There’s something strange in the D.C. air these days. It smells a bit like … competence.
Seriously, it has been amazing to watch the media narrative on the Biden administration change. Just a few weeks ago President Joe Biden was portrayed as hapless, on the edge of presiding over a failed presidency. Then came the Inflation Reduction Act, a big employment report and some good news on inflation, and suddenly we’re hearing a lot about his accomplishments.
But I still don’t think the media narrative gets it quite right. Biden has indeed accomplished a lot — in some ways more than he’s getting credit for, even now. On the other hand, America is a huge nation with a huge economy, and his policies don’t look as impressive when you compare them with the scale of the nation’s problems.
Furthermore, at this point Biden is arguably benefiting from the soft bigotry of low expectations. His policy achievements are big by modern standards, but they wouldn’t have seemed astounding in an earlier era — the era before the radicalization of the Republican Party made it almost impossible to pursue real solutions to real problems.
So, what has Biden accomplished?
As I see it, he came into office with three main domestic policy goals: investing in America’s fraying infrastructure, taking serious action against climate change and expanding the social safety net, especially for families with children. He got most of two and a bit of the third.
Last year’s infrastructure bill gets remarkably little media attention; only about one-quarter of voters even know that it passed. But we should remember that Barack Obama wanted to invest in infrastructure but couldn’t; Donald Trump promised to do it but didn’t (and “It’s infrastructure week!” became a running joke); then Biden got it done.
By contrast, the Inflation Reduction Act, which is mainly a climate law, has received a lot of attention, and deservedly so. America is finally taking action against the biggest existential threat of our times. Energy experts believe that it will have large direct effects in reducing greenhouse gas emissions.
These are significant achievements, and a big contrast with the last administration, whose only major domestic policy change was a tax cut that had almost no visible positive effects.
But when I see news reports describe these laws as “massive” or huge, I wonder whether the writers have done the math. The infrastructure law will add roughly $500 billion in spending over the next decade. The Inflation Reduction Act will increase spending by roughly an additional half trillion. A law to promote U.S. semiconductor production will add around $50 billion more. Overall, then, we’re talking about a bit more than $1 trillion in public investment over 10 years.
To put this in perspective, the Congressional Budget Office expects cumulative gross domestic product to be more than $300 trillion over the next decade. So the Biden agenda will amount to around one-third of 1% of GDP. Massive it isn’t.
True, some of what Biden has done may have effects much bigger than the dollar sums might suggest. There are reasons to hope that the climate law will have a sort of catalytic effect in promoting a transition to clean energy. And some economists believe that boosting the budget of the resource-starved IRS will greatly reduce tax evasion and hence increase revenue.
And can we say a word about foreign policy? Biden got immense flak over the Taliban’s takeover of Afghanistan, although the critics offered few suggestions about what he should have done differently. But the narrative on foreign affairs has changed, too; I’m no expert, but it looks to me as if the Biden administration has done a remarkable job assembling and holding together a coalition to help Ukraine resist Russian aggression.
OK, I can already hear people yelling in response to any citation of Biden’s achievements, what about inflation? Indeed, the Biden administration failed to appreciate the risks of an inflation surge. However, so did many others, including the Federal Reserve (and yours truly). And it does seem worth pointing out that other countries, notably Britain, are also suffering from high inflation, even though they didn’t follow anything like Biden-style policies. In fact, Britain’s inflation problem looks worse than ours, on multiple dimensions.
And both the public and financial markets expect inflation to be brought under control. So it doesn’t look as if this admittedly big misstep will do enduring damage.
Again, I don’t want to sound Trumpian and claim that Biden is doing an awesome job, a perfect job, the best job anyone has ever seen. What he has done — and was doing even before the media narrative turned — is deal, reasonably effectively, with the real problems America is facing.
The thing is, what we’re getting from Biden should be routine in a wealthy, sophisticated nation; indeed, it was routine before the GOP took its hard right turn. At this point, however, competent, reality-based government comes as a shock.
Paul Krugman, winner of the Nobel Memorial Prize in Economic Science, is a columnist for The New York Times.