The Foreign Affairs Interview

Episode: What Happened to Bidenomics?
Host: Daniel Kurtz-Phelan (Foreign Affairs)
Guest: Jason Furman (Harvard Professor; former Chair, White House Council of Economic Advisers)
Date: February 13, 2025

Overview

This episode features Foreign Affairs editor Daniel Kurtz-Phelan in conversation with economist Jason Furman, discussing Furman’s recent essay, The Post Neoliberal Delusion and the Tragedy of Bidenomics. Through the lens of recent U.S. economic policy, they unpack why the Biden administration’s ambitious economic vision largely failed to deliver on its promise, how inflation eroded the administration's goals, the consequences for American politics (including Donald Trump’s reelection), and what a path forward might look like for U.S. economic thinking.

Key Discussion Points & Insights

1. America’s Economic Outperformance: Real or Relative?

• [02:59–04:04]
  • The U.S. economic picture looks robust compared to Europe and China—strong productivity, positive demography, steady immigration.
  • "I would rather have the US Economy than any other economy in the world." —Jason Furman [02:59]
  • These strengths span multiple administrations (Obama, Trump, Biden), suggesting structural advantages rather than singular policy brilliance.

2. Risks in Current U.S. Economic Policy

• [04:22–05:15]
  • Early Trump actions: Rising trade restrictions, uncertainty, potential curbs on immigration/science could harm productivity and labor force growth.
  • “All of that affects productivity. The uncertainty we’re seeing may cause some pullback in business investment.” —Jason Furman [04:22]

3. The ‘Post-Neoliberal’ Critique and Bidenomics Defined

• [05:15–11:13]
  • Post-neoliberal critique: Skepticism about scarcity, budget constraints, a preference for policies blending economics with politics.
  • Bidenomics aimed for ambitious, government-led investment (infrastructure, industrial policy), and expanded social programs, but only achieved the “stuff” (physical investment), not the “people” (social spending).
  • “Bidenomics was about big amounts of spending, running the economy very hot, and trying to redo the industrial structure… emphasizing ‘stuff’ over people.” —Jason Furman [09:45]

4. On Macro Outcomes: An Impressive Recovery, But at a Price

• [12:17–13:41]
  • Early fiscal and monetary policies (esp. 2020) crucial for pandemic rebound.
  • Subsequent, large 2021 stimulus may have been unnecessary: “I just don’t think, looking back at it, that much if any of [the March 2021 stimulus] was necessary.” —Jason Furman [12:43]

5. Inflation’s Core Impact and Political Toll

• [13:41–15:16]
  • Highest, most sustained inflation since the early 1980s; 9% at peak.
  • Real wages stagnant; infrastructure investment shrunk in real terms, child tax credit ended smaller.
  • “Inflation really went to the heart and core and undermined a lot of what otherwise might have been accomplished.” —Jason Furman [14:37]

6. International Comparison: Is U.S. Inflation ‘Bad Luck’?

• [15:16–17:41]
  • Furman is skeptical of claims that global factors fully absolve U.S. policy for inflation.
  • U.S. demand drove up global prices: “Durable good spending in the United States in 2021…30% above pre-COVID; you don’t see that increase in Europe.” —Jason Furman [17:53]

7. Policy Mistakes: Fiscal and Monetary

• [18:23–19:54]
  • Two main errors: Oversized 2021 stimulus, and Fed’s late response to inflation.
  • “The Fed’s mistake…was more egregious and unforgivable, but less consequential than the administration’s mistake.” —Jason Furman [19:00]
  • Missed opportunities: Lowering Trump’s China tariffs could have aided inflation fight.

8. Manufacturing ‘Renaissance’—Promises vs. Results

• [22:44–25:32]
  • Despite targeted subsidies/factory announcements, broader manufacturing didn’t rebound.
  • Industrial policy led to “crowd out”—favored sectors grow, others shrink.
  • “There’s just been all this turnover that it’s caused…crowd out. And I felt some of that was minimized.” —Jason Furman [23:42]

9. National Security in Economic Policy

• [26:36–29:15]
  • Complex balancing act: Protecting key sectors like semiconductors is justified for security, but should acknowledge the tradeoff.
  • Debate over where to draw the national security line, especially with China.

10. Immigration: Economic Boon, Political Toxicity

• [30:31–32:23]
  • Massive COVID/post-COVID immigration improved growth and demographics, but much of it was not “deliberate” policy and lacks public support.
  • “If all you cared about was GDP…the more immigrants, the better. But people also care about the rule of law…” —Jason Furman [31:00]

11. Tariffs, Trade Policy, and Political Economy

• [32:23–37:49]
  • Persistent gap between economic consensus and political realities—tariffs are politically popular, economically dubious.
  • “You are also effectively taxing your exports…that’s something…barely a part of the political discussions.” —Jason Furman [33:23]
  • Trump’s renewed, sweeping tariffs are seen by Furman as “economically bad and national security bad.” [35:26]

12. Smaller Role for Economists in Policymaking

• [38:10–39:32]
  • Both Trump and Biden saw diminished influence of technocrats versus previous (Clinton/Obama) eras.
  • Rise of “post-neoliberal” and populist thinking—less intermediary analysis, more direct pursuit of political aims.

13. Supply Constraints and Deregulation

• [39:32–41:17]
  • Both administrations did not effectively address permitting and supply-side barriers (housing, energy, infrastructure).
  • Deregulatory moves under Trump might provide “silver lining” if they help reduce supply bottlenecks.

14. Deficits and Fiscal Sustainability

• [42:12–44:02]
  • Furman’s view has shifted: in 2019, “deficit obsession” was overblown, but now—given higher debt and interest rates—deficits do matter.
  • “I changed my mind. I think mostly because the world changes and reality changes.” —Jason Furman [43:00]

15. Toward a Post-Post-Neoliberal Synthesis: What Next?

• [45:02–48:13]
  • Growth and productivity (the “abundance agenda”) must return to the center.
  • More progressive tax/transfer policy, especially investing in children.
  • Realistic industrial policy: limited role, mainly for national security—not as general economic panacea.
  • Full employment strategies and supply-side reforms need more focus.

Notable Quotes & Timestamps

• “I would rather have the US Economy than any other economy in the world.” —Jason Furman [02:59]
• “Inflation really went to the heart and core and undermined a lot of what otherwise might have been accomplished.” —Jason Furman [14:37]
• “The Fed’s mistake…was more egregious and unforgivable, but less consequential than the administration’s mistake.” —Jason Furman [19:00]
• “There’s just been all this turnover that it’s caused and churn and crowd out. And I felt some of that was minimized.” —Jason Furman [25:32]
• “If all you cared about was GDP…then the more immigrants, the better. But people also care about the rule of law…” —Jason Furman [31:00]
• “You are also effectively taxing your exports…that’s something…barely a part of the political discussions.” —Jason Furman [33:23]
• “Economically bad and national security bad. So to me, it seems really lose. Lose that.” —Jason Furman on Trump’s tariffs [35:26]
• “I changed my mind. I think mostly because the world changes and reality changes.” —Jason Furman on deficits [43:00]
• “With a growing pie you can deal with a lot of issues and there are a lot of impediments to growing the pie on the supply side.” —Jason Furman [45:34]

Timestamps for Key Segments

• Intro & Framing: [00:00–02:59]
• Global U.S. Economic Strengths: [02:59–04:04]
• Risks Under Trump II: [04:04–05:15]
• Defining Bidenomics/Post-Neoliberal Turn: [05:15–11:13]
• Macro Outcomes, Stimulus Assessment: [12:17–13:41]
• Inflation, Real Economic Effects: [13:41–15:16]
• Global Comparisons/Debunking Excuses: [15:16–17:41]
• Policy Mistakes (Stimulus, Fed): [18:23–19:54]
• Manufacturing Policy Miss: [22:44–25:32]
• National Security/Economic Policy Interaction: [26:36–29:15]
• Immigration: Economic Gains, Political Costs: [30:31–32:23]
• Tariffs and Political Economy: [32:23–37:49]
• Economists’ Declining Influence: [38:10–39:32]
• Permitting, Supply Constraints & Deregulation: [39:32–41:17]
• Deficit Thinking: Change over Time: [42:12–44:02]
• What’s Next: Abundance Agenda & Industrial Policy: [45:02–48:13]
• Closing: [48:13–end]

Memorable Moments

• The discussion repeatedly returns to inflation as a political and substantive poison pill for Bidenomics, citing specifics like infrastructure investments actually falling in real terms.
• Furman offers a candid view into policy disagreements within Democratic administrations—including his critiques of the “crowd out” effect from targeted industrial subsidies.
• The interplay between national security arguments and economic reasoning (especially with China and supply chains) is explored in depth, highlighting messy tradeoffs and lack of intellectual clarity on where to draw key lines.

Tone and Language

The tone throughout is frank, analytic, at times self-critical (especially from Furman). The conversation balances macroeconomic detail with political reality, frequently punctuated by sharp, memorable lines. Both participants maintain a rigorously fair, sometimes skeptical, perspective on both Democratic and Republican policy choices.

For Further Exploration

• Furman’s original essay in Foreign Affairs: “The Post Neoliberal Delusion and the Tragedy of Bidenomics”
• Past Foreign Affairs podcasts on industrial policy, deficits, and the evolving U.S.-China economic relationship

This episode is an in-depth, nuanced autopsy of Biden’s economic record and a sobering preview of the policy battles to come. It’s essential listening for those interested in the intersection of economics, politics, and global power.