Top Lines: US Economy And Trade Policy | 2020 Election And Political Analysis | Coronavirus Crisis | Impeachment | Protecting Our Elections And Disinformation | Immigration And The Border | Countering Illiberalism's Rise
White House Struggles With COVID Are An Ominous Sign For The Country - Despite warnings from experts that the virus was still too active in the US to re-open the country, two weeks ago the White House itself returned to work. The Vice President traveled. Governors came to visit. Meetings with outside leaders including the House GOP leadership, which could have been held over video conference, were held inside the White House. Based on photos from then and subsequent days, the President, his team, and his visitors didn’t wear masks and didn't keep six feet apart.
Last week, as predicted, COVID came into the White House. At least two senior staffers and some number of Secret Service agents tested positive for the virus. Dr. Fauci and the heads of the FDA and CDC have all self-quarantined, as have some number of White House staffers. The Vice President announced that he was self-quarantining last night, but then reversed his decision soon after. White House economic advisor Kevin Hassett, in a TV interview yesterday morning, said that it was "scary to go to work" at the White House but that the urgency of our national challenges required staff there to risk it all, go in, and not work from home. Re-opening has become a chaotic and dangerous mess, even for the White House.
For every American trying to figure out how to navigate phase II, that the White House is on the verge of shutting down within days of re-opening is a clear sign of how hard these next few months are going to be. Perhaps emboldened by their access to rapid daily testing, the President, his staff, and their visitors haven’t followed the protocols - they haven’t worn masks and haven't stayed six feet apart. We don’t know whether they’ve eaten together and shared meals across from one another, but we have to assume that they have. And the virus came, quickly. Unlike the rest of us, however, their access to rapid testing may have caught the virus early, and prevented a huge outbreak which could have threatened the President himself. Most American workers will not be so lucky if the virus hits their workplace, as very few will have access to this level of testing each day. The virus will come, people will start to get sick, and lock downs will return. It is no wonder, then, that the public isn't happy with the President's COVID response.
As of Saturday, DC has the highest per capita rate of new infections of any state in the country - the virus is spreading faster here than anywhere else. A Senate hearing tomorrow on the virus will be conducted by a Committee Chairman in quarantine, working from home, and experts will also be quarantined and speaking from home. It will be another powerful reminder of our struggle to manage this extraordinary time and return to normal - re-opening here, in DC, carries incredible risks at this time for anyone.
At NDN, we hope that the President uses his own struggles with re-opening to help educate the country about the challenges ahead. The virus isn’t gone or receding - the US still has among the highest new infection rates of any nation on earth, and they aren’t dropping. Our "lockdowns" were not as aggressive as other nations, and thus didn’t get the virus under control in the way that we all would have wanted. We don’t have rapid ubiquitous testing in place, like the President does, which is needed to allow workplaces and communities to catch new infections early, isolate the sick, and allow people to keep working. Re-opening will require an incredible commitment to social distancing and masking (um, Mr. President); and if nothing else the President should admit his errors, and commit now to crashing a national testing/tracing/isolation regime for the country, a regime which has allowed his workplace to stay open. The President's repeated refusals to adhere to any of the things that experts have recommended to combat the virus - immediate national shelter-in-place, social distancing/masking, testing/tracing/isolation - remain inexplicable and terribly terribly reckless. He has the opportunity now to course correct, and to help us all learn from this experience. Re-opening now is fraught with risks, ones that he should be honest about; and risks which, if he is unwilling to admit and address, require Congress to step in and address for him.
Wed, May 13th, 2pm - “With Dems, Things Get Better” Webinar - Please join us this Wednesday for the latest showing of our "With Dems, Things Get Better" webinar. This project builds on a body of our work over the past few years, and makes the argument that one of the defining political developments of our time is just how different the two American political parties are, and have become.
This webinar will be a data rich dive into America in this new age of globalization since 1989. We will look at the performance of the two parties during this time - the 16 years of Obama and Clinton, the 15 plus years of the Bushes and Trump. What the data shows is that America has prospered and made progress when Democrats have been in power, and fallen behind, again and again, when Republicans have held the White House. This webinar will take place on Zoom, and you can register for the event here.
As Unemployment Hits Its Highest Level Since The Great Depression, More Must Be Done To Support The Economy - Last Friday, the Bureau of Labor Statistics announced that the country's unemployment rate hit 14.7% in April, the highest jobless rate in over 80 years. And even this number almost certainly underestimates the true level of unemployment in America today. As our long-time contributor Rob Shapiro explains in a new Washington Monthly piece, the April unemployment number likely overestimates the number of truly temporarily unemployed workers (many more will permanently lose their job than currently expect to do so), doesn't include the significant drop in labor force participation as a result of people losing their jobs, and doesn't yet take into account job losses in the last two weeks of April. When you account for these factors, April's "real" unemployment rate was actually closer to 18.6%, he argues.
Importantly, it didn't have to be this way. The CBO projects that real GDP will decline by 5.6% this year, quite comparable to the European Commission's projection that German real GDP will decline by 6.5% this year. However, while the CBO projects that US unemployment will average 11.4% in 2020, German unemployment is projected to average just 4%. Indeed, while US unemployment increased from 4.4% to 14.7% in April, German unemployment is projected to have only increased from 3.5% to 4.2% last month. How is it possible for Germany to suffer a larger decline in growth and yet have significantly less unemployment? Because, similar to their experience during the 2008-09 global recession, they have a massive, well-designed payroll subsidization program called "short-time working" that has allowed firms to hold onto their employees while at the same time ensuring that workers receive similar wages to the ones they did before the crisis. As a result, while only 370,000 workers became unemployed in April, over 10 million received payroll subsidies under this program last month - over 25% of all German workers.
As we discussed last week, probably the most worrisome piece of the CBO's unemployment projections is that they forecast that the jobless rate will continue to average 10.1% in 2021, meaning that large numbers of Americans will be unemployed for a significant period of time. As a result, it is critical that the Administration and Congress act now to beef up every aspect of economic recovery program. First, as Germany has done, the payroll protection program fund should be significantly expanded, with more generous rules for loan forgiveness if firms hire their workers back and easier accessibility for small businesses. Second, the expanded unemployment insurance benefit should be extended for as many months as unemployment remains elevated (and should be explicitly tied to economic conditions). And finally, more cash payments to individuals alongside expansions in food stamps, the earned income tax credit, and the child tax credit should be considered. By doing everything it takes right now, we have the chance to develop a vigorous and strong economic recovery and to avoid a lost decade of high unemployment and low wage growth.
Best,
Simon, Chris, and the rest of the NDN team
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