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Is Bidenomics Trying to Do Too Much?
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Biden advisor Heather Boushey refutes critiques of the White House’s industrial policy.
Last month, when news emerged that the American economy grew by 2.4 percent in the second quarter of 2023, U.S. President Joe Biden responded by saying that the results were “Bidenomics in action.” Biden had reason to be pleased: Apart from the faster-than-expected growth, inflation has begun to cool and the chance of a recession this year has declined.
Bidenomics is rooted in a belief that the best way to grow the economy is from the middle out and the bottom up. But it’s also been a sweeping foray into industrial policy and protectionism, with the administration prioritizing domestic manufacturing and bringing jobs back home. This has angered several U.S. allies. It has also generated criticism from economists who say that industrial policy can spark a subsidies race, that protectionism can backfire, and that the White House may be trying to do too many things at once.
Do the critics have a point? Not according to Heather Boushey, a member of the president’s Council of Economic Advisers and chief economist of the White House’s Investing in America Cabinet.
“The United States took a historic step that the world had long asked us to take—to build a clean energy economy,” Boushey said, addressing criticism of provisions in the CHIPS and Science Act that encourage protectionism in an FP Live interview with host Ravi Agrawal. “We did it in a way that worked for us politically.”
Is Bidenomics trying to do too much by tying investments in semiconductor fabrication plants to, for example, the building of daycare facilities? “We’re encouraging businesses to follow best-in-class practices,” Boushey countered.
And the United States isn’t looking to stop trade with China: “We are looking to de-risk that relationship,” she said. “But as we think about our trade policies, we have to think about what that means for American workers and American communities.”
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