — that’s easy to distill and understand. Democrats don’t really have that.
“I think for a long time Democrats have lacked a real coherent analysis of what their economic plans will do,” Hanks said.
Bidenomics is, in part, a way to try to change that. It takes a lot of actions and tactics that are, admittedly, quite complex on the part of the Biden administration and Democrats, and tries to package them. Semiconductors are important, as they power everything from cars to computers to washing machines. They are also not a thing any regular person wants to have to think about in their daily lives.
“What I think you’re looking at is an attempt to articulate what all of these things add up to and a clearer overarching vision,” Hanks said. “It is built out of these things that are already happening, and we have to be able to say it in a way that makes sense to people — the why behind it and why it makes sense to achieve.”
Williams, from Employ America, echoed the point. “Biden came into a genuinely very complex economic situation and has performed genuinely very admirably, but because of the complexity of the situation, it’s difficult to adequately communicate in terms of the simple parables that people are used to using to explain the economy,” Williams said.
The Bidenomics strategy is a tricky one. The economy is, by many measures, in good shape. The investments the country is making in a variety of areas, from climate to broadband, could in the long term do a lot of good. The pandemic was a stark reminder of just how fragile America’s supply chains are and why they need shoring up. Many consumers appreciate being able to sit next to their kids on a flight or finally get hearing aids over the counter, both of which were Biden initiatives on the competition front.
At the same time, many people don’t necessarily associate these positive developments with Biden, nor do they feel very positive about the economy or him overall. Polls show that voters remain quite negative on the economy and on the president’s handling of it. Whatever the aggregate data says, you can’t tell people their perceptions and personal experiences are wrong.
That makes the goal of Bidenomics a sort of two-pronged one: to get Americans to see all of the good that there is in the economy right now, and to tie it back to the White House.
“Why we need to articulate a vision like Bidenomics is because we need to connect the outcomes that people think are good and don’t necessarily attribute to government with the actions the government’s taken,” Gamble said. “And this is a perennial challenge.”
There’s no solid, one-sentence answer on what exactly Bidenomics is, and to a certain extent, it doesn’t really matter. What will ultimately matter are the results, what this approach looks like five, 10, 20 years down the line, and what doing things a little bit bigger and a little bit more intentionally, accomplishes.