How Dems Saved the Economy
The message we need to repeat EVERY day
GOP leaders talk daily about CRT - and have made a largely marginal issue a central political focus of national debate.
The Dems barely mention how the CARES and American Rescue Plan saved the economy - and that has to change.
We need to repeat and repeat and repeat a few key messages on the economic recovery:
* The Biden recovery is the fastest and strongest in US history.
* This recovery is only one in history where working families were largely protected from economic devastation- many even ending up financially better off than before the pandemic
* Dems took leadership to push through CARES, the American Rescue Plan, and other pandemic programs in the face of GOP resistance at every step.
The Biden recovery is the fastest and strongest in US history
Ignore the Maureen Dowds and media babblers and repeat an indisputable truth. Job creation in the first nine months of Biden’s Presidency is the fastest and largest in any year of any President in history. It dwarfs any year among recent Presidents.
Comparing the first year of each recent President, the job growth in Biden’s first year is like a rocket taking off.
If you compare Biden’s record to past Presidents, it will likely surpass total job growth in his first year than the TOTAL net job creation of George W Bush and Trump for their entire Presidencies- all because policy drove rapid recovery. Notably, it will likely surpass the total job growth Trump had BEFORE the pandemic hit.
Media has underplayed job growth, but after the 531,000 jobs that were added in October - and low estimates of job recovery in earlier months were revised upwards - that economic strength is becoming harder for the media to discount (even if they will try).
This recovery is the only one in history where working families were largely protected from economic devastation
In every past recession, workers at the bottom took the worst economic hit and often saw their financial condition permanently damaged as savings were emptied, they lost their homes, and debt left them financially drowning during any period of recovery.
Instead, because of Democratic-initiated recovery measures, working families were protected from that usual financial destruction and many families even ended up financially better off than before the pandemic
In fact, the US is the only leading economy where real household income - which takes into accounts inflation- as well as overall GDP, are higher now than before the pandemic hit. Every country has struggled with pandemic recovery challenges, from reopening schools to dealing with supply chain disruptions, but strong government action meant the U.S. has recovered far better than other countries.
Most notably, the family finances of the lowest-income Americans were the most strongly helped by US policy, particularly Pandemic Unemployment Insurance and other supports that ensured that job losses did not translate into economic catastrophe for most families.
The results have been far better even compared to during the financial crisis recession - induced by George W Bush’s deregulation agenda on Wall Street - where Obama and the Dems stepped in with a better recovery program than those in the past, but where the programs still helped better-off Americans recover better than those at the bottom.
Economist JW Mason captures the results in this graphic, based on data from the Current Population Survey produced by the Bureau of Labor Statistics, highlights how much better off the lowest-income earners have done in this recession compared to the last, where those at the very bottom has a 10% INCREASE in family income where comparable poor families saw more than a 10% decrease in income a decade ago.
In fact, a study by the JPMorgan Chase Institute found that households had $2.4 trillion more in savings than would have been expected before the pandemic, with the median checking account balance 50% higher in July of this year than back in 2019- with the highest increases among those with the lowest incomes.
A central part of the federal support for families during the pandemic was the extended unemployment insurance programs, which one in four workers benefited from at some point during the pandemic, as this report by the Century Foundation details. Overall unemployment insurance support in 2020 far surpassed what was available in 2009 during Obama’s first year- mostly due to the specific Pandemic Unemployment Assistance (PUA) program, which not only expanded benefits but included many self-employed workers and others usually not eligible for past UI programs. Almost $1 trillion in various UI programs were distributed during 2020, making that program the backbone of the recovery, particularly for lower-income workers most impacted by job losses.
Beyond the infusion of cash into family accounts due to federal recovery efforts, wages have been rising faster than inflation (according to the Household Survey)- with particular large real wage gains for the lowest-wage workers. We are seeing increased union organizing and more confidence as workers at places like John Deere strike for better pay and working conditions - a major gain from pandemic recovery programs that few anticipated.
So despite GOP harping on inflation, working families continue to gain more income day-to-day due to those higher wages ON TOP of the additional support they are receiving from the government.
Dems took leadership to push through CARES, the American Rescue Plan, and other pandemic programs despite GOP resistance at every step
Every single Republican voted against continuing pandemic UI, against the Child Tax Credit expansion and against funding schools and other local government needs through the American Rescue Plan earlier this year.
And while Republicans did vote for the CARES Act, they did that only after opposing any action initially- and they still resisted programs like Pandemic UI that were most critical in helping working families survive the pandemic.
Trump and the GOP initially played down the threat of Covid-19 to both public health and to the economy.
Only after the stock market continued to crash did Trump begin to admit some action was needed - but he proposed limited measures like a payroll tax cut that would have directed most financial support to the wealthiest workers and done nothing for the unemployed.
In final negotiations for the CARES Act in March 2020, most of the focus of the GOP leadership - and some left criticism of the final bill -was on promoting a $500 billion Federal Reserve loan program to assist big corporations during the pandemic. Ironically, because the rest of the CARES Act did such a good job sustaining consumer demand during the pandemic, almost none of the so-called “Title IV” loan money was used and the program expired at the end of 2020.
Even as the GOP fought for corporate subsidies, Dem leaders were the ones who demanded the inclusion of expanded federal unemployment insurance investments, including the provision for $600 per week “Pandemic UI” support for workers. Adopted in late-night negotiations in the Senate, the GOP leadership made up of multi-millionaires had not even recognized that they had signed off on substantial increases in income for many laid-off minimum wage workers.
GOP leaders tried to amend the plan on the floor to limit unemployment benefits, but failed in a 48-48 vote.
Even as tens of millions of people were losing their jobs in lockdowns around the country, GOP Senators ridiculously argued “we don't want this piece of the bill to create an incentive for folks to stop working."
Dem Senators would mock their colleagues for handing out billions to corporations with little worry about accountability but refusing to step up to offer additional help to lower-income workers.
Republicans would fight renewing federal UI support in the fall and refused to support legislation for additional individual checks to all Americans - a popular provision of the CARES Act. Many attributed the refusal of the GOP Senate leadership to issue new checks as a primary reason Democrats won the two Senate seats in Georgia in early January.
With those Senators’ victory, Dems gained control of that chamber and by March had passed the American Rescue Plan Act, which would distribute $1.9 trillion to individuals, schools, local governments, transit agencies, and local governments to rebuild their lives and communities as we recovered from the pandemic.
All of these laid the groundwork for the unprecedented speed and vigor of the current economic recovery.
The goal is for longer-term spending in the recently signed Infrastructure Investment and Jobs Act and the proposed Build Back Better Plan to sustain the recovery for years to come- a long-term framework for growth and jobs that has never been enacted in this country.
So progressives have a strong message for voters on both the critical role of these programs in saving the economy and the Democratic leadership in making it happen.
Now we just have to repeat that message every day until the midterm elections next November.