The President Falls into the ‘Bidenomics’ Trap

T he portmanteau “Bidenomics” was not meant as a compliment. The expression has been used to describe the president’s inability to understand “how the private economy works,” his hostility toward economic growth if that growth contributes to particular livelihoods he dislikes, and his rage toward the objective metrics used to gauge economic successes. Recently, the Biden White House decided to appropriate the term and turn the “insult into a strength.” Conservatives should be thrilled. President Joe Biden’s embrace of “Bidenomics” will only make it easier to hang it around the president’s neck next November.

In a Chicago speech this week, President Biden’s speechwriters wrote the stage directions into the text. “I didn’t come up with the name,” he said of the neologism that appears regularly in the Wall Street Journal and Financial Times. “I now claim it.” Having dispensed with even the pretense of subtlety, Biden launched into an effort to define his economic doctrine. In the process, he claimed for himself not just the word but all the negative connotations around it.

Biden opened with a rote denunciation of “trickle-down economics,” in which the president broadcast his misapprehension of what “trickle-down economics” means. But the president got one thing right: “Under the trickle-down economic theory was that public investment would discourage private investment,” he said. Biden waved the idea away. “Give me a break,” he sneered. That’s hardly sufficient to refute the real-world conditions his economic policies have produced.

In the first quarter of 2023, government spending increased by 4.7 percent while consumption grew by an annualized 3.7 percent — “well below estimates and driven by a worrying new record in credit card debt,” the economist Daniel Lacalle warned. Moreover, gross private domestic spending declined by 12.5 percent, and it’s not expected to recover in the second quarter. “After recent releases from the US Census Bureau and the National Association of Realtors, the nowcast of second-quarter real gross private domestic investment growth decreased from 9.7 percent to 8.6 percent,” read a release via the Atlanta Federal Reserve.

Ah, well. Moving on: Biden touted his administration’s approach to crafting a domestic industrial policy, which began with an attack on Donald Trump. He “talked a lot about increasing manufacturing,” Biden said, but “construction of manufacturing facilities here on U.S. soil grew only 2 percent on my predecessor’s watch in four years. On my watch, it’s grown nearly 100 percent in two years.”

American manufacturing has grown this year, but not in particularly sustainable ways. According to the Atlantic Council GeoEconomics Center’s analysis, U.S. manufacturing growth is attributable to an influx of investments in renewable energy technology and equipment and the zombified production of personal protective equipment (such as surgical masks and gloves) and pharmaceuticals meant to address a pandemic that is now behind us. The Atlantic Council further notes that U.S. manufacturing output has been boosted by the increase in American crude-oil exports — an achievement Biden’s speechwriters conspicuously omitted.

At this point in the speech, Biden pivoted from the hard data around Bidenomics to its philosophical principles. “I believe every American willing to work hard should be able to say where they grew up and stay where they grew up,” he contended. “That’s Bidenomics.” That’s also stasis. There is romance to living and dying in the place of one’s childhood, but it is a bizarre assumption to suggest that the public is clamoring for that — much less that the government could somehow provide it. Census data over the last two decades indicate that Americans change residences nearly twelve times over their lifetimes and once on average every five years. Does the president assume Americans do this only under duress and in response to financial hardships?

This rhetorical paean to stagnation is even odder considering Biden’s efforts to hype the tools his administration believes facilitate economic mobility. The president complained of occupational-licensing requirements imposed on those without college degrees and the cartelization of apprenticeships, which serves to bar entry into specific industries. He’s got a point there. It’s one that conservative reformers have made for years despite Democratic objections to their efforts to revise the status quo.

If Bidenomics rejects these barriers, it’s hard to see that from one of the president’s earliest executive orders rescinding a Trump-era order creating “industry-recognized apprenticeships.” Under the Trump administration’s scheme, the Labor Department would work with trade and labor organizations to design and certify industry-specific apprenticeship programs. Biden’s method scraps this model in favor of one preferred by organized labor that restores federal oversight and administration of this Roosevelt-era program.

This initiative was performed in service to Joe Biden’s goal of boosting labor-union membership, whether labor likes it or not. He remains convinced, however, that he is channeling public sentiment. “Americans’ support of unions is higher than it’s been in 60 years,” the president proclaimed glowingly. Yes, the public looks increasingly fondly on unions in the abstract. But when they are confronted with the prospect of unionization for themselves, they recoil.

Last summer, Gallup pollsters found that the public’s approval of labor unions had fully recovered from its nadir in 2010. Unions hadn’t been viewed this favorably by average Americans since 1965. But among non-union employees, only one in ten said they were “extremely interested” in unionization. Fifty-eight percent weren’t interested at all. “Interest in joining a union among nonunion members, at 20%, aligns closely with households which currently have a union member, according to Gallup (16%),” CNBC reported. Biden would like to believe that public opinion plays only a modest role in the decline of union membership to all-time lows in 2022, but that seems unlikely.

Lastly, Biden issued a perfunctory attack on fiscally reckless Republicans who are “pushing for tax cuts for large corporations and the wealthy and adding trillions of dollars to the deficit,” among other policies that “blew up the deficit.” Biden’s concerns about the ballooning deficit are about as sincere as the GOP’s.

“If current laws governing taxes and spending generally remained unchanged, the federal budget deficit would increase significantly in relation to gross domestic product (GDP) over the next 30 years,” a recent Congressional Budget Office projection warns. “In 2053, such debt would exceed any previously recorded level,” at 181 percent of GDP. The financial consequences would be dire. Borrowing costs would rise. Private investment would decline. Financial crises would last longer and grow deeper. America would hemorrhage capital as interest payments on the debt to foreign holders would become America’s largest expenditure. Contingencies in the event of an emergency would become cost prohibitive.

Biden’s speech is replete with niche appeals to those who subscribe to the progressive lifestyle brand. Beset by the myopia that accompanies wealth, he is looking out for the salt-of-the-earth folks for whom the extra costs associated with a transcontinental flight and “hotel resort fees” are a drag (though Biden declined to dwell in this speech on the excessive expense of Taylor Swift concert tickets). But these digressions only underscore the number of opportunities Biden’s speech has provided his Republican opponents.

Bidenomics gave us the “growth recession” — a condition defined by high employment coupled with sluggish economic growth. It has produced a suffocating regulatory environment, the cost of which ($617 billion annually) surpasses even the Obama administration’s expenditures. It has imposed on Americans the worst inflation in nearly a half century — a condition Biden mentioned only in passing in his speech, and then only to attribute it primarily to Russia’s war in Ukraine. Republican lawmakers couldn’t have made the case against Bidenomics better if they had tried. Indeed, if they can’t leverage Biden’s indictment of his own economic policies for all the political value they’re worth, they’re in the wrong business.