Why Bidenomics Gets No Love From Voters

Legislative wins on infrastructure and industrial policy are overshadowed by inflation hangover of stimulus, pandemic and war

By Greg Ip. Excerpts:

"That record, though, is overshadowed by the record of his first months in office, when his American Rescue Plan pumped $1.9 trillion of demand into a supply-constrained economy. The result was the tightest job market in memory and a surge in inflation"

"Bidenomics,” . . . is about expanding the middle class, bolstering infrastructure, and bringing manufacturing back from overseas. This doesn’t really distinguish Biden from other presidents, though."

"His early agenda was also not particularly novel. The Rescue Plan was old-fashioned Keynesian demand stimulus, notable mostly for its sheer size."

"his political strategists Anita Dunn and Mike Donilon write that Biden “faced an immediate economic crisis when he took office” in January 2021.

Actually, he didn’t. By then, the economic crisis brought on by Covid-19 was largely over, even if the health crisis wasn’t. As lockdowns were lifted and vaccines approved, businesses were furiously rehiring. Payroll growth averaged 800,000 a month over the last six months of 2020, in percentage terms the strongest such streak preceding a new president’s inauguration since 1952.

The American Rescue Plan, in other words, was designed to bolster demand in an economy that already had plenty."

"many of the benefits of that tight labor market have been negated by inflation."

"Since inflation has risen in almost every advanced country since the pandemic, Biden could logically claim it wasn’t his fault."

"But it’s logically inconsistent for Biden to disown inflation while taking credit for tight labor markets since they are mirror images of the same thing: an overheated economy."

"This newly assertive role for the federal government in shaping private investment isn’t without controversy. It is bulking up deficits, its “buy American” provisions have upset allies, and it has lowered the bar to interventions of questionable merit."