What, Exactly, Is Bidenomics?
Over the last several months a new term has entered our political vocabulary: Bidenomics. Like most labels in the content-free, rage-led era in which we live, it’s become ubiquitous without ever really being defined.
How Bidenomics Is Perceived
To hear the Administration and its fervent supporters describe it, Bidenomics is all about the recent economic successes with the current fellow at the helm. To the extent there are mentions of an agenda, it’s all about an “economy from the middle out and the bottom up, not the top down.” Otherwise, they just slap the label on their previously enacted policies (such as the various items in the Inflation Reduction Act). Ironically, Republicans basically agree with Democrats on what Bidenomics is; they simply use the definition to lay blame for all inflation since January 2021 at his feet (The Hill).
Romney noted that inflation has been significant since Biden took office in January 2021, pointing out that “people are paying almost 20 percent more for goods than they were paying before President Biden became president.”
This was why Republicans used “Bidenomics” a lot more than Democrats … until this year (same link).
Republican lawmakers have made inflation and the economy their top attack against President Biden, but recent reports showing that annual inflation has dropped to 3 percent is forcing them to rethink their political strategy.
The economy is suddenly showing signs of being not a weakness but a strength for Biden and Democrats as inflation falls to a third of its peak and unemployment stands at a near-record low of 3.6 percent.
With a record like that, one can see why Democrats are happy with the label.
Neither party, however, is very good at describing what Bidenomics actually includes. There’s a good reason for that. Behind the name and the gloating, we find a mish-mash of pre-Reagan assumptions and Trumpist policies. Odds are, neither party is willing to admit just how close Trump and Biden are on economic matters.
What Bidenomics Actually Is
In point of fact, much of Trump’s economic plans remain intact in the Biden Administration. Many of the tariffs Trump imposed remain in place. We are still outside of the Trans-Pacific Partnership. Trump’s restrictions on immigration have largely survived. Here, the Trump GOP moved away from its freer trade traditions and closer to the Democrats’ historical protectionism. Thus, there is no surprise that Biden largely left these alone.
On government spending, Republicans largely gave up trying to keep that in line during the Trump Administration, especially during COVID. As a share of GDP, Biden’s has actually lowered government spending since he took office (The Fed). He doesn’t want credit for that. In theory, the House GOP would steer their presidential nominee towards their apparent preference for smaller government. In reality, Trump will shift them back to big government spenders. Again, Biden is mainly following normal Democratic history here.
There has been a shift regarding anti-trust. Biden is far more skeptical of big business than several of his predecessors. His anti-trust policy is a shift backward to a pre-Reagan (and I would say, pre-Carter) preference for smaller firms. If this sticks, it could have dramatic implications going forward.
What The Alternative Actually Is
If this were 1983, or even 1993, Bidenomics would be roundly condemned as old-style Keynesian thinking. Luckily for Biden, it’s neither year, but rather 2023 – and in this year, the Republican or “conservative” alternative is nothing like the supply-side arguments of the late 20th century. Instead, it’s whatever Donald Trump or Insert-culture-warrior-here want to do.
Neither Trump nor his would-be slayer Ron DeSantis are willing to keep government from interfering with business activity. Trump was even willing to block mergers of firms he didn’t like (CNN). Neither Trump nor Biden have any concern for the size of the federal government at all. Nor do they differ on international trade.
The one difference between the two, in theory, is on taxation. But even here, Trump’s tax reductions of 2017 are largely Keynesian in character, due to their expiration dates. Trump has no interest in real supply-side reforms. In fact, when he did opine on politics during the supply-side zenith (the 1980s and early 1990s), he usually spoke out against them.
What Does the Future Hold?
So far, Biden has been rather fortunate. The supply-chain problems that spurred inflation are fading. The Fed has finally been able to normalize interest rates from their Great Recession lows. An actual recession has been avoided. The war in Ukraine has, if anything, accelerated America’s transition to an energy net exporter (EIA), greatly reducing the chance of an energy-based supply shock in the future.
His biggest political advantage on the economy, however, has been the Republican reversal from its Reagan-era policies. In short, they are all Keynesians once more. So long as the choice remains an authoritarian Keynesian versus a democratic one, it’s not really a choice at all.