Pod Insights The Ezra Klein Show The Best Explanation of Biden's Thinking I’ve Heard About this episode With the $2 trillion American Jobs Plan, the economic theory that is Bidenomics is taking shape. It’s big. It puts climate at the center of everything. It is more worried about political risks — losing the House, giving Donald Trump a path back to power — than some traditional economic risks, like wasting money and bumping up inflation. It prefers to err on the side of spending more and making sure people know they got a bridge or a job than doing less and having people question whether government is working for them. But I still have a lot of questions about Bidenomics, in terms of both its economic theories and its political ones.
Brian Deese is the director of the National Economic Council, the nerve center that coordinates economic policy across the executive branch. He led the auto bailout in the Obama administration and then turned to climate, first in the Obama White House and then at BlackRock. When President Biden brought him on to run the N. E. C., it was a message: In the Biden administration, all economics was going to be climate economics.
I asked Deese to join me on the podcast to talk about how his economic policymaking and thinking have changed since 2009, what the Biden administration learned from the successes and failures of the Obama era, why so much of the White House’s economic policy is framed in terms of competition with China, why he doesn’t think a carbon tax is the right answer for climate, how the Biden administration will invest in the care economy and more.
You can find transcripts (posted midday) and more episodes of "The Ezra Klein Show" at nytimes.com/ezra-klein-podcast, and you can find Ezra on Twitter @ezraklein.
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“The Ezra Klein Show” is produced by Rogé Karma and Jeff Geld; fact-checking by Michelle Harris; original music by Isaac Jones; mixing by Jeff Geld.
Transcript Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.
0:06 Ezra Klein? I'm Ezra Klein and this is the Ezra Klein Show.
0:18 Ezra Klein? I've covered Joe Biden for decades now. I covered him as a senator, covered him as a vice president, I covered him as a participant in the Democratic Party's searching traumatized post-Trump debates about which direction to go, and I covered him twice as a presidential candidate. And I thought I had a pretty good handle on him, but I would not have predicted this presidency, I would not have predicted these bills. The American Rescue Plan was a $1.9 trillion bill that erred really heavily on the side of doing more. That is not, I would say, a hallmark of Joe Biden's career up until now. But then maybe you could say, well, it's a coronavirus emergency. That changed everything. Well, coronavirus doesn't
0:59 Ezra Klein? explain the $2 trillion American Jobs Plan that just came out. This is not a coronavirus bill. It is not fixing problems caused by a pandemic. This is a searing critique of the pre-pandemic economy. Its provisions amount to an argument that the economy we had before the pandemic was a calamity for people and for the planet. The status quo ante was a disaster. And by implication, Democrats, very much including Joe Biden, who had a hand in building it, had been too slow to recognize its problems and much too timid in facing them. I like to say that every president is an emergent property. When you take that office, you become more than just yourself. You become a complex system that includes your staff, your party, the opposition party, the moment, the public,
1:44 Ezra Klein? chance, geopolitical realities, and so much more. But out of all that, the president and his staff, they have to fashion a philosophy, a coherent account of what they're doing and why they're doing it. And frankly, I wanted a better account than the one we've gotten, one that goes beyond coronavirus and beyond Joe Biden's much more moderate primary positioning to account for the ambition we've seen. Brian Deese is director of Joe Biden's National Economic Council. He was a young economic policy prodigy in the Obama administration. He helped to run the auto bailout. Then he turned to focus on climate, both in the Obama White House and then at BlackRock. And when Biden brought him back to run the National Economics Council, which is really powerful. It's the nerve center of economic policymaking in the executive branch. That was a message.
2:29 Ezra Klein? It was a message that, for one thing, in the Biden administration, all economics was going to be climate economics. So I asked Brian to come on the show to walk me through the American Jobs Plan and the way his thinking and the way Biden's thinking have changed since 2009 and why. Now, look, I always worry when I have a public official on, they're not going to say anything. They'll just dodge your questions and give me a lot of problem. That didn't happen here. Brian was a lot more forthcoming than I feared. So I left, and I think you will too, with a much better understanding of why the combination of forces we refer to as Joe Biden is taking the shape we now see. As always, my email is ezra kline show at nytimes.com. Here is Brian Deese.
3:14 Ezra Klein? So in 2009, I want to go all the way back there. The stimulus, it got sold as timely, temporary and targeted. And there was some long-term investment in there. But there was this idea that what we were trying to do was accelerate recovery back to the pre-crisis economic trends. And what's happening now in the Biden administration seems to be more fundamentally an argument that the pre-crisis economy was sort of a disaster for both people and the planet. Is that right?
3:43 Speaker 01 I think that that is a pretty fair reflection. I think that implicit in the slogan that the president coined on the campaign of Build Back Better was this notion that even as we were in the middle of a totally unique crisis, that we had to be thinking forward to fundamental challenges in the economy and how we were going to overcome them. And I think that you put your finger on two of them, one of which is this sort of growing economic inequality that the rate of growth persisted over the course of, you know, a couple of decades, but really sort of exacerbated and was laid bare during the pandemic.
4:26 Speaker 01 And the other is climate change, that we've also seen the impact accelerating. And I think that in the president's view and in our view, that having an economic strategy that is unresponsive or agnostic to those issues is no longer a viable option.
4:42 Ezra Klein? So these bills, the rescue plan, the jobs plan, the coming family plan, they're always built on both a mix of political and economic theories. So I want to go through this part. What have you changed your mind on politically since 2009?
4:55 Speaker 01 Well, certainly, one of the important things politically is making sure that the ultimate recipients, the ultimate beneficiaries of the things you are trying to accomplish, know and understand and appreciate what you're trying to accomplish for them. Some of that gets distilled down into kind of complexity versus simplicity. But I think another of it is the willingness to see what we're trying to accomplish in terms of making sure people understand what is going on. And certainly, one of the things in 2009 that, and when I was involved, I thought was sort of virtue, was this sense in which we were really focused
5:38 Speaker 01 on the task at hand and the idea of selling or explaining or being out on the road, interacting with the ultimate end beneficiaries, whether it be a small business or whether it be a community organization or a family, was sort of that was the politics of it. And now I think that that's more inextricably the policy of it, because your ability to sustain good policy is connected to your ability to sustain political support for that good policy.
6:07 Ezra Klein? And let me drill on that for a minute, because I think this helps illuminate a debate that happened, particularly over the rescue plan and the checks, which is that there were economists, and some of them, including your former, the former guy who held your position, Larry Summers, who argued they were not well targeted. They were going to people who weren't suffering. And there's another group who said, you know, even if they're not perfectly targeted, there's a trade off here where they're popular, people are going to know they're getting them, they're going to like get a sense that they're being helped by the administration, and that's going to generate political momentum. Should I understand that as a trade off that is a new one this administration is making?
6:42 Speaker 01 I think there's a couple of things there to unpack. One of them is that the policy rationale and the policy goal Is different, or at least we understand it to be different, that the goal of providing relief is more akin to post-natural disaster, how do you bridge people to when life is going to return to some semblance of normal? If you look at what the rescue plan was designed to do with respect to the checks, or frankly, with with respect to support to small businesses. In the current crisis, we are providing loans that turn over to become grants, basically grant funding to bridge a small business.
7:25 Speaker 01 Analytically, very different than the kind of approach that was taken in 2009. And that reflects a view that this is more about bridging relief, avoiding suffering. The second thing that you're getting at, though, is the kind of the direct salience of understanding that this is a benefit that people are getting and that they can rally around it. And I think there was a salience to that, and there continues to be a salience to that, that this definition of what it means to be hurting is broader and more universal than the idea of viewing people as pass-throughs for increments of fiscal stimulus. That the question of sort of the multiplier and how much of that unit is going to get spent out over a month is less the answer to the question than, you know, even if you
8:10 Speaker 01 have retained your job, if you have a two-earner family and you've retained your job during this crisis, life is very hard right now. It's more costly in ways that are important to the way people are experiencing their life, even if it doesn't fit into the sort of an output gap multiplier analysis. So that's a that's a piece of it, too.
8:30 Ezra Klein? Yeah, and I will say, viewing people as pass-throughs for units of incremental stimulus is one of the truly great sentences of economics I have ever heard, and I and I honor you for it. How about economically? What have you changed your mind on economically about about the state of the economy or what kinds of economic policies make sense since 2009?
8:51 Speaker 01 A couple of things. One is, since 2009, both the evidence and my understanding of the impact of climate change have affected my view of the importance of understanding how to reflect resilience to the inevitable and now irreversible changes that increasing global average temperatures are having on our society, but also the importance of building into everything we're doing of mitigating those impacts. That's number one. Number two is that our economy is becoming more unequal. And so the distributional consequences
9:33 Speaker 01 of fiscal policy in particular have become more resonant to me. You think about this crisis, if you look at the averages in this crisis, you almost look through almost all of the pronounced economic damage that's happening. And so in that context, this crisis, but even the run into this crisis, has made me more attuned to and more attentive to the ways in which economic policy that is sort of agnostic to distributional impacts and agnostic to the growth impacts of economic inequality likely fails to actually address the moment. And I guess the last piece, and maybe we'll get there, this is sort of going off in a different direction to some degree, but the global economic situation has changed.
10:17 Speaker 01 China is in a very different place than it was a decade ago. We are in a different place vis a vis our international competitors. And my openness to and appetite to and emphasis that I would place on more targeted efforts to try to build domestic industrial strength, the things that people, you know, in prior eras would demean or mock as industrial policy, has increased because I think we are not operating on a level playing field. We're not, there's not a market-based solution to try to address some of the big weaknesses that we're seeing open up in our economy when we're dealing with competitors like China that are not operating on market-based terms. That's a, for me at least, a pretty,
11:00 Speaker 01 a change in perspective from where I was a decade ago.
11:04 Ezra Klein? You're right that that is lower in where I wanted to go in this conversation, but but let's do it now because I expected the focus on climate in this plan and I did not expect the focus on China in the framing and even policy design of this plan. So tell me more about why you're thinking the administration thinking has changed on this since oh nine. China was not market based in many ways in 2009. There is a different ideological current in the Democratic Coalition around China right now and a different sense of what policy makes sense. So why? What has structurally changed here?
11:36 Speaker 01 Well, I want to start there by saying this. A lot of this comes directly from how the president is thinking about the current moment and the direction that he's providing to us. When we think about infrastructure and he's thinking about the infrastructure investments necessary, a lot of it is in contraposition to what he is seeing China doing in terms of strategic investments. So China has gotten high speed rail right where the United States has not. China is increasing its strategic R and D as a share of its economy, as a share of whatever metric you want to use in a way that we have let deteriorate. And so the thing that has changed is that we've we've lived through a decade where China
12:20 Speaker 01 has been meticulously thinking about making those investments, marshaling those investments, not all successful, but all with a deliberate focus on trying to build its own industrial base and its own intellectual and innovation base. And we have for the better part of a decade ignored or derogated and undermined those levers. So whatever argument there was for making those investments a decade ago are more pertinent now. But I think the second element of it is that on the wake of the last four years that we lived through, the thing that has surprised, I think, many of us is coming in and understanding that among our allies and among our global counterparts, there is a big question about
13:05 Speaker 01 can the United States deliver for its own citizens? Can the United States competently govern and invest in things that are obviously beneficial?
13:16 Speaker 01 To its own welfare, its economic strength, its economic resilience. Because the world has watched now for a couple of years where the United States operated in a way that was very difficult for our international counterparts to fathom. And they didn't expect the United States to do things that it did over the last couple of years. And that is really now a dominant question. I think now more than any time in modern history, the world is watching US domestic policy and US domestic economic policy. This question of whether or not the rescue plan would pass was sort of a top question at the G7. And I think that that reflects the fact that the world is asking this question.
13:57 Speaker 01 If the US is going to lead again internationally on an issue like climate change or an issue like global health and pandemic response to this pandemic and future pandemics, first and foremost, the question is can the US get its house in order? And that question is inevitably framed vis a vis China.
14:16 Ezra Klein? Why frame questions in terms of China and what they're doing? We don't think too much about how much the UK or Germany or Malaysia or Brazil are spending on R and D. We don't think that much about the strategic investments they're making. Why frame things in context of China? Why are they the relevant comparator?
14:34 Speaker 01 They are the ascendant economic and military power in the world. And so for geopolitical and economic reasons, their economic strength and their national security strength will loom larger than others. I think that that's number one. Number two is because of the investments that they have made, they've positioned themselves in a number of critical areas to our global economy and to supply chains as a critical actor and one in which, as we think about the competitive dynamics with China, we need to ask ourselves a more serious set of questions about our own vulnerability.
15:18 Speaker 01 I would also say to your question, it's not just China. And this isn't just a great power dynamic between the US and China. It's also that this pandemic has exposed for us in the US, the vulnerability of our economy and our supply chains to A unrestrained, globalized economy as well, where the supply chain vulnerabilities often are connected to China, but are connected in very complicated ways. You know, the semiconductor shortage we have in the United States today is a complicated story that involves lots of countries and lots of elements of the supply chain and where your second-tier supplier sits in Europe,
15:59 Speaker 01 even if the ultimate place where the wafer is being manufactured is in Asia. That's a reality of the global economy, but those realities are creating vulnerabilities for the US economy that I think have been more difficult to see, or at least people haven't focused as much on them until something like this pandemic happens and exposes us so viscerally.
16:22 Ezra Klein? I want to touch back to something else you were talking about a minute ago, which is political risk, the concern that this wouldn't pass, the concern that can American government still deliver for its own people? One thing that seems to me to have changed in the past 10, 15 years in part of the democratic economic politics is a sense that the risks of economic policy are not just economic, they are political. One of your colleagues said something to me that has rung in my head. It's like an iconic quote to me, which is that if people don't see, now he's speaking of your administration, if people don't see we're helping the shit out of them, this country could be back to Donald Trump or something like him very soon. Is there a different sense of the interaction here between economics, the sense people have of the government working
17:07 Ezra Klein? and what the range of political outcomes for America are?
17:11 Speaker 01 I think that there's definitely a sense of the stakes, that we just lived through four years of Donald Trump, which certainly raises the stakes for making sure that we can effectively deliver and never go back to that again. But we're also living through this pandemic, which has exacerbated a lot of weaknesses in the economy, but also upended so much of what we took for granted as stable elements of our economy and our life. And we are at a critical moment internationally as well, for the reasons we just discussed. So for all those reasons, I think that there is a heightened sense of the stakes. And also, I would say, on the positive side, a sense of the opportunity, that we do see historically that these moments of crises
17:54 Speaker 01 are moments where the potential spectrum of possibilities expands and that In a moment like this, there's a unique opportunity. But to connect it back to the point you were raising, our view is that making sure that we maintain this thread that President Biden has been pretty consistent on since before the election, that he is focused on the things that matter most to working people in the country. And when he says he's laser focused on COVID and the economy, that is a political message. He is a political actor, but it is deeply rooted in what his understanding and our understanding of what matters most in people's lives right now and making sure that they understand that when we're taking actions, it's connected.
18:39 Speaker 01 We may fail, we may make mistakes, we will be, try to be very upfront about that when it happens, but it's in service of trying to actually address those issues that matter most to their lives.
19:11 Ezra Klein? How has negotiating with the Congressional Democratic Caucus changed since 2009 and 10?
19:17 Speaker 01 Well, I think the politics of the country and the politics of Democratic Party have changed, and there is a different aspiration and expectation for what we were elected to do. And I think that the president had a lot to do with that in terms of the campaign that he ran and the vision that he outlined for the country. But I also think that even with the slim majorities that we have, the Democratic Caucus as a whole is focused on delivering on that agenda, which is big and ambitious. And as a result, the pressure on us to stay consistent with delivering on a big and ambitious agenda is there.
19:57 Speaker 01 I also think that at least, you know, so far, there's been a remarkable amount of agreement, not on all the policy details and not on all of the elements of what we're trying to do. And this is complicated and everyone's got different views. But on the fact that we need to move, we need to move with speed, we need to move with focus to try to get at those issues. We're not having a fundamental debate that says we should be spending our time focused on something categorically different than the agenda the president's trying to put forward. There's a shared sense of where we need to get to and the stakes of what we need to get done.
20:39 Speaker 01 But within that, we've got a broad coalition and a caucus that's got a lot of different views and certainly they make those views known.
20:46 Ezra Klein? One of my senses of the way the negotiating space here has changed is that in 2009, 2010, but also every administration prior to President Obama that I covered and that I knew of, everything was designed, every policy, every message from the beginning with the expectation that there was going to be a negotiation with the congressional party of the other side, too. And if you go back to the stimulus, it's the third tax cuts for that reason, the Affordable Care Act is built on the framework of Romney Care. And it seems to me that for both the administration and for congressional Democrats, everybody would love Republican engagement and votes and would be willing to make changes to get them, but things are not getting pre-negotiated down in the expectation of it.
21:30 Ezra Klein? And that has really changed policy design in a pretty fundamental way. Is that reasonable?
21:36 Speaker 01 I would say two things about that. One is, the president has been clear, and I hope and expect it's clear in both the rescue plan and the jobs plan, that he believes we need to go big. It is a moment to be bold. It is a moment to outline what it is that the country actually needs, which puts you in the category of doing things that are big, bolder, things that haven't been done in quite some time. And that's the president's firmly held belief that the right thing for the country is to outline that kind of vision and then try to galvanize the country around why that's necessary. That's definitely defines the way that he is approaching this, and I think that is different. The second thing, though, to get at a point you're making is that particularly with
22:20 Speaker 01 respect to this jobs plan, part of what I think the president is showing is that you can actually outline a bold vision that's not about trying to pre-negotiate or trim your own sails from what you think is right to do while also proposing things that are broadly within the bounds of what both parties have agreed are necessary. I think it's a difference between trimming your own sails, saying, you know, I think what the country needs is X, but I'm only going to call for point three X, and saying, it turns out that that X that the country needs is something that is actually broadly supported across
23:02 Speaker 01 the country. It's not particularly a partisan political priority. It's just that it hasn't been done. We haven't figured out a way to get it done. That certainly gets us into this conversation on infrastructure. But the president's view is that there isn't a disconnect between being bold and proposing things that putatively on their face, there's no reason why Democrats and Republicans couldn't work together. Now, we're going to work to figure out whether that's possible, but there's no reason on its face why that shouldn't be, shouldn't be true.
23:35 Ezra Klein? Well, it seems to me there's an effort now, maybe an effort is the wrong way to put it, but that to the extent there's a disconnect that is being exploited, it's a disconnect between congressional Republicans and their base, that the administration is trying to propose things that do have Republican support, but that's support from Republicans across the country. It is not being defined in the way it used to be defined, as support among sort of elite Republican think tanks and legislators in Washington.
24:04 Speaker 01 The thing about this jobs package that's interesting in that respect is that there is so much, maybe in part because we have failed to actually do meaningful infrastructure investment for a decade and meaningful public investment for decades before that. There is so much that actually people out there in the country. Particularly in areas of the country that have not benefited from prior investments, which which often overlap with red parts of the country, rural America, areas where there's been chronic underinvestment in things like, you know, water systems and electricity systems and the like. And there is broad overlap with things that are, we desperately need to do as a country and that have a broad common sense appeal.
24:47 Speaker 01 And so we certainly are trying to tap into that, but in a good faith effort to try to say, if there's any possible way that we can bring people together and do something in a bipartisan way in Congress, we're going to do that. But to your point earlier, we're not going to preemptively say, the president's only going to be out there saying and arguing that we need to do half of what we need to do, simply because we think that that's sort of a necessary precondition to have that conversation in Congress.
25:17 Ezra Klein? You and I have known each other a while now. You were the young guy in the Obama administration. Now you're the grizzled old guy running the National Economics Council. How are the young economists in the administration different ideologically or temperamentally than in your generation?
25:34 Speaker 01 I have a, I have a hard time thinking of myself as the old guy, but I, but I, but I, I know, but I get it. I get it. Well, so I think that there has been a lot more work done to try to understand what the roots of economic inequality are over the course of the last decade and openness to thinking about power and power dynamics in the economy, worker power, a significantly more intellectual work that has gone into, you know, what has the decline of the unionization movement in the United States meant? Why and how can we realistically build that back? Whether it's in, again, sort of worker power issues, competition and antitrust, other
26:16 Speaker 01 areas where the space of thought was more constrained, now it's more wide open. And so. That's one example. Another example is get back to when we were talking about things that would be traditionally written off as industrial policy, where now we're asking ourselves questions about, how do you actually think about building industrial strength in key sectors of the economy where we clearly have vulnerabilities? And do it in a way that doesn't get us into a place where we're doing really dumb things, we're picking winners, we're wasting money, that kind of thing. The space of thought there has really broadened and having people who are really disciplined about making sure we're thinking smartly about this, but open to a much broader range of potential outcomes.
26:59 Speaker 01 The last thing I will say is that, and this was true during the Obama administration and now, it is also incredibly beneficial to have a combination of fresh thinking and experience. Having somebody like Secretary Yellen on the economic team, who has actually served in the Clinton White House, been in the Fed Chair, been through economic crises, that perspective too also helps in making sure that we're thinking carefully about the markets and about issues as well. So it's an energizing team, but it definitely is, I think we have a broader diversity of perspectives, willing to challenge some things that have been, you know, conventions of
27:41 Speaker 01 economic thinking, or at least were conventions of economic thinking prior to the middle of the last decade.
27:46 Ezra Klein? I'm going to lay some of my reporting cards on the table here and then use it as a bridge, which is that one thing that I have been struck by reporting on the administration and on sort of this like, sort of new generation of Democratic staffers, is that the generation of Democrats forged, whose formative experiences were the financial crisis and the climate crisis, just see the world and seemed to me to see the role of government in that world very different than those whose formative experiences were maybe stagflation and, you know, the Clinton economic policies and then subsequent boom. And that strikes me when I asked you even earlier, how your thinking has changed, the first thing you said was climate, the first economic point you mentioned was climate. So I do want to talk about the climate context of this bill.
28:31 Ezra Klein? Explain to me the theory of how the American Jobs Plan approaches climate and approaches dealing with the climate problem.
28:40 Speaker 01 So we have two big issues when it comes to climate and our infrastructure. The first is that The increased frequency and severity of extreme weather events, be it flooding in the Midwest, fires in the in the West, storms in the Atlantic Basin. If you have a climate agnostic view to building infrastructure, you're going to you're going to miss important elements of how you build resilient, smart, sustainable infrastructure. So that has to affect all of the things that you would think about in traditional roads and bridges, even the sort of most basic elements of infrastructure
29:21 Speaker 01 has to affect that because we have to, we have to build forward to the reality of the ways in which the physical environment and the environment that we all operate in have have changed. So piece one is across every element of what we're thinking about. We have to ask ourselves the question, are we building back to a more resilient place to address the inevitable impacts that we're going to live through, independent of how effective we are at mitigating future CO2 emissions in the country or greenhouse gas emissions in the country. So that's piece one of it. And then piece two is if you think across the big systems in our country, the transportation system being one, but the power and energy system being another.
30:01 Speaker 01 In order to actually solve climate change, we're going to have to transform those systems. And actually, investing in infrastructure the right way can be one of the most effective ways to do that in a way that creates lots of jobs, creates lots of new opportunity and is is economically sensible as well. So the second way that we think about it from the structure of the American Jobs Plan is across those systems, transportation, power, the built environment, the homes we live in, the businesses we operate in, and then industry, right? And so if you look across each of those, the objective is where can we make the investments
30:41 Speaker 01 necessary to build toward the future infrastructure system that we're going to want and need? So obviously, on the transportation side, the thing that, you know, captures the most imagination is building out electric charging stations across the country. On the power sector side, it's You know, building the actual infrastructure of how we move electrons around the country in a way that is very job intensive, brings jobs to lots of different parts of the country, but is absolutely necessary if that's the sort of future structure. The built environment and industry get less attention, but are extraordinary, you know, opportunities. And this, this plan has a very significant investment in upgrading buildings, making them more energy efficient. The jobs doing that happen all around the country.
31:26 Speaker 01 There are construction jobs, building trades. A lot of it is actually high value investment where providing an incentive could actually unlock a bunch of private capital to invest particularly in the commercial building space. On the industry side, both investing in R and D and in the deployment of new technologies that will help US industry lead in creating low carbon or zero carbon industrial applications to the future, whether that's low carbon materials, steel, cement, or in zero carbon areas like CCS and hydrogen. Those are places where you need public investment to actually help unlock new breakthroughs. And we have a big stake in having that innovation happen in the United States
32:11 Speaker 01 and then having the manufacturing happen co-located with the innovation. That's one of the things I think we've learned about doing innovation policy well. So across all of those areas, we're trying to think about where you can invest in a way that will help lay the groundwork for the future economy, the zero carbon economy that we're going to want.
32:31 Ezra Klein? So let me pose a friendly fire critique. I've heard of the, the theory in the plan, which is this. I'm sure you're very excited. So some of the things you're talking about are things in theory the private sector should know how to do. We built out gas stations in this country without it being the, the federal government that, that did it. Weatherizing homes, weatherizing buildings, upgrading energy efficiency. That stuff the private sector knows how to do. So the, the correct economics approach to this from this, this critic is that you do a carbon tax, you should raise the price of carbon and then like let the magic of the private market go to work. Why does the government have to take such a central role here?
33:06 Speaker 01 So there's a couple of things there. One is that we need to move as quickly as possible to decarbonizing our economy. And we need to do it in a way that creates as many jobs and as much economic opportunity as we can for Americans in this country. That is our objective. So if that is your objective, then looking sector by sector at what are going to be the foundational elements that are going to help unlock that private capital is a sensible way to do it. So, you know, in the transportation sector, inevitably and eventually, the private sector might solve the chicken and egg problem of are there enough charging stations to solve range anxiety sufficient so that people feel comfortable buying electric vehicles?
33:50 Speaker 01 But by the time that we have done that, we will have lost time on the climate side and we will have lost opportunity in terms of the underlying investments in the core innovations and elements that are going to become the basis of that industry for the future. So we see this in semiconductors. We're already seeing this in batteries, but we're intent on trying to stem that tide, which is we actually have a policy goal of not just having American consumers able to buy electric vehicles, but to have those vehicles assembled in the United States and have as much of the innovation ecosystem as possible happen in the United States because we believe this is going to be a growing global market. And it's one of the great export opportunities to build in the United States and make us a leader.
34:33 Speaker 01 To do that requires strategic upfront investment. It requires laying the foundation in a way that will unlock that private capital. And, you know, economy wide pricing would have very different impacts in different sectors. So you see the stylized models of economy wide pricing that drives emissions down in the power sector much more quickly. In the transportation sector, it doesn't because the barriers. So you would need, you know, if your goal was to try to drive down emissions in the transportation sector, you would need a very different pricing structure. That's all in part an answer to the thoughtful critique. I think the other more practical answer is that it's been true for multiple years
35:16 Speaker 01 that energy efficiency upgrades in commercial buildings are close to in the money. And so the private sector should just, you know, they should just happen and they're not. And so the other thing that we're trying to do is to look Across and say, what are the practical barriers where strategically, public investment or the public sector can play a catalytic role? A lot of these are, you know, market failures or barriers that are not just solvable by, you know, a price and unlocking the private sector. The reason why we don't have transmission build out sufficient to support the increase build out of renewable energy is a complicated mix of politics and economics and jurisdictional
35:58 Speaker 01 issues that actually the federal government intervening with a combination of incentives and requirements could really help unlock. And so our view certainly is more nuanced than let's just set a course and the private sector will sort it out. I think that that's borne out by both by the urgency of needing to act and also the practicality of in a number of these places, the barrier is not just a pricing barrier, the barrier is trying to overcome something else.
36:29 Ezra Klein? And so I want to plug a political idea in there, which is that it seems to me the theory, and this is a change in theory over the past, I'd say 15 years in climate politics, is you can't just walk up to people and ask them for sacrifice. You can't say, we're going to do this by making energy more expensive and certain things are not going to be available anymore, that you want to do this in a way that feels positive some to people, better technologies, new jobs, like you're getting something out of it and being taken along in it, not that this is just a call for you get less in order for the future to get more.
37:02 Speaker 01 I want to double down on that and say, it's not just a messaging and narrative imperative, that it actually, it has to be that Americans see and experience that, that the investments in building out a more resilient power grid actually improve their lives and create job opportunities for them or their neighbors or otherwise. And that an investment agenda along the lines of what the president has put forward actually is among the best opportunities we have to create a next generation of good paying jobs all across America. That actually has to become true in practice and that in a sense, we're better positioned
37:44 Speaker 01 now than we ever have because in so many of these areas. The market is moving toward cleaner and lower carbon sources of of energy. The global market is moving toward that. And so these investments actually can unlock more private investment. But that doing that in a way where people feel as if the government policy is actually enabling that in a way that will make it better for their lives. So that to your point, electric vehicles are coming. That's an inevitability. The question is, can we do that in a way that's going to be really good for our economy and for American workers and American consumers? And so part of what we're trying to answer is the policy levers that will make sure
38:27 Speaker 01 that that's the case and that we get there as quickly as we can, consistent with it being really good for American consumers and American jobs. So what the president has tried to do is explain, you know, he says, when I think about climate change, I think about jobs. That's his narrative, but I think it is a good way of trying to encapsulate what it is we're trying to accomplish.
39:10 Ezra Klein? So a lot of what's going on in the climate space here is infrastructure. A lot of what's going on in the rest of the bill is a very, very, very big infrastructure spend. There've also been a bunch of misses on big infrastructure projects in in recent years. I'm in California and I don't get to ride the high speed rail. So what has been learned on building infrastructure, particularly at this scale? Or what needs to change in building infrastructure at this scale such that we get the the promised bang for the buck here?
39:37 Speaker 01 So I think we've learned a number of things, some of which coming from the Recovery Act, which I will say, I think overall was a useful and successful investment in public infrastructure.
39:50 Speaker 01 But we also learned a lot of lessons, a couple of them. Number one, this bill is not just focused on shovel-ready, it's also focused on shovel-worthy. And, you know, in 2009, there was, because the the frame, the paradigm was stimulus, fiscal stimulus, operate as quickly as possible, get shovels and ground as quickly as possible, that defined a lot of what was possible. There was a lot of focus on deferred maintenance, there was a lot of focus on obligating that money immediately, which meant that the state and municipal entities that were receiving the money, a lot of what they were doing was recycling that capital. If you look at the American Jobs Plan, there is a real focus on a multi-year public investment plan designed
40:32 Speaker 01 to get at those shovel-worthy projects, those projects that are not going to take forever, but really do require some planning and technical capability. A second thing that I think is learned is that technical and technocratic capability matters, and it matters at the state and local level, and you have to invest in that capability. One of the things that, you know, is an idea that's in the American Jobs Plan is this idea of an infrastructure America authority. It builds off of what other countries have done in the UK and Canada, to try to actually build a independent authority that helps do broad, comprehensive reviews of where, across the infrastructure complex, are the highest value investments to make,
41:17 Speaker 01 but then also works with states and localities to build the technical capability, so that the entity that is tasked with figuring out how to build the tunnel, or lay the transmission line, or build the bridge, has the capability to, you know, think ahead to what are the things that could get in the way. The third is more on the political economy side, which is, the more that we can use federal investments in a way that provides competitive funding to identify those areas where there is capability and appetite, the better. So, formula funding is important for some uses. If you look at the Recovery Act, almost all of it went through formula funding, in part because of that speed element. But the ability to, for example,
42:01 Speaker 01 in the Jobs Plan, there's this focus on the 10 most economically significant bridges, which are all, will all be very large, complicated projects, because these are the bridges that the most people and stuff go over on a daily basis. But the goal there is to say, we want to run a competition, a thoughtful national competition, perhaps using this Infrastructure America authority to say, not only where do they exist, but where does the local buy-in and technical know-how exist? We can diligence it, you can encourage it by holding out the investment, and then invest in those places where you have high confidence to do that. So I think in all of those areas, we've learned a lot.
42:43 Speaker 01 We've tried to build those lessons into the design of this plan. The last thing I would say is a lesson which is, there are more opportunities now because the market is driving decarbonized sources of transportation and electrification. There's more opportunities at the seam between the transportation electric system where public capital can unlock greater private capital. So this idea of a clean energy accelerator, you know, clean energy bank is an idea in this plan that largely builds off of the thinking that members of Congress from both parties have done over the last couple of years. And we think there's more opportunity to learn from what's been done in other countries on that front that wouldn't have been true several years ago.
43:28 Ezra Klein? I'm interested in this idea of using money to either reward or even to change local capacity and even laws on the ground sometimes by holding out or by running the competitions. In the housing section of the bill, you want to build a ton of new housing, but it's also connected, at least in some cases, to getting cities to change their zoning laws such that it is easier to build that housing. That's a pretty interesting policy. I know it's been kicking around for a bit. Tell me about how that might work in practice.
43:58 Speaker 01 Yeah, look, and just to be clear, there's been some lack of clarity. This is not, you know, federal preemption of local zoning laws or anything. And in fact, these are ideas that build off of ideas that, again, Republicans and Democrats have at least put forward congressionally over the course of the last couple of years. But the idea is basically, we need to build more housing in the US in the right places. And if we can do that, it has a important economic multiplier because it allows people to move to opportunity and move to jobs that are potentially ladders into higher-paying careers in areas where those jobs exist. And part of the opportunity in doing that is to have more enlightened zoning policies at the local level.
44:44 Speaker 01 But using investment can help sometimes get over the chicken and the egg problem of changing zoning policies to allow for development is harder to do if you don't have some investment or some match to help fund the construction of that housing. So the idea is relatively basic, which is to hold out that carrot, but then put those resources in the areas where there's going to be the biggest bang. And in some cases, that's going to be because you've gotten a change in zoning that would unlock more opportunity to build housing in the right places.
45:16 Ezra Klein? I want to make sure we talk about the care side of this bill for a couple of minutes here. The American Jobs Plan reads, even before COVID-19, our country was in the midst of a caregiving crisis. Talk me through the pre-coronavirus crisis.
45:30 Speaker 01 This is a place where I think policy has to be personal. I think there are so many people out there who are either caring for an elderly parent, millions of people who actually care for adult children who have some form of disabilities that require significant care, and then, of course, parents of children, particularly younger children. And pre-pandemic, if you look at the infrastructure to support the care of those people, which is ultimately an economic prerequisite for those parents, for those caregivers to actually participate
46:10 Speaker 01 in the economy fully, that infrastructure has been failing for some time. So, you know, the backlog, something you know well, the backlog for home and community-based care in Medicaid is hundreds of thousands of people. So if you need that care, you're in no way guaranteed that you could access that care. The lack of affordable and quality childcare in the country prior to the pandemic was a significant constraint on the ability for families to find the right balance of having one or both partners in a parenting relationship actually work. And so, pre-pandemic, we're in a place where that infrastructure was holding back our economy, holding back our potential. And then, all of a sudden, we have this pandemic, which...
46:57 Speaker 01 Is this perfect exacerbator of that failed infrastructure of care? Certainly with respect to our elderly population and the disproportionate death we've seen because the care infrastructure for nursing homes and for how we care for the elderly has failed us in this context of this pandemic. And then for parents, one of the biggest legacies that we will have to focus on coming out of this crisis is parents and disproportionately women leaving the labor force because they don't have an alternative care option in the pandemic. So as we think about building back the infrastructure of a better economy on the back of this pandemic,
47:39 Speaker 01 we are focused on what the right public investments are to build a stronger care infrastructure going forward.
47:45 Ezra Klein? It has seemed to me that one of the things the pandemic did to change the politics of this is that basically every family that had older parents or young kids, or just anybody in their family in a difficult situation, suddenly got exposed to the kind of absent care infrastructure or disrupted care infrastructure that like a lot of families, that was simply their normal before the pandemic, that like part of it's simply been an exposure to a preexisting reality, but now it hit everybody simultaneously, which changes the politics out pretty profoundly. But so what does all this then investment amount to? Once it is all spent out, what care options or what reliability that isn't currently
48:28 Ezra Klein? there in care options would be available to a family compared to right now?
48:32 Speaker 01 Well, I want to pick up on one thing you just said, which I think that you're right, that it exposed sort of simultaneously for the families who were reliant on that care. It also exposed the workforce, the people who care for the elderly and disabled in the country, and the people who principally provide childcare are overwhelmingly women and overwhelmingly paid at poverty wages. And so the people who were in those nursing homes, providing that elder care, part of the essential workforce exposed during this pandemic are also the substructure of this infrastructure of care that is failing. And part of what is failing is the society failing to dignify.
49:15 Speaker 01 The work that they do, which is some of the hardest work done, that this is some of the putting a face on in the modern infrastructure. People who put on a gown and go change bedpans and care for truly sick elderly people or provide care in those people's homes are doing hard work that creates an infrastructure that allows so many of us to actually operate in the economy. So what's different? One, access to that care. So for those families who otherwise couldn't access it, building childcare facilities, right? Investing in the supply side of childcare. So there is more, there are more, more available options.
49:55 Speaker 01 And then also investing in mechanisms to ensure that the workers who, who provide that care are better paid, have more opportunity to organize, and have more ladders to, as we look at that as one of the expanding areas of employment in our economy, we're going to need more care. And so we want to have that sector create not only more power for those workers, more dignity for those workers, but also career ladders so that you can, there's organization behind working in a home and community-based care workforce and that, that, that translates. It's less, there's more formality, it's less informal, it's more, there's more opportunities to succeed and advance.
50:37 Speaker 01 So I think on the other side of this, in addition to addressing the immediate crisis situation of how do we get more parents and women back into the workforce and kids not losing years of their education, we should have a system that provides that, where that care is easier to find, that quality care is easier to find, and that we're compensating it, that we're, you know, providing the right incentive that it's compensated the way it deserves to be.
51:02 Ezra Klein? And that, that seems to be an idea laced throughout the bill. It's here in the, in the care section. It's also in the, the pro act, which is about labor organizing. A lot of pieces of the bill deal with very profound market failures. The market's failure to, not to stop climate change, but actually it accelerates it, market failures around inequality. But this is one where the idea seems to be that worker power has become a failure in the economy. And as workers in, in key industries have lost power or have been exploited, like in the care industry, that not only has it been bad for those workers, but it's actually been bad for everybody.
51:37 Speaker 01 The president's view is particularly as we make these public investments, we should make them tied to better wages, more collective bargaining and opportunity for workers to join a union and to dignify jobs and dignify employment. And that takes different forms in different parts of the investment, but you are right that it is a core part of the whole agenda, including even things like investments in R and D. The public investments in R and D, particularly as we extend that to deployment, part of the theory here is that we need to invest in ways that we haven't since the 1960s,
52:19 Speaker 01 but also think about how do we make sure that when we invest in the United, we're generating more quality job opportunities in the United States. And, you know, we hear a lot about this from different sides, but the president is unapologetic that the other element of using these dollars is that when we invest, we should be prioritizing American-made products and American prevailing wage labor. And there's a climate element of that, too, which is that the power of federal procurement can be used to actually pull forward technology and pull forward new markets and do so in a way that builds more domestic opportunity.
53:00 Speaker 01 So saying that we're not only going to buy building materials to build a bunch of new housing, but we're going to make bulk purchases of lower carbon building materials and we're going to preference American-made products actually creates stable demand for US-based manufacturers. The same is true for electric vehicles. So saying that the US government is going to be a big purchaser of electric vehicles and make those commitments on the front end helps to buy down the cost of that, helps to buy down the cost of the battery technology that's embedded in there. And I would, I think that this plan and the president's vision represents a much more forward-leaning willingness to use the tools of federal procurement to actually try to
53:44 Speaker 01 pull forward that technology connected to better paying jobs.
53:48 Ezra Klein? We've talked a lot about what could go right here if the bill passes. But assuming the bill passes and we know the American Rescue Plan is passed, what are you worried that can go wrong? You know, we've heard the Summers talk about inflation, Republicans talk about budget deficits. What risks are you watching out for?
54:04 Speaker 01 If we're talking about the jobs plan, the goal is to is actually to have a multi-year investment program. We haven't got into the corporate tax reform and offsetting it. That's a whole conversation of itself. I have less concern about overheat or about long-term fiscal issues because this is a plan that's intended to invest largely one time, but multi-year and can easily, not easily, but straightforwardly be offset over a longer period of time. The principal areas where I have concern is about execution and implementation. It goes to some of the questions about lessons learned, that we're trying to accomplish a set of big things.
54:45 Speaker 01 And so when you're trying to provide, for example, high-speed internet to all Americans, if you do that wrong, you can end up in a situation where what you're doing is you're subsidizing incumbents, you're paying a lot for relatively little public benefit, and it costs a lot more than it should, right? When you're investing in large infrastructure projects, if you don't prioritize some of the competitive aspects we talked about, the technocratic capability, you can end up with things taking too long or not happening. So to me, the biggest concern is demonstrating that multi-year public investment is actually
55:28 Speaker 01 in the interest of the American people and American workers will be a high-stakes effort to try to demonstrate that these types of government interventions can deliver. A lot of that will come down to execution. A lot of that comes down to the professionalism of the civil service at the federal level and the state and local level, a lot of which has been hollowed out. And so we have to be very humble about how hard that is and how much work and effort and focus and implementation that will take across time. But that's where a lot of, I think, our focus needs to be on getting it right.
56:03 Ezra Klein? Brian Deese, thank you very much.
56:05 Speaker 01 Thank you, Ezra.
56:16 Ezra Klein? The Ezra Clanchot is a production of New York Times Opinion. It is produced by Roja Karma and Jeff Geld. Fact checked by Michelle Harris. Original music by Isaac Jones and mixing by Jeff Geld.
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