The Bidenomics Brief: First Edition

October 4, 2023


The Bidenomics Brief is a Roosevelt Institute newsletter where we track the big debates and developments shaping the new economic paradigm.



Welcome to the Bidenomics Brief, a new Roosevelt Institute newsletter where we’ll be tracking the big debates and developments that are shaping a new economic paradigm.

The series of investments and policy changes that constitute the “Bidenomics agenda” are meant to rebalance the economy, lead to the revitalization of industries that are central to the nation’s future, and improve the lives of working people. As the president has said in recent speeches on Bidenomics, “It’s about growing the economy from the middle out and bottom up instead of the top down.” The historic investments that were part of the Inflation Reduction Act (IRA), the CHIPS and Science Act, and the Infrastructure Investment and Jobs Act, as well as Biden’s many executive orders and policy shifts, represent a sharp departure from the trickle-down economics that defined the past 40 years of policymaking.

This new approach to the economy has already succeeded at many of the goals it was meant to achieve: Hotter labor markets are leading to higher wages for many workers, and investments in clean energy have vastly exceeded expectations. Inflation has slowed, unemployment is at or near record lows, and job growth is strong. The IRA is on track to spur about $3 trillion of investment in renewable energy technology, according to Goldman Sachs Research. Thus far, private companies have announced $516 billion in commitments to invest, including $231 billion in semiconductors and electronics, $139 billion in EVs and batteries, and $111 billion in clean energy.

But, public polling has shown that Bidenomics has yet to break through with most people, and many important decisions that will determine the overall direction and outcomes of spending have yet to be made. So, the fight over Bidenomics—what it really means, whether it’s working, why it matters—has only just begun.

In the Bidenomics Brief, we’ll explain these new rules for the economy as they are built from the ground up. We will follow whether Bidenomics is rebalancing wealth and power—both of which have grown increasingly concentrated in the past 40 years—toward working people. We’ll track the implementation of these huge, historic laws and the decisions that will have the greatest impact. And, we’ll analyze whether government is taking the lead to shape industries and markets, rather than leaving it up to corporate interests and big finance to determine the course of the country’s future.

We’re excited for you to join us.


The Rebalancing

Last week, President Biden became the first sitting president to walk alongside striking workers—whom 58 percent of Americans support. And the administration can take credit for the hot labor markets and empowered unions that have emboldened workers to launch this year’s historic wave of strikes, as Roosevelt’s Alí Bustamante argues this week. As Biden’s Acting Secretary of Labor Julie Su said, “A strong labor movement and a worker-centered economy are very much part of Bidenomics. It’s the president’s entire vision for how we build a strong workforce, profitable employers, and a strong nation.”

This administration has been loud and proud in its support for labor and has taken historic steps to lend its support for ongoing labor organizing. Starting with President Biden’s support for the Amazon workers who were in the midst of organizing a union campaign, through his trip to the picket line in Michigan, the president has vocally supported his pledge to be the most pro-union president in history. In the case of his trip to Michigan, he broke long-standing taboos against a president visiting a striking worksite and using the bully pulpit on behalf of workers. These actions come at a time when 67 percent of the public has a positive view of organized labor—in contrast with 41.5 percent approval of Biden, 26 percent of Congress, and 40 percent of the Supreme Court.

The strike has provided President Biden with a golden opportunity to make clear that Bidenomics isn’t just about smart investments, or empowering and educating workers: It’s about building worker power and taking on corporate power. The new economic paradigm is designed to shift wealth and power away from the CEOs who’ve received more than their fair share to the workers who haven’t. The president’s support for the striking workers out on the picket lines is a key part of how Bidenomics will help workers take on corporate power, and rebalance the economy to work better for all of us.

 

Some Like It Hot

Coming on the heels of a global pandemic and economic shutdown, the Bidenomics agenda powered a recovery from 2021 to 2023 that was far and away the best performance among peer developed nations, with the US economy recovering much faster than any other in the G7. The US economy recovered all jobs lost during the recession by the end of 2022, and the unemployment rate remains near a 50-year low. Job growth in 2023 is higher than the nation’s monthly job gains before the pandemic.

Yet, that recovery and all it entails for workers’ real wages, rebuilding vital industries, and maintaining economic growth is at risk if the government shuts down. The deal struck last week restarted the clock at 45 days to avert the next shutdown. And there’s still a lot at stake: Goldman Sachs estimates a government shutdown would reduce US economic growth by 0.2 percent, and Ernst & Young puts the cost to the US economy at $6 billion per week. Directly, 737,000 workers, or 34 percent of all federal employees, would be sent home without pay. Moody’s—the final credit rating agency to give the US government an AAA rating—has said a shutdown could potentially trigger a downgrade.

The knock-on effects from a slowdown in policy progress may be just as significant. For instance, US Trade Representative Katherine Tai said that a government shutdown would pose the biggest challenge to the US and the EU reaching a historic deal to rewrite trade rules to penalize carbon emissions. And a shutdown would put a damper on the Bidenomics agenda in other ways:

  • Most of the Federal Trade Commission’s consumer-protection workers would be furloughed, as would half of its antitrust employees.
  • The Securities and Exchange Commission (SEC) would furlough roughly 90 percent of its 4,600 employees and suspend most activities, leaving only a skeleton staff to respond to emergencies.
  • The ability of the National Labor Relations Board (NLRB) to mediate labor disputes would be curtailed because almost all of its 1,200 employees would be furloughed, according to a 2022 plan.

Even as Washington takes a collective sigh of relief for the next few weeks, it’s important not to lose sight of what is driving the shutdown debate in the first place. As the conservative Competitive Enterprise Institute writes, “The White House rewrite of regulatory review guidance, happening at the time as the Bidenomics World Tour, is all the more reason for Congress to clamp down.” As shutdown talk heats up again in a few weeks, we’ll be keeping an eye on the invisible—but very real—costs of forcing the government to step back from its role in rebalancing power and structuring markets.

 

What to Read

  • Numbers released last week show that manufacturing construction contributed the most to GDP of any six months on record.
  • Some conservatives are attempting to claim a pro-worker, post-neoliberal mantle. Is it for real? Sen. Bernie Sanders’s former advisor Matt Duss is skeptical. Read his latest in Democracy Journal.
  • Need a catch-up on how green industrial policy came to be? Listen to The Dig podcast, where journalist Dan Denvir interviews Ted Fertik from the Working Families Party, Daniela Gabor from the University of the West of England, and Tim Sahay of the Green New Deal Network.
  • The Financial Times’s Gideon Rachman has an interview with Brian Deese, former head of the National Economic Council, on the ideas behind Bidenomics, and an assessment of the current state of play. Listen here.

 

Who Said It: JRB or FDR?

Every week, we’ll close with a quote from either President Biden or FDR that sheds some particular light upon the news of the prior week. Take your guesses for this week.

This week’s quote:

Q. Mr. President, do you see any prospects at all, can you give us any possibility of daylight ahead on the strike in view of [the car companies representative’s] refusal? Can you give us any idea of the next step ahead?

“I said, ‘Please stay at the table as long as you can to try to work this out.’ And they’ve been around the clock, and the companies have made some significant offers. But I believe they should go further to ensure record corporate profits mean record contracts . . . It’s my hope that the parties can return to the negotiation table to forge a win-win agreement.”