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Economy

Federal Reserve Chairman Jerome Powell

Photo by BrookingsInst is licensed under CC BY-NC-ND 2.0

Reprinted with permission from American Independent

Federal Reserve Chair Jerome Powell said Sunday that the economy is likely about to boom, big time. And he credited two of President Joe Biden's efforts for that progress.

On CBS News' 60 Minutes, Powell observed that the economy appears to be at an "inflection point."

"We feel like we're at a place where the economy's about to start growing much more quickly and job creation coming in much more quickly," he said, noting, "we and a lot of private sector forecasters see strong growth and strong job creation starting right now. So really, the outlook has brightened substantially."

Powell was picked for the job by Donald Trump in November 2017. As he announced the nomination at a Rose Garden event, Trump called Powell "strong," "committed," and "smart," saying, "I am confident that with Jay as a wise steward of the Federal Reserve, it will have the leadership it needs in the years to come."

But after praising Powell's "integrity and good judgment," Trump largely ignored Powell's advice and savaged him as an "enemy" of America.

From the early days of the coronavirus pandemic, Powell warned that it could be a major economic threat. "We are closely monitoring the emergence of the coronavirus, which could lead to disruptions in China that spill over to the rest of the global economy," he said in February 2020.

Trump responded by pretending the problem would go away and continuing to attack Powell.

In October, Powell urged more congressional action to address the crisis and its economic fallout, and renewed efforts to curb the virus' spread.

"Too little support would lead to a weak recovery, creating unnecessary hardship for households and businesses," he told the National Association for Business Economics. "By contrast, the risks of overdoing it seem, for now, to be smaller."

He cautioned that "COVID-19 cases might again rise to levels that more significantly limit economic activity, not to mention the tragic effects on lives and well-being. Managing this risk as the expansion continues will require following medical experts' guidance, including using masks and social-distancing measures."

Trump instead halted all negotiations on a COVID-19 relief package and continued to promote an unsafe immediate reopening of the economy. Cases spiked to an all-time high and the recovery slowed.

Since taking office, Biden has focused on vaccinating everyone and passing massive economic relief. Powell credited both on Sunday for the improved economic situation, saying it was "because of widespread vaccination and strong fiscal support, strong monetary policy support."

After Trump promised in the 2020 campaign to vaccinate just 200,000 people a day, Biden pledged to get that number up to 1 million a day for the first 100 days of his administration. He has far exceeded this goal and CNN reported Monday that at the current pace, half of U.S. adults could be at least partially inoculated by the end of the week.

Powell also expressly praised the pandemic relief bills, saying without them things "would've been so much worse." While some of the bills were bipartisan efforts under Trump, congressional Republicans refused to even consider a House-passed $3 trillion relief package for most of 2020 and unanimously opposed Biden's $1.9 trillion American Rescue Plan.

Powell noted that his colleagues are forecasting "growth for this year in the range of six or seven percent, which would be the highest level in, you know, 30 years — or even maybe a little bit higher."

Trump promised growth of "four, five, and maybe even six percent ultimately" but failed to achieve even four percent growth for any year of his presidency.

Experts predict that growth could be even better if Congress enacts Biden's $2.25 trillion American Jobs Plan. A recent Georgetown University Center on Education and the Workforce analysis suggested an infrastructure bill around that size could boost GDP by up to $320 billion annually.

Published with permission of The American Independent Foundation.

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Pandemic lockdown art

Reprinted with permission from American Independent

Republicans have claimed repeatedly that so-called "blue state" lockdowns in response to the coronavirus pandemic have destroyed their economies and that red states are enjoying robust recovery. However, a recent study has found that of the five states recovering jobs the most quickly since the beginning of the pandemic, four of them went blue in the 2020 presidential election — and the other is helmed by a Democratic governor.

The study, conducted by Wallet Hub and released on March 25, found that Maine, Minnesota, North Carolina, Pennsylvania, and New Hampshire had the most marked decreases in unemployment claims between the beginning of the pandemic to the present, indicating at least some promising recovery for their respective job markets. Of these, three (Minnesota, Pennsylvania, and New Hampshire) went to President Joe Biden in the November presidential election, with a fourth, Maine, giving three of its four electoral college votes to Biden.

The four states implemented strict safety precautions, lockdown measures, and mask mandates at the outset of the pandemic. The sole red state in the top five for job recovery, North Carolina, is helmed by a Democratic governor who also implemented strong safety measures when combating COVID-19.

Maine's Democratic governor, Janet Mills, enforced a mask mandate at the beginning of the pandemic and signed an executive order strengthening the mandate in December. She also implemented a March 15, 2020 Civil State of Emergency, closing bars and restaurants statewide March 18. At the end of May 2020, the state gradually began lifting stay-at-home restrictions.

Minnesota's Democratic Gov. Tim Walz issued a statewide stay-at-home order March 27 and did did not loosen stay-at-home restrictions until May 18. Since July 25, Minnesotans have been required by executive order to wear masks in public spaces outside their homes.

New Hampshire Gov. Chris Sununu, a Republican, issued a stay-at-home order in his "blue" state early in the pandemic, and implemented a strict extension of it in late May. The state remains under a statewide mask mandate.

Pennsylvania's Democratic Gov. Tom Wolf issued a statewide stay-at-home order March 23, as well as another stay-at-home advisory in November ahead of holiday COVID-19 case spikes. Many state restrictions for businesses and gatherings were only relaxed Sunday. A Pennsylvania mask mandate has remained in effect for the duration of the pandemic, only eased recently for vaccinated individuals.

And although North Carolina is a red state, it's governed by Democrat Roy Cooper, who enacted common-sense lockdowns early in the pandemic. He issued a 30-day stay-at-home order March 27. In the face of soaring COVID-19 cases statewide in early 2021, he also extended a modified stay-at-home order which mandated curfews and shuttered nonessential businesses at 10 p.m. in January, extending it again in March. A mask mandate was implemented early and remains in effect throughout the state in all public indoor settings.

The successes of these states in job recovery undercuts false claims by Republican politicians and right-wing think tanks that a recession exists only in blue states, painting economic recovery during the pandemic as something taking place only in red states.

Sen. Marsha Blackburn (R-TN) slammed the American Rescue Plan on March 10, tweeting, "This bill represents everything wrong with Washington. In Tennessee, we've worked hard to protect both our people and our economy. We should not be bailing out the blue states that failed to do the same."

It also contrasts frequent Republican talking points that suggest lockdowns in blue states caused long-term damage to their economies.

"The science is also clear: Schools can safely open, cases rarely spread outdoors, and pointless lockdowns like California's [closing outdoor dining and playgrounds] are harmful and counterproductive," tweeted Sen. Tom Cotton (R-AR) in February.

Sen. Kevin Cramer (R-ND) tweeted on March 16 that it would be illogical to reinstate lockdowns. During the presidential debate in October, Sen. Rand Paul (R-KY) similarly slammed then-Democratic nomineeJoe Biden for refusing to rule out further lockdowns as a COVID-19 response, claiming they were "hurting our economy and hurting our children."

Experts have said lockdowns actually lead to better outcomes and a swifter economic recovery.

As International Monetary Fund economists Francesco Grigoli and Damiano Sandri wrote in October, "Addressing the health risks appears to be a pre-condition to allow for a strong and sustained economic recovery. Lockdowns impose short-term costs but may lead to a faster economic recovery as they lower infections and thus the extent of voluntary social distancing."

Data has also repeatedly demonstrated that state lockdowns did not cause the economic recession. Rather, it shows that most people were already staying home at around the same rate at the height of the pandemic, hastening the recession — before precautions were even implemented.

Republicans have falsely framed Democrats' COVID relief package passed earlier this year, the American Rescue Plan, as a "blue state bailout," depicting all red-state economies as thriving. But suffering red states saw as much or more of a benefit from the legislation.

According to a third-quarter report from the Urban-Brookings Tax Policy Center, of the six states that saw the sharpest drops in state tax revenue, two-thirds of them — Alaska, North Dakota, Florida, and Texas — are traditionally bright red.

A new report by WalletHub Monday made similar findings: that of the six states hardest-hit economically by the pandemic, two-thirds are Republican strongholds.

Published with permission of The American Independent Foundation.