Bidenomics - the Economic Policy Leitmotif of the Coming Era?

A Google search for “Bidenomics” brings up almost 15 million hits. For “Reaganomics” it is not even a million.  The comparison may seem unfair, as Reagan’s followers had their heyday decades ago. Still, it is impressive how much the economic policies currently being put together by US president Joe Biden and his team in Washington are already being treated as ‘the new thing’. The Financial Times even calls it a “revolution in economic policy”.

The details of what lies behind this policy in detail have been summarized in an analysis by Max Krahé from Dezernat Zukunft this week. His conclusion: Bidenomics is a paradigm shift in economic policy – one that promises a lot.

The question is whether Germany can keep up – for example, with the Wachstumschancengesetz (Growth Opportunity Act) recently presented by Finance Minister Christian Lindner as a fitting response to the Inflation Reduction Act.  Or whether the EU is not already doing the same thing as Biden, i.e. promoting green technologies on a similar scale. Nils Redeker of the Jacques Delors Centre recently argued on Twitter that the comparison was misleading. Unlike similar EU programmes, the bulk of the IRA consists of uncapped tax credits. How big the package will be in the end depends on the demand for it – and nobody can possibly know that at the moment. What is clearer is that this is a break with the market-liberal practice, which first and foremost is concerned with limiting debt, rather than focusing on the impact of the respective aid on the real economy.

By the way, we compile such articles on the emergence of a new paradigm once a week in our New Economy Ticker. What else stood out besides the Bidenomics discussion can be read here.