Vice President Kamala Harris has some serious manufacturing credentials, and she shouldn’t be afraid to brag about them in her campaign against former President Donald Trump, who has long claimed to champion domestic industry without delivering anything near the current administration’s results.
Spending on manufacturing construction in the US has tripled under the Biden-Harris industrial policy, including the Infrastructure Investment and Jobs Act, Inflation Reduction Act (where Harris cast the tie-breaking Senate vote) and CHIPS Act. Most notably, the spending has been led by investments in computer and electronic manufacturing facilities, and the benefits have been shared across the country.
There’s even been a striking impact in the broad economy, with the building boom playing an outsized role in the growth of gross domestic product for the past couple of years.
That’s important to highlight at this critical inflection point in the economy. The past several years have been dominated by debates and finger-pointing over inflation and high interest rates, and the rhetoric from both the Harris and Trump campaigns makes it seem — erroneously, I suspect — as if the same concerns will remain front and center.
In populist appeals to voters, both candidates have floated bad ideas to rein in prices and interest rates. Harris is flirting with light versions of economically blasphemous rent and price controls, while Trump has even more alarmingly proposed increasing his sway over the Federal Reserve (although he’s now apparently walking that idea part of the way back). Sadly, these sorts of promises probably work on a part of the electorate that’s weary from the inflation experience and uninspiring real wage gains, making such moves politically expedient but economically short-sighted.
In reality, the inflation dragon has been mostly slain, thanks to the magic of supply-chain healing and tight monetary policy, and the best path forward involves steady and sustainable — and ideally, productivity-driven — wage increases that help people gain ground on more stable consumer prices. The most important question for the next four years isn’t, “Who will bring prices down?” It is, “Who will bring wages up with relatively steady prices?” In other words, who has the best vision for economic growth and job creation? In that respect, Harris has a powerful record to present to voters against Trump — a candidate with an unearned reputation as a builder (what happened to that border wall?) and a self-anointed manufacturing champion with little to actually show to back that claim.
In addition to creating jobs and adding to growth, the Biden-Harris industrial policy has helped tackle the vulnerability of the semiconductor supply chains and taken steps, through the IRA, toward adapting to climate change. Importantly, the measures are also relatively popular on a local level. As my Bloomberg Opinion colleague Liam Denning wrote recently, Speaker Mike Johnson has heard from 18 Republican members that he shouldn’t mess with the IRA’s clean technology subsidies. For all the partisan gamesmanship in Washington, it’s hard for any politician to take away jobs and factories once they’ve been promised. It’s particularly notable that three quarters of cleantech manufacturing investments announced under Biden are planned in Republican districts.
Clearly, the Harris campaign doesn’t ignore these accomplishments, but the ratio of inflation-to-jobs rhetoric ought to be frankly inverted. Instead, it was Trump who appeared this week at a factory in swing-state Pennsylvania in front of a banner reading “Jobs! Jobs! Jobs!,” talking up his manufacturing resume and falsely claiming Harris wants to de-industrialize the country. She’s letting him control a narrative that should be hers.
There are a few caveats to the Biden-Harris manufacturing boom, of course: Some portion of the uptick started before the key legislation was signed, both as a result of broader market forces and in anticipation of the coming incentives. And construction-material inflation has played some role in exaggerating the jump in spending, but it’s still quite remarkable even after making adjustments.
Overall, there can be little doubt that policy played a critical role in making that happen, and many of the jobs are still ahead of us. That’s an extraordinary accomplishment to run a presidential campaign on, and — for my part — that’s what I’d be shouting from the rooftops. Come 2025, the American people will need someone who can foster job creation and sustainable wage growth — not someone with empty populist promises to fight an inflation war that’s essentially over.
Credit: Bloomberg
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