Biden's Two-Track Economy Tackles Twin U.S. Threats
The administration's strategy will be able to both grow jobs and improve U.S. competitiveness with China, but also risks deepening social divisions.
Most jobs will involve taking care of each other.
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President Joe Biden’s economic plans promise to split the U.S. economy between industries that increase productivity and industries that provide mass employment. This is a reasonable response to the pressures the U.S. is facing from changes in technology and the global economy. But it also risks creating social divisions between the people who work in the two types of industries.
In a recent blog post, I tried to lay out a general vision for where Biden’s economic plans are taking us. One concept I kept coming back to was the idea of a “two-track economy.” I got this idea from Japan, where world-class export industries — think of Toyota Motor Corp. and Panasonic Corp. and Nintendo Co. — ended up subsidizing other inward-looking industries that were fairly unproductive and hidebound but managed to employ a huge number of people. Japan sort of stumbled into this arrangement, but my idea is that Biden is attempting to create something along these lines -- providing research funding and other support for innovative knowledge industries like software, bioscience, and advanced manufacturing, but also supporting a domestically focused “care economy.”