Jared Bernstein on the Next Stage of Bidenomics

Joe Weisenthal (0:10)

And welcome to another episode of the Odd Lots Podcast. I'm Joe Weisenthal.

Tracy Alloway (0:15)

And I'm Tracy Alloway.

Joe Weisenthal (0:16)

Tracy, so we're recording this Friday, June 30th. It really felt like this week, a bunch of people kind of like declared victory on the economy, or suddenly, like there's been like something in the water, you know? Like they put LSD in the water or something, like people are like feeling good. There's a good mood vibe.

Tracy Alloway (0:32)

Yeah, if last year we were all worried about the vibe session, so the idea that all these survey-based measures were turning down even while activity was still relatively robust, what are we gonna call this one?

Joe Weisenthal (0:44)

Vibe, what's the vibe expansion? I don't know.

Tracy Alloway (0:47)

Vibe expansion.

Joe Weisenthal (0:48)

We need to get Kyla Scanlon to come up with a term, but yes, the vibes shifted somehow this week.

Tracy Alloway (0:54)

Yeah, and it's interesting because a lot of the trends that we saw last year, you know, very low unemployment, you know, still some inflationary pressures, housing market relatively robust, those have just continued. This year, so not a lot has changed, but it definitely feels like people are more optimistic.

Joe Weisenthal (1:15)

Yeah, right, exactly. A bunch of people declaring that all the recession calls are null and void, the vibe session is over, Noah Smith had a blog saying that, and I think most notably, the White House sort of chose this week as a week to stamp out the success of what they're calling Bidenomics. And they're basically, you know, we had the president and they're sort of saying, yes, this is the economy that the White House has planned for and designed and envisioned.

And so I think that's a sign they're kind of like in a position where they want to brag a little bit. Yeah. They want to talk about it.

Tracy Alloway (1:45)

Yeah, and it is interesting in and of itself that the White House feels comfortable enough to choose this moment to kind of put a timestamp on the idea of Bidenomics and declare it an early success.

Joe Weisenthal (1:58)

Yeah, and so, I mean, obviously we know like some big components of it. And there are these really sort of extraordinary, like, you know, industrial policy-like strategies, the CHIPS Act, which we talk a lot about on this show, the Inflation Reduction Act, the reshoring, domestic investment, all of these things, sort of like sort of ongoing fiscal support for the economy, putting money in the hands of workers, et cetera.

And, you know, again, the numbers today seem solid. And so then I guess the question is like, okay, what is the big coherent thought? And like, where are we going from next? Because we're getting the investments. We see the factory announcements all the time.

But then like, what's next for all that's being built?

Tracy Alloway (2:35)

Why now and what's next?

Joe Weisenthal (2:37)

Well, to learn more about what is Bidenomics and what is next, we are going to be speaking with Jared Bernstein. He is the head of the White House Council of Economic Advisors. Jared Bernstein, thank you so much for coming on Odd Lots today.

Huge week.

Jared Bernstein (2:53)

Wait a second, am I the perfect guest or not?

Joe Weisenthal (2:57)

We have the perfect guest.

Jared Bernstein (2:59)

Thank you, that's what I want to be here.

Joe Weisenthal (3:01)

Yeah, someone told us recently how devastated they would be if they got intro'd without the perfect guest mentioned. You are the perfect guest.

Jared Bernstein (3:08)

I mean, once you start saying that, it sort of becomes like, wow.

Tracy Alloway (3:12)

Yeah, we have to say it every time.

Jared Bernstein (3:13)

I didn't get it.

Joe Weisenthal (3:14)

When we don't say it, it's never intentional.

Jared Bernstein (3:17)

Yeah, exactly.

Joe Weisenthal (3:17)

It's not that important. It's volumes.

Huge week, obviously. Why now? The economy is hot and it's been hot for a while. Inflation is elevated, labor market tightness. Why was this the week that President Biden and the White House chose to sort of declare that Bidenomics is working?

Jared Bernstein (3:36)

Well, I think the simple answer is that there's a lot of evidence that it is.

And in terms of the broader economy, I think that there's headwinds and there's tailwinds. And I think one of the things that, I know I listen to you guys all the time and I really enjoy what you do, but I think all of us here in this business get very focused on the news of the day, the news of the minute, the news of the week, the market asset that's in trouble or the market asset that's soaring, the supply chain that's broken, the dwell time in some port somewhere. All of that's critically important to all of us and you two do a great job of reporting on that. But Bidenomics takes both a near term and a very long term view. So when we're talking about the bipartisan infrastructure law, the inflation reduction at the CHIPS Act, I know you've done shows on all of those. We're talking about a long term play here where if we get the implementation and the public private aspects of those investments right, we have the potential to transform the economy very much in the spirit of Bidenomics bottom up, middle out growth. A complete reversal from the trickle down, top down approach that I think decades of evidence fails to support.