Full text at The New York Review
Joe Biden pursued as transparently assertive an industrial policy as any since the mobilization for World War II. Why did it fail to win over voters?
As the Democratic Party reckons with another loss to Donald Trump, no issue looms larger than its continued hemorrhaging of working-class voters. It’s not hard to find proximate causes for this crisis. Inflation—which rose from 1.4 percent when Biden took office and peaked at 9.1 percent in June 2022—certainly eroded the party’s razor-thin 2020 margins in crucial states. The cost of housing and childcare, meanwhile, rose at an even faster rate. As many commentators pointed out, the Democrats allowed the Covid-era social safety net expansions to lapse just as inflation was peaking.
But the picture grows more complicated when we consider what Biden accomplished from a policy perspective. His Department of Labor and National Labor Relations Board genuinely advocated for workers’ rights. He was the first occupant of the White House to walk a picket line. Above all there was “Bidenomics.” The term, as Osita Nwanevu explained in these pages, describes “a three-pronged approach to reviving an active role for the federal government in setting the direction of the economy: substantially increasing public investment, involving the federal government more directly in the development of the workforce, and bolstering economic competition.”
Bidenomics is associated with three major pieces of legislation: the CHIPS Act, the Inflation Reduction Act (IRA), and the Infrastructure Bill. Together they amount to as transparently assertive an industrial policy as the US has pursued since the mobilization for World War II. The total package could reach $1.6 trillion, much of it directed toward green energy and advanced technology. Biden claimed that the IRA would “create tens of thousands of good-paying jobs and clean energy manufacturing jobs, solar factories in the Midwest and the South, wind farms across the plains and off our shores, clean hydrogen projects and more.” The CHIPS Act, he said, could stimulate “more than 1 million construction jobs alone over the next six years building semiconductor factories.” These initiatives have indeed drawn a remarkable level of private investment: over $1 trillion by this November, per the administration. Not for nothing did Bernie Sanders concede that “Joe Biden has been the most pro-worker president since FDR.”
What, then, explains the disjuncture? If Biden did so much to boost the economy and labor markets, why didn’t voters feel the effects? One way to answer this question is by analyzing the underlying structure of Bidenomics. Biden often pitched his industrial policy as a way to grow the economy from the middle out and the bottom up. But in reality these initiatives primarily subsidize corporations; the trickle-down benefits for workers and regular people are supposed to come later. The vast majority of government funds are routed through business incentives—tax credits, subsidies, public-private partnerships, and so forth—and through grants to be disbursed by middlemen at universities, banks, nonprofits, and other parastate organizations. The result is a massive program built upon business and nonprofit welfarism.