In 2008, amid one of the worst economic downturns in U.S. history, former Massachusetts governor Mitt Romney wrote an op-ed for the New York Times railing against a proposal for the federal government to prop up the automobile industry. Headlined “Let Detroit Go Bankrupt,” it bedeviled Romney’s ultimately unsuccessful 2012 presidential campaign. The public had decided that amid economic crises, the government should do everything it could to stave off disaster.
Today, as we look at how our economy has fared in another crisis, we can say Republicans are equally wrong in what they would have done and what they still advise doing.
That’s one of the messages of the extraordinary jobs report released Friday, showing that employers added 528,000 jobs in July. By some calculations, the U.S. unemployment rate has reached its lowest point in half a century.
Whatever difficulties the economy is having and whatever lies ahead, one thing that’s clear is that the United States is not in a recession at the moment. Not only that, President Biden can claim, so far at least, to have what may be the greatest job-creating record of any U.S. president.
Consider this comparison. Every Republican will tell you that, whatever you think of former president Donald Trump, he was great for the economy. In Trump’s first three years in office — before the covid-19 pandemic hit — the economy added 6.5 million jobs, according to Bureau of Labor Statistics data. In the first year and a half of Biden’s presidency — so, half the time — 9.5 million jobs have been created.
Even more remarkable, the U.S. economy has recovered all the jobs lost when the economy shut down in 2020, the most rapid employment recovery the country has ever seen.
As with all matters economic, the reasons are complex; and, of course, the large total number of jobs created reflects how far into a hole employment had fallen. But here’s one thing Democrats should never stop saying: Our approach to fixing that calamity has proved to be right.
Not that we couldn’t have done some things better. But the basic formula that was followed — pour as much money as possible into businesses, families, and local and state governments to get them through the worst of the crisis — averted what could have been prolonged catastrophe.
When covid-19 hit in 2020, Congress passed multiple rounds of pandemic relief, most notably the Cares Act, which passed almost unanimously in March 2020 (Republicans only oppose stimulus spending when there’s a Democrat in the White House). These efforts culminated with Biden signing the American Rescue Plan in March 2021. Every Republican voted against it, though many of them also tried to take credit for the provisions that helped their states and districts.
Those infusions of cash kept the economy steadily climbing out of the trough, and we’re now seeing the results. Of course, we know what Republicans would say: “But inflation! Inflation, inflation, inflation!”
Every time you turn on your TV, talking heads are highlighting inflation and Republican campaign ads say your local Democrat destroyed the economy with profligate spending.
Yes, inflation is high, and how quickly it will come down is unclear. (One bright spot: In the past month and a half, the average price of gas nationally has fallen by 90 cents a gallon.) But while it’s possible the pandemic relief spending made some marginal contribution to the current inflation, if it were all Biden’s fault (and the fault of Trump and the Republicans who supported stimulus spending while he was president), then we’d be unique in how much our prices are going up.
But we’re not. At the moment, inflation is a global phenomenon. Countries around the world with very different sets of economic policies are all experiencing higher prices than they had before the pandemic, and the United States places near the middle of the pack in the rate of inflation.
No one would dispute that inflation is a bad thing. But regardless of what Republicans did when Trump was in office, the argument they are now making is that having the government step in to save the economy was a terrible idea.
So they should be asked: What would you have done instead? Nothing?
Had we done nothing, millions of people who are now working would probably be unemployed. Americans would still be struggling to drag ourselves out of a nightmarish recession. The higher prices we’re seeing for milk and gas today might look like a picnic compared with what they could have been.
Republicans will never stop saying that whatever you don’t like about the economy must be the fault of Democrats. But if that’s true, it must also be true that Democrats deserve the credit for the terrific pace of job creation. If Republicans object to that, ask them why the decisions that led to this job market were so wrong.