The Simple Story Biden Needs to Tell

February 3, 2023

The new economics is here.

The Roosevelt Rundown features our top stories of the week.

What Biden’s State of the Union Should Do

Today’s 3.4 percent unemployment rate is the lowest recorded in half a century—but most Americans don’t know why that is.

Next week, the president needs to tell them.

“When President Joe Biden delivers his second State of the Union address on February 7, he has an opportunity to tell the American people something they haven’t heard before: the story of today’s economic transformation, and the dramatic shift in policy thinking behind it,” Roosevelt President and CEO Felicia Wong writes in a new Washington Monthly piece.

As she explains, the administration’s hard-won achievements of the last two years—from the American Rescue Plan to the CHIPS and Science Act to the Inflation Reduction Act—didn’t just save a COVID-battered economy and set it on a better path.

“Biden’s administration has broken with more than 40 years of anti-government orthodoxy to fashion a new economic strategy—investing in people, investing in places,” Wong writes.

“The story Biden tells at this State of the Union should be simple: We know what doesn’t work, and we know what does. We’re putting the old economics aside and instead investing in ourselves.”

Read more in “President Biden Should Aim Higher in His State of the Union Address.”


How to Address Climate Risk in Our Financial System

Many major US banks have made pledges to reach net-zero emissions by 2050, but their business practices often do not align with these commitments.

“[B]anks are acting as if they will be able to manage this change at some future date, without laying the appropriate groundwork in their governance and operations today,” Yevgeny Shrago and Roosevelt fellow David Arkush write in a new report.

What’s needed: stronger and more decisive action from financial regulators to hold banks accountable for their public climate commitments.

“By embracing their role as supervisors of voluntary transition plans, regulators can reinforce the value of those plans as risk management tools.”

Read more in Supervising the Transition: How Banking Regulators Can Address the Coming Shift to Net-Zero Emissions.


Why the Fed Is Handling Inflation All Wrong

Roosevelt Chief Economist Joseph Stiglitz has a lesson for the Fed: Relentless interest rate hikes are not the way to fight today’s inflation.

“A careful look at what is going on, and at where prices have come down, supports the structuralist view that inflation was driven mainly by supply-side disruptions and shifts in the pattern of demand. As these issues are resolved, inflation is likely to continue to come down,” he argues.

Meanwhile, “the risks of increasing interest rates are clear: A fragile global economy could be pushed into recession.…”

Read more from Stiglitz.


What We’re Reading

Powell Is Determined to Drive Down Wages. What Else Is at Stake. [by Roosevelt fellow J.W. Mason]Barron’s

Climate Disasters Hit Poor People Hardest. There’s an Obvious Solution to That. – Vox

“It Can Be Scary”: How Corporate America Is Hitting Back against UnionsThe Guardian