Thursday 28 May 2020

Harvard economics professor expects world economy to boom again this year

SHARE carries the most cheerful news story I have read since Coronavirus, at first a cloud no bigger than a man's hand, came to cover the sky in darkness.

Professor Jason Furman of Harvard, a leading economist in the Obama administration thinks the US economy will quickly bounce back.

He thinks the data point to the kind of recovery that happens after a hurricane or similar catastrophe. (This is exactly what I have been saying, providing the lockdowns end quickly.)

This good news has gravely worried leading Democrats.

“This is my big worry,” said a former Obama White House official who is still close to the former president. Asked about the level of concern among top party officials, he said, “It’s high — high, high, high, high.”
Nobody believes the official spokesman but everyone believes the anonymous source. This anonymous source continued:

“Trump beats Biden on the economy even right now! This is going to be extremely difficult no matter what. It’s existential that we figure it out. In any of these economic scenarios Democrats are going to have to win the argument that our public health and economy are much worse off because of Donald Trump’s failure of leadership.”

“Even today when we are at over 20 million unemployed Trump gets high marks on the economy, so I can’t imagine what it looks like when things go in the other direction. I don’t think this is a challenge for the Biden campaign. This is the challenge for the Biden campaign. If they can’t figure this out they should all just go home.”

This is much of the reason why the Democrats continue to advocate lockdowns, to blame Republicans for ending them and to blame Donald Trump for not having stopped flights from China and Europe much sooner (policies they opposed as reactionary, but then they did not have the information the President had).

If the lockdowns look unnecessary, Democrat governors like Cuomo are accused of being responsible for unnecessary deaths in old people's homes and the economy surges, the Biden campaign is in big trouble, without even discussing Mr Biden himself, who unfortunately but unmistakably is in the early stages of senility.


  1. Cristian Constantinescu comments:

    Nassim Taleb knows what he is talking about.
    I would love to see a quick bounce back, but it is not going to happen in my opinion (and not only mine). I am preparing for a long recession, multi-year.


  2. Taleb has a lot to say that is very sensible (Skin in the Game) but the fact is that nobody knows (including Jason Furman who is not known to me before).
    Certainly the US equity market appears to be discounting a decent recovery, but that sentiment could obviously turn on a dime.
    FWIW the S&P500 has recovered to its 200-day moving average, a key techincal indicator. Typically one would expect a pause here with some volatility before one can establish whether the current level is the floor...or the ceiling...!

    1. Taleb has a lot to say that is very sensible (Skin in the Game) but the fact is that nobody knows (including Jason Furman who is not known to me before)

      Yes. It's completely impossible to predict what the economy will do. It's possible there might be a boom in some sectors while others languish. It's possible that the economic indicator so beloved of economists will be booming but unemployment will remain very high. Almost anything is possible.

      The big issue is whether consumer confidence will recover.