*Background: Significance
There are few other government policies that more directly impact the well being of American people than economic policies.
-What is Bidenomics? President Biden has defined “Bidenomics” as encompassing all that is good in the U.S. economy: falling unemployment, robust wage growth, new small business creation. He says that “Bidenomics” is just another way of saying, “Restoring the American Dream.” The president professes to “growing the economy from the bottom up and from the middle out”. In a nutshell, Bidenomics means having the federal government intervening in the economy much more than has been done in decades in support of the middle class.
*Talking Points
–Understanding the Five Pillars of Bidenomics
-When Democrats Are in Power, Things Are Better
-US Treasury Secretary Yellen: Threats to Democracy Risk U.S. Economic Growth
*Understanding Bidenomics
[Acknowledgement: Thanks to John Bayerl for providing this explanation of Bidenomics.]
The five pillars of Bidenomics (and how they are faring):
1. Running the economy hot
2. Allowing labor unions to grow stronger
3. Reviving domestic manufacturing in key areas
4. Reining in corporate power
5. Expanding the safety net
Pillar 1. Running the economy hot
Biden’s first major economic triumph was signing the America Rescue Plan Act of 2021. It represented a $1.9 trillion economic stimulus to push the country forward after the years-long ravages of the Covid pandemic. Biden said he had learned from the early days of the Obama administration that: “the biggest risk is not going too big …it’s if we go to small”.
That one act spurred the fastest growing U.S. economy in many decades. GDP surged to 6% for the first time since the 1980’s. Unemployment rates dropped dramatically, and the number of small business creations soared. We are still reaping the fruits of that initial infusion of communal capital. When inflation began to rise steeply in the following year, skeptics like Larry Summers said that Biden had over-reached with his stimulus. But after Summers’ predicted rise in inflation over an entire year, that rate slowly but steadily started coming down.
Subsequent to the American Rescue Plan, a massive infrastructure and climate technology initiative added to the economy’s “heating”, but inflationary fires predicted by skeptics have still not yet re-ignited.
Pillar 2. Allowing labor unions to grow stronger
President Biden has publicly vowed to be “the most pro-union president in history.” Vice President Kamala Harris says that Biden immediately succeeded in fulfilling that vow with the American Rescue plan, which unleashed a surge in employment. These numbers gave Labor greater power at the bargaining table and brought about long-awaited increases in wages and benefits. Other ways that the Biden administration has strengthened organized labor are:
- Appointing staunch union allies to the Labor Department and National Labor Relations Board (NLRB)
- Tying infrastructure grants and other federal funds to companies having unionized labor
- Meeting publicly with labor leaders trying to unionize their workplaces, including Starbucks and Amazon
- Encouraging the NLRB to enforce pro-labor rulings, such as forbidding retaliatory firings, tougher penalties on firms that violate labor laws, and banning the practice of requiring all workers to attend anti-union meetings.
Pillar 3. Reviving domestic manufacturing in key areas
Biden has signed sweeping investment laws that are reviving key U.S. industries: semiconductor manufacturing, essential infrastructure, and green energy.
All of these growth areas have the potential to address the climate crisis. And the legislation has already helped to ameliorate blockages in supply chains that had restrained further growth. In fact, all the passed legislation has an additional goal of restoring essential product supply chains in the United States. This is accomplished with a mixture of new tax incentives, trade restrictions, and domestic subsidies. The Treasury Department is reporting that investment spending in U.S. manufacturing technology has exploded since Bidenomic legislation took effect.
Pillar 4. Reining in corporate power
President Biden has a core plan of muting some of the power of large corporations. This has manifested in trying to break down monopolies, in challenging large-scale corporate mergers, and in cracking down on corporations’ “junk fees”.
Biden has met opposition in Congress but has succeeded in meeting these goals via his selection of Lina Khan to lead the Federal Trade Commission. Khan has driven the FTC to be far more aggressive in blocking large corporate mergers. In fact, the number of merger notifications dropped about 40% since Ms. Khan took the helm. Business leaders seeking mergers report a “chilling effect” of the FTC’s newly found backbone.
The administration’s actions to control “junk fees” have enjoyed strong consumer support. Many of us suffer from the obtuseness of airline billing, mega-fees on credit cards, and the opaqueness of cable company fees and services.
Pillar 5. Expanding the safety net
The president’s initial “Build Back Better” initiative called for the largest expansion of social programs since the 1960s. It included generous child-care benefits, increased housing subsidies for the poor, and new dental benefits for seniors. Unfortunately, Sen. Joe Manchin refused to go along with his Democratic colleagues and prevented these large-scale initiatives from moving forward. The American Rescue Plan continued to provide Covid-era subsidies to the poor and unemployed, but those have now largely expired. Food stamp payments have plummeted, and the ranks of Medicaid recipients have dropped dramatically.
Biden has taken a number of actions to foster healthcare, including a new cap on insulin costs, a plan to lower drug costs for all Medicare recipients, and bigger subsidies for people using the Affordable Care Act’s exchanges.
The President’s initial effort to cancel student debt was blocked in the Supreme Court, but he has been more successful with some smaller-scale Department of Education loan forgiveness programs.
A key item on the progressive agenda is to restore the Child Tax Credit enacted during Covid. That law allowed many millions of American families to emerge from dire poverty. Biden is a strong supporter of it.
In summary, it’s clear that President Biden has brought about a most respectable economic program that has already reaped many benefits for citizens of all economic backgrounds. If the state of the economy is a primary indicator of strength for an incumbent, the president is in a strong position to claim the mantle of economic mastery.
(NOTE: The above text is an extractive summary by John Bayerl of an article in The Washington Post Business section by Jeff Stein — August 20, 2023; p. G5). to see the article, click here.
*Things Get Better Under Democrats.
An informative blog by Simon Rosenberg, called Hopium Chronicles, includes a very interesting series of graphs that dramatically show how the country fares so much better when the Democrats are in power. Two of his slides are shown below. It illustrates the dramatic difference in job growth between Democratic and Republican administrations.
To see more of the Hopium Chronicles, click here.
-Democracy and Rule of Law Good for US Businesses
Treasury Secretary Yellin in a speech in Arizona on May 3, 2024 makes it clear that America’s businesses and the economy do much better in a democracy that is committed to the rule of law. Her remarks serve as a reminder to business leaders of the critical role of the rule of law in enabling capitalism to flourish. This fact should be recognized by economic business leaders who may overlook Trump’s disregard for modern democratic norms because they prefer the former president’s vision of achieving growth by slashing taxes. To read her remarks that make the economic case for democracy, click here.
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