One-term presidents don’t usually leave big legacies on domestic policy. If anything, political parties move away from the ideas of presidents who fail to win a second term. It was true of Gerald Ford, Jimmy Carter and George H.W. Bush.
It will be true of President Biden in some ways, too. Democrats have already abandoned Biden’s initial immigration policy, which contributed to a record surge at the southern border.
But one major part of Biden’s agenda has a decent chance of surviving. It was the idea that animated much of the legislation he signed — namely, that the federal government should take a more active role in both assisting and regulating the private sector than it did for much of the previous half-century.
This idea has yet to acquire a simple name. The historian Gary Gerstle has called it the end of the neoliberal order. Felicia Wong and her colleagues at the Roosevelt Institute, a liberal think tank, have used the term “a new economics.” Jake Sullivan, a top Biden adviser, has referred to it as a new consensus. I’ve described it as part of a new centrism.
The philosophy didn’t originate with Biden, but he meaningfully shifted the country toward it, first as a candidate in 2020 and then as president. He moved the Democratic Party away from decades of support for trade liberalization and imposed tariffs on China. He pursued an industrial policy to build up sectors important to national security (like semiconductors) or future prosperity (like clean energy). And his administration was more aggressive about restraining corporate power than any in decades, blocking mergers, cracking down on “junk fees” and regulating drug prices.
When Biden delivers his farewell address from the Oval Office tonight, he will emphasize these issues.
Promises unmet
The rationale for this new approach was simple enough: The previous consensus — the neoliberal order, in Gerstle’s terms — failed to deliver on its promises.
For most of the past 50 years, the federal government moved toward a more laissez-faire approach to the economy. Tariffs and tax rates plunged. Regulators allowed corporations to grow larger. Presidents of both parties supported these changes, to differing degrees, and argued that the inevitable march of globalization demanded them.
These same presidents often promised that the changes would bring more prosperity to American workers and more freedom to the rest of the world. “It didn’t turn out that way,” as Sullivan said in a 2023 speech explaining Biden’s approach. Democracy has retreated, and China and Russia are more authoritarian. In the U.S., incomes for most families have grown frustratingly slowly. Many measures of well-being — including life satisfaction, loneliness, marriage and birthrates — look grim. The United States today has the lowest life expectancy of any high-income country.
Biden failed to fix these problems, of course, and voters decided last year that they preferred Donald Trump’s approach to them. Trump will surely undo major parts of the Biden agenda, especially on climate change and some aspects of corporate regulation.
In other ways, though, Trump is part of the shift away from neoliberalism. He romped through the 2016 Republican primaries partly because he was more hostile to trade, China and cuts to Medicare and Social Security than other Republican politicians. Some of Trump’s second-term nominees, including for labor secretary and head of the Justice Department’s antitrust division, are hardly small-government neoliberals. Neither is Vice President-elect JD Vance.
The policies vs. the man
One explanation is that most Americans have similar views on these issues. Polls show majority support for government action to reduce drug prices, regulate trade and prevent corporations from becoming too powerful.
That’s also why the Biden shift on economic policy remains virtually a consensus within the Democratic Party. Moderate Democrats sometimes sound even more populist than progressives (as I described in a recent Morning). The disagreements between the party’s center and left tend to involve other issues, such as immigration, gender, crime and foreign policy.
Politics is uncertain. There is obviously no guarantee that Biden’s big economic ideas will survive. One question is whether his investments in new technologies succeed in creating thriving companies and good jobs over the next several years. Another question is how much success the more laissez-faire members of Trump’s circle, like Elon Musk, have in shaping policy.
The best way for Biden and Kamala Harris to protect their legacy would have been to win the election. But it’s possible that Biden’s presidency will nonetheless be part of a turning point in American economic policy. Some of his big ideas remain more popular than Biden himself.
For more: In the final days of his presidency, Biden has issued a series of policy decisions on issues including environmental justice, immigration and prison reform.
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