Ashok Dhillon
Oct 17, 20207 min
The COVID-19 pandemic of 2020 has to-date cost over a million lives and devastated the global economy. The generally spotty response of global leaders in managing and controlling the pandemic has greatly prolonged and exacerbated the negative effect of the pandemic on their respective economies. In 2020, the Global economy, on average, is expected to contract by almost 5%, according to the International Monetary Fund (in its latest Report the IMF is revising the figure to 4.3%, but they often err on the side of being too optimistic).
This failure of responsive leadership is nowhere more pronounced than in the United States, currently the wealthiest and most powerful country in the world, with the greatest failure in leadership. With only 4% of the world’s population, the US has approximately 20% of the global deaths to the COVID-19 virus, at 216,000, and has from the very beginning led the world in the highest numbers of people infected with the virus, reaching 7.9 Million and climbing daily.
This extraordinary failure of leadership is directly attributable to the irrational response to the health crisis by the incumbent President, Donald J. Trump, and his administration, supported by the sycophantic Republicans in Congress and the Republican-majority-controlled Senate.
This sycophantic support by the Republicans has greatly emboldened Trump, the President, who has ignored and actively undermined his administration’s top-most medical and scientific experts at every turn, and as a result made America the most infected country in the world, with the greatest number of deaths due to the pandemic, with the corresponding exaggerated and prolonged impact on the US economy.
The US is an advanced country, and yet because of Trump, his administration, and the Republican’s making light of the pandemic, calling it ‘only a flu’, ‘a hoax’, etc., and the politicizing of all the precautionary measures such as face masks and strict social distancing, to control and contain it, America is the worst hit advanced country in the world by a long shot. The other advanced countries have a fraction of the number of infections and deaths, of the US. This failure to manage the pandemic is specifically Trump’s and the Republican’s to own.
The extraordinary failure to properly manage the pandemic, which is currently setting records of new infections in several States, is directly responsible for the prolonged economic hit that the American economy is going to take.
In the rush to open the economy, the travel, the businesses, schools and colleges, Trump and the Republicans failed to take the example of China into account, which was to first bring the virus under strict control, and then open the economy, which they have managed to do quite successfully. Today, China’s economy is setting new records in its positive trade balances, while America has just run-up its worst trade deficit numbers, which Trump had vowed to reverse with his trade and tariff war on friends and foe alike, particularly China. Trump lost that war for America, and by the numbers and global standing, China won.
Trump and the Republicans failed to understand that without strictly controlling the pandemic, there was no opening the economy, and no going back to ‘normal’ life, without unacceptable numbers of Americans getting sick, and dying.
There was a vertical drop in economic activity as the pandemic hit the US economy, and as vast areas of the economy shut down to try and contain the ‘first wave’. Over 20 million jobs were lost in that first hit, and the stock markets dropped precipitously.
The extraordinary and swift action of the Federal Reserve (the Fed) in providing unprecedented Trillions of dollars in ‘Monetary Stimulus’, coupled by a similar unprecedented ‘Trillions in Fiscal Stimulus’ by Congress, swiftly approved by the Senate and the White House, limited the massive economic damage to individuals, families and businesses, while the Fed single-handedly reversed the drop in the stock markets into a steep rebound. This steep rebound in the stock markets was by no means a ‘V-shaped recovery' of the economy, as by now the stock markets were effectively detached from the underlying economy, and were firmly attached to the Fed instead. And even as the US struggles with a faltering economy, and a partial rebound in jobs (of about the 20 million jobs lost, about 11 million have recovered), based on all the fiscal and monetary stimulus, and the ‘whatever it takes’ long term assurances by the Fed Chair, Jerome Powell, the stock markets have rebounded to irrational levels - not because of any Trump recovery policies.
Let us be clear, the record setting stock markets are Fed Chair Jerome Powell’s doing, and not Trump’s. And if proof was needed by the more sceptical Trump supporters, and his shills, the possible defeat of Trump in the coming election is not spooking the markets, but a cautionary word about any ‘tightening’ by the Fed Chair, or the delay in additional fiscal stimulus do send the markets into an immediate swoon. It is the Fed’s stock market.
In the US, it is a very well promoted myth that the Republicans are better economic managers than the Democrats. A good look at the previous administrations will show that almost all the Democrat administration did better in producing growth, jobs, stock market performance, and general economic well-being for most Americans, than most of the Republican administrations.
According to the internationally famous economist, Nouriel Roubini: ‘In fact, US recessions almost always occur under Republican administrations – a pattern that has persisted since our book appeared. The recessions of 1970, 1980-82, 1990, 2001, 2008-09, and, now, 2020 all occurred when a Republican was in the White House (with the exception of the double-dip recession of 1980-82, which started under Jimmy Carter but continued under Ronald Reagan). Likewise, the Great Recession of 2008-09 was triggered by the 2007-08 financial crisis, which also occurred on the GOP’s watch.
This tendency is not random: loose regulatory policies lead to financial crises and recessions; and, compounding matters, Republicans consistently pursue reckless fiscal policies, spending as much as Democrats do, but refusing to raise taxes to make up for the resulting budget shortfalls.
Owing to such mismanagement under the George W Bush presidency, President Barack Obama and Vice President Joe Biden inherited the worst recession since the Great Depression. In early 2009, the US unemployment rate surpassed 10%, growth was in free fall, the budget deficit had already exceeded $1.2 Trillion, and the stock market was down almost 60%. Yet, by the end of Obama’s second term in early 2017, all of those indicators had massively improved. In fact, even before the Covid-19 recession, US employment and GDP growth, as well as the stock market’s performance, were better under Obama than under Trump. Just as Trump inherited millions from his father, only to squander it on business failures, so he inherited a strong economy from his predecessor, only to wreck it within a single term.’
Now that Trump has greatly aggravated the economic fallout from the pandemic, Joe Biden will once again be taking over a broken economy, from the previous Republican administration. But, he has the experience of taking over a shattered economy from a Republican administration previously, and in helping to putting it back on the path of stability and growth, as he did with President Obama, on inheriting the shattered economy from the Republican George W Bush, in the financial and economic crisis of 2008, known as ‘the Great Recession’.
Conversely, Trump inherited two terms of solid, almost unbroken economic and jobs growth from Barack Obama and Joe Biden, and with his irrationality and incompetence, greatly damaged the US economy in his very first term. And pre-pandemic, despite inheriting a solid economy and jobs market, Trump could only manage average GDP growth rates and no more. After the pandemic, Trump lost it all, and upon losing the election will be handing over a severe economic crisis to Joe Biden and the Democrats. The negative economic numbers from this pandemic crisis compare to ‘the Great Depression’.
Additionally, Joe Biden has a long history in public service and has built a consistent image of being able to unite disparate parties and reach across the political divide to work with members of the Republican Party, on important policy issues. His long political record proves Joe Biden to be a unifyer, while Trump, unfortunately, is the greatest political and racial divider amongst decades of American Presidents. In his short public life, Trump has proven only how to divide America and Americans.
Joe Biden also has built a long record of championing the causes of the blue-collar workers, the working Americans, the Middle Class. And in this very difficult time, he will work to control the pandemic with expert and scientific advice, rather than encourage foolish, dangerous behaviour that prolongs and exacerbates the pandemic. Biden will work to stabilize the economy and bring jobs back with common sensical policies geared towards the working people and small businesses. He and the Democrats have well thought out fiscal plans to bring back the economy, jobs and stability to the US, including the long talked about but still not done - investment in America’s crumbling infrastructure.
Trump and the Republicans have no such formulated plans. They are limited to - cut taxes for the wealthy, regardless of the state of the economy, and cut regulations to facilitate corporate abuse. Both of their old favourite policies do more economic harm than good, as decades of past Republican administration records show when compared to the Democrats.
Joe Biden and the Democrats will work to bring better healthcare for all Americans. It is a priority with them. Trump and the Republicans could not produce anything resembling a healthcare plan despite all of Trump’s promises of ‘healthcare for all and cheaper’, and all the Republican efforts to-date. Nada! Nothing! Zilch! Finally, they just gave up and continued to destroy what little Americans already had in healthcare, the ‘Affordable Care Act’.
Similarly, the Republicans have no ambitions or plans to improve the education systems in America, while the Democrats are bursting with ideas and ambitions to invest in America’s youth, and their training for the very competitive global future.
As the past records show, the Republicans can out-spend the Democrats when it comes to budgetary deficits. Trump proved that in-spades, once again, but they don’t know how to balance the budgets, or even reduce them. Democrats have actually done both.
In spite of consistent Republican propaganda, the records show the Democrats are better economic managers. Joe Biden and Kamala Harris are no ideological extremists but are are solidly common-sense moderates. They will manage the economy and all the critical issues facing America, like Climate Change, sustainable environmental regulations, green energy, consumer protection, stable business environment, pandemic and infectious disease protection, job creation and financial stability, law and order, American security, and restoration of American global leadership, far better than Trump and his sycophants, as the records show. Joe Biden will restore America. Trump only knows how to run it into the ground, like his businesses, while claiming the opposite...but somewhere there are his TAX RETURNS. The Truth.