Having started out as a term in the financial press, the White House this week specifically embraced “Bidenomics” as a description of its overall economic agenda as it heads towards the presidential election next year.
The Biden administration has been on the back foot on the economy for some time. Opposition Republicans have sought to exploit politically the high inflation that ordinary Americans can see reflected in the prices in shops and supermarkets.
A poll this week by Associated Press-NORC Center for Public Affairs Research found only 34 per cent approved of Biden’s economic leadership.
However, the administration believes it has put in place the building blocks to underpin its economic vision and now needs to sell it to the public.
The president is a self-proclaimed eternal optimist. And he predicted this week that the recession which Republicans and some economists have been forecasting for a year or more will not materialise after all.
[ Biden touts ‘Bidenomics’ as antidote to failed trickle-down policiesOpens in new window ]
The White House senses some of the economic winds are in its favour. Unemployment at 3.7 per cent is at a near historic low, consumer confidence increased in June to the highest level in more than a year while inflation has come back to 4 per cent from a peak of 9 per cent 12 months ago.
But prices are still rising faster than the official target of 2 per cent and remain a worry for voters.
Essentially, Bidenomics has three pillars: public investments in infrastructure and other areas; empowering and educating workers to grow the middle class, including encouraging apprenticeships and union membership; promoting competition and aggressively enforcing antitrust laws.
Politically and economically, Bidenomics represents a significant break from the economic theory that has been in favour on the right in the United States for decades.
The president has made no secret of the fact that he is not a fan of “trickle-down economics”, which came to prominence in the era of Ronald Reagan.
This centred on the belief that if high-income earners did better financially, then ultimately everyone would benefit as their increased wealth filtered down.
Biden proclaims regularly that he is a capitalist but argues the problem with trickle-down economics is that it just does not work.
In Chicago on Wednesday, he said that 40 years of tax cuts to the wealthy and big corporations “had been a bust”.
“When it was all done, we hollowed out the middle class in [the] United States. We blew up the deficit significantly. We shipped jobs overseas because of cheaper labour. We stripped the dignity and pride and hope of one community after another.”
At another event that day he went further.
He said under the trickle-down model the principle was to shrink public investment in infrastructure and public education and let good jobs get shipped overseas. He said it involved a tax policy that encouraged companies to go overseas to save money. The president added that big corporations were allowed to amass more power while it was harder for workers to join unions.
Biden said he was tired of waiting for the benefits of trickle-down economics to actually trickle down, claiming people were working as hard as ever but couldn’t get ahead because it was more difficult to buy a home, pay for a college education, start a business or retire with dignity.
He said the path of the middle class seemed to be getting out of reach.
“Bidenomics is about building an economy from the middle out and the bottom up. When that occurs the middle class does well, the poor have a chance and the wealthy still do very, very well.”
Under the Biden administration state investment in large infrastructure projects – to rebuild often crumbling roads, bridges and railways – is now back in fashion.
It is also encouraging the return of manufacturing to the US and actively promoting the use of domestically made materials in new projects.
International free-trade agreements are no longer a priority in Washington.
The shift towards Bidenomics is not just about economics; it is also about politics, both domestic and international.
It is not exclusively about bringing jobs home. There is also a strategic context. The pressure on international supply chains during and after the pandemic as well as tensions with China have increased the importance of manufacturing key products such as semiconductors in the US.
Biden is also acutely aware of the drift of his Democratic Party’s traditional working-class base to the Republicans in recent times.
Boosting the economic prospects of working-class and middle-class Americans may also boost his electoral prospects in November next year.