The U.S. economy is at last moving into the recovery stage from the coronavirus, at least in most states.
One definite pattern has emerged: Republican states are reopening much more swiftly than Democratic states. A most notable case in point is the revival strategies of the four largest states. California and New York are closed for weeks to come; Florida and Texas are getting back in business now.
Battle lines are getting drawn up between the two parties on the next round of "stimulus" for the economy. House Speaker Nancy Pelosi and Senate Minority Leader Chuck Schumer are demanding as much as $1 trillion more in federal money to bail out state budgets. The blue states of California, Illinois, New Jersey and New York are lining up to be first at the trough. Senate Majority Leader Mitch McConnell has said there should be "no blue state bailout," and he is right.
We've known for years that China lies and cheats and steals when it comes to international trade. Now we've learned that it also spread the deadly disease COVID-19. Donald Trump ran for president five years ago as the ultimate China hawk on trade, and he was way ahead of the curve for protecting against China's devious behavior. He saved countless lives here in the United States by shutting down travel from China back in February.
America's domestic energy producers are under siege. The price of oil fell to below $5 a barrel on Monday, down from roughly $50 a barrel a year ago. This 90% drop in price is sending nearly the entire oil and gas industry into bankruptcy.
What is going on here?
It would be natural to believe that nearly everyone on the planet is horrified by the death and economic destruction wrought from the COVID-19 pandemic. But some see the body bags and the shutdown of economic production as a weird kind of blessing in disguise.
There is nothing worse than the government bailing out private industries. I've spent a career opposing corporate welfare giveaways. When an industry gets in financial trouble because of its poor business practices, the owners, shareholders and executives should bear the cost -- not the taxpayers.
"Government help to business is just as disastrous as government persecution. ... The only way a government can be of service to national prosperity is by keeping its hands off." -- Ayn Rand.
In the face of the coronavirus pandemic, everyone should read Robert Higgs' economic classic "Crisis and Leviathan." The critical warning of this masterpiece is that government always uses a crisis -- from the Civil War to the Great Depression to World War II -- to expand power, not only during the emergency but also afterward. Emergencies tend to ratchet up the cost and power of government permanently.
It was just a little over 10 years ago, at the height of the 2008-2009 financial crisis, that House Speaker Nancy Pelosi said one of the dumbest things in modern times. The best way to stimulate the economy, she declared, was with "unemployment insurance and food stamps." Right. Paying people not to work will get more people to work.
The Democratic presidential field is down to two old, white males, former Vice President Joe Biden and Sen. Bernie Sanders. Though they are said to represent two polar-opposite wings of the party, on one issue, they are in complete agreement. They both have solemnly pledged to destroy millions of blue-collar jobs across Middle America's oil patch.
Why in the world is the federal government, 20 years into the 21st century, continuing to pour tens of billions of tax dollars into little-used mass transit rail projects? In a digital age with increasingly popular and affordable door-to-door ride-sharing apps such as Uber and Lyft, universal use of cars by all income groups and the revolution of smart driverless vehicles around the corner, subway systems and light rail are as old-fashioned as the rotary phone. The federal government and urban planners in at least 25 cities are frantically spending money to lay down tracks that, in 10 or 20 years, they will have to rip right out of the ground.
The U.S. Energy Information Administration just announced some spectacular news that should be banner headlines across the country: The price of natural gas has fallen to its lowest February level in 20 years. The data shows that natural gas prices fell to $1.77 per million British thermal units. In inflation-adjusted terms, the price of gas has plunged by some 80% since its high of $13.60 12 years ago. The price is down 90% since 2005, when prices hit nearly $20. (Quick: Can you think of anything else that now costs one-tenth of what it did 15 years ago?)
There's an old saying about baseball and life that no one ever had a 1.000 batting average. It turns out that's not exactly true. At least when it comes to the Trump economy, anti-Trumpers defied the near-impossible statistical odds and somehow have batted 1.000 on their predictions. They managed to get it wrong every time.
President Donald Trump's new budget confirms that without corrective action, trillion-dollar deficits will be with us for years and perhaps decades to come. Trump's budget plan has many smart and urgent spending reforms. But will Congress ignore them once again?
President Donald Trump rightly touts the economy-wide savings from his deregulation initiatives. But one federal agency didn't get the memo. Some members of the Surface Transportation Board, which has oversight over the nation's network of freight railroads, wants to resurrect price controls on the industry.
At the World Economic Forum in Davos, Switzerland, last week, President Donald Trump again talked positively about negative interest rates. That's not a very good idea considering negative interest rates are a warning signal of deflation, which can be as bad for an economy as runaway inflation.
Almost all of us know (because President Trump boasts of it in nearly every speech) that our 3.5% unemployment rate has reached a 50-year low. But this official decline in joblessness doesn't tell the entire story of the improvement in the job market in the United States. And it doesn't fully capture the change in direction between what happened under President Barack Obama and Trump.
Over the holidays, I read Elton John's biography, "Me." He writes about his friendship with Freddie Mercury, the ultratalented lead singer of the rock group Queen. Mercury tragically died of AIDS at the age of 45 in 1991. Mercury was one of the last people to die of the disease in Britain during the epidemic years. John writes sadly and almost offhandedly that if Mercury had lived one year longer, he probably would have survived because of the AIDS medication that eventually saved millions of lives.
Let's face it: 2019 is going to be a hard year to beat -- stocks and 401(k) plans up more than 25% on average, wage gains of 3% to 5%, 7 million surplus jobs and the lowest unemployment and inflation rates in nearly 50 years. That's a lot to celebrate.
These days, when you listen to the gloom of the media and many of the presidential candidates, you have to wonder what country these Debbie Downers are talking about.
