Democrats are panicking over a prediction by a former economic adviser to President Barack Obama that the country’s fiscal outlook will rapidly improve in very short order now that states are reversing coronavirus-related lockdowns.
The lockdowns have led to nearly 40 million Americans being thrown of work as governors shut down “non-essential” businesses, leading to sharp upticks in unemployment claims, long lines at food pantries, and the permanent closure of many small and larger retail outlets.
All said, however, the economy is poised for the rebound of all rebounds, and that has Democrats petrified because they were counting on keeping the economy in the tank to help destroy President Donald Trump’s reelection chances, Politico reported.
Under the headline, “The general election scenario Democrats are dreading,” the outlet quoted former Obama economist Jason Furman, who told leaders from both political parties last month, “We are about to see the best economic data we’ve seen in this history of this country,” as masses of Americans return to their jobs and new ones sprout up as the Trump economy roars back to life.
The outlet reported that Furman “laid out a detailed case for why the months preceding the November election could offer Trump the chance to brag — truthfully — about the most explosive monthly employment numbers and GDP growth ever.”
Furman’s counterintuitive pitch has caused some Democrats, especially Obama alumni, around Washington to panic. “This is my big worry,” said a former Obama White House official who is still close to the former president. Asked about the level of concern among top party officials, he said, “It’s high — high, high, high, high.”
And top policy officials on the Biden campaign are preparing for a fall economic debate that might look very different than the one predicted at the start of the pandemic in March. “They are very much aware of this,” said an informal adviser.
This fear is likely what is driving the new anti-science, continued-lockdown narrative from blue state governors and mayors who have continued moving the coronavirus reopening goalposts from the initial ‘just give us a couple of weeks to flatten the curve’ pleas.
Furman is forecasting a “V” recovery – that is, one that rebounds as sharply as it collapsed, not a gradual upward slope.
In fact, Furman says the economy is already rolling again, as consumption and hiring are beginning to jet skyward “in gross terms, not in net terms.”
The comeback “can be 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,” he said, according to Politico.
“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,” he added.
The Trump administration has made a similar “V” prediction. Senior adviser Jared Kushner said in late April that “the hope is that by July the country’s really rocking again.”
If the Memorial Day remembrance is any indication – where reopened states featured crowded venues as the weather cooperated – then the economy’s already on the backside of the ‘V.’
No one believes that second-quarter economic performance numbers – the April-June timeframe – will be anything but horrible. But after that, beginning with the third quarter, many economists including a former Obama adviser see nothing but positive growth.
All in all though, if the Democrats are said to “dread” this comeback, what does that say about them and how they really feel about the 40 million Americans who have lost livelihoods?