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Trump Gets His Glorious Recession In Just One Term. USA! USA!
Republican president steers US into recession? STOP THE PRESSES! You mean the maniacal push to redistribute wealth to America's richest citizens by Reagan, both Bushes, and now Trump doesn't trickle down and make us all better off? Unpossible!
The National Bureau of Economic Research (NBER) announced Monday that we have officially entered a recession, with two consecutive quarters of economic contraction beginning in February. Astute observers will note that February was before coronavirus lockdown, when Donald Trump was bragging about the amazing job he did supercharging America's economy. Apparently, even before Trump couchsurfed for eight weeks while a viral pandemic killed 110,000 Americans, employers were already starting to get jumpy. WITCH HUNT!
On the plus side, the recession will probably be short because the way we measure it is vectored. It's not "over" when we recover — it's over when the recovery starts .
Confused? Okay, imagine the economy is a huge staircase. We had been climbing the staircase for 128 straight months, most of it under the stewardship of Barack Obama. In February of 2020, we started tumbling backward. Then in March and April we fell down, down, down as millions of people lost their jobs in the coronavirus closures. In technical terms, the recession "began" when we hit the peak in February and changed directions. And it will "end" when we stop falling and start moving back up, even if we are nowhere near where we are when we started.
Here's a graphic from the New York Times .
Between March and April, 22 million Americans lost their jobs. In May, we had a net gain of 2.5 million jobs, meaning we switched directions and the recession is probably over. But that still leaves us at 13 percent (really 16 percent ) unemployment, with hundreds of flights to climb to get back to where we were at the beginning of the year when unemployment was at 3.5 percent.
And God willing, all those people furloughed from their jobs will go right back to work in the next six weeks and there won't be a second wave of virus this fall. But that's certainly not a given, as Trump and his acolytes would have you believe.
America is coming back! https: //t.co/Er1O33va2N
— The White House (@The White House) 1591395248.0
GREEN SHOOTS! Or is it white lines?
Here on Planet Earth, continuing restrictions on occupancy will likely restrict supply of goods and services, while pay cuts and loss of income will suppress demand. If the coffee shop in your neighborhood has limited indoor seating, and your hours got cut so your employer didn't have to lay anyone off, then fewer frappuccinos are getting sold. Moreover, the Paycheck Protection Program was just modified so that employers don't have to return to "full" employee rosters until the end of the year to get loan forgiveness, so lots of them may well decide they can cut costs by laying off workers temporarily.
Meanwhile, Mitch McConnell and the rest of the Gippers have seized on the jobs numbers as proof that we're out of the woods and no further stimulus is necessary.
"It takes a lot of the wind out of the sails of any" new plan, Trump's econ loon Stephen Moore told the Washington Post . "We don't need it now. […] There's no reason to have a major spending bill. The sense of urgent crisis is very greatly dissipated by the report."
No need to finish that course of antibiotics now, we're fine!
But let's assume that we dodge all the bullets and everything in the US goes back to normal in the US by the end of August. All good?
Well, maybe not. Exports account for about 12 percent of the country's GDP, and the World Bank predicts a massive global economic contraction of 5.8 percent this year, the worst since the Great Depression. Brass tacks, if no one can buy our shit, we're still screwed even if we somehow manage to get the pandemic under control (or get used to 750 people a day dying, which looks more likely at this point). And that's before we get to worrying about China's threat to stop buying American corn and pork .
So ... yeah, it's a recession. And if Democrats were Republicans, we would jump up and down shouting and make as much political hay out of a minimally significant metric as possible. But if we're not that mean, the Lincoln Project guys are, bless them. Countdown to an ominous Trump Recession ad in 3...2...
[ NPR ]
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