Sunday, May 10, 2020

A Grim Portrait of the Coronavirus Economy

John Cassidy at the New Yorker paints a grim portrait indeed in his weekend email summary.

… the Labor Department released its jobs report for April, which showed that 20.5 million people were laid off or furloughed during the month, and the unemployment rate rose to 14.7, the highest rate since the nineteen-thirties.

In a post about the report, I pointed out that this alarming figure actually underestimates the real unemployment rate. …

It is a bleak picture all round, but what are its political implications? In terms of economic policy, the answer should be pretty clear. “Congress needs to continue providing relief to workers and their families across the country,” Elise Gould, a senior economist at the Economic Policy Institute, said in an analysis of the jobs report. “They need to extend unemployment until the labor market has sufficiently recovered and provide a huge amount of aid to state and local governments.”

Democrats in Congress are pressing to include these measures in a new emergency spending bill, but on Friday the Trump Administration indicated that it was in no hurry to move in this direction, despite the dreadful jobs report. Larry Kudlow, the head of the National Economic Council, said that the Administration had “kind of paused” negotiations with the Democrats about another emergency-spending bill. Trump confirmed Kudlow’s message. “We’re in no rush,” he told reporters. “The Democrats have to do what they have to do… . I can’t say that we’re in a rush.” Evidently, the President believes the tentative reopening of businesses that is taking place across the country will provide a rapid cure to the disease of mass unemployment, despite warnings to the contrary from many economists and business leaders. Either that, or he and his advisers have completely lost touch with reality.

No comments:

Post a Comment