“The Daily Torch is the featured publication of Americans for Limited Government, with opinion-based content dating back through 2008, dedicated to reducing the size and scope of government and maximizing individual freedom,” says their website, which also says that “Robert Romano is the Vice President of Public Policy at Americans for Limited Government.”
As the data for our industry and many other professions has been reflecting, much but not all sectors of the economy has suffered as a result of the COVID-19 outbreak that the World Health Organization (WHO) belatedly declared a pandemic. The data that follows is thus useful for professionals, investors, policy advocates, and others to objectively explore and unpack.
The column below by Romano is dated July 31st, so bear in mind that the “U.S. economy added 1.8 million jobs in July as it worked to recover from the coronavirus pandemic,” as reported by the left-of-centerWashington Post based on U.S. Labor Department data.
The question of what happens if the virus response never produces a useful vaccine or other countermeasures is an apt one that Romano explores using data. Following Romano’s facts and analysis, which is a mix of good and bad news the original of which are linked here, will be additional related MHProNews information, analysis and commentary.
Will the virus ever allow the U.S. economy to fully reopen again?
The U.S. economy contracted a record-setting, inflation-adjusted, annualized 32.9 percent in the second quarter of 2020 according to the latest data from the Bureau of Economic Analysis as tens of millions of Americans waited out the Chinese coronavirus in their homes, not venturing out much except for work and needed supplies.
The second quarter comprises of April, May and June, when in Bureau of Labor Statistics’ household survey 25 million jobs were lost by April and then 8.8 million came back in May and June as states slowly began reopening.
It was by far the worst quarter in American history including the Great Depression, and gives you an idea of what a catastrophe the pandemic has been to the U.S. economy.
And that’s with the $3.3 trillion of deficit-spending Congress has pumped into the economy since the beginning of the year — and counting as Congress considers phase four legislation — to cover payroll protection for small businesses, expanded unemployment benefits, checks to every household, plus payments to critical industries, larger businesses and state and local governments.
When you ignore what the government did via the massive spending — government spending is calculated as a part of GDP — the hit to the private sector and the American people came in at a whopping 39.1 percent.
Consider that. Closing the economy for a few months cut the private sector almost in half.
Personal consumption was down 34.6 percent. That includes an 11.3 percent drop in goods consumption and a 43.5 percent drop in services consumption.
Gross private domestic investment was down 49.0 percent.
That was offset by a 17 percent increase in federal government consumption expenditures.
All of that is the equivalent of an asteroid hitting the economy.
Now, some good news. The summertime spike in new daily COVID-19 cases appears to have stabilized nationwide, including in Texas, Florida, Arizona and California, which had seen a wave of new cases as those states began reopening before changing course and making adjustments to reopening strategies.
Additionally, the Institute for Health Metrics and Evaluation projects that, even with states still continuing reopening, daily cases will be dropping through August and September, until the cold and flu season begins again in the fall.
That gives the American people something of a reprieve for the rest of summer.
But there’s bad news too. The pace of economic recovery has appeared to slow down in recent weeks amid further volatility in labor markets, where on a continuing basis those on continuing unemployment claims from the Department of Labor has stabilized at about 17 million Americans the past four weeks after dropping significantly from its high-water mark of 22.8 million on May 9.
The states that contributed the most to continued claims the week of July 18 were California, which saw unemployment rise 464,000, and Texas, which saw it rise 111,000, which have significantly slowed down the national pace of reopening. Pennsylvania added 85,000 and Michigan added 54,000.
But because those job losses are coming later in the month, they may not be accounted for in the July monthly report that comes out from the Bureau of Labor Statistics next week.
The clear predictor here is the number of daily new cases per state, and state actions to shut down their economies again. Meaning, as the virus abates the rest of the summer somewhat, you might expect a bit more reopening, and the third quarter should show a significant bounce back economically.
But once we head into September, October and November with the cold and flu season, as cases rise again, so too will the job losses likely begin mounting again. Everything could begin shutting down again.
That is why Americans, in order to safely return to work, and for children to safely return to schools, we need confidence. If it’s not a vaccine, then we’ll be needing treatments and cures — if not hydroxychloroquine that the President has touted, then something else — to supplement Americans’ immune systems as a stopgap.
But so far the federal government is not recommending anything be taken preventively. According to the Food and Drug Administration website, “there are no proven treatments for COVID-19 and no vaccine.”
Here’s the rub. Everyone’s sitting around waiting for a safe and effective vaccine as a predicate for reopening. The phase three clinical trials for the Moderna vaccine, mRNA-1273, began on July 27. A July 28 New England Journal of Medicine study found that in non-human primates, “mRNA-1273 induced robust SARS-CoV-2 neutralizing activity, rapid protection in the upper and lower airways, and no pathologic changes in the lung.” So that could be good.
But what if the vaccine doesn’t work for humans? After all, there’s never been an effective vaccine for a coronavirus in human history, including SARS.
The longer we remain without a stopgap, the less confidence the American people will have, and likely the worse the economy will do going forward, especially as we head into the cold and flu seasons. Looking back at the ten recessions that have occurred since 1948, it took on average 16 months after reaching a labor market bottom to recover.
But in the Great Recession, which from peak employment in Nov. 2007 to the bottom in Dec. 2009, saw 8.3 million jobs lost and the U.S. economy did not get them back until in Sept. 2014. It took almost five years just to get back the jobs lost. In the current case, up to 25 million jobs have been lost when the labor market bottomed in April, and about 8 million or so have been recovered. How quickly will we recover this time?
If we’re still having this conversation about the lack of effective vaccines and treatments in December and in 2021, we’ll have a choice to make. Either, we take our chances knowing there is nothing that can be done to stop the virus short of dramatic upheaval to our way of life, devastating school closures and leaving everything shut down, with millions of jobs lost, or the economy — and our country — may never recover. ##
Robert Romano is the Vice President of Public Policy at Americans for Limited Government.
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In response to the above from Romano, PDuffy wrote the following on the Daily Torch’s website. Typos that follow are in the original.
“The blog said, “Either, we take our chances knowing there is nothing that can be done to stop the virus short of dramatic upheaval to our way of life”.
There have been several studies now comparing countries that had draconian shutdowns with countries that had no shutdown (i.e. Sweden/Belarus and a few others), and guess what? There was virtually NO DIFFERNCE in the actual death rate and infections per capita. Sweden is somewhere in the middle, and LESS than most other European countries like Italy for example.
So why in the world would we ever opt for a ‘dramatic upheaval’ ???? The truth is the ‘shutdown’ policy was a disastrous failure, and politically motivated bureaucrats (Fauci and others), single-handedly destroyed the American economy for NO REASON. We went insane over the flu, and unless we admit there is nothing we can do, we will destroy ourselves with this delusion. Politicians have NO POWER to stop a virus!!! it’s time to go back to normal and accept the ordinary death rate we all expect from the annual flu – Covid is NO DIFFERENT. Wash your hands and stay home if you are sick – that’s what the president of Sweden said, and it turned out MUCH BETTER for them!”
The argument can be made that key notions raised by Duffy and Romano are pointing to related and intertwined realities. While there are items that could be nuanced or expressed differently, the arguments each made are not mutually exclusive.
The mindset of Americans for Limited Government (ALG) could be described like this: that limited government is in many ways better than big bloated government. Limited government is more accountable to the people, while big government is less accountable to the people and thus more easily swayed or used by the powerful, wealthy, and connected.
While that is not the specific argument that Romano made in his commentary above, it is precisely the questionable or debatable pandemic response that Duffy illustrates that goes back to the keen issue — did the massive federal and international bureaucracies handle the Wuhan, China originated coronavirus correctly?
If there were errors or omissions that could have contained the “Crimson Contagion,” why is there so much confidence in big government here and in so many nations around the world? Because over 120 countries have joined Australia in a call to hold the Communist Chinese Party (CCP) led government in Beijing to account for failing to promptly quarantine and warn the world against what was in time declared by the World Health Organization (WHO) to be a pandemic.
The document from WHO that the above is based upon is found in the report at this link here.
America is far from alone in being harmed. Australia has been pushing back against the Chinese Communist Party (CCP), along with some 120 other nations, as has the Trump Administration.
It wasn’t just American institutions that failed to warn the U.S. or other countries. Intelligence and health experts around the world failed in national and international warnings until it was arguably too late to stop what has now transpired.
The WHO, Communist China, nonprofits, major corporations and their leaders that should or could have been more nimble, and others involved in this unfolding disaster exemplify why a bureaucracy can nestle incompetence and/or corruption.
How this pandemic interrelates with other domestic issues – which likewise has its counterparts in other nations – is as important as the pandemic itself in the search for the root causes of what went wrong and who should be held to account.
These issues often trace back to the ‘usual suspects’ that fund various activities that routinely harm independents in our profession, but also in numerous others too.
The U.S. Constitution must be properly understood and followed instead of letting a false narrative hijack that along with the other key parts of the American Dream.
Voices across the left-right divide may not always realize it, but there are some common themes and concerns. When free speech is limited and debate is cut off, the best solutions may not be allowed to emerge.
See the related reports linked from herein and below the byline and notice that follow to learn more.
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