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**FEBRUARY 22, 2021**

Kuttner on TAP

Oh, No! A Robust Recovery

****

The news is filled with reports suggesting that recovery is just around
the corner. Economists surveyed by the Federal Reserve Bank of
Philadelphia predicted that GDP will grow by 4.5 percent this year.
Goldman Sachs economists forecast that unemployment will drop to 4.1
percent by year-end.

The bond market responded by worrying about increased inflation, bidding
up interest rates a tad. The stock market responded by bidding down
stock prices.

And of course Republicans in Congress have responded by throwing more
cold water on President Biden's $1.9 trillion relief package. But hold
on a minute.

Take a closer look at these projections and you appreciate that we are
still a long way from the robust job creation at good wages that
Americans need. According to the Federal Reserve, the real unemployment
rate is still north of 10 percent when you count all the people who are
out of the labor force. And even if the recovery performs as advertised,
we are a long way from solid wage growth.

Riding to the rescue of the Biden plan, playing against type, is Jerome
Powell, chair of the Federal Reserve. At his testimony before the Senate
Banking Committee this morning, Powell refused to be used as a partisan
pawn.

But he did point out that only half of the 22 million jobs lost to the
pandemic recession have been regained; that the suffering has been most
severe among lower-income and Black workers; and he did not recant his
earlier strong support for the Biden package.

One reason is that Powell appreciates that the Fed, which has extended
upward of a trillion dollars in credit to the economy in the form of 13
special lending facilities, is out of monetary-policy tricks. The
central bank needs fiscal help from Congress. Another is that his term
as chair expires in early 2022 and he is eager to be reappointed by
Biden.

Either way, in a battle over whether to borrow nearly $2 trillion to
fight the pandemic and the recession, the Fed chair is a good ally to
have.

~ ROBERT KUTTNER

Follow Robert Kuttner on Twitter

Robert Kuttner's latest book is
The Stakes: 2020 and the Survival of American Democracy
.

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THE FUTURE OF ORGANIZING

A Prospect roundtable discussion about organizing and progressive
politics
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* Organizing Going Forward
BY STEVE
ROSENTHAL

* The Other Infrastructure Program: Progressive Organizing

BY LARA PUTNAM

Acting Officials Can Govern for Years. They Deserve Scrutiny.

President Biden has total authority to select replacements for
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ALSBERGAS

Noem Bill Would Make Dark Money Disclosure Illegal

The bill comes after her political allies formed a nonprofit under an
IRS designation commonly used for dark money political groups. BY DONALD
SHAW

First 100: The Biden Vaccine Rollout Is Working

Just a couple hurdles remain for successful global inoculation from
coronavirus. BY DAVID DAYEN

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