What happens to Biden’s industrial policy initiatives now?
Companies have made big investments in response to those policies. That’s not easy to roll back, says Heather Long of The Washington Post.
With President Joe Biden out of the election, a change in U.S. leadership is imminent. His administration’s industrial policy efforts, such as the CHIPS Act, Inflation Reduction Act and Bipartisan Infrastructure Law, will be part of his economic legacy. As “Marketplace” has explored in a series called Breaking Ground, many of those policies could take decades to implement.
“Marketplace” host Kai Ryssdal spoke with Washington Post columnist Heather Long about Biden’s legacy and the future of his administration’s industrial policy initiatives. The following is an edited transcript of their conversation:
Kai Ryssdal: So as most of us in this field have been thinking about President Biden’s legacy over the past 24 hours — economic legacy in particular — what comes to mind for you?
Heather Long: You have to give President Biden huge credit for reviving the economy. OK, presidents can only do so much, but come on, when he entered office, we were still in a lot of the dark days of COVID, the unemployment rate was 6.7%. I remember writing these articles, that we might have a double-dip recession. And they took a big risk by doing that massive stimulus in 2021 in the spring there. That was very controversial, but it ended up spurring incredibly low unemployment … the lowest black unemployment rate ever, a huge surge in manufacturing jobs, a huge surge in new business applications and startups. Obviously, we also had an inflation surge, but that’s come way back down. The other thing he’s really left a mark on, in my mind, is industrial policy. And I know you and I were both in Arizona, staring at the early stages of that industrial policy.
Ryssdal: So let’s talk about that, right? We’ve got the CHIPS Act, we’ve got the Inflation Reduction Act, we’ve got the Bipartisan Infrastructure Law. These are things that, as we talked about in Phoenix at the time, are going to take decades to play out. And obviously Biden wasn’t going to be around in office to see that play out. But how much do you suppose it matters now that there’s going to be a change in the relatively early phases of getting this money out the door?
Long: It’s a great question. So far, the CEOs that I’ve had a chance to speak to in those industries, particularly in the semiconductors, are still really bullish at the end of the day. Whoever wins in November is likely to want to continue this policy of reshoring American jobs, and especially of ensuring that they can produce this key component, these chips. They want that back home, and that’s likely to stay, whether it’s President [Kamala] Harris or President [Donald] Trump or President Somebody we haven’t even thought of yet. But you know, it’s really a dramatic turnaround, the last eight years. You know, Trump basically made tariffs mainstream again, and Biden has made industrial policy mainstream again. And it’s hard to really conceptualize what a dramatic 180 that is from the 1990s and early 2000s view of how you do government economic policy.
Ryssdal: I was listening back to the to the recap you and I did of our Phoenix visit. And one of the things you said struck me. It was along the lines of, you know, no matter which administration is in place, no matter which party, the companies themselves have now invested billions and billions and billions of dollars. TSMC and Intel and all the rest, they’re not going to walk away from that investment.
Long: It would be very hard to do. They’d obviously have to write down a ton of money to do that. And I think that’s what’s been the really big surprise, and the really big encouraging part of this industrial policy — for all the critics who’ve said it can’t happen or it’s going to be too costly — the Biden administration can really point to, yes, we put a lot of government money in, but the companies have put three and four times as much money in. It’s also a number of companies that, even since we were there in March, have started apprenticeship programs and have expanded their training for workers, so these jobs are starting to materialize. They’d all like to go a little faster, but I think there’s a lot of green shoots, to use a popular word in economics.
Ryssdal: With the caveat that you’re an economics reporter and not a political reporter, Vice President Harris, assuming she gets this [Democratic Party] nomination, is going to have to campaign to some degree on the Biden economic legacy, right? How does she now make that case when it’s not going to pay off for a very long time?
Long: You’re right. I think she’s going to recite a lot of these statistics that we were speaking about, about getting the unemployment rate down, lowest black unemployment rate, these sorts of things. But on the core industrial policies, I think you’re right, you can point to, ‘We’ve started this, and the factories are being built, and a lot of construction,’ but in terms of a ton of people whose lives have totally changed so far? That’s going to be a little bit — there just aren’t those tens of thousands of jobs that they’re hoping for yet.