At a recent conference in Brussels, on a panel entitled "The Battleground for Global Economic Domination: What's Ahead for Europe, as the US and China Fight for Supremacy?", Adam Tooze of Columbia University and former U.S. Trade Rep. Katherine Tai had an exchange on the political impact of the Biden administration's economic policies that I thought people might find interesting. I am providing a partial transcript, but you may want to check out the video as well.
Here is Tooze making the case that in political terms, the Biden administration's economic policies failed (starts at around 1:12:40)
The single thing to say about the Biden administration, in the end, unfortunately, is that in its central political objective, which was to prevent Trump II ... the fundamental reality about everything you've just heard is that, though this is a strategy which sounds great, it failed in its absolutely central mission, which was to prevent a second Trump administration.
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If the case for the Biden administration was that it was able to rally working class Americans, blue collar Americans, around the Biden administration, the evidence goes against that. In other words, whatever the strategy's intentions were, it didn't work. Right? In terms of class polarization, the electional outcome in last year was every bit as polarized, and the moving apart of the American electorate into a group which is dominated, on the one hand, by college educated folks like ourselves, and on the other hand, blue collar Americans with less education, is more extreme than it was in previous elections. This is not something you can blame the Biden administration for. It's a long running trend. But this well intentioned strategy did not, in its most fundamental outline, succeed.
Tai responded as follows (starts at around 1:29:25)
There's a very moving story, and I believe the story's origin is Irish, and you really have to hear Martin Sheen, our great American actor, tell the story. So he does it, it's on YouTube. Take a look. But I'll do my best rendition, which is, a man dies and he goes to heaven, and he's at the pearly gates, and he's greeted by St Peter. And St Peter looks at him and says, Did you live a good life? And he says, Yes, I believe I was a good person. I tried to do the right thing. And St Peter said, great, great. Now roll up your sleeves. And the man's confused, and he says, Well, okay, why? So he rolls up his sleeves, and St Peter leans over and looks at him and says, well, but where are your scars? And the man says, Well, why I don't have any. And St Peter says, Well, was there nothing worth fighting for? So Adam, I think my response to you on your point of political failure is this. I don't want anybody to leave this room thinking that they have no role in what happened or what's going to happen. Where are your scars, Adam? I can show you mine, ... It was not fun being Biden's US Trade Representative, and I can tell you about the beatings that I have taken here in Brussels and across Europe. Where was Europe these past four years? Our futures are bound together, fortunately or unfortunately, the future is not yet written, and yes, these next years are going to be extremely painful. The last nine days, last eight days, we're on the ninth day, are just the beginning. But I think that the most important part of this conference and this conversation is for everyone here to understand that they have agency and that they are a part of the problem we are facing now. And therefore, each and every one of us is also a part of any solution that there may be in the future.
Their debate here is over whether the Biden administration's economic policies -- and given that Tai was in charge of trade policy, I'm going to focus on that sub-set of economic policies -- worked in a specific political way, that is, to appeal to a particular group of U.S. voters. Given the election result, it seems clear that the policies did not accomplish their ultimate objective. (I'm not totally sure what Tai meant by "where was Europe," and I'd love to hear her elaborate on this point.)
Having said that, let me offer a mildly hot take on this issue, with the caveat that it is purely based on instinct and I claim no particular expertise in political analysis or strategy. With that in mind, here's what I think.
At this moment in U.S. politics, it seems to me that personality plays a big role in presidential elections. I'm not sure policy matters as much as some people think, and to the extent it does, the framing may be more important than the actual policy. For example, if the goal is to put forward a trade policy that is for the middle class, you can frame either free trade or protectionism that way. The key is, can you do the framing in a way that appeals to the people you are trying to convince.
Applying that view here, my sense of what happened in the last presidential election is that Biden's unpopularity, and Kamala Harris's subsequent loss, were in large part based on Biden's age and unlikability (and belated withdrawal from the race). As to the role of Biden's economic policies, while inflation was clearly a factor in the election, my point is that how the candidate talks about an issue such as inflation is more important than whether inflation exists. And then on trade policy, keep in mind that polling consistently shows that people don't care much about trade policy. As a result, adopting a specific set of trade/industrial policies isn't likely to be a significant factor in winning elections, no matter how you talk about them.
Regardless of whether I'm right about any of that, there is a political reality here that cuts in the other direction. There are many people who believe that policy plays a more important role than I've suggested, and the perception going forward may be that Biden's trade policies failed in political terms. When the Democrats are debating which way to go on trade policy in the future, opponents of Biden's policies are going to be able to point to Biden's approach and say "that failed, let's not do it again." I have no idea how those debates will go, although sticking with my earlier point, I think the outcome mainly depends on who the political players are and how they present their arguments.
