During a March 12 appearance on Fox, National Economic Council Director Kevin Hassett rosily predicted strong growth for the American economy in the first quarter of 2025 and dismissed consumer confidence surveys indicating fears of a looming recession. Hassett boldly stated: “I'll give you an expectation that GDP growth is going to be 2-2.5% in the first quarter, at least,” even as the Federal Reserve Bank of Atlanta’s GDPNow estimate at the time predicted a contraction.
Now that the Bureau of Economic Analysis’ advance estimate has shown that GDP “decreased at an annual rate of 0.3 percent in the first quarter of 2025,” Fox anchor Sandra Smith has acknowledged that it was “a reversal from 2.4% growth in the fourth quarter [of 2024].”
However, Smith also downplayed the contraction, saying, “Some might say that wasn’t as big a drop as anticipated considering the sharp change in policies.”
Yet, as University of Michigan economist Justin Wolfers noted on April 21, dozens of economic forecasters had been consistently downgrading their expectations of economic growth since President Donald Trump took office in January.
White House economic adviser Kevin Hassett is leaving the administration after his second tour of duty under the tumultuous presidency of Donald Trump, and he shared an ominous warning about the country's future in an interview Monday with theWashington Post.
"I think everyone should be worried about how this is going to turn out in the end, because it's a shock unlike anything we've ever seen," Hassett said. "Certainly, the crisis is not over — and there's a lot of work to do."
He said that, when he rejoined the administration in March after having previously chaired the White House Council of Economic Advisers, he only planned to stay on for a few months to help the administration respond to the crisis. As he admitted, the crisis is continuing, but he argued that some recent economic data has been surprisingly positive and the administration has an "incredibly competent" team in place to respond to the challenges ahead.
Yet his words of warning resonate most as the president and those around him seem intent on declaring the crisis over and the Republican Party as a whole appears resistant to more aggressive economic policy.
Hassett himself is no bastion of credibility and foresight. He was widely criticized for pushing an extremely simplistic mathematical model of COVID-19 deaths that seemed to project — quite wrongly, it turned out — that coronavirus deaths would drop to zero in May.
Ryan Cooper of The Week recently argued that, in fact, the worsening of the pandemic means that additional economic trouble lies ahead:
Therefore, on our current track I see no way around one of two possibilities. Either people will look around them and refrain from fully going back to their normal activities, and the economy will stall out. Or they actually will resume normal activities, which will sooner or later spark galloping outbreaks in most states, leading many more people to self-isolate, and the economy will stall out. Even Americans' bulletproof individualism will not keep people going to bars and restaurants if tens of thousands of people are dying and hundreds of thousands are becoming severely ill. To quote the Florida woman mentioned above: "I think we were careless and we went out into a public place when we should not have." So far Republicans have seized on every piece of even slight economic good news to declare that the economy is in perfect shape, coronavirus is over, and no more rescue is needed. "We did it," Vice President Mike Pence triumphantly declared in Iowa on Tuesday. But if more rescues are not passed, and especially if super-unemployment expires, then the economy will stall sooner or later. That will be reflected in economic data like the monthly jobs reports, and probably cause the stock market — which shows every sign of being at wildly unsustainable values — to tank.
Despite his obvious flaws and egregious errors, Hassett has at times seemed to appreciate economic reality with a bit more clarity than many of the other people Trump surrounds himself with. As buffoonish as he can be, many of those remaining are worse. So it probably doesn't bode well for the country that Hassett is looking for the fastest exit. Perhaps his understanding of the current perils is behind his decision to head for the hills.
A Trump administration economic adviser with no experience in epidemiology created a coronavirus model that predicted deaths from the virus dropping to near zero by May 15, the Washington Postreported. The model offers an extremely optimistic prediction that no others have shown.
The adviser who created the model, Kevin Hassett, has denied it plays a role in decisions related to the virus. "I have never, ever said that that's my projection of what the death count was going to be, and no administration policy has been influenced by my projections," he told the Post.
However, according to a Postreport, Trump and his aides used that model to justify plans to start reopening the economy. White House officials, like Trump's son-in-law Jared Kushner, were reported to have relied on it because it "affirmed their own skepticism about the severity of the virus and bolstered their case to shift the focus to the economy, which they firmly believed would determine whether Trump wins a second term," the Post reported.
With coronavirus deaths now at a staggering 68,237, and with hundreds more dying from COVID-19 each day, there is no way that deaths will drop to zero in just 10 days.
The Institute for Health Metrics and Evaluation — which produces another model the White House has been using — revised its death count higher on Monday, following some states' decisions to start reopening their economies. That model now predicts 1,551 deaths on May 15, the day Hassett's model said deaths would stop.
Larry Kudlow, another Trump economic adviser, said on Feb. 25 that the coronavirus was "very well under control." That turned out to be false, as the virus has now infected more than 1 million Americans and led to tens of thousands of deaths.
Commerce Secretary Wilbur Ross also predicted that the coronavirus — which was halting international travel — would be good for jobs in the United States.
"We're going to have Americans staying home instead of going and spending their money in other countries and maybe that's one of the reasons the job numbers are so good," Ross said on March 6.
Since then, more than 30 million Americans have filed for unemployment — which CNN reported amounts to 18.6% of the country's labor force.
What makes Hassett's prediction different is that the White House used his model to justify its decisions about the virus, with life-and-death consequences for Americans.
According to the Post, Hassett's model "provided justification" for Trump to focus on the economy rather than the public health impacts of the coronavirus.
Published with permission of The American Independent Foundation.
Donald Trump’s former top economic adviser issued some dire warnings about the economic impact stemming from the global spread of the novel coronavirus, saying that he is almost certain the fallout will lead to a global recession and unprecedented job losses.
“I think that the odds of a global recession are close to 100 percent right now,” Kevin Hassett, who served as Trump’s chair of the Council of Economic Advisers until June 2019, told CNN’s Poppy Harlow on Monday.
Hassett was speaking about how social distancing measures being put into place to stop the spread of the virus will cause the American economy to plummet, with job losses possibly reaching 1 million or more.
“I think the U.S. we’re going to have a very terrible second quarter,” Hassett said on CNN. “You know we just ran the numbers … carefully over the weekend, and we think the second quarter is going to me minus 5 percent, and we think the jobs number in early April might me as much as minus a million or so, because … nobody’s going to get hired next week.”
Hassett went on to say that if job losses get that high, “you’re looking at the worst job numbers we’ve ever seen.”
Markets have fallen sharply as predictions of a global recession set in, with the Dow Jones Industrial Average falling more than 1,500 points on Monday as of the time this article was published.
This came after the Centers for Disease Control and Prevention on Sunday recommended that gatherings of more than 50 people should be postponed for at least eight weeks — leading governors across the country to order businesses closed, impacting millions of workers.
Congressional Democrats are seeking to provide economic security to those workers, pushing for paid sick leave and increased access to food security programs, as well as free testing for coronavirus.
A bill that includes those measures passed the House last week, but the Senate has yet to take it up, as GOP senators are opposed to some of the provisions in the House bill.
That means economic protections won’t be passed until at least midweek, NBC’s Kasie Hunt reported.
Democrats have expressed anger and frustration that Senate Majority Leader Mitch McConnell sent the Senate home over the weekend, continuing to delay passage of worker protections as the economic fallout marches on.
“Every minute, hour, & day that Fed action is delayed on Coronavirus puts lives at risk,” Rep. Alexandria Ocasio Cortez (D-NY) tweeted on Saturday.
Published with permission of The American Independent Foundation.
