The Rachman Review

The problem with Bidenomics

Oct 5, 2023

In this podcast, Adam Posen discusses his objections to Bidenomics, including subsidies to private companies. The comparison between pandemic response and the climate emergency is explored, advocating for urgent action. The global implications of Bidenomics are analyzed, including concerns about the subsidy race and its impact on the poorest countries. The argument linking China's growth and subsidies is disputed, emphasizing the importance of domestic savings and investment.

23:33

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Quick takeaways

Subsidizing private companies in Bidenomics may not generate expected manufacturing jobs and could lead to corruption and trade protection issues.

Bidenomics should focus on tighter regulation, R&D subsidies, infrastructure, and consumer subsidies for green products, while prioritizing international cooperation to avoid harmful subsidy races and spread green technology globally.

Deep dives

Objections to Bidenomics

Adam Pozen raises several objections to Bidenomics. Firstly, he criticizes the idea of too much subsidies going directly to private companies, as it may not generate the expected manufacturing jobs. He also highlights the risk of corruption associated with entrenching companies as preferred providers with trade protections and government relationships. Additionally, Pozen expresses concerns about the escalating subsidies competition between countries and the preference for domestic production, which may hinder technological outcomes. Lastly, he warns against repeating the mistakes made with COVID vaccines by not prioritizing international side payments and grants in the green transition.

Introduction

2min

Objections to Bidenomics

7min

Comparing the Pandemic Response to the Climate Emergency

3min

The International Impact of Bidenomics on the United States

2min

The Link between China's Growth and Subsidies

10min

Will Bidenomics help the US Democrats win another term in office? Will the policies be effective in tackling the climate crisis? Adam Posen, president of the Peterson Institute for International Economics, thinks not. In the last in our series on Bidenomics, he tells Gideon why offering incentives to private sector businesses is, in his view, a bad strategy.

Free links to read more on this topic:

John Kerry: Energy transition is the ‘new industrial revolution’

Adam Posen: ‘Russia and North Korea worked hard to be self-sufficient, it has not turned out well for them’

The west shouldn’t give up on ‘gentle commerce’ just yet

WTO warns about fragmentation of global trade into allied blocs

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Presented by Gideon Rachman. Produced by Fiona Symon. Sound design is by Breen Turner

Read a transcript of this episode on FT.com

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