The U.S. economy blew the barn doors off all other past recoveries with a record, inflation-adjusted 33.1 percent gain in the Gross Domestic Product (GDP) — more than any other quarter in economic history — in the last major economic report before the election in November.
That is great news for the American people, and it certainly bodes well for President Donald Trump in his bid for reelection against former Vice President Joe Biden as the race for 2020 comes down to the wire. It comes as more than 14 million jobs have been recovered since labor markets bottomed in April amid the Covid state-led lockdowns, according to the Bureau of Labor Statistics.
Trump has framed the race as a choice between reopening under him or going back into shutdowns under Biden. In the final debate, Trump declared, “We can’t close up our nation, or you’re not going to have a nation.”
The President is right. 25 million jobs were lost at the height of the state-led economic lockdowns, and although we are halfway through a V-shaped recovery, that could all change in a hurry if the economy shuts down again with Biden in office.
A big part of the remainder of the recovery will be reopening the schools, as closing them disproportionately knocked women out of the labor force, making up 53 percent of the job losses despite only making up 47.2 percent of the workforce. The female labor participation rate fell from 57.8 percent in February to 54.7 percent in April, a low not seen since 1986.
In other words, there are long-term consequences for leaving the economy closed for too long.
At the debate, Trump said, “I want to open the schools. We have to open our country. We’re not going to have a country. You can’t do this. We can’t keep this country closed, this is a massive country with a massive economy. People are losing their jobs. They’re committing suicide. There’s depression, alcohol, drugs at a level that nobody’s ever seen before. There’s abuse, tremendous abuse. We have to open our country… I’ve said it before, the cure cannot be worse than the problem itself, and that’s what’s happening, and he wants to close down, he’ll close down the country, if one person in our massive bureaucracy says we should close it down.”
In the first debate, Biden declared, “Schools — why aren’t schools open? Because it costs a lot of money to open them safely.” He also repeated his line that “You need to shut it down” and “you can’t fix the economy until you fix the Covid crisis.” This mirrored what Biden told ABC News in August that “we cannot get the country moving until we control the virus” and “in order to keep the country running and moving, and the economy growing and people employed, you have to fix the virus,” and adding that if it was recommended to him, “I would shut it down, I would listen to the scientists.”
Meanwhile, Dr. Anthony Fauci told Politico in early August that in following the Trump administration’s strategy for virus mitigation that there is no need for another shutdown.
“That would not require shutting down again,” Fauci said, adding, “There seems to be a misperception that either you shut down completely and damage a lot of things, mental health, the economy, all kinds of things, or let it rip and do whatever you want. There’s a stepwise fashion that you can open up the economy successfully. You don’t have to lock down again, but everybody has got to be on board for doing these five or six fundamental public health measures.”
By the time the second debate rolled around, Biden had changed his tune — maybe he read a poll — and instead said, “I’m going to shut down the virus, not the country.”
But the virus appears to be largely under control. Probable total cases are still way down from April peak 282,000 to 147,000 today, a drop of 47 percent, according to the Institute for Health Metrics and Evaluation (IHME). And so are deaths, which peaked on April 14 at 2,321 and are down to about 800 now, a 65 percent decrease. The overall mortality rate is down too, therefore, from 0.82 percent to 0.67 percent, judging from the peaks in the IHME data, thanks to treatments and therapies and protecting the elderly, by 18 percent. Thank goodness.
In the meantime, the top ten states in the country with the highest unemployment rates in August prior to many workers losing their benefits are all run by Democratic governors with the worst lockdowns. This could be coming to a state near you should Biden win and he locks down the economy again:
Now those numbers coming down in September, but that’s largely because people are losing their benefits and exiting the labor force altogether as the CARES Act expires. In September, 879,000 Americans left the U.S. labor force nationwide. So, we’re not out of the woods yet.
And clearly the impact of the ongoing lockdowns could have a major impact on the race. Trump at the debates made his closing argument to those states: “Take a look at what’s happening in Pennsylvania, where they’ve had it closed. Take a look at what’s happening with your friend in Michigan, where her husband’s the only one allowed to do anything. It’s been like a prison. Now it was just ruled unconstitutional. Take a look at North Carolina. They’re having spikes, and they’ve been closed. And they’re getting killed financially. We can’t let that happen, Joe, you can’t let that happen. We have to open up.”
But with the Covid pandemic less intense at the moment — and perhaps the vaccines we need right around the corner — America appears to be in a position to be renewed, and the economy is roaring with unprecedented 33.1 percent growth in the third quarter and 14 million jobs recovered in just five months.
The American people can clearly see the benefits of safely reopening. And in just a few short days, we’ll find out if they want to keep on reopening with Trump, or shut it back down with Biden. Stay tuned.
Robert Romano is the Vice President of Public Policy at Americans for Limited Government.