President Biden has defined “Bidenomics” as encompassing almost everything good in the U.S. economy — falling unemployment, robust wage growth, new small business creation. And he’s planning to make the concept central to his bid for a second term.
“Bidenomics is just another way of saying, ‘Restore the American Dream,’” the president said in a recent address.
Republicans have defined the term in the almost the exact opposite way. Former president Donald Trump has called Bidenomics “total economic surrender to China and other foreign countries.” House Speaker Kevin McCarthy (R-Calif.) calls it “blind faith in government spending and regulations.”
Beyond the partisan talking points, how has “Bidenomics” changed the U.S. economy?
Since taking office, the president has pushed through dozens of changes and personnel appointments that have upended everything from how workers unionize to how large corporations merge. Biden and his aides have sought to revive domestic manufacturing through a clean energy boom, while also trying — with mixed success — to expand the federal safety net.
Biden’s advisers say the president wants an attempt to move beyond the “trickle-down economics” that defined the last four decades in Washington. Biden frequently says past administrations focused on tax breaks for rich people and corporations, but that he aims instead for “growing the economy from the bottom up and middle out.”
The underlying idea is that new government investment “crowds in” additional investments from private companies, a break from past belief that constraining the public sector would free the private sector to grow more. The result is a federal government that intervenes directly much more than it’s done in decades — to boost unions, block corporate monopolies, and spur economic and industrial growth, among other goals.
“The idea of trickle-down [economics] is if the public sector stops investing — if it just disinvests in our public infrastructure — the private sector will come in and make up the difference,” Jared Bernstein, the chair of the White House Council of Economic Advisers, told Washington Post Live last month. “Joe Biden knows that’s always been wrong, and that, in fact, it’s backward.”
Republicans see “Bidenomics” not as a coherent doctrine, but a collection of sometimes contradictory policies designed to please various interest groups in the Democratic coalition. Critics in both parties have blamed Biden’s attempts to spur growth for exacerbating the highest inflation rates in four decades, and courts have repeatedly blocked his attempts to increase competition among corporate giants. Even to his allies, the execution of Biden’s overarching vision has been, at times, uneven and incomplete.
“Bidenomics is much less a coherent approach to economic policy and much more a grab bag of subsidies designed to advance key interests of the Democratic Party coalition,” said Michael Strain, an economist at the American Enterprise Institute, a center-right think tank.
Here are five key parts of Bidenomics — and how they’ve fared over the president’s first two years in office.
Run the economy hot
Biden’s first major economic act was to sign the American Rescue Plan, a $1.9 trillion stimulus aimed at pushing past the recession caused by the pandemic. Determined to avoid the sluggish growth that characterized the recovery from the Great Recession under President Barack Obama, Biden argued that “the biggest risk is not going too big … it’s if we go too small.”
The result, in part, was the fastest-growing economy in decades. The nation’s gross domestic product surged by roughly 6 percent — a level not seen since the 1980s — as the unemployment rate plummeted and the number of new small businesses soared. The president is fond of emphasizing that the United States has had the fastest recovery among the Group of Seven industrialized Western economies, which he and many economists attribute to the rescue plan. And growth has powered on for two years, including 2023 so far.
But economists are still debating how the rescue plan contributed to inflation. Price increases have proven perhaps Biden’s central political liability, even though Russia’s invasion of Ukraine and supply chain snarls — two factors largely beyond the president’s control — exacerbated the crisis. And although inflation has eased recently, voters still rank it as a top concern.
