President Biden’s economic policies mark a paradigm shift away from the trickle-down economics that have held sway over Washington DC for the past 40 years. Bidenomics recognizes that a strong and inclusive economy grows from the middle class outwards, centering working Americans and their families rather than relying on a top-down approach that benefits the wealthy first and foremost. In this episode, President Biden’s chief economic advisor, Jared Bernstein, joins us to unpack the key ideas behind this middleout understanding of how the economy really works, and to explain how Bidenomics is reshaping the economy to truly work for all Americans—not just a wealthy few at the top. After helping to engineer a best-in-the-world economic recovery from the pandemic, Bernstein explains what’s next for Bidenomics and the American economy.
Jared Bernstein is a prominent economist and author who is widely recognized for his expertise in labor economics and income inequality. As the chair of the United States Council of Economic Advisers, he serves as President Biden’s top economic adviser. From 2009 to 2011. From 2009 to 2011, he served as Chief Economist and Economic Advisor to then-Vice President Biden. Bernstein is a prolific writer and commentator whose work emphasizes the importance of addressing income inequality and promoting policies that benefit working families and the broader economy.
Twitter: @econjared46
Website: https://pitchforkeconomics.com
Twitter: @PitchforkEcon
Instagram: @pitchforkeconomics
Nick’s twitter: @NickHanauer
Nick Hanauer:
The rising inequality and growing political instability that we see today are the direct result of decades of bad economic theory.
Speaker 2:
It’s time to build our economy from the bottom up and from the middle out, not the top down.
Nick Hanauer:
Middle out economics is the answer.
Speaker 2:
Because Wall Street didn’t build this country, a great middle class built this country.
Nick Hanauer:
The more the middle class thrives, the better the economy is for everyone, even rich people like me.
Speaker 3:
This is Pitchfork Economics with Nick Hanauer, a podcast about how to build the economy from the middle out. Welcome to the show.
Goldy:
In March of 2019, Nick, we had on the economist, Jared Bernstein, to talk with us about the board game Monopoly. Well, it turns out in the years since he’s gone on to a somewhat bigger game.
Nick Hanauer:
That’s right. Today on the podcast, we get to talk to my really old friend, Jared Bernstein. He’s the chair of the Council of Economic Advisers to President Biden. He also served as Vice President Biden’s chief economist and economic adviser from 2009 to 2011. He and I have collaborated on economic policy for, I mean, wow, I think literally for as long as I’ve been thinking about economics and he’s both a great economist, but also a wonderful man. Just a great, lovely guy.
Goldy:
And at the center of the Bidenomics revolution.
Nick Hanauer:
That’s right. That’s right. Jared and I have gone back and forth on so many things over so many years, and it’s just such a great thing for me to see him get to implement so many of the things that we wrestled over so many years. So with that, let’s talk to Jared about Bidenomics and the administration’s middle out approach to economic policy making.
Jared Bernstein:
I am Jared Bernstein. I chair President Biden’s Council of Economic Advisers. What do I do? My day job is apparently answering emails, but I like to think I do more than that. The Council of Economic Advisers provides economic guidance, advice to the president and the senior staff here at the White House, including policy analysis, but also tracking the data flow really at a very granular level.
Nick Hanauer:
Well, Jared, thank you for being with us. God, how long have we known each other? How long have we been at this? I was trying to-
Jared Bernstein:
Decades.
Nick Hanauer:
I mean, so long. So many years of grinding. So it’s so great to have you on the show and to both talk about and celebrate the accomplishments. So let’s start with that. Can you explain to our listeners what the key principles and goals of Bidenomics are and how they differ from previous economic approaches?
Jared Bernstein:
In terminology that will be very familiar to you, Bidenomics starts from a framework that growth originates from the bottom up and the middle out. That’s very different, you asked for a contrast, than top-down, trickle down economics, which not only doesn’t work, and that’s an empirical statement, not a judgmental one, but has in fact exacerbated inequality and damaged growth, particularly through an inability to make the kind of investments that you see our administration making. So let’s get to the pillars of Bidenomics because investment is one of them.
Nick Hanauer:
Yes.
Jared Bernstein:
Pillar one, empowering workers. Nick, you and I, as long as we’ve known each other, have talked about the importance of worker bargaining power. And in fact, that word power, we’ve been talking for about a minute and a half and we said it already. Those five letters mean a ton to how economies function, and yet they’re a little discussed in much of classical economics. Pillar two, investment, that is reversing decades of disinvestment in our public goods. In many cases, partnering with the private sector to invest in domestic production in key areas where markets have consistently failed to provide adequate investment. And part three, competition and lowering costs. So those are the three pillars, and I’m sure we can go into whatever details you like, but as I said, I’m sure that’s quite familiar to the two of you.
Nick Hanauer:
Yes, absolutely. So why don’t we talk for a minute about the remarkable success this approach represents. There’s just been a lot of remarkably positive economic data that’s come out over the last months that suggests that this sort of middle out approach is working. Can you share some of that data with us?
Goldy:
Yeah. Tout the president’s accomplishments here because you’re not getting much help from the mainstream press.
Jared Bernstein:
Well, in the way you teed up the question, the word remarkable came up a few times and I myself have used that. But there’s a way in which what’s going on actually isn’t that remarkable. In a way, it’s kind of predictable, in fact. So look, I think remarkable is… Yep, and you wanted some numbers, when the expectation like we had for job growth in January is for 185,000 and you end up with 353,000, I think it’s fair to call that kind of remarkable. And the fact that the unemployment rate’s been below 4% for two years running, I don’t think that’s remarkable, but I think it’s certainly persistently low unemployment and links up to my original answer here, which is there’s something not so remarkable going on, which I’ll get to in a second.
But then one thing that has also gotten the R word, the remarkable word, is the fact that while all of this growth has been ongoing, inflation has come down a great deal. The classical economic theory is that you’ll never get this much disinflation without giving up many points of growth, whether much higher unemployment or recession or something like that. And President Biden never believed that, and I suspect he shares that with the two of you, which is the idea that you have to achieve the inflationary goals on the backs of workers, completely antithetical to the way he thinks about how the economy works and in fact how it’s been working.
So what do I mean when I say “Not so remarkable?” Well, when you empower the middle class, when you have a situation like we have in our job market where workers have real bargaining power, both because of the extent to which this president has leaned into union power, but also because of the persistence of very low unemployment, the benefits of growth flow much more readily to those in the middle class and then in the bottom three-quarters of the income scale. And that creates a perpetual motion kind of device with this middle out growth theory that you guys have originated and talked about. So in a way, I suspect you would agree that there’s some remarkable things going on, but they’re not unexplainable.
Nick Hanauer:
No, they’re… And you know what’s really remarkable?
Goldy:
Well, they’re unexplainable using Mankiw’s Principles of Economics.
Nick Hanauer:
Yes, exactly, exactly. And the thing that is both true and slightly frustrating is that if you look at the last a hundred years of empirical economic evidence, you find that there is an absolutely consistent pattern, which is that when you do things similar or the same as what the administration is doing, you get the same results. You get more job creation, higher GDP growth rates, more productivity increases, sort of the panoply of better economic results than you do when you cut taxes for rich people and you stop investing in the country and in Americans themselves. And I guess what’s so interesting and what must make your job so interesting is to be at the helm of this transformation in how we see economic cause and effect. And on the sidelines, it’s super funny to watch all these pundits twist in the wind, effectively complaining about these good results because it’s like they can’t believe they’re happening.
Jared Bernstein:
I think what’s compelling about this from the perspective of the Biden administration is I’ve been talking about these issues with Joe Biden since 2008. I was his chief economist when he was the vice president, and I started talking to him late that year, moved into the White House when he was VP 2009, President Obama. This is how he has understood the economy to work since he’s been in politics, which has been all of his professional life. And it’s kind of interesting and almost a little weird that someone who’s been in the system for so long has not drunk the Kool-Aid that says, no, you got to listen to the rich donors and do what they say. I mean, he’s always thought trickle down was obviously a false idol. And so the idea that you… A common sense to the average person would dictate that if you give a bunch of money to rich people, all the good things that trickle down says are going to happen, are not obviously going to happen.
They’ll be richer, but they won’t necessarily invest more. Why should they? They’re getting richer without that. Instead, if you grow an economy from the bottom up and the middle out and you have very strong demand from the vast majority of the population, because newsflash, the top 1% is comprised by only 1%. So if the vast majority are doing well, not only is that going to continually boost growth through the consumption channel, we’ve seen that. This is 70% consumer spending economy, but it’s going to signal to investors that it’s a good climate to invest in because consumer spending is strong, the broad middle class is strong. Now you don’t have any guarantee that the investment is going to flow to places where markets have failed to adequately invest.
Clean energy is a great example. Domestic production of semiconductors is another great example. Of course, public goods and our infrastructure, another great example. So not only has this president applied straight up common sense economics to our economy, but he’s also managed to get across the goal line, three pieces of legislation that address each one of those market failures on the investment side of the equation. So it’s been a great privilege to sit here and watch that and play what little role I can in helping to move it forward.
Goldy:
Is this starting to sway the minds of mainstream economists? I mean, you used to be, 10, 15 years ago, you would’ve been the minority in the room if you were allowed in at all. What’s happened? The empirical evidence over the past few years over the course of this administration, the Bidenomics program and the success it’s had so far, are minds being changed or are they sticking to the old ways of thinking?
Jared Bernstein:
I think that some minds are being changed a little bit, but that the real change is coming from younger, more dynamic economists. There’s the old statement about science proceeds one funeral at a time or something like that. As the old guard steps down, there’s younger economists coming on who are much more empirically driven, much quicker to reject theories about how the world should work even if it doesn’t work that way for decade after decade. And that’s been tremendously refreshing and we scooped up as many as we can to come help us. But it’s also very refreshing to see them on the outside. I mean, I will put in a plug for the Economic Policy Institute, which is where I cut my teeth, and Nick’s very familiar with their work.
I remember Larry Mishel, who ran the EPI teaching me early on that economists far too often seem to believe their job is to explain to policymakers why they can’t do what they want to do. Oh, you want to help low income people by raising minimum wage? You can’t do that. You want to regulate a particular industry so it doesn’t poison kids? No, can’t do that. So I would say that the EPI model of understanding ways in which markets underperform and fail is much more pervasive and there’s a lot of great younger people coming online in the profession that espouse that position.
Nick Hanauer:
Jared, can we go back? I wanted to emphasize some of the things that you said because there’s a not unreasonable view that middle out economics, this approach, is simply a demand side argument, that we should just increase demand by consumers and that will take care of everything. And I think it’s really worth underscoring that this middle out approach is much broader than that. Of course, we want to empower workers so their costs go down and their incomes go up because in fact, that is what creates the increasing returns dynamic that you talked about that drives the economy. But investments are an incredibly important part of this approach, not just in people, but also in the infrastructure and in the market failures that you noted. But what’s also core to this approach is promoting competition, the executive order that is working its way through.
And again, one of the canons or trickle down economics is that any kind of regulation on big corporations will harm productivity and growth and all that. And in fact, the opposite is true, that when you deregulate industries, all that happens is that they consolidate into oligopolies, which both increases prices, decreases wages and slows competition. And the promoting competition thing that you guys are all over is unbelievably consequential and probably the least well understood part of this program. So can you speak to that a little bit?
Jared Bernstein:
Yeah, and I want to underscore the way you brought this around here, which is I do think that many people think middle out, bottom up is exclusively a matter of if people in the middle class, lower income communities have more resources, there’ll be more demand. That’s true. That can’t be the whole program. And one of the reasons, just saying what you said in my own language is that you can’t ignore the economy’s supply side. I mean anyone who thought you could, and I think even many progressives fell into this trap, but mostly because we were so focused on demand, which was insufficient for so many years that we maybe took some of our eye off the ball on the supply side of the economy. And you can’t do that. So what do we mean by the supply side of the economy? Well, part of it is just logistics.
One of the things the president recognized in 2021 was that in order to get inflation back down to where we needed it to be, we were going to have to unsnarl supply chains. And we worked very carefully with the private sector. We never could have done it by ourselves to get that unsnarling happening. We had something called the Supply Chains Disruption Task Force. I was a member. We sent a representative out to the ports of LA and Long Beach to help get those ports kind of talking to each other in ways that they hadn’t before. Again, working with the unions, working with the port management and all of that turned out to be very important. Now you’re talking about competition. So that means taking on big pharma. One of the things this president did that no one’s ever been able to get over the goal line before is pretty obvious.
We talked about bargaining power before. Well, Medicare should have really powerful bargaining power, but it was always prohibited due to the effectiveness of big pharma lobbyists from using that bargaining power to lower prescription drug costs. No more. Part of the IRA is President Biden getting that over the legislative goal line and giving Medicare the ability to bargain for lower costs, insulin $35 a month, capping that for seniors, saving 15 million Americans $800 per year on healthcare. Cracking down on hidden junk fees, on ways in which corporate America is not passing savings onto their consumers, canceling student debt where we can, helping with internet access, helping with housing costs, all of those I view as ways to unclog and to hypercharge the economy supply side. So both sides of that equation are important.
Nick Hanauer:
Yeah, absolutely. And so important for people to understand how crucial promoting real competition is to making markets function the way that they should. My favorite example of one of your recent accomplishments is the elimination of becoming elimination of non-competes, which is again, theoretically in a competitive market you shouldn’t have non-competes. It’s like prima facie, absurd.
Jared Bernstein:
Does everybody know what those are? Do we need to-
Nick Hanauer:
Yeah, well I mean-
Jared Bernstein:
I know you have.
Nick Hanauer:
We’ve talked about before, but go ahead. Yeah.
Jared Bernstein:
Well, no, I mean, I know that this is a smart audience, so I don’t know. Yeah, this is the idea that if you leave a job at firm A to go work for firm B, you might not be able to make that transition because you would be violating a non-compete clause, meaning that you can’t take your institutional knowledge and then go work for a competitor, for example. Well, you can certainly see ways in which having some secret recipe or something might make sense there, but those were extended to even middle and lower wage workers who couldn’t possibly be carrying any kind of secrets from one firm to another. So it was just a way of dampening precisely the kind of competition which capitalism needs to run on. And the president has said, the president said this many times, capitalism without competition looks a lot more like exploitation. So I always think it’s a good thing when we can sort of follow some of the rules of basic economics in ways that more conservative elements violate all the time.
Goldy:
But how is a poor CEO going to maximize shareholder value in a competitive market? It’s impossible.
Jared Bernstein:
Well, the stock market kind of returns seven or 8% a year on average, one way or another. So I noticed there are lots of people, let me put it this way, because I can’t get into politics in my own restrictions. So there are people claiming credit for the stock market going up on any given day. Obviously that should be heavily discounted. What really makes financial markets do well, they are not the dog, they are the tail. So what really makes financial markets do well, and again, you guys know as much about this as anybody, is when the broad economy is doing well, when the middle class is doing well, when there’s a good investment environment, when unemployment stays low, when job growth stays strong, it is really easy to say that the stock market is up today because I’m talking to Nick and Goldy and such silliness should be ignored.
Nick Hanauer:
Let’s talk for a moment about the disconnect between how good the economic indicators are and how people are feeling about the economy, because I do think it’s important to level set and recognize that for most people, the economy is simply my job and the expenses. And for lots and lots and lots of people in the country, because of the pandemic, prices rose dramatically and many people continue to be underwater. This is of course not President Biden’s fault, but it is a reality that you folks are having to manage through and confront. So how do you think about that and where will we go in the future?
Jared Bernstein:
Every time the president talks about the economy, he points out that there are still some prices that are too high, and I think we shouldn’t forget that. We’ve been talking very positively as we should about a set of economic indicators underscoring a theory of the case that I think has been proved time and time again, proved when we’ve undertaken the kind of initiatives that we’ve had and proved when the opposition has applied trickle down. But that doesn’t mean everybody is where they want or need to be. And one of the things that we have to keep doing is putting pressure on lowering costs. One of the best ways to do that is what we’ve already talked about, more competition, blocking big pharma from overcharging when it comes to prescription drugs. We’ve obviously been taking that on, pushing back on junk fees and overdraft fees and non-transparent pricing, we’re taking that on aggressively.
And so a big part of our agenda, in fact, I told you pillar three of Bidenomics is to promote competition and eradicate non-transparent pricing and junk fees in order to further lower prices. And we will continue to work on that. But I also think two other points are germane. One is this theory of the case that we’ve been describing. I said this months ago, so I’m not making this up today. If we are able to build the economy from the middle out and the bottom up to maintain a tight job market while easing inflationary pressures, real wages will start to go up, which they have now for about 10 months in a row year over year. So a trend, not a blip, and people will start feeling it. People will start to feel it and we’ll start to see that in the sentiment or confidence indicators.
Well, over the last few months, we’ve started to see precisely that, confidence indicators are up strongly. The University of Michigan survey up twenty-nine percent over the past two months. Haven’t seen growth like that for decades in that survey. So not there yet by a long shot, more work to do, but there is evidence that we’re moving in the right direction. Now, I said two things. The second thing is this, compare and contrast, it’s not enough to just explain what we’re doing. We also have to look at what the opposition says they want to do in this space.
And I’m sorry to report, as predictable as it is, is that they want to go back to trickle down economics and they literally want to repeal some of the very measures that are helping to reduce costs as we speak, particularly the IRA, the Inflation Reduction Act. Repealing that would of course make prescription drug prices go up, make the cost of insulin go up, make the cost of health coverage go up so it pushes in exactly the wrong direction while undermining the middle out, bottom up approach that the evidence shows is working very well in recent years.
Nick Hanauer:
And so Jared, obviously there’s much work left to do. When you folks are re-elected, what will the next four years bring? And forget for a moment the challenge of Congress. What is the work left to do? We made so much progress in these years, but there were many things that we didn’t get to do or couldn’t do that we wish we had. So can you speak to that a little bit?
Jared Bernstein:
I can speak to that, but before I get to the things we haven’t, the unfinished business of which there is some really important parts, let me just say that, and this is very Biden-esque, implementation of what we are doing is in many ways just getting started. You don’t implement transformational investment programs of the type that we’ve talked about, transforming our energy supply in the country, transforming our ability to build semiconductors in ways that will make us less dependent on the vicissitudes of foreign suppliers. You don’t make a lasting infrastructure investment without extensive and years-long implementation. Remember the vast majority of the capital that’s supporting the IRA domestic production, whether it’s EVs, batteries, or clean energy production, is coming from the private sector, of course, 600 and counting billion dollars of investment in building manufacturing facilities here in those countries. Those facilities take a couple of years to build.
So this is an investment, a seed that must be nurtured, that must be watered over time, versus an opposition who wants to come in and tear it up by its roots, absolutely counterproductive in a productivity sense. And then there’s unfinished business. So two big issues there, housing and child care. So we have a shortage of affordable housing that has been 10 years in the making. It met us when we got here and we have a great set of plans, $175 billion of investment in affordable housing. We think we could stand up 2 million units of affordable housing.
Congress obviously has to work with us on that, that’s a purse strings issue, and we need the resources to do that. We can’t do it administratively. And that investment is paid for, by the way, with progressive tax changes. Second, child care, same kind of market failure. These are two big market failures. The market has clearly failed to provide enough affordable housing for people and affordable, accessible child care for caretakers who want to get into the workforce without spending a huge share of their income on child care. We have great plans in both cases. We want to implement them going forward.
Nick Hanauer:
That’s great. What about the minimum wage? We’re still stuck. Do you think there’s hope in the new Congress to raise the minimum wage to $15 an hour nationally?
Jared Bernstein:
I always think there’s hope. I think if I didn’t think there’s hope, I’d have a hard time getting here. And I think that the extent to which Joe Biden keeps pulling legislative rabbits out of hats, it should continue to give you hope. Because I think if I told you a few years ago we’d be talking about some of the largest, most transformative investments in these areas, you would’ve laughed at me, and yet here we are. So there’s always hope. I think with the minimum wage, obviously we have a lot of states who have acted on their own and that’s great, but the fact that at some level, the federal minimum wage is the southern minimum wage, because those states have yet to act. Simply informing people that the minimum wage in a lot of places in this country is $7.25 an hour. Okay, everybody knows that’s nuts.
That’s my sophisticated economic analysis. And so simply based on, again, common sense goes a long way for Joe Biden, so simply based on common sense, we’ve got a great argument there. If you want to layer on that decades of empirical research showing that increases in the minimum wage don’t have the traditionally predicted negative impacts, in part because of the bottom up mechanisms we’ve been talking about. The argument is strong. So, we’ll see.
Nick Hanauer:
Yeah, great. A couple of final questions.
Goldy:
I don’t know. Do you ask the Chief Economic Advisor to the president the benevolent dictator question?
Nick Hanauer:
Yeah, yeah. We always-
Goldy:
He’s about as close to being one as we’ll get.
Nick Hanauer:
Benevolent dictators, yeah. We have this benevolent dictator-
Jared Bernstein:
I think you overestimate where I am on the pecking scale here, but go ahead.
Nick Hanauer:
If it was you and you were in charge, let’s say you got a clean sweep in Congress, what would your top five or four or three economic objectives in the next administration, if you could implement what you wished you could, what would you do? Feel free to reject that question if it puts you in an awkward place.
Goldy:
On political grounds.
Nick Hanauer:
Yeah, yeah, yeah.
Jared Bernstein:
I mean, it sounds a little repetitive, but affordable childcare and affordable housing are just such obvious impediments that we have to fix and the idea… And interestingly in housing, by the way, I believe I have this number right. There are 225 members of Congress on both sides of the aisle who recognize how important this is and have supported, at least on paper, a lot of the initiatives that we’re pursuing. And one of the reason is we’re talking about housing and childcare, that’s not a blue or a red problem. There are people in all counties and all regions that face those constraints. So if I were benevolent dictator, I would simply, instead of parting the seeds, I’d part members of Congress from, get out of your own way and pass some things that I think you actually agree on. Look, if I were benevolent dictator, we would do a lot more on guns.
Matter of fact, we’ve managed to make some progress there, but of course, we need to make a lot more, I think we’ve made some progress on racial justice, but I would like to make a ton more progress. So it is underappreciated that in 2023, the Black unemployment rate was the lowest on record with data going back to 1972, and the Black-white unemployment rate gap was the lowest on record, going back to when that data begins in 1972. So I would build on these accomplishments in terms of racial gains because they very much fit right into the middle-out, bottom-up framework where oftentimes under the trickle down framework, folks are just, economically vulnerable communities are just so often left behind.
Nick Hanauer:
Yeah. And one final question, why do you do this work?
Jared Bernstein:
I think I’m not going to say that I’m good at it, but it’s the only thing that I do kind of okay, I think. So part of it is just personal proclivities, try to do what you, what you’re least bad at. So you said it earlier, Nick, you and I have been talking about this stuff forever. So you and I would be sitting around in a ratty old couch in the boardroom of some underfunded think tank talking about, what’s this all about? And we thought we had it right, but not too many people were listening to us. Thanks to President Biden, we’ve had a chance to implement a common sense agenda that we thought would have many of the very outcomes that we’re seeing.
And to be able to sit here and talk to the president about this, to brief him on a jobs report, calls me from Air Force One the other night and says, “Wow, tell me about what just happened with the jobs number.” And I can talk about this in a way that resonates with him. That’s why I do this work, because I think that an economy that is failing to reach the people who need it most is a huge problem. And an economy that’s reaching folks who would otherwise be left behind is my life’s work, and I know your life’s work. And to be able to do that life work from here, tremendous privilege. That’s why I do it.
Nick Hanauer:
Yeah. Got to be awesome. Well, Jared, thank you so much for being with us, and thank you for your work. I have not been at this as long as you have. I’ve been at it for a long time, so I know how much blood, sweat, and tears has gone into getting to where you’ve gotten, and we just appreciate it so much. So thank you for being with us.
Jared Bernstein:
My pleasure. Take care.
Goldy:
Well, obviously that was a great conversation, but amongst all those words, three stood out to me. The words power, common sense, and hope. That’s assuming you spell common sense as a single compound word instead of two words. Otherwise, it’s four words. I know, the editor in me, I think Thomas Paine had it as one, I can’t remember. Anyway, and he kicks off right away with the word power, and let’s be clear about that word. There’s multiple meanings to it. That idea that power is missing from Orthodox economics, and it’s not missing from Bidenomics.
Nick Hanauer:
That’s right. It’s really important for listeners to understand that the idea of power was effectively-
Goldy:
Theorized away.
Nick Hanauer:
Theorized away out of neoclassical economics. If you assume that markets are perfectly efficient, if you assume that people and business owners have the same amount of power, if you make all these absurd assumptions, you can just pretend like power differentials do not exist in market economies. And pretending that power doesn’t exist in economics would be like pretending that gravity doesn’t exist in physics.
Goldy:
It sure makes the math easier.
Nick Hanauer:
It makes the math easier.
Goldy:
I mean, how could you do these models if you had a model power into the equation?
Nick Hanauer:
Exactly. And of course, if you assume in a world where some people have lots of power and most people have no power that power doesn’t exist, that is very advantageous to the people with lots of power.
Goldy:
That’s right. And just an example of how important power is, Jared was talking to us from the White House.
Nick Hanauer:
Exactly.
Goldy:
We have somebody either with power or clearly with the ear of people with power, the ear of the president, who is pushing this new economic paradigm, well, because he believes it. Which brings me to the second word or words that stood out for me, which is common sense. His point about the president just having this common sense take on the economy that trickle down was, well, I don’t think he said it, but obviously bullshit.
Nick Hanauer:
It’s a scam. Yeah, it was a scam.
Goldy:
And I’ve said this before, Nick. People talk a lot about the president’s age and yeah, do I really want an octogenarian president? Would I prefer that somebody younger was in… I’d feel more comfortable. My own parents and grandparents have grown old, I’ve seen that happen. But there is a huge advantage to having an 80-year-old in the White House who was elected to the Senate in the early seventies, who predates the neoliberal era.
Nick Hanauer:
Exactly. He’s the only guy in politics today, probably in America that remembers the country before neoliberalism wrecked it. He can remember an actual vital middle class. He remembers a world where the country wasn’t dominated by these oligopolies, and where you didn’t have to continually hear about Jeff Bezos and Elon Musk and Mark Zuckerberg and the rest of these narcissistic clowns.
Goldy:
And as much as I admire President Obama as smart and as well-meaning as he clearly was as a president, he was just too young to know any better. I mean, he literally came out of the University of Chicago. I mean, this is-
Nick Hanauer:
Straight up neoliberal.
Goldy:
And so neoliberalism was common sense to him that in the end, you don’t want to interfere too much in markets because markets are rational and always produce more efficient outcomes than government. He understood there was a need for government, but he was afraid to go too far and he didn’t go far enough. So common sense, we have a president with common sense, and that has really paid dividends over the past few years. And the final word that stood out to me was hope. And there’s this saying about economics. They call it the dismal science. And Jared brought this up, this idea that what the role, the job of economist was to tell you what you couldn’t do. You can’t raise taxes, because that would hurt investment. You can’t regulate it, because that would introduce inefficiencies and drive jobs elsewhere and all that. It was all about the things you couldn’t do.
It’s about scarcity and restrictions and that’s not what middle-out economics is about. That’s not my Bidenomics and what this new economics about. And you can see it in Jared, not just in the words he’s saying, but the expression on his face, the tone of his voice, he’s hopeful. What he sees are all the good that economics, good economics can do for the country, can do for the economy, can do for the typical American, and how much that pays off in the long run. And that’s why we have an administration that is willing to invest in the future. Because as he pointed out, these big investments that the Inflation Reduction Act and these other measures, these landmark measures are making, they don’t pay off. These are not short-term investments. These are long-term investments that will take years, decades to fully pay off. And it’s interesting, again, to have an 80-year-old president looking 20 years out in the future.
Nick Hanauer:
Yeah, absolutely.
Goldy:
Because you weren’t getting that in the past because you had to produce real results right now. And they’ve been willing to wait it out. And so confident has President Biden and Jared been in Bidenomics and this middle out, bottom up theory of growth that they were willing to stick by it and keep pushing it and keep talking it, and wait for the positive economic effects to start changing people’s minds and particularly voters minds. And as he pointed out, as we’ve seen in recent months, you see consumer confidence just spiking up. And hopefully we will see that continue through to November.
Nick Hanauer:
Yep. Absolutely. Crossing our fingers for more progress in the future.
Speaker 6:
Pitchfork Economics is produced by Civic Ventures. If you like the show, make sure to subscribe, rate and review us wherever you get your podcasts. Find us on Twitter and Facebook at Civic Action and Nick Hanauer. Follow our writing on Medium at Civic Skunk Works, and peek behind the podcast scenes on Instagram at Pitchfork Economics. As always, from our team at Civic Ventures, thanks for listening. See you next week.