Yuri Gripas/Abaca/Sipa USA via AP Images
President Joe Biden arrives on the South Lawn of the White House upon his return to Washington, August 14, 2023.
Joe Biden in many ways is the most progressive Democratic president since FDR. He has resurrected national economic planning as a necessary government function and scrapped the neoliberal myth that government should not try to pick winners.
But there are two huge differences between Biden and Roosevelt, and neither is Biden’s fault. First, FDR had immense working Democratic majorities in both houses of Congress, and Biden has fumes. Second, FDR had World War II.
In the war buildup, unemployment melted away from over 13 percent in 1940 to effectively zero by early 1942. During the war years, real wages grew by half. Government spent about 30 percent of GDP on the war effort and the related recapitalization of U.S. industry.
Biden’s big public programs, including the CHIPS and Science Act, Inflation Reduction Act, and the bipartisan infrastructure law together spend about $2 trillion over ten years—about 1 percent of GDP. If you compare the relative scale, as well as the longer lead time of Biden’s public investments, you can appreciate why Biden does not get the credit he deserves.
Reviewing Biden’s overall economic performance in the pandemic and related recession and recovery, he’s done just about everything right. Unemployment is at record lows, job creation is at record highs, real wages are (modestly) up, inflation has subsided. Biden has attempted other more immediate and vivid sources of help, such as student debt relief or a permanent child allowance, but has been blocked by Congress or the courts.
The White House fact sheet on CHIPS, released August 8, tells us: “In the one year since CHIPS was signed into law, companies have announced over $166 billion in manufacturing in semiconductors and electronics, and at least 50 community colleges in 19 states have announced new or expanded programming to help American workers access good-paying jobs in the semiconductor industry.”
Great stuff, but not a huge number of new, well-paying jobs in the near term. The Semiconductor Industry Association projects that the industry will be short just 67,000 workers by 2030.
However, as Ronnie Chatterji, who recently stepped down as White House coordinator for the CHIPS and Science program, points out, these new publicly subsidized investments do make a concentrated difference, with high local media visibility, in some states and regions.
These include Ohio, where Intel has broken ground for a massive new campus and several thousand new jobs, and upstate New York, where Micron will invest billions. Other key places with large new semiconductor investments are Arizona and Indiana.
Many of these happen to be swing states or swing districts. The other local good-news story here is the several hundred million in new funding for community colleges to increase training of a workforce for new tech jobs.
The challenge, beyond election year visibility, is that the administration has only so much leverage. These are global companies that can produce anywhere in the world; they have never had union production workforces.
That said, the Biden semiconductor program is a genuine achievement that will revive a key domestic industry and relieve supply chain pressures, as well as a monumental ideological reversal. The political question is whether it’s sufficient, even with the best messaging in the word, to overcome the long-term sense of government having failed to deliver for working-class voters who face worsening terms of engagement with the economy. Only a relative few will get these new tech jobs.
