Paul Krugman details how the GOP may pull the plug while the economy is 'still on life support'
Liberal economist Paul Krugman delivers some good news and some bad news in his New York Times column this week. The good news: the U.S. jobs report for May released by the Bureau of Labor Statistics on June 5 was much better than expected. The bad news: the U.S. economy, battered by the coronavirus pandemic, is “still on life support” — and Republicans in Congress will want to turn that life support off.
“A good jobs report may be bad for future policy,” Krugman warns. “Why? Because the U.S. economy is still very much on life support. And a bit of good news is all too likely to encourage the usual suspects to end that life support too soon, with dire effects just a few months from now.”
During the pandemic, Krugman has been stressing the need for economic stimulus and slamming Republicans he believes are weak in that area, such as Senate Majority Leader Mitch McConnell. And the fact that the BLS figures released on June 5 were better than expected, argued Krugman, doesn’t mean that stimulus should be discontinued or that the federal government shouldn’t be helping unemployed workers, state governments or small businesses that are struggling.
“So far, employment numbers in this time of COVID-19 look like a fishhook: a huge decline followed by a much smaller upturn,” Krugman explains. “Unemployment is still higher than it was for most of the Great Depression. And while unemployment over all fell in May, it rose slightly for black workers.”
The lesson to be learned from the better-than-expected jobs report, according to Krugman, is that “emergency aid” passed by Congress in March “largely at Democrats’ insistence” has worked.
“This safety net alleviated hardship while allowing the unemployed to maintain spending and encouraging businesses to maintain their payrolls,” Krugman observes. “And unless Congress and the White House act, that safety net will be yanked away by August…. The Paycheck Protection Program, which offers small businesses loans that can be converted into grants if they’re used to maintain payroll, is already out of money.”
Republicans in Congress, Krugman laments, fail to realize that the BLS figures released on June 5 make a strong case for more economic stimulus — not less.
“We’re facing probable disaster in the near future unless Congress acts,” Krugman warns. “But here’s the thing: Republicans just hate helping the unemployed, hate aiding states — in fact, hate any kind of disaster response other than tax cuts. And the uptick in jobs gives them an excuse to indulge their hatred.”