ICYMI: President Biden "Changed the Paradigm" and "Laid the Groundwork for US Exceptionalism"

In new columns, Matthew A. Winkler and E.J. Dionne Jr. write about President's economic legacy of growing the economy from the middle out and bottom up, which has led to record job creating, strong economic growth, and a manufacturing construction boom.

In Bloomberg, Winkler writes, "From the American Rescue Plan Act of 2021 that ushered in the longest period of unemployment below 4% since the 1960s to the Infrastructure Investment and Jobs Act of 2021 that paved the way for road and bridge building, and from the Chips and Science Act of 2022 that sparked the biggest manufacturing construction boom the country has ever seen to 2022's Inflation Reduction Act that has led to many tens of billions of investment in new technologies that are already leading to new sources of climate-friendly energy, history will show that the 46th president laid the groundwork for US exceptionalism lasting many years, perhaps even decades, after his administration has long ended."

And in the Washington Post, Dionne writes that President Biden "changed the paradigm of economic policy from a view that prosperity stems from rewarding 'job creators' at the top to what he called a 'middle-out' and 'bottom-up' strategy. It wasn't just a slogan. In recent years, wage growth among low- and middle-income workers has outpaced that of higher-income groups."

Read more below:

Bloomberg (Opinion): History Will Be Kinder to Joe Biden Than the Pollsters
[Matthew A. Winkler, 12/16/24]

The 46th president laid the groundwork for US exceptionalism lasting many years, perhaps even decades, after his administration has long ended.

[…] From the American Rescue Plan Act of 2021 that ushered in the longest period of unemployment below 4% since the 1960s to the Infrastructure Investment and Jobs Act of 2021 that paved the way for road and bridge building, and from the Chips and Science Act of 2022 that sparked the biggest manufacturing construction boom the country has ever seen to 2022's Inflation Reduction Act that has led to many tens of billions of investment in new technologies that are already leading to new sources of climate-friendly energy, history will show that the 46th president laid the groundwork for US exceptionalism lasting many years, perhaps even decades, after his administration has long ended.

This is why the US economy is growing faster than any developed country as measured by the International Monetary Fund. It's why America has been able to avoid a recession that so many pundits said would be inevitable by now. It's why the US stock market is the envy of the world, soaring 58% percent under Biden's watch, compared with just 2.5% for everyone else as measured by the MSCI indexes. Were he still around, economist John Maynard Keynes would surely call the performance of equities a psychological referendum on Biden's policies.

No US president in the last half century comes close to replicating Biden's superior score among most of the 15 measures of relative prosperity weighted equally, according to data compiled by Bloomberg. The 2.9% annual increase in non-farm payrolls, 7.9% nominal rate of annualized GDP growth, 14.1% increase in homeowners equity, 5.1% surge in average hourly earnings and the dollar's 19% appreciation against a basket of major currencies are just some of the metrics that make Biden the uncontested economic leader.

What makes this performance all the more remarkable is that Biden inherited the once-in-a-century Covid-19 pandemic that led to a catastrophic 1.12 million deaths in the US alone from his predecessor, President-elect Donald Trump. Remember that at the time of the 2020 election, a recovery from both the pandemic and the worst recession since the Great Depression presided over by Trump was still in doubt. Biden then delivered what had been largely missing for the previous two decades: fiscal stimulus.

"If you look at the economy" before the pandemic "it was very low growth for 20 years," JPMorgan Chase & Co. Chairman and Chief Executive Officer Jamie Dimon told the Economic Club of New York in April. "But if you look at the economy since then, it's been booming." (It was the first time in his career as the CEO of the No. 1 bank that Dimon used the word "booming" to describe the US.) "The American consumer, even if we go into a recession, is much wealthier than before," he added. "Debt service ratios are very low...their home prices are up; their stock prices are up." […]

Contrary to popular opinion, the Biden economy benefitted a wider swath of Americans. The poverty rate fell to 11.1%, the second lowest in data going back to 1973, according to the US Census Bureau. Also, the Gini Index of Income Inequality declined for two straight years, the first time that has happened since the early 1970s. Under Biden, household net worth has surged by an unprecedented $32.1 trillion through mid-2024. Americans are spending less than 10% of their incomes servicing debt, a record low in data going back to 1980 and excluding the pandemic years of 2020 and 2021 when many payments were put on hold. […]

Washington Post (Opinion): Progressives should defend Biden's legacy to protect their future
[E.J. Dionne Jr., 12/15/24]

Trump's victory should not be used to erase Biden's policy achievements.

[…] [Biden] changed the paradigm of economic policy from a view that prosperity stems from rewarding "job creators" at the top to what he called a "middle-out" and "bottom-up" strategy. It wasn't just a slogan. In recent years, wage growth among low- and middle-income workers has outpaced that of higher-income groups.

Biden's approach to trade was pragmatic, not ideological, and, again, oriented toward workers. He rejected free trade purism, recognizing a need to bring parts of the supply chain back to the United States — and with them, well-paying jobs. He reinvigorated antitrust, taking the problem of monopolies seriously again, and was proudly pro-union when it came to labor regulations. He used the government's power to lower drug prices, take on junk fees and protect consumers against abuses by financial institutions.

His largest contributions will be to the future: the bipartisan infrastructure law, the Chips and Science Act, and the Inflation Reduction Act. Biden has grounds for claiming that these initiatives "mark the most significant investment in America since the New Deal," and he's certainly right that the misnamed Inflation Reduction Act is "the most significant investment in climate and energy ever."

Trump wails about China and lost American jobs, but my Brookings Institution colleagues concluded that Biden's policies are what steered "generous flows of high-value private investment into many of the regions most blighted by economic damage and chronic joblessness attributable to the China shock." […]

The economy Biden leaves behind really is in good shape. Unemployment and, now, inflation are both low. The initial effects of Biden's investment programs have been positive, and their impact will grow over time. […]