Until recently, I assumed that Joe Biden would get a second term despite worries about his age because most Americans find Trump so loathsome.
But I’ve underestimated Bidenomics. It’s turning out to be the most successful set of economic policies the United States has witnessed in a half-century.
It may not only give Joe another term but also give Democrats control over both houses of Congress. It may even put the nation on the path to widely shared prosperity for a generation.
New economic data last week showed that inflation cooled to 3% in June, down from over 9% last year, and close to the Fed’s goal of 2%.
And as inflation has subsided, real wages – that is, what paychecks will buy – have finally risen.
Meanwhile, economic growth has accelerated. Consumer spending is solid. Consumers expect the economy to continue to do well.
Inflation is coming down without a crash landing, in large part because the Fed’s rate increases – designed to slow the economy, stop wage growth and cause higher unemployment – are being offset by Bidenomics’ massive public investments in infrastructure, semiconductors, wind and solar energy, and manufacturing.
This isn’t all. The Biden administration has added three other critical ingredients: the threat (and, in some cases, reality) of tough antitrust enforcement, a pro-labor National Labor Relations Board, and strict limits on Chinese imports.
Taken together, these policies are beginning to alter the structure of the American economy in favor of the bottom 90%.
In recent decades, the Fed has been in charge of evening out the business cycle, but no one has taken charge of altering the structure of the economy so that the poor and working middle class get a larger share of the gains.
This restructuring has been difficult to achieve for the simple reason that the monied interests don’t want it.
In Republican circles, the monied interests have preached the snake oil of supply-side economics, which legitimized giant tax cuts going mostly to the rich and large corporations.
Those tax cuts – under Reagan, George W Bush and Trump – exploded the federal debt, fueled giant profits in the biggest firms and financial institutions, and stoked a surge in billionaire wealth but did literally nothing for average working people. Nothing trickled down.
In Democratic circles, the monied interests have used neoliberalism – which has called for deregulation, privatization, free trade and the domination of finance over the economy.
This orthodoxy pervaded the Clinton and Obama administrations. (I won’t bore you with my war stories, but trust me.)
The result was similar to that of supply-side economics: wealth surged to the top, but average working people remained stuck in the mud.
In contrast to both supply-side economics and neoliberalism, the Biden administration is focused on altering the structure of the economy.
Over the past year, manufacturing construction in hi-tech electronics, which the administration has subsidized through Chips and the Inflation Reduction Act, has quadrupled.
Tens of billions in infrastructure spending has been funneled to the states for road, water system and internet upgrades.
More clean-energy manufacturing facilities have been announced in the last year than in the previous seven combined.
Biden understands that these investments must translate into high-paying jobs, which often require unions.
“When I think climate, I think jobs … union workers are the best workers in the world,” he said in a recent speech on what he has called Bidenomics.
The monied interests don’t want unions, of course. The narrow congressional majority that got these bills passed rolled back some of the labor conditions that originally accompanied the tax credits and grants.
Moreover, much of the funding is pouring into so-called “right-to-work” states that make it exceedingly difficult to unionize.
But a buoyant economy strengthens the hand of workers, making it easier to unionize – which helps explain the ubiquitous labor action this summer.
Voters may not yet understand Bidenomics, but it’s probably not necessary that they do in order for Biden and the Democrats to benefit.
If Bidenomics continues to alter the structure of the economy in ways that help the vast majority, voters will give Biden another term and reward Democrats with both houses of Congress.
And if Bidenomics is successful, it will make the American economy both stronger and fairer in years to come.
I’m betting on it.
Robert Reich, a former US secretary of labor, is professor of public policy at the University of California, Berkeley, and the author of Saving Capitalism: For the Many, Not the Few and The Common Good. His new book, The System: Who Rigged It, How We Fix It, is out now. He is a Guardian US columnist. His newsletter is at robertreich.substack.com
