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Speaker 1: Hello, and welcome to another episode of the Odd Lots Podcast.

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Speaker 2: I'm Joe Whysenthal and I'm Tracy Alloway.

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Speaker 1: Tracy, So we're recording this of Friday, June thirtieth. It

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Speaker 1: really felt like this week a bunch of people kind

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Speaker 1: of like declared victory on the economy or suddenly like

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Speaker 1: there's been like something in the water, you know, like

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Speaker 1: they put LSD in the water or something like people

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Speaker 1: are like feeling good. There's a good mood vibe.

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Speaker 3: Yeah.

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Speaker 2: If last year we were all worried about the Vibe session,

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Speaker 2: so the idea that all these survey based measures were

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Speaker 2: turning down even while activity was still relatively robust. What

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Speaker 2: are we going to call this one?

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Speaker 3: VI?

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Speaker 1: What's the vibe expansion?

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Speaker 2: I don't know vibe Spanish.

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Speaker 1: You need to get Kyla Scanlon up, yeah, to come

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Speaker 1: up with the term. But yes, the vibes shifted somehow

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Speaker 1: this week.

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Speaker 2: Yeah, And it's interesting because a lot of the trends

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Speaker 2: that we saw last to her, you know, very low unemployment,

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Speaker 2: you know, still some inflationary pressures, housing market relatively robust.

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Speaker 1: Those have just.

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Speaker 2: Continued this year. So not a lot has changed, but

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Speaker 2: it definitely feels like people are more optimistic.

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Speaker 1: Yeah, right, exactly, a bunch of people declaring that all

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Speaker 1: the recession calls are null and void. The vibe session

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Speaker 1: is over. Noah Smith had a blog saying that. And

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Speaker 1: I think most notably, the White House sort of chose

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Speaker 1: this week as a week to stamp out the success

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Speaker 1: of what they're calling Bidenomics. And they're basically, you know,

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Speaker 1: we had the president and they're sort of saying, yes,

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Speaker 1: this is the economy that the White House is planned

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Speaker 1: for and designed and the envisioned. And so I think

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Speaker 1: that's a sign they're kind of like in a position

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Speaker 1: where they want to brag a little bit. Yeah, they

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Speaker 1: want to talk about it.

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Speaker 4: Yeah.

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Speaker 2: And it is interesting in and of itself that the

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Speaker 2: White House feels comfortable enough to choose this moment to

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Speaker 2: kind of put a time step on the idea of

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Speaker 2: Bidenomics and declare it an early success.

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Speaker 3: Yeah.

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Speaker 1: And so I mean, obviously we know like some big

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Speaker 1: components of it, and they are these really sort of

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Speaker 1: extraordinary like you know, industrial policy like strategies, the Chips Act,

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Speaker 1: which we talk a lot about on the show, the

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Speaker 1: Inflation Reduction Act, the reshoring, domestic investment, all of these

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Speaker 1: things sort of like sort of ongoing fiscal support for

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Speaker 1: the economy, putting money in the hands of workers, et cetera.

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Speaker 1: And you know, again, the numbers today seem solid, and

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Speaker 1: so then I guess the question is like, Okay, what

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Speaker 1: is the big coherent thought and like where going from next?

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Speaker 1: Because we're getting the investments, we see the factory announcements

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Speaker 1: all the time, but then like what's next for all

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Speaker 1: that's being built?

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Speaker 2: Why now? And what's next?

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Speaker 1: Well, to learn more about what is Bidenomics and what

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Speaker 1: is next, we are going to be speaking with Jared Bernstein.

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Speaker 1: He is the head of the White House Council of

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Speaker 1: Economic Advisors. Jared Bernstein, thank you so much for coming

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Speaker 1: on Odd Loaves today, huge week.

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Speaker 3: Wait a second, am I am I the perfect guest?

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Speaker 3: Or not?

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Speaker 1: We have the perfect guest?

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Speaker 3: Okay, that's what I wanted to hear.

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Speaker 1: Yeah, soone told us recently how devastated they would be

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Speaker 1: if they got intro without the perfect guest. Mentioned you

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Speaker 1: are the perfect guest.

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Speaker 3: I mean once you start, once you start saying that,

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Speaker 3: it sort of becomes like, wow, yeah, we have to

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Speaker 3: say it every time. I didn't get it.

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Speaker 1: But when we don't say it. It's never intentional. Yes,

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Speaker 1: we don't. It's not that volumes huge week, obviously. Why now,

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Speaker 1: you know, the economy is hot and it's been hot

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Speaker 1: for a while, inflation is elevated, labor market tightness. Why

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Speaker 1: was this the week that President Biden in the White

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Speaker 1: House chose to sort of sort of declare that biden

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Speaker 1: Nomics is working well.

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Speaker 3: I think the simple answer is that there's a lot

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Speaker 3: of evidence that it is. And in terms of the

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Speaker 3: broader economy, you know, I think that there's headwinds and

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Speaker 3: there's tailwinds. And I think one of the things that

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Speaker 3: I know, I listened to you guys all the time,

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Speaker 3: and I really enjoy what you do. But I think

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Speaker 3: all of us here in this business get very focused

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Speaker 3: on the news of the day, the news of the minute,

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Speaker 3: the news of the week. You know, the mark asset

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Speaker 3: that's in trouble, or the market asset that's soaring, the

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Speaker 3: supply chain that's broken, the dwell time in some port somewhere,

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Speaker 3: all of that's critically important to all of us, and

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Speaker 3: you two do a great job of reporting on that.

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Speaker 3: But you know, Bidenomics takes both a near term and

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Speaker 3: a very long term view. So when we're talking about

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Speaker 3: the bipartisan Infrastructure Law, the inflation reduction at the Chips Act,

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Speaker 3: and I know you've done shows on all of those,

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Speaker 3: we're talking about a long term play here where if

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Speaker 3: we get the implementation and the public private aspects of

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Speaker 3: those investments right, we have the potential to transform the

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Speaker 3: economy very much in the spirit of Bidenomics, bottom up,

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Speaker 3: middle out growth, a complete reversal from the trickle down,

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Speaker 3: top down approach that I think decades of evidence fails

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Speaker 3: to support. So I do think there is a longer

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Speaker 3: term view here that gets away from the headwinds and

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Speaker 3: tailwinds of the day.

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Speaker 2: So I'm glad you mentioned this because this sort of

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Speaker 2: feeds into one of the criticisms that you sometimes hear

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Speaker 2: about a more active industrial policy or you know, Bidenomics,

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Speaker 2: where investment, long term investment does take a more central role,

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Speaker 2: and that criticism is that potentially you are pulling a

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Speaker 2: lot of investment forward, so you're sort of front loading capex,

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Speaker 2: and that maybe you know in the next downturn, which

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Speaker 2: hopefully will be a long time from now, that maybe

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Speaker 2: you won't have as much ammunition for this type of spending. Again,

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Speaker 2: how would you respond to that.

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Speaker 3: Well, I think one of the very positive attributes of

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Speaker 3: the Bidenomics investment that we're seeing right now is the

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Speaker 3: extent to which public investment, which does have a longer

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Speaker 3: term spend out it's much smoother, is pulling in private investment, which,

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Speaker 3: as you suggest, can be kind of lumpy. Part of

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Speaker 3: that is because of the actual building the initial cost

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Speaker 3: that take place when we are standing up a domestic

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Speaker 3: semiconductor industry, when we're standing up a domestic electric vehicle

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Speaker 3: electric battery industry, when we're making these longer term investments

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Speaker 3: in clean energy. So here's a way to think about that.

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Speaker 3: If you look at the record on the prior administration

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Speaker 3: of domestic spending on manufacturing facilities, So the construction of

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Speaker 3: manufacturing plants in flatlined for many years. I think it

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Speaker 3: grew two percent real in the prior administration. That's up

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Speaker 3: one hundred percent since the president took office. So that's

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Speaker 3: a hockey stick kind of a figure in the Treasury

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Speaker 3: Department putut a nice blog on that if you want

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Speaker 3: to just post the figure on that, And what the

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Speaker 3: Treasury folks did in their blog was they looked at

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Speaker 3: where those manufacturing facilities, what sectors is that construction taking place,

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Speaker 3: and it very clearly relates to the investments that are

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Speaker 3: incentivized by the legislation that we've been talking about. So

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Speaker 3: of course you're going to see a big initial spend,

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Speaker 3: but I think over the longer term that smooths out,

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Speaker 3: and if we do it right, it keeps delivering in

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Speaker 3: terms of domestic production and high quality jobs for American workers. Tracy,

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Speaker 3: I want to comment on something you said. You guys

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Speaker 3: talk a lot about industrial strategy policy. I'm not sure

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Speaker 3: that this point has been made clearly enough, though you know,

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Speaker 3: if it has, I'm repeating it, which is that, yes,

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Speaker 3: we certainly have a very clear, conscious, visible, elevated agenda

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Speaker 3: in that space. Nobody's trying to be cute or hide

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Speaker 3: any balls. But I also think that you cannot find

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Speaker 3: a time in our economic history when there wasn't an

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Speaker 3: industrial policy of some sort or another. And you know,

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Speaker 3: obviously you can go back to the beginning of our

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Speaker 3: country and see a very clearly articulated industrial policy of

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Speaker 3: Hamilton's manufacturing initiatives. But what I'm talking about is something

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Speaker 3: much less positive than that. What I'm talking about is

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Speaker 3: an industrial policy that is a function of who has

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Speaker 3: the best connected lobbyist to get the tax code that

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Speaker 3: they want and what you end up with, What you

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Speaker 3: end up in that kind of industrial policy is the

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Speaker 3: deepest pocketed, best connected, in many cases, most divorced from

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Speaker 3: actual economic productivity initiatives are the ones that get the brakes,

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Speaker 3: the funding, the tax credits, the attention. One thing you'd

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Speaker 3: expect to have in that scenario is an outsized role

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Speaker 3: for finance. And you know what I call the shampoo cycle,

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Speaker 3: bubble bust, repeat, and you know, we've seen a lot

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Speaker 3: of that. So I think that it's wrong to think that,

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Speaker 3: you know, we sort of fell out of the sky

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Speaker 3: with in industrial strategy, and more more correct to view

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Speaker 3: this as very intentional and I hope very thoughtful.

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Speaker 1: One I want to ask about, you know, you mentioned

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Speaker 1: the investment in structures and it's it is a hockey stick.

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Speaker 1: And we see the battery announcements almost every other day,

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Speaker 1: and the chip announcements almost every other day. What is

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Speaker 1: next and by next them specifically, what can you and

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Speaker 1: the administration and the rest of the administration do to

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Speaker 1: focus that what happens inside the plants actually happens in

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Speaker 1: a cost competitive way that good cutting edge batteries are made,

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Speaker 1: that we compete, that they compete globally, that good cutting

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Speaker 1: edge chips are being made. What's next in terms of, basically, yeah,

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Speaker 1: guaranteeing that what's built inside these structures sort of delivers

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Speaker 1: on the outside.

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Speaker 3: Well, the thing with capitalism is that there's no guarantees.

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Speaker 3: The idea of you know, the government sort of getting

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Speaker 3: in there and saying, you know, don't use this widget,

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Speaker 3: use that widget sounds kind of unappealing to me. I

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Speaker 3: think the best thing for our industrial strategy, and certainly

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Speaker 3: the way I believe the President thinks about this, is

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Speaker 3: that we create the environment and the conditions, both in

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Speaker 3: terms of capital investment, in terms of worker quality, and

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Speaker 3: in terms of the ancillary functions which I'll explain that

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Speaker 3: workers need to make this all work. So, the first

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Speaker 3: thing is there are deep market failures where private investors,

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Speaker 3: because of risk reward ratios being what they are, will

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Speaker 3: underinvest in critical sectors such as climate, such as batteries,

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Speaker 3: such as more resilient supply chains here, and so our

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Speaker 3: financing structures. And again, you've had lots of good conversations,

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Speaker 3: You've had folks from the government on to talk about this.

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Speaker 3: Our financing structures have to tweak those risk rewards so

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Speaker 3: that we can get so that we can get the

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Speaker 3: investment we need. That's you know, a pretty thirty thousand

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Speaker 3: feet up versus you know, having to get into factory

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Speaker 3: and make sure the chips are coming out the right way.

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Speaker 3: But that's important. And then secondly, we have to make

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Speaker 3: sure that the workforce is empowered and educated, and that

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Speaker 3: happens to be Pillar two of Bidenomics, by the way,

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Speaker 3: empowering and educating the workforce. And I think one somewhat

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Speaker 3: underappreciated part of chips is the very significant resources in

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Speaker 3: that bill to provide training for workers to come into

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Speaker 3: these places, places which, by the way, and this might

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Speaker 3: even be an od launch show someday, places that are

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Speaker 3: being stood up all across the country. This is my

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Speaker 3: favorite aspects of Bidenomics and the investment agenda. They're showing

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Speaker 3: up in the Southwest, in upstate New York, in Ohio

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Speaker 3: and Tennessee and Oklahoma, in blue places, in red places.

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Speaker 3: You know, the President has a joke, I'll see you

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Speaker 3: at the ribbon cutting for people who didn't vote for

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Speaker 3: the legislation, would show up to cut the ribbons. And

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Speaker 3: I think that's great. I mean, I think that's the

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Speaker 3: way to have the most productive economy. But where's it

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Speaker 3: going the third part of your question, Well, look, our

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Speaker 3: car agenda is really important. That may sound divorced from

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Speaker 3: what we're talking about, but it's not. Just like we

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Speaker 3: announced earlier one of these weeks. They all mushed together

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Speaker 3: for me. We're going to make sure that if you

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Speaker 3: live in rural America, you have affordable high speed broad

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Speaker 3: that is economic oxygen to people in those places. You

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Speaker 3: can't participate without it. I'd say the same thing about

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Speaker 3: accessible and affordable childcare. That's something we have to work

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Speaker 3: on going forward, and it's in our budget we have

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Speaker 3: to I think that's a great tool for us to

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Speaker 3: work on, both in the context of helping people's personal

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Speaker 3: budgets in their economies, their household economies, but also in

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Speaker 3: this context to make sure people have access to the

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Speaker 3: job market and to these good jobs.

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Speaker 2: Well, Joe and I would be more than happy to

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Speaker 2: do a Studs Turcle version of the show where we

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Speaker 2: go on the road and talk to workers and new

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Speaker 2: types of jobs. But just on that note, you know,

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Speaker 2: Joe asked you about being cost competitive. How do you

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Speaker 2: thread the needle between creating, for instance, a semiconductor factory

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Speaker 2: and also a semiconductor factory that's able to, you know,

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Speaker 2: compete on a global basis with empowering workers and making

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Speaker 2: sure that workers are getting a fair deal. And the

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Speaker 2: reason I asked that is because I think we just

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Speaker 2: saw a headline that came out saying that there are

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Speaker 2: some semiconductor firms that are talking about importing migrant labor

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Speaker 2: rather than hiring locally in order to keep costs down.

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Speaker 1: And we know that, for example, the auto workers are

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Speaker 1: concerned about wages and paid some of the battery factories

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Speaker 1: replacing the ice factories.

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Speaker 3: I think this is very much a walk and chew

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Speaker 3: gum kind of question. I think when it comes to

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Speaker 3: the cost of production, we very have a very conscious

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Speaker 3: agenda to lower cost curves, and I think we're seeing

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Speaker 3: some success there. We've seen cost curves come down, particularly

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Speaker 3: in renewable energy, where the prison and I believe said

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Speaker 3: this in this speech in Chicago the other day, that

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Speaker 3: some of the price points around renewable energy, given the

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Speaker 3: increasing capacity in those sectors, have come down to be

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Speaker 3: quite competitive with traditional sources. I think we could say

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Speaker 3: the same thing with chips if our plans are able

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Speaker 3: to be realized with the pace that they're on now.

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Speaker 3: And that's just a very simple aggregate supply demand chart,

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Speaker 3: whereby increasing capacity increasing supply, you help on the price side.

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Speaker 3: And then you know, the other part is the job market. Look,

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Speaker 3: we've had an on that's below four and a half percent.

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Speaker 3: That's below four percent for eighteen months, a year and

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Speaker 3: a half we've had. When you do that, you start

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Speaker 3: seeing workers get a bit more bargaining cloud and that

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Speaker 3: shows up in pay. And in fact, we're finally starting

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Speaker 3: to see real wage gains as inflation begins to ease

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Speaker 3: and the job market remains strong. We've now seen a

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Speaker 3: year over year wage gain in the last job support

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Speaker 3: real wage guyers say, a year over year real wage

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Speaker 3: gain in the last job support. We now have real

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Speaker 3: wages up a percent since last June. If you look

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Speaker 3: for production non supervisory workers, so blue collar workers, non managers,

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Speaker 3: that's eighty percent of the workforce, their pay is up

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Speaker 3: one point five percent since last June. So interestingly that

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Speaker 3: it's up fifty BIPs more than the overalls. That's a

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Speaker 3: bargaining power story. We have blog on the CEA website

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Speaker 3: showing gains for black workers even closing some of the

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Speaker 3: black white gap a little bit because of the important

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Speaker 3: that bargaining power. We have an economy that can do

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Speaker 3: both of the above. That's the answer to Tracy's question,

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Speaker 3: that can do both of the above, that can invest

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Speaker 3: in productive capacity to bend cost curves while we run

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Speaker 3: a tight enough labor market that workers are getting their

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Speaker 3: fair share of the growth that they're helping to create.

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Speaker 3: And by the way, one of the ways that happens

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Speaker 3: mechanically or arithmetically is by labor share of income getting

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Speaker 3: back to some of its historical average. It's been pretty

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Speaker 3: depressed lately, and that's actually a non inflationary way of

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Speaker 3: paying for higher real pay is through a higher labor share.

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Speaker 1: Can you talk about international trade under the bidonomics framework,

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Speaker 1: and I'm thinking specifically about some of the frustrations from

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Speaker 1: our our friends and allies in Europe about some of

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Speaker 1: the rules that were put in place with the Inflation

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Speaker 1: Reduction Act, and how you think about that relationship and

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Speaker 1: how you know, what is the bidonomic stance on how

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Speaker 1: we relate to our trading partners.

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Speaker 3: Yeah, one of the things I get to do is

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Speaker 3: chair of the CEA. Is I chair something called the

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Speaker 3: Economic Policy Committee of the OECD, and we recently had

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Speaker 3: a meeting over there and I was talking to folks

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Speaker 3: in my position in many different many other countries, and

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Speaker 3: it was a very good, robust discussion about this point.

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Speaker 3: I think there's actually a lot more commonality, a lot

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Speaker 3: more agreement that we're all engaged. Many of these economies

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Speaker 3: we're talking about, if you look at their policy agendas,

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Speaker 3: we're all doing some version of the same thing. And

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Speaker 3: it's exactly what we've been talking about in our investment discussion,

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Speaker 3: and in fact, in many cases, Europe's been doing this

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Speaker 3: for a lot longer than we have. You know, industrial

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Speaker 3: strategy was not a bad couple of words over there,

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Speaker 3: I would say, longer than has been the case here.

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Speaker 3: And the idea is to I think, promote more spillovers

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Speaker 3: than sort of head to head competition. If we can

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Speaker 3: help lower the cost curve for producing the components of

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Speaker 3: clean energy economy, components of electric vehicles. Yes, of course

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Speaker 3: there's going to be competition, but there's also going to

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Speaker 3: be I think some cooperation and some benefits from the

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Speaker 3: increased capacity that we have here. Let me give a

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Speaker 3: concrete example. If you're making a battery here, you're making

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Speaker 3: it here, and if you follow the president's plans, you're

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Speaker 3: creating good union jobs for folks to do that here.

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Speaker 3: But nature, in her wisdom put the components of electric

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Speaker 3: batteries under the earths of many different countries, and most

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Speaker 3: of them aren't this one. I think there's some of

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Speaker 3: that up in Alaska, but there's just you're going to

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Speaker 3: be getting those intermediate inputs from other countries. So I

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Speaker 3: think one mistake that's been made in this discussion is

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Speaker 3: somehow assuming that our international trade policy is leaning towards

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Speaker 3: autarchy and you know, far less in terms of trade flows.

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Speaker 3: That is demonstrably false if you look at the trade

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Speaker 3: flows themselves, which have been quite robust. I mean, I

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Speaker 3: try to point people just do a couple of clicks

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Speaker 3: and you'll see we engage in robust trade. But I

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Speaker 3: would say, you know what really frames are thinking about

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Speaker 3: this differently is we don't look under bidnomics. We don't

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Speaker 3: look at Americans as consumers one hundred percent, full stop.

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Speaker 3: We recognize that they and their communities are also working people,

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Speaker 3: workers who depend on domestic production, getting good jobs here.

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Speaker 3: If all you thought about was consumer spending, you'd say,

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Speaker 3: let me import everything to try to increase the supply

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Speaker 3: and lower the price. If you thought about consumers on

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Speaker 3: people are consumers, but they're also workers, you'd think about

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Speaker 3: both and you'd say, yes, we want robust trade flows.

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Speaker 3: Yes we want to work with our partners to lower

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Speaker 3: the costs of goods that are so quick for our future.

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Speaker 3: But we also want to have good jobs here and

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Speaker 3: we don't want to hollow out our communities. So I

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Speaker 3: think that's really the way to think about the package.

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Speaker 2: Just going back to the investment side of Bidenomics, and

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Speaker 2: I guess differentiating between bad industrial policy versus smarter industrial policy.

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Speaker 2: You mentioned the idea of you know, potentially money or

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Speaker 2: power being concentrated in the hands of a few firms,

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Speaker 2: and I know that anti monopoly measures are of interest

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Speaker 2: and a big plank of the Bidenomics agenda. So does

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Speaker 2: this type of ramped up public investment, does that need

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Speaker 2: to go hand in hand with stronger anti monopoly measures,

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Speaker 2: and what are you thinking on that front?

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Speaker 3: I think it does, and I think that's h and

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Speaker 3: that happens to be Pillar three of Bidenomics, by the way,

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Speaker 3: which is promoting a competition both to lower costs and

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Speaker 3: to give a smaller busin This is a seat at

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Speaker 3: the table, chance to leap over some of those anti

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Speaker 3: competitive barriers that you were just kind of alluding to.

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Speaker 3: In terms of what it means, it's it's really everything

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Speaker 3: from some very granular stuff to getting some competitive cops

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Speaker 3: back on the beat. So on the granular side, you've

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Speaker 3: seen a president who's who's come out strong against junk fees,

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Speaker 3: who has implemented anti overdraft initiatives. I was talking to

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Speaker 3: the President about this the other day and he reminded

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Speaker 3: me about a famous case I know, Aaron Kline Brookings

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Speaker 3: talks about this of this banker who had a boat

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Speaker 3: that was called overdraft. He had a yacht and he

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Speaker 3: had named it overdraft. You know that that was something

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Speaker 3: that that does not sit well with President Biden, and

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Speaker 3: so he took an action that's saving consumers five and

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Speaker 3: a half billion dollars a year on overdraft fees. You know,

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Speaker 3: non competes, which I think you've probably talked about. I'm

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Speaker 3: sure you know what I'm talking about, the idea that

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Speaker 3: workers are come out from these really non competitive, non

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Speaker 3: compete closes, and to allow that to get jobs in

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Speaker 3: the same or similar industries where they were in a

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Speaker 3: way that doesn't do anything to hurt company disclosures or

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Speaker 3: anything like that. So that's the granular side of that equation.

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Speaker 3: I think the other side, which there are other people

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Speaker 3: who could talk about it know more thoroughly than me,

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Speaker 3: is just having the FTC back on the beat, and

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Speaker 3: you've seen lots of action there. I think it's fair

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Speaker 3: to say they're an independent regulator, just like the FED,

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Speaker 3: so we don't like the gut up in their knitting,

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Speaker 3: but I think it's fair to say that they have

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Speaker 3: taken this kind of view very seriously, the idea that

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Speaker 3: when too many of your industries retail, healthcare, technology are

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Speaker 3: so concentrated that's non or anti competitive. They've taken that

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Speaker 3: seriously and they're actively working to fix the damage in

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Speaker 3: a way that I think is impressive.

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Speaker 1: We just have about a minute or two left with you.

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Speaker 1: You know, obviously for the remainder of this particular term,

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Speaker 1: Republicans con control Congress, so legislative window probing not particularly

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Speaker 1: wide open. I'm just curious, like, what active is there

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Speaker 1: that you're working on specifically, whether it's still trying to

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Speaker 1: push through legislation or on the sort of administrative regulatory

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Speaker 1: side that we should be watching for.

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Speaker 3: Well, I think that so, first of all, we have

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Speaker 3: to do both. And I'm not going to talk about

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Speaker 3: student debt because we're going to let the President talk

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Speaker 3: about that first. But that remains something he's been committed

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Speaker 3: to since the campaign, helping helping people there. And you know,

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Speaker 3: we have a lot of plans in that space, some

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Speaker 3: of which are not as well known as they should be.

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Speaker 3: In fact, i'd like to nudge you to do a show,

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Speaker 3: not necessarily with me.

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Speaker 1: I appreciate, we appreciate all the show suggestions.

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Speaker 3: By the way, Yeah, yeah, I should be one of

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Speaker 3: your editors in on our new income driven repayment plan.

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Speaker 3: That is something people really need to learn a lot about.

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Speaker 3: I'd love you guys to dig into that. It's great plan.

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Speaker 3: We have people here can help explain it to the

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Speaker 3: audience in a way that I'm sure people would find compelling.

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Speaker 3: So you know, there are things we can do on

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Speaker 3: the admin side, the rule side, But I think the

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Speaker 3: more falseome answer to your question is to look at

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Speaker 3: our budget. Our budget is where we put the idea

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Speaker 3: is the policy agenda that the president believes is most important.

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Speaker 3: And while people always say, oh, the president budget isn't

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Speaker 3: going anywhere, in fact, the truth is that the history

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Speaker 3: of presidential administrations, they always pull ideas out of their

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Speaker 3: budget and you know, if they're good. And President Biden

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Speaker 3: has shown that he's better than good when it comes

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Speaker 3: to getting tough things over legislative goal lines. That's the

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Speaker 3: place to look. Now. The carriage that we talked about earlier, childcare,

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Speaker 3: elder care, that's in there. We have a really important

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Speaker 3: housing agenda. We have a housing supply structural, not cyclical,

437
00:23:31,800 --> 00:23:35,960
Speaker 3: structural housing supply shortfall for affordable housing in this country.

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Speaker 3: We have really great ideas, many of which, by the way,

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00:23:39,400 --> 00:23:42,120
Speaker 3: people on sort of both sides of both builders and

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00:23:42,240 --> 00:23:45,600
Speaker 3: people who want to be homeowners would appreciate. So look

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Speaker 3: at our housing agenda. And then there's the fiscal agenda.

442
00:23:48,840 --> 00:23:53,280
Speaker 3: Look in order to maintain a sustainable fiscal policy, the

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Speaker 3: President has been very much devoted to lowering the budget

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Speaker 3: deficit by trillions of dollars. Much of that is on

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Speaker 3: the book, but a lot of that is in the budget,

446
00:24:02,880 --> 00:24:06,439
Speaker 3: and it does two things. We promote fairness in the

447
00:24:06,480 --> 00:24:10,160
Speaker 3: tax code by finally getting folks at the top over

448
00:24:10,280 --> 00:24:15,040
Speaker 3: four hundred thousand dollars, no tax increase, no audits for

449
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Speaker 3: people under four hundred k. But for people over four

450
00:24:18,280 --> 00:24:21,000
Speaker 3: hundred k, you know, some of our wealthiest people, the

451
00:24:21,000 --> 00:24:23,400
Speaker 3: President likes to point out, pay an eight percent effective

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00:24:23,440 --> 00:24:26,159
Speaker 3: tax rate, and that's just not fair. So look, of

453
00:24:26,200 --> 00:24:30,040
Speaker 3: course we have an anti tax evasion agenda, which means

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00:24:30,320 --> 00:24:33,239
Speaker 3: getting the irs the resources they need, and we're going

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00:24:33,280 --> 00:24:35,920
Speaker 3: to keep pushing that. Some of that came out of

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Speaker 3: the debt deal, but we're going to keep pushing that.

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Speaker 3: But we also have agenda for you know, high end

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00:24:41,200 --> 00:24:44,679
Speaker 3: progressive taxation, which just to circle back to kind of

459
00:24:44,680 --> 00:24:49,399
Speaker 3: where we started, is, you know, Bidenomics, bottom up, middle

460
00:24:49,480 --> 00:24:53,040
Speaker 3: out grow the economy. That's the opposite of trickle down

461
00:24:53,320 --> 00:24:55,520
Speaker 3: trickle down. You know, you cut taxes for the rich,

462
00:24:55,640 --> 00:24:58,720
Speaker 3: and you know, somehow hope that that magically, against.

463
00:24:58,320 --> 00:24:59,880
Speaker 4: Decades of evidence, lifts the middle.

464
00:25:00,480 --> 00:25:05,600
Speaker 3: It doesn't. So Bidenomics versus that achieves a stable fiscal

465
00:25:05,680 --> 00:25:10,120
Speaker 3: path by injecting some real fairness into the tax code

466
00:25:10,280 --> 00:25:12,920
Speaker 3: while not touching anyone under four hundred thousand.

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00:25:13,040 --> 00:25:15,400
Speaker 2: May I ask just one more question. It's a quick one.

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00:25:15,520 --> 00:25:18,520
Speaker 2: I think you'll enjoy answering it. But you've obviously been

469
00:25:18,560 --> 00:25:21,480
Speaker 2: working with Biden for a long time, back when he

470
00:25:21,520 --> 00:25:24,879
Speaker 2: was vice president as well. How does he think through

471
00:25:25,280 --> 00:25:27,640
Speaker 2: these issues? You know, when you and he get together,

472
00:25:28,000 --> 00:25:29,960
Speaker 2: what kind of questions does he ask you.

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00:25:30,720 --> 00:25:33,119
Speaker 3: It's not a simple quick question, and I do have

474
00:25:33,200 --> 00:25:37,720
Speaker 3: to I'll give you. Here's what I'll tell you. This

475
00:25:37,800 --> 00:25:41,159
Speaker 3: has been my experience, and Okay, I'm going to unpack

476
00:25:41,240 --> 00:25:42,800
Speaker 3: this a little more than I have time for, So

477
00:25:42,840 --> 00:25:43,920
Speaker 3: I apologize for people.

478
00:25:44,200 --> 00:25:44,960
Speaker 2: We appreciate it.

479
00:25:45,480 --> 00:25:48,879
Speaker 3: Yeah. When I talked to Joe Biden in December of

480
00:25:48,880 --> 00:25:50,800
Speaker 3: two thousand and eight and he was trying to decide

481
00:25:50,800 --> 00:25:54,000
Speaker 3: if I shall be as chief economist, I sit down

482
00:25:54,000 --> 00:25:57,679
Speaker 3: with him since Delaware House. He reaches into his jacket

483
00:25:57,720 --> 00:25:59,600
Speaker 3: pocket and he pulls out a graph that I had

484
00:25:59,640 --> 00:26:04,040
Speaker 3: made with Larry Michelle that showed GDP going up and

485
00:26:04,119 --> 00:26:07,480
Speaker 3: middle class incomes flatlining. And he pointed to the gap

486
00:26:07,520 --> 00:26:10,679
Speaker 3: between those two and he said, Jared, this is what

487
00:26:10,720 --> 00:26:14,080
Speaker 3: we're going to work on. The Idea that the economy

488
00:26:14,160 --> 00:26:17,439
Speaker 3: was growing and the middle class was falling behind is

489
00:26:17,560 --> 00:26:20,919
Speaker 3: unacceptable to him, and that is the core value at

490
00:26:20,960 --> 00:26:24,320
Speaker 3: the heart of binomics. If I run into the President's

491
00:26:24,320 --> 00:26:27,320
Speaker 3: office today and I say, sir, GDP did great in

492
00:26:27,359 --> 00:26:30,240
Speaker 3: this quarter or the stock market up, He's like, Jared,

493
00:26:30,320 --> 00:26:33,720
Speaker 3: stop wagging your tail and explain to me how that's

494
00:26:33,800 --> 00:26:36,960
Speaker 3: reaching the middle class, how that's building the ladders for

495
00:26:37,040 --> 00:26:39,600
Speaker 3: people who aspire to be in the middle class. What's

496
00:26:39,640 --> 00:26:42,640
Speaker 3: the connective policy tissue that's missing, because that's what we're

497
00:26:42,640 --> 00:26:46,520
Speaker 3: going to work on, because if the economy is growing

498
00:26:47,040 --> 00:26:49,840
Speaker 3: and the middle class, lower income people are falling behind,

499
00:26:49,960 --> 00:26:54,840
Speaker 3: that's not okay with this president. And bidnomics is another

500
00:26:54,880 --> 00:26:58,280
Speaker 3: way of saying the economic agenda to close that gap.

501
00:26:59,400 --> 00:27:02,040
Speaker 1: Jared Burns and so great to have you on. Really

502
00:27:02,080 --> 00:27:04,760
Speaker 1: appreciate it, really appreciate you taking the time, and we

503
00:27:04,840 --> 00:27:07,320
Speaker 1: will be following the trajectory of Biden nomics.

504
00:27:08,359 --> 00:27:22,280
Speaker 4: Okay, take there. Than Thank you so much, Tracy.

505
00:27:22,320 --> 00:27:25,280
Speaker 1: I love you using the classic lawyer a tactic there,

506
00:27:25,840 --> 00:27:28,280
Speaker 1: asking a very interesting question right at the end of time,

507
00:27:28,400 --> 00:27:31,200
Speaker 1: knowing that he would have some you know, can't resist

508
00:27:31,320 --> 00:27:33,600
Speaker 1: being able to answer. But I really, I really appreciate

509
00:27:34,440 --> 00:27:35,560
Speaker 1: Bernstein coming on the show.

510
00:27:35,720 --> 00:27:38,520
Speaker 2: No totally, and it was a very good overview of

511
00:27:38,720 --> 00:27:43,240
Speaker 2: the key planks of biden Omics, so public investment, pro worker,

512
00:27:43,480 --> 00:27:46,200
Speaker 2: and anti monopoly, I think, he said. But I do

513
00:27:46,320 --> 00:27:50,240
Speaker 2: think maybe the difficulty in messaging is that it's kind

514
00:27:50,280 --> 00:27:54,320
Speaker 2: of it feels like the Biden administration wants to take

515
00:27:54,480 --> 00:27:59,520
Speaker 2: credit for a strong labor market while also backing away

516
00:27:59,600 --> 00:28:03,399
Speaker 2: from some of the inflationary pressures. And that feels like

517
00:28:03,520 --> 00:28:07,199
Speaker 2: a little bit of a difficult needle to thread.

518
00:28:07,320 --> 00:28:07,639
Speaker 1: Sure.

519
00:28:07,760 --> 00:28:11,200
Speaker 2: But that said, you know, here we are in twenty

520
00:28:11,240 --> 00:28:16,040
Speaker 2: twenty three. Things certainly have not been as bad as

521
00:28:16,119 --> 00:28:18,240
Speaker 2: a lot of people were predicting just last year.

522
00:28:18,480 --> 00:28:21,159
Speaker 1: No, I mean definitely not. I mean, inflation has not

523
00:28:21,320 --> 00:28:23,840
Speaker 1: come down as fast as people might have guessed. But

524
00:28:23,920 --> 00:28:26,639
Speaker 1: on the other hand, everyone unemployment, I mean, but unemployment

525
00:28:26,760 --> 00:28:29,199
Speaker 1: of some four percent. And I thought that was interesting, And

526
00:28:29,280 --> 00:28:32,040
Speaker 1: I do think there's you know, speaking of tensions, the

527
00:28:32,119 --> 00:28:36,639
Speaker 1: UAW is concerned about wages at battery plans, and there's

528
00:28:36,720 --> 00:28:40,160
Speaker 1: a pretty big question of like, okay, to Jared Bernstein's point,

529
00:28:40,600 --> 00:28:44,280
Speaker 1: in a hot labor market environment, you can expect wage games,

530
00:28:44,440 --> 00:28:47,360
Speaker 1: you can expect labor's share of income, whether you can

531
00:28:47,400 --> 00:28:50,640
Speaker 1: get back to the wages that the UAW has set

532
00:28:50,720 --> 00:28:54,320
Speaker 1: at legacy automakers and legacy ice plants for years and years,

533
00:28:54,480 --> 00:28:58,760
Speaker 1: accumulated through negotiations and negotiations and strikes and pressures through

534
00:28:58,840 --> 00:29:01,520
Speaker 1: that hot wage a hot labor market, I do think

535
00:29:01,640 --> 00:29:05,720
Speaker 1: is highly TBD and I do think watching that relationship unfold,

536
00:29:06,200 --> 00:29:08,200
Speaker 1: especially you know, he said a lot of these new

537
00:29:08,200 --> 00:29:09,680
Speaker 1: plants are going to be in red states where they

538
00:29:09,680 --> 00:29:12,600
Speaker 1: don't have strong labor protections, et cetera, is going to

539
00:29:12,640 --> 00:29:15,200
Speaker 1: be a pretty interesting tension for the next couple of years.

540
00:29:15,320 --> 00:29:15,560
Speaker 4: Yeah.

541
00:29:15,600 --> 00:29:17,640
Speaker 2: Well, there are so many tensions here. One of the

542
00:29:17,640 --> 00:29:21,880
Speaker 2: big ones is delivering short term results on inflation and

543
00:29:21,960 --> 00:29:27,440
Speaker 2: employment while trying to fix very long term structural supply

544
00:29:27,640 --> 00:29:30,960
Speaker 2: side issues. And I got to say, like, from that perspective, A,

545
00:29:31,120 --> 00:29:34,360
Speaker 2: it's ambitious, and I kind of appreciate someone trying to

546
00:29:34,400 --> 00:29:38,000
Speaker 2: take that on. But B for now, again, it seems

547
00:29:38,040 --> 00:29:39,800
Speaker 2: to be working. I guess the big question mark is

548
00:29:39,800 --> 00:29:42,240
Speaker 2: what happens in you know, a decade's time.

549
00:29:42,320 --> 00:29:44,960
Speaker 1: I appreciate that he wants to give us suggestions and

550
00:29:45,040 --> 00:29:47,960
Speaker 1: maybe maybe he'll have a career working along with Carmen

551
00:29:48,080 --> 00:29:50,120
Speaker 1: and Dash as one of our producers one day. Wouldn't

552
00:29:50,120 --> 00:29:50,520
Speaker 1: that be called?

553
00:29:50,640 --> 00:29:54,000
Speaker 2: Carmen says He's welcome to become an all Thoughts producer.

554
00:29:54,040 --> 00:29:58,760
Speaker 2: Thanks Carmen, Yeah, anytime, guys. All right, shall we leave

555
00:29:58,760 --> 00:29:58,959
Speaker 2: it there?

556
00:29:59,040 --> 00:29:59,680
Speaker 1: Let's leave it there?

557
00:29:59,680 --> 00:30:03,080
Speaker 2: Okay, this has been another episode of the Odd Loots podcast.

558
00:30:03,120 --> 00:30:06,440
Speaker 2: I'm Tracyalloway. You can follow me on Twitter at Tracy Alloway.

559
00:30:06,800 --> 00:30:09,680
Speaker 1: And I'm Jill Wisenthal. You can follow me on Twitter

560
00:30:10,040 --> 00:30:13,320
Speaker 1: at the Stalwart. Follow our guest Jared Bernstein, the head

561
00:30:13,320 --> 00:30:15,960
Speaker 1: of the White House Council of Economic Advisors. He's at

562
00:30:16,040 --> 00:30:20,720
Speaker 1: econ Jared forty six. Follow our producers Carmen Rodriguez at

563
00:30:20,800 --> 00:30:24,200
Speaker 1: Carmen Arman and dash Ol Bennett at dashbot. And check

564
00:30:24,200 --> 00:30:26,680
Speaker 1: out all of our podcasts at Bloomberg under the handle

565
00:30:26,760 --> 00:30:29,200
Speaker 1: at podcasts and from our Odd Loots content. Go to

566
00:30:29,200 --> 00:30:32,520
Speaker 1: bloomberg dot com slash odd Lots, where we have a blog,

567
00:30:32,840 --> 00:30:35,480
Speaker 1: transcripts and a newsletter that comes out every Friday. And

568
00:30:36,080 --> 00:30:39,440
Speaker 1: check out the Oddlogs Discord, Discord dot gg slash odd

569
00:30:39,440 --> 00:30:41,840
Speaker 1: Lots chat about all these topics twenty four to seven,

570
00:30:41,920 --> 00:30:43,880
Speaker 1: along with follow listeners.

571
00:30:43,320 --> 00:30:46,320
Speaker 2: And if you enjoy odd Lots, please leave us a

572
00:30:46,400 --> 00:30:50,320
Speaker 2: positive review on your favorite podcast platform. Thanks for listening

573
00:31:07,600 --> 00:31:07,640
Speaker 3: In