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The White House’s new push to define Bidenomics

After months of gloom, the Biden administration is now more wanting to define and discuss Bidenomics.

Why it matters: The White House isn’t introducing major new policy proposals. Rather, it’s discussing the Biden economic record as something to embrace, suggesting a shifting tone heading into midterm elections and beyond.

  • The president’s advisers see both an improving outlook for the near-term and a summary of policy achievements which will support longer-term goals like rebuilding American manufacturing capacity and fighting climate change.

Driving the news headlines: The White House released a 58-page “economic blueprint” today outlining what officials see as their major achievements, and yesterday Treasury Secretary Janet Yellen began an economic roadshow embracing similar themes.

Between your lines: Through roughly mid-summer, the economy and domestic policy were looking such as a major drag on Democrats’ political fortunes. Soaring inflation, mounting recession worries and a legislative stalemate over important elements of President Biden’s plans were a toxic combination.

  • However when speaking with Biden administration economic officials within the last few weeks, there’s been an unmistakable pep within their step.
  • The passing of major legislation targeted at climate and healthcare (the Inflation Reduction Act) and bolstering the semiconductor industry (the CHIPS Act) have helped a whole lot. So have falling gasoline prices along with other signs of moderating inflation pressure.
  • Administration officials enthusiastically indicate a recently available report from Goldman Sachs’ economic team arguing a soft landing for the economy inflation decreasing with out a recession could be plausible in the end.

Speaking in Detroit, with Ford executives and plant workers looking on, Yellen dusted off an economic framework she first introduced prior to the virtual Davos crowd earlier this season: modern supply-side economics.

  • The theory would be to expand the supply side of the economy not through tax cuts or deregulation (because the traditional supply-side economics thinking goes), but through injecting large sums of cash into sectors and communities which have been “too-long neglected,” which “will improve the ceiling for what our economy could produce,” Yellen said.

The White House blueprint cites the opportunity for progress on “decades-long economic challenges,” starting from creating more resilient supply chains to bolstering domestic manufacturing and clean energy infrastructure.

Yes, but: There were recent inflation victories most significantly, an extended stretch of falling gasoline prices but there is no guarantee those will continue.

  • The happy messaging on the economy might not read well at the same time of soaring grocery prices and overall prices rising faster than wages (until recently, at the very least).
  • Yellen acknowledged the Biden administration’s biggest near-term challenge is bringing inflation down “without sacrificing the economic gains of days gone by 2 yrs.”

Moreover, if Republicans win one or both houses of Congress in November, the window for major legislative accomplishments may likely close. Biden advisers see some prospect of smaller-scale bipartisan bills, however, on issues like housing policy.

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