Bidenomics Was More Successful Than People Think

The conventional wisdom on Joe Biden’s Inflation Reduction Act (IRA) is that it failed as an experiment in policy-based politics. The law, signed into effect in 2022, aimed to create factories and good-paying jobs in communities across the country, with the expectation that voters would reward Democrats at the ballot box for their efforts. However, when voters rejected Democrats in the 2024 election, many pundits declared that the IRA’s theory of politics had been proven wrong.

Recent research suggests that the law’s impact was more significant than initially thought. Policy feedback – the phenomenon where policies create new incentives for politicians to protect them – played a crucial role in shaping the election. The key component of the IRA was a massive tax credit for clean-energy manufacturing, which drove economic growth and job creation in targeted communities.

Our study focused on 234 House districts that saw a total of 523 clean-energy factories announced during the Biden years. We compared these districts with demographically similar areas that weren’t slated for factories and found that the manufacturing boom lifted Democrats’ vote share by roughly 1.5 percentage points – or a swing of 2.5 million votes across the affected districts. This swing was larger than Trump’s entire margin of victory in Michigan, where every single district had at least one factory announced.

The implications are significant. Without the manufacturing build-out, our estimates suggest that Harris would have lost Michigan by three times as much as she did. There was no backlash – not even in deep-red districts. This phenomenon is a prime example of policy feedback: a law that puts a battery factory in a district changes the politics of that place.

Suddenly, its representative has a reason to protect that policy. More than 70 percent of announced clean-manufacturing investments went to districts that Trump carried in 2020. The impact wasn’t limited to electoral politics either. Behind the scenes, clean-energy companies lobbied hard against the repeal of the clean-energy tax credits.

Several senators worked to strip out the House’s harshest cuts before the repeal bill passed. This is a testament to the power of policy feedback – and the need for politicians to take it into account when crafting policies. The notion that Trump erased Biden’s climate law is also overstated.

The Trump tax bill did repeal some aspects of the IRA, including grant programs to help disadvantaged communities, but consumer tax credits were preserved. The IRA remains on the books – still growing the clean economy and cutting pollution. As politicians consider what climate policy should look like after Trump, it’s essential that they avoid drawing the wrong lessons from the Biden administration’s experience.

Policy feedback is a powerful tool – one that can be leveraged to drive meaningful change in the years ahead. The Inflation Reduction Act was never just about climate – it was about using policy to reshape politics and create new economic opportunities. By recognizing the impact of policy feedback, we can build on its successes and create more effective policies for the future.

The lesson is clear: when done right, policy can be a powerful catalyst for change – and a reminder that even in the face of adversity, there’s always room to improve and adapt.