How Bidenomics Produced Bidenflation
Jason Furman, a longtime Democratic economist and former Obama adviser, has issued a stunning rebuke of Bidenomics, confirming what many of us have been saying for years: Biden’s economic policies were a disaster, and voters knew it. Writing in Foreign Affairs, Furman lays out why the grand experiment of Biden-era economic policy—massive government spending, industrial policy, and “running the economy hot”—failed miserably.
Unlike many of his peers, Furman has been an honest broker throughout the Biden administration, resisting the partisan temptation to spin economic failures into triumphs. While others performed mental gymnastics to defend the administration’s decisions, Furman shot straight. He has carefully tracked inflation and warned that it was likely to be more persistent than many Democrat-leaning economists expected, acknowledged the failures of industrial policy, and refused to gaslight Americans into believing they were somehow better off despite rising costs and falling real wages. His candor is refreshing in an era when economic analysis too often bends to ideology.
The Economic Realities Biden Ignored
Furman highlights several fundamental failures of Bidenomics:
- Inflation was not just a global problem—it was a self-inflicted wound. The Biden administration insisted that inflation was a transitory issue caused by supply chain disruptions and Russia’s invasion of Ukraine. But as Furman points out, core inflation (which excludes food and energy) hit nearly seven percent in 2022, and price increases proved more persistent than expected. The primary driver was not global factors but excessive government stimulus that flooded the economy with cash.
- The so-called ‘manufacturing renaissance’ never happened. Despite pouring billions into semiconductor and green energy subsidies, Biden’s industrial policy failed to move the needle. Manufacturing employment continued its long-term decline, and U.S. industrial production remained stagnant. Furman describes how these subsidies contributed to “crowding out” effects, where higher wages, material costs, and borrowing costs made it harder for non-subsidized industries to grow.
- Bidenomics left American workers worse off. Inflation outpaced wage gains, meaning that even with low unemployment, Americans were struggling to afford basic necessities. Real median household income fell from 2019 to 2023, erasing gains made during the Trump administration. The poverty rate, which had reached historic lows, climbed again. Furman rightly points out that for all the grand talk about helping working families, Biden became the first Democratic president in a century to leave office without a permanent expansion of the social safety net.
- Infrastructure spending failed to deliver. The Bipartisan Infrastructure Law was supposed to rebuild America’s roads, bridges, and broadband. Instead, skyrocketing costs and bureaucratic red tape meant that infrastructure spending actually declined in real terms compared to pre-Biden levels. More than half the funds dispersed to states went to highway and bridge projects, but the costs of asphalt, concrete, and labor soared so high that real infrastructure investment actually dropped by 17 percent. As Furman puts it, Biden’s much-vaunted “building boom” was, in reality, a building bust.
The Blindness of Biden’s Economic Defenders
Furman’s forthright critique stands in stark contrast to left-wing economists who spent years downplaying the inflationary risks of Bidenomics. Take Joseph Stiglitz, who insisted early on that inflation fears were “a red herring” and that supply chain disruptions, not government spending, were the culprit. In a 2021 Project Syndicate piece, Stiglitz scoffed at concerns about rising prices, arguing that temporary inflation was “exactly what one would expect” and dismissing fears that excessive stimulus could overheat the economy.
Others, like Rex Nutting at MarketWatch, reassured Americans that higher prices were nothing to worry about, chalking them up to idiosyncratic market shifts that would resolve themselves. Nutting insisted that “higher inflation rates aren’t baked into the cake” and that most of the price spikes were merely short-term adjustments. But, as Furman explains, this was wishful thinking, not sound analysis. Inflation wasn’t transitory; it was structural, driven in large part by reckless fiscal policy.
Even more absurdly, some economists tried to spin inflation as a good thing. As we wrote in Breitbart Business Digest back in 2021, a cadre of left-wing economists argued that inflation was a sign of a strong economy, an indication that Biden’s policies were working. They dismissed concerns from working-class Americans as paranoia or a GOP psy-op, failing to grasp that rising prices were eroding real wages and making life unaffordable for millions. This kind of analysis helped pave the way for Biden’s economic reckoning.
We repeatedly warned in Breitbart Business Digest that Biden’s spending binge would cause large and persistent inflation. As we wrote in November 2021, “Inflation is not some fluke of supply chains or a momentary artifact of reopening. It is the inevitable result of an administration that has flooded the economy with trillions of dollars while disregarding the consequences.” In early 2022, we noted that “the Federal Reserve may be late in tightening, but the real culprit here is a White House that spent recklessly and ignored every warning sign.”
Furman has now acknowledged what was clear to us but apparently lost on many establishment economists: Bidenomics was a recipe for economic calamity.
The Voters Rejected Bidenomics
Voters understood this reality far better than Biden’s economic advisors. As Furman notes, in exit polls from the 2024 election, 75 percent of voters said inflation was a “hardship,” and over 60 percent of swing-state voters believed the economy was on the wrong track. These numbers sealed Biden’s political fate, paving the way for Donald Trump’s return to the White House.
Democrats, however, seem unwilling to acknowledge the failure. Instead of reckoning with the consequences of Biden’s economic mismanagement, some on the left continue to argue that voters simply didn’t “appreciate” Biden’s achievements. Furman dismisses this excuse, making clear that the administration’s policies directly fueled voter discontent.
Furman’s essay also takes a shot at Trump’s economic policies, warning that tariffs and other trade restrictions could create similar risks. But this is where he fundamentally misunderstands the difference between Bidenomics and Trump’s economic vision. Biden’s problem was excessive government intervention, reckless spending, and a disregard for economic trade-offs. Trump’s approach—focused on reducing regulation, reshoring manufacturing, and protecting American industries from unfair trade practices—is a corrective to those mistakes, not a repeat of them.
Bidenomics was a grand experiment in post-neoliberal policymaking. It was supposed to be the dawn of a new economic order—one that abandoned market-driven policies in favor of direct government control. Instead, it ended in failure, inflation, and electoral defeat. Furman’s belated admission of Bidenomics’ shortcomings is welcome, but the damage has already been done. Now, it’s up to Trump and the new administration to clean up the mess.
The economists in and around the Biden administration built a beautiful house without doors or windows—a closed-off intellectual mansion where economic trade-offs did not exist, and every dollar spent somehow produced two without raising inflation. But reality, as always, had the final say.
Washington Whispers
Sen. Jim Banks (R-IN) will deliver the keynote address on Tuesday night at the American Iron and Steel Institute. According to prepared remarks obtained by Breitbart Business Digest, Banks will highlight President Trump’s revitalization of the American steel industry and explain how he intends to work in the Senate to further Trump’s America First policies.
Here are a few excerpts from his prepared remarks:
“He brought manufacturing back to Indiana and boosted wages for hardworking Hoosiers. Trump saved the American Dream.”
“Make no mistake, I want to preserve an American iron and steel industry that competes head-to-head with any country in the world.”
Stay tuned for our exclusive coverage of Banks’ keynote speech at the American Iron and Steel Institute, which will be published on Breitbart News at 7:30 p.m. ET.
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