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Brian: It's The Brian Lehrer Show on WNYC. Good morning, everyone, it's State of the Union Day, President Biden's chance to get an audience bigger than those of you who watch MSNBC or CNN all the time. According to Variety Magazine, the Super Bowl was the most watch show of 2022 with around 100 million viewers. Depends on how you calculate it. The NFL says 200 million, but we'll accept the first Nielsen number, 100 million viewers. The most viewed entertainment show was the Oscars at around 17 million, then the season finale of Yellowstone with around 13 million.

The State of the Union address last year? Take your internal guesses. What's your over/under? It drew a little under 40 million people, not too bad. That's barely over 10% of the American population paying attention, but that's still the biggest news event audience of the year. In historical context, it's still meh. The most watched State of the Union address ever according to the Nielsen ratings was Bill Clinton's just after his inauguration in 1993. We just did that series on 1993. Did you hear that as turning point? That was one reason why.

Charismatic Bill Clinton had everybody paying attention, and it was a new era that America felt was dawning then after the Cold War, and as the country was beginning to recover from the worst of a recession, and of 1980s crime. 66 million people watched that State of the Union. More than half, again, as many as watched Biden last year. As another footnote to history, just saying. Donald Trump claimed his 2018 State of the Union address was the most watched ever, It wasn't. Nielsen clocked that at around 46 million viewers, so 20 million less than Clinton's 66 million, which was the best ever according to Nielsen. We know that not coming in first never stopped Trump from saying he came in first. Maybe we'll call that the little lie, a footnote to State of the Union history.

Tonight, it's Joe Biden's third State of the Union address. We'll see who watches, but what does the president need to do tonight? Here's his former press secretary Jen Psaki on MSNBC this morning.

Jen Psaki: Even if it's 40 million people watch it, which is less than the Super Bowl, but still, that's a huge number of people, that's a big opportunity for any president. It's the biggest speech of the year any president gives. What he needs to do is tell a story. Joe Biden is an amazing storyteller. You sit in the Oval Office, Karine can tell you, and he can story tell for six hours. He needs to do that in this speech tonight. People aren't sitting at home, and just writing down data points. They vote and support people who they feel something from, so he needs to tell the story.

Brian: He needs to tell the story, but with Democrats and Republicans alike in a pessimistic mood according to the polls, and Biden's latest approval number at just 37%, what kind of story does he have that he can tell? One thing we expect is for Biden to tout the economy. With the lowest unemployment rate since 1969, according to the numbers that came out on Friday, and the US manufacturing sector once more or less, left for dead, thank you 1993 by the way, with Bill Clinton's NAFTA agreement and other forces, the American manufacturing sector is coming back with Biden era laws, including the CHIPS Act and the Inflation Reduction Act.

In fact, here's something that surprised me from this show yesterday, from our own show yesterday that could even help Biden tell his story. Some of you heard our call in at the end of yesterday's show asking people if they recently got a job, or recently lost the job. We got this revealing call from Robert in Jersey City, who started by saying he had been laid off from his recruiter job in the tech sector. We know the tech sector is shrinking, but then he went on.

Robert: I'm actually a tech recruiter. I’ve worked for a lot of great Fortune 500 companies, and there's a huge portion made in USA. There's a lot of jobs in manufacturing. Within the last one month, I've actually gotten three offers all from the manufacturing sector instead of the software, which I'm part of.

Brian: What a reversal compared to what we're used to. Lost his tech recruiter job, got a manufacturing recruiter job as though sectors switched places as what's growing, what's shrinking. The story of January 2023 in less than 30 seconds there. Let's preview the state of Joe Biden's Union by talking about the state of Joe Biden's economy with Idrees Kahloon, Washington bureau chief for The Economist. One of their recent articles is called America's Government is Spending Lavishly to Revive Manufacturing. Idrees, thanks so much for coming on State of the Union morning. Welcome to WNYC.

Idrees: Thank you so much for inviting me, I really appreciate it.

Brian: First, can I get your reaction to that caller yesterday, Robert in Jersey City? Was he an accidental focus group of one?

Idrees: No. I think that makes a very interesting point because, as you noted, manufacturing jobs are up. They hit their bottom around 2010 at 11.5 million jobs. They've since gained about a million and a half, which is a bit of a reversal. What we see actually is that a lot of those jobs require technical skills. They require college degrees even though they are part of the manufacturing sector. There is still a place for brawn in that sector, but a lot of it is computerized, a lot of it's automated, and the kinds of jobs that are being created require a certain set of STEM skills. In that way, I think that the focus group of one is actually quite revealing.

Brian: The article in The Economist starts at what we might think of as an old school location where mostly it was brawn as you put it, doing the work. The article opens at a Ford Motor Company manufacturing complex called River Rouge near Detroit. You describe what was happening there in the 1930s, then what's happening there today. You want to tell both of those stories a little bit?

Idrees: Yes. In the 1930s, this complex outside of Detroit had roughly 100,000 people who were making cars once a minute. It was a huge enterprise, and it was the heyday of the American manufacturing sector, was when Detroit was the fourth largest city, was incredibly rich. All the art deco buildings that we see today were being built. We've all known about the decline of Detroit since, but actually, what's interesting is if you go back now, what you see is that this complex is now churning out electric F150s. My colleague who wrote that particular briefing had a good time taking it all the way across a few states. Actually, the issue was less the car, which worked fine, but the charging stations along the way.

Brian: I was just going to ask, did he run out of charge before he found a charging station?

Idrees: Yes. She went with two colleagues and they had to spend a very cold dinner outside of a supermarket while they waited for the car to charge up. In a lot of ways, the sector is changing. If you go there, my colleague noted that you see the whirring of machines. You don't see the legions of people producing cars like you had before. What they're producing is fairly high quality, it's advanced, it's almost futuristic. It is a very different kind of manufacturing and it's one that the Biden administration is spending a lot of money trying to encourage at the moment.

Brian: That gets to the heart of the article. One reason for the revival of River Rouge is lavish new tax credits people can get for buying American-made electric vehicles, for example. I'm glad you told the story that way because, I think the American-made part of that sentence, American-made electric vehicles tends to get lost in most of the media. What we hear a lot is about the tax credits themselves in the context of trying to reduce climate change.

We did a segment like that here last month as our climate story of the week one week, how are you trying to take advantage of those new green energy tax incentives for cars, or things for your home or whatever. But if you buy an American-made electric car, you get more of a tax credit than a Japanese electric car, or other import?

Idrees: That's right. The IRS has set up for the individual, a $7,500 tax credit that you can receive for an electric car. There are requirements on precisely how much of that car needs to be made within America. A few automakers whose supply chains don't run through America in quite the same way are a bit irate about that. To your point, this goes at the central- -tension of the article that we tried to explore, which is for the first two years that President Biden had a unified control over Congress, he managed to pass quite a lot of legislation.

A lot of that was geared towards spending, and spending with a few aims. It was roughly $2 trillion to be spent on semiconductor manufacturing, clean energy manufacturing, with the intent of revitalizing the American manufacturing sector, bringing people back to work, competing with China, and preparing the economy for this massive decarbonization that needed to happen. It does that by relying in large part on the Buy America provisions, on domestic subsidies.

The argument the administration makes is that these subsidies will ultimately reduce the cost of providing clean energy, of wind, and solar innovation that can be transmitted to the rest of the world. The skeptical pessimistic view on what this money might do is it might encourage domestic giants that aren't that efficient, that basically are able to subsist on subsidies for a while, whereas the actual products that they produce are not going to be the epoch-changing ones that we hope that they will be.

That is the big gamble that we're writing about, and that we're going to continue to write about also. This isn't our first stab. We're going to be spending much of the year looking at this.

Brian: Even if they exist on subsidies for a while, I presume that means they're creating jobs, because so far what we've talked about, what I pointed to, is what your article calls the indirect subsidies of subsidies for the buyer. There are also government subsidies going directly to the manufacturers?

Idrees: Yes, there are, and for a variety of kinds of products. There's the wind and solar subsidies. We've had those for a while actually, and they’ve probably helped reduce the cost per kilowatt hour of providing those renewable energy sources such that they are now competitive with non-renewable resources. For more experimental ideas such as carbon capture, advanced nuclear reactors, hydrogen production. There is money going there, and potentially, that money might have the best return because that might encourage the research and development that is needed to make these technologies more mainstream.

Brian: Just staying with automaking for a minute, are there many River Rouges popping up around the country right now?

Idrees: There are. We have a chart that the White House is very proud of that we put into our piece about new starts of semiconductor factories. Those are the ones that are sponsored or helped subsidized by the CHIPS Act, and electric vehicle and battery plants. Those are manufacturing facilities that have been subsidized in part by the Inflation Reduction Act, which is a bad name for what is basically a huge climate change legislation. You see all over the place. You see Hyundai, you see Ford, states are getting in on the action as well. They're setting up their own subsidy programs, they're competing with one another, to see who can attract the most jobs.

We saw even in Georgia when I was covering that race for governor, one thing that Brian Kemp emphasized aside from the national culture war and these sorts of things, that was the way that it got covered was the fact that he got in an electric manufacturing plant from a company called Rivian. That was a big part of the campaign that was maybe missed if you only looked at it from the DC angle. It's really quite a big change that we're seeing already.

Brian: The article put Ford’s River Rouge complex into broader context. You write, "It's not just that factory enjoying a renaissance, but the American dream of a country made prosperous by multitudes of jobs in cutting-edge manufacturing, mostly in two sectors," according to your article, "Green energy and semiconductors." That brings us to the other main Biden era law that Congress passed called the CHIPS Act. All right Idrees, for 25 bonus points, can you state what CHIPS is an acronym for?

Idrees: I'm going to forfeit the bonus points. Can you help me out? Infrastructure protection, is that in there?

Brian: No, no, I cheated. I wrote it down. It's the Creating Helpful Incentives to Produce Semiconductors Act. Creating, so CHIPS, right, Creating Helpful Incentives to Produce Semiconductors. Tell our listeners, what's a semiconductor? Common word, but the layperson using their personal tech toys may not know what part of what is a semiconductor.

Idrees: Yes. If you remember back to science class, you have things that conduct and things that don't. Semiconductors are somewhere in between so they can conduct a bit of current. That makes it very useful for basically any electronic information. If you want to store data in terms of bits, you need semiconductors, and these are largely silicon. These are basically produced in these massive facilities that are really, really complicated, because you need to pack a lot of semiconductors into a very small place.

As chips have gotten better and better, they've also enabled the powering of computers that are just better and better every year. The moon landing was done with some trivial amount of computing power, which now exists on the average middle schooler's graphing calculator. We've advanced quite a lot, such that we can now have this conversation over the internet live.

These chips are important, not just to the economy. Ford, for example, I believe, had issue manufacturing trucks last year because it didn't have enough semiconductors for its windshield wipers, and the average car has something like maybe more than 40 semiconductor chips that are needed for it. It's used in all sorts of industries, the advanced chips--

Brian: That's a great story. That's really a funny story too because the last thing that people were thinking of when I asked the question, what's a semiconductor, and what's it in? Probably the very last thing that was on people's mind was windshield wipers.

Idrees: Yes. It’s in your windshield wipers. It's in modern fridges, and ovens, and anything that has a cute little Wi-Fi-enabled logo next to it, which a lot of things do require chips. For the functioning of a typical-- for a modern economy, relies on chips. The advanced ones, the cutting-edge ones are needed for supercomputers. They're needed for warfare increasingly, which is fought based on technological advantage. The problem that the CHIPS Act tries to solve is that right now, the most advanced chipmaking happens in Taiwan by a company called TSMC. No one can produce chips as good as this company effectively.

America is very concerned that if China were to try to occupy Taiwan, as a lot of people in DC fear that they will, within the coming years, that they would no longer have access to those advanced chips. There's an effort to make sure that supply lines for the chips that power the modern economy, that power the defense sector, can be made domestically or at least among allies. America set out this CHIPS Act, which is basically trying to make sure--

Brian: Taiwan is an ally, right?

Idrees: Taiwan is an ally. That's right, but for example, the Netherlands are very good at producing chips, and there's less fear that China might get involved in a war with Amsterdam that inhibited the flow of chips. The Europeans are also subsidizing domestic chip production, and America is also getting in on it now. They've set up these CHIPS Act like you mentioned, which has this very cute abbreviation like all laws that pass in DC do except for the Inflation Reduction Act. They lost their creativity there.

That aims to spend somewhere between $50 billion depending on how you count it, or $200 billion on subsidizing companies such that they can produce chips here so that the supply lines don't require or don't run into the possibility of conflict.

Brian: That is a pretty good description of what semiconductors are used for by the way. My producer Mary said in my ear as you were giving that answer, "Pretty good for a Washington bureau chief."

Idrees: I really liked physics when I was in high school.

Brian: Plus, you're the Washington bureau chief for The Economist. Maybe the Washington bureau chief for some political magazine wouldn't be able to do what you just did there. Listeners, if you're just joining us, my guest is Idrees Kahloon, Washington bureau chief for The Economist, as we preview the State of the Union address in a narrow way, but with topic one, most years on most people's minds, and that's the economy and things that are happening, especially in the manufacturing sector, with acts that have passed Congress under Biden's watch.

Listeners, does anyone work in any kind of manufacturing that is being affected by Biden policies in any way? Help us report this story. We had that one caller- -yesterday that we played at the beginning of the segment. We'd love to hear from more of you who work in manufacturing, or for that matter, any sector that you think is being affected positively, negatively, not much at all, by Biden-era policies, things that actually have gotten through Congress. (212) 433-WNYC. Help us report the story at (212) 433-9692 or tweet @BrianLehrer.

If the CHIPS Act stands for Creating Helpful Incentives to Produce Semiconductors, meaning to produce semiconductors here, how does the CHIPS Act subsidize or otherwise incentivize making things like that here rather than in Taiwan, as you mentioned, or other places, where some of the best of those products come from these days? How does it incentivize that?

Idrees: There are two ways. One is the direct subsidies that would go to-- say I'm Intel, or TSMC, which also is interested in setting up plants in America. They would receive some of the money to help set up the plant. These semiconductor facilities are hugely capital-intensive. They can cost billions of dollars to produce so the government will help defray some of that cost. That's one pillar.

A bigger part actually, is the research and development spending, which would go to universities to develop basically innovations in the quality of chips. There's a very famous law called Moore's Law. I think it was named after one of the founders of Intel, which said that basically, computing power doubled every two years. Basically, the pace of innovation has been so fervent that we've been able to count on that for the last few decades. Actually, where we--

Brian: Which makes you have to buy a new laptop or something every two years in order to keep up, but that's another story.

Idrees: Yes, it does. It does. Also, applications are designed to take advantage of this such that games that you could play 10 years ago now no longer work. The problem that we're running into is actually now the amount of semiconductors that we're able to fit onto a single narrow postage stamp size space, these are nanometers apart. Space is getting tight. People are looking into things like quantum computing, which is the level that you're having to get to now to produce more innovation. The pace might slow, but the American government is hoping to increase the pace of research into this area.

Brian: Is it too soon to ask if all this is working to create manufacturing jobs?

Idrees: Yes. I think that we will have a better sense in the years to come. One of the things that we're going to be paying attention to, we think at The Economist that this is a huge potential transformation of the economy, but there were a few barriers that might keep it from doing the things that it hopes to do. One, this might just end up being a subsidy, rather than producing innovation. That's one thing we're going to keep an eye on.

Two, one big hindrance to the production of new facilities are permitting laws. This is boring sounding, but the fact is that it can take up to five years to get a permit to create a new solar plant. Wind turbines also that we know will be necessary to help decarbonize the economy in some cases can take six to seven years of permitting time because of the environmental reviews and such. If all this money is allocated, and it takes years and years and years for it to get spent, obviously, that will be an issue.

Then the third problem is the productivity issue. In some sectors, actually, manufacturing has become more productive over time. It produces a lot with fewer people, which is maybe a problem in its own right, but other industries are quite slow to produce any gains. There's a very fascinating paper that I came across that found that the cost to build a mile of interstate highway has basically quadrupled from 1980 until now, the same patch of highway.

The construction sector as a whole, there's an economics paper that just came out on this arguing that productivity in the construction sector has actually declined over time. If billions and billions are being spent, but they're being spent inefficiently. You're in New York, you know all about the efficiency of spending on infrastructure development, so they could get bogged down by reality, and we're going to be paying attention to that.

Brian: What's your take on what's making the construction industry inefficient nationwide?

Idrees: That is something that I'm hoping to probe in a future article. Off the top of my head, I think that construction is quite ad hoc in terms of construction. It's very hard for a certain innovation to be transmitted to all the different projects because every project is composed of its own team. Permitting is another issue. The pace of inspections that are required have made building safer but maybe have also introduced more barriers in speedy production of buildings and all sorts of infrastructure. That would be my guess, but I haven't looked into it as closely as I'd like yet.

Brian: All right. We’ll continue after a break with Idrees Kahloon, Washington bureau chief for The Economist as we talk about Biden's impact on the economy as a preview of the State of the Union address tonight. Here's a program note. Our State of the Union coverage begins at eight o'clock tonight when I will be back to host a pre-speech call-in. It'll be, The State of Our Inion is-- and you fill in the blank. Kai Wright host of Notes from America and Lee Miringoff from the NPR/Marist Poll will be along for the ride too. Join me for that at eight o'clock tonight and get ready to fill in the blank on The State Of Our Union Is-- and then the speech itself begins at 9:00 here on WNYC.

Jeff in Queens calling from the climate tech sector. We see you. You'll be the first call after the break. Idrees get ready for me to ask you what you think January's eye-popping jobs number of 500,000 net new jobs created even as the headlines were all about tens of thousands of layoffs in the tech sector. What does it all mean? We'll continue in a minute, Brian Lehrer on WNYC.

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Brian: Brian Lehrer on WNYC as we continue with Idrees Kahloon, Washington bureau chief for The Economist, as we talk about Biden's impact on the economy, especially the manufacturing sector in the United States as a one-issue preview of the State of the Union address tonight. As promised, Jeff in Queens, you're on WNYC. Hi, Jeff.

Jeff: Good morning, Brian. The point I wanted to make was, I work in the climate tech sector. We're building technology to capture carbon and upgrade it to useful products. My colleagues in Europe, in many cases we’re ahead on the core technology, are very interested in the United States and the changes Biden has put in place. It makes it very attractive to tell the technology in the United States rather than Europe with tax exemptions and so on.

Brian: We have a lot of noise on your line, but from what you know, are the European countries gearing up to compete against us in that respect, or is what you're saying, "Oh, look what they're doing in the United States, we're going to buy their products."

Jeff: Actually, the first. I just read yesterday, there was some incentives being put in place, and people are saying it's too little, but they are panicked that their core technology has been stolen-- not stolen, but co-opted-

Brian: Competed with.

Jeff: -in the States.

Brian: Jeff, I'm going to leave it there, because of all the noise in the background, but thank you for making an important point. We'll go next to Andreas in Manhattan, calling about the CHIPS Act. Andreas, you are on WNYC. Hi, there.

Andreas: Hi, Brian. Thanks so much. I'm working in the education sector and I wanted to ask your guest about, I think the CHIPS Act is going to be impacting education enormously in science, technology, engineering, and mathematics majors both in high school and in community colleges and colleges are going to be employable in these kinds of jobs, particularly in rural areas in upstate New York, it's going to have a huge impact. I wonder if your guest has any insight into that.

Brian: Thank you. Idrees?

Idrees: Yes, thank you for that point. I think yes, these will create jobs that rely on training in STEM but we already- -have a pretty sizable gap in terms of the number of jobs that require training in STEM and our capacities to supply them. I'm worried about learning in general. Over the pandemic, we had a significant amount of learning loss that we're just getting a sense of the scale of. A few months ago we saw the release of NAEP scores, which are used to assess overall-- sorry, I just got a call, that are used to assess overall performance and we saw a pretty sizable decline in terms of performance. I'm worried about those things in addition to what this might do for STEM, so that's the point I'd make there.

Brian: Which hopefully is short-term after the remote learning era of the pandemic. Let me put this, or ask you to put this into a maybe even larger context than we've been talking about. Because one of the articles in The Economist that you sent us for this notes that the approach with these subsidies for manufacturing marks a major reversal from the US government approach to economic success for the last 40 years, free trade deals, low taxes, and relatively little regulation.

Again, I'd say echoes of 1993 when Bill Clinton brought the Democrats on board with what had been more of a Republican approach described that way and made it bipartisan. How much does Bidenomics actually represent a really epical end of an era in the Democratic Party?

Idrees: I think it does, you're exactly right. I think it does encapsulate this turn away from the third way centrism of Bill Clinton that relied on liberalized trade agreements and low taxes and low regulations. What's interesting is that what Bidenomics is, and I don't think people appreciate it quite as much, is it’s in some ways is a continuation of Trumponomics. Biden has kept the same level of tariffs on China as Donald Trump did. He also thinks that the decline to manufacturing is a problem. He's skeptical of free trade agreements, all things that the two presidents who have a lot of differences share.

This idea that buying American is the way forward, is actually one that's shared by people across the political spectrum. People like Josh Hawley and Marco Rubio on the Republican side are increasingly interested in industrial policy. Donald Trump kept saying that he wanted to do infrastructure investment along these lines. He was never able to. The only significant piece of legislation he passed was the tax cuts in 2017. What Biden is doing is trying to put this vision into effect, and it is a stark departure from the bipartisan way in which economic policy was conducted years ago.

Brian: The January job numbers, to what extent is the eye-popping January jobs number of 500,000-plus net new jobs created in one month the fruits of these Biden bills and subsidies?

Idrees: It is the hangover of the COVID stimulus. You had trillions of dollars being injected into the economy, which I think a lot of people would agree were necessary to stave off the consequences of the lockdown and its economic effects. What we've seen the problem with, if you add that into the supply shocks is that you've produced inflation, and the Federal Reserve has been trying to get that under control by raising interest rates. The Federal Reserve actually probably looks at these numbers and thinks that it hasn't tightened enough, and it might continue to increase rates as a result.

Now, you mentioned the tech layoffs, and how to think about those. It's interesting, Facebook, sorry, it's called Meta now, but everyone forgets to say that, in November they announced that they were cutting 13% of their workforce, which is 11,000 jobs. In 2016, Facebook as a whole only had roughly that many employees. These companies went on a huge hiring spree over the course of the pandemic and a lot of the time, and what we're seeing now is them moving back to levels of employment that they had in 2021 or 2020

Brian: When we still considered them really big. I read the Google numbers, They went from like 90,000 employees to twice that, 180,000 employees just in the last five years before this 12,000-layoff number that we heard the other week, which makes it sound like, "Oh my God, Google is drowning." It's still like 70-something thousand more employees than they had five years ago.

Idrees: Yes, exactly. Exactly. I think that we've missed sometimes in the way that it's reported. The numbers sound very large, and you wonder whether these companies are flailing but they are just going back to hiring numbers that they had maybe even a year ago. Tech, unlike a lot of other industries, is very sensitive to the interest rates because a lot of their future value relies on innovation and gains that are realized many years in the future. When money was free, or nearly free, things were good. Now that money is tight there has to be a bit of belt tightening, but these companies ultimately, I think are going to be fine.

Brian: Mike in Brooklyn, you're on WNYC. Hi Mike.

Mike: Hi. Thank you for taking my call. I am interested in learning if your guest believes that Biden's economic agenda, the successes that he's seen over the past year or two if that has the ability to be countercyclical to any upcoming slowdown and what that would mean politically.

Brian: All right. As the Washington bureau chief, you are being asked for the first time in this segment to put your politics hat on as well as your economist hat.

Idrees: Yes, I think that countercyclical means that basically if there's a downturn in the economy that these policies will be able to push the economy out of that rut, and I think that they will. The traditional thing you do if you are in a depression, this is Keynes' idea, is that you spend money and stimulate demand and get yourself out of it. That's what the idea was for Barack Obama’s stimulus after the Great Recession. The problem is not so much whether or not it'll be countercyclical if we do have a recession, but whether or not it produces inflation in the near term, which is the issue that we're running into.

It's not whether the economy is going too slow, it's whether it's going too fast and is too hot. Actually, and I think the pace of spending is meted out over the next 10 years such that the idea is that it won't exacerbate inflation. Definitely if things were to sour in the economy as a whole you would expect some of these subsidies to help provide some lift.

Brian: What's that 10-year economic subsidy number? You were getting at it before. Do you have it at the tip of your fingers?

Idrees: I know it's something like 0.5% of GDP per year, and if you multiply that by GDP, you'll get the number. I don't have --

Brian: I think you had said something like $250 billion for subsidies for the semiconductor industry.

Idrees: Yes.

Brian: Am I remembering that right? That's over how many years?

Idrees: That's over the next 10 years.

Brian: I was thinking, if that's true, isn't that an incredible bargain for the taxpayers for all those jobs? The government is spending $850 billion, you said 250 over 10 years. The government is spending $850 billion this year alone just for the Pentagon, and twice that much this year alone for Medicare and Social Security. $25 billion this year for a generational reset of the whole economy and to revive manufacturing if it works, that's an epical bargain.

Idrees: Well, it depends on whether or not this money creates jobs only, or whether or not it incentivizes the private sector to do more. If it does do that, then obviously it is a big change. If you divide for example the $98 billion that the IRA, the Inflation Reduction Act is going to spend, if you divide that by the million jobs that it's expected to create, that's a governmental subsidy of $100,000 dollars a worker, which is a lot. Hopefully it manifests itself in innovations that produce a more productive workforce, but on the whole, direct subsidy of governmental jobs can be quite expensive.

Brian: One more call. Billy in East Orange, you're on WNYC. Hi Billy.

Billy: Hello.

Brian: Hello, Billy.

Billy: Can you hear me?

Brian: I can hear you. Can you hear me?

Billy: Oh, excellent. I'm sorry. Okay. Let me say one thing. One irony about talking about River Rouge as this massive place in the- -‘30s, 50,000 people employed. Of course, we know who owns that joint. That's Mr. Henry Ford, who was nice enough to and accept an award from Adolf Hitler in 1938, since Mr. Hitler thought Henry's creeds about Jews was so good that he actually--

Brian: Yes. Sure, but that's the 1930s. Talk about today.

Idrees: Okay. Today. We have approximately 52 million workers in the United States making $15 an hour or less, about 20 million, making $10 an hour or less. We have 20 million children going to bed hungry every night. We have a department of war with 1,000 bases approximately in 80 different countries spending over a trillion dollars a year. I think we have some really big messes because decision making is for profit.

Brian: Right. Well, you point out important things and it's a theory of everything. Billy, thank you very much. We had some callers yesterday too, when we were talking about the economy Idrees, saying that January, despite all those new jobs, was an example of the ravages of modern capitalism. Good paying jobs were disappearing like those tech jobs, low wage jobs like in healthcare, and retail, and hospitality plus gig economy jobs that don't have the benefits, like Billy was just saying, were being created, more redistribution of wealth away from the workers and toward the owners. How much do the stats that you're seeing bear that out?

Idrees: I think they're not going to be captured in a single month of jobs figures. I think that the right stats to look at are the decade long trends in inequality, the decade long trends in poverty and wages. That requires probably another hour or two of dissection to really get at the roots of those trends. But I will say that the legislation that we're talking about now is geared towards jobs and it is geared towards climate change mitigation, and there are other things, other pieces of legislation that would aim to address those problems.

One thing that I've written about extensively is the Child Tax Credit, which was implemented over the course of COVID and had the effect of reducing child poverty by 40%, which I think was a heroic coup, which didn't get enough notice. There are different legislations that deal with different problems. The Biden administration does have an issue sometimes in describing its economic agenda in theory of everything terms, which sometimes hinders comprehensibility among the general public, but I do think that there are different solutions for all these problems.

Brian: That is one of the things that I'll be curious to hear tonight. Will he propose reviving the Child Tax Credit, which we certainly have talked about on this show as having reduced child poverty by about half according to the stats that were available and it got killed by the Republicans in the Senate. We'll see if he tries to bring that back as a standalone, as one of the things that he proposes tonight. There's a lot more that we will see tonight at nine o'clock when the president gives his State of the Union address. For now, we thank Idrees Kahloon, bureau chief in DC for The Economist for talking through some of the economic backdrop for Bidenomics and the speech that he might give tonight. It was a great conversation. Thank you, very, very much.

Idrees: Great. Thank you so much for inviting me.

 

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