M-RCBG Associate Working Paper No. 252
What should the UK learn from “Bidenomics”?
Dan Turner
Huw Spencer
Julia Pamilih
Vidit Doshi
Ed Balls
Executive Summary
A little over a year ago, “Bidenomics” was hailed as a policy success: overseeing the fastest growth in the developed world in the aftermath of the pandemic; delivering a “soft landing” despite fears of stagflation; and pioneering, according to advocates, a new paradigm in economic policymaking that the world could learn from. In the UK, then-Shadow Chancellor Rachel Reeves said she would “embrace the insights of an emergent economic consensus”.
After the Democratic Party lost the 2024 presidential election, by contrast, many commentators sought to pin the blame on the outgoing administration’s economic policy. According to critics, the stimulus was too big, hitting capacity constraints rather than boosting growth. Policy focused on marginal sectors or concerns, making them ineffective or irrelevant to most Americans. And inflation eroded the benefits for most workers: median real incomes seeing one of their worst performances over the four years in decades. Unsurprisingly, enthusiasts for Bidenomics – in the UK or in the EU – are now much more muted.
Bidenomics had four objectives: worker empowerment; supporting “left behind” places; advancing economic competitiveness in strategic industries; and achieving national security goals. Jared Bernstein, chair of the Council of Economic Advisers under Biden, gave us the elevator pitch: “if you’re helping bake the pie, you ought to get a fair slice.” Building on interviews with senior US economic policy makers inside and outside of the Biden administration, we set out our view of the lessons the UK can draw from the US economy under Biden.
To what extent did Biden’s policies drive US economic performance? Was America’s economic success inevitable in an era of technological innovation and geopolitical rivalry? And does Biden’s electoral defeat – or the fundamental differences between the US and UK economies – imply that Britain has little to learn from Bidenomics?
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