When it comes to the economy, there’s been a fixation in some circles on choosing the appropriate letter of the alphabet. Will the economy look like an “L,” dropping sharply and staying low? Will the recovery look more like a “W,” falling, then rising, then dropping again before returning to normal? Perhaps we should expect more of a “U,” which would offer more gradual gains?
On Team Trump, of course, there’s only one letter that matters. Earlier this week, Larry Kudlow, the director of the National Economic Council and the top voice on economic policy in the White House, told Fox Business that the economy isn’t in bad shape. He added that he believes a “V-shaped recovery … is still very much intact.”
To bolster his argument, Kudlow pointed to a series of metrics, including, “[U]nemployment claims and continuing claims are falling rapidly.”
I wish that were true. It’s not.
And while it’s certainly a problem that the White House official whose sole focus is supposed to be the economy got this backwards, there’s a larger problem unfolding: as the economy struggles, a few too many Republicans appear largely indifferent to the conditions. The New York Times had a good report on this today:
The United States just suffered its worst economic quarter in nearly 75 years. Its recovery from the depths of a pandemic-induced recession has stalled, as coronavirus deaths rise again across the country. President Trump has what appears to be one final chance to cut a deal with Congress to ensure hard-hit workers and businesses do not collapse before the November election. He has shown little interest in taking it.
To be sure, Donald Trump’s passivity is difficult to understand, but it appears to be a party-wide problem. After House Democrats, eager to stay ahead of deadlines, passed a sweeping economic aid bill in mid-May, congressional Republicans dithered for 10 weeks, choosing to do effectively no work on the issue at all.
Eventually, with time running out before the expiration of CARES Act benefits, GOP leaders threw together an underwhelming pitch, which was widely panned by members of both parties. This led to a few days of bipartisan negotiations that went nowhere. Then they went home.
Republicans were so indifferent to the economic details that they disagreed on what belonged in their own blueprint, even after its unveiling, and criticized the Democratic plan for completely contradictory reasons.
As a result, without an 11th-hour miracle, millions of families will soon lose economic lifelines, including the $600 weekly unemployment supplement, which have kept many Americans’ heads above water during the pandemic. The real-world impact on these households will be dramatic, and the effects on the economy won’t be any better.
And yet, Trump, who hoped to make the economy the centerpiece of his re-election campaign, seems unfazed and reluctant to do any real work. Asked this week if he’s worried about the economy, the president replied, “I don’t think so. I think the recovery has been very strong.”
It really hasn’t been, but he either doesn’t know that or he’s been persuaded not to care. The Times‘ report added:
Some members of Mr. Trump’s inner circle, along with his allies in the Senate, have urged the president to oppose a large new spending bill, including some of the provisions included in the Senate Republican proposal unveiled on Monday. The economists Arthur B. Laffer and Stephen Moore, who informally advise Mr. Trump, have told him to focus on a payroll tax cut for workers and businesses — a move that few Republicans support and that economists say would do little to help the 30 million Americans without a job.
This isn’t a good sign. The president’s perspective is being steered by the likes of Kudlow, Moore, and Laffer, who collectively have been wrong about practically every major economic question raised in recent decades.
On Capital Hill, things aren’t much better. The Times spoke to Sen. Todd Young (R-Ind.), who argued, “A strategy for the economy? That’s not how economies work. He’s not the Wizard of Oz … who controls the economy. Growth is created by innovators and entrepreneurs and rank and file workers, based on supply and demand.”
In other words, asked for an economic strategy, some post-policy Republicans don’t bother to come up with a plan because they don’t see the need to even try. Their ideological assumptions take precedence over the public’s need for policymakers to take action.
And if this attitude seems familiar, it’s because the GOP’s approach to the economic crisis is eerily similar to the party’s approach to the coronavirus crisis: hope everything will be fine, wait for everything to become fine, and do very little to make sure everything is fine.
