What Trump promised, Biden seeks to deliver in his own way

The Biden Economy

President Biden listens during an infrastructure event in the South Court Auditorium at the White House complex on October 19 in Washington. Susan Walsh/Associated Press

WASHINGTON – Donald Trump has promised to fix US infrastructure as president. He vowed to take over China and mass produce in America. He said he would reduce the budget deficit and make the rich pay their fair share of taxes.

Yet after two years as president, it was Joe Biden who made those promises. He jokes that he’s created an “infrastructure decade” after Trump ruled a short game of “infrastructure weeks.” His legislative victory did not win votes from Trump supporters or boost his overall approval rating. But they represent a major pivot in how government interacts with the economy at a time when many Americans fear a recession and a broader national recession.

The tax cuts are over. No more unfettered faith in free trade and non-democracy. The Biden White House has committed more than $1.7 billion in the belief that a mix of government aid, focused policies and technical expertise can provide long-term growth that lifts the middle class. This reverses the previous administration’s view that lowering regulations and taxes increased investment by businesses with lower labor input.

With the new laws in place, Biden is taking a gamble that the federal bureaucracy can successfully implement and deliver on his promises, including after leaving office.

This is a tricky place, as Trump himself learned that global crises like the pandemic can quickly destroy the foundations of the economic agenda, causing businesses and voters to change their priorities. There are few guarantees that the economy will behave over 10 years as government forecasts expect, while Biden’s policies may be challenged by the new Republican majority in the House.

Mr. Biden and his team said Americans are already seeing innovations and announcements of new computer plants and 6,000 infrastructure projects underway.

“There’s an industrial plan that really uses public investment to drive private capital and more innovation in the historical tradition of everyone from Alexander Hamilton to Abraham Lincoln to John F. Kennedy,” said Brian Deese, White House executive director. National Economic Council. “The results speak for themselves.”

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Trump supporters saw little overlap with Biden, although funding for infrastructure, computer chip production and scientific research was passed along bipartisan lines.

“The Biden administration’s agenda is 180 degrees different,” said James Carter, policy director at the American Policy Institute. “More regulation, higher taxes, no border controls and a war on fossil fuels. They are two different administrations with two different methods. One is the free market, the other is big government.”

The current president and the former president appear to be close to each other in the public arena. On the eve of Biden’s August signing into law of $280 billion in semiconductors and research, FBI agents raided Trump’s home to find classified documents, overshadowing the White House event. Likewise, Biden called Trump a threat to democracy ahead of the November midterm elections, while Republicans campaigned to slam the president for troubling inflation.

Biden aides are quick to say that the president is fulfilling his campaign promises, rather than honoring the promises made by Trump. But one of Biden’s first moves as president in 2021 was to provide $1,400 in direct payments to Americans as part of his coronavirus relief package. Along with the $600 in payments in Biden’s aid package, the amount matches the $2,000 that Trump called for in the twilight of his presidency, though he was unable to get it through Congress.

“I would like to avoid the idea that somehow what Joe Biden did was take Donald Trump’s ideas and make them into law,” Deese said. “What President Biden has done is take the campaign agenda he campaigned on and deliver it.”

For all that, Americans give Biden low marks on the economy. Inflation fell from a 40-year peak this summer, but consumer prices are still 7.1% higher than last year. The Federal Reserve is raising its benchmark interest rate to reduce inflation, indicating that its forecasts will cause unemployment to rise next year.

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Three out of four Americans describe the economy as poor, and nearly the same percentage say the US is on the wrong track, according to a new poll by the Associated Press and the NORC Center for Public Affairs Research.

Biden asks for patience.

“I know it’s been a tough couple of years for hard-working Americans and small businesses,” Biden said Tuesday about inflation. “But there are bright spots across America where we’re starting to see the impact of our economic strategy, and we’re starting to.”

Trump supporters have accused Biden of $1.9 billion in coronavirus relief for causing inflation, even though it contains about $400 billion in direct payments that the former president said Americans should receive. They argue that the US economy could be stronger if Biden takes steps such as allowing all businesses to fully recoup their investments in new equipment, instead of providing targeted subsidies to technology and clean energy sectors.

But even without the economic slowdown caused by the pandemic, Trump’s economic record has been far from good as the promised growth has not materialized. Manufacturers began cutting jobs in 2019 before the coronavirus spread, instead of the resumption promised by Trump. Annual budget deficits have worsened under Trump, but have improved under Biden as pandemic aid has declined.

Biden tells Americans that his policies will strengthen the US economy for the next decade. His 52 billion dollar computer chip production led to a series of groundbreaking factories in Arizona, Idaho, New York, North Carolina, Ohio and Texas that will take years to complete. The idea is that government assistance reduces risk and makes it easier for these companies to invest in areas where global demand exceeds availability.

Chris Miller, a Tufts University professor and author of the book “Chip War,” said incentives are only a fraction of the cost of building plants. Miller said the investment benefits will flow to companies that sell raw materials to chip makers as well as to makers of cars, electronics and home appliances that rely heavily on chips.

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“The chip financing makes it clear that there will be more meaningful fabric construction and chip manufacturing in the US,” he said, “and to the suppliers of the chip industry, it’s clear that the demand for their products will be greater than would otherwise be the case.” they encouraged them to invest as well.”

Of all economic concerns, manufacturing has improved under Biden as factory employment reached 12.9 million jobs, the most since December 2008. Just as Biden boosted domestic investment, he expanded the Trump administration’s efforts to compete with China and kept previous taxes.

The Biden administration has banned the export of computer chips and semiconductor devices, citing national security reasons that China is using this technology for surveillance and hypersonic missiles. It has also forged deep ties with Australia, Japan, South Korea and several European countries to counter China’s growing influence.

Kurt Campbell, Biden’s “Asia chief” on the White House National Security Council, said that many of the steps taken by the Trump administration in China “were followed” during the Biden presidency, saying at an April panel that it was “in many ways, the highest honor” for the previous administration.

But Steve Yates, a senior fellow at the American Policy Center and former president of Radio Free Asia, said Biden has not shown as much focus on China as Trump.

Yates cited as evidence that Biden’s national security strategy identifies the US as having a shared interest with China in addressing climate change. He said that China will use that first to their advantage as Biden is determined to work with climate change will prevent him from confronting Beijing as Trump did.

“We just have a weak hand,” Yates said.

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