From Editor Michael Tomasky’s “Yes, the Inflation Reduction Act Is a Big Effing Deal” at The New Republic: ”

So Kyrsten Sinema didn’t back out (although of course she threatened to),no other Democratic senator got Covid-19, and the Inflation Reduction Act passed the Senate Sunday afternoon. Passage is assured, we think, in the House, so it should soon become law….The bill is only a portion of what should have been, true. But here’s the big picture on why even this whittled-down bill is, as Joe Biden once said of another historic but compromised piece of legislation, “a big fuckin’ deal.” In a nutshell: It begins to turn 40 years of bad economic conventional wisdom on its head by asserting that the government has a role in structuring markets, promoting growth, and guiding industrial policy.

Tomasky, author of the forthcoming “The Middle Out: The Rise of Progressive Economics and a Return to Shared Prosperity,” reviews the history of Democratic economic policy in the post WW II period, and writes that “today, the Democratic Party is a different animal than it was a decade ago. It’s very frustrating that Build Back Better Act, or BBB, didn’t pass, but I sometimes look at it this way: Of the 271 elected Democratic legislators in Congress, all but two or three either did vote for a $2.2 trillion version of BBB (in the House) or were prepared to vote for it (in the Senate). That would not have been remotely true just five years ago. The Democratic Party has embraced an economic populism from which there is no turning back.” Further,

So that brings us back to the Inflation Reduction Act, IRA. Yes, I wish it were bigger and contained some of the key elements of BBB like subsidized childcare and Medicare expansion and housing. Yes, that sop to Joe Manchin on fossil fuels is very unfortunate. And Republicans stripping out the insulin provision for non-seniors is monstrous, except that between killing abortion rights and keeping insulin prices high, they sure seem intent on handing Democrats opportunities to hold their majorities.

But whatever it doesn’t do, the IRA does this important thing: It establishes the principle that the government has a role to play in setting industrial policy and creating growth, and in determining what kind of growth we want. That’s why the climate investments in the bill are so important. Over the weekend, I read a National Bureau of Economic Research paper that I’m told has been making the rounds in the Biden administration that lays out a case for attacking climate change through direct subsidy of clean-electricity generation (as opposed to putting a price on emissions, like a carbon tax, which the paper also finds would be productive but for which there aren’t the votes in Congress). The IRA invests in decarbonization in every sector of the economy, with $10 billion directed toward the building of clean technology manufacturing centers and $20 billion toward construction of clean vehicle manufacturing facilities.

If you want to dive deeper into all this, read the important speech that Brian Deese, the director of the National Economic Council and the person really driving Biden administration economic policy, delivered in June to the Atlantic Council on the administration’s industrial strategy. He talked about how inequality is slowing growth. This is a key point. Conservatives have spent the past four decades arguing that growth is all that matters, and inequality is a byproduct of growth and is thus inevitable. They have that, and basically everything, backwards.

Dees also lays out the five-point strategy for promoting equitable growth: supply-chain resilience, targeted public investment, public procurement, climate resilience, and equity (“equity” is government lingo for making sure historically underserved groups share in the bounty this time). It’s a strategy that can both modernize the economy and invest in the middle class.

This is exactly what the United States needs. It’s a tragedy that Sara Gideon and Cal Cunningham raised and spent all those millions and failed to win their Senate seats. If they’d won, Biden would have had the votes for $2 trillion or so, it would have passed a year ago, and most Americans still wouldn’t even know who Joe Manchin and Kyrsten Sinema are. They lost, and we are where we are. But let’s not allow what might have been to make us too cynical about what is. The IRA is historic.

Tomasky concludes, “The right wing doesn’t believe there is such a thing as the common good. I do. Joe Biden does. Society is not just the sum of 330 million individuals pursuing their self-interest. Someone has to steer the ship. We can’t do it as individuals any more than people who live along a certain roadway can pool their resources to repave it. Private enterprise, which puts profit first, won’t fill these needs, as has been shown repeatedly over the decades. Only government can. The climate investments in the IRA fulfill this important social principle. Let’s hope they’re the first of many such investments over the next several years.”