The coming COVID economic boom
Plus potato heads, Syria, and the minimum wage
2020 was a mess of a year and 2021 isn’t starting off a whole lot better. However, we do have something to look forward to. After just over two months of vaccine distribution, Our World In Data reports that over six percent of the US population has already been vaccinated. As America and the rest of the world become more thoroughly vaccinated and COVID-19 has fewer hosts to which it can spread, we are about to experience a global economic boom.
The question is not whether there is pent-up demand that will be loosed when the pandemic is over, the question is when that pent-up demand will become unpent (to coin a phrase). No one knows exactly when the virus will be relegated to occasional outbreaks among the unvaccinated, but the Atlantic recently surveyed public health experts to find out when they thought the danger would be passed. The general consensus was that the combination of widespread vaccinations and warmer weather will make COVID-19 relatively rare at some point between June and September.
We may see another surge in the meantime as people abandon masks and social distancing before herd immunity is achieved through vaccinations. There is also the possibility of another surge next winter, but hopefully, by that point, the vaccine will be widespread enough to make the disease a minor inconvenience.
As COVID recedes, people will come back out and start spending money. Travel restrictions will be dropped and people will board trains, planes, and cruise ships once again to return to crowded beaches, cities, theme parks, restaurants, movie theaters, you name it. Not all businesses will survive the pandemic, but many of those that do will soon be adding employees to handle the influx of customers.
Many people have suffered financially during the pandemic, but many others have been earning money and unable to spend it. As we say in the South, this money will soon be burning a hole in their pockets. People newly freed from a year’s relative isolation will be anxious to spend, travel, and enjoy life.
People who have lost jobs or wages in the pandemic will also be poised to gain from the recovery. There will be new jobs, promotions, and pay raises as the rising tide lifts all boats. The recovery will be widespread.
The strength of the COVID recovery will likely be strong enough to overcome bad economic decisions, which is one reason I don’t worry too much about the Biden Administration (with another being the independent streaks of Joe Manchin and Kyrsten Sinema). If we’ve learned anything over the past 12 to 20 years, it’s that the American economy is extremely resilient. We’ve weathered terrorist attacks, massive government control of large portions of the economy, tax increases (remember that tariffs are taxes too), trade wars, civil unrest, and attempts at central planning by both parties.
Through it all, the economy has withstood the dumbest policy decisions that both parties could throw at it. Even the Great Recession only lasted 18 months. More often, we psych ourselves into believing that the economy is either good or bad depending on whether our tribe’s guy is in office while the economy chugs along like the little engine that could. Until the trade war recession and pandemic hit, the Trump economy and the Obama economy were basically the same, but you’d never know it from listening to the partisans.
I say that to say this: I don’t think that bad Democratic economic policies will kill the recovery. I don’t favor tax increases, increasing the minimum wage, or any number of other Biden proposals, but I also don’t think they will crash the economy or kill the recovery. At worst, the Democrats might make the recovery a bit smaller than it would have been otherwise.
There is always the possibility that something unforeseen might alter the trajectory of the post-COVID recovery. There might be another terror attack on the order of 9/11, a war might break out, there could be a catastrophic natural disaster, or maybe the SMOD will finally show up. The mysterious illness in India could even turn into another pandemic.
A lot of things could happen, but the odds are good that we are due for some much-needed relief in the form of an economic boom. Pandemics are rare in modern life, but remember that the 1918 flu pandemic ushered in the prosperous Roaring Twenties. It’s very possible that the 2020s will roar as well.
If you’re near the end of your rope, realize that things will get better soon. And you can do your part to fuel the boom by getting the vaccine and staying safe until then.
You may be wondering why no one on the Racket has addressed the burgeoning Potato Head crisis. The reason that I haven’t written on it is that, frankly, I don’t care.
I would like to make two points, however. The first is that, as an Alert Reader pointed out on our Twitter account, the Mr. and Mrs. Potato Head will not become gender-neutral. As AP points out, the toy line is losing the “mister,” but the characters will retain their gender-specific titles. Therefore the whole Potato Head crisis is really misunderstood. Or more likely misrepresented by the Outrage du Jour set.
Second, even if the Potatoes were transitioning to gender-neutral status, so what? They’re potatoes. If we are going to talk science, let’s also discuss the fact that potatoes are asexual and do not have genders. A gender-neutral potato head would be scientifically accurate.. except for the anthropomorphic features.
Better yet, let’s not get on the micro-aggression train at all.
On another note, as I’m writing this, news has come in that the US has launched airstrikes on Iranian-backed militias in Syria in President Biden’s first military action as president. The attacks were in response to attacks on US military personnel and in response to “ongoing threats” per CNN.
This seems to strike the right balance. Biden has alternately been accused of being weak on foreign policy and being a warmonger. I don’t think either accusation is true (and both are ironic coming from people who cheered Trump’s threatens to go to war with Iran and unilaterally withdraw from Syria). President Biden showed that he is not a pushover.
I don’t think for a minute that this is an indication that he’s about to invade and occupy Syria. This is business as usual for a superpower with troops in a hostile land. For better or worse.
Finally, there was another piece of good news this morning as the Senate parliamentarian ruled that the minimum wage cannot be changed through a budget resolution. The Democratic leadership is under a lot of pressure to ignore the ruling and scuttle the rule. If Biden and Schumer stand firm and abide by the decision, they will deserve a lot of credit for standing up to the progressive left.
As I wrote yesterday, Republicans should meet the Democrats halfway by engaging in good faith talks to find a compromise for something that the country overwhelmingly wants. If the GOP “just says no,” it will increase pressure to eliminate the filibuster and ignore the budget reconciliation rule
The American form of government depends on the ability to compromise with our opponents. We need to rediscover that.
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I always cringe at this types of posts. Clinton and Obama's economys were sure better than Bush and Trump's. I don't see any reason people shoud worry about how a democrat handles the economy.
I fully support the air strike and would not waste time criticizing Joe for his actions that I agree with. Many on the left and right are criticizing him but most of the complaints from the right appear to be directed at the left's hypocrisy. The progressives who aren't critical are crediting Joe with having more noble motives than Trump.