Larry Kudlow makes a interesting point that the V shape recovery, uneven as it is, continues as unemployment dropped to 5.8. As I mention before, our employment should be lower, between 4 to 4.8 percent and this higher unemployment is due to many states slow in reducing or lifting their economic restrictions.
If Biden did nothing and no additional stimulus passed, we would be pushing even faster economic growth. Kudlow has made the point that this recession was the reaction to a natural disaster nationwide, the pandemic. The economy was in good shape in February 2020 and the economic restrictions enacted along with the lockdown stopped economic growth abruptly. Unemployment was 14.4 percent but many states opened up and the unemployment dropped to 6.7 by the end of year and the last six months saw the annualized rate of nearly 19%.
It could have been been even higher if other states followed through with opening their economy and if many states chose to open their economy. Blue states were out performed by states with Republican governors and their policies slowed the recovery.
Kudlow warns, “If Uncle Joe’s policies — I’m calling them his plan for a Green Workers’ Paradise — get through, then the outlook is going to turn poor: stagnation, growth recession with big inflation. If his pre-Soviet, Bulgarian approach is enacted into law, we will devalue the dollar and choke off the supply-side of the economy.”
On the Donelson Files, Center for American experiment economist John Phelan feared that Demand side of Biden policy could choke off the recovery and we can see 10 percent inflation by year end. Phelan joined follow researcher Martha Njolomole and Jim Echols discuss the economic development and how to move forward. Among the agreements was that we need less regulations in urban center and remove obstacles for lower income workers to make a living or start new businesses, reducing taxes and restraining spending. Echols noted that there are educational programs being developed in the Kansas City area to educate minorities about capitalism and all three noted how much of the media were not well informed on economy as recent new stories showed.
Kudlow is an optimist since he believes that much of Biden agenda moving forward will not be passed as he stated, “Wait a second, though — are those policies going to get through? That’s what Gerry Baker and Kim Strassel are asking, and a couple of weeks ago, when the Senate parliamentarian allowed only one 51-vote reconciliation package, I myself started getting interested in the possibility that these far-left policies just might not make it across the finish line and that the forces of growth and good and prosperity would eventually prevail.,,The congressional Republican Party is completely united against the high-tax Green Workers Paradise.”