J. D. Vance and the Success Stories of Bidenomics

This past Friday, job figures showed that the U.S. had added more than a quarter of a million jobs last month and the unemployment rate nudged down to 4.1 per cent. Since President Joe Biden came into office, the economy has created 16.2 million jobs. To be sure, some of those gains were the result of a pandemic rebound, but, since June of 2022, when total employment got back to its pre-COVID high, 6.8 million more jobs have been added. In another sign of the economy's strength, the percentage of the population working or actively looking for work is currently at a level not seen in nearly thirty years.

As impressive as these aggregate figures are, they can sometimes fail to convey what is actually happening in towns and cities across the country, or at individual places of employment. Consider, for example, the steel plant in Senator J. D. Vance 's home town of Middletown, Ohio, which employs about twenty-four hundred people and has long played a vital role in supporting the city and its surrounding area. In his 2016 memoir " Hillbilly Elegy ," Vance, who is now the Republican candidate for Vice-President, described how his grandparents moved from a small town in the Appalachian Uplands of eastern Kentucky to Middletown, where Vance's grandfather, referred to as Papaw, got a job at the steel mill, which was then owned by Armco, a company that dated back to 1899. "For my grandparents, Armco was an economic savior—the engine that brought them from the hills of Kentucky into America's middle class," Vance wrote. "My grandfather loved the company and knew every make and model of car built from Armco steel."

During the nineteen-eighties, Armco, along with other American steelmakers, ran into difficulties because of cheap foreign competition. In 1989, it entered a partnership with Kawasaki Steel Corporation, a Japanese manufacturer, which invested in the Middletown plant. Owing to persistent global overcapacity, however, the U.S. steel industry continued to face financial challenges and pressures to consolidate. In 2020, the Middletown plant's parent company was taken over by another U.S. firm, Cleveland-Cliffs. Now, four years later, question marks still hang over the entire industry, but the future of Middletown seems to be more assured.

That's because, earlier this year, the Department of Energy agreed to provide Cleveland-Cliffs with up to half a billion dollars in funding to update the Middletown plant with new furnaces powered by natural gas or hydrogen, which would emit much less carbon than the coke-fuelled furnaces that are currently in use. Cleveland-Cliffs wrote, in a press release, that the upgrade would "consolidate Middletown Works as the most advanced, lowest [greenhouse-gas] emitting integrated iron and steel facility in the world." Local officials are thrilled about this development, which they believe will bring jobs, tax revenues, and cleaner air. "It's a wonderful opportunity for the city as a whole and our entire community," Nathan Cahall, the acting city manager of Middletown, told the New York Times, for a story that ran shortly before last week's Vice-Presidential debate .

The debate moderators didn't bring up the Middletown steel plant. Neither did Vance. He did claim, without providing any evidence, that the policies of the "Harris Administration" were leading to "more manufacturing overseas." His opponent, Tim Walz , pointed out that, actually, these policies are creating thousands of manufacturing jobs across the United States, including in Vance's home state, in towns like Jeffersonville, where Honda, the Japanese carmaker, and LG Energy Solution, a South Korean company, have agreed to build a new factory to make batteries for electric vehicles.

The financial support that sparked the new manufacturing investments in Middletown, Jeffersonville, and many other places comes from Biden's pathbreaking industrial policy, which I've highlighted previously , and, more specifically, from three major pieces of legislation that Congress passed during his first twenty months in office: the Inflation Reduction Act, the Infrastructure Investment and Jobs Act, and the CHIPS and Science Act. Even as the Biden Administration has repeatedly tried to highlight the results of these bills, which allocated hundreds of billions of dollars in tax credits and government grants to promote green-tech and high-tech manufacturing, the breadth of their impact remains largely unacknowledged .

In Ohio alone, according to figures compiled by the White House and detailed on an interactive map , the federal government has allotted $13.8 billion in public investments in clean energy, infrastructure and advanced manufacturing during Biden's term. Simultaneously, private-sector companies have announced plans to spend $42.9 billion on more than thirty new projects, the largest of which is the twenty-billion-dollar Ohio One plant in New Albany, northeast of Columbus, where Intel is building two semiconductor factories. Across the entire country, according to the White House database, companies have announced $910 billion in planned investments, with the biggest chunks going to semiconductors and electronics, and electric vehicles and batteries.

Of course, the long-term success of these ventures can't be assured. These industries are highly competitive. Intel, having recently run into financial difficulties, has pushed back the planned opening date of the Ohio One plant from next year to 2027 or 2028. Other projects have also been delayed. In Middletown, Cleveland-Cliffs seems to have been angling for even more public support for the renovation of its plant. But, a couple of weeks ago, the firm's chief executive confirmed that it is continuing "to move forward with award negotiations and project execution on the transformational Middletown project."

That's the nature of capitalism. Even with government subsidies or tax credits, there's no guarantee that any given project will endure and flourish. At this stage, however, the key point is that Biden's policies have done what they were designed to do: stimulate investments in the manufacturing industries of the future. Indeed, over-all manufacturing construction has tripled on an annualized basis since January, 2021.

That was the month when Donald Trump left the White House. Before and during Trump's Presidency, he frequently promised to bring manufacturing plants and employment back to the United States. But, apart from jawboning companies, such as Carrier, that were threatening to ship jobs abroad, and slapping tariffs on foreign goods, he didn't do much to encourage manufacturers to invest in the U.S. Even Vance conceded in a text message from February of 2020, which the Washington Post recently published , that "Trump has just so thoroughly failed to deliver on his economic populism." When Biden arrived in office, he put in place a set of financial incentives designed to effectuate the transformation that Trump had promised. But why, then, hasn't he received more credit?

One answer is that big price rises that we saw between 2021 and 2023 impact everyone, whereas industrial policies primarily affect people in the targeted industries and ancillary businesses, which is a much smaller group. Another factor to consider is that, though some of the big commitments to invest in manufacturing have come in blue states—including California, New York, and Michigan—many are concentrated in red parts of the country, where local politicians and voters are reluctant to give any credit to Democrats.

Based on figures in the White House database, which I analyzed in terms of private-sector investments per capita, the states that have done well include Idaho, Indiana, Louisiana, Kansas, Kentucky, Ohio, South Carolina, Tennessee, Texas, Utah, and West Virginia—all red states—and Arizona and North Carolina, which are purple. The White House figures cover all the Biden-era legislation. A recent study of just the I.R.A., conducted by E2, an environmental consultancy, reached a similar conclusion: "Red states and Republican congressional districts are benefitting the most from the IRA. In its full two-year history, more than half of all projects were in Republican districts, and 19 of the top 20 congressional districts for clean energy investments are held by Republicans."

These findings support the theory that partisanship is preventing Biden from getting some of the credit he is due. Nationwide, the vast majority of Republican politicians are supporting Trump's call for a repeal of the I.R.A., which he and Vance have dubbed the "Green New Scam." Significantly, however, some in the G.O.P. are starting to break ranks. In August, eighteen House Republicans sent a letter to Speaker Mike Johnson, in which they wrote, "Energy tax credits have spurred innovation, incentivized investment, and created good jobs in many parts of the country—including many districts represented by members of our conference." Some Republican governors, including Kevin Stitt, of Oklahoma, and Henry McMaster, of South Carolina, have also welcomed the new investments in their states.

Depending on the outcome of the election, it seems possible that Biden's green industrial policies will eventually follow the path of the Affordable Care Act: a historic Democratic effort that Trump and other Republicans vilified, vowed to repeal, failed to repeal, and were eventually forced to accept. Vance might even end up being obliged to acknowledge Biden's role in modernizing Papaw's steel plant and assuring its future. But that certainly won't happen before November 5th.