Biden’s economic plans put American manufacturing at the center.

As President Biden seeks to push through a $1.9 trillion coronavirus relief package, his economic team already has its eyes set on more distant horizons.
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As Noam Scheiber reports in a new 7,500-word feature for The Times Magazine, Biden and his economic advisers are hoping for nothing short of a total transformation of the United States economy, turning the page on an era in which business interests and free trade were often given more weight than the interests of middle-class and working-class Americans.

Noam and I connected today, and he answered a few questions about what he learned while reporting.

Hi Noam. You mention in the story that Biden’s economic plans include an embrace of protectionist trade policies, which will shelter American manufacturing from foreign competition. How much does this represent a shift from the approaches of recent presidents, including Democrats like Barack Obama and Bill Clinton? And how realistic does it seem?

Yes, it’s not quite protectionist in the most obvious sense of the term — with tariffs or overt trade restrictions of the sort that Trump put in place. But the White House very much intends to subsidize new industries in a way that advantages domestic production over imports, which is something that countries like China have done a lot of in recent decades and we’ve typically shied away from.

Clinton of course signed an agreement to permanently normalize our trade relationship with China, which a lot of economists now believe resulted in devastating losses to the U.S. manufacturing sector. Obama negotiated and aggressively promoted the Trans-Pacific Partnership, which would have liberalized trade with 12 other countries. So this is a shift, one that’s at odds with the language of some of Biden’s own advisers before entering the administration. Most prominent among them is Treasury Secretary Janet Yellen, long a self-proclaimed free trader.

How are labor leaders feeling about Biden’s plans? Do they feel as if they have a real seat at the table?

Yes, organized labor has been very pleased with Biden so far. The campaign consulted closely with industrial unions like the United Automobile Workers and the United Steelworkers, as well as service-sector unions like the Service Employees International Union. S.E.I.U. was thrilled by Biden’s $775-billion-plus proposal to raise the pay of care workers like home health aides and improve access to care for families who rely on them.

You write that the United States has recently seen a widespread embrace of so-called economic nationalism across the political spectrum. Why do you think that is?

It’s a handful of things. The loss of manufacturing jobs thanks to the so-called China shock — a flood of Chinese imports undercutting domestic manufacturing — during the first decade of this century played a key role. Employment in manufacturing had hovered near 18 million from 1965 to 2000. Then we lost over three million manufacturing jobs from 2001 to 2007. That was promptly followed by the Great Recession in 2007-9, and then by a grindingly slow recovery. The combination of those things was a pretty good recipe for populism and economic nationalism.

Then there’s another factor, which is that over the past two decades it has become increasingly clear that China is itself practicing a very aggressive form of economic nationalism. For years the Chinese government suppressed the value of its currency to make the country’s exports cheaper, which undercut American goods.

China also massively subsidizes a variety of industries to help its producers achieve global dominance. Both Democrats like Biden and Republicans like Senators Marco Rubio, Mitt Romney and Tom Cotton have become alarmed at China’s industrial ambitions.

Biden often says that all of this industrial activity will go hand-in-hand with building a green economy. Is it really possible to invest tons of resources in manufacturing and not harm the environment?

It should be doable if Biden is able to simultaneously meet his goals for the power generation industry — he wants to make power generation carbon-free by 2035, which means relying a lot more on wind and solar energy. The bigger tension on the left is between job creation and environmental goals. To meet those emissions goals, we’re going to have to increase the amount of solar and wind power we generate each year roughly threefold. That means we’ve got to start building a lot more solar and wind farms pretty much immediately.

But we don’t manufacture nearly enough solar panels and wind turbines, or their components, domestically to meet that demand. We’re going to have to import a lot of that equipment, meaning workers in countries like Malaysia, Vietnam, Korea and Denmark are going to be doing a lot of that manufacturing, not Americans. That said, there’s a lot of work to be done installing this equipment, and making and pouring concrete and steel for new plants. But the jobs picture is a little more complicated than either Biden or supporters of Green New Deal policies make it out to be.
The New York Times