Patrick Semansky/AP Photo
President Biden’s commitment of funds and tax credits to revive America’s industries and infrastructure has clear echoes of Roosevelt’s public investments.
This article appears in the October 2023 issue of The American Prospect magazine. Subscribe here.
In 1959, as a prelude to his campaign to become the Democratic nominee for president in 1960, then-Sen. Lyndon Johnson traveled to Hyde Park, New York, to remind Democrats of his political beginnings as the young Texas congressman who’d championed the New Deal. He praised his hero Franklin Roosevelt, “a New Yorker and an Easterner,” for dedicating himself to building up the South and the West with programs like electrification and water projects. “And the West and the South will forever love him—and follow where he led,” Johnson said.
Even in 1959, the assertion that the West and South would forever love Roosevelt looked shaky. In 1948, four Deep South states had strayed from the Democratic column, voting for third-party segregationist Strom Thurmond rather than Roosevelt’s successor, Harry Truman. But the assertion that Roosevelt had made massive public investments to raise living standards in regions outside the more prosperous Northeast and Midwest was not only true, it was a necessary reminder of a massive accomplishment that was already vanishing from the nation’s memory.
The New Deal, after all, had been about social insurance, minimum wages, workers’ right to unionize, regulating finance. That its efforts to raise ordinary Americans’ living standards also encompassed vast economic development projects targeted to the South and West wasn’t omitted from history books, exactly. But the regional aspects of the New Deal—the electrification of the South through the dams and power lines of the Tennessee Valley Authority, the provision of hydroelectric power to Western states that enabled their huge and rapid growth—were never central to the reigning New Deal narratives.
A similar dynamic is taking place today. Like Lyndon Johnson once he became president, Joe Biden has deliberately sought to build on Roosevelt’s New Deal legacy. He is surely the most pro-union president since FDR; he is reviving the long-overdue regulation of big business; his social proposals in the Build Back Better bill of paid sick leave, affordable child care, and free community college would have extended the social provisions of the New Deal; and his commitment of funds and tax credits to revive America’s industries and infrastructure has clear echoes of Roosevelt’s public investments.
That those commitments of funds also have a specific regional focus, though, isn’t often viewed as a central feature of Bidenomics. A Washington Post article from this August headlined “5 Key Pillars of President Biden’s Economic Revolution” said that the five were: Run the economy hot; Make unions stronger; Revive domestic manufacturing through green energy; Rein in corporate power; and Expand the safety net.
Those are indeed five key Bidenomics pillars. But there’s a sixth, or, at least, a crucial addition to the one about reviving domestic manufacturing: Locating that revival in regions that private capital has long abandoned.
THE UNITED STATES NO LONGER HAS DISTINCT geographically contiguous regions that are economically underdeveloped, at least not the way it did before the New Deal began to spread the wealth spatially. Disparities in wealth and income between the South and the Northeast had widened steadily and hugely from the outset of the Civil War until the New Deal began to address them. The South’s white power structure didn’t really want them addressed; its senators and House members only supported establishing a federal minimum wage and legalizing collective bargaining if those laws expressly excluded agricultural and domestic workers (that is, African Americans). Still, the TVA was the first major investment of capital in the region since the Civil War destroyed slavery, which had been its primary form of capital. And the TVA was the kind of investment that made possible other investments, from the shipyards and Oak Ridge uranium processing plants of World War II to the defense factories that Ronald Reagan showered on the Sun Belt during his presidency.
Biden has confronted a different kind of underdevelopment, one that’s not particular to any one geographic region. It’s rural. It’s small-town. To be sure, the once-industrial Midwest has been called the Rust Belt for several decades now, but that’s chiefly due to contrast between prior investment and then its abandonment. Disinvestment is a steady state in nearly all of non-metropolitan America.
In 2016, the Economic Innovation Group (EIG) released a study that revealed with grim clarity the scope of capital flight from rural America. It looked at the share of new businesses in large counties (more than 500,000 residents), midsized counties (100,000 to 500,000), and small counties (fewer than 100,000) in what were then the three most recent economic recoveries: 1992 to 1996; 2002 to 2006; and 2010 to 2014. During the first recovery, the share of the nation’s newly created businesses that were in the midsized counties was 39 percent; during the second, it declined to 36 percent; and during the third, it dropped still further to 19 percent.
Within the small counties, the share of the nation’s newly created businesses during the first recovery was 32 percent, which fell to 15 percent during the second recovery, and collapsed to a flat zero percent in the third recovery after the 2008 financial implosion. Similarly, in the small counties, the share of the net increase in the nation’s jobs fell steadily, from 27 percent in the 1992–1996 recovery to one-third of that—just 9 percent—in the recovery of 2010–2014.
The scope of private capital’s abandonment of non-metropolitan America is breathtaking, and surely due to Wall Street financialization, offshoring, and associated ills. But investment by public capital flatlined as well, as the end of the Cold War decreased the military Keynesianism that had spread public dollars across the nation, as the federal government proved itself incapable of investing in improvements to the nation’s infrastructure, and as a growing number of right-wing state governments adamantly opposed public spending.
It’s to these places—to Disinvested America—that Bidenomics is prompting massive investment, primarily through tax credits and grants to corporations to build factories (manufacturing construction has increased by 76 percent over last year).
THE REASONS FOR THIS TARGETING are straightforward. First, factories take up space; there’s little if any room for them in metropolitan areas. Second, these places, where life spans have been contracting and deaths of despair rising, need investment, and the higher wages that manufacturing will hopefully bring to these terrains. Third, it must be said, corporations pursuing these tax subsidies and grants are seeking out locations where they can enjoy non-union labor and right-to-work laws.
The fourth reason isn’t so straightforward. These places are home to those working-class, disproportionately white Americans whose decades-long flight from Democrats has condemned the party, even when it wins, to the narrowest of victories. These places present Democrats with, at best, limited growth potential. And it’s in rural counties that support for Democrats has dropped the most. In this summer’s vote in Ohio on what effectively was a referendum on women’s right to an abortion, seven of the eight most populous counties voted to support these rights; 41 of the 42 smallest counties voted to deny them.
If density is political destiny, the effects of even transformative investment on Democratic prospects may be muted at best. Still, that’s where Bidenomics is betting big on an industrial renaissance. The most recent comprehensive survey of the more than 200 manufacturing projects spawned by green-energy tax credits in the Inflation Reduction Act lists the six leading states, in order, as Georgia, South Carolina, Michigan, Ohio, Tennessee, and Texas—states of the anti-union South and the formerly unionized Midwest. Of the roughly 125 congressional districts where companies have announced they’ll be building or expanding IRA-funded factories, the 15 with the highest level of investment are all represented by Republicans. Approximately 72 percent of the jobs projected to be created by these investments and 86 percent of the dollar value of all investments announced thus far are in Republican districts, the survey reported.
I don’t for a moment think that the Biden people believe investments of any size will enable Biden to carry South Carolina, Tennessee, or other solid-red states in 2024. I do think they believe it can help him in swing states like Georgia, Arizona, and North Carolina, and add an insurance point or two in a state like Michigan. That said, most of his campaign jaunts have been to states and districts where he can claim credit for a new plant springing up. Even if he’s in the reddest of red states, the thinking goes, his message can seep across state lines and may swing some votes that really matter.
And yet, he can’t really count on getting his message out as well as FDR could. For one thing, Roosevelt campaigned in a nation with tens of thousands of local newspapers, in which a new factory or new bridge, let alone a presidential visit, qualified as big news. In our time, rural and small-town news outlets have disproportionately disappeared. Fully 2,500 newspapers have folded since 2005, many in the kinds of places where Bidenomics factories are springing up, and where the void created by newspaper closures has been filled by Fox News.
Biden clearly learned from the failure of the Obama administration to promote projects funded by their stimulus package that the absence of such a publicity campaign can contribute to disaster at the polls. What’s not clear is how much a publicity campaign for these kinds of projects can actually help. Has he embarked on a fool’s errand?
No polling exists that can disaggregate the reasons for Roosevelt’s re-elections. In voting for him, Americans were affirming the New Deal generally, and FDR’s leadership through depression and war. As to the New Deal’s largest public investments, FDR carried the South after the TVA had been created, but Democrats had been carrying the South by and large since the days of Thomas Jefferson and Andrew Jackson. Once the Hoover and the Grand Coulee Dams had been completed, he carried the Pacific states, but he carried them before they’d been completed, too.
Roosevelt understood that major development projects were economically and morally necessary, but not by themselves at all key to his electoral hopes. Much of his large-scale dam and bridge and aircraft carrier building was carried out through the Public Works Administration (PWA), but as his first winter in office loomed in 1933, he responded to the very real threat of mass starvation among the quarter of American workers who were unemployed by taking funds from the PWA and redirecting them to less capital-intensive projects (paving roads, building parks and schools) that immediately created jobs for millions. That was even more morally necessary, but also more immediately tangible in its effects on the populace than massive transformative projects that would be slow to take shape.
As a political matter, the PWA investments weren’t game changers by themselves, but they were part of the larger New Deal gestalt. That’s the role that Biden’s IRA-funded factories can play in the Bidenomics gestalt. By revitalizing communities with the shops and eateries and everything needed to serve a new workforce, these projects, if they continue to spring up as they’ve done so far, can bring new life to Disinvested America. Placed alongside Biden’s pro-union actions, his campaign against monopolies and overpriced medications, his as-yet-unrealized plans to help families navigate child care and sick leave and the costs of college, his resurrection of American industry and the places from which it fled affords him just one more way he can answer the question of Which Side Are You On.
Despite his neo-Rooseveltian policies, though, Biden has yet to convince most Americans—especially those whose local economies will benefit the most from those policies—that he is, in fact, very much on their side. His resurrection of American manufacturing comes with no guarantee of electoral success. But in its long-term effect on American well-being, as Biden once famously said, it’s a big fuckin’ deal.
