Economy

“Things are starting to turn — that’s my take”

JM Ashby
Written by JM Ashby

House Democrats recently passed a $3 trillion spending package that includes aid for states, students, health care, and more direct stimulus checks for Americans, but Senate Republicans aren't acting on it and the Trump White House isn't asking them to.

And why not?

It may be because all of Trump's advisers are telling him that things are already Great Again.

Pointing to credit card spending, of all things, several of Trump's advisers including Larry Kudlow say the economy is already rebounding.

On Monday, White House economist Kevin Hassett cited what he called positive economic trends in retail, business reopenings, and credit card transaction data over the last two weeks. He said the administration has “a little bit of a luxury to watch and see" before having to approve additional aid.

“I’ve been really positively impressed by how quickly things are turning around,” Hassett told reporters on Monday. He added at a separate White House event: “I was pretty depressed about how bad it looked a few weeks ago, but you can really see it turning on faster than I thought." [...]

“Unemployment claims look terrible, but they look a lot less terrible," Kudlow said at a White House event with restaurant executives. “Things are starting to turn — that’s my take.”

Credit card transactions are up because people are using them for essential goods like food and clothing after losing their jobs. Several major retailers have filed for bankruptcy in the last two weeks. Another retailer, Pier 1 Imports, literally filed for bankruptcy while I was in the middle of writing this post.

But I digress.

The president’s confidence in a “spectacular” economic comeback is shared by White House officials, said Stephen Moore, an economic adviser to the White House at the Heritage Foundation, a conservative think tank.

“From the people at the White House I talked to over the weekend, there’s a renewed sense of optimism that things are working out,” Moore said. “They feel like the direction of things is good, very positive, in terms of the sense of crisis is lessening, and that this is playing up pretty much as had been hoped.”

Just yesterday, Federal Reserve Chairman Jerome Powell said the economy may not recover for another year and a half, pushing a potential recovery to nearly 2022. The Congressional Budget Office (CBO) has also estimated that unemployment will remain above 10 percent through 2021. Other economists and banks have predicted the same thing even if Congress passes another aid bill.

Powell has called on Congress to pass another aid bill like the one recently passed by House Democrats to avoid an even longer downturn (longer than 2022), but a longer downturn is what we may see simply because Trump and his advisers want to project an image of success.

Trump and his company of Yes-Men may lock in a temporary, jobless "recovery" based on stocks, loans, and little else if the Democratic aid package is never passed. The hypothetical Biden administration will have to start over from scratch.

None of Trump regime's views of the economy are based on sound economic reason or logic; it's based on political and emotional whims. Projecting an image of supreme confidence is a political stance for them, not a mathematical one. They want to project an image so that just enough Americans will vote to reelect them.

We're going to hit 100,000 coronavirus deaths, at least officially, sometime in the next 4 or 5 days.

  • gescove

    Only haters pretend the economy 1) isn’t great right now, 2) won’t be even better as soon as we absolve corporations of any liability to protect workers, and 3) won’t blast off into the stratosphere because TAX CUTS!

  • Draxiar

    Yeah it’s rebounding so well that we can once again consider buying Greenland.

  • muselet

    Kevin Hassett, Larry Kudlow and Stephen Moore say the economy is going to come roaring back any time now. Given the track records of those three, I think it’s safe to predict the economic downturn will look more like the Great Depression than the Great Recession.

    We could dodge that particular bullet if Rs started paying attention to relatively sane people like Jerome Powell, but that won’t happen, of course. All anyone in or connected to the White House wants is for the economy to look not too terribly bad on Election Day. After that, they don’t care.

    –alopecia