Justin H. Vassallo in American Affairs:
The recent media flurry over “Bidenomics” is the latest attempt to distill a complex but far from complete rupture with neoliberalism. Premised in part on lifting the wages and employment rate of historically low-income groups, Bidenomics is really about two things: strengthening the relationship between climate policy and national security, and prodding capital to commit to more useful, more productive investment in the domestic economy. Industrial policy is its core feature—the main means of inducing, steering, and even compelling capital to serve societal and national goals short of explicit economic planning. Like a heresy without a new church, industrial policy has been the watchword of the last two years despite having no organized base in the American electorate. As for Bidenomics in general, according to an Associated Press poll released in June, just 34 percent of the public approves of Biden’s overall handling of the economy.
More ambitious than anything attempted by a Democratic administration since the mid-1960s, Bidenomics nevertheless marks another uncertain chapter for the party in the twenty-first century. While some analysts, pointing to bipartisan agreement over the imperative to strategically decouple from China, have been quick to declare a new economic consensus in Washington, debates over industrial policy and Bidenomics more generally are stimulating new divisions within the liberal-left.
For those who hail it as the start of a “new progressive era,” Bidenomics is both the apotheosis and transmutation of the legislative potential glimpsed in Barack Obama’s electoral coalition. It demonstrates that today’s Democrats have finally embraced activist government to achieve inclusive growth, enhance the welfare state, pursue social justice, and meet ambitious climate targets.
Economic progressives of a more populist, New Deal bent are likewise sympathetic, if more cautious. Developmental states, they argue, require time to build up their capacities; altering the composition of a country’s industrial mix does not occur overnight. This is no less true of the West’s ultra-polarized hegemon, pockmarked as it is by staggering social and regional inequalities.
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