Politico unleashes a bombshell about what's happening to our damaged economy
In 2020, America's economy went from the strongest in the world to free fall. The historically low 3.5% unemployment rate in February grew to 14.7% in two months. In a bombshell article, however, Politico reveals that we should expect explosive economic growth. It reports, too, that the Democrats hate this good news.
The optimistic news about the economy doesn't come from Trump, a happy warrior who is promising that America's greatest days are still to come:
Stock Market up BIG, DOW crosses 25,000. S&P 500 over 3000. States should open up ASAP. The Transition to Greatness has started, ahead of schedule. There will be ups and downs, but next year will be one of the best ever!— Donald J. Trump (@realDonaldTrump) May 26, 2020
Instead, the economic optimist is Jason Furman, who spent three and a half years as the chair of Obama's Council of Economic Advisors. On Tuesday, Politico reported that Furman has been riling up Democrats by telling them that America is trembling on the verge of its greatest economic boom ever:
In early April, Jason Furman, a top economist in the Obama administration and now a professor at Harvard, was speaking via Zoom to a large bipartisan group of top officials from both parties. The economy had just been shut down, unemployment was spiking and some policymakers were predicting an era worse than the Great Depression. The economic carnage seemed likely to doom President Donald Trump's chances at reelection.
Furman, tapped to give the opening presentation, looked into his screen of poorly lit boxes of frightened wonks and made a startling claim.
"We are about to see the best economic data we've seen in the history of this country," he said.
Furman argues that the downfall that preceded today's economy is different from that preceding both the Great Depression and the 2008 Recession. As he sees it (correctly, I think), our economy didn't collapse from systemic problems. Instead, we had the equivalent of a nationwide natural disaster. Fundamentally healthy economies usually recover well from such disasters:
[Beginning in mid-April, c]onsumption and hiring started to tick up "in gross terms, not in net terms," Furman said, describing the phenomenon as a "partial rebound." The bounce back "can be very very fast, because people go back to their original job, they get called back from furlough, you put the lights back on in your business. Given how many people were furloughed and how many businesses were closed you can get a big jump out of that. It will look like a V."
What should also make the economy explosive is Trump's using the pandemic to cut back business- and job-killing regulations.
The second bombshell Politico detonates, which shouldn't surprise us, is that Democrats are unhappy with Furman's optimistic economic prediction. Politico quotes one former Obama official saying of the promised economic bounce, "This is my big worry."
The same official, who still hangs out with Obama, says that for other party officials, any economic improvement also occasions "high, high, high, high" concern. Biden's team members are worried as well because they had hoped to run on a failing economy.
The recovery will be rocky because the economy will reflect businesses that are gone forever, as well as the Democrat governors' seeming determination to cripple their states' economies. Nevertheless, the overall economic numbers should improve dramatically:
"In absolute terms, the economy will look historically terrible come November," said Kenneth Baer, a Democratic strategist who worked in a senior role at the Office of Management and Budget under Obama. "But relative to the depths of April, it will be on an upswing — 12 percent unemployment, for example, is better than 20, but historically terrible. On Election Day, we Democrats need voters to ask themselves, 'Are you better off than you were four years ago?' Republicans need voters to ask themselves, 'Are you better off than you were four months ago?'"
One progressive Democratic operative pointed out that recent polling, taken during the nadir of the crisis, shows Joe Biden is struggling to best Trump on who is more trusted to handle the economy. "Trump beats Biden on the economy even right now!" he said. "This is going to be extremely difficult no matter what. It's existential that we figure it out. In any of these economic scenarios Democrats are going to have to win the argument that our public health and economy are much worse off because of Donald Trump's failure of leadership."
In 2018, leftist TV host Bill Maher dreamed of a recession that would destroy Trump:
The Democrats' mistake was forcing a recession too early in the game. It's possible that they hurt their states irreparably, even while assuring that Trump will still benefit from a generalized nationwide post-recession recovery.