Only a year ago, Joe Biden was seen as an aging if likable establishment figure whose main claim to the US presidency was that he wasn't Donald Trump. Biden himself suggested he might be a "transitional president" rather than a transformational one: Elect me, get rid of the widely hated Trump, and then we'll figure out how to fix our country. Or perhaps my successor will.
But that isn't the Biden who has shown up this year—at all. In a May 27 speech at Cuyahoga Community College in Cleveland outlining his $6 trillion budget proposal, Biden talked about "creating a new paradigm": resurrecting America's beleaguered underclass with a combination of major education, health care, and tax proposals and a new brand of industrial policy and economic nationalism that will, eventually, propel the United States past China and other rising competitors.
If he is able to follow through on this plan—by no means a given—the president will cast onto history's ash heap the ruling doctrine of the past 40 years: Reaganomics, or "trickle-down economics," as Biden calls it. Far from acting as a placeholder in US presidential history, Biden is setting his sights high, as revealed by the name he has given his program: the "new bargain," consciously echoing Franklin D. Roosevelt's New Deal. Or perhaps we should call it Bidenomics.
The truth is, Biden always had big plans of his own. By the accounts of some of his closest advisors, the new president has long been a pent-up populist who spent his eight years as vice president—on top of 30 years of vying for the White House—pushing hard for a major government expansion of support for America's long-suffering working class.
One longtime Biden aide, the economist Jared Bernstein, confirms none of this thinking is new for the 78-year-old president: Biden has long believed US global leadership is entirely dependent on US economic leadership. He also believes its edge has been lost through decades of obsessive deficit reduction and government paralysis, leading to rapidly declining public investment and an undereducated middle class that is desperate for affordable housing, decent public transit, and adequate child and elder care.
"He's enacting a set of core principles that he's carried with him forever, at a moment that invites precisely that kind of action," said Bernstein, who currently serves on Biden's Council of Economic Advisers. "What he's talking about is making necessary investments so we don't just show up as good GDP growth and a stock market but that we are globally competitive to the point where the prosperity we're generating is realized not only by the top 1 or 2 percent but all the way down to the lowest-income communities."
"The private sector, by itself, isn't going to solve the biggest challenges we face."
That means correcting inequities that have festered since the Reagan era—and frankly embracing a national industrial policy for the first time in decades. "He is saying we need a different social contract," said a senior administration official who is directly involved with developing the policy. "The private sector, by itself, isn't going to solve the biggest challenges we face—extreme inequality and social disparities, the climate crisis, people dropping out of the labor force, the narrowing of our technological edge."
Much of this government-directed, spread-the-wealth thinking comes out of Biden's more than three decades on Capitol Hill. Jim Greene, a longtime Senate advisor to Biden, said the president's thinking goes back to the opening of China in the 1980s and the fall of the Berlin Wall, which thrust millions of new low-wage workers into the global market. "He knew that would put US labor on the back foot," Greene said. Biden watched as his conservative Senate colleagues did little to invest in retraining and upgrading America's workforce, and while productivity and GDP surged, middle-class incomes did not.
Not only that, but the declining middle class took on a greater burden of taxes during the decades after Ronald Reagan. According to government data, changes in US tax laws saw labor's proportion of taxed federal revenue leap from 50 percent in 1950 to more than 80 percent today, and at the same time taxes on corporations fell from 30 percent of GDP to less than 10 percent now—making America's rich much richer and the working class poor and desperate. Beyond that, with government starved of funds, public research and development fell from 2 percent in the 1960s to a meager 0.7 percent today—making the United States one of the few advanced nations where public investment actually dropped in the past quarter century. Under Biden's plan, anyone earning more than $400,000 a year will see their taxes increase to pay for his grand plans, while those below that threshold will not. "This is about rebalancing the burden between labor and [corporate] profits," said the senior administration official involved with formulating the plans.
In response, Biden has proposed a revolutionary new global corporate income tax, and in his first speech to Congress on April 28, he trotted out his third $2 trillion plan in a hundred days and boasted that his infrastructure spending scheme would be "the largest jobs plan since World War II." In all, Biden is proposing about $7.5 trillion in new spending, nearly double what the United States spent in inflation-adjusted dollars to win World War II. His budget plan is heavily focused on a flood of new government-led R&D and infrastructure spending and assistance to lower-income Americans. That includes massive subsidies for free community college and health and child care, as well as additional federal funding programs for schools with large concentrations of less advantaged students.
Biden's ambitious plans for reorienting the US economy away from the billionaires and back toward the middle class could also shift the ideological axis globally. For decades, the rest of the planet has had to endure stern lectures from the leader of the free world about the virtues of letting markets rip and shoving government out of the way. Washington's tireless advice was simple: Privatization, free trade, and market discipline will lead to a more prosperous, globalized world. America's counsel was so cut and dried it even assumed a stuffy name: the Washington Consensus.
As senator and then vice president, Biden mostly went along—often reluctantly, his aides say—with the Washington Consensus crowd, the centrist Democrats who acted almost like neo-Reaganites in their distaste for too much government in the wake of America's Cold War victory and who tended to discredit centralized economies. Both his Democratic predecessors, Bill Clinton and Barack Obama, also bowed to the popular demand for smaller government, lower corporate taxes, and tighter budgets, with Obama once lamenting that it was hard "to change the narrative after 30 years."
Now other nations are watching in amazement as blue-collar Joe Biden from hardscrabble Scranton, Pennsylvania—as he likes to portray himself—throws it all out the window in favor of a new kind of quasi-protectionism and spending plans so ambitious they have quieted even the petulant progressives in his own party. In only a few short months, the Democratic Party has learned to stop worrying and love big government again, enthusiastically endorsing Biden's new budget.
And that's just for starters: The new president is also embracing a new economic nationalism unheard of since the grimmest days of the Cold War—only this time, the bogeyman is China rather than the Soviet Union. Whether the issue is COVID-19 or climate change, the United States will lead the way and "win the 21st century" in the global competition with China, Biden said in his first address to Congress. In his May budget speech, Biden elaborated on this point, saying America's global leadership role depends entirely on the country's economic resurgence. And that in turn depends on major government investment in every kind of infrastructure, from interstate highways to internet connectivity to new climate-saving (and job-creating) technology. "Like when we brought electricity to every household in the country in the 1930s or we connected the country through the Interstate Highway System in the '50s," he said.
"You know what the basis of foreign policy is in our stature in the world? One thing: our economic prowess," Biden said. "We must be No. 1 in the world to lead the world in the 21st century. It's a simple proposition." So far Bidenomics may be working: In early June, the World Bank nearly doubled its January projections of US GDP growth from 3.5 percent to 6.8 percent, the fastest pace since 1984.
Still, Biden's big correction—especially his inward, intensely America-first focus—has some globalists concerned. For one, the protectionist themes that Biden sometimes sounds tend to undercut good economics. "There is simply no reason why the blades for wind turbines can't be built in Pittsburgh instead of Beijing. No reason. None," Biden declared on April 28. Forget the suddenly antiquated idea that other nations might build such things more cheaply or better, as US economists once argued in favor of promoting globalization, open markets, and national comparative advantage. In May, Biden again declared that "100 percent of [government] investment is going to be guided by one principle: Make it in America. Make it in America."
Perhaps the most worrisome issue is if the United States doesn't stand up for globalization and open markets, who will? Many other countries never much liked all that free trade anyway. China is already warning of a "vicious life-or-death struggle that could turn the world into a battleground," as the Global Times, an official Beijing mouthpiece, put it in February. And there are indications that the European Union is preparing to respond to Biden's "Buy American" plan with a "Buy European" riposte. EU leaders were also irritated by Biden's apparent willingness to keep in place Trump's steel and aluminum tariffs (which are popular among steelworkers' unions, whose support Biden cherishes).
If the United States doesn't stand up for globalization and open markets, who will?
"In Europe, there could be a doubling down on strategic autonomy," said Erik Brattberg of the Carnegie Endowment for International Peace. "The big question mark to me is not whether we're going to see more industrial policy—that is a certainty. It's whether the allied states can work together at all."
Ultimately, Bidenomics could set the stage—in a Smoot-Hawley sort of way—for protectionist fervor to spread around the globe. Critics have belittled Biden's approach as Trump's America First agenda but with a smile—Trumpism without Trump. Certainly the nationalism and anti-China rhetoric sound familiar—and are just as dangerous to global prosperity, some critics say.
"A strong US economy should not be a threat to China, just as Chinese economic growth need not have been damaging to America," said Dani Rodrik, a Harvard economist who is president-elect of the International Economic Association and has been a longtime skeptic of globalization. "Biden's framing is damaging insofar as it turns good economics at home into an instrument of aggressive, zero-sum foreign policy directed at China. Can we blame China if it tightens restrictions on US corporations as a defensive measure against the Biden plan?"
The senior administration official disputes that Biden is a protectionist at all, though conceding that "there is a difference between the way we're thinking about trade compared to recent administrations."
"The reality is that not all trade is good trade," the official said, alluding to the state subsidies that create unfair trade from nations such as China. "We want to create a global trading environment in which we're competing on our ability to attract and develop the best talent, commercialize the best ideas, and ultimately create and innovate for the benefit of the US and the world. … That is not protectionist."
Other economists agree that Biden is not exactly embracing Trumpian protectionism, even as he puts government in the lead. "I don't see him arguing that we shouldn't import generally from other countries (as Trump did)," said Wendy Edelberg, a former chief economist at the Congressional Budget Office. "I see him saying that there is technology and capabilities that we want to make sure we develop here. That is more industrial policy than protectionism."
David Autor, a leading trade economist at the Massachusetts Institute of Technology, said Biden may be avoiding the worst protectionist mistakes of his predecessor: "The Trump administration wanted to compete with China not by investing in the US but by taxing the Chinese. This is false economics."
Rather than new tariffs, Biden likes to speak of the government's greatest investments—without the usual caveats about the superiority of private investment: the transcontinental railroad and interstate highways and victory in the 1960s space race. "Throughout our history, if you think about it, public investment and infrastructure has literally transformed America," the president said in his April 28 speech. Biden also touted the Defense Advanced Research Projects Agency, which "led to everything from the discovery of the internet to GPS and so much more." Biden now wants to apply the same government-in-the-lead idea to beating back diseases like COVID-19.
Biden's American Families Plan for education, meanwhile, goes beyond government-funded free high school, he said, and adds two additional years of preschool along with two free years of community college. When Sen. Bernie Sanders pitched the idea of free college during the 2020 campaign, it was dismissed as radical and undoable. No more, apparently—not with China breathing down America's neck. "Twelve years is no longer enough today to compete with the rest of the world in the 21st century," Biden said in April.
On this score, aides say, the president has been deeply influenced by his wife, Jill Biden, who has taught for years at Delaware Tech and other community colleges. As Biden himself declared in his Cuyahoga Community College speech: "Jill has a constant refrain: 'Joey, any nation that out-educates us is going to outcompete us.' It's a simple proposition."
"The Biden administration has launched a bold and long-overdue economic transformation," Rodrik said. "But those who are looking for a new economic paradigm should be careful what they are wishing for."
Indeed, it's fair to ask: How much of Biden's response is really new? In many ways, it has something of a musty odor about it—as if America's oldest inaugurated president has been rummaging through an ideological mothball closet from the 1970s. In part, the ideas he has pulled out are Democrats' old answers to the excesses of free market fervor. Biden and other populists have mainly been leading global opinion back to a place where globalization was about 40 or 50 years ago—an infant and mistrusted phenomenon best kept in check. We may, in other words, be headed back to some version of the dreaded 1970s, minus the runaway inflation (though it seems to be edging up) and the bad hair. Back then, the problem was "stagflation." Now, it's "secular stagnation." In both cases, growth is lagging.
The biggest difference: China has replaced the Soviet Union as the mechanical rabbit to America's resurgent greyhound economy.
If the present has thus become the past, then conventional wisdom is settling into a kind of post-Trump intellectual equilibrium that one might call the "new-old world order." This was the real subtext to Biden's speech to Congress, in which he re-embraced an idea that many economists had once declared to be economically and geopolitically dubious: that nations actually compete with each other for markets the way corporations do. By restoring the idea of national competition, Biden is seeking to restore the necessity of government.
By restoring the idea of national competition, Biden is seeking to restore the necessity of government.
Whether or not the president's grand plans are really new—or economically and geopolitically sound—the Biden reckoning has been a long time coming. His aides say Biden was only waiting for his moment to completely redirect the US economy—and the disastrous Trump presidency and COVID-19 pandemic provided it.
"We're at an inflection point in American history. It happens every several generations," Biden said in his speech at Cuyahoga Community College, repeating themes he has sought to sell for months.
Biden himself has acknowledged that the pandemic—and Trump's disastrously inept response—afforded him the opportunity to reinvent the whole idea of government because it "exposed just how badly we need to invest in the foundation of this country."
"He always had a muscular view of government intervention," said Austan Goolsbee, who served as chair of the Council of Economic Advisers under Obama and was an advisor to Biden. "And what's happened is that we've gone through a wild pandemic and economic collapse that put all the pathologies of our system in front of everyone's face—problems that were always there but have now become glaring problems." Inequality, to begin with: the difference between wealthier, educated people who are able to do their jobs from home and low-income people who generally can't; a health care system that is still largely tied to employers, which means some 5 million people have lost their insurance; and the devastating loss of manufacturing and service jobs, first in the 2008 Wall Street-generated Great Recession and then in the pandemic.
"All of that changed the American people's idea of what the role of government should be," Goolsbee said.
Biden's embrace of government intervention entered high gear as the Great Recession exposed the harsh inequalities in US society, Goolsbee said. Until the crash, the reality of stagnating middle-class income had been obscured by the false dawn of the mid-2000s mortgage mania, when the poor felt rich but in truth were only more indebted. When that all came to an end abruptly, Biden saw that the United States had come out the other side of the Great Recession a very different economy altogether, with most of the recovered wealth flowing to richer Americans while ordinary people were drowning in mortgage debt.
Thus it was Biden, Goolsbee said, who in 2009 pushed for a grand social mobilization behind new infrastructure programs like a smart energy grid and who advocated an all-out rescue of the Big Three automakers—General Motors, Ford, and Chrysler—because he was concerned about the workers and small businesses down the line that would go under. Biden also regularly harangued Obama about strengthening the Dodd-Frank financial reform law in favor of the underprivileged over the big banks, Goolsbee said. "He said, 'You've got to put the Consumer Financial Protection Bureau front and center. And we have to make mortgages cheaper.' It was in the same populist mode."
At one point, Goolsbee added, Biden became so impassioned at a cabinet meeting about a proposal to restrain reckless bank trading that Obama put his hand on the vice president's arm, saying, "Easy, Joe. We'll get to that."
Biden and other Democrats also came to realize that they had effectively sacrificed the US middle class to unfair competition from China's state-subsidized low-wage workers over the past quarter century. At the same time, Republicans found their identity as the party of small government stripped away by the populist Trump, who still rules the GOP roost from his retreat in Mar-a-Lago. The coup de grâce to small-government ideology finally came a year ago in the form of the COVID-19 pandemic, which shut down the private economy. So the path was wide open to a new need for government intervention—and a new way of thinking.
Added Goolsbee: "Biden comes along and says, 'I can do this. You want muscle? I've got the muscle.' … And he's going to sell it. He's really good at that."
Biden has a lot to sell, a razor-thin vote margin in the Senate to make it happen, and not a lot of time to do it as recalcitrant Republicans—who deride his spending plans as rampant socialism—gear up to take back at least one house of Congress in the 2022 midterm elections.
Biden has a lot to sell and a razor-thin vote margin in the Senate to make it happen.
For many Republicans, of course, harking back to that pre-Reagan era of the '70s triggers their worst fears. Biden's big-government approach is precisely the sort of "socialism," they say, that they warned about during the 2020 campaign. Responding to the White House's proposed $1.8 trillion American Families Plan, Senate Minority Leader Mitch McConnell said Biden's "daydreams" of a "sweeping socialist legacy" will "never happen."
The Republican wall of opposition is another factor in Biden's ambitious rush to spend. What he also learned from his years as Obama's veep was that his moment for change may be brief if Republicans win the midterms in 2022; after the same happened to Obama in 2010, he found his programs blocked at every turn. Right now, Biden has the votes to pass his big budget bills—just barely in a 50-50 Senate (where Vice President Kamala Harris delivers the tiebreaking vote). But the Republicans have structural advantages in both the House of Representatives and Senate; the party controls and is using its majorities in statehouses and governorships across the country to pass voting laws that solidify its edge going into 2022.
Most Republicans no longer seem to care much about free market ideology, only loyalty to Trump. That was the message that came out of the May 12 ouster of Trump's most vocal critic, Rep. Liz Cheney, from the House leadership and her replacement by the more moderate (but zealously Trump-loyal) Rep. Elise Stefanik.
And if Trump still dominates the party, then so does his neo-nationalist worldview. If there's any new consensus in a polarized Washington, it's that nearly everyone on both sides of the aisle seems to love to hate China. As recently as the early Trump years, centrist pundits in both parties were appalled at the China-bashing of hard-liners such as Peter Navarro, Trump's chief China advisor, and US Trade Representative Robert Lighthizer, who in May 2020 called for a reversal of US economic offshoring in response to China's "predatory trade and economic policies."
Now Biden indulges in the same rhetoric with scarcely a pushback or a mention of its pitfalls. On the contrary, even in the face of gridlock over infrastructure spending, the Senate on June 8 voted overwhelmingly to pass the US Innovation and Competition Act, which will allocate nearly a quarter trillion dollars to counter China's rise, funding what Biden called "tomorrow's most vital technologies—from artificial intelligence to computer chips to the lithium batteries used in smart devices and electric vehicles—right here in the United States." Here, too, Biden's approach is a stark departure from his Democratic predecessors, especially when it comes to recasting the role of China as America's No. 1 bogeyman. Obama, for example, repeatedly said that "the United States welcomes the rise of China," and he declared at a town hall in Shanghai in 2009 that the whole idea of national competition was "no longer a zero-sum game." Clinton, who fancied himself the globalization president, consistently spoke of the mutual, stabilizing benefits of the so-called G-2 relationship with China.
"The Biden plan has the potential to be transformative for the US and set an important example for other nations to follow," Harvard's Rodrik said. "But to achieve its potential, it must avoid outdated Cold War tropes and misleading state versus market dichotomies. Today's problems—climate change, the disruption of labor markets due to new technologies, and hyperglobalization—require new solutions."
Most economists still agree that trade is not a zero-sum game—everyone generally benefits from free trade—but this established wisdom may be swept away by the new wind of economic nationalism. "There's been a serious realignment of thinking about China as a competitive threat and the importance of restoring middle-class jobs for non-college workers," MIT's Autor said.
More bluntly than any president since Lyndon B. Johnson, Biden is intent on raising up the underclass at the expense of the richest 1 percent, calling his American Jobs Plan a "blue-collar blueprint to build America" and noting that nearly 90 percent of the infrastructure jobs he's proposing do not require a college degree.
More bluntly than any president since Lyndon B. Johnson, Biden is intent on raising up the underclass.
Despite concerns from Republicans that Biden's generous subsidy plans for child care only incentivize family caregivers to stay home rather than work—harking back to Reagan's infamous critique of "welfare queens"—some experts say he is in fact correcting long-festering economic inequities. "Cash-based child benefits are among the most effective anti-poverty policies in any modern government's tool kit, producing social benefits many times their costs," said Samuel Hammond of the libertarian-leaning Niskanen Center.
Autor, one of the economists credited with documenting the "China shock" to US middle-class jobs in the last couple of decades, said the new Bidenomics is a radical mix of good and bad ideas. Biden's embrace of domestic content restrictions—like those wind turbine blades—is only "bound to raise costs and not really benefit anyone other than a few well-positioned companies," he said. So, too, the demonizing of China as a purely competitive threat to American jobs may come back to haunt the president.
"Generally, the wishful thinking that says that we can maintain leadership by holding others back is just foolish or worse," Autor said.
It may also be somewhat risky as China turns ever more aggressive and autocratic, with President Xi Jinping recently anointing himself as "helmsman," an honorific no Chinese leader since Mao Zedong has enjoyed.
Rodrik agrees. "The fear that the US may be losing its edge in ballistic missiles and in the space race to the Soviet Union helped catalyze a national technological mobilization in an earlier era. But there is much less reason for such fearmongering today," he said. "Doing so is unlikely to buy much Republican support, given the intense polarization at present."
On the other hand, Autor, Rodrik, and other economists applaud Biden's ambitious (and expensive) plans to reinvest in US human capital by providing lower-income child care; to fund education from prekindergarten through 12th grade schooling and beyond, in addition to better supplying vocational training via community colleges; to modernize US infrastructure; and to restore US leadership in R&D and innovation.
"There are good ways to use the China challenge to modernize US economic policy and institutions. There are foolish ways as well," Autor said. "The right steps will require substantial public investment and some actual industrial policy, a term that's been almost unsayable since the 1980s. … It's going to take a big push, or it won't gain enough momentum to be self-sustaining. The Biden administration seems to know this." The question is, though, is the country ready for Bidenomics?
Some economists fear what Rodrik calls "overreach" by Biden—provoking yet another pendulum swing "between excessive optimism and pessimism about the role of the government in the economy." "Pendulum swings in the balance between markets and government have not been helpful in the past," Rodrik said. "Each excessive swing in one direction has prompted another extreme correction down the line." The only way Biden can break this cycle, he said, is to demonstrate that "markets and governments are complements, not substitutes—that each works better when the other pulls its weight."
That means that "the government will have to work together with markets and private businesses, as well as other stakeholders such as unions and community groups," Rodrik said.
Other economists, though, welcome his ambitious thinking. It has been at least a decade or so since globalization crashed into a ditch with the Great Recession. Suddenly, all those neat global interconnections that were going to make everyone more prosperous brought down the global economy, making the rich richer and the poor poorer. And as the smoke cleared from the disaster, out popped Trump, Boris Johnson, Narendra Modi, Jair Bolsonaro, Viktor Orban, and other nationalists who preached, each in his own way, a new kind of illiberalism. At the same time, economists began edging their way backward as well, finding new ways to question rather than promote globalization while there was no new consensus on how to regain broad-based prosperity—to restore the fabled "American dream" of opportunity for all.
Consensus now seems further away than ever. One of the hazards of Bidenomics is that Biden may have the votes to get a lot of his spending plans passed but not to revamp the tax code to pay for them by making the wealthy and corporations dole out more. "I do think we are reaching a point where we need to start thinking about the debt," said Mark Gertler, an economist at New York University. "I would prefer that Biden focus more narrowly on getting an infrastructure bill passed."
That plainly is not going to happen, although Biden is also trying to get the rest of the developed world, especially Europe, to go along by proposing a global minimum tax on corporate profit. Curbing corporate tax havens abroad, Biden hopes, will help him raise the corporate rate at home. As Bernstein put it: "What Biden recognized is that in fact we already have a shadow industrial policy in our tax code and it very heavily favors wealth over work because those with the most connected lobbyists were able to write the tax laws." An explosive new report by ProPublica reveals that some of America's wealthiest billionaires paid a scant 3.4 percent in taxes in recent years.
Yet while Biden may be able to put through many of his spending plans, without dismantling the Senate filibuster rule that requires a supermajority of 60 votes he may well fail to change the underlying problem: a tax code that raises up the rich.
Has Biden really rid his party of Reagan envy?
If the unequal tax code is not redressed, the question ultimately is how deep and enduring Biden's "inflection" will be. Has he really rid his party of Reagan envy? So far the polls show support across party lines for Biden's agenda, but how long will that outlast the pandemic and economic downturn?
Back in January 2008, when Obama was battling Hillary Clinton for the Democratic nomination, then-candidate Obama stunned many of his supporters by praising Reagan as a transformational president—while Bill Clinton wasn't, Obama added cuttingly. "Ronald Reagan changed the trajectory of America in a way that, you know, Richard Nixon did not and in a way that Bill Clinton did not," Obama said then. "He put us on a fundamentally different path because the country was ready for it."
The greatest political danger, some economists say, is that Biden will do little but provoke right-wing opposition in the end—especially if government debt and inflation get out of control (as happened in the 1970s, setting the stage for Reaganomics), creating a 2022 midterm backlash.
Some Biden aides agree that selling this idea will be the test of success—just as they acknowledge that "winning the 21st century" isn't mainly about narrowing the competitive gap with China but rather narrowing the inequities in America's own economic system. Bidenomics in the end is about making America's billionaires, far more than Beijing, pay their fair share.
Biden himself insists that he doesn't intend to displace the global market system—only to moderate it. "I'm a capitalist," the president said in May. "I'm not looking to punish anyone or to say business shouldn't be able to make a significant profit. … I just think, after decades of workers getting a raw deal, it's time they be given a fair shake."
Michael Hirsh is a senior correspondent and deputy news editor at Foreign Policy. Twitter: @michaelphirsh
Disclaimer: This article first appeared on Foreign Policy, and is published by special syndication arrangement.