A Longtime Biden Adviser Gives a Final Defense of Bidenomics

Since November 6th, critics have pointed to Joe Biden’s economic policies as one explanation for Donald Trump’s victory. Many postmortems have focussed on the rising prices that soured voters. Meanwhile, The Atlantic’s Jonathan Chait argued last week that Biden’s costly efforts to stimulate manufacturing in the heartland had failed to win back working-class Democrats. Dylan Matthews, of Vox, blamed Biden’s inability to prioritize and choose between his policy goals, which resulted in a “failed presidency that left Biden without much of an enduring domestic policy legacy.”

There is a long-standing tendency in the United States for one-term presidents—Jimmy Carter, George H. W. Bush—to be written off as flops, even if some of their policy achievements turn out to be consequential. (Carter created the Departments of Energy and Education; no Republican President since Bush has pushed through broad tax increases on corporations and the wealthy.) But the propensity to characterize Biden’s time in office as a flop is especially problematic. Whatever one thinks of his decision to run again or of his handling of Gaza, his Administration’s drive to create a low-carbon economy by subsidizing the growth of green energy and green manufacturing was a historic development, and its records on jobs and G.D.P. growth are very strong. The December employment report from the Department of Labor showed that employers created another quarter of a million jobs last month, bringing the total since Biden was elected to more than 17.5 million, while the unemployment rate ticked down to 4.1 per cent. G.D.P. expanded at a rapid clip of 3.1 per cent in the third quarter of last year, and, according to the Federal Reserve Bank of Atlanta’s GDPNow model, fourth-quarter growth is likely to clock in at three per cent. (An initial estimate of the actual figure will be announced at the end of the month.)

Last week, I called Jared Bernstein, the chair of Biden’s Council of Economic Advisers, for his final thoughts as he prepared to leave the post. The sixty-nine-year-old said he’d already packed up his office, including a picture of Biden standing under a “Bidenomics” sign, which was now hanging in his home’s workout room, next to his stationary bike. Understandably, he was keen to frame the Biden record in a positive light. Earlier that morning, he had spoken on a panel at the Brookings Institution, a think tank situated about six blocks north of the White House. The event was held to mark the publication of the 2025 edition of the Economic Report of the President (E.R.P.), a congressionally mandated annual update. In his remarks at the session, Bernstein noted that, in terms of employment and growth, the economy has “outperformed even the most optimistic forecasts over the last few years.” He also acknowledged what he described as “a forty-year inflationary spike,” which saw the inflation rate rise to 9.1 per cent in June, 2022. In what sounded like a parting message to the incoming Trump economic team, he advocated a “middle way” on trade policy.

In a break with the policies of past Democratic Administrations, the Biden Administration retained the tariffs on Chinese goods that Trump had introduced during his first term, and it imposed new restrictions of its own on exports of semiconductor chips and other high-tech products to China. Bernstein defended these restrictions on the ground that China’s industrial dominance threatened American workers and also cited issues of national security. He noted that reduced imports from China had been offset by larger inflows from Mexico, Vietnam, and other countries. Without mentioning Trump directly, he said the Biden Administration had rejected “reductionist views like ‘The trade deficit is a scorecard, and if it gets bigger you are losing.’ ”

During our conversation, Bernstein was more explicit in criticizing the populist electoral pledges that Trump campaigned on, in his bid for a second term, which include universal tariffs on imports and mass deportations of undocumented workers. “Targeted tariffs can be useful, but I don’t think that’s the case of sweeping tariffs,” he said. “Mass deportations would impact labor supply, particularly in sectors like construction. The combination of sweeping tariffs, mass deportations, and perhaps even compromising the independence of the Federal Reserve—all of that is potentially very inflationary, as others have pointed out.”

Bernstein started advising then Vice-President Biden in 2008. He joined the Council of Economic Advisers at the beginning of the Administration, and he took over as chair in February, 2023. As a longtime economist at the liberal Economic Policy Institute, in Washington, he made his reputation during the nineteen-nineties by co-authoring, along with his colleague, the economist Lawrence Mishel, an invaluable biennial report on the “State of Working America,” which tracked wages, inequality, unemployment, and health-care coverage, among other things. He told me that his interest in labor issues and inequality was probably the reason that Biden chose him as an adviser. “Fair-slice economics—that has always united me and the President,” he said.

When I asked Bernstein what element of the Biden record he was most proud of, he pointed to the maintenance of full employment even as the Federal Reserve raised interest rates sharply to bring inflation back toward its target of two per cent. “There were many experts who told us that, to get inflation down, we would have to accept a much higher unemployment rate,” he said. “That was a trade-off we weren’t willing to make.” In his talk at the Brookings Institution, Bernstein cited some of the broader benefits of low rates of joblessness: a strong labor market can encourage employers to hire from a larger pool of candidates, thus providing more opportunities for minority workers, and increased ​​competition for labor can incentivize firms to make productivity-enhancing investments. He also emphasized to me the significance of enhanced wage-bargaining leverage that tight labor markets give to employees. Boosting workers’ bargaining power was a central element of Bidenomics, he said. “That’s also why he has been such a pro-union President—the first to walk a picket line.”

Biden’s concern about labor issues was genuine enough. (At the behest of the leaders of the United Steelworkers union, he recently blocked a Japanese takeover of U.S. Steel.) But, even with a narrow majority in the Senate during Biden’s tenure, Democrats were unable to summon the sixty votes that would have been necessary to pass the PRO Act, which would have made union organizing easier, and were unable to raise the federal minimum wage, which is still just $7.25 an hour. More consequential than Biden’s gestures to organized labor were four big pieces of legislation that Congress passed during his first two years in office, which Bernstein hailed as unprecedented.

As the E.R.P. explains, the $1.9-trillion American Rescue Plan Act of 2021, which included cash payments of fourteen-hundred dollars to individuals in low- and middle-income families, strengthened household finances. The bipartisan $1.2-trillion Infrastructure Investment and Jobs Act of 2021 led to a surge in building projects at the state and local levels. The eight-hundred-ninety-one-billion-dollar Inflation Reduction Act of 2022, which provided subsidies and grants to makers of electric vehicles, electric batteries, and other green technologies, generated a surge in manufacturing investments. So did the two-hundred-eighty-billion-dollar CHIPS and Science Act of 2022, which was designed to encourage onshoring of semiconductor manufacturing. Factory construction rose to record levels in 2024, and some new facilities, including a state-of-the-art plant in Arizona which is owned by Taiwan Semiconductor Manufacturing Company, are already up and running. “If there is any fairness to history, the temporary surge in inflation won’t be Biden’s lasting legacy,” Bernstein said to me. “I think the biggest Biden legacy will be the adoption of what he calls bottom-up, middle-out economics, and of an investment agenda that is creating new manufacturing industries in the United States.”