Why a Former Obama Economist Just Offered the Biden 2020 Campaign a Very Stark Warning

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Posted: May 26, 2020 1:25 PM
Why a Former Obama Economist Just Offered the Biden 2020 Campaign a Very Stark Warning

Source: AP Photo/Evan Vucci

Some who aren’t fixing bayonets in this war between left and right, liberal and conservative, Democratic and Republican are rightfully disgusted by the behavior of Congress during this COVID outbreak. The coronavirus has sparked multiple relief packages that always run into a roadblock in the Democratic-controlled House. Speaker Nancy Pelosi doesn’t want these bills to sail through. These are wins for the Trump White House during an election year. She has to act like an idiot and pump the brakes while millions of Americans languish in unemployment. The virus has shut down the economy, though the vast majority of states are starting to re-open, and perhaps some of us overreacted to the initial outbreak. As more data from the CDC and elsewhere trickles in, like the virus no longer being easily spread on surfaces, that appears to be the case. It’s time to re-open. Even in New York City, there could be protocols for a soft phase one re-opening, as most of the deaths are grounded in nursing homes, people who are already inside anyway. Those places have been turned into graveyards, thanks to Gov. Andrew Cuomo’s asinine policy of forcing these locations to accept COVID-positive patients, but that’s a tale for another time. 

We’re about to experience a massive economic boom, folks. And it will occur in the key months prior to Election Day. It’s a V-shaped recovery. And this isn’t just the Trump economic team making these projections. Former Obama economist Jason Furman has gone on record to declare, “We are about to see the best economic data we’ve seen in the history of this country.”

This has reportedly sent his former colleagues in the Obama administration into panic mode. The concerns among Democrats are high. With Donald Trump handily beating Sleepy Joe Biden on handling the economy and besting him in battleground states, this is an election-killer. The fact that Democrats want to extend these stay-at-home orders absence of evidence or justification only makes this more of a death blow to Democrats, as voters will correctly see them as being the biggest obstacles to them getting back to their jobs. The reason will be painfully transparent: they want to prolong economic turmoil to increase their odds of winning an election. Well, that won’t happen when people can see you telegraphing the easily decipherable political play here, and with someone who needs to be reminded to wear pants, what state he’s in, and what office he’s running for this year. Oh, and have we already forgotten old man Joe decided to lecture black voters last week. Yep, if you don’t vote Joe in 2020, you’re not black—says the old white guy. 

Furman also had a warning for the Joe Biden team as well. Don’t make projections that will be easily blown up, like saying the situation we’re in, economically, is worse than it was during the Great Depression. Politico has more, but this is the 2020 situation that is keeping Democrats up at night. Granted, as with any economic issue, there will still be lingering areas for the Trump administration, if re-elected, will need to solve. There still will be higher unemployment numbers than we’re used to, plus a slew of other issues, but Furman said Trump and his team could easily package that into this successful campaign narrative: We can finish the job (via Politico) [emphasis mine]:

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.

Furman’s case begins with the premise that the 2020 pandemic-triggered economic collapse is categorically different than the Great Depression or the Great Recession, which both had slow, grinding recoveries.

Instead, he believes, the way to think about the current economic drop-off, at least in the first two phases, is more like what happens to a thriving economy during and after a natural disaster: a quick and steep decline in economic activity followed by a quick and steep rebound.

The Covid-19 recession started with a sudden shuttering of many businesses, a nationwide decline in consumption and massive increase in unemployment. But starting around April 15, when economic reopening started to spread but the overall numbers still looked grim, Furman noticed some data that pointed to the kind of recovery that economists often see after a hurricane or industrywide catastrophe like the Gulf of Mexico oil spill.

Consumption 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.”

[…]

A rebound won’t mean that Trump has solved many underlying problems. Since the crisis started, many employers have gone bankrupt. Others have used the pandemic to downsize. Consumption and travel will likely remain lower. Millions of people in industries like hospitality and tourism will need to find new jobs in new industries.

The scenario would be a major long-term problem for any president. But before that reality sets in, Trump could be poised to benefit from the dramatic numbers produced during the partial rebound phase that is likely to coincide with the four months before November.

That realization has many Democrats spooked.

[…]

When Obama ran for reelection in 2012, during the recovery from the Great Recession, he was able to point out that the unemployment rate was dropping about 1 point every year. But in a V-shaped recovery it would be much faster. “The Trump argument will be he’s producing the fastest job growth and fastest economic growth in history. If he has any ability to do nuance he would say, ‘We are not there yet, reelect me to finish the job,’” Furman said.

[…]

Furman is an economist, but he had some strategic advice for the Biden campaign. “Don’t make predictions that could be falsified. There are enough terrible things to say you don’t need to make exaggerated predictions,” he said. “The argument that we are in another Great Depression will look like it was overstated. Trump can say, ‘Two million deaths didn’t happen, Great Depression didn’t happen, we are making a lot of progress.’”

Democrats are panicking. That’s always good news. Even in the midst of COVID, I was still positive that Trump would win re-election as a) the virus was not his fault, thanks to China; b) the areas hardest hit were states that wouldn’t be competitive in national elections anyway (California, New Jersey, New York, Connecticut, etc.), and c) the politicians doing the overreaching regarding the quarantine were Democrats. Trump’s response to the crisis was swift, transparent, and aggressive. The Trump White House’s daily COVID pressers in April showed that which helped him rebound his poll numbers. It’s no wonder that this trend oddly coincided with the liberal media not wanting to air the pressers anymore. 

Either way, the fact that former Obama people and this isn’t the first time, are freaking out about Teflon Don is a welcome sign. Also, if this projection is true, we get the bonus of another outpouring of liberal tears when Trump is re-elected, coupled with an economic recovery that is pretty solid—spectacular actually. As the president has said often, the best is yet to come. Let’s give him that extra four years.