‘Why the downfall of Bidenomics should have Labour worried’

When Labour was in opposition, it looked across the Atlantic to the Democrats for inspiration. Their message of stability, prosperity and an end to the chaotic administration of Donald Trump resulted in electoral success in 2020 and echoed what Labour was up against.

They seemed to have got it all right. Now, with Trump set to be back in the White House, Labour must reassess how it will deliver the growth this country needs – or risk meeting the Democrats’ same fate.

Once upon a time, elections could be won on a pitch to aspiration. Now, appealing to aspiration has been exchanged for addressing insecurity.

What Bidenomics got right – and wrong

On paper, the American economy is healthy and by most metrics “Bidenomics” has been a runaway success. Real GDP averaged 3.4% during President Biden’s first three years, America enjoyed low unemployment and wage gains consistently exceeded inflation. Yet four in ten voters considered the economy and jobs to be the most important problem facing the US, according to AP VoteCast.

It begs the question, if Kamala Harris couldn’t make the case and win with all the success on GDP, jobs and wage growth, what could Labour do to succeed where the Democrats have failed?

In the run up to the recent general election, direct comparison of Rachel Reeves’s “Securenomics” with “Bidenomics” was actively encouraged. Not only because of the latter’s supposed success, but also because Labour’s growth plans shared common principles.

READ MORE: Liam Byrne: ‘Trump’s victory is a warning to Britain and Europe – fix inequality or populists will win’

Following the American election, Labour should see their approach less as a roadmap, but more as a warning. The government needs to have a relentless focus on insecurity and its consequences to chart a path through the next election.

I established the Good Growth Foundation to explore how growth can create a fairer economy, and to understand how people experience growth in their day-to-day lives. Our recent focus groups indicated a disdain for ‘aspiration politics’ and an attention to the value of the pound in people’s pocket.

For voters, financial security and visibly transformed communities will be the proof in the pudding.

Creating a fairer economy

The Budget was a step in the right direction. The changes to inheritance tax signalled a willingness to tackle long-overdue sense of unfairness and our polling last month showed a strong level for support for borrowing to invest in infrastructure.

But in other areas, our focus groups have given worrying glimpses into the same challenges faced by the Democrats. For example, on housebuilding and clean energy, two areas of great economic opportunity, we’ve heard Labour hero voters dismiss their connection to growth.

To reap the electoral rewards of future economic success, Labour must start laying breadcrumbs that explain its growth agenda now.

READ MORE: ‘Trump’s victory is devastating for progressives, but our voice is more important than ever’

The fear that delivery would not be enough pervaded Labour’s election campaign – now it’s a reality staring us in the face.

Luckily for Labour, the Democrats went first. The government has a chance to learn from mistakes across the pond. Labour has to re-establish the link between economic growth and rising living standards.

The economy can’t just be bigger, it has to be fairer too. In other words: growth has to work for good.

• SHARE: If you have anything to share that we should be looking into or publishing about this story – or any other topic involving Labour– contact us (strictly anonymously if you wish) at [email protected]. 
• SUBSCRIBE: Sign up to LabourList’s morning email here for the best briefing on everything Labour, every weekday morning. 
• DONATE: If you value our work, please donate to become one of our supporters here and help sustain and expand our coverage.
• PARTNER: If you or your organisation might be interested in partnering with us on sponsored events or content, email [email protected].