Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News.
Speaker 2: Hello and welcome to another episode of The Odd Lots Podcast.
Speaker 3: I'm Joe Wisenthal and I'm Tracy Alloway.
Speaker 2: Tracy, it's almost here. Yeah, we're almost to the November
Speaker 2: FED decision.
Speaker 3: Okay, we are recording this on October thirtieth. Do you
Speaker 3: think by this time next week we'll actually know who's won?
Speaker 3: On the Wednesday, the day after.
Speaker 2: You didn't continue my joke about how next week is
Speaker 2: the FED decision. You just went straight to the obvious. Sorry,
Speaker 2: that's okay, we're all fried. Obviously.
Speaker 3: Payrolls data on Friday.
Speaker 2: Yes, yeah, so by the time this episode comes out,
Speaker 2: payrolls will have been out. But yes, there is a
Speaker 2: lot going on right now. But one thing that's happening
Speaker 2: is the election.
Speaker 3: I can't keep track anymore.
Speaker 2: There's too much when people are listening to this. We're
Speaker 2: gonna get out before the election. But yes, we may
Speaker 2: know very soon who the next president of the United
Speaker 2: States is.
Speaker 3: But whatever happens, whatever happens next week with the FED
Speaker 3: or with the election, it's clear that Biden is no
Speaker 3: longer going to be president, right.
Speaker 2: And I think it's like a real moment. We should
Speaker 2: talk about that because I think to your point you
Speaker 2: said it exactly, we may get a democratic presidency, Uder Harris,
Speaker 2: we may get a Trump presidency, but we've done so
Speaker 2: many episodes in the last four years, particularly around twenty
Speaker 2: twenty two to twenty twenty one. Others might call it
Speaker 2: a sort of post neoliberal turn, right, this sort of
Speaker 2: industrial policy.
Speaker 3: Turn of industrial policy, new supply side economic.
Speaker 2: New supply side economics. And I don't know, Like, first
Speaker 2: of all, I don't know what the legacy of any
Speaker 2: of these programs will be. It it's too soon to
Speaker 2: say are we going to be like great at making
Speaker 2: chips and batteries and solar panels and all that stuff.
Speaker 2: We also don't know if anyone will talk about this
Speaker 2: stuff at all in the next administration. Was it just
Speaker 2: like a one or two year thing where people got
Speaker 2: excited about what I would say, policy adventurism, use this
Speaker 2: effort to expand the care economy, childcare that's sort of fizzled,
Speaker 2: but there's still maybe interested in that. But I don't know, like,
Speaker 2: regardless of who the next president is, whether we'll see
Speaker 2: more continuation of these ideas or whether we'll go back
Speaker 2: to something that just sort of looks more like, I
Speaker 2: don't know, something people would call normal.
Speaker 3: I kind of like the idea that we went through
Speaker 3: like a teenage experimental policy phase. That's the funny way
Speaker 3: of looking at it. But you're absolutely right. I think
Speaker 3: we should talk about what could happen to all of
Speaker 3: this in the next four years and beyond.
Speaker 2: Totally Well, I'm really excited to say because coming to
Speaker 2: this big moment, we have the perfect guest. We're going
Speaker 2: to be speaking with, Ezra Klein. He is the host
Speaker 2: of the Ezra Kleines Show at the New York Times. Columnist,
Speaker 2: famous journalist, done extraordinary things. Everyone knows his name, so
Speaker 2: no need to add too much of an introduction. But Ezra,
Speaker 2: thank you so much for coming back on Odd Lots.
Speaker 4: Thank you for having me back on one of my
Speaker 4: favorite shows. And I do want to say that I
Speaker 4: like your joke at the beginning, Joe, I thought that
Speaker 4: was funny.
Speaker 3: You caught it.
Speaker 2: I appreciate it. No, it's okay, I said, it's been.
Speaker 4: It brought me back to the self conscious nerdery of
Speaker 4: the work block days, jokes that are really about how
Speaker 4: boring we are. It's it's a beautiful form.
Speaker 2: The most important thing still the FED decision and the
Speaker 2: job support. Look, if I'm going to be honest, first
Speaker 2: of all, I sort of admire political journalists or people
Speaker 2: will really pay attention to this stuff because a lot
Speaker 2: of it hurts my brain. So like the fact to
Speaker 2: like go in and every day talk about it and
Speaker 2: pay attention is something that and to take it seriously
Speaker 2: is something I often find myself not having the stomach
Speaker 2: to do. And so I'm probably like a little bit
Speaker 2: less informed on the election than I should be. But
Speaker 2: some of this stuff, what we call Bidenomics, IRA, the chips, ACKed,
Speaker 2: et cetera. Is this important to U Kamala Harris? Is
Speaker 2: this part of something that she talks about and sort
Speaker 2: of conveys on the trail.
Speaker 4: It's a good question. Any candidate, any politician, has the
Speaker 4: policy areas that really move them, the things that they
Speaker 4: think about and talk to people about when they're not
Speaker 4: on the clock, so to speak. And Harris has a
Speaker 4: bunch of those. She is amazing and committed and passionate
Speaker 4: about abortion rights. She's in general very interested in rights,
Speaker 4: speaking broadly right, She's a lawyer, a former da an
Speaker 4: ag economics that I've done a fair amount of reporting
Speaker 4: on this is just not the thing that she has
Speaker 4: been highly attracted to across her career. So in a
Speaker 4: way that is a little bit unusual if you have
Speaker 4: been involved in Democratic Party politics for a long time.
Speaker 4: She is coming in without being highly associated with one
Speaker 4: or the other schools of thought. She's obviously been in
Speaker 4: the Biden administration, but whereas Biden had incredibly clear economic
Speaker 4: lanes and ideas in the Obama administration. It's worth remembering
Speaker 4: that he brought on Jared Bernstein as his chief economist,
Speaker 4: which was an unusual move. And Bernstein, who is of
Speaker 4: course now on the Council of Economic Advisors, but he
Speaker 4: was understood then as a quite heterodox economist, somebody who
Speaker 4: is holding like the left flank of that against you know,
Speaker 4: Larry Summers and Jason Furman and Peter Orzag and so
Speaker 4: Biden was sort of associated with this more trade skeptical,
Speaker 4: you know, lunch pale economics, and Harris isn't really she's
Speaker 4: not associated with like the theories of the Inflation Production Act,
Speaker 4: although there's no reason to think she doesn't support them,
Speaker 4: not highly associated with like the Chips and Science Act,
Speaker 4: the sense of what moves her is not that well known. Now.
Speaker 4: One thing she has brought to the ticket, which we
Speaker 4: had not heard before, is a real central focus, at
Speaker 4: least rhetorically on housing supply, which makes sense. She's a
Speaker 4: San Francisco politician, the sort of Yimbi movement and the
Speaker 4: Democratic Party has gotten a lot bigger. The sense that
Speaker 4: housing is the price right at a time when the
Speaker 4: inflation rate has come down that you could really target,
Speaker 4: and that it's at the center of a lot of
Speaker 4: policy pathology in the country. I think that's real. So
Speaker 4: she's bringing that. But yeah, the sense of she's not
Speaker 4: running as like the inheritor of the industrial policy legacy.
Speaker 3: Well, she does talk a lot about the opportunity economy
Speaker 3: and doing stuff to reduce inequality and things like that.
Speaker 3: Is that just a rebranding of Bidenomics or do you
Speaker 3: get the sense that it's actually a departure.
Speaker 4: The opportunity economy has both never felt to me like
Speaker 4: it's Bidenomics, although I do want to say I don't
Speaker 4: think the biden administration has done a great job explaining
Speaker 4: or selling what Bidenomics is either, and it's never been
Speaker 4: one hundred percent clear to me. How much that's like
Speaker 4: the idea from her team that she liked, versus how
Speaker 4: committed she is to it. So, when Harris was in
Speaker 4: the Senate, her big economic proposal was a significantly expanded
Speaker 4: child tax credit, which she goes sponsored along with Senator
Speaker 4: Michael Bennett, Senator Corey Booker. There were others on that
Speaker 4: bill as well, and I think that some of her
Speaker 4: economic thinking reflects sort of where Democrats were then. Right,
Speaker 4: The opportunity economy is, I think closer in the way
Speaker 4: it gets talked about to this sort of anti inequality push,
Speaker 4: the sense to it that we should have bigger cash
Speaker 4: transfer to young fanse Right, she's talked about having a
Speaker 4: six thousand dollars credit in the first year of a
Speaker 4: child's life. But I don't find the opportunity economy. I've
Speaker 4: read her speeches, I've read her eighty page policy book
Speaker 4: is something I can get my arms around. Every politician
Speaker 4: says a support opportunity, so it doesn't quite tell you
Speaker 4: what she doesn't support. Right, The key question with all
Speaker 4: these people is which fights are you willing to pick?
Speaker 4: So when Biden comes in in twenty twenty one, his
Speaker 4: team is telling me they're saying publicly, we are going
Speaker 4: to be the full employment presidency. Right. This is Jared
Speaker 4: Bernstein had co written a book with Steen Baker about
Speaker 4: full employment. They're going to run the economy hot. They
Speaker 4: are going to spend They're going to make sure that
Speaker 4: the wage gains we've been seeing for some years reach
Speaker 4: the workers who they need to reach. That's true. You know,
Speaker 4: even as they're dealing with the pandemic, they are going
Speaker 4: to make sure that they don't undershoot on stimulus. Right.
Speaker 4: This is a team very much forged by the Obama era,
Speaker 4: to some gree the Trump era, in which the problem
Speaker 4: was too little demand and the problem was that even
Speaker 4: growth was not lasting for long enough to reach more
Speaker 4: marginalized workers who weren't seeing you know, low income wage gains,
Speaker 4: wage gains for black and Hispanic workers. So they come
Speaker 4: in very clear on which mistakes they are not going
Speaker 4: to make. They are willing to run the economy hot
Speaker 4: with the risks that that might entail, which I end
Speaker 4: up coming true, in order to not see the kind
Speaker 4: of weak recovery that we've seen before. I would like
Speaker 4: to know that answer for Harris and her team. Harris
Speaker 4: and her advisors not to say that we have to
Speaker 4: know it this second, because it is a really unusual
Speaker 4: thing to have to create a national presidential campaign from
Speaker 4: a standing start. But the opportunity economy thing, it doesn't
Speaker 4: answer that question for me, who is Harrison not going
Speaker 4: to be Which factions is she not aligning with in
Speaker 4: the way that the Biden folks were not aligning with,
Speaker 4: like the Larry Summers faction of the Democratic Party. That
Speaker 4: question is open.
Speaker 2: So it occurred to me, you know, if we're talking
Speaker 2: about Biden nomics, and you mentioned, you know, Biden has
Speaker 2: long been advised by Jared Bernstein, who maybe a little
Speaker 2: bit more sympathy to some of the heterodots thinking in macro.
Speaker 2: So there was the element of the fact that Biden
Speaker 2: domics existed because Biden won and maybe this is how
Speaker 2: he views the economy. But it's a little bit of
Speaker 2: an incomplete story because so even though I lumped the
Speaker 2: Chips Act into it, that was a bipartisan thing, and
Speaker 2: there was interest in doing something on semiconductors before Biden
Speaker 2: even came into office, I believe. And then you know,
Speaker 2: you mentioned the Trump Eureau, which if we're talking about
Speaker 2: some sort of turn or rethink on trade. I mean
Speaker 2: it clearly started more under Trump than Biden. Why now,
Speaker 2: like how much of it was? Like this is what
Speaker 2: Biden is into, This is what Biden and his advisors
Speaker 2: are into, versus there is some moment happening in the
Speaker 2: US economy or US society that created this political impulse
Speaker 2: to push in new ways.
Speaker 4: I think this is a great question and an important
Speaker 4: way to think about all these figures. So you could
Speaker 4: ask what the principle in this case, the president or
Speaker 4: the presidential candidate thinks. Then there's a question of what
Speaker 4: their coalition thinks. Right, if it's Kamala Harris and a
Speaker 4: Democratic House and a Democratic Senate, then what the Democratic
Speaker 4: House and Democratic Senate want to do? What is happening
Speaker 4: at the center of the coalition we think of as
Speaker 4: a democratic party becomes really really important. Then there's a
Speaker 4: question also of what kind of institutional power structure they're
Speaker 4: going to face. Right, if it's Kamala Harris and our
Speaker 4: Republican House and our Republican Senate, well, where the center
Speaker 4: of the Democratic party is then matters actually less than what,
Speaker 4: if anything, is in the Venn diagram between Kamala Harris
Speaker 4: and Mike Johnson, and all of those are very just
Speaker 4: different conditions which we should talk about and think about differently.
Speaker 4: But I do agree strongly with something you're agenna, Joe,
Speaker 4: which is there is a shift in the technonic plates
Speaker 4: of economic policy, of policy broadly. So I'm very influenced
Speaker 4: by this historian named Gary Gristal. He wrote a great
Speaker 4: book called The Rise and Fall of the Neoliberal Order.
Speaker 4: Before that, he was known for working on the Rise
Speaker 4: and Fall of the New Deal Order. And he's got
Speaker 4: this whole idea about orders, orders being these structuring agreements
Speaker 4: between the two parties, the shape what is taken for
Speaker 4: granted in American politics and policy and what is not.
Speaker 4: So he sort of describes this New Deal Order, which
Speaker 4: is not just the new deals we think about it
Speaker 4: under FDR, but it lasts from like nineteen thirty ish,
Speaker 4: you know, when FDR comes in thirty two, to the
Speaker 4: nineteen seventies when it sort of dies under stagflation and
Speaker 4: the Vietnam War. But the New Deal Order is very
Speaker 4: importantly concretized when Dwight Eisenhower takes control of the Republican Party,
Speaker 4: not Robert Taft, and Eisenhower brings a new Deal into
Speaker 4: something Republicans now support too, in order to fend off
Speaker 4: the Soviet Union. They neither sort of neoliberal order, you know,
Speaker 4: we think of Ronald Reagan and then later Bill Clinton.
Speaker 4: With the era of big government is over. There's a
Speaker 4: lot of deregulation, a lot of support of free trade,
Speaker 4: a lot of talk about governmental inefficiency, moving to markets,
Speaker 4: moving towards outsourcing, much more focus on the individual, and
Speaker 4: that order sort of dies amidst the financial crisis. And
Speaker 4: I do think Trump is a disruptive force who creates
Speaker 4: some of the shape of an order that is emerging,
Speaker 4: but we don't know which party will control it or
Speaker 4: exactly what its structurre will be. But it's clearly feels
Speaker 4: very differently about manufacturing and production. I think in the
Speaker 4: way that those two orders were both related, first to
Speaker 4: the power of the Soviet Union in the New Deal order,
Speaker 4: and then it's weakening in its fall in the neoliberal order.
Speaker 4: I think China is the great pressure on our politics
Speaker 4: and has been for some time. Trump talks about that
Speaker 4: very explicitly, But it is surprising then that Biden comes
Speaker 4: in and doesn't revert to where Barack Obama was on China.
Speaker 4: Biden goes further than Donald Trump. He goes further than
Speaker 4: Donald Trump on gating technologies. He adds on more tariffs,
Speaker 4: he keeps the Trump tariffs, and he uses China as
Speaker 4: a spur of passings like the Bipartisan Infrastructure Bill the
Speaker 4: Chips and Science Act, which are both very explicitly framed
Speaker 4: as bills to help American compete with China in terms
Speaker 4: of infrastructure and scientific development and semiconductor manufacturing. And of
Speaker 4: course the IRA has a lot of bi American and
Speaker 4: on shoring provisions. So I think China is a big
Speaker 4: part of this. I think that there is a growing
Speaker 4: sense that there are critical technologies like we just simply
Speaker 4: need to make here, or at least have our friends make.
Speaker 4: I think inflation and the broader affordability crisis heavily created
Speaker 4: a sense that whatever was going on before, we were
Speaker 4: good at making the price of consumer goods cheap, but
Speaker 4: actually not good at making the fundamentals of a life
Speaker 4: cheap right healthcare and education and home elder care, things
Speaker 4: like that. And so there's something happening, right. It's Trump,
Speaker 4: it's Biden, it's Harris, it's both coalitions. You know, they're
Speaker 4: fighting over it. They don't have the same view of it.
Speaker 4: But it's just a wild thing to me to watch,
Speaker 4: you know, Donald Trump running saying he, you know, helps
Speaker 4: save the Affordable Care Act, Right, Like, the locuses of
Speaker 4: polarization are different. Now. We are polarized over the system itself, right, elections, democracy,
Speaker 4: the freedom of the press kind of thing. But there's
Speaker 4: actually a huge amount of ferment and confusion and uncertainty
Speaker 4: about the policy consensus and like what is in and
Speaker 4: outside of the things members of Congress might agree on
Speaker 4: or negotiate over.
Speaker 3: Since you brought up China, it is kind of fascinating
Speaker 3: to me that, like so much policy on both sides
Speaker 3: of the aisle is framed in terms of very intense
Speaker 3: competition with China or a looming threat from China.
Speaker 1: Do you think the.
Speaker 3: Policy evolution of the past eight years now would have
Speaker 3: been possible without an external enemy to sort of catalyze action.
Speaker 4: I don't, and I think this is a normal thing
Speaker 4: for politics. I think we actually really underestimate how important
Speaker 4: the external antagonist or comparator is to us, because it
Speaker 4: isn't just the external enemy. I mean that turned towards
Speaker 4: China as a real antagonist under Trump, that's been very,
Speaker 4: very important. But if you go back a few years
Speaker 4: before that, you can just find members of Congress and
Speaker 4: members with politically talking constantly about how our system is
Speaker 4: gridlocked and it's a photocracy and we don't get anything
Speaker 4: done and we can't build anything, and look at our
Speaker 4: shitty airports, while over there in China, look how fast
Speaker 4: we're moving, Look how much they're doing, Look how big
Speaker 4: they're great. Their infrastructure is like, Look how effectively they're
Speaker 4: building their manufacturing capabilities. Look how competent their government seems.
Speaker 4: We don't talk about it in exactly those terms, but
Speaker 4: I have come to believe, and you know, I was
Speaker 4: on the show before to talk about abundance in this
Speaker 4: sort of move towards ideas about building in American politics.
Speaker 4: I think I'm part of this too, that I think
Speaker 4: that there's been a real pressure on people in American
Speaker 4: politics to think about what does it mean that America
Speaker 4: has gotten so bad at building, at building public infrastructure,
Speaker 4: at building homes, at building mass transit, at you know,
Speaker 4: manufacturing critical things. And that comes from the pressure of
Speaker 4: Chinese competition, right, not just Chinese sort of where it's
Speaker 4: moved to the slightly darker form of competition. But be
Speaker 4: even before that, this sense that we seem to be
Speaker 4: able to innovate but not build, and they seem to
Speaker 4: be able to build. I think John Arno will put
Speaker 4: it this way, but not necessarily innovate, and you actually
Speaker 4: need both.
Speaker 2: This is actually a good pivot because right we talked
Speaker 2: in the beginning about what might be the different emphasis
Speaker 2: during a Harris administration. Obviously there's a very good chance
Speaker 2: that we get a Trump administration. There's been noises obviously
Speaker 2: about gutting the Inflation Reduction Act in some ways, but
Speaker 2: I think it's ambiguous. There's a lot of jobs in
Speaker 2: Trump areas, red areas that would be gone I think
Speaker 2: without Inflation Reduction Act money, So I think imagine that
Speaker 2: complicates the politics of that. And then furthermore, there is
Speaker 2: what I would call maybe like a conservative or Republican
Speaker 2: or right wing industrial strategy. There's obviously the China antagonism,
Speaker 2: maybe much more explicitly about defense, tech, et cetera. But
Speaker 2: how would you characterize how some of these things morph
Speaker 2: during a Trump administration.
Speaker 4: I genuinely don't think anybody knows at all, And I've
Speaker 4: been thinking about this a lot Over the past couple
Speaker 4: of months, as I've been having a number of people
Speaker 4: on the American First Movement as they like to call it,
Speaker 4: on my show, and one thing I've noticed is that
Speaker 4: the universal sense that Donald Trump, in his seventy eighth
Speaker 4: year of life, running for his second term as president,
Speaker 4: still doesn't really know what he believes or you cannot
Speaker 4: know what he believes on any number of subjects, creates
Speaker 4: an immense sense that he can be moved and shaped right,
Speaker 4: that the competition going on behind him to wield governing
Speaker 4: power in his administration is immense. I just had vivig
Speaker 4: Ramaswami on the show, and I was so struck by
Speaker 4: him really trying to push Trump and why I call
Speaker 4: more traditionally conservative direction, right, you know, don't try to
Speaker 4: take over the administrative state, try to get rid of it,
Speaker 4: shutter these agencies. And he really sees Elon Musk as
Speaker 4: an ally in that effort, so you can call it.
Speaker 4: There's like this JD. Vance wing that is more national populace.
Speaker 4: And then all of a sudden, here's like Elon Musk
Speaker 4: and these like right wing billionaires and they have Trump's here,
Speaker 4: and maybe what they want is something a little bit
Speaker 4: more in between. In many ways, it looks more like
Speaker 4: what other Republicans were doing with a much more nationalistic edge.
Speaker 4: You know, whenever I talk to people about Trump's tariffs,
Speaker 4: they say, has proposed the you know, universal Tarriffy like, Oh,
Speaker 4: He's not going to do that. Trump's a negotiator, right,
Speaker 4: He's just saying that to get maximal leverage in order
Speaker 4: to run a really good negotiation. I mean, maybe maybe not.
Speaker 4: You know, Project twenty twenty five is an internally contradictory document,
Speaker 4: and then there are other documents floating around like it
Speaker 4: that are contradictory to that. You know, Mike Johnson's just
Speaker 4: said he would repeal Obamacare. I think that's probably unlikely,
Speaker 4: But the idea that they might pull money out of
Speaker 4: the IRA, it doesn't seem unlikely to me. There's going
Speaker 4: to be a huge tax cliff everybody's going to have
Speaker 4: to deal with in twenty twenty five, as you know,
Speaker 4: trillions of dollars of Trump tax cuts come ready to expire,
Speaker 4: and particularly if Democrats have any amount of power, there's
Speaker 4: going to have to be a lot of negotiation with
Speaker 4: them about what you do about that. It feels to
Speaker 4: me like, at this point we should be able to
Speaker 4: say better what Donald Trump will do. And I tend
Speaker 4: to just take the guy at his word on his
Speaker 4: policies and talk about the tariffs and what their effect
Speaker 4: on the economy would be. But I will say that
Speaker 4: if you're taking his movement on its own terms, that
Speaker 4: is not how it is spoken about or treated. It
Speaker 4: is spoken about like almost like it's a parliamentary system,
Speaker 4: right like Trump will have to form a government and
Speaker 4: inside the government will be different coalitional partners and they
Speaker 4: will vy for influence and then eventually we will see
Speaker 4: what the king does and like that almost more. Maybe
Speaker 4: it's not parliamentary, maybe it's a monarchy model is much
Speaker 4: more how everybody over there is acting.
Speaker 3: It would be pretty funny if like the Senate or
Speaker 3: the House started throwing paper and like insulting each other
Speaker 3: the way they do in UK Parliament. I would watch
Speaker 3: that on CSPAN es. Can we talk about the branding
Speaker 3: of Bidenomics and you touched on this earlier, but it
Speaker 3: does feel like the administration to some extent has had
Speaker 3: difficulty messaging the success of the program, and I think
Speaker 3: maybe in retrospect, the bet on full employment was isn't
Speaker 3: the best one. It turns out that Americans really care
Speaker 3: about inflation more than whether or not their neighbors have jobs.
Speaker 3: Can you talk to us about that, like, why isn't
Speaker 3: it resonating more?
Speaker 4: It's hard for me to know the counterfactual here, right,
Speaker 4: What if Joe Biden were sixty five years old, possessed
Speaker 4: of the explanatory and communicative power that Joe Biden had
Speaker 4: when he was sixty five years old, would he have
Speaker 4: been able to sell Bidenomics in a different way, particularly
Speaker 4: given the focusing event of a second presidential campaign. Right
Speaker 4: when the twenty twelve campaign is happening, Barack Obama for
Speaker 4: part of that campaign is trailing at Romney. What happens
Speaker 4: over the course of that campaign when unemployment is quite
Speaker 4: high by the way, I mean, it's above eight percent
Speaker 4: for much of that period. What happens in that campaign
Speaker 4: is that Obama and his team and Bill Clinton at
Speaker 4: the DNC convention are able to sell the Obama economic record,
Speaker 4: tell a story about it then, even though the commomy
Speaker 4: wasn't looking that good yet, was a story of recovery,
Speaker 4: a story of all that we did and averted, And
Speaker 4: that storytelling worked Biden just was not able to storytell
Speaker 4: I mean not during his presidency, I would say, and
Speaker 4: very much not during his campaign. And so the question
Speaker 4: of what would have happened if someone had really tried
Speaker 4: to make the case for Bidenomics, really tried to use
Speaker 4: the artillery of a presidential campaign, the money, the surrogates,
Speaker 4: the convention to make that case is hard to know. Obviously,
Speaker 4: biden ends up stepping aside a party Knight's friend Kamala Harris,
Speaker 4: and Harris I think in a way that is wise,
Speaker 4: but is the lower risk path. Also does not try
Speaker 4: to sell Bidenomics right, does not come in and try
Speaker 4: to turn around where people are on this right. She
Speaker 4: talks about what she is going to do to lower prices.
Speaker 4: She talks about how much oil and gas it has
Speaker 4: been produced, but she doesn't try to make a giant
Speaker 4: argument about how Bidenomics has set the structure for not
Speaker 4: an infrastructure weak but an infrastructure decade or multi decade project,
Speaker 4: and how we are going to be building factories at
Speaker 4: this wild pace, and on and on and on and
Speaker 4: we are just at the beginning, and how much Bidenomics
Speaker 4: invested in innovation, and how we are trying to have
Speaker 4: these industries of the future here, like Bidenomics. I mean,
Speaker 4: if somebody's writing a book that's very much about the
Speaker 4: need for liberalism built around building and invention, Bidenomics is
Speaker 4: very much built around building an invention. I have my
Speaker 4: places where I wish it to have gone further, or
Speaker 4: I don't think it's doing enough to confront what actually
Speaker 4: makes it so hard to build an invent in America.
Speaker 4: You know, permitting reform and procurement reform, and you know,
Speaker 4: paperwork and bureaucracy and so on. But at its core,
Speaker 4: it is really like we're going to make things in
Speaker 4: the real world, and then the things we need that
Speaker 4: we don't yet have, like green hydrogen, we're going to
Speaker 4: pump a bunch of money into inventing them, and that's
Speaker 4: going to be the basis of the next generation of
Speaker 4: economic prosperity. That is not a story Harris has tried
Speaker 4: to tell. Harris has tried to run much more the
Speaker 4: way a sort of generic Democrat would. She is not
Speaker 4: wanted and I think again there's probably a lot of
Speaker 4: political wisdom in this, but she's not wanted to try
Speaker 4: to run as the defender of the biden record. She's
Speaker 4: wanted to the extent she can without seeming disloyal. Run
Speaker 4: is something new because people are not very happy with
Speaker 4: the Biden record, and she is not herself Joe Biden,
Speaker 4: so she's not actually yoked to it in the way
Speaker 4: he is.
Speaker 2: This might be actually just another version of the same
Speaker 2: question that Tracy asked. And maybe the answer again is
Speaker 2: that the counterfactual would be different if Biden were sixty
Speaker 2: five years old. But he appeared at the picket line
Speaker 2: for GM And you know, you mentioned lunch pail economics,
Speaker 2: which we associate with people taking their lunch pail to
Speaker 2: work in a factory. Specifically, there are a lot of
Speaker 2: factories going up, and yet it does not seem that
Speaker 2: Biden is particularly popular even among union members. Maybe some
Speaker 2: maybe in the counterfactual whatever, certainly not. You know, this
Speaker 2: is that big crisis of the Democratic Party, the white
Speaker 2: working class, et cetera. Is the theory of the case wrong?
Speaker 2: Is the theory that if Biden stands on the picket
Speaker 2: lines and does a bunch of stuff to build factory
Speaker 2: like that, that will improve the Democrats standing among the
Speaker 2: white working class? Was that never the theory? Is that
Speaker 2: just something that was never actually part of the political calculus.
Speaker 2: Is it just about politics? Like, what do you see
Speaker 2: as going on there?
Speaker 4: I think it is hard to say, because again I
Speaker 4: can't run the counterfactual of like the sixty five year
Speaker 4: old Joe Biden. But I think you have to look
Speaker 4: at it and say, the theory doesn't look very good.
Speaker 4: It's not just being on the pickline didn't do that
Speaker 4: much for him. They bailed out the teamsters and they didn'
Speaker 4: even get the teams to endorsement. Right, they've directly bailed
Speaker 4: out the teamsters. Right, So forget like what you have
Speaker 4: to communicate this, You should just be able to communicate
Speaker 4: to the union. Right, we did the thing you wanted
Speaker 4: us to do, like, gave your puncher plants a big
Speaker 4: help in hand, and the team stress didn't endorse him.
Speaker 4: Part of the loss of the working class for Democrats.
Speaker 4: I think democrats always want the loss of the working class,
Speaker 4: the white working class, to be about economic materialism. The
Speaker 4: answer Democrats want to hear on that, because it is
Speaker 4: the answer they would most like to respond to, is
Speaker 4: that you're using these voters because you have strayed too
Speaker 4: far from a more progressive Fire and Brimstone class war economics,
Speaker 4: and I'm not telling you that's not part of it.
Speaker 4: It very well maybe, but it doesn't fit the story
Speaker 4: as we're seeing it very well. I mean, Biden, by
Speaker 4: the way, it's way to the left of Bill Clinton,
Speaker 4: who did way better with the white working class, and
Speaker 4: Joe Biden is Biden is way the left of Michael Ducaucus,
Speaker 4: who also did better among the white working class than
Speaker 4: Joe Biden has. And you know, the class realignment or
Speaker 4: de alignment in this country, it has a lot to
Speaker 4: do with culture. It has a lot to do with
Speaker 4: senses of who belongs and who doesn't, with views people
Speaker 4: have on immigration, views that they have on religion. Right,
Speaker 4: you know, identity is very complex, and we are, at
Speaker 4: sort of all level still a much more post materialist
Speaker 4: society than the left often wishes. At least our politics
Speaker 4: was because honestly, if the politics could just be reduced
Speaker 4: down to who is going to do better for the
Speaker 4: working class in terms of you know, who's going to
Speaker 4: get the tax credits and the tax rebates, and who's
Speaker 4: going to get healthcare? And you know, who is going
Speaker 4: to stand up to big corporations. The Democrats have a really, really,
Speaker 4: really good argument, right. I mean, people can always say
Speaker 4: they should move further left, but man, they are really
Speaker 4: quite a bit further left than they were a couple
Speaker 4: of years ago, and quite a bit further left than
Speaker 4: the Republicans are. But if you look around, it just
Speaker 4: doesn't actually seem to track that. So maybe you should
Speaker 4: do all those things because they are good things to do.
Speaker 1: Right.
Speaker 4: You should walk the pickline because walking the pickline is
Speaker 4: a good thing to do. You should raise the minimum
Speaker 4: wage because raising them minium wage is a good thing
Speaker 4: to do. But the sense that you're going to kick
Speaker 4: off this policy feedback loop where by being more populist
Speaker 4: in your economics you change who is voting for you
Speaker 4: in a dramatic sense, We're just not seeing it, and
Speaker 4: I think at this point the burden is on supporters
Speaker 4: of this theory to explain, like why we're not seeing
Speaker 4: it if indeed it works.
Speaker 3: We've obviously been focused on domestic issues in this conversation,
Speaker 3: but of course the US is the world's biggest economy
Speaker 3: and it does not exist in a vacuum. And one
Speaker 3: thing I'm curious about is your take on, I guess,
Speaker 3: the international legacy of Bidenomics, because to some extent, you know,
Speaker 3: the emphasis on building things in America, building out strategically
Speaker 3: important industries and things like that, it has generated tensions
Speaker 3: with some allies, like in Europe.
Speaker 4: You know, this is a place where I think it's
Speaker 4: hard to say until things play out for longer, I
Speaker 4: don't know that. I think there's a huge international legacy
Speaker 4: to Bidenomics at this exact moment. Right. Countries during this
Speaker 4: period have been going through a lot of inflation. There's
Speaker 4: been Russia's invasion of Ukraine. There's the war that is
Speaker 4: what's currently waging in Gaza now in seven Lebanon. There's
Speaker 4: so much going on in the world that the question
Speaker 4: of how the Biden administration is doing their green subsidies
Speaker 4: just doesn't strike me as something that.
Speaker 3: Like now everyone is as repetive on industrial policy as
Speaker 3: we are. Yeah, that's fair.
Speaker 4: And then, particularly if Donald Trump comes back in, I
Speaker 4: think that the main thing people will think about with
Speaker 4: Joe Biden that has been true is the amount of
Speaker 4: attention and intention Biden put into nurturing alliances, to being
Speaker 4: aligned with our partners to try to work these disputes out,
Speaker 4: but also to standing together where America can and would
Speaker 4: want to against Russian aggression on climate. Right, there's a
Speaker 4: million things where they've been putting like endless work into
Speaker 4: the alliances. I just don't buy that the industrial policy
Speaker 4: is just that big of a story of bidenministration foreign policy. Now.
Speaker 4: The China stuff, I think is the China side of
Speaker 4: things to me is I don't want to call it
Speaker 4: the It's obviously not an uncovered story. But if you
Speaker 4: ask me what has surprised me most about the Biden administration,
Speaker 4: it has been how hawkish and competitive with China they've been,
Speaker 4: how they went further than Donald Trump. They did things
Speaker 4: he did not, do things he really, in many ways
Speaker 4: didn't even imagine doing. When you listen to speeches and
Speaker 4: people like Jake Sullivan have given right, there's a real
Speaker 4: sense that the old model failed and that this all
Speaker 4: needed to be rethought, and that they are out there
Speaker 4: rethinking it, right, I mean, and they've been willing to
Speaker 4: do this even when it does I think have real
Speaker 4: conflict with other goals in their agenda. On the one hand,
Speaker 4: they want to have a rapid transition to electric vehicles.
Speaker 4: You can't hit our climate goals if you don't. On
Speaker 4: the other hand, they've put a what is it, one
Speaker 4: hundred percent tariff on Chinese electric vehicles even though they're
Speaker 4: cheaper and they're good cars, and you can bring them
Speaker 4: in and accelerate the pace of the EV transition. So
Speaker 4: that's a place where they have found the competition with China.
Speaker 4: Trump's something they have often spoken of as a very
Speaker 4: very high priority, which is the decarbonization and clean energy transition.
Speaker 4: So what they've done on China to me, and the
Speaker 4: way that they have taken what Trump began almost intuitively
Speaker 4: and made it into a structured policy that has to
Speaker 4: sign off not just of the Republican Party under Donald Trump,
Speaker 4: but the Democratic Party under Joe Biden. That feels like
Speaker 4: a very big shift that will have very far reaching consequences.
Speaker 2: So we've been talking a lot about industrial policy and
Speaker 2: the Inflation Reduction Act and so forth, But before the
Speaker 2: Inflation Reduction Act existed, there was a package called Build
Speaker 2: Back Better, and Build Back Better had hundreds of billions
Speaker 2: of dollars allocated towards the care economy, childcare and pre
Speaker 2: kindergarten and paid family leave and all of these things.
Speaker 2: And that's ultimately the big chunk that didn't make it
Speaker 2: into the Inflation Reduction Act, and we know these things
Speaker 2: paid family leave, universal childcare of some sort. They're big deals,
Speaker 2: particularly well for a lot of people, but also for
Speaker 2: a lot of influential people in the Democratic Party specifically.
Speaker 2: What was the constraint? I mean, I've seen things that like, oh,
Speaker 2: there are all these different groups involved and they couldn't coordinate.
Speaker 2: Some people say it was just like the legislation was
Speaker 2: sort of bad and unworkable. Maybe it was just the money.
Speaker 2: Why didn't the care economy part make it in in
Speaker 2: your view? And is that something that would do think
Speaker 2: likely to come up next the next time the political
Speaker 2: stars align in DC.
Speaker 4: I have a very simple answer to this and rhymes
Speaker 4: with schmosh mansion. Is it really that simpole? It is
Speaker 4: that simple. Look, there are a lot of problems in
Speaker 4: the ker economy side of the bill. There's a great
Speaker 4: piece by Rachel Cohen and Box about the kind of
Speaker 4: crazy interest group politics around it. I think a lot
Speaker 4: of bits of the care economy side of the bill
Speaker 4: were not that well designed. Right, you can hand pick
Speaker 4: this to death. It didn't pass because they didn't have
Speaker 4: the votes, and they'd ended the votes because they had
Speaker 4: a fifty to fifty Senate split, and very importantly, Joe
Speaker 4: Manchin was not on board, right, and that was not
Speaker 4: his priority, And in a way in the end, I
Speaker 4: think it wasn't exactly there is at least compared to
Speaker 4: climate right, and in terms of what the Democratic Coalition
Speaker 4: ranked higher, the climate investments were more pressing to them
Speaker 4: than the care economy side. Now, if Joe Manchin had
Speaker 4: said yes, could they have got in Kristen Cinema, maybe right?
Speaker 4: I mean you could maybe name like one or two
Speaker 4: or three members of the Senate who would have at
Speaker 4: least shaved that down. But I think think they could
Speaker 4: have gotten something out of the care economy package if
Speaker 4: Joe Manchin had been more open to it. Right, maybe
Speaker 4: not everything, but something, so they didn't have the juice
Speaker 4: and the Senate to pass that. I mean, I actually
Speaker 4: think it's really as simple as that. Now, if Manchin
Speaker 4: had said, I'm open to this, but this bill, and
Speaker 4: this was a period of the negotiations were like this,
Speaker 4: and I'd have to go back and look at what
Speaker 4: made it into this version of it. But I don't
Speaker 4: remember how big the original build back better was. But
Speaker 4: there's a period where it looked like Mansion might do
Speaker 4: one point eight trillion, or maybe it's one point two trillion. Right,
Speaker 4: there were different There was a lot of different things floated,
Speaker 4: and it was like how much of the climate investments
Speaker 4: could you keep in? How much of the care economy
Speaker 4: work could you keep in? And a lot of different
Speaker 4: menus were offered, and depending on what the constraint from
Speaker 4: the Senate had been, you could imagine different menus having
Speaker 4: been proposed, and then the question of how you choose
Speaker 4: and like how you like have the deal with the
Speaker 4: disappointment of some of the groups inside that coalition, that
Speaker 4: would become very salient. But in the end, Mansion was
Speaker 4: a no on the care economy and that's what killed it.
Speaker 3: Do you have a sense of continuity or lack of
Speaker 3: it in the next four years? And what I mean
Speaker 3: by that is we've started all these big projects with
Speaker 3: like multi decade timelines, right, and some of them are
Speaker 3: going to be finished for years and years and years
Speaker 3: and years. And whether you know, Harris comes in or
Speaker 3: Trump comes in, it seems like there's a question mark
Speaker 3: over how these programs are going to run. I guess
Speaker 3: to summon up my question is like how much of
Speaker 3: this is locked in.
Speaker 4: I think that if Trump comes in, it's not clear
Speaker 4: to me how much is locked in. I mean, some
Speaker 4: of it is. I don't think they can get rid
Speaker 4: of everything in the IRA or the Bipartisan Infrastructure Bill.
Speaker 4: They're definitely not getting rid of Chips and Science Act.
Speaker 4: But I think it is not implausible they would get
Speaker 4: rid of quite a bit of the IRA, right that
Speaker 4: that money might go towards tax cuts or something else.
Speaker 4: If it's Harris, I think it is locked in, and
Speaker 4: I think you should expect that a Harris administration will
Speaker 4: be stocked with many of the same people in the
Speaker 4: Biden administration. I think that if you imagine who might
Speaker 4: have been appointed in Abiden's second term, I don't think
Speaker 4: those appointments will look very different than the ones Harris
Speaker 4: will make. Not shown, as far as I can tell,
Speaker 4: any actual clear signal that she thinks that the appointments
Speaker 4: or the ideological direction on this set of issues should
Speaker 4: be radically different than where it's been in the Biden
Speaker 4: Harris administration. You know, she's known to have a very
Speaker 4: good relationship with Janet Yellen. If you look at who's
Speaker 4: been coming in to sort of help create her economic
Speaker 4: policy it's people like Brian Deese and Mike Pyle, who
Speaker 4: are key members of the Biden team. If you look
Speaker 4: at the sort of people who seem to be advising her,
Speaker 4: it's all the same people. If you look at the
Speaker 4: sort of signal she's sending about what she wants to do,
Speaker 4: it's very largely similar things. Biden is a very coalitional politician.
Speaker 4: He had his own views, but he was also governing
Speaker 4: from the center of the Democratic Coalition. Harris is also
Speaker 4: a very coalitional politician. I think one of the things
Speaker 4: we don't know about her, and the different people I
Speaker 4: think are jocking to try to define about her, is
Speaker 4: what her relationship will be with some of the more
Speaker 4: left groups and figures who wielded more power in the
Speaker 4: Biden administration than people expected them to, which is one reason,
Speaker 4: by the way, that when there was all this pressure
Speaker 4: on Biden to step aside, he was backed up and
Speaker 4: reinforced by Bernie Sanders, by AOC and members of the
Speaker 4: squad like That was very surprising that that was who
Speaker 4: was rallying for Biden, but in a way it wasn't
Speaker 4: because they'd actually been enormously favored in terms of the
Speaker 4: Biden administration right, and in terms of the kinds of
Speaker 4: people you appointed, were very much in the sort of
Speaker 4: Elizabeth Warren wing of the party. Biden had a very
Speaker 4: friendly relationship with the left and he gave them a
Speaker 4: lot of power. It's the coalitional government he actually on
Speaker 4: economic policy ran. Nobody quite knows where Harris will be
Speaker 4: on that. On the one hand, when she ran in
Speaker 4: twenty twenty, she was terrible at saying no to the
Speaker 4: groups and she ended up taking all kinds of positions
Speaker 4: that she's had to back off from in this campaign.
Speaker 4: On the other hand, in this campaign, she's backed off
Speaker 4: from positions like banning fracking or defunding the police, with
Speaker 4: absolutely no ill effects in terms of her political coalition
Speaker 4: as far as anybody can tell. And so the sense
Speaker 4: that you know, and she seems to be friendlier maybe
Speaker 4: the business community than Biden was to me, it's very
Speaker 4: hard to know how all that will net out, and
Speaker 4: she's actually gonna have to make these decisions, which right
Speaker 4: now I think the entire Democratic Party is giving her
Speaker 4: a pretty big pass on positioning in order to beat
Speaker 4: Donald Trump. But you know, you could see her either
Speaker 4: being a little bit more kind of pro business and
Speaker 4: a little bit less like in this relationship with Sade
Speaker 4: the Bernie Sanders wing of the party than Biden was.
Speaker 4: You could see her governing in the exact same way,
Speaker 4: and you could also imagine really that it's like what
Speaker 4: Chuck Schumer thinks to be the center of economic policy
Speaker 4: and the Democratic Party is ultimately what matters here. Those
Speaker 4: all seem like very plausible outcomes to me.
Speaker 2: Ezra Klein, that was so great. Thank you so much
Speaker 2: for coming back on odd lots, the perfect guest at
Speaker 2: the perfect time ahead of the election, and I really
Speaker 2: appreciate you taking the time.
Speaker 4: Thank you all the pleasure.
Speaker 2: Always you got to come back on when you're on
Speaker 2: your podcast book tour. When's your book.
Speaker 4: Coming, I will I will definitely let you know and
Speaker 4: I will come back on and we will abund into
Speaker 4: the hell out of it.
Speaker 2: Thanks Ezra, thank you, Thank you all. Tracy, I really
Speaker 2: liked that conversation. Just a very good I guess scene setter.
Speaker 2: You know, we don't do a lot of like electoral
Speaker 2: politics thing on the show, but it is also true
Speaker 2: that we've gotten dozens and dozens of episodes in the
Speaker 2: last few years directly downstream from politics and from political changes.
Speaker 2: So it's like we can't like just pretend to exist
Speaker 2: in a vacuum where that doesn't exist as much as
Speaker 2: I'd like to.
Speaker 3: No, of course, not one thing I hadn't like considered
Speaker 3: that much or hadn't focused on is the coalitional aspects
Speaker 3: that he brought up, Like not just for Trump, who
Speaker 3: you know, we know he has a lot of advisors
Speaker 3: and depending on who's talking to him, you know, he
Speaker 3: kind of seems to change his mind. But also on
Speaker 3: the Harris side, I haven't realized that.
Speaker 2: No, it's true. I mean there's a lot there. First
Speaker 2: of all, Ezra sort of alluded to this, but one
Speaker 2: of the challenges of trying to figure out what will
Speaker 2: Trump do under his administration is figuring out who actually
Speaker 2: speaks for Trump because there are a lot of various organizations.
Speaker 2: The Heritage Institute put out Project twenty twenty five, then
Speaker 2: Trump disavout it. There are a lot of organizations that
Speaker 2: would like to be the mouthpiece for whatever trump Ist
Speaker 2: economics are, and I think it's still highly tbd who
Speaker 2: actually gets that, and so you know the.
Speaker 3: Sort of you know, it's funny just on this point,
Speaker 3: there's a Goldman Sachs note that like literally just hit
Speaker 3: my inbox while we were recording this, and they're talking
Speaker 3: about tariffs under Trump, and you know, Trump has said
Speaker 3: sixty percent on Chinese imports, but Goldman is going ahead,
Speaker 3: and they're like, actually, we think it's going to be
Speaker 3: tiered across product categories and it's going to look like this.
Speaker 2: They're sticking their neck out there.
Speaker 3: Yeah. I don't know, like there's always a temptation to
Speaker 3: try to like formulate Trump's policies because many of them
Speaker 3: are so unclear or you know, to some people, unbelievable.
Speaker 4: Yeah.
Speaker 2: The other thing I think that interesting too in that
Speaker 2: conversation was I liked hearing Ezra his take sort of
Speaker 2: on the rise and fall of different ideological reasons that
Speaker 2: are bipartisans. So the idea that New Dealism to some
Speaker 2: extent was a bipartisan project after FDR neoliberalism, you know,
Speaker 2: people call it that was a Reagan and Bush and
Speaker 2: Clinton thing, et cetera. And so the idea that like
Speaker 2: from Trump starting in twenty sixteen through Biden through twenty
Speaker 2: twenty four. You know, we can talk about Biden onmics,
Speaker 2: but there was also some other shift happening right now.
Speaker 2: That makes sort of electoral analysis a little bit unclean
Speaker 2: in terms of, oh, there's going to be a pivot
Speaker 2: every four years.
Speaker 3: Yeah. The Bipartisan Infrastructure Act is a good example. Yeah,
Speaker 3: that's right.
Speaker 2: And the Chips Act.
Speaker 3: Yeah.
Speaker 2: And Tom Cotton of Arkansas that was like a big
Speaker 2: thing for him, Republican. So all these things are a
Speaker 2: little more muddied.
Speaker 3: Yeah, Well, this time next week will be interesting, certainly.
Speaker 3: Shall we leave it there?
Speaker 2: Let's leave it there.
Speaker 3: This has been another episode of the All Thoughts podcast.
Speaker 3: I'm Tracy Alloway. You can follow him at Tracy Alloway.
Speaker 2: And I'm Jill Wisenthal. You can follow me at The Stalwart.
Speaker 2: Follow our guest Ezra Kline. He's at Ezra Kline, and
Speaker 2: check out The Ezraklin Show. Obviously. Follow our producers Carman
Speaker 2: Rodriguez at Kerman Ermann dash Ol Bennett at Dashbot, and
Speaker 2: Kilbrooks at Kelbrooks. Thank you to our producer Moses ONEm.
Speaker 2: More Oddlots content go to Bloomberg dot com slash odd lots,
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