'The Best Explanation of Biden’s Economic Thinking I’ve Heard'

The New York Times

Malcolm Riddell




Ezra Klein | The New York Times

'The Best Explanation of Biden’s Economic Thinking I’ve Heard'
'The Best Explanation of Biden’s Economic Thinking I’ve Heard'






BIG IDEA | ‘When President Biden’s thinking about the infrastructure investments necessary, a lot of it is in contraposition to what he is seeing China doing in terms of strategic investments.’
Here are the comments by Brian Deese about China from a very long podcast interview. As with the Blinken interview, above, it lays out in some detail the principles underlying Biden economic policy. Unlike Mr. Ignatius piece, here we have the full transcript. The China portion is below, but the whole interview is well worth reading.

‘Brian Deese is the director of the National Economic Council, the nerve center that coordinates economic policy across the executive branch.

  • ‘He led the auto bailout in the Obama administration and then turned to climate, first in the Obama White House and then at BlackRock.
  • ‘When President Biden brought him on to run the N.E.C., it was a message: In the Biden administration, all economics was going to be climate economics.

Ezra Klein: ‘How about economically? What have you changed your mind on economically since 2009?

Brian Deese: A couple of things.

  • 1: ‘The impact of climate change.’
  • 2: ‘Our economy is becoming more unequal.’

No. 3: ‘And the last piece is, the global economic situation has changed.’

  • ‘China is in a very different place than it was a decade ago.’
  • ‘We are in a different place vis-à-vis our international competitors.’

‘And my openness to more targeted efforts to try to build domestic industrial strength — the things that people in prior eras would demean or mock as industrial policy — has increased, because I think we are not operating on a level playing field.’

‘There’s not a market-based solution to try to address some of the big weaknesses that we’re seeing open up in our economy when we’re dealing with competitors like China that are not operating on market-based terms.’

  • 'And that’s, for me at least, a change in perspective from where I was a decade ago.’

Ezra Klein: ‘I expected the focus on climate in this plan. I did not expect the focus on China in the framing and even policy design of this plan. So tell me more about why your thinking, the administration’s thinking, has changed on this since ’09.’

Brian Deese: ‘A lot of this comes directly from how the president is thinking about the current moment and the direction that he’s providing to us.’

'When he’s thinking about the infrastructure investments necessary, a lot of it is in contraposition to what he is seeing China doing in terms of strategic investments.’

  • ‘China has gotten high-speed rail right, where the United States has not.'
  • 'China is increasing its strategic R. and D. as a share of its economy in a way that we have let deteriorate.’

‘We’ve lived through a decade where China has been meticulously thinking about making those investments, marshaling those investments — not all successful but all with a deliberate focus on trying to build its own industrial base and its own intellectual and innovation base.’

  • ‘And we have, for the better part of a decade, ignored or derogated those levers.'
  • ‘So whatever argument there was for making those investments a decade ago is more pertinent now.’

‘But I think the second element of it is that in the wake of the last four years among our allies and among our global counterparts, there is a big question about, can the United States deliver for its own citizens? Can the United States competently govern and invest in things that are obviously beneficial to its own welfare, its economic strength, its economic resilience?’

‘Because the world has watched now for a couple of years where the United States operated in a way that was very difficult for our international counterparts to fathom.’

  • ‘That is really the dominant question.’

‘I think now more than any time in modern history, the world is watching U.S. domestic policy.’

  • ‘This question of whether or not the rescue plan would pass was a top question at the G7. And I think that that reflects the fact that the world is asking this question: If the U.S. is going to lead again internationally on an issue like climate change or an issue like global health and pandemic response, first and foremost, the question is, can the U.S. get its house in order?’
  • ‘And that question is inevitably framed vis-à-vis China.’

Ezra Klein: ‘We don’t think too much about how much the U.K. or Germany or Malaysia or Brazil are spending on R. and D. We don’t think that much about the strategic investments they’re making. Why frame things in the context of China?’

Brian Deese: ‘They are the ascendant economic and military power in the world.’

  • ‘And so for geopolitical and economic reasons, their economic strength and their national security strength will loom larger than others. I think that that’s No. 1.’

‘No. 2 is, because of the investments that they have made, they’ve positioned themselves in a number of critical areas to our global economy and to supply chains as a critical actor.’

  • ‘As we think about the competitive dynamics with China, we need to ask ourselves a more serious set of questions about our own vulnerability.’

‘But it’s not just China. This isn’t just a great power dynamic between the U.S. and China.’

  • ‘It’s also that this pandemic has exposed for us in the U.S. the vulnerability of our economy and our supply chains to an unrestrained globalized economy, where the supply chain vulnerabilities often are connected to China but are connected in very complicated ways.’

‘The semiconductor shortage we have in the United States today is a complicated story that involves lots of countries and lots of elements of the supply chain and where your second-tier supplier sites are in Europe, even if the ultimate place where the wafer is being manufactured is in Asia.’

  • ‘That’s a reality of the global economy, but those realities are creating vulnerabilities for the U.S. economy that I think have been more difficult to see or at least people haven’t focused as much on them until something like this pandemic happens and exposes us so viscerally.’
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Biden China Tracker