Bidenomics: A Break with Trickle-Down Economics

  On Wednesday, the US President outlined his proposal in Chicago, Illinois, which aims to bolster the middle class and counter policies that favour wealthy investors and corporations. Biden spoke out against the “trickle-down economics” championed by Ronald Reagan in the 1980s and pushed by subsequent Republican leaders. Joe Biden set out an economic plan labeling it as “Bidenomics”. The recent Tax Cuts and Jobs Act, signed into law by former President Donald Trump, awarded dramatic tax breaks to corporations and reduced taxes for the majority of US households, though the higher earners disproportionately benefitted. In contrast, Biden is proposing to “grow the economy from the middle out and the bottom up, instead of just the top down”, to ensure “the poor have a ladder up and the wealthy still do well”. His plan, which is likely to be a centrepiece of his re-election campaign, is threefold: making smart public investments in America, empowering and educating workers to grow the middle class, and promoting competition to lower costs and help entrepreneurs and small businesses thrive.

To this end, Biden has already signed a bipartisan infrastructure bill, a law to boost domestic semiconductor manufacturing, and investment in domestic clean energy industries. He has also unveiled a new $42bn initiative to bring high-speed internet throughout the country. Republicans, unsurprisingly, have been quick to criticize Biden’s economic plan. Speaker of the House of Representatives Kevin McCarthy labelled it “blind faith in government spending and regulation”, while Trump’s campaign sent out an email blast during Biden’s speech predicting “high taxes, crippling regulations, crushing inflation, war on American energy [and] soaring energy costs”. The White House Press Secretary Karine Jean-Pierre defended the label “Bidenomics” when questioned about it, saying “it makes good sense, Bidenomics. It kind of flows off the tongue really well”.

Since Reagan’s “Reaganomics”, presidents have sought to fuse their names with their economic plans, to varying degrees of success. Recent polls have shown lagging support for Biden’s economic leadership, with just one in three US adults approving of his approach. The White House is aiming to allay fears of a looming recession, despite Federal Reserve Chair Jerome Powell acknowledging it is “certainly possible”. Biden has said he does not expect a recession, and monthly job creation has outpaced expectations. At the heart of Bidenomics is the restoration of the “American Dream”. It remains to be seen if Biden’s plan will succeed in this endeavour, but the President has made it clear he is determined to push back against trickle-down economics and provide economic security for the middle class.