Opinion | How Inflation Killed Bidenomics
I started noticing in 2018 that economists I knew were receiving grants from the California-based Hewlett Foundation. These grants were part of an organized effort to develop an alternative to neoliberalism, an intellectual framework that Hewlett said had “outlived its usefulness.” Hewlett defined neoliberalism as a paradigm focused on free markets, limited government, maximum growth and individuals competing to improve their welfare.
This paradigm, Hewlett argued, led to a mistrust of government, fear of public investment, drive for deregulation and preference for free trade. It became prominent after the stagflation of the 1970s, which undercut the credibility of Keynesian demand-side macroeconomic policy. Hewlett argued that more recent developments—wage stagnation, wealth inequality, and some negative effects of free trade—had weakened the appeal of neoliberalism. It was time to birth something new, and the foundation would be the midwife.
In December 2020, a month before President Biden took office, Hewlett published an assessment of its program’s first two years. To develop the new economic paradigm, the foundation had funded academic centers and left-leaning think tanks. Some denizens of these organizations, such as Heather Boushey of the Washington Center for Equitable Growth, entered the Biden administration, while others—such as Felicia Wong of the Roosevelt Institute and Barry Lynn of the Open Markets Institute—served as influential outside voices.
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