Joe Biden’s supporters in the political establishment seem increasingly perplexed. Although they insist that the administration’s economic policies – marketed as “Bidenomics” by the DNC – have been a huge success, the public isn’t buying it. In one recent poll, only 28% of Americans said they were satisfied with the economy.
Political commentators aligned with the Democratic Party are expressing growing frustration about this “disconnect.” Some have offered convoluted non-economic rationalizations for why the public is unhappy with the economy, while others have given up on rational explanation entirely – instead blaming “bad economic vibes.” One exasperated pundit, Matthew Yglesias, simply dismissed voters’ perceptions of the economy as “crazy.” What’s going on here?
The Truth About Bidenomics
First, let’s back up: what is “Bidenomics” anyway? Biden’s economic policies, exemplified by legislation such as the CHIPs Act and the Inflation Reduction Act, aim to increase manufacturing investment in the US. The Biden administration argues that, by “bringing manufacturing back to America,” it is creating high-paying jobs, while simultaneously “addressing the climate crisis” through investments in green energy.
Biden and his supporters are correct to point out that millions of people have gotten new jobs. But despite the big increase in the percentage of people who are working, the typical family is actually getting paid less in real terms, taking inflation into account: according to data from the Federal Reserve, real median household income has been falling during the entire time Biden has been president.
Families at the low end of the income distribution have been hit especially hard. Last year the poverty rate more than doubled, and the number of people struggling with hunger jumped to 44 million, an increase of 10 million from the year before.
Where Did The Money Go?
How is the typical family becoming poorer if the economy is growing and a rising percentage of people are working? Economists at the University of California, Berkeley have created an online database which makes it possible to answer this question.
Their data show that since January 2021 (when Biden took office), the U.S. economy has generated about $840 billion in new inflation-adjusted after-tax income, but the vast majority of this went to the richest 1% of adults, while the combined real income for the bottom 50% of adults actually fell. Biden has presided over a massive redistribution of income from working people to the ultra-rich.
Two things particularly contributed to this. First, over the past few years, businesses have increased prices at the fastest rate in four decades, reducing what workers can afford to buy with the wages they receive. Second, Biden chose to end the COVID-era social safety net expansion that was initiated before he became president.
The combined result is that working people are now living with less than they did a few years ago, while the rich have gotten significantly richer. Maybe that’s why, according to campaign finance data, wealthy Americans seem to be the only ones excited about Biden’s campaign for re-election.
A “Pro-Labor” President?
Workers have not passively accepted the decline in their living standards. There have been a series of organizing drives, and strike activity for this year is at the highest level in over two decades. But Biden – notwithstanding his tedious speeches about being “pro-labor” – has actually worked behind the scenes to push union leaders to negotiate settlements acceptable to CEOs. And when railroad workers repeatedly voted down the deals negotiated by union leadership anyway, Biden responded by making it illegal for them to strike.
The bottom line is that whether Biden is successful in bringing new manufacturing jobs to the US or not, workers cannot count on him to improve their living standards. Although there was a period in the past when industrial workers were paid relatively well, this was because they built strong unions and were willing to physically fight against strike-breaking by corporations and the federal government – including when supposed “progressives” like Franklin D. Roosevelt were in power.
These sorts of militant tactics were necessary, not just for winning pay increases, but for forcing employers to negotiate with the unions in the first place. Today, as corporations like Starbucks and Amazon refuse to bargain with their newly organized employees, and Biden’s NLRB fails to do anything meaningful to address the situation, the fighting tactics used by workers in the past will be as relevant as ever.
Bidenomics And The Climate
Biden has also promoted his economic policies as a way to address climate change, and the legislation he has promoted has included some new funding for clean energy. These policies fall far short of what is needed, however. To stop climate catastrophe, the US needs to rapidly decrease its carbon emissions, but emissions in 2022 actually increased.
The worst effects of global warming will not, of course, be possible to measure in dollar terms. Still, Biden’s failure to take meaningful action on this issue will have profound economic consequences that cannot be ignored. Emissions in the US grew to 5.9 billion metric tons in 2022, and scientists estimate that each new ton of carbon will ultimately cause about $185 worth of future economic damage. This means that the future economic losses caused by 2022’s carbon emissions will be around a trillion dollars – enough to cancel out the entirety of measured real income growth for the year.
The Real Purpose Of Biden’s Economic Policies
Despite what his cheery press releases would have us believe, Biden’s economic policies have not addressed climate change or runaway income inequality. In fact things have only gotten worse. So then what was the point of “Bidenomics”?
It is important to understand Biden’s policies in the larger context of Washington’s New Cold War with Beijing. For both sides of the conflict, the geographic location of production, and especially the production of advanced semiconductor technology, is a key strategic concern. This – and not some abstract desire to “invest in Americans” – is why Democrats and Republicans now increasingly seek to bring investment back to the US.
But for the capitalist politicians who make up both parties, the only way to “reshore” production is to convince corporations that it is profitable to do so. That means making sure workers are paid as little as possible, and absolutely avoiding anything like taxing corporations to fund a Green New Deal. Although Biden will pay lip service to progressive ideas, his real position is revealed in the fact that, instead of using the country’s enormous wealth to improve people’s lives, he is asking Congress for a hundred billion dollars in new military spending to prolong the war in Ukraine and support the Israeli regime’s criminal assault on Gaza.
No, You Aren’t Crazy
Even if establishment commentators like Matthew Yglesias call us “crazy,” the truth is that we have every reason to be dissatisfied with the state of the US. economy. The past three years have been a disaster for working people.
Of course, that does not mean things would have been better with Trump in office. Capitalism is a system in decline, and any politician committed to maintaining that system will end up protecting the profits that keep it going, while forcing the rest of us to pay the costs. A better world is possible, but not as long as mega-corporations and the politicians who serve them are running society.