The dormant industrial scene of Buffalo, New York is undergoing a drastic renaissance as the once pulsating center of American manufacturing is beginning to show signs of life again. This remarkable change is the result of President Joe Biden’s economic policy overhaul, signaling a momentous shift in American economic thinking.
Reigniting the flame of industry
A colossal industrial campus, originally built in 1923 for General Motors, is now the operation base for a cleantech company, Viridi Parente.
Employees of Viridi Parente, including those who have never held a job before, are now creating lithium-ion batteries that will help power office blocks, hospitals, and other structures.
This is the type of initiative the Biden administration wishes to see more of, particularly in regions like Buffalo that felt the brunt of deindustrialization in recent decades.
Biden’s approach represents a U-turn from the era of laissez-faire economics, now pushing for a more active government role in the economy.
The new policy is guided by a series of legislative actions including the Inflation Reduction Act, the Chips and Science Act, and the Infrastructure Investment and Jobs Act.
These bills, which collectively provide vast amounts of subsidies, grants, and loans, aim to foster investment in sectors such as broadband networks, semiconductors, electric vehicles, and batteries.
Biden shifting economic paradigms
This change in direction indicates a departure from Reaganomics and an end to the pursuit of expansive trade liberalization, marking a shift that has not been witnessed since the introduction of Reaganomics itself.
The Biden administration is now promoting domestic producers in strategic sectors with the goal of creating hundreds of thousands of new jobs.
The strategy seeks to reorient the American economy, placing a strong emphasis on domestic production. A primary goal is to decrease the dependence on China by reversing the flow of manufacturing jobs and weakening China’s competitiveness in clean energy and technology.
As such, Biden’s policies strive to form a balance between economic goals and foreign policy objectives. This significant policy shift did not occur in a vacuum.
It is a response to several events and factors including the financial crisis of 2008-9, the aftermath of the Trump era, the Covid-19 pandemic, and rising geopolitical tensions, particularly with China and Russia.
These circumstances have shaped the current administration’s approach, leading Biden to place industrial America at the center of his mission. This economic strategy, however, faces its share of challenges.
Some Republicans argue that the government’s expansive spending might exacerbate inflation. Additionally, the policies might face hurdles such as labor shortages and bureaucratic red tape, both of which could slow down the progress of new projects.
Furthermore, the U.S. lags behind China in cleantech manufacturing and the supply of critical minerals and parts necessary for energy transition. As the country aims to compete with China in these sectors, these challenges present significant obstacles.
Biden’s economic policy overhaul marks a watershed moment in America’s economic journey, signaling an ambitious effort to revitalize the country’s industrial sector.
This is but the first chapter in the story of a profound shift in economic policy. Its potential success or failure will reverberate not just within the U.S., but across the global economic landscape.
