Jason Furman, former chairman of the Council of Economic Advisers during Barack Obama’s administration, has been making the case to the Biden campaign that Democrats should be fearful of the third quarter of 2020 where he predicts we will “see the best economic data we’ve seen in the history of this country.”
What Furman is suggesting is that while unemployment will be in the double digits, entire industries such as hospitality will remain decimated and tens of millions of people will continue to not afford the health care they need in the middle of a global pandemic, and so Democrats should be wary of making the state of economy central to the 2020 campaign.
Families are facing catastrophe, but Furman’s concern is not how we create policies that address the deep structural problems at the root of people’s economic pain. Instead he fears that Democrats will overhype the current crisis. “Don’t make predictions that could be falsified. There are enough terrible things to say, you don’t need to make exaggerated predictions,” he told Politico. “The argument that we are in another Great Depression will look like it was overstated.”
An acolyte of Clinton treasury secretary and former Goldman Sachs chair Robert Rubin, Furman’s thinking exemplifies the problem with the upper echelons of Democratic Party economic policymaking. Instead of examining the very real pain felt by workers in our economy over decades, they hide behind broad macro numbers and use them to avoid confronting the economic hardship caused by the very systems they helped create.
Manufacturing workers watched as their jobs were outsourced in the aftermath of NAFTA and other bad trade treaties, while leaders in the Democratic Party either ignored their plight, claimed we were trading low-wage jobs for higher-wage ones, or falsely promoted the promise of programs like the Trade Adjustment Assistance which never lived up to the hype.
Factories closed, communities were gutted, and good jobs were nowhere to be found. Yet the economic thought leaders in the Democratic Party continued to paint rosy economic scenarios. This is exactly what Furman did in the White House while selling the Trans-Pacific Partnership.
A certain set of Democratic policymakers and strategists would like to pretend that the only thing exposed by the COVID-19 pandemic is the utter incompetence of Donald Trump. What they would like to ignore is that the crisis we are in has laid bare the consequences of the neoliberal economic agenda Furman and his ideological allies have been pushing for decades.
They fought mercilessly in 2019 for a health care system where insurance coverage was tied to employment. In the 1990s they scaled back welfare programs. They pushed policies that tied educational advancement to personal debt and an international trade system whose supply chain is over-reliant on foreign manufacturing, in particular in China.
Each of these steps were taken under the advisement of wonderfully written economic studies claiming broad economic benefits for the country. In truth the opposite occurred, and the economic pain of the current crisis has been magnified because of them.
Earlier this month, the Biden campaign was promoting the notion of an “FDR-size presidency” under the rationale that the Democratic nominee needs to meet this moment. For centrist policymakers this was the threat they thought had been defeated in the primary.
Furman, on the other hand, wrote an op-ed in the Wall Street Journal in early March making his case for a “big coronavirus stimulus.” Big to Furman amounted to a laughably small $350 billion program.
Furman is not worried that Trump’s campaign will successfully be able to sell an economic miracle. Instead he and other centrist policymakers’ greater fear is that the economic conditions of the Great Depression would steer the Biden campaign and administration toward bolder economic policies. While thus far there is little evidence of this, even deploying progressive rhetoric is too much for the centrist establishment.
Furman’s former boss, Obama White House chief of staff Rahm Emanuel, who has been privately advising the Biden campaign, explained this to David Axelrod on his podcast this week. “The moment may call for it, and I’m a big believer in never allowing a crisis to go to waste, but the whole primary was a couple people in our party talking about a revolution and a couple people in our party talking more reform than revolution,” he said. “And what Biden is now saying is, ‘Well, the post-COVID world requires a revolution,’ and I’m surprised, because he did not win on the revolution model. He won on the reform model.”
Emanuel continued, “I’m not sure revolution is going to be reassuring to Southfield, Michigan; Bloomfield, Michigan; the suburbs out of Milwaukee; the suburbs in Phoenix.”
Axelrod replied that Biden’s policies should be “packaged as pragmatic answers to the crisis.”
The notion that people who are out of work, without health care and not knowing how they are going to put food on the table, are not seeking help but instead political pragmatism is ludicrous. It is yet another example of centrists ignoring economic pain because they fundamentally support a politics where “nothing will fundamentally change.” This is what they were promised by Joe Biden’s campaign. But if they acknowledge that the economic fallout from the coronavirus could lead to a second Great Depression, then the logical policy response is a second New Deal, and that promise would be broken.
Instead Furman suggests a Democratic response fundamentally based on accepting a false reality. He knows that Donald Trump will campaign saying he has built the greatest economy in American history. Regardless of data, the president was always going to make that claim, and Fox News and his other propaganda organs would dutifully tout that party line.
That is how fearful the centrist establishment is of progressive policy change. They would rather ignore the real pain of working people and cower to the phony economic posturing of Donald Trump than confront corporate power.