Speaker 1: Hello, and welcome to another episode of the Odd Lots Podcast.
Speaker 2: I'm Joe Whysenthal and I'm Tracy Alloway.
Speaker 1: Tracy, So we're recording this of Friday, June thirtieth. It
Speaker 1: really felt like this week a bunch of people kind
Speaker 1: of like declared victory on the economy or suddenly like
Speaker 1: there's been like something in the water, you know, like
Speaker 1: they put LSD in the water or something like people
Speaker 1: are like feeling good. There's a good mood vibe.
Speaker 3: Yeah.
Speaker 2: If last year we were all worried about the Vibe session,
Speaker 2: so the idea that all these survey based measures were
Speaker 2: turning down even while activity was still relatively robust. What
Speaker 2: are we going to call this one?
Speaker 3: VI?
Speaker 1: What's the vibe expansion?
Speaker 2: I don't know vibe Spanish.
Speaker 1: You need to get Kyla Scanlon up, yeah, to come
Speaker 1: up with the term. But yes, the vibes shifted somehow
Speaker 1: this week.
Speaker 2: Yeah, And it's interesting because a lot of the trends
Speaker 2: that we saw last to her, you know, very low unemployment,
Speaker 2: you know, still some inflationary pressures, housing market relatively robust.
Speaker 1: Those have just.
Speaker 2: Continued this year. So not a lot has changed, but
Speaker 2: it definitely feels like people are more optimistic.
Speaker 1: Yeah, right, exactly, a bunch of people declaring that all
Speaker 1: the recession calls are null and void. The vibe session
Speaker 1: is over. Noah Smith had a blog saying that. And
Speaker 1: I think most notably, the White House sort of chose
Speaker 1: this week as a week to stamp out the success
Speaker 1: of what they're calling Bidenomics. And they're basically, you know,
Speaker 1: we had the president and they're sort of saying, yes,
Speaker 1: this is the economy that the White House is planned
Speaker 1: for and designed and the envisioned. And so I think
Speaker 1: that's a sign they're kind of like in a position
Speaker 1: where they want to brag a little bit. Yeah, they
Speaker 1: want to talk about it.
Speaker 4: Yeah.
Speaker 2: And it is interesting in and of itself that the
Speaker 2: White House feels comfortable enough to choose this moment to
Speaker 2: kind of put a time step on the idea of
Speaker 2: Bidenomics and declare it an early success.
Speaker 3: Yeah.
Speaker 1: And so I mean, obviously we know like some big
Speaker 1: components of it, and they are these really sort of
Speaker 1: extraordinary like you know, industrial policy like strategies, the Chips Act,
Speaker 1: which we talk a lot about on the show, the
Speaker 1: Inflation Reduction Act, the reshoring, domestic investment, all of these
Speaker 1: things sort of like sort of ongoing fiscal support for
Speaker 1: the economy, putting money in the hands of workers, et cetera.
Speaker 1: And you know, again, the numbers today seem solid, and
Speaker 1: so then I guess the question is like, Okay, what
Speaker 1: is the big coherent thought and like where going from next?
Speaker 1: Because we're getting the investments, we see the factory announcements
Speaker 1: all the time, but then like what's next for all
Speaker 1: that's being built?
Speaker 2: Why now? And what's next?
Speaker 1: Well, to learn more about what is Bidenomics and what
Speaker 1: is next, we are going to be speaking with Jared Bernstein.
Speaker 1: He is the head of the White House Council of
Speaker 1: Economic Advisors. Jared Bernstein, thank you so much for coming
Speaker 1: on Odd Loaves today, huge week.
Speaker 3: Wait a second, am I am I the perfect guest?
Speaker 3: Or not?
Speaker 1: We have the perfect guest?
Speaker 3: Okay, that's what I wanted to hear.
Speaker 1: Yeah, soone told us recently how devastated they would be
Speaker 1: if they got intro without the perfect guest. Mentioned you
Speaker 1: are the perfect guest.
Speaker 3: I mean once you start, once you start saying that,
Speaker 3: it sort of becomes like, wow, yeah, we have to
Speaker 3: say it every time. I didn't get it.
Speaker 1: But when we don't say it. It's never intentional. Yes,
Speaker 1: we don't. It's not that volumes huge week, obviously. Why now,
Speaker 1: you know, the economy is hot and it's been hot
Speaker 1: for a while, inflation is elevated, labor market tightness. Why
Speaker 1: was this the week that President Biden in the White
Speaker 1: House chose to sort of sort of declare that biden
Speaker 1: Nomics is working well.
Speaker 3: I think the simple answer is that there's a lot
Speaker 3: of evidence that it is. And in terms of the
Speaker 3: broader economy, you know, I think that there's headwinds and
Speaker 3: there's tailwinds. And I think one of the things that
Speaker 3: I know, I listened to you guys all the time,
Speaker 3: and I really enjoy what you do. But I think
Speaker 3: all of us here in this business get very focused
Speaker 3: on the news of the day, the news of the minute,
Speaker 3: the news of the week. You know, the mark asset
Speaker 3: that's in trouble, or the market asset that's soaring, the
Speaker 3: supply chain that's broken, the dwell time in some port somewhere,
Speaker 3: all of that's critically important to all of us, and
Speaker 3: you two do a great job of reporting on that.
Speaker 3: But you know, Bidenomics takes both a near term and
Speaker 3: a very long term view. So when we're talking about
Speaker 3: the bipartisan Infrastructure Law, the inflation reduction at the Chips Act,
Speaker 3: and I know you've done shows on all of those,
Speaker 3: we're talking about a long term play here where if
Speaker 3: we get the implementation and the public private aspects of
Speaker 3: those investments right, we have the potential to transform the
Speaker 3: economy very much in the spirit of Bidenomics, bottom up,
Speaker 3: middle out growth, a complete reversal from the trickle down,
Speaker 3: top down approach that I think decades of evidence fails
Speaker 3: to support. So I do think there is a longer
Speaker 3: term view here that gets away from the headwinds and
Speaker 3: tailwinds of the day.
Speaker 2: So I'm glad you mentioned this because this sort of
Speaker 2: feeds into one of the criticisms that you sometimes hear
Speaker 2: about a more active industrial policy or you know, Bidenomics,
Speaker 2: where investment, long term investment does take a more central role,
Speaker 2: and that criticism is that potentially you are pulling a
Speaker 2: lot of investment forward, so you're sort of front loading capex,
Speaker 2: and that maybe you know in the next downturn, which
Speaker 2: hopefully will be a long time from now, that maybe
Speaker 2: you won't have as much ammunition for this type of spending. Again,
Speaker 2: how would you respond to that.
Speaker 3: Well, I think one of the very positive attributes of
Speaker 3: the Bidenomics investment that we're seeing right now is the
Speaker 3: extent to which public investment, which does have a longer
Speaker 3: term spend out it's much smoother, is pulling in private investment, which,
Speaker 3: as you suggest, can be kind of lumpy. Part of
Speaker 3: that is because of the actual building the initial cost
Speaker 3: that take place when we are standing up a domestic
Speaker 3: semiconductor industry, when we're standing up a domestic electric vehicle
Speaker 3: electric battery industry, when we're making these longer term investments
Speaker 3: in clean energy. So here's a way to think about that.
Speaker 3: If you look at the record on the prior administration
Speaker 3: of domestic spending on manufacturing facilities, So the construction of
Speaker 3: manufacturing plants in flatlined for many years. I think it
Speaker 3: grew two percent real in the prior administration. That's up
Speaker 3: one hundred percent since the president took office. So that's
Speaker 3: a hockey stick kind of a figure in the Treasury
Speaker 3: Department putut a nice blog on that if you want
Speaker 3: to just post the figure on that, And what the
Speaker 3: Treasury folks did in their blog was they looked at
Speaker 3: where those manufacturing facilities, what sectors is that construction taking place,
Speaker 3: and it very clearly relates to the investments that are
Speaker 3: incentivized by the legislation that we've been talking about. So
Speaker 3: of course you're going to see a big initial spend,
Speaker 3: but I think over the longer term that smooths out,
Speaker 3: and if we do it right, it keeps delivering in
Speaker 3: terms of domestic production and high quality jobs for American workers. Tracy,
Speaker 3: I want to comment on something you said. You guys
Speaker 3: talk a lot about industrial strategy policy. I'm not sure
Speaker 3: that this point has been made clearly enough, though you know,
Speaker 3: if it has, I'm repeating it, which is that, yes,
Speaker 3: we certainly have a very clear, conscious, visible, elevated agenda
Speaker 3: in that space. Nobody's trying to be cute or hide
Speaker 3: any balls. But I also think that you cannot find
Speaker 3: a time in our economic history when there wasn't an
Speaker 3: industrial policy of some sort or another. And you know,
Speaker 3: obviously you can go back to the beginning of our
Speaker 3: country and see a very clearly articulated industrial policy of
Speaker 3: Hamilton's manufacturing initiatives. But what I'm talking about is something
Speaker 3: much less positive than that. What I'm talking about is
Speaker 3: an industrial policy that is a function of who has
Speaker 3: the best connected lobbyist to get the tax code that
Speaker 3: they want and what you end up with, What you
Speaker 3: end up in that kind of industrial policy is the
Speaker 3: deepest pocketed, best connected, in many cases, most divorced from
Speaker 3: actual economic productivity initiatives are the ones that get the brakes,
Speaker 3: the funding, the tax credits, the attention. One thing you'd
Speaker 3: expect to have in that scenario is an outsized role
Speaker 3: for finance. And you know what I call the shampoo cycle,
Speaker 3: bubble bust, repeat, and you know, we've seen a lot
Speaker 3: of that. So I think that it's wrong to think that,
Speaker 3: you know, we sort of fell out of the sky
Speaker 3: with in industrial strategy, and more more correct to view
Speaker 3: this as very intentional and I hope very thoughtful.
Speaker 1: One I want to ask about, you know, you mentioned
Speaker 1: the investment in structures and it's it is a hockey stick.
Speaker 1: And we see the battery announcements almost every other day,
Speaker 1: and the chip announcements almost every other day. What is
Speaker 1: next and by next them specifically, what can you and
Speaker 1: the administration and the rest of the administration do to
Speaker 1: focus that what happens inside the plants actually happens in
Speaker 1: a cost competitive way that good cutting edge batteries are made,
Speaker 1: that we compete, that they compete globally, that good cutting
Speaker 1: edge chips are being made. What's next in terms of, basically, yeah,
Speaker 1: guaranteeing that what's built inside these structures sort of delivers
Speaker 1: on the outside.
Speaker 3: Well, the thing with capitalism is that there's no guarantees.
Speaker 3: The idea of you know, the government sort of getting
Speaker 3: in there and saying, you know, don't use this widget,
Speaker 3: use that widget sounds kind of unappealing to me. I
Speaker 3: think the best thing for our industrial strategy, and certainly
Speaker 3: the way I believe the President thinks about this, is
Speaker 3: that we create the environment and the conditions, both in
Speaker 3: terms of capital investment, in terms of worker quality, and
Speaker 3: in terms of the ancillary functions which I'll explain that
Speaker 3: workers need to make this all work. So, the first
Speaker 3: thing is there are deep market failures where private investors,
Speaker 3: because of risk reward ratios being what they are, will
Speaker 3: underinvest in critical sectors such as climate, such as batteries,
Speaker 3: such as more resilient supply chains here, and so our
Speaker 3: financing structures. And again, you've had lots of good conversations,
Speaker 3: You've had folks from the government on to talk about this.
Speaker 3: Our financing structures have to tweak those risk rewards so
Speaker 3: that we can get so that we can get the
Speaker 3: investment we need. That's you know, a pretty thirty thousand
Speaker 3: feet up versus you know, having to get into factory
Speaker 3: and make sure the chips are coming out the right way.
Speaker 3: But that's important. And then secondly, we have to make
Speaker 3: sure that the workforce is empowered and educated, and that
Speaker 3: happens to be Pillar two of Bidenomics, by the way,
Speaker 3: empowering and educating the workforce. And I think one somewhat
Speaker 3: underappreciated part of chips is the very significant resources in
Speaker 3: that bill to provide training for workers to come into
Speaker 3: these places, places which, by the way, and this might
Speaker 3: even be an od launch show someday, places that are
Speaker 3: being stood up all across the country. This is my
Speaker 3: favorite aspects of Bidenomics and the investment agenda. They're showing
Speaker 3: up in the Southwest, in upstate New York, in Ohio
Speaker 3: and Tennessee and Oklahoma, in blue places, in red places.
Speaker 3: You know, the President has a joke, I'll see you
Speaker 3: at the ribbon cutting for people who didn't vote for
Speaker 3: the legislation, would show up to cut the ribbons. And
Speaker 3: I think that's great. I mean, I think that's the
Speaker 3: way to have the most productive economy. But where's it
Speaker 3: going the third part of your question, Well, look, our
Speaker 3: car agenda is really important. That may sound divorced from
Speaker 3: what we're talking about, but it's not. Just like we
Speaker 3: announced earlier one of these weeks. They all mushed together
Speaker 3: for me. We're going to make sure that if you
Speaker 3: live in rural America, you have affordable high speed broad
Speaker 3: that is economic oxygen to people in those places. You
Speaker 3: can't participate without it. I'd say the same thing about
Speaker 3: accessible and affordable childcare. That's something we have to work
Speaker 3: on going forward, and it's in our budget we have
Speaker 3: to I think that's a great tool for us to
Speaker 3: work on, both in the context of helping people's personal
Speaker 3: budgets in their economies, their household economies, but also in
Speaker 3: this context to make sure people have access to the
Speaker 3: job market and to these good jobs.
Speaker 2: Well, Joe and I would be more than happy to
Speaker 2: do a Studs Turcle version of the show where we
Speaker 2: go on the road and talk to workers and new
Speaker 2: types of jobs. But just on that note, you know,
Speaker 2: Joe asked you about being cost competitive. How do you
Speaker 2: thread the needle between creating, for instance, a semiconductor factory
Speaker 2: and also a semiconductor factory that's able to, you know,
Speaker 2: compete on a global basis with empowering workers and making
Speaker 2: sure that workers are getting a fair deal. And the
Speaker 2: reason I asked that is because I think we just
Speaker 2: saw a headline that came out saying that there are
Speaker 2: some semiconductor firms that are talking about importing migrant labor
Speaker 2: rather than hiring locally in order to keep costs down.
Speaker 1: And we know that, for example, the auto workers are
Speaker 1: concerned about wages and paid some of the battery factories
Speaker 1: replacing the ice factories.
Speaker 3: I think this is very much a walk and chew
Speaker 3: gum kind of question. I think when it comes to
Speaker 3: the cost of production, we very have a very conscious
Speaker 3: agenda to lower cost curves, and I think we're seeing
Speaker 3: some success there. We've seen cost curves come down, particularly
Speaker 3: in renewable energy, where the prison and I believe said
Speaker 3: this in this speech in Chicago the other day, that
Speaker 3: some of the price points around renewable energy, given the
Speaker 3: increasing capacity in those sectors, have come down to be
Speaker 3: quite competitive with traditional sources. I think we could say
Speaker 3: the same thing with chips if our plans are able
Speaker 3: to be realized with the pace that they're on now.
Speaker 3: And that's just a very simple aggregate supply demand chart,
Speaker 3: whereby increasing capacity increasing supply, you help on the price side.
Speaker 3: And then you know, the other part is the job market. Look,
Speaker 3: we've had an on that's below four and a half percent.
Speaker 3: That's below four percent for eighteen months, a year and
Speaker 3: a half we've had. When you do that, you start
Speaker 3: seeing workers get a bit more bargaining cloud and that
Speaker 3: shows up in pay. And in fact, we're finally starting
Speaker 3: to see real wage gains as inflation begins to ease
Speaker 3: and the job market remains strong. We've now seen a
Speaker 3: year over year wage gain in the last job support
Speaker 3: real wage guyers say, a year over year real wage
Speaker 3: gain in the last job support. We now have real
Speaker 3: wages up a percent since last June. If you look
Speaker 3: for production non supervisory workers, so blue collar workers, non managers,
Speaker 3: that's eighty percent of the workforce, their pay is up
Speaker 3: one point five percent since last June. So interestingly that
Speaker 3: it's up fifty BIPs more than the overalls. That's a
Speaker 3: bargaining power story. We have blog on the CEA website
Speaker 3: showing gains for black workers even closing some of the
Speaker 3: black white gap a little bit because of the important
Speaker 3: that bargaining power. We have an economy that can do
Speaker 3: both of the above. That's the answer to Tracy's question,
Speaker 3: that can do both of the above, that can invest
Speaker 3: in productive capacity to bend cost curves while we run
Speaker 3: a tight enough labor market that workers are getting their
Speaker 3: fair share of the growth that they're helping to create.
Speaker 3: And by the way, one of the ways that happens
Speaker 3: mechanically or arithmetically is by labor share of income getting
Speaker 3: back to some of its historical average. It's been pretty
Speaker 3: depressed lately, and that's actually a non inflationary way of
Speaker 3: paying for higher real pay is through a higher labor share.
Speaker 1: Can you talk about international trade under the bidonomics framework,
Speaker 1: and I'm thinking specifically about some of the frustrations from
Speaker 1: our our friends and allies in Europe about some of
Speaker 1: the rules that were put in place with the Inflation
Speaker 1: Reduction Act, and how you think about that relationship and
Speaker 1: how you know, what is the bidonomic stance on how
Speaker 1: we relate to our trading partners.
Speaker 3: Yeah, one of the things I get to do is
Speaker 3: chair of the CEA. Is I chair something called the
Speaker 3: Economic Policy Committee of the OECD, and we recently had
Speaker 3: a meeting over there and I was talking to folks
Speaker 3: in my position in many different many other countries, and
Speaker 3: it was a very good, robust discussion about this point.
Speaker 3: I think there's actually a lot more commonality, a lot
Speaker 3: more agreement that we're all engaged. Many of these economies
Speaker 3: we're talking about, if you look at their policy agendas,
Speaker 3: we're all doing some version of the same thing. And
Speaker 3: it's exactly what we've been talking about in our investment discussion,
Speaker 3: and in fact, in many cases, Europe's been doing this
Speaker 3: for a lot longer than we have. You know, industrial
Speaker 3: strategy was not a bad couple of words over there,
Speaker 3: I would say, longer than has been the case here.
Speaker 3: And the idea is to I think, promote more spillovers
Speaker 3: than sort of head to head competition. If we can
Speaker 3: help lower the cost curve for producing the components of
Speaker 3: clean energy economy, components of electric vehicles. Yes, of course
Speaker 3: there's going to be competition, but there's also going to
Speaker 3: be I think some cooperation and some benefits from the
Speaker 3: increased capacity that we have here. Let me give a
Speaker 3: concrete example. If you're making a battery here, you're making
Speaker 3: it here, and if you follow the president's plans, you're
Speaker 3: creating good union jobs for folks to do that here.
Speaker 3: But nature, in her wisdom put the components of electric
Speaker 3: batteries under the earths of many different countries, and most
Speaker 3: of them aren't this one. I think there's some of
Speaker 3: that up in Alaska, but there's just you're going to
Speaker 3: be getting those intermediate inputs from other countries. So I
Speaker 3: think one mistake that's been made in this discussion is
Speaker 3: somehow assuming that our international trade policy is leaning towards
Speaker 3: autarchy and you know, far less in terms of trade flows.
Speaker 3: That is demonstrably false if you look at the trade
Speaker 3: flows themselves, which have been quite robust. I mean, I
Speaker 3: try to point people just do a couple of clicks
Speaker 3: and you'll see we engage in robust trade. But I
Speaker 3: would say, you know what really frames are thinking about
Speaker 3: this differently is we don't look under bidnomics. We don't
Speaker 3: look at Americans as consumers one hundred percent, full stop.
Speaker 3: We recognize that they and their communities are also working people,
Speaker 3: workers who depend on domestic production, getting good jobs here.
Speaker 3: If all you thought about was consumer spending, you'd say,
Speaker 3: let me import everything to try to increase the supply
Speaker 3: and lower the price. If you thought about consumers on
Speaker 3: people are consumers, but they're also workers, you'd think about
Speaker 3: both and you'd say, yes, we want robust trade flows.
Speaker 3: Yes we want to work with our partners to lower
Speaker 3: the costs of goods that are so quick for our future.
Speaker 3: But we also want to have good jobs here and
Speaker 3: we don't want to hollow out our communities. So I
Speaker 3: think that's really the way to think about the package.
Speaker 2: Just going back to the investment side of Bidenomics, and
Speaker 2: I guess differentiating between bad industrial policy versus smarter industrial policy.
Speaker 2: You mentioned the idea of you know, potentially money or
Speaker 2: power being concentrated in the hands of a few firms,
Speaker 2: and I know that anti monopoly measures are of interest
Speaker 2: and a big plank of the Bidenomics agenda. So does
Speaker 2: this type of ramped up public investment, does that need
Speaker 2: to go hand in hand with stronger anti monopoly measures,
Speaker 2: and what are you thinking on that front?
Speaker 3: I think it does, and I think that's h and
Speaker 3: that happens to be Pillar three of Bidenomics, by the way,
Speaker 3: which is promoting a competition both to lower costs and
Speaker 3: to give a smaller busin This is a seat at
Speaker 3: the table, chance to leap over some of those anti
Speaker 3: competitive barriers that you were just kind of alluding to.
Speaker 3: In terms of what it means, it's it's really everything
Speaker 3: from some very granular stuff to getting some competitive cops
Speaker 3: back on the beat. So on the granular side, you've
Speaker 3: seen a president who's who's come out strong against junk fees,
Speaker 3: who has implemented anti overdraft initiatives. I was talking to
Speaker 3: the President about this the other day and he reminded
Speaker 3: me about a famous case I know, Aaron Kline Brookings
Speaker 3: talks about this of this banker who had a boat
Speaker 3: that was called overdraft. He had a yacht and he
Speaker 3: had named it overdraft. You know that that was something
Speaker 3: that that does not sit well with President Biden, and
Speaker 3: so he took an action that's saving consumers five and
Speaker 3: a half billion dollars a year on overdraft fees. You know,
Speaker 3: non competes, which I think you've probably talked about. I'm
Speaker 3: sure you know what I'm talking about, the idea that
Speaker 3: workers are come out from these really non competitive, non
Speaker 3: compete closes, and to allow that to get jobs in
Speaker 3: the same or similar industries where they were in a
Speaker 3: way that doesn't do anything to hurt company disclosures or
Speaker 3: anything like that. So that's the granular side of that equation.
Speaker 3: I think the other side, which there are other people
Speaker 3: who could talk about it know more thoroughly than me,
Speaker 3: is just having the FTC back on the beat, and
Speaker 3: you've seen lots of action there. I think it's fair
Speaker 3: to say they're an independent regulator, just like the FED,
Speaker 3: so we don't like the gut up in their knitting,
Speaker 3: but I think it's fair to say that they have
Speaker 3: taken this kind of view very seriously, the idea that
Speaker 3: when too many of your industries retail, healthcare, technology are
Speaker 3: so concentrated that's non or anti competitive. They've taken that
Speaker 3: seriously and they're actively working to fix the damage in
Speaker 3: a way that I think is impressive.
Speaker 1: We just have about a minute or two left with you.
Speaker 1: You know, obviously for the remainder of this particular term,
Speaker 1: Republicans con control Congress, so legislative window probing not particularly
Speaker 1: wide open. I'm just curious, like, what active is there
Speaker 1: that you're working on specifically, whether it's still trying to
Speaker 1: push through legislation or on the sort of administrative regulatory
Speaker 1: side that we should be watching for.
Speaker 3: Well, I think that so, first of all, we have
Speaker 3: to do both. And I'm not going to talk about
Speaker 3: student debt because we're going to let the President talk
Speaker 3: about that first. But that remains something he's been committed
Speaker 3: to since the campaign, helping helping people there. And you know,
Speaker 3: we have a lot of plans in that space, some
Speaker 3: of which are not as well known as they should be.
Speaker 3: In fact, i'd like to nudge you to do a show,
Speaker 3: not necessarily with me.
Speaker 1: I appreciate, we appreciate all the show suggestions.
Speaker 3: By the way, Yeah, yeah, I should be one of
Speaker 3: your editors in on our new income driven repayment plan.
Speaker 3: That is something people really need to learn a lot about.
Speaker 3: I'd love you guys to dig into that. It's great plan.
Speaker 3: We have people here can help explain it to the
Speaker 3: audience in a way that I'm sure people would find compelling.
Speaker 3: So you know, there are things we can do on
Speaker 3: the admin side, the rule side, But I think the
Speaker 3: more falseome answer to your question is to look at
Speaker 3: our budget. Our budget is where we put the idea
Speaker 3: is the policy agenda that the president believes is most important.
Speaker 3: And while people always say, oh, the president budget isn't
Speaker 3: going anywhere, in fact, the truth is that the history
Speaker 3: of presidential administrations, they always pull ideas out of their
Speaker 3: budget and you know, if they're good. And President Biden
Speaker 3: has shown that he's better than good when it comes
Speaker 3: to getting tough things over legislative goal lines. That's the
Speaker 3: place to look. Now. The carriage that we talked about earlier, childcare,
Speaker 3: elder care, that's in there. We have a really important
Speaker 3: housing agenda. We have a housing supply structural, not cyclical,
Speaker 3: structural housing supply shortfall for affordable housing in this country.
Speaker 3: We have really great ideas, many of which, by the way,
Speaker 3: people on sort of both sides of both builders and
Speaker 3: people who want to be homeowners would appreciate. So look
Speaker 3: at our housing agenda. And then there's the fiscal agenda.
Speaker 3: Look in order to maintain a sustainable fiscal policy, the
Speaker 3: President has been very much devoted to lowering the budget
Speaker 3: deficit by trillions of dollars. Much of that is on
Speaker 3: the book, but a lot of that is in the budget,
Speaker 3: and it does two things. We promote fairness in the
Speaker 3: tax code by finally getting folks at the top over
Speaker 3: four hundred thousand dollars, no tax increase, no audits for
Speaker 3: people under four hundred k. But for people over four
Speaker 3: hundred k, you know, some of our wealthiest people, the
Speaker 3: President likes to point out, pay an eight percent effective
Speaker 3: tax rate, and that's just not fair. So look, of
Speaker 3: course we have an anti tax evasion agenda, which means
Speaker 3: getting the irs the resources they need, and we're going
Speaker 3: to keep pushing that. Some of that came out of
Speaker 3: the debt deal, but we're going to keep pushing that.
Speaker 3: But we also have agenda for you know, high end
Speaker 3: progressive taxation, which just to circle back to kind of
Speaker 3: where we started, is, you know, Bidenomics, bottom up, middle
Speaker 3: out grow the economy. That's the opposite of trickle down
Speaker 3: trickle down. You know, you cut taxes for the rich,
Speaker 3: and you know, somehow hope that that magically, against.
Speaker 4: Decades of evidence, lifts the middle.
Speaker 3: It doesn't. So Bidenomics versus that achieves a stable fiscal
Speaker 3: path by injecting some real fairness into the tax code
Speaker 3: while not touching anyone under four hundred thousand.
Speaker 2: May I ask just one more question. It's a quick one.
Speaker 2: I think you'll enjoy answering it. But you've obviously been
Speaker 2: working with Biden for a long time, back when he
Speaker 2: was vice president as well. How does he think through
Speaker 2: these issues? You know, when you and he get together,
Speaker 2: what kind of questions does he ask you.
Speaker 3: It's not a simple quick question, and I do have
Speaker 3: to I'll give you. Here's what I'll tell you. This
Speaker 3: has been my experience, and Okay, I'm going to unpack
Speaker 3: this a little more than I have time for, So
Speaker 3: I apologize for people.
Speaker 2: We appreciate it.
Speaker 3: Yeah. When I talked to Joe Biden in December of
Speaker 3: two thousand and eight and he was trying to decide
Speaker 3: if I shall be as chief economist, I sit down
Speaker 3: with him since Delaware House. He reaches into his jacket
Speaker 3: pocket and he pulls out a graph that I had
Speaker 3: made with Larry Michelle that showed GDP going up and
Speaker 3: middle class incomes flatlining. And he pointed to the gap
Speaker 3: between those two and he said, Jared, this is what
Speaker 3: we're going to work on. The Idea that the economy
Speaker 3: was growing and the middle class was falling behind is
Speaker 3: unacceptable to him, and that is the core value at
Speaker 3: the heart of binomics. If I run into the President's
Speaker 3: office today and I say, sir, GDP did great in
Speaker 3: this quarter or the stock market up, He's like, Jared,
Speaker 3: stop wagging your tail and explain to me how that's
Speaker 3: reaching the middle class, how that's building the ladders for
Speaker 3: people who aspire to be in the middle class. What's
Speaker 3: the connective policy tissue that's missing, because that's what we're
Speaker 3: going to work on, because if the economy is growing
Speaker 3: and the middle class, lower income people are falling behind,
Speaker 3: that's not okay with this president. And bidnomics is another
Speaker 3: way of saying the economic agenda to close that gap.
Speaker 1: Jared Burns and so great to have you on. Really
Speaker 1: appreciate it, really appreciate you taking the time, and we
Speaker 1: will be following the trajectory of Biden nomics.
Speaker 4: Okay, take there. Than Thank you so much, Tracy.
Speaker 1: I love you using the classic lawyer a tactic there,
Speaker 1: asking a very interesting question right at the end of time,
Speaker 1: knowing that he would have some you know, can't resist
Speaker 1: being able to answer. But I really, I really appreciate
Speaker 1: Bernstein coming on the show.
Speaker 2: No totally, and it was a very good overview of
Speaker 2: the key planks of biden Omics, so public investment, pro worker,
Speaker 2: and anti monopoly, I think, he said. But I do
Speaker 2: think maybe the difficulty in messaging is that it's kind
Speaker 2: of it feels like the Biden administration wants to take
Speaker 2: credit for a strong labor market while also backing away
Speaker 2: from some of the inflationary pressures. And that feels like
Speaker 2: a little bit of a difficult needle to thread.
Speaker 1: Sure.
Speaker 2: But that said, you know, here we are in twenty
Speaker 2: twenty three. Things certainly have not been as bad as
Speaker 2: a lot of people were predicting just last year.
Speaker 1: No, I mean definitely not. I mean, inflation has not
Speaker 1: come down as fast as people might have guessed. But
Speaker 1: on the other hand, everyone unemployment, I mean, but unemployment
Speaker 1: of some four percent. And I thought that was interesting, And
Speaker 1: I do think there's you know, speaking of tensions, the
Speaker 1: UAW is concerned about wages at battery plans, and there's
Speaker 1: a pretty big question of like, okay, to Jared Bernstein's point,
Speaker 1: in a hot labor market environment, you can expect wage games,
Speaker 1: you can expect labor's share of income, whether you can
Speaker 1: get back to the wages that the UAW has set
Speaker 1: at legacy automakers and legacy ice plants for years and years,
Speaker 1: accumulated through negotiations and negotiations and strikes and pressures through
Speaker 1: that hot wage a hot labor market, I do think
Speaker 1: is highly TBD and I do think watching that relationship unfold,
Speaker 1: especially you know, he said a lot of these new
Speaker 1: plants are going to be in red states where they
Speaker 1: don't have strong labor protections, et cetera, is going to
Speaker 1: be a pretty interesting tension for the next couple of years.
Speaker 4: Yeah.
Speaker 2: Well, there are so many tensions here. One of the
Speaker 2: big ones is delivering short term results on inflation and
Speaker 2: employment while trying to fix very long term structural supply
Speaker 2: side issues. And I got to say, like, from that perspective, A,
Speaker 2: it's ambitious, and I kind of appreciate someone trying to
Speaker 2: take that on. But B for now, again, it seems
Speaker 2: to be working. I guess the big question mark is
Speaker 2: what happens in you know, a decade's time.
Speaker 1: I appreciate that he wants to give us suggestions and
Speaker 1: maybe maybe he'll have a career working along with Carmen
Speaker 1: and Dash as one of our producers one day. Wouldn't
Speaker 1: that be called?
Speaker 2: Carmen says He's welcome to become an all Thoughts producer.
Speaker 2: Thanks Carmen, Yeah, anytime, guys. All right, shall we leave
Speaker 2: it there?
Speaker 1: Let's leave it there?
Speaker 2: Okay, this has been another episode of the Odd Loots podcast.
Speaker 2: I'm Tracyalloway. You can follow me on Twitter at Tracy Alloway.
Speaker 1: And I'm Jill Wisenthal. You can follow me on Twitter
Speaker 1: at the Stalwart. Follow our guest Jared Bernstein, the head
Speaker 1: of the White House Council of Economic Advisors. He's at
Speaker 1: econ Jared forty six. Follow our producers Carmen Rodriguez at
Speaker 1: Carmen Arman and dash Ol Bennett at dashbot. And check
Speaker 1: out all of our podcasts at Bloomberg under the handle
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