Bidenomics Unveiled

By Douglas Holtz-Eakin.

"The president is speaking in Chicago today where he will outline “Bidenomics” – putatively his signature approach to economic policy. What is Bidenomics? A White House memo from two of his top advisers and administration talking points provided some hints.

Per these previews, Bidenomics is built on the three pillars of (1) smart public-sector investment, (2) improved competition, and (3) empowering workers. More on these pillars in a bit; just know that they are supposed to have done wonderful things. For example, the president “faced an immediate economic crisis” that Bidenomics cured.

False. When the president took office, the economy was growing at a rate of 6.3 percent. It is 1.3 percent now. Unemployment had fallen from 14.7 percent in April 2020 to 6.3 percent in January 2021. The momentum on both fronts has only diminished in response to a dose of Bidenomics.

Some of the other claims are simply pathetic. The assertion that “President Biden reduced the deficit by $1.7 trillion” has been widely debunked, and earned a “bottomless Pinocchio” from the Fact Checker at The Washington Post. Houston, if your only defense of your economic policy is something already proven wrong, you have a problem.

What about the pillars? In its analysis of infrastructure legislation, the Congressional Budget Office concluded that moving $1 of investment from the private sector to $1 of government investment means giving up half of the rate of return. Is that “smart”? If you are throwing hundreds of billions of taxpayer dollars at “investments” in clean energy production, is it “smart” to impose wage standards and domestic content requirements that make these investments ever-more expensive?

On competition, the administration has orchestrated its agencies’ abandonment of the consumer welfare standard. Message to voters: We plan to regulate according to our whims, not to benefit you. Terrific. When forced to trot out some evidence, we are given an executive order on ocean shipping and finishing the Trump-initiated deregulation of hearing aids. My joy at having the Danes and Thais compete for my hearing loss is immeasurable.

I presume “empower workers” means taking away their choice to join a union or not, regulating the gig economy like a 1950s factory job, and otherwise making labor more expensive, jobs scarcer, and work flexibility a distant memory.

Bidenomics is not a set of principles or programs with an internal logic or discipline. It’s a word salad in which phraseology like “grow the economy from the middle out and the bottom up” is supposed to substitute for rising real wages and respect for individuals’ preferences.

Finally, notice that Bidenomics is fundamentally backward-looking. This is an odd feature for something that is supposed to propel a candidate to a future presidential term. Voters will want to know what he intends to do with that term. They will be less interested in an elaborate messaging effort to convince them that “I’m not really as bad as my poll numbers indicate.”

The president has been in office since January 2021. Since then, we’ve experienced declining growth, record-high inflation, and redistribution to favored constituencies. Those are the three pillars of Bidenomics."