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--:-- Noel King: It's the rare political ad that becomes canon. Reagan's Morning in America, LBJ's Daisy. This week, the Biden campaign came close. It released this ad about Bidenomics, featuring Biden emesis Marjorie Taylor Greene.
--:-- Noel King: Joe Biden had the largest public investment in social infrastructure and environmental programs that is actually finishing what FDR started that LBJ... Appearing to praise him. Programs to address education, medical care, urban problems, rural poverty, transportation, Medicare, Medicaid, labor unions. Her words. She was actually criticizing Biden's big spending, part of his plan to remake the American economy.
--:-- Noel King: Bidenomics is about building an economy from the middle out the bottom up, not the top down. Huh. Marjorie said it better, I think.
--:-- Noel King: On Today Explained, everybody, including us, is talking Bidenomics. Support for Today Explained comes from Saks Fifth Avenue. Fall is here. Might be time to find some nice new pieces you can wear again and again.
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--:-- Noel King: It's Today Explained. Jeff Stein is the White House economics reporter for The Washington Post.
--:-- Jeff Stein: In this job, I've watched as the Biden administration tries to remake the American economy. But also, I think there's a lot of confusion over what Bidenomics is.
--:-- Jeff Stein: It's become this kind of impenetrable term that means everything good and everything bad, and people have lost sight of, like, what actually is going on here?
--:-- Jeff Stein: What the administration will say, and I think there's something to this, is that for the last really 30, 40 years in American economic policy, there's been a really heavy emphasis on consumers and reducing costs for consumers.
--:-- Jeff Stein: And sometimes you hear this talked about as the neoliberal era, the era of free markets, and what the Biden people are focused on and what Biden himself is focused on has been kind of expanding the definition of what the economy needs to address to include workers, to include the manufacturing sector, to include certain sectors and key industries.
--:-- Jeff Stein: I knew we couldn't go back to the same failed policies when I ran. So I came into office determined to change the economic direction of this country, to move from trickle-down economics to what everyone on Wall Street Journal and Financial Times began to call Bidenomics.
--:-- Jeff Stein: We are seeing really across several different dimensions, the Biden administration tried to really revolutionize economic policy and the way the federal government interacts with key parts of the American economy by sort of expanding the focus of the government to not just be about reducing prices and benefiting the consumer.
--:-- Jeff Stein: Biden economics means the industries of the future are going to grow right here at home. At home. I mean it. Not a joke.
--:-- Jeff Stein: This isn't an official White House position, but my observation is that there's really four key areas where Biden has revolutionized policy. Antitrust policy, fiscal policy, industrial policy, and labor policy.
--:-- Jeff Stein: Let's walk through those one by one. Antitrust policy. What's the revolutionizing being done there?
--:-- Jeff Stein: Well, although it's a semi-autonomous agency that doesn't take direct instructions from the White House, Biden has appointed to the Federal Trade Commission a young woman named Lena Kahn, who's 34, and she has done really a sea change in the administration of that department.
--:-- Jeff Stein: Over the past 24 months, the FTC has moved to challenge major transactions that would have eroded competition in critical sectors of the economy.
--:-- Jeff Stein: Her view, which reflects that of Biden, is that the American economy is far too concentrated in the hands of a few companies, that some sectors in particular have become monopolistic, and that a new era of antitrust enforcement is necessary to increase competition, to give small businesses a better chance, and to reduce sort of the arbitrage effects from a company that can control, you know, many parts of its supply chain, for instance.
--:-- Jeff Stein: Last year, the FTC and a bipartisan coalition of 10 state attorneys general charged the two largest pesticide manufacturers with unlawful schemes that prevented farmers from having access to cheaper products, costing them billions of dollars.
--:-- Jeff Stein: That effort, you know, has been uneven at times. Lena Kahn has lost several big lawsuits seeking to block mergers.
--:-- Jeff Stein: U.S. appeals court has rejected the Federal Trade Commission's request to pause that deal between Microsoft and Activision from happening.
--:-- Jeff Stein: But I think at a minimum, what people in corporate America will tell you is that companies are much less eager to file for consolidation for mergers.
--:-- Jeff Stein: And so you're seeing really for the first time in decades, aggressive federal action to rein in the trust, as you might remember from high school with Teddy Roosevelt and the big stick.
--:-- Jeff Stein: The dull, purblind folly of the rich, their greed and arrogance and corruption have produced a very unhealthy condition, Roosevelt wrote.
--:-- Jeff Stein: What about fiscal policy? This has been a really big change from Democrats under the Obama administration.
--:-- Jeff Stein: President Biden when he came to office was very worried about sort of reliving the experience that characterized the economy during Obama when there wasn't enough economic demand.
--:-- Jeff Stein: Unemployment was high. The economy was kind of slow and that was a real millstone for the Obama administration.
--:-- Jeff Stein: President Barack Obama says he knows the top question on voters' minds this election year is why has the economic recovery been so painfully slow.
--:-- Jeff Stein: People are saying, what have you done? What Biden did instead was approve a nearly $2 trillion economic stimulus that I think by all accounts, even though people close to the administration was probably on the big side, but they would say, even its defenders, even people who would acknowledge, yeah, maybe it was a little big, would say it was necessary to make sure that the economy ran so hot that workers would be in demand, that they could use their leverage from all the economic demand to bargain higher wages, to bargain better working conditions.
--:-- Jeff Stein: If we invest now boldly, smartly, and with unwavering focus on American workers and families, we will strengthen our economy, reduce inequity, and put our nation's long-term finances on the most sustainable course.
--:-- Jeff Stein: What about industrial policy? This is something that American presidents have to focus on. What's Biden doing different? What's the anomics here?
--:-- Jeff Stein: Yeah, so obviously climate change has been a key thing that Democrats have wanted to address for at least a decade.
--:-- Jeff Stein: And there were lots of ways that the administration could have tackled that. One idea would be to sort of tax carbon and make it more expensive to use products that contribute to global warming.
--:-- Jeff Stein: What the Biden administration did instead was try to stand up a clean energy manufacturing sector, try to create this new trillion-dollar industry that will basically make it so clean energy is so cheap that it's exciting, that it's profitable, I should say, for consumers and companies to make the jump to clean energy.
--:-- Jeff Stein: Up until about nine, 10 months ago, Europe was considered the overwhelming leader in climate action. China, a little bit to some extent, and the U.S., a distant third.
--:-- Jeff Stein: This has propelled us to the top of the list. That has been sort of the Biden administration's approach to a bunch of areas, including the shortage in semiconductors we've seen and the infrastructure that's decaying across the country.
--:-- Jeff Stein: We've seen you know over the last 40 years the the decline in manufacturing jobs a lot of those jobs go overseas and many economists think that that is sort of the appropriate evolution of developed capitalistic high-income economy and Biden with the backing of of sort of more liberal economists has said no like that is not an immutable force of nature we can actually reverse that we can use government policy to shield with protective tariffs and with government subsidies, industries that are critical to national security and will bring critical benefits to particular parts of the Midwest and parts of the industrial heartland that have been left behind by the outsourcing of those jobs.
--:-- Jeff Stein: And so it's a really different vision of economic growth to say, we're not going to just let the chips fall where they may, which I think a lot of people will legitimately say has led to, you know, the concentration of capital on the coast, the growth of the finance industry, you know, California, New York doing fine, but Ohio not.
--:-- Jeff Stein: And Biden has really tried to say we will use government intervention and taxpayer money to reverse that trend.
--:-- Jeff Stein: And what about the policy area that affects us all? What about labor policy? You know, Biden had a really far-reaching agenda on labor.
--:-- Jeff Stein: Most of it has been stymied by opposition from Joe Manchin and congressional Republicans.
--:-- Jeff Stein: But I think there's, you know, real evidence that they are doing some things that are working.
--:-- Jeff Stein: I mean, the number of workers in a union in this country has steadily declined.
--:-- Jeff Stein: The administration has been determined to reverse that number.
--:-- Jeff Stein: So far, those efforts really, we have not seen proof that that's working.
--:-- Jeff Stein: But we're seeing a lot of evidence of new labor unrest, in part because of the fiscal policy that's given workers more bargaining authority, and in part because Biden has appointed real, I think it's fair to say, allies of the labor unions to run the national labor relations board, which is sort of in charge of adjudicating disputes between labor and businesses.
--:-- Jeff Stein: And that government agency, which Biden really changed, has been instrumental in increasing policing of corporate malfeasance of workers and child labor and encouraging the union efforts we're seeing in Starbucks and Amazon.
--:-- Jeff Stein: The choice to join a union belongs to workers alone.
--:-- Jeff Stein: And by the way, By the way, Amazon, here we come.
--:-- Jeff Stein: Those efforts haven't really led to a macro change in the position of workers, but it's not, I think it's fair to say, from want of trying.
--:-- Noel King: What does the economy look like if Bidenomics is working well at the end of a second Biden administration? Let's say Biden wins. Are we talking about a real reshaping of the American economy?
--:-- Jeff Stein: I think, you know, the president's vision for the economy is one in which far more workers are unionized, far more workers are able to get jobs in high-skill manufacturing for higher pay, a world in which there's much more competition in the corporate sector between large companies and where unemployment stays low and inflation stays low.
--:-- Jeff Stein: So that said, there's been a lot of headwinds to achieving this world.
--:-- Jeff Stein: And I think we're seeing the difficulty in real time of bringing about this transformation without accidentally causing other problems in the economy that create big political problems for the administration.
--:-- Noel King: Coming up, by the numbers, the American economy is pretty good. So why does everyone feel so bad about it? Plus, Jeff Stein accidentally talks his way into a class war?
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--:-- Noel King: Explained. 2024 Explained. It's Today Explained. I'm Noelle King.
--:-- Noel King: Depending on where you sit in the American firmament, you may think Bidenomics is revolutionary or that it's akin to socialism or, like Marjorie Taylor Greene, it might be making you Biden curious.
--:-- Noel King: So as we heard earlier, the Biden administration hopes to remake four sectors of American policy to be better for American workers, industrial, labor, antitrust and fiscal.
--:-- Noel King: Earth, fire, wind, water, heart. We don't know how this will turn out, and we might not for many years.
--:-- Noel King: But Jeff Stein, White House economics reporter for The Washington Post, The Biden administration has to sell Bidenomics to the American people. How's that going?
--:-- Jeff Stein: Terribly. They are really, really struggling with their economic messaging.
--:-- Jeff Stein: A separate Reuters Ipsos poll finds President Biden's approval rating falling closer to the lowest levels of his presidency.
--:-- Jeff Stein: Just 40 percent of Americans say that they approve of the job that he's doing.
--:-- Jeff Stein: These are numbers that, you know, the economists and pollsters I talk to regularly have been genuinely shocked by over the last two years.
--:-- Jeff Stein: At a time where unemployment is extremely low and, you know, we're seeing more new business formation than we have in a very long time.
--:-- Jeff Stein: And the size of the economy, the gross domestic product is growing at a really rapid clip.
--:-- Jeff Stein: People are still really upset.
--:-- Jeff Stein: There was a poll from Economist YouGov asked people, do you believe the U.S. is currently in an economic recession? Not are we heading there, not is there a chance of one, but do you feel that we are right now in a recession?
--:-- Jeff Stein: And you have very close to a majority saying yes, 47 percent said yes, 29 percent say no.
--:-- Jeff Stein: And it is quite clear that that traces back to inflation and the rising prices that the pessimistic story is that those are the, in part, inevitable consequences of an attempt to create an economy that empowers workers more.
--:-- Noel King: I wonder whether the perception of biodynamics is fair. Like the pessimism surrounding it, is it justified?
--:-- Jeff Stein: This is a question I've spent a lot of time thinking about and tweeting too much about, frankly.
--:-- Jeff Stein: Because there's a narrative that some people have and smart, credible people have, which is essentially that there's something fundamentally irrational and stupid might be too strong a word, but misguided in Americans' frustrations about the economy.
--:-- Jeff Stein: And they'll list the positive indicators I've just cited and say, how can people be about as down on the economy as they were in the throes of the financial crisis and Great Recession?
--:-- Jeff Stein: And I think it's a legitimate point.
--:-- Jeff Stein: What I would say, even though it is the case that there are these positive indices, real wages, which is a very simple calculation that economists do, that they just take the cost of goods, you know, just inflation, and then they subtract that from wages, how much people's earnings are going up, that that has been negative for most of the Biden administration.
--:-- Jeff Stein: And that's pretty unusual.
--:-- Jeff Stein: And maybe that's not the Biden administration's fault. Maybe economic shocks from COVID and the supply chain disruptions we saw, the shift in consumption patterns, also Russia's invasion of Ukraine, also significantly reduced inflation.
--:-- Jeff Stein: So there are all these external factors that are not Biden's fault, certainly.
--:-- Jeff Stein: But whatever the cause of it, it seems clear from the data that most workers have not seen their wages increase at the same rate that costs have been going up.
--:-- Jeff Stein: And that's a very disconcerting thing.
--:-- Jeff Stein: It just means really that more people are getting poorer.
--:-- Jeff Stein: As a mom, I feel stressed about everything. We find more activities to do that are cheaper, free.
--:-- Jeff Stein: That's a thing that most people, I think, would rationally be quite upset about.
--:-- Jeff Stein: The other day, my kids were talking about how they miss eating Pizza Hut because that was, for us, it's a luxury item.
--:-- Jeff Stein: Now, it is the case that people at the bottom of the economic distribution, particularly people in the labor market at the bottom 10%, they've seen their wages rise much faster than inflation.
--:-- Jeff Stein: So people in the service industry in particular, people who work as waiters and bartenders and that kind of work, they've actually done better in the last three years than inflation has risen.
--:-- Jeff Stein: Currently, I'm making the most money I've ever made.
--:-- Jeff Stein: And I make $30,000 a year, which isn't a lot.
--:-- Jeff Stein: But when you've spent your whole life making $22,000, $23,000 a year, you know, that's some life-changing.
--:-- Jeff Stein: So you are seeing meaningful gains there.
--:-- Jeff Stein: But the downside is that lots of middle-class people, and this is not just like annoying tech bros on Twitter, like middle-class people like firefighters and nurses and public school teachers, the value of their dollars have not kept up with inflation.
--:-- Jeff Stein: And maybe that's not Biden's fault, but I think that the response that some people have to the idea that Biden is just getting a raw deal because people don't like him for unrelated other reasons I thought I saw something recently that said consumer sentiment is improving. Is that right?
--:-- Jeff Stein: That's correct.
--:-- Jeff Stein: University of Michigan's consumer sentiment index rose to 72.6 in July. That is the highest it has been since September of 2021.
--:-- Jeff Stein: In the last six months to a year, we've seen really for the first time since Biden took office, real wages start to improve.
--:-- Jeff Stein: For the first time since early 2021, the U.S. Labor Department says wages are rising at a faster rate than inflation.
--:-- Jeff Stein: Compared to early 2021, wages are up about 4%, while the consumer price index has increased by about 3%.
--:-- Jeff Stein: And the thinking is maybe, maybe not, but maybe the consumer sentiment is a lagging indicator.
--:-- Jeff Stein: You know, it's sort of a delayed effect where we're starting to see consumer sentiment tick up after real wages began to rise.
--:-- Jeff Stein: And for the White House, you know, the people I talked to over there are like, oh, thank God, like, finally, this number is looking like it's going in the right direction.
--:-- Jeff Stein: And maybe, maybe the public sentiment will change.
--:-- Jeff Stein: Now, if it doesn't, then that kind of calls into question my whole theory of like this is going to change with real wages.
--:-- Jeff Stein: But maybe that's not why the public is upset with Biden over the economy.
--:-- Jeff Stein: But we'll have to see.
--:-- Noel King: It's so interesting that Biden and Biden's administration clearly have these much bigger goals for the American economy.
--:-- Noel King: Things that for a lot of people who have jobs or who buy goods, who are not the owners of big companies, seem pretty good.
--:-- Noel King: People who want to survive climate change, they seem pretty good.
--:-- Noel King: But at the end of the day, when we go to vote, what a lot of Americans are thinking about is not 15 years down the line or even five.
--:-- Noel King: It's what is inflation this month? What are gas prices today?
--:-- Noel King: At the end of the day, how much does Bidenomics really matter?
--:-- Jeff Stein: I think that's a really profound point and one worth stopping on and thinking about.
--:-- Jeff Stein: I mean, when you look at what the Biden administration has done over the last few years, it's become very clear that they kind of agree with what you just said.
--:-- Jeff Stein: They're not out there saying, don't worry about inflation. We are doing all these great things to transform the economy.
--:-- Jeff Stein: Like every bit of messaging that they have is like, we know you're pissed about inflation. We're like working on it. We're sorry. We're trying.
--:-- Jeff Stein: And, you know, inflation has come down quite substantially from, you know, the 9% year-over-year number we saw too close to 3%.
--:-- Jeff Stein: And so that's, you know, it's not the battle isn't won, they would say, but they are seeing huge improvement.
--:-- Jeff Stein: And I think you're really astute to point out that like, that might be the precondition for all the other goals we're talking about.
--:-- Jeff Stein: And actually, you see them kind of operate this way when you look at how they're willing to put their other goals on hold temporarily to achieve lower inflation.
--:-- Jeff Stein: Just for instance, during the run-up in gas prices we saw, the Biden administration was very eager to take reserves from the Strategic Petroleum Reserve and push them out into the American economy to lower gas prices because people, as you were saying, were furious about them.
--:-- Jeff Stein: Now, if you were purely running a climate strategy of encouraging people to decarbonize, that wouldn't have made sense, right?
--:-- Jeff Stein: But they understand and feel deeply that all their other goals are at risk if they don't get these numbers under control.
--:-- Jeff Stein: I think one of the scary possible interpretations that I hope is wrong of the last couple of years is that what's happening in the American economy is that Biden has empowered really the working class to make more money and have more power.
--:-- Jeff Stein: And that the effect of that has been to push price increases off on the bigger and more politically powerful middle class.
--:-- Jeff Stein: And that the middle class has reacted to that higher power for the bottom end by demanding that it be crushed.
--:-- Jeff Stein: And all the supply chain and COVID and war in Ukraine issues are huge confounding variables to this.
--:-- Jeff Stein: So it is possible that this is very wrong.
--:-- Jeff Stein: But I think there's this very pessimistic, like grimly pessimistic story that attempts to empower the bottom end is just not long-term politically feasible in a system where the middle class can outvote the working class.
--:-- Noel King: Washington Post White House economics reporter Jeff Stein.
--:-- Noel King: Today's episode was produced by Miles Bryan.
--:-- Noel King: Matthew Collette is our editor.
--:-- Noel King: Michael Raphael is our engineer.
--:-- Noel King: And Laura Bullard is our senior fact-checker.
--:-- Noel King: The rest of our team includes Hadi Mawagdi, Amanda Llewellyn, Avishai Artsy, Siona Petros, Halima Shah, and Victoria Chamberlain featuring John Ahrens.
--:-- Noel King: Our supervising producer is Amina El-Sadi.
--:-- Noel King: Our EP is Miranda Kennedy.
--:-- Noel King: My co-host is Sean Ramosveram.
--:-- Noel King: And we are distributed to public radio stations across these United States by WNYC in New York.
--:-- Noel King: Today Explained is part of the Vox Media Podcast Network.
--:-- Noel King: And I am Noelle King.
--:-- Noel King: Thank you.
