Biden’s Big Bet on Transforming America’s Economy
Why Biden’s re-election chances hinge on showing the tangible results of this bet and linking domestic and global economic policy moves in a clearer story for working Americans.
It’s that time of America’s political cycle again: when candidates announce presidential bids more than a year and a half before the 2024 election. First Lady Jill Biden delivered the strongest hint yet this past week that her husband will seek re-election, saying “he’s just not done.”
The GOP presidential field also continues to grow. As long as President Joe Biden’s favorability ratings remain underwater, “Republican presidential candidate” will see a lot of job growth in the coming months.
Much of the media and the likely candidates remain fixated on culture wars, preying and playing upon divisions between Americans. Case in point: in the debate over an actual train wreck in eastern Ohio this past week, the people affected there were used as props.
If you step away from much of the loud white noise produced by America’s political and media-industrial complex, you’ll find that most Americans remain concerned about their economic well-being and basic security. It’s on this ground where the real fight for America’s future takes place because it’s connected to most Americans’ daily lives.
Biden’s investments in America’s economy fail to resonate with the public so far
In a political environment with so many distractions and a broader world with so many complications, it’s often easy to forget the fundamentals that shape most people’s lives. Much of that is connected to how secure they feel, and economic security remains a top concern.
During his first two years in office, President Joe Biden introduced three pieces of legislation totaling at least $2 trillion of public investments in high-tech and clean energy aimed at re-making America’s economy. The scale of these investments will take many more years to implement.
This past week, Commerce Secretary Gina Raimondo made the case for the $53 billion CHIPS and Science Act, one of the three main pillars of this broader package of investments, in a speech at Georgetown University. Later this week, the U.S. Department of Commerce will open up the application process for companies to receive funding under this act — all with the goal of creating at least two semiconductor manufacturing clusters by 2030.
These investments are just getting underway and the lag time for implementation is considerable, so expectations of an immediate political impact should be modest. Recent polls found that most Americans don’t think Biden has created jobs (even though 12 million jobs were created in Biden’s first two years), improved the country’s roads and bridges (despite the $1.2 trillion infrastructure bill passed in 2021), or made electric vehicles more affordable.
It's still early, but building stuff takes time, and it will require a strong focus on implementation and clear arguments for how these measures are making the lives of working-class Americans better. Advancing a clear argument on this front will be make-or-break for Biden’s re-election chances.
A brief look at the full package of more than $2 trillion finds many opportunities to re-make America’s economy, but they come with some major implementation challenges.
First, there are the many implementation challenges with the CHIPS Act — most notably whether it is done in a way that benefits working Americans rather than rich corporations already aggressively lobbying to benefit from it.
The United States needs more public investment, but as Washington Post columnist David Ignatius argues, “this would be a crazy moment to embrace Chinese-style public-private interdependence,” in large part because China’s more rigid system has proven less resilient than America’s in recent years, particular since the pandemic. The strength of America’s political economy and its ability to bounce back is largely due to the give-and-take in a market economy, but it is also a system that gutted America’s working middle class in recent decades. America does need a new balance between its public and private sectors, but it’s far better to look back at our own history or the models of fellow democracies for inspiration.
Next, the Infrastructure Act faces several implementation challenges, including questions about whether there are enough workers and building materials in America’s own domestic supply chains to build roads and bridges quickly enough. Some estimate that America has a shortage of around half a million construction workers today, part of a wider labor shortage in the country. Some sort of immigration reform, however limited, that encourages more of these workers to come to the United States would be useful.
Furthermore, the “Buy American” provisions of the act, though popular with nearly three-quarters of Americans, may actually slow the implementation as it has in previous infrastructure building efforts. The United States no longer produces many of the items needed to upgrade its roads, bridges, and ports — though many of America’s allies do. “Friend shoring” needs to go beyond rhetoric and into substance.
Finally, the Inflation Reduction Act of 2022, a measure that aims to make America a green energy superpower and global leader in the energy transition likely to play out over the coming decades, faces the practical implementation challenge of getting different jurisdictions to rezone and approve permits for all types of projects. The new Congress needs to take action here after an unlikely coalition of progressives and conservatives blocked a push for permitting reform late last year.
What does this mean in practice? The Biden administration has placed a big bet on transforming America’s economy. This bet will require a lot of detail-focused policy implementation that improves the lives of ordinary Americans. Smart implementation necessarily requires working with the private sector, rather than overriding it, to identify the infrastructure needs and labor issues that need to be addressed in order to make sure that allocated money is spent wisely.
It will also require a public communications strategy that convinces the American public about the value of these investments and how they are improving their lives in tangible ways. The story is simple. No place in America will be left behind. We need everyone working on these efforts and doing their part, and the end result will be a stronger nation with the world’s best economy and more secure families with solid paychecks.
The Biden administration should focus this effort on the working Americans who have felt like they were left behind by the previous period of globalization that put big corporations and other countries as higher priorities. America’s booming economy offers an opportunity to take an abundance agenda global and build a shared security agenda with close partners and allies who share our values, including those who respect workers’ basic rights and freedoms.
With unemployment rates low and massive public investment likely to boost demand for workers, the Biden administration might be able to transform America’s economy in a historic way. It’s a tall order, but it can be done — and is more than worth the shot.