Some people think the Great Depression, which began in 1929 during the presidency of Herbert Hoover, ended shortly after Franklin D. Roosevelt replaced him in 1933. Not so. It went on and on and on — and on. As late as January 1941, the unemployment rate was still 10.5%. That is useful context as we consider our current plunge into the abyss, which has now consumed about one-fifth of the U.S. labor force in seven shattering weeks.
I’m not saying we’re in for a 12-year rut like the one Hoover and FDR encountered—knock on wood. But I am saying our recovery is unlikely to be as quick or dramatic as our leaders predict. When it comes to what the future holds when the storm has passed, I'm reluctant to accept the word of those who ignored its approach in the first place and then, when it was too late, bungled the response. We’re supposed to have faith in them? No thanks.
Meanwhile, here’s something many of the blow-dried TV pundits seem to have missed. As bad as Friday’s jobs report was, the data was for April’s household survey (which determines the unemployment rate) was collected through April 18. It’s not like the Niagara of bad news miraculously ceased on that day; it’ll be reflected in the May unemployment report, which comes out June 5. Here’s a preview: An additional 2.5 million Americans probably lost their jobs in the week that ended May 9, according to a survey by the analytical firm Trading Economics.
Happy talk is foolish and misleading
President Donald Trump has said we’re in for a “spectacular” 2021. His top economic adviser, Larry Kudlow, used the same adjective in an interview with CNN’s Jake Tapper. I don’t blame them for predictions of a rapid recovery; what do you expect politicians to say in an election year with their necks on the line? That we’re in for a long, painful slog? That it’ll take years to dig out of this hole, and that the economic suffering may be, for many, unbearable?
And yet consider some realities that existed even before any of us had heard of the coronavirus. Last year the Federal Reserve estimated that 39% adults would find an unexpected $400 expense — say for a car repair or medical bill — a “hardship.” Four out of five adults. The Fed estimates that 12% of adults “would be unable to pay the expense by any means.”
The Fed also estimated, again, long before the coronavirus hit, that 39% of adults expected to skip essential payments like rent, mortgage or their water, gas or electric bills. Similar numbers said they’d skip things like phone bills. How can you look for a job if your electricity or phone gets cut off?
False choice:Protesters should demand coronavirus safety and a reopened economy. We can have both.
It’s sad data like this that has swept away the illusion we were fed as recently as February 2019 B.C. (Before Coronavirus), that Americans never had it so good. In fact, as recently as two weeks ago, the president was still telling us that we used to have the “greatest economy the world has ever seen." But it's a flimsy claim. Since the end of World War II, there have been numerous periods when the U.S. economy grew faster — often far faster — than what Trump would have you think.
Slower growth and poorly paid jobs
The political hyperbole that Americans have been subjected to over the past few years has obscured the fact that things really weren’t that great to begin with. We heard about “jobs, jobs, jobs,” yet the reality is that post-recession job growth has been slowing down since 2015. And many of those jobs appear to pay shockingly little. A Brookings Institution study found that "53 million Americans between the ages of 18 to 64 — accounting for 44% of all workers — qualify as 'low-wage.' Their median hourly wages are $10.22, and median annual earnings are about $18,000." That means half make even less.
Blueprint from US Chamber of Commerce president: This is how we reopen America
Given that we're talking about 44% of the gargantuan U.S. labor force, it's reasonable to say that this isn’t so much a Trump problem as it is a long-term slide covering both Republican and Democratic presidents, and Republican and Democratic-dominated Congresses. Neither party has been able to stop it.
Stimulus checks are going out to tens of millions of Americans, a helpful gesture. But when so many of them were living paycheck-to-paycheck to begin with, and those paychecks are now gone, a few hundred or thousand dollars is like tossing a morsel of food to a hungry elephant: It isn’t much in the grand scheme of things. What would really be helpful? How about actually addressing those underlying problems, that long-term slide, that pushed so many of our citizens to the edge in the first place?
Paul Brandus, founder and White House bureau chief of West Wing Reports, is the author of Under This Roof: The White House and the Presidency and a member of USA TODAY's Board of Contributors. Follow him on Twitter @WestWingReport.