Ezra Klein On the Legacy of Bidenomics

stuff at all in the next administration. Was it just like a one or two year thing where people got excited about what I would say, policy adventurism, use this effort to expand the care economy, childcare that's sort of fizzled,

but there's still maybe interested in that. But I don't know, like, regardless of who the next president is, whether we'll see more continuation of these ideas or whether we'll go back to something that just sort of looks more like, I don't know, something people would call normal.

less informed on the election than I should be. But some of this stuff, what we call Bidenomics, IRA, the chips, ACKed, et cetera. Is this important to U Kamala Harris? Is this part of something that she talks about and sort of conveys on the trail.

been highly attracted to across her career. So in a way that is a little bit unusual if you have been involved in Democratic Party politics for a long time. She is coming in without being highly associated with one or the other schools of thought. She's obviously been in the Biden administration, but whereas Biden had incredibly clear economic lanes and ideas in the Obama administration. It's worth remembering that he brought on Jared Bernstein as his chief economist,

which was an unusual move. And Bernstein, who is of course now on the Council of Economic Advisors, but he was understood then as a quite heterodox economist, somebody who is holding like the left flank of that against you know, Larry Summers and Jason Furman and Peter Orzag and so Biden was sort of associated with this more trade skeptical, you know, lunch pale economics, and Harris isn't really she's not associated with like the theories of the Inflation Production Act,

although there's no reason to think she doesn't support them, not highly associated with like the Chips and Science Act, the sense of what moves her is not that well known. Now. One thing she has brought to the ticket, which we had not heard before, is a real central focus, at least rhetorically on housing supply, which makes sense. She's a San Francisco politician, the sort of Yimbi movement and the

Democratic Party has gotten a lot bigger. The sense that housing is the price right at a time when the inflation rate has come down that you could really target, and that it's at the center of a lot of policy pathology in the country. I think that's real. So she's bringing that. But yeah, the sense of she's not running as like the inheritor of the industrial policy legacy.

committed she is to it. So, when Harris was in the Senate, her big economic proposal was a significantly expanded child tax credit, which she goes sponsored along with Senator Michael Bennett, Senator Corey Booker. There were others on that bill as well, and I think that some of her

economic thinking reflects sort of where Democrats were then. Right, The opportunity economy is, I think closer in the way it gets talked about to this sort of anti inequality push, the sense to it that we should have bigger cash transfer to young fanse Right, she's talked about having a six thousand dollars credit in the first year of a child's life. But I don't find the opportunity economy. I've read her speeches, I've read her eighty page policy book

is something I can get my arms around. Every politician says a support opportunity, so it doesn't quite tell you what she doesn't support. Right, The key question with all these people is which fights are you willing to pick? So when Biden comes in in twenty twenty one, his team is telling me they're saying publicly, we are going to be the full employment presidency. Right. This is Jared Bernstein had co written a book with Steen Baker about

full employment. They're going to run the economy hot. They are going to spend They're going to make sure that the wage gains we've been seeing for some years reach the workers who they need to reach. That's true. You know, even as they're dealing with the pandemic, they are going to make sure that they don't undershoot on stimulus. Right.

This is a team very much forged by the Obama era, to some gree the Trump era, in which the problem was too little demand and the problem was that even growth was not lasting for long enough to reach more marginalized workers who weren't seeing you know, low income wage gains, wage gains for black and Hispanic workers. So they come in very clear on which mistakes they are not going

to make. They are willing to run the economy hot with the risks that that might entail, which I end up coming true, in order to not see the kind of weak recovery that we've seen before. I would like to know that answer for Harris and her team. Harris and her advisors not to say that we have to know it this second, because it is a really unusual thing to have to create a national presidential campaign from

a standing start. But the opportunity economy thing, it doesn't answer that question for me, who is Harrison not going to be Which factions is she not aligning with in the way that the Biden folks were not aligning with, like the Larry Summers faction of the Democratic Party. That question is open.

he views the economy. But it's a little bit of an incomplete story because so even though I lumped the Chips Act into it, that was a bipartisan thing, and there was interest in doing something on semiconductors before Biden even came into office, I believe. And then you know, you mentioned the Trump Eureau, which if we're talking about some sort of turn or rethink on trade. I mean it clearly started more under Trump than Biden. Why now,

like how much of it was? Like this is what Biden is into, This is what Biden and his advisors are into, versus there is some moment happening in the US economy or US society that created this political impulse to push in new ways.

a democratic party becomes really really important. Then there's a question also of what kind of institutional power structure they're

going to face. Right, if it's Kamala Harris and our Republican House and our Republican Senate, well, where the center of the Democratic party is then matters actually less than what, if anything, is in the Venn diagram between Kamala Harris and Mike Johnson, and all of those are very just different conditions which we should talk about and think about differently. But I do agree strongly with something you're agenna, Joe, which is there is a shift in the technonic plates

of economic policy, of policy broadly. So I'm very influenced by this historian named Gary Gristal. He wrote a great book called The Rise and Fall of the Neoliberal Order. Before that, he was known for working on the Rise and Fall of the New Deal Order. And he's got this whole idea about orders, orders being these structuring agreements between the two parties, the shape what is taken for granted in American politics and policy and what is not.

So he sort of describes this New Deal Order, which is not just the new deals we think about it under FDR, but it lasts from like nineteen thirty ish, you know, when FDR comes in thirty two, to the nineteen seventies when it sort of dies under stagflation and

the Vietnam War. But the New Deal Order is very importantly concretized when Dwight Eisenhower takes control of the Republican Party, not Robert Taft, and Eisenhower brings a new Deal into something Republicans now support too, in order to fend off the Soviet Union. They neither sort of neoliberal order, you know, we think of Ronald Reagan and then later Bill Clinton.

With the era of big government is over. There's a lot of deregulation, a lot of support of free trade, a lot of talk about governmental inefficiency, moving to markets, moving towards outsourcing, much more focus on the individual, and that order sort of dies amidst the financial crisis. And I do think Trump is a disruptive force who creates some of the shape of an order that is emerging, but we don't know which party will control it or exactly what its structurre will be. But it's clearly feels

very differently about manufacturing and production. I think in the way that those two orders were both related, first to the power of the Soviet Union in the New Deal order, and then it's weakening in its fall in the neoliberal order. I think China is the great pressure on our politics and has been for some time. Trump talks about that very explicitly, But it is surprising then that Biden comes in and doesn't revert to where Barack Obama was on China.

Biden goes further than Donald Trump. He goes further than Donald Trump on gating technologies. He adds on more tariffs, he keeps the Trump tariffs, and he uses China as a spur of passings like the Bipartisan Infrastructure Bill the Chips and Science Act, which are both very explicitly framed as bills to help American compete with China in terms of infrastructure and scientific development and semiconductor manufacturing. And of course the IRA has a lot of bi American and

on shoring provisions. So I think China is a big part of this. I think that there is a growing sense that there are critical technologies like we just simply need to make here, or at least have our friends make.

I think inflation and the broader affordability crisis heavily created a sense that whatever was going on before, we were good at making the price of consumer goods cheap, but actually not good at making the fundamentals of a life cheap right healthcare and education and home elder care, things like that. And so there's something happening, right. It's Trump, it's Biden, it's Harris, it's both coalitions. You know, they're fighting over it. They don't have the same view of it.

But it's just a wild thing to me to watch, you know, Donald Trump running saying he, you know, helps save the Affordable Care Act, Right, Like, the locuses of polarization are different. Now. We are polarized over the system itself, right, elections, democracy,

the freedom of the press kind of thing. But there's actually a huge amount of ferment and confusion and uncertainty about the policy consensus and like what is in and outside of the things members of Congress might agree on or negotiate over.

very important. But if you go back a few years before that, you can just find members of Congress and members with politically talking constantly about how our system is gridlocked and it's a photocracy and we don't get anything done and we can't build anything, and look at our shitty airports, while over there in China, look how fast we're moving, Look how much they're doing, Look how big they're great. Their infrastructure is like, Look how effectively they're

building their manufacturing capabilities. Look how competent their government seems. We don't talk about it in exactly those terms, but I have come to believe, and you know, I was on the show before to talk about abundance in this sort of move towards ideas about building in American politics.

I think I'm part of this too, that I think that there's been a real pressure on people in American politics to think about what does it mean that America has gotten so bad at building, at building public infrastructure, at building homes, at building mass transit, at you know, manufacturing critical things. And that comes from the pressure of Chinese competition, right, not just Chinese sort of where it's

moved to the slightly darker form of competition. But be even before that, this sense that we seem to be able to innovate but not build, and they seem to be able to build. I think John Arno will put it this way, but not necessarily innovate, and you actually need both.

complicates the politics of that. And then furthermore, there is what I would call maybe like a conservative or Republican or right wing industrial strategy. There's obviously the China antagonism, maybe much more explicitly about defense, tech, et cetera. But how would you characterize how some of these things morph during a Trump administration.

an immense sense that he can be moved and shaped right, that the competition going on behind him to wield governing power in his administration is immense. I just had vivig Ramaswami on the show, and I was so struck by him really trying to push Trump and why I call more traditionally conservative direction, right, you know, don't try to take over the administrative state, try to get rid of it, shutter these agencies. And he really sees Elon Musk as an ally in that effort, so you can call it.

There's like this JD. Vance wing that is more national populace. And then all of a sudden, here's like Elon Musk and these like right wing billionaires and they have Trump's here, and maybe what they want is something a little bit more in between. In many ways, it looks more like what other Republicans were doing with a much more nationalistic edge. You know, whenever I talk to people about Trump's tariffs, they say, has proposed the you know, universal Tarriffy like, Oh,

He's not going to do that. Trump's a negotiator, right, He's just saying that to get maximal leverage in order to run a really good negotiation. I mean, maybe maybe not. You know, Project twenty twenty five is an internally contradictory document, and then there are other documents floating around like it that are contradictory to that. You know, Mike Johnson's just said he would repeal Obamacare. I think that's probably unlikely, But the idea that they might pull money out of

the IRA, it doesn't seem unlikely to me. There's going to be a huge tax cliff everybody's going to have to deal with in twenty twenty five, as you know, trillions of dollars of Trump tax cuts come ready to expire, and particularly if Democrats have any amount of power, there's going to have to be a lot of negotiation with them about what you do about that. It feels to me like, at this point we should be able to

say better what Donald Trump will do. And I tend to just take the guy at his word on his policies and talk about the tariffs and what their effect on the economy would be. But I will say that if you're taking his movement on its own terms, that

is not how it is spoken about or treated. It is spoken about like almost like it's a parliamentary system, right like Trump will have to form a government and inside the government will be different coalitional partners and they will vy for influence and then eventually we will see what the king does and like that almost more. Maybe it's not parliamentary, maybe it's a monarchy model is much more how everybody over there is acting.

the best one. It turns out that Americans really care about inflation more than whether or not their neighbors have jobs. Can you talk to us about that, like, why isn't it resonating more?

part of that campaign is trailing at Romney. What happens over the course of that campaign when unemployment is quite high by the way, I mean, it's above eight percent

for much of that period. What happens in that campaign is that Obama and his team and Bill Clinton at the DNC convention are able to sell the Obama economic record, tell a story about it then, even though the commomy wasn't looking that good yet, was a story of recovery, a story of all that we did and averted, And that storytelling worked Biden just was not able to storytell I mean not during his presidency, I would say, and

very much not during his campaign. And so the question of what would have happened if someone had really tried to make the case for Bidenomics, really tried to use the artillery of a presidential campaign, the money, the surrogates, the convention to make that case is hard to know. Obviously, biden ends up stepping aside a party Knight's friend Kamala Harris, and Harris I think in a way that is wise, but is the lower risk path. Also does not try to sell Bidenomics right, does not come in and try

to turn around where people are on this right. She talks about what she is going to do to lower prices.

She talks about how much oil and gas it has been produced, but she doesn't try to make a giant argument about how Bidenomics has set the structure for not an infrastructure weak but an infrastructure decade or multi decade project, and how we are going to be building factories at this wild pace, and on and on and on and we are just at the beginning, and how much Bidenomics invested in innovation, and how we are trying to have

these industries of the future here, like Bidenomics. I mean, if somebody's writing a book that's very much about the need for liberalism built around building and invention, Bidenomics is very much built around building an invention. I have my places where I wish it to have gone further, or I don't think it's doing enough to confront what actually makes it so hard to build an invent in America. You know, permitting reform and procurement reform, and you know,

paperwork and bureaucracy and so on. But at its core, it is really like we're going to make things in the real world, and then the things we need that we don't yet have, like green hydrogen, we're going to pump a bunch of money into inventing them, and that's going to be the basis of the next generation of economic prosperity. That is not a story Harris has tried to tell. Harris has tried to run much more the

way a sort of generic Democrat would. She is not wanted and I think again there's probably a lot of political wisdom in this, but she's not wanted to try to run as the defender of the biden record. She's wanted to the extent she can without seeming disloyal. Run is something new because people are not very happy with the Biden record, and she is not herself Joe Biden, so she's not actually yoked to it in the way he is.

Biden is particularly popular even among union members. Maybe some maybe in the counterfactual whatever, certainly not. You know, this is that big crisis of the Democratic Party, the white working class, et cetera. Is the theory of the case wrong? Is the theory that if Biden stands on the picket lines and does a bunch of stuff to build factory like that, that will improve the Democrats standing among the

white working class? Was that never the theory? Is that just something that was never actually part of the political calculus. Is it just about politics? Like, what do you see as going on there?

to the union. Right, we did the thing you wanted us to do, like, gave your puncher plants a big help in hand, and the team stress didn't endorse him. Part of the loss of the working class for Democrats. I think democrats always want the loss of the working class,

the white working class, to be about economic materialism. The answer Democrats want to hear on that, because it is the answer they would most like to respond to, is that you're using these voters because you have strayed too far from a more progressive Fire and Brimstone class war economics, and I'm not telling you that's not part of it. It very well maybe, but it doesn't fit the story

as we're seeing it very well. I mean, Biden, by the way, it's way to the left of Bill Clinton, who did way better with the white working class, and Joe Biden is Biden is way the left of Michael Ducaucus, who also did better among the white working class than Joe Biden has. And you know, the class realignment or de alignment in this country, it has a lot to do with culture. It has a lot to do with senses of who belongs and who doesn't, with views people

have on immigration, views that they have on religion. Right, you know, identity is very complex, and we are, at sort of all level still a much more post materialist society than the left often wishes. At least our politics was because honestly, if the politics could just be reduced down to who is going to do better for the working class in terms of you know, who's going to get the tax credits and the tax rebates, and who's going to get healthcare? And you know, who is going

to stand up to big corporations. The Democrats have a really, really, really good argument, right. I mean, people can always say they should move further left, but man, they are really quite a bit further left than they were a couple of years ago, and quite a bit further left than the Republicans are. But if you look around, it just doesn't actually seem to track that. So maybe you should do all those things because they are good things to do.

what's currently waging in Gaza now in seven Lebanon. There's so much going on in the world that the question of how the Biden administration is doing their green subsidies just doesn't strike me as something that.

the alliances. I just don't buy that the industrial policy is just that big of a story of bidenministration foreign policy. Now. The China stuff, I think is the China side of things to me is I don't want to call it the It's obviously not an uncovered story. But if you ask me what has surprised me most about the Biden administration, it has been how hawkish and competitive with China they've been,

how they went further than Donald Trump. They did things he did not, do things he really, in many ways didn't even imagine doing. When you listen to speeches and people like Jake Sullivan have given right, there's a real sense that the old model failed and that this all needed to be rethought, and that they are out there rethinking it, right, I mean, and they've been willing to do this even when it does I think have real

conflict with other goals in their agenda. On the one hand, they want to have a rapid transition to electric vehicles. You can't hit our climate goals if you don't. On the other hand, they've put a what is it, one hundred percent tariff on Chinese electric vehicles even though they're cheaper and they're good cars, and you can bring them in and accelerate the pace of the EV transition. So that's a place where they have found the competition with China.

Trump's something they have often spoken of as a very very high priority, which is the decarbonization and clean energy transition. So what they've done on China to me, and the way that they have taken what Trump began almost intuitively and made it into a structured policy that has to sign off not just of the Republican Party under Donald Trump, but the Democratic Party under Joe Biden. That feels like a very big shift that will have very far reaching consequences.

paid family leave, universal childcare of some sort. They're big deals, particularly well for a lot of people, but also for a lot of influential people in the Democratic Party specifically. What was the constraint? I mean, I've seen things that like, oh, there are all these different groups involved and they couldn't coordinate. Some people say it was just like the legislation was sort of bad and unworkable. Maybe it was just the money. Why didn't the care economy part make it in in

your view? And is that something that would do think likely to come up next the next time the political stars align in DC.

this to death. It didn't pass because they didn't have the votes, and they'd ended the votes because they had a fifty to fifty Senate split, and very importantly, Joe Manchin was not on board, right, and that was not his priority, And in a way in the end, I think it wasn't exactly there is at least compared to climate right, and in terms of what the Democratic Coalition ranked higher, the climate investments were more pressing to them

than the care economy side. Now, if Joe Manchin had said yes, could they have got in Kristen Cinema, maybe right? I mean you could maybe name like one or two or three members of the Senate who would have at least shaved that down. But I think think they could have gotten something out of the care economy package if Joe Manchin had been more open to it. Right, maybe not everything, but something, so they didn't have the juice and the Senate to pass that. I mean, I actually

think it's really as simple as that. Now, if Manchin had said, I'm open to this, but this bill, and this was a period of the negotiations were like this, and I'd have to go back and look at what made it into this version of it. But I don't remember how big the original build back better was. But there's a period where it looked like Mansion might do

one point eight trillion, or maybe it's one point two trillion. Right, there were different There was a lot of different things floated, and it was like how much of the climate investments could you keep in? How much of the care economy

work could you keep in? And a lot of different menus were offered, and depending on what the constraint from the Senate had been, you could imagine different menus having been proposed, and then the question of how you choose and like how you like have the deal with the disappointment of some of the groups inside that coalition, that would become very salient. But in the end, Mansion was a no on the care economy and that's what killed it.

If it's Harris, I think it is locked in, and I think you should expect that a Harris administration will be stocked with many of the same people in the Biden administration. I think that if you imagine who might have been appointed in Abiden's second term, I don't think those appointments will look very different than the ones Harris

will make. Not shown, as far as I can tell, any actual clear signal that she thinks that the appointments or the ideological direction on this set of issues should be radically different than where it's been in the Biden Harris administration. You know, she's known to have a very good relationship with Janet Yellen. If you look at who's been coming in to sort of help create her economic policy it's people like Brian Deese and Mike Pyle, who

are key members of the Biden team. If you look at the sort of people who seem to be advising her, it's all the same people. If you look at the sort of signal she's sending about what she wants to do, it's very largely similar things. Biden is a very coalitional politician. He had his own views, but he was also governing from the center of the Democratic Coalition. Harris is also

a very coalitional politician. I think one of the things we don't know about her, and the different people I think are jocking to try to define about her, is what her relationship will be with some of the more left groups and figures who wielded more power in the Biden administration than people expected them to, which is one reason, by the way, that when there was all this pressure on Biden to step aside, he was backed up and reinforced by Bernie Sanders, by AOC and members of the

squad like That was very surprising that that was who was rallying for Biden, but in a way it wasn't because they'd actually been enormously favored in terms of the Biden administration right, and in terms of the kinds of people you appointed, were very much in the sort of Elizabeth Warren wing of the party. Biden had a very friendly relationship with the left and he gave them a lot of power. It's the coalitional government he actually on

economic policy ran. Nobody quite knows where Harris will be on that. On the one hand, when she ran in twenty twenty, she was terrible at saying no to the groups and she ended up taking all kinds of positions that she's had to back off from in this campaign. On the other hand, in this campaign, she's backed off from positions like banning fracking or defunding the police, with absolutely no ill effects in terms of her political coalition

as far as anybody can tell. And so the sense that you know, and she seems to be friendlier maybe the business community than Biden was to me, it's very hard to know how all that will net out, and she's actually gonna have to make these decisions, which right now I think the entire Democratic Party is giving her a pretty big pass on positioning in order to beat

Donald Trump. But you know, you could see her either being a little bit more kind of pro business and a little bit less like in this relationship with Sade the Bernie Sanders wing of the party than Biden was. You could see her governing in the exact same way, and you could also imagine really that it's like what Chuck Schumer thinks to be the center of economic policy and the Democratic Party is ultimately what matters here. Those all seem like very plausible outcomes to me.

Trump disavout it. There are a lot of organizations that would like to be the mouthpiece for whatever trump Ist economics are, and I think it's still highly tbd who actually gets that, and so you know the.

twenty four. You know, we can talk about Biden onmics, but there was also some other shift happening right now. That makes sort of electoral analysis a little bit unclean in terms of, oh, there's going to be a pivot every four years.

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