Joe Biden seguiu uma política industrial tão transparente e assertiva quanto qualquer outra desde a mobilização para a Segunda Guerra Mundial. Por que ela não conseguiu conquistar os eleitores?
Brent Cebul
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O presidente Joe Biden chegando para falar em uma nova fábrica de semicondutores da Intel perto de New Albany, Ohio, 9 de setembro de 2022 Saul Loeb/AFP/Getty Images |
1.
Enquanto o Partido Democrata avalia outra derrota para Donald Trump, nenhuma questão é maior do que sua contínua hemorragia de eleitores da classe trabalhadora. Não é difícil encontrar causas próximas para esta crise. A inflação — que subiu de 1,4% quando Biden assumiu o cargo e atingiu o pico de 9,1% em junho de 2022 — certamente corroeu as margens estreitas do partido em 2020 em estados cruciais. O custo de moradia e creche, enquanto isso, aumentou a uma taxa ainda mais rápida. Como muitos comentaristas apontaram, os democratas permitiram que as expansões da rede de segurança social da era Covid expirassem quando a inflação estava atingindo o pico.
Mas o quadro se torna mais complicado quando consideramos o que Biden realizou de uma perspectiva política. Seu Departamento do Trabalho e o Conselho Nacional de Relações Trabalhistas defenderam genuinamente os direitos dos trabalhadores. Ele foi o primeiro ocupante da Casa Branca a caminhar em uma linha de piquete. Acima de tudo, havia "Bidenomics". O termo, como Osita Nwanevu explicou nestas páginas, descreve "uma abordagem tripla para reviver um papel ativo para o governo federal na definição da direção da economia: aumentando substancialmente o investimento público, envolvendo o governo federal mais diretamente no desenvolvimento da força de trabalho e reforçando a competição econômica".
A Bidenomics está associada a três grandes peças de legislação: o CHIPS Act, o Inflation Reduction Act (IRA) e o Infrastructure Bill. Juntos, eles equivalem a uma política industrial tão transparente e assertiva quanto a que os EUA têm buscado desde a mobilização para a Segunda Guerra Mundial. O pacote total pode chegar a US$ 1,6 trilhão, grande parte dele direcionado para energia verde e tecnologia avançada. Biden afirmou que o IRA "criaria dezenas de milhares de empregos bem remunerados e empregos na fabricação de energia limpa, fábricas solares no Centro-Oeste e no Sul, parques eólicos nas planícies e em nossas costas, projetos de hidrogênio limpo e muito mais". O CHIPS Act, disse ele, poderia estimular "mais de 1 milhão de empregos na construção civil somente nos próximos seis anos, construindo fábricas de semicondutores". Essas iniciativas realmente atraíram um nível notável de investimento privado: mais de US$ 1 trilhão até novembro deste ano, segundo a administração. Não foi à toa que Bernie Sanders admitiu que "Joe Biden foi o presidente mais pró-trabalhador desde FDR".
O que, então, explica a disjunção? Se Biden fez tanto para impulsionar a economia e os mercados de trabalho, por que os eleitores não sentiram os efeitos? Uma maneira de responder a essa pergunta é analisando a estrutura subjacente da Bidenomics. Biden frequentemente lançou sua política industrial como uma forma de fazer a economia crescer do meio para fora e de baixo para cima. Mas, na realidade, essas iniciativas subsidiam principalmente as corporações; os benefícios indiretos para trabalhadores e pessoas comuns devem vir depois. A grande maioria dos fundos do governo é encaminhada por meio de incentivos empresariais — créditos fiscais, subsídios, parcerias público-privadas e assim por diante — e por meio de subsídios a serem desembolsados por intermediários em universidades, bancos, organizações sem fins lucrativos e outras organizações paraestatais. O resultado é um programa massivo construído sobre o bem-estar empresarial e sem fins lucrativos.
Essa abordagem necessariamente leva tempo para se tornar visível aos eleitores — algo que Biden não tinha a seu favor. Semanas antes de ele desistir da corrida de 2024, apenas cerca de um quarto dos americanos relataram benefícios positivos dos projetos de lei. Aproximadamente a mesma parcela de entrevistados (37%) acreditava que Donald Trump tinha sido tão bem-sucedido em impulsionar a infraestrutura e criar empregos quanto Biden (40%). Os milhões de americanos presos em empregos de baixa remuneração, irregulares ou de serviços não dormiam tranquilos à noite porque as corporações estavam planejando novos investimentos.
A Bidenomics encapsula algo fundamental sobre o Partido Democrata. Desde o New Deal, um dos pilares de sua abordagem à governança tem sido subsidiar e segurar corporações e firmas envolvidas no fornecimento de moradia, assistência médica, manufatura de alta tecnologia e outras atividades que possam contribuir para o bem comum. Em vez de chamar isso de política industrial — com suas conotações de chaminés e planejamento estatal — esse conjunto de estratégias é melhor compreendido como criação de mercado. Em um país tão conservador quanto os Estados Unidos, isso tem algum sentido político. Ele permite que os democratas moldem os resultados econômicos e sociais de maneiras que desviem as acusações da direita de supremacia governamental; ele tenta alinhar objetivos sociais progressistas com os interesses do capital, que de outra forma poderia atacar ou simplesmente fugir do país. Talvez o mais importante, das décadas de 1930 a 1960, foi subsumido dentro de uma agenda assistencialista maior e mais robusta que oferecia benefícios diretos como emprego em obras públicas, ao mesmo tempo em que expandia significativamente a rede de segurança social pública: Previdência Social, Medicaid e Medicare foram todos estabelecidos neste período.
Nas décadas subsequentes, no entanto, à medida que os sindicatos declinavam e a austeridade do setor público se consolidava, a conveniência política da criação de mercado gradualmente colonizou toda a imaginação democrata. Um exemplo paradigmático dessa mudança é o Obamacare. Em vez de oferecer uma opção genuinamente pública, o governo Obama criou um sistema altamente complicado de incentivos e subsídios para expandir o acesso aos mercados de seguros privados — o que aumentou os custos, levou a enormes lucros inesperados para as seguradoras e cedeu cada vez mais controle sobre nossas vidas para as corporações de assistência médica. Mesmo que se enraíze por meio de políticas públicas, a criação de mercado democrata na verdade estreitou o relacionamento entre os cidadãos e o estado, que passou a depender dos interesses e caprichos do capital para realmente proporcionar progresso social.
De certa forma, a Bidenomics estava pronta para romper com esse status quo. Mas, apesar da escala dos recursos gastos, ela acabou se baseando nas antigas estruturas de criação de mercado. A história da formulação de políticas democratas ajuda a explicar como chegamos aqui: ao ponto em que até mesmo iniciativas importantes de políticas federais falham em conquistar os eleitores.
2.
A política industrial alimentou o dinamismo econômico americano desde os primeiros dias da República. Em seu Relatório sobre Manufaturas (1791), Alexander Hamilton implorou ao estado para impor tarifas protecionistas, aprovar políticas comerciais mercantilistas e fornecer "recompensas" — isto é, dinheiro derivado de tarifas — para apoiar o crescimento. Suas ideias desenvolvimentistas foram adaptadas ao longo do século XIX, quando o governo tomou dinheiro emprestado e gastou em canais e ferrovias, roubou terras de nativos americanos e as transferiu para colonos e estabeleceu universidades públicas "A&T" que, até hoje, conduzem pesquisas para agricultura e indústria.
O padrão moderno de criação de mercado, no entanto, surgiu durante o New Deal — um período em que os conservadores foram rápidos em acusar os democratas de tendências socialistas. Para desviar ou plausivelmente negar que o estado estava moldando a indústria, os New Dealers adotaram três formas primárias de intervenção indireta: seguro ou garantias de empréstimo para empresas e corporações (que os especialistas hoje chamam de "redução de risco"); contratos com, subsídios diretos para ou investimentos em empresas; e créditos fiscais direcionados.
Descrevi essa abordagem como “liberalismo do lado da oferta”.1 Onde a versão conservadora familiar da “economia do lado da oferta” é baseada em cortes de impostos e regulamentações, os democratas usam investimento, financiamento, seguro e créditos fiscais direcionados para estimular o crescimento em setores específicos. Em vez de desocupar o estado e convidar as empresas sozinhas para moldar a economia, em outras palavras, eles subsidiam empresas para moldar a economia de maneiras mais ou menos direcionadas, se não diretamente planejadas.
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| Crianças em um projeto habitacional federal de quatrocentas unidades em Manitowoc, Wisconsin, operado pela National Housing Authority (NHA) para funcionários do estaleiro da cidade, por volta de 1940–1946; fotografia de Ann Rosener Library of Congress/Wikimedia Commons |
The promise—and pitfalls—of granting the private sector wide autonomy over the use of public subsidies are illustrated by the operations of the Federal Housing Administration (FHA) and Home Owners’ Loan Corporation (HOLC). By design, the FHA’s mortgage lending insurance created a lot of new business for home builders, for the primary and secondary manufacturing sectors whose products went into homes, and, of course, for the financial institutions that brokered home loans. It mostly did this indirectly—not by paying construction firms or transferring money to lenders, but by insuring the home loans that banks made to applicants. If a homebuyer defaulted on their mortgage, FHA insurance bailed out the lending bank but not the homeowner. When making FHA-backed loans, banks were effectively lending house money. Their risks—and profits—were utterly socialized.
Here was where redlining came in. If banks granted home loans to applicants or in areas deemed risky—in practice, this meant Black Americans as well communities home to large groups of certain ethnic or minority groups—they were generally denied FHA insurance. The state’s responsibility for housing discrimination is now widely recognized. But real estate and banking interests began honing such lending practices in the late nineteenth century.2 New Dealers even hired bankers and real estate professionals into the FHA and HOLC to ensure that the “best market practices” were followed. The private sector taught the state how to create the markets that produced the modern, lily-white suburb.
By the 1940s, New Dealers’ market-making initiatives proliferated precisely because they offered politically and fiscally lighter alternatives to the more direct social benefits created by European social democracies.
The state deployed loan guarantees and subsidies in sectors far beyond mortgage markets. Following the New Deal, government’s invisible hand wore the glove of many private sector intermediaries—banks, Silicon Valley startups, universities, corporations, and contractors. These government subsidized organizations fostered not only rental housing, private pension plans, and postindustrial urban redevelopment, but also specific products like nanotechnology, LCD displays, and lithium batteries.
Consider the Internet, which was first created in the late 1960s to facilitate internal communication between researchers working for the Pentagon’s Advanced Research Projects Agency (ARPA). ARPAnet, as it was called, was expanded in the 1980s through the support of the National Science Foundation (NSF), to connect university-based computer scientists through the Computer Science Network. In 1993 NSF-funded students at the University of Illinois-Urbana-Champaign also created Mosaic, the first freely available web browser, with web pages that included both text and graphics. By the 1990s, as the fantastic commercial possibilities began to attract investment, the NSF awarded contracts to private corporations to develop and maintain the internet’s infrastructure. In 1998 it entirely ceded control—and future profits—to the private sector.
Where government’s hand was most visible, and devastatingly so, was in the military-industrial state. As the historian Tim Barker has pointed out, in the 1950s and 1960s the aerospace industry was the largest manufacturing employer in the US—and it did 80 percent of its business through contracts with the Department of Defense. Even today the Pentagon functions as a global financier and broker for domestic arms manufacturers. But then Republicans have never taken umbrage at state support for warfare.
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In the Reagan years federal subsidies flowed toward military projects, including the Strategic Defense Initiative, his unrealized missile defense shield (which the incoming Trump administration has pledged to revive as an American version of Israel’s Iron Dome). At the same time, he slashed income and corporate tax rates, exploding the federal deficit. As the government borrowed foreign capital to paper over its deficits, Wall Street financiers expressed concerns that it was “crowding out” opportunities for private investment. Managing the deficit, they stressed, was essential for maintaining businesses confidence—which is to say, for domestic investment.
Bill Clinton and the generation of “New Democrats” took those warnings to heart. They balanced budgets by sacrificing traditional liberal commitments, most significantly by ending welfare as an entitlement. In search of policy models, they even held up the FHA’s mortgage insurance provisions as an ideal. In their influential book Reinventing Government, the consultants David Osborne and Ted Gaebler claimed that the FHA showed that the way to solve “a problem generated by the market”—in that case bankruptcies, a foreclosure crisis, and a sharp downturn in construction jobs—was to “restructure that market.”4
A related article of faith among the New Democrats was that the state could maximize resources by inviting nongovernmental partners—nonprofits or private contractors—to administer public programs. When Clinton signed legislation ending the federal welfare entitlement, he offered just such a public-private partnership as a replacement. The “Welfare to Work Partnership” delivered some $3 billion in subsidies to businesses, nonprofits, and local governments to create jobs for former welfare recipients. (Businesses also enjoyed generous tax advantages.) This effectively inverted the logic of the New Deal era: rather than offer bounties to business to develop crucial economic sectors in the context of a welfare state, it invited business to erode and even replace the social safety net.
By the turn of the century Democratic market-making had narrowed into highly technical fiscal and monetary policies: targeted tax breaks, interest-rate adjustments, and the odd loan guarantee. This withered scope for public action defined the 2000 Democratic Party platform, which conveyed Al Gore’s hopes to secure growth while addressing climate change. Americans, it proclaimed, had been “led to believe they had to make a choice between the economy and the environment.” This “false choice” missed how the “right incentives”—tax credits and budget neutral spending—could spur consumers and businesses to invest in “new environmentally-friendly technologies” such as fuel-efficient cars. The chastened Democrats promised “no new bureaucracies, no new agencies, no new organizations. But there will be action and there will be progress.”
The technical expertise, legal and regulatory knowledge, and sheer fiscal and financial wonkery required to run these circuitous programs was prodigious. As they proliferated, the ranks of middlemen swelled: nonprofit staffers, lawyers, economists, think tank researchers. By the twenty-first century, these professionals—along with their private sector partners in finance, health care, and Silicon Valley—increasingly defined the Democratic agenda.
By the turn of the century Democratic market-making had narrowed into highly technical fiscal and monetary policies: targeted tax breaks, interest-rate adjustments, and the odd loan guarantee. This withered scope for public action defined the 2000 Democratic Party platform, which conveyed Al Gore’s hopes to secure growth while addressing climate change. Americans, it proclaimed, had been “led to believe they had to make a choice between the economy and the environment.” This “false choice” missed how the “right incentives”—tax credits and budget neutral spending—could spur consumers and businesses to invest in “new environmentally-friendly technologies” such as fuel-efficient cars. The chastened Democrats promised “no new bureaucracies, no new agencies, no new organizations. But there will be action and there will be progress.”
The technical expertise, legal and regulatory knowledge, and sheer fiscal and financial wonkery required to run these circuitous programs was prodigious. As they proliferated, the ranks of middlemen swelled: nonprofit staffers, lawyers, economists, think tank researchers. By the twenty-first century, these professionals—along with their private sector partners in finance, health care, and Silicon Valley—increasingly defined the Democratic agenda.
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As Barack Obama took office, the Democrats flirted with a return to bold government solutions, in response to the interconnected crises set off by the Wall Street crash. But ultimately he offered generous and direct aid only to big banks imperiled by mass foreclosures. To expand private health insurance, Obamacare embraced the full suite of market-making tools: budget-neutral incentives, regulations, credits, fees, and targeted taxes. To stimulate green technologies, Obama pursued a limited version of the old federal de-risking, loan-guarantee model. Despite promising that his election would mark “the moment when our planet began to heal,” he never passed significant climate legislation.
This was partly due to Republican obstruction. But the Democrats utterly failed to forge their own consensus on the green transition. Obama’s top economic advisor, Larry Summers, was staunchly opposed to creating a “Green Bank” to finance climate-friendly startups. Others argued that he should simply shelve climate legislation: the post-2008 recession would slow carbon emissions in any event.6
As Barack Obama took office, the Democrats flirted with a return to bold government solutions, in response to the interconnected crises set off by the Wall Street crash. But ultimately he offered generous and direct aid only to big banks imperiled by mass foreclosures. To expand private health insurance, Obamacare embraced the full suite of market-making tools: budget-neutral incentives, regulations, credits, fees, and targeted taxes. To stimulate green technologies, Obama pursued a limited version of the old federal de-risking, loan-guarantee model. Despite promising that his election would mark “the moment when our planet began to heal,” he never passed significant climate legislation.
This was partly due to Republican obstruction. But the Democrats utterly failed to forge their own consensus on the green transition. Obama’s top economic advisor, Larry Summers, was staunchly opposed to creating a “Green Bank” to finance climate-friendly startups. Others argued that he should simply shelve climate legislation: the post-2008 recession would slow carbon emissions in any event.6
O presidente Barack Obama visitando a sede da Solyndra, uma fabricante de painéis solares, com Ben Bierman, vice-presidente executivo de engenharia da empresa, Fremont, Califórnia, 26 de maio de 2010
Paul Chinn-Pool/Getty Images
Today Obama’s green policy is remembered, if at all, for a $500 million loan guarantee to Solyndra, a California-based solar cell manufacturer, which declared bankruptcy on the eve of his reelection campaign. That Mitt Romney could stoke public outrage about this comparatively trivial failure says much about voters’ amnesia about decades of actual existing industrial policy. Meanwhile, the Obama administration made successful loans to Ford ($5.9 billion) and Tesla ($465 million) to develop electric vehicle technology—but these are largely forgotten.
3.
By the time Joe Biden ran for president in 2020, the prospect of inclusive growth had all but disappeared. He was strikingly clear about this development. In a debate with Donald Trump, he dwelled on the concept of the “K-shaped economy.” This was, he said, “a fancy phrase for everything that’s wrong with Trump’s presidency…what ‘K’ means is those at the top are seeing things go up, and those at the middle and below are seeing things go down and get worse.” If this structural crisis—a dual economy that served the elite while exploiting the rest—was the main reason for Biden’s embrace of industrial policy, there were three other contingent factors: growing urgency around the climate crisis, particularly among younger policy advocates and experts; momentary acceptance of government spending during the Covid-19 pandemic among traditional opponents; and Democratic hopes that a Green New Deal could help forge a coalition of the working class, minority groups, and well-educated suburbanites.
The Build Back Better (BBB) package, the doomed bill from which the IRA was carved, contained the seeds of this alternative future. It was the first Democratic proposal in generations that not only went big on green market-making, but that also shored up and expanded the social safety net, proposing free universal preschool for three- and four-year-olds, making the Covid-era child tax credits permanent, and offering significant subsidies for paid family leave, childcare, and eldercare. The neoliberal fever seemed about to break.
Business struck back. As the economic historian Andrew Yamakawa Elrod has shown, an array of actors banded together to lobby against the bill. Industry groups that depended on low-wage service work for their outsized profits—distribution, retail, leisure, and hospitality—knew that its child support and family leave allowances would threaten their low labor costs. Multinational firms and Wall Street interests were alarmed at the prospect of increased corporate taxes. And Democratic Senators Joe Manchin and Kyrsten Sinema opposed expanding social benefits. By the late fall and early winter of 2021, BBB and its New Deal-style direct social benefits were dead.
Still, the market-making bills that did pass were momentous. To give credit where due: Biden’s green industrial policy was a technocratic tour de force. Learning from Obama’s fiscal timidity, his staffers understood that lightly nudging markets would not suffice to meet the climate crisis. This is because of what economists call a market failure. Developing foundational technologies is often initially prohibitively expensive, because of low immediate consumer demand or lack of economies of scale. Private investment is unlikely to take the risk—and needs a helping shove (and often some security) from the state.
Bidenomics was that shove. The clean energy strategists Lachlan Carey and Jun Ukita Shepard have described the relationship between its three bills in anatomical terms. The CHIPS Act is the “‘brains’ of the operation,” underwriting billions to foundational research in energy biofuels, advanced battery technology, and quantum computing. The Infrastructure Act is the backbone, supporting not only traditional roads, ports, and water infrastructure but also clean hydrogen, low and zero-emission transit buses, and EPA Superfund projects to clean up contaminated sites. The IRA is the financial heart of the machine, subsidizing both the production and consumption of green technology. The lions’ share of federal spending has been directed at foundational research and development and the initial scaling up of markets—the stage, as Carey and Shepard put it, “where private markets are less likely to invest in research, development, demonstration, and early commercialization.”
Bidenomics also aims to onshore entire supply chains. For instance, the Section 45X Advanced Manufacturing Tax Credit supports the domestic production of components for wind and solar energy, battery development, and electric vehicles. Take solar panels: the credit offers $3 per kilogram for manufacturing polysilicon, which transforms sunlight into electricity. Companies turning that element into components for solar cells receive $12 per square meter. The next links up the chain receive credits—ranging from $40 to $70 per kilowatt—based on how much electricity their cells and panels produce. Along with a range of other subsidies for aluminum and other core components, these credits are projected to reduce the costs to producers of domestic solar by more than 40 percent, according to Advanced Energy United, a consortium of green energy businesses. They have been effective: the Bureau of Labor Statistics estimates that wind turbine service technicians and solar photovoltaic installers will be the fastest-growing occupations through 2033.
As far as energy and component production goes, the IRA was responsible for some 646 energy projects (either announced or underway) that have produced 334,565 jobs as of August 2024. The Swiss firm Meyer Burger used 45X to complete building facilities in Goodyear, Arizona. The US manufacturer First Solar made a $450 million investment in a new R&D center in Perrysburg, Ohio, which they commissioned in 2024; hiring is underway for an estimated three hundred new positions to be filled this year. Perhaps most impressive, the South Korean corporation Qcells invested more than $2.5 billion on a solar-cell and module production facility in Dalton, Georgia—which anchors a region devastated by the decline of the textile industry. That campus employs two thousand full-time workers who produce 5.1 gigawatts worth of solar panels each year, the most of any site in the country.
Clean energy manufacturing requires semiconductors, which are the building blocks of solar cells as well as the digital components of wind turbines, electric vehicles, and advanced energy storage. Every electric vehicle contains between two to three thousand chips. As the pandemic shortage made clear, US industries relied overwhelmingly on foreign production. This is where the CHIPS Act came in. The legislation granted $50 billion to the Department of Commerce: $11 billion for semiconductor research and development and $39 billion for chip manufacturing and workforce training. The resulting surge of private investment has been impressive. According to the Financial Times, by April 2024 some thirty-one projects worth at least $1 billion had been founded since the act was passed, compared to just four in 2019. By that point the government had spent just over half of the act’s incentives.
Since the election the Biden administration has been working to get the rest of the subsidies to businesses. Leading recipients include Intel, Taiwan Semiconductor Manufacturing Co. (TSMC), Samsung, and Micron. In December the commerce department announced that Texas Instruments could receive as much as $1.61 billion in direct CHIPS funding for projects in Texas and Utah. The department now predicts that by 2030 domestic markets could produce a fifth of the world’s chips; until very recently, the US produced none.
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Bidenomics, in short, has certainly bolstered domestic supply chains and manufacturing—and made jobs in the process. Unless the Trump administration completely shuts down the initiatives, more are likely to follow. But it should be clear by now that these tax credits and subsidies first benefit corporations and professional middlemen rather than working people. This is true even of programs for underserved communities. Take the IRA’s Environmental Justice grants, which, among a range of initiatives, are intended to fund environmental cleanup efforts, workforce development, air quality monitoring, and asthma remediation programs. In 2023 and early 2024 the EPA announced two rounds of funding totaling more than $1 billion.
Such projects could have made Bidenomics more visible to voters, if only at the margins, but the money was not handed out directly. Instead it was routed through what the administration called “Regional Environmental Justice Thriving Communities Grantmakers.” These include Fordham University ($50 million), the Research Triangle Institute in North Carolina ($100 million), and Texas Southern University ($50 million). Those organizations had until summer 2024 to begin opening subgrant competitions. A spokesperson for the Research Triangle Institute conceded that it hadn’t planned to make any awards until this past fall. Following the election, however, local environmental justice groups now worry that Republicans will claw back or redirect funds.
Today Obama’s green policy is remembered, if at all, for a $500 million loan guarantee to Solyndra, a California-based solar cell manufacturer, which declared bankruptcy on the eve of his reelection campaign. That Mitt Romney could stoke public outrage about this comparatively trivial failure says much about voters’ amnesia about decades of actual existing industrial policy. Meanwhile, the Obama administration made successful loans to Ford ($5.9 billion) and Tesla ($465 million) to develop electric vehicle technology—but these are largely forgotten.
3.
By the time Joe Biden ran for president in 2020, the prospect of inclusive growth had all but disappeared. He was strikingly clear about this development. In a debate with Donald Trump, he dwelled on the concept of the “K-shaped economy.” This was, he said, “a fancy phrase for everything that’s wrong with Trump’s presidency…what ‘K’ means is those at the top are seeing things go up, and those at the middle and below are seeing things go down and get worse.” If this structural crisis—a dual economy that served the elite while exploiting the rest—was the main reason for Biden’s embrace of industrial policy, there were three other contingent factors: growing urgency around the climate crisis, particularly among younger policy advocates and experts; momentary acceptance of government spending during the Covid-19 pandemic among traditional opponents; and Democratic hopes that a Green New Deal could help forge a coalition of the working class, minority groups, and well-educated suburbanites.
The Build Back Better (BBB) package, the doomed bill from which the IRA was carved, contained the seeds of this alternative future. It was the first Democratic proposal in generations that not only went big on green market-making, but that also shored up and expanded the social safety net, proposing free universal preschool for three- and four-year-olds, making the Covid-era child tax credits permanent, and offering significant subsidies for paid family leave, childcare, and eldercare. The neoliberal fever seemed about to break.
Business struck back. As the economic historian Andrew Yamakawa Elrod has shown, an array of actors banded together to lobby against the bill. Industry groups that depended on low-wage service work for their outsized profits—distribution, retail, leisure, and hospitality—knew that its child support and family leave allowances would threaten their low labor costs. Multinational firms and Wall Street interests were alarmed at the prospect of increased corporate taxes. And Democratic Senators Joe Manchin and Kyrsten Sinema opposed expanding social benefits. By the late fall and early winter of 2021, BBB and its New Deal-style direct social benefits were dead.
Still, the market-making bills that did pass were momentous. To give credit where due: Biden’s green industrial policy was a technocratic tour de force. Learning from Obama’s fiscal timidity, his staffers understood that lightly nudging markets would not suffice to meet the climate crisis. This is because of what economists call a market failure. Developing foundational technologies is often initially prohibitively expensive, because of low immediate consumer demand or lack of economies of scale. Private investment is unlikely to take the risk—and needs a helping shove (and often some security) from the state.
Bidenomics was that shove. The clean energy strategists Lachlan Carey and Jun Ukita Shepard have described the relationship between its three bills in anatomical terms. The CHIPS Act is the “‘brains’ of the operation,” underwriting billions to foundational research in energy biofuels, advanced battery technology, and quantum computing. The Infrastructure Act is the backbone, supporting not only traditional roads, ports, and water infrastructure but also clean hydrogen, low and zero-emission transit buses, and EPA Superfund projects to clean up contaminated sites. The IRA is the financial heart of the machine, subsidizing both the production and consumption of green technology. The lions’ share of federal spending has been directed at foundational research and development and the initial scaling up of markets—the stage, as Carey and Shepard put it, “where private markets are less likely to invest in research, development, demonstration, and early commercialization.”
Bidenomics also aims to onshore entire supply chains. For instance, the Section 45X Advanced Manufacturing Tax Credit supports the domestic production of components for wind and solar energy, battery development, and electric vehicles. Take solar panels: the credit offers $3 per kilogram for manufacturing polysilicon, which transforms sunlight into electricity. Companies turning that element into components for solar cells receive $12 per square meter. The next links up the chain receive credits—ranging from $40 to $70 per kilowatt—based on how much electricity their cells and panels produce. Along with a range of other subsidies for aluminum and other core components, these credits are projected to reduce the costs to producers of domestic solar by more than 40 percent, according to Advanced Energy United, a consortium of green energy businesses. They have been effective: the Bureau of Labor Statistics estimates that wind turbine service technicians and solar photovoltaic installers will be the fastest-growing occupations through 2033.
As far as energy and component production goes, the IRA was responsible for some 646 energy projects (either announced or underway) that have produced 334,565 jobs as of August 2024. The Swiss firm Meyer Burger used 45X to complete building facilities in Goodyear, Arizona. The US manufacturer First Solar made a $450 million investment in a new R&D center in Perrysburg, Ohio, which they commissioned in 2024; hiring is underway for an estimated three hundred new positions to be filled this year. Perhaps most impressive, the South Korean corporation Qcells invested more than $2.5 billion on a solar-cell and module production facility in Dalton, Georgia—which anchors a region devastated by the decline of the textile industry. That campus employs two thousand full-time workers who produce 5.1 gigawatts worth of solar panels each year, the most of any site in the country.
Clean energy manufacturing requires semiconductors, which are the building blocks of solar cells as well as the digital components of wind turbines, electric vehicles, and advanced energy storage. Every electric vehicle contains between two to three thousand chips. As the pandemic shortage made clear, US industries relied overwhelmingly on foreign production. This is where the CHIPS Act came in. The legislation granted $50 billion to the Department of Commerce: $11 billion for semiconductor research and development and $39 billion for chip manufacturing and workforce training. The resulting surge of private investment has been impressive. According to the Financial Times, by April 2024 some thirty-one projects worth at least $1 billion had been founded since the act was passed, compared to just four in 2019. By that point the government had spent just over half of the act’s incentives.
Since the election the Biden administration has been working to get the rest of the subsidies to businesses. Leading recipients include Intel, Taiwan Semiconductor Manufacturing Co. (TSMC), Samsung, and Micron. In December the commerce department announced that Texas Instruments could receive as much as $1.61 billion in direct CHIPS funding for projects in Texas and Utah. The department now predicts that by 2030 domestic markets could produce a fifth of the world’s chips; until very recently, the US produced none.
*
Bidenomics, in short, has certainly bolstered domestic supply chains and manufacturing—and made jobs in the process. Unless the Trump administration completely shuts down the initiatives, more are likely to follow. But it should be clear by now that these tax credits and subsidies first benefit corporations and professional middlemen rather than working people. This is true even of programs for underserved communities. Take the IRA’s Environmental Justice grants, which, among a range of initiatives, are intended to fund environmental cleanup efforts, workforce development, air quality monitoring, and asthma remediation programs. In 2023 and early 2024 the EPA announced two rounds of funding totaling more than $1 billion.
Such projects could have made Bidenomics more visible to voters, if only at the margins, but the money was not handed out directly. Instead it was routed through what the administration called “Regional Environmental Justice Thriving Communities Grantmakers.” These include Fordham University ($50 million), the Research Triangle Institute in North Carolina ($100 million), and Texas Southern University ($50 million). Those organizations had until summer 2024 to begin opening subgrant competitions. A spokesperson for the Research Triangle Institute conceded that it hadn’t planned to make any awards until this past fall. Following the election, however, local environmental justice groups now worry that Republicans will claw back or redirect funds.
O presidente Joe Biden em frente a um computador quântico durante um tour pelas instalações da IBM em Poughkeepsie, Nova York, 6 de outubro de 2022
Mandel Ngan/AFP/Getty Images
While some bloat is to be expected with any massive government undertaking, such public-private initiatives also serve to hollow out the state. Government is underwriting its future incapacity. And middlemen breed middlemen. The application process for smaller, community-based grants poses greater legal and technical barriers than do the subsidies for businesses. The EPA’s solution to that problem was to hire more intermediaries: independent contractors who assist both applicants and subgrant-making organizations. An EPA press release explained that the Technical Assistance Services for Communities (TASC) program “has the expertise and skills needed to guide communities in the direction of their choice.” Given such administrative complexities, the recent flurry of CHIPS Act subsidies is unlikely to be replicated for environmental justice groups.
Similarly, the EPA’s $27 billion IRA-funded “national green bank” was designed to make direct grants to community groups, individual firms, and smaller organizations. But in April 2023 the EPA quietly announced an alternative approach: it would disburse money to between four and ten nonprofit organizations that would, in turn, act as funding agents. Last spring and summer President Biden and Vice President Kamala Harris made a big show about rolling out the initial awards. But rather than describe anyone doing anything substantive, they merely said that $20 billion was awarded to eight community development banks and nonprofits—which would then set up their own subgrant process.
Even when grants have been made, businesses and professional middlemen have often benefited first. Last October Climate United, which oversees $7 billion in federal green bank funds, made the first of its grants (a revolving loan, in fact, meaning that Climate United will continue to offer green financing well into the future). It delivered $31 million in financing to Scenic Hill Solar, a solar energy developer based in Little Rock, Arkansas, which will use the money to lower the carbon footprint and utility bills of the University of Arkansas system. Lowering carbon footprints and energy costs is important. But it’s also byzantine, top-down, and slow-moving structures like this that led Adam Tooze to conclude that Bidenomics was “not a policy ‘by’ or ‘of’ the middle class but ‘for’ them”—to say nothing of the working class.
The public-private grants system is inefficient in other ways, too. In December Vox described the thicket of state and local regulations, administrative authorities, and zoning requirements that slows the funding and development process. Take the IRA’s Home Energy Rebates program, which offers households up to $14,000 to install more efficient heating and cooling systems. Those credits generally take the form of reimbursements from a utility company or a state agency. States and utilities have struggled to set up reimbursement systems, the feds were slow to approve them, and higher interest rates blunted consumer enthusiasm. In addition to up-front cash, then, beneficiaries need patience.
*
The success of market-making efforts always and ultimately depends on wider market conditions. Arizona is an instructive case in how these conditions can slow progress to a crawl. The state successfully courted the semiconductor industry, but a shortage of skilled labor curbed development. (This is a national problem: one industry association estimates that the US will face a shortfall of nearly 70,000 workers by 2030.) So Maricopa County created the Quick Start program, a CHIPS-funded ten-day crash course in chipmaking. Graduates of the program receive a “pre-apprentice credential,” intended to help them land entry-level, $30-per-hour jobs with promises of future training and advancement. The Maricopa County Community College District offered thirty-one special degree and certificate programs, some developed in partnership with Intel.
But in January 2024 Business Insider reported that the jobs simply weren’t there yet: 58 percent of Quick Start graduates were looking for work and 11 percent had stopped trying. Last May Intel and TSMC announced delays or entire holds on Arizona projects, citing labor and material costs. Other firms entered holding patterns while awaiting federal grant decisions. Still others pressed pause until the outcome of the election was known.
Volatile economic dynamics and the whims of business interests limited another promising initiative: Pennsylvania’s Whole Home Repairs program for residential decarbonatization. It supports up to $50,000 in home repairs to improve energy and water efficiency and, as an incentive, allows homeowners of modest means to pursue a wider range of other essential repairs. Decarbonizing housing and commercial buildings is an underappreciated piece of the green transition: together those structures account for roughly three quarters of national energy use. State senator Nikil Saval spearheaded the innovative program using $125 million in pandemic relief funds; aspects were included in the commonwealth’s $4.6 billion application for IRA funds. (Senator John Fetterman has introduced legislation that would take the program national.) As of last summer 1,151 residences were repaired or modified. But local administrators had received 25,700 applications. Many counties froze the process in the face of overwhelming demand. Others capped their awards at just under $25,000, a figure that would trigger compliance with prevailing wage laws.
Small contractors found such wage regulations burdensome. Larger contractors were simply not interested in small scale repair projects. (The construction industry was booming.) In a state as divided as Pennsylvania, the legislature declined to allocate additional funds to beef up the programs. Maryann Velez runs a nonprofit in Luzerne County that helped thirty-five homeowners apply for the Whole Home Repair program. None were funded. “You could just hear the defeat in their voices,” she lamented. “It’s very disheartening.”
*
When they advocate for market-making as their political vision, today’s Democrats sound like nothing so much as used car salesmen: they promise discounts, rebates, credits, low ARPs. When he signed the IRA, Biden announced the plan would benefit “working families” by “providing them rebates to buy new and efficient appliances, weatherize their homes, get tax credits for purchasing heat pumps and rooftop solar, electric stoves, ovens, dryers.” At his final state of the union, salesman Joe promised to move more inventory. “When you refinance your home, you can save $1,000 or more . . .” Cutting usurious credit card fees, forgiving student loan debt, and promoting electric vehicles are obviously good things to do. But when the main thrust of your appeal to voters is the stuff of daytime television ads—low APR! no credit down! get out of debt!—you are a party adrift.
The Trump administration could theoretically shut down many of Biden’s green initiatives. But the electoral benefits to Republicans would be unclear: most of the IRA’s recent projects are based in congressional districts with Republican representatives. It’s more likely that they will redirect subsidies to their districts and preferred businesses—including in the extractive sector—and brag about job growth. They are already at it. In 2023, when Kamala Harris appeared at the Qcells plant in Dalton, Representative Marjorie Taylor Greene accused her of “trying to take credit for jobs that President Trump and Governor Kemp created in Georgia back in 2019.”
That Harris did not even make the case for a renewed Build Back Better agenda speaks volumes about the Democratic Party’s continued aversion to state intervention. Yet if Obama’s bank bailout and the rapid expansion of the social safety net during the pandemic have taught Americans anything, it’s that the state can undertake big, expensive, and effective policies. The Democratic Party must learn this lesson, too, and yoke their technocratic know-how to public initiatives that squarely address economic insecurity, social inequality, and the green transition. This will be the surest—and probably the only—way to win back working-class voters. Far more than the party’s future is at stake.
While some bloat is to be expected with any massive government undertaking, such public-private initiatives also serve to hollow out the state. Government is underwriting its future incapacity. And middlemen breed middlemen. The application process for smaller, community-based grants poses greater legal and technical barriers than do the subsidies for businesses. The EPA’s solution to that problem was to hire more intermediaries: independent contractors who assist both applicants and subgrant-making organizations. An EPA press release explained that the Technical Assistance Services for Communities (TASC) program “has the expertise and skills needed to guide communities in the direction of their choice.” Given such administrative complexities, the recent flurry of CHIPS Act subsidies is unlikely to be replicated for environmental justice groups.
Similarly, the EPA’s $27 billion IRA-funded “national green bank” was designed to make direct grants to community groups, individual firms, and smaller organizations. But in April 2023 the EPA quietly announced an alternative approach: it would disburse money to between four and ten nonprofit organizations that would, in turn, act as funding agents. Last spring and summer President Biden and Vice President Kamala Harris made a big show about rolling out the initial awards. But rather than describe anyone doing anything substantive, they merely said that $20 billion was awarded to eight community development banks and nonprofits—which would then set up their own subgrant process.
Even when grants have been made, businesses and professional middlemen have often benefited first. Last October Climate United, which oversees $7 billion in federal green bank funds, made the first of its grants (a revolving loan, in fact, meaning that Climate United will continue to offer green financing well into the future). It delivered $31 million in financing to Scenic Hill Solar, a solar energy developer based in Little Rock, Arkansas, which will use the money to lower the carbon footprint and utility bills of the University of Arkansas system. Lowering carbon footprints and energy costs is important. But it’s also byzantine, top-down, and slow-moving structures like this that led Adam Tooze to conclude that Bidenomics was “not a policy ‘by’ or ‘of’ the middle class but ‘for’ them”—to say nothing of the working class.
The public-private grants system is inefficient in other ways, too. In December Vox described the thicket of state and local regulations, administrative authorities, and zoning requirements that slows the funding and development process. Take the IRA’s Home Energy Rebates program, which offers households up to $14,000 to install more efficient heating and cooling systems. Those credits generally take the form of reimbursements from a utility company or a state agency. States and utilities have struggled to set up reimbursement systems, the feds were slow to approve them, and higher interest rates blunted consumer enthusiasm. In addition to up-front cash, then, beneficiaries need patience.
*
The success of market-making efforts always and ultimately depends on wider market conditions. Arizona is an instructive case in how these conditions can slow progress to a crawl. The state successfully courted the semiconductor industry, but a shortage of skilled labor curbed development. (This is a national problem: one industry association estimates that the US will face a shortfall of nearly 70,000 workers by 2030.) So Maricopa County created the Quick Start program, a CHIPS-funded ten-day crash course in chipmaking. Graduates of the program receive a “pre-apprentice credential,” intended to help them land entry-level, $30-per-hour jobs with promises of future training and advancement. The Maricopa County Community College District offered thirty-one special degree and certificate programs, some developed in partnership with Intel.
But in January 2024 Business Insider reported that the jobs simply weren’t there yet: 58 percent of Quick Start graduates were looking for work and 11 percent had stopped trying. Last May Intel and TSMC announced delays or entire holds on Arizona projects, citing labor and material costs. Other firms entered holding patterns while awaiting federal grant decisions. Still others pressed pause until the outcome of the election was known.
Volatile economic dynamics and the whims of business interests limited another promising initiative: Pennsylvania’s Whole Home Repairs program for residential decarbonatization. It supports up to $50,000 in home repairs to improve energy and water efficiency and, as an incentive, allows homeowners of modest means to pursue a wider range of other essential repairs. Decarbonizing housing and commercial buildings is an underappreciated piece of the green transition: together those structures account for roughly three quarters of national energy use. State senator Nikil Saval spearheaded the innovative program using $125 million in pandemic relief funds; aspects were included in the commonwealth’s $4.6 billion application for IRA funds. (Senator John Fetterman has introduced legislation that would take the program national.) As of last summer 1,151 residences were repaired or modified. But local administrators had received 25,700 applications. Many counties froze the process in the face of overwhelming demand. Others capped their awards at just under $25,000, a figure that would trigger compliance with prevailing wage laws.
Small contractors found such wage regulations burdensome. Larger contractors were simply not interested in small scale repair projects. (The construction industry was booming.) In a state as divided as Pennsylvania, the legislature declined to allocate additional funds to beef up the programs. Maryann Velez runs a nonprofit in Luzerne County that helped thirty-five homeowners apply for the Whole Home Repair program. None were funded. “You could just hear the defeat in their voices,” she lamented. “It’s very disheartening.”
*
When they advocate for market-making as their political vision, today’s Democrats sound like nothing so much as used car salesmen: they promise discounts, rebates, credits, low ARPs. When he signed the IRA, Biden announced the plan would benefit “working families” by “providing them rebates to buy new and efficient appliances, weatherize their homes, get tax credits for purchasing heat pumps and rooftop solar, electric stoves, ovens, dryers.” At his final state of the union, salesman Joe promised to move more inventory. “When you refinance your home, you can save $1,000 or more . . .” Cutting usurious credit card fees, forgiving student loan debt, and promoting electric vehicles are obviously good things to do. But when the main thrust of your appeal to voters is the stuff of daytime television ads—low APR! no credit down! get out of debt!—you are a party adrift.
The Trump administration could theoretically shut down many of Biden’s green initiatives. But the electoral benefits to Republicans would be unclear: most of the IRA’s recent projects are based in congressional districts with Republican representatives. It’s more likely that they will redirect subsidies to their districts and preferred businesses—including in the extractive sector—and brag about job growth. They are already at it. In 2023, when Kamala Harris appeared at the Qcells plant in Dalton, Representative Marjorie Taylor Greene accused her of “trying to take credit for jobs that President Trump and Governor Kemp created in Georgia back in 2019.”
That Harris did not even make the case for a renewed Build Back Better agenda speaks volumes about the Democratic Party’s continued aversion to state intervention. Yet if Obama’s bank bailout and the rapid expansion of the social safety net during the pandemic have taught Americans anything, it’s that the state can undertake big, expensive, and effective policies. The Democratic Party must learn this lesson, too, and yoke their technocratic know-how to public initiatives that squarely address economic insecurity, social inequality, and the green transition. This will be the surest—and probably the only—way to win back working-class voters. Far more than the party’s future is at stake.
1. See my Illusions of Progress: Business, Poverty, and Liberalism in the American Century (University of Pennsylvania Press, 2023).
Brent Cebul
Brent Cebul is Associate Professor of History at the University of Pennsylvania. He is the author of Illusions of Progress: Business, Poverty, and Liberalism in the American Century (Penn Press, 2023), and co-editor with Lily Geismer of the forthcoming Mastery and Drift: Professional Class Liberals since the 1960s (University of Chicago Press, 2025).
Brent Cebul
Brent Cebul is Associate Professor of History at the University of Pennsylvania. He is the author of Illusions of Progress: Business, Poverty, and Liberalism in the American Century (Penn Press, 2023), and co-editor with Lily Geismer of the forthcoming Mastery and Drift: Professional Class Liberals since the 1960s (University of Chicago Press, 2025).
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