Kevin Hassett, senior economic adviser to President Donald Trump and the man pushing to quickly reopen the U.S. economy to boost Trump's re-election chances, predicts a "raging" economic recovery by election time in November despite historic double-digit unemployment.
It's widely held in U.S. political circles Trump stands little chance of re-election as long as the two most painful economic impacts of the COVID-19 pandemic -- high unemployment and an economic recession -- persist into November. Americans blame Trump for their suffering due to the pandemic, and their anger can be seen in a poll by Trump's favorite TV station, Fox News.
Released May 21, this poll found 48% of voters will elect Democratic Party presidential candidate Joe Biden president compared to 40% for Trump. More to the point, only 43% of voters approved of Trump's handling of the federal government's pandemic response, down 8% from the previous poll in April.
On Monday, Hassett sought to paper over this bad news by saying he foresees "all the signs of economic recovery are going to be raging everywhere" by November despite double-digit unemployment.
Hassett admitted the U.S. might still not be back to full employment by September or October. He said his view about this will change if there were a vaccine in July, and he'd be way more optimistic about full employment).
Hassett also admitted current unemployment figures have to reach Great Depression levels. The highest unemployment rate during this global catastrophe that began in 1929 was 25%.
Hassett acknowledged U.S. unemployment will hit Great Depression-level figures in May when he said this number could be "north of 20%." The reason for his pessimism is there are still a huge number of initial unemployment insurance claims still being processed,
Because of this and other reasons, Hassett expects the unemployment rate will be higher in June than in May. And, in a bid to boost Trump, Hassett said he also expects unemployment to trend downwards starting July.
Hassett's optimism about unemployment falling in July is groundless given the non-partisan Congressional Budget Office (CBO) projects unemployment at 16% in the third quarter, 11.7% in the fourth and 11.4% for the entire year of 2020.
Despite being an economist with no experience in medicine whatsoever, Hassett was hired by Trump to oversee his administration's medical response to the pandemic. It was in this role Hassett made his projection -- since proven horribly wrong -- deaths from COVID-19 in the U.S. will plunge to zero by May 15. That hasn't occurred.
Instead, the U.S. recorded at least 400 new deaths due to COVID-19 as of Monday afternoon on the East Coast and 600 at the same time on Sunday. More than 99,700 people in the U.S. have died from the disease, the world's highest death toll.
Hassett's widely ridiculed "cubic model" was invented to elicit results supporting the Trump's drive to reopen the economy, said Jason Furman, former chairman of the Council of Economic Advisors under President Barack Obama. Furman said Hassett's model has no place whatsoever in any discussion of the government's response to the pandemic.
Furman said Hassett's cubic fit made terrible predictions back in March and April. The methodology Hassett used, which is a long-discarded epidemiological model was chosen to get the results Trump wanted, noted Furman.
