There are quite a few raised eyebrows about today’s story in Politico with the headline “The General Election Scenario That Democrats Are Dreading.” The story is built around the economic forecast of the former chief economist for President Obama, Jason Furman, who is now a professor at Harvard.
I sat next to Furman once at one of those big deal luncheons in Washington DC back when Furman was in the Obama White House (so probably ten years ago or so), and I rather liked him during our conversation before the speaker came on. He is an easygoing and engaging fellow, quite willing to take criticism and reply in a reasonable manner. I didn’t follow him closely, but have had a general impression that he is much less a dogmatic liberal that Obama’s first chief economist, Austan Goolsbee. Conservative economists I know regard Furman as a straight shooter, so when he has an optimistic view of how the economy is going to do over the summer and into the fall, you can understand why it is giving Democrats heartburn. From the article:
In early April, Jason Furman, a top economist in the Obama administration and now a professor at Harvard, was speaking via Zoom to a large bipartisan group of top officials from both parties. The economy had just been shut down, unemployment was spiking and some policymakers were predicting an era worse than the Great Depression. The economic carnage seemed likely to doom President Donald Trump’s chances at reelection…
Furman, tapped to give the opening presentation, looked into his screen of poorly lit boxes of frightened wonks and made a startling claim. “We are about to see the best economic data we’ve seen in the history of this country,” he said…
Since the Zoom call, Furman has been making the same case to anyone who will listen, especially the close-knit network of Democratic wonks who have traversed the Clinton and Obama administrations together, including top members of the Biden campaign.
Furman’s counterintuitive pitch has caused some Democrats, especially Obama alumni, around Washington to panic. “This is my big worry,” said a former Obama White House official who is still close to the former president. Asked about the level of concern among top party officials, he said, “It’s high — high, high, high, high.”
Furman’s case begins with the premise that the 2020 pandemic-triggered economic collapse is categorically different than the Great Depression or the Great Recession, which both had slow, grinding recoveries.
Instead, he believes, the way to think about the current economic drop-off, at least in the first two phases, is more like what happens to a thriving economy during and after a natural disaster: a quick and steep decline in economic activity followed by a quick and steep rebound.
Now don’t get cocky, as Glenn Reynolds likes to remind us on a regular basis. Still, it is interesting that current polls give Trump better marks than Biden on who is best able to handle the economy, another indication that voters don’t blame Trump for the current economic crash as they would most presidents. (Incidentally, while we’re talking about polls, there’s one out of Minnesota today—from Scott’s favorite newspaper, the Minnesota Star-Tribune!—showing the race there to be quite close for such a blue state, with Biden ahead of Trump only 49-44, with a large margin of error. Given the Star-Tribune‘s long record of left-skewing poll results, and Trump’s usual over-performance in the voting booth, I think this means Minnesota is dead even. Send a case of Zantac to your nearest Farm-Labor-Democrat.)
Some obvious factors come to mind. First, we’ll have to see if the economy does indeed recover robustly. I remain skeptical about this, but some early indications suggest it might be a V-shaped recovery. But even if not, Trump is in a good position to recycle “Make America Great Again” (instead of the less resonant “Keep America Great” the campaign has been using), arguing that he got us to full employment once, and do you really want to hand the economy back over to the Democrats? Looks like a winning formula.
Hence it will also be interesting to see how many Democratic governors like Gwretched Whitless try to keep their state economies smothered in order to hurt Trump’s chances. I can easily see this backfiring, but this year has been full of surprises.