President Joe Biden takes off his sunglasses as he speaks at the White House, July 4, 2023. (AP Photo/Susan Walsh)
President Joe Biden and his administration have been pushing hard in the past month to promote Bidenomics, trying to convince Americans that the U.S. economy is strong and growing thanks to his economic agenda, policies and legislation.
Bidenomics is the president’s interventionist approach involving the use of taxes and government subsidies to strengthen the middle class and move the economy into growth, Chloe Taylor wrote for Fortune. The president claims that Bidenomics will help America invest in new technology, create jobs, and improve social mobility. Much of the policy is centered around reviving U.S. manufacturing and factory jobs.
It’s hard to argue with numbers like the 2.4 percent growth in gross domestic product reported Thursday by the Commerce Department for Q2 2023.
That seasonally- and inflation-adjusted 2.4 percent annual rate of GDP growth was faster than economists expected and more than the 2 percent growth of the first quarter.
Morgan Stanely praised Biden and revised its growth forecast for the first half of 2023 from 0.5 percent to 1.9 percent GDP growth. The investment banker expects GDP to rise 1.3 percent on average for 2023, Reuters reported.
Unemployment is close to a historic low at 3.6 percent and inflation is at its lowest point since 2021, though still higher than the Federal Reserve’s target of 2 percent.
Biden’s Infrastructure Investment and Jobs Act — legislation signed in November 2021 — was a major piece of his agenda that is creating a “boom” in infrastructure and strengthening manufacturing construction, Morgan Stanley Chief U.S. Economist Ellen Zentner wrote in a research note last week, according to CNBC.
However, much of the public remains unconvinced that Biden is doing a good job on the economy, Spectrum News NY1 reported.
Larry Summers — director of the National Economic Council under President Obama and former Treasury Secretary for Bill Clinton — argued that certain aspects of the Biden administration’s economic agenda could push prices even higher.
During a speech at the Peterson Institute for International Economics, Summers described Bidenomics as “increasingly dangerous.”
Summers said he agreed with much of what the Biden administration has done economically—including passing the Inflation Reduction Act—but less so about the president’s approach to trade.
“I am profoundly concerned by the doctrine of manufacturing-centered economic nationalism that is increasingly put forth as a general principle to guide policy,” Summers said. “We do not have a problem of a shortfall of jobs. We do have a problem of costs.”
Americans’ spending power is “not where we would like [it] to be,” Summers argued, saying it was “wrong to suppose that manufacturing-based economic nationalism is a route to higher incomes or better standards of living for the middle class.”
It’s a “fallacy” that industrial policies such as those in the Bidenomics package offer “some kind of route to prosperity,” Summers said.
Recent polling showed that 33 percent of respondents approve of Biden’s leadership on economic issues.
A White House statement Thursday after the GDP data release reiterated that “The economy is growing, and we’re lowering costs for families … That’s Bidenomics at work. Today’s report shows that the economy grew at a 2.4% annual rate in the second quarter while inflation fell significantly.”
