Bidenomics Has Changed Our Policymaking. Here’s Where It Needs to Go Next.
June 28, 2023
By Felicia Wong
In a speech in Chicago this afternoon, President Biden made his clearest case yet for an approach many of us have long identified as a necessary paradigm shift. “I didn’t name it Bidenomics,” he said. “But I think it’s a plan I’m happy to call Bidenomics.”
As the president told it, he came into office determined to turn the page on the long tail of 1980s Reaganomics. In the midst of the COVID pandemic and other interlocking crises, Biden presided over a sea change in our understanding of how the economy works, and for whom. Bidenomics, as he laid out today, holds that the economy must grow “from the middle out and the bottom up, instead of just the top down. When that happens, everybody does well.” And in launching this Bidenomics tour, and $40 billion high-speed internet funding, the administration is drawing its own parallels to FDR.
The White House is right to be proud of this new approach. This is no longer about a failed neoliberal model—modest fiscal relief if we’re lucky and congressional stars align, and otherwise letting the market rip. We now know, more than two years into this administration, that the invest-in-people approach works. And as I’ll explore here, fully realizing FDR-style transformation will require even more, including finally recognizing the economic and social importance of remaking the care sector—everything from childcare to elder care—and tackling radically concentrated wealth, still the beating heart of the failed system.
The Successes and Opportunities of Bidenomics—and the Sea Change They Represent
The Biden team has rightfully bragged about its economic achievements: The strongest post-COVID recovery of any major economy in the world. The highest growth. Lower unemployment than anyone thought possible three years ago, and 13 million new jobs with higher wages, better benefits, and more predictable scheduling. And, all hand-wringing and finger-pointing aside, one of the lowest levels of inflation across advanced economies.
Make no mistake: It took both a paradigm shift and significant political courage to make Bidenomics real.
During the pandemic, this administration successfully pushed trillions of dollars in relief money directly to Americans and their families. Yes, this was made possible by the panic and sheer unprecedented economic uncertainty of COVID-19, but also by a shifting economic argument that many of us had been making for years: that investing directly in American workers and American families, via the expanded Child Tax Credit, was the right thing to do in bad economic times.
In 2021 and 2022, as we moved from relief to recovery—Build Back Better was not just a slogan, but an actual idea premised on a better way to manage the economy—the Biden team made an affirmative decision to invest in America directly, including over a trillion dollars in infrastructure. And even more cutting-edge was their decision to build safer, stronger supply chains: bringing jobs back home through laws that would build everything from semiconductors to wind and solar to cars and batteries, mostly here at home.
A year ago, the news media mostly covered the agonizing Lucy-and-the-football negotiations on Capitol Hill. The economic sea change these policy frameworks represented was less visible, but far more profound. When the history is finally written, let’s hope that the shift in economic emphasis from our nation’s top policymakers will get its due.
Many of us argued early that economic resilience and a direct government focus on the sources of human well-being were more important for our policymakers than the failed neoliberal approach of efficiency, big business, and small government. On the first front, the administration made seismic strides in its first two years.
Industrial policy, which was, just a few short years ago, the “policy that shall not be named” became cutting-edge. This meant that government was no longer going to pretend to be hands-off. Instead, it would affirmatively craft markets by picking important goals—like fighting climate change—and investing public money directly to draw private money in off the sidelines. So far, judging by the numbers of jobs and investment announcements that the White House is touting, this part of the paradigm change seems to be paying off.
To be clear, some relics of neoliberalism remain, including a default of focusing on markets. To ensure that our policies are designed for us as parents, as students, and for all the other identities we hold, we need to remember that we are more than consumers—and need to govern accordingly.
And of course, the ultimate success of Bidenomics will depend on implementing infrastructure, the Inflation Reduction Act, and the CHIPS and Science Act well. Most of the money is not yet out the door, and strong governance across the federal government will matter given the breadth, depth, and complexity of these laws. All of us will be watching and pushing to ensure that public funds do not line corporate coffers—which they will if inertia alone is the only force at play—but actually yield public benefit: a cleaner economy and a more inclusive one as measured by race, gender, and region.
Unfinished Business: A Broken Care System and Concentrated Wealth
Beyond implementation of existing legislation, an important part of the president’s argument has been that we need to finish the job. This is absolutely correct. Here are two essentials those of us at the Roosevelt Institute would like to see to further this paradigm shift and usher in a true new economic worldview.
The first, and most clear given what was left on the cutting-room floor in last year’s Manchin-driven legislative negotiations, is government support to truly fix the economics of care. This is a broken market. Supply is difficult to come by, expensive for far too many of us, and a source of stress for every American family. At the same time workers—mostly women of color—are shamefully underpaid. Government can fix this at scale, with more economic support to families, a better structure for paying caregivers with more real worker protections, and most importantly with public options for childcare and more comprehensive insurance.
The second is a focus on wealth, and taxation. Lost in all of the excitement about the US government’s newfound ability to spend real public dollars on a set of North Star goals for our economy and society is something much deeper: Capital accumulation by the ultra-wealthy has gotten even worse over the last five years. Even with all of the policy change we have seen—all of the carrots, all of the public investment—this radical inequality remains the beating heart of our society. It is economically senseless. Economist Thomas Piketty has challenged us to imagine trillions more spent on health care, on housing, on teaching and education. It is also, as Roosevelt Institute Fellow Darrick Hamilton has long-argued, a representation of generations of racist laws and norms. And it must be fixed through better wealth-focused policies, including more, and more progressive, taxation than we have yet seen on the table from this administration.
Moving these additional elements of paradigm change is the unfinished business the administration must reckon with: creating a stronger care sector beyond manufacturing, and tackling wealth and other forms of concentrated power.
The country is better off because Bidenomics invests in people, in places, and in a strong labor market. This has taken real political courage. It will take even more courage to fully rebalance power, but it’s what true economic transformation requires.