HOW BIDENOMICS CAME TO BE
ONLY A YEAR AGO, JOE BIDEN was seen as an aging if likable establishment figure whose main claim to the U.S. presidency was that he wasn’t Donald Trump. Biden himself suggested he might be a “transitional president” rather than a transformational one: Elect me, get rid of the widely hated Trump, and then we’ll figure out how to fix our country. Or perhaps my successor will.
But that isn’t the Biden who has shown up this year—at all. In a May 27 speech at Cuyahoga Community College in Cleveland outlining his $6 trillion budget proposal, Biden talked about “creating a new paradigm”: resurrecting America’s beleaguered underclass with a combination of major education, health care, and tax proposals and a new brand of industrial policy and economic nationalism that will, eventually, propel the United States past China and other rising competitors.
If he is able to follow through on this plan—by no means a given—the president will cast onto history’s ash heap the ruling doctrine of the past 40 years: Reaganomics, or “trickledown economics,” as Biden calls it. Far from acting as a placeholder in U.S. presidential history, Biden is setting his sights high, as revealed by the name he has given his program: the “new bargain,” consciously echoing Franklin D. Roosevelt’s New Deal. Or perhaps we should call it Bidenomics.
THE TRUTH IS, BIDEN ALWAYS had big plans of his own. By the accounts of some of his closest advisors, the new president has long been a pent-up populist who spent his eight years as vice president—on top of 30 years of vying for the White House—pushing hard for a major government expansion of support for America’s long-suffering working class.
One longtime Biden aide, the economist Jared Bernstein, confirms that none of this thinking is new for the 78-year-old president: Biden has long believed U.S. global leadership is entirely dependent on U.S. economic leadership. He also believes its edge has been lost through decades of obsessive deficit reduction and government paralysis, leading to rapidly declining public investment and an undereducated middle class that is desperate for affordable housing, decent public transit, and adequate child and elder care.
“He’s enacting a set of core principles that he’s carried with him forever, at a moment that invites precisely that kind of action,” said Bernstein, who currently serves on Biden’s Council of Economic Advisers. “What he’s talking about is making necessary investments so we don’t just show up as good GDP growth and a stock market but that we are globally competitive to the point where the prosperity we’re generating is realized not only by the top 1 or 2 percent but all the way down to the lowest-income communities.”
That means correcting inequities that have festered since the Reagan era—and frankly embracing a national industrial policy for the first time in decades. “He is saying we need a different social contract,” said a senior administration official who is directly involved with developing the policy. “The private sector, by itself, isn’t going to solve the biggest challenges we face—extreme inequality and
