Bidenomics in a nutshell
President Biden’s Vision of the Economy
Despite the prevailing gloomy consumer sentiment, President Joe Biden takes pride in the economy he has built. Speaking at a Labor Day event with a Philadelphia metal workers’ union, he highlighted the stark contrast between his administration and his predecessor’s. “It wasn’t that long ago we were losing jobs in this country,” Biden remarked. “In fact, the guy who held this job before me was just one of two presidents in history that left office with fewer jobs in America than when he got elected office. By the way, do you know who the other one was? Herbert Hoover.”
The line works on two levels: by comparing President Donald Trump to Hoover, a presidential failure, but also by analogizing Biden to Hoover’s successor, Franklin Delano Roosevelt. The implication, delivered to a union audience, is not an accident. FDR was a union-backed president who oversaw passage of the Wagner Act, ushering in decades of union dominance. Biden has sought to pick up that mantle, walking picket lines, barnstorming union halls, and otherwise signaling that he is, in the words of former AFL-CIO chief Richard Trumka, “the most pro-union president in history.”
This affinity with Roosevelt is just one aspect of the image Biden has tried to cultivate. His moderate stance, in comparison to the far-left wing of his party, aims to rebuild the center-left coalition that propelled Roosevelt to the White House. His ambitious spending programs, known as the “Build Back Better” agenda and the Inflation Reduction Act, are often likened to the New Deal. Biden’s thesis is clear: “the era of big government is over” is over; big government is back with a vengeance.
The Biden-Roosevelt Connection
To draw a parallel between Biden and Roosevelt is to embrace a particular theory of American economic history. This theory is eloquently presented in David Leonhardt’s new book, Ours Was the Shining Future. Leonhardt covers a century of history, arguing that “capitalism remains the best system for delivering rising living standards to the greatest number of people—but only a certain type of capitalism.” This type, which he terms “democratic capitalism,” mirrors the political economy of the New Deal: regulated markets, a disdain for excessive wealth accumulation, and close collaboration between business, government, and labor. According to Leonhardt, this form of capitalism has been replaced by what he calls “rough-and-tumble capitalism,” characterized by deregulation and a relentless pursuit of growth, resulting in widening inequality and a decline in American life expectancy.
Leonhardt’s narrative traces the transformation from the postwar era, where a moderate coalition of business and labor leaders, guided by government, fostered economic prosperity for all. However, this coalition eventually crumbled. The rise of the New Left in the 1960s and ’70s prioritized social issues over economic concerns, while labor unions failed to redirect the conversation. Seizing the opportunity, the right capitalized on culture war issues to push through radical reforms. Additional factors such as rising immigration and educational polarization further contributed to the decline of the working class.
Leonhardt weaves this story through biographical portraits of key figures involved in economic policy. Presidents, professors, activists, and lawyers all play a role. While the book serves as a review for those familiar with the latter half of the 20th century’s social policy history, it primarily serves the larger purpose of advocating for the restoration of “democratic capitalism,” which aligns with Biden’s vision. After all, isn’t the president’s goal to return to the corporatism that defined post-WWII America? Doesn’t he argue that capitalism is beneficial but requires effective management? Even Biden’s positioning on social issues, as he attempts to differentiate himself from the left wing of his party, rejects the politics that Leonhardt blames for the decline of “democratic capitalism.”
A Critical Perspective
However, when it comes to persuading readers that the Rooseveltian past is the Bidenomic future, Ours Was the Shining Future falls short. The decline of democratic capitalism was not accidental; it was inherent. The New Deal gave way to the Great Society, which led to a bloated social services bureaucracy that trapped individuals in cycles of poverty. Labor unions transformed into entrenched interest groups, hindering economic growth. Leonhardt conveniently overlooks the power of public sector unions when discussing the influence of special interest groups. Most significantly, massive government spending proved unsustainable. While Leonhardt acknowledges the inflation of the 1970s, he attributes it to external factors like OPEC oil shocks, sidestepping the insight of economist Milton Friedman that the expanding money supply was the true cause. Similarly, Biden’s initial wave of spending programs has already resulted in inflation, echoing the challenges faced by democratic capitalism. As Margaret Thatcher once said, “the problem with democratic capitalism is that you eventually run out of other people’s money.”
This critique is not aimed at Ours Was the Shining Future itself, which effectively presents the Bidenomics theory. Rather, it questions the viability of this vision. It didn’t work in the past, and it won’t work now.
Ours Was the Shining Future: The Story of the American Dream
by David Leonhardt
Random House, 528 pp., $32
Charles Fain Lehman is a fellow at the Manhattan Institute and a contributing editor to City Journal.
How might increased government intervention and investment in issues like climate change, infrastructure, and healthcare shape the economic landscape?
At the government should play a more active role in the economy, ensuring that it serves the needs of all Americans and reduces inequality?
President Biden’s vision of the economy is rooted in a belief that the government has a crucial role to play in shaping the economic landscape and ensuring that it works for the benefit of all Americans. This vision is inspired by the legacy of President Roosevelt and the New Deal, a period in American history characterized by regulated markets, collaboration between business, government, and labor, and a focus on reducing inequality and improving the lives of working-class Americans.
In his efforts to rebuild the center-left coalition that propelled Roosevelt to the White House, Biden has embraced a moderate stance that sets him apart from the far-left wing of his party. He has sought to position himself as a unifying figure, appealing to a broad base of support and emphasizing his commitment to bipartisanship. However, this does not mean that he shies away from bold and ambitious policies. On the contrary, Biden has put forth a series of spending programs, such as the “Build Back Better” agenda and the Inflation Reduction Act, that are reminiscent of the New Deal in their scope and ambition.
Biden’s goal is to address the prevailing economic challenges facing the country, such as rising income inequality and declining economic mobility. He believes that the era of “big government is over” has come to an end, and that it is time for the government to play a more active role in shaping the economy. He aims to tackle issues such as climate change, infrastructure, and healthcare through government intervention and investment.
Biden’s vision of the economy is not without its critics. Some argue that his policies, such as increased government spending and regulation, could stifle innovation and economic growth. They worry that an expanded role for the government could lead to inefficiencies and a loss of individual freedoms. However, Biden and his supporters argue that his approach is necessary to address the systemic challenges facing the country and ensure that economic prosperity is shared by all.
Ultimately, President Biden’s vision of the economy is one that seeks to restore a sense of fairness and equity, while also fostering economic growth and innovation. It is guided by a belief in the power of government to shape the economic landscape and ensure that it serves the needs of all Americans. Whether or not his vision will be realized remains to be seen, but it is clear that President Biden is committed to pushing for change and building an economy that works for everyone.
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