September 17, 2021
Federal Mismanagement of Economic Policies Threaten Recovery
The American economy has the fundamental capability to recover from the COVID-19 pandemic but is being held back by a variety of factors. In a recent survey, American CFOs expressed optimism that the American economy has the potential to bounce back but is being inhibited by the poor handling of the Delta variant, rising inflation, and a labor shortage.
Fox Business: “The decline in optimism likely reflects the economic uncertainty triggered by a number of external factors such as the spread of the highly contagious delta variant, return-to-work delays, inflation and supply chain disruption, among other issues.
“Internally, CFOs cited difficulty attracting and retaining labor and a potential slowdown in return-to-work as the biggest risks facing their businesses.
“Talent and labor have been a perennial internal risk cited by CFOs in our quarterly surveys,” Deloitte said. “This quarter, though, concerns over talent and labor and a host of related issues – from retention to morale, disgruntlement, and rising wages – are even more pronounced among CFOs.”
The positive sentiment from CFOs is clashing with reality as unemployment claims were on the rise last week after reaching their pandemic low. Rising unemployment claims follow a devastating jobs report for August that shows an economy at the mercy of incompetence from the federal government.
AP: “The job market and the broader economy have been slowed in recent weeks by the delta variant, which has discouraged many Americans from traveling, staying in hotels and eating out. Earlier this month, the government reported that employers added just 235,000 jobs in August after having added roughly a million people in both June and July.
“Hiring in August plummeted in industries that require face-to-face contact with the public, notably restaurants, hotels and retailers. Still, some jobs were added in other areas, and the unemployment rate actually dropped to 5.2% from 5.4%.
“The steady fall in weekly applications for unemployment benefits coincides with a scaling-back of aid for jobless Americans. Last week, more than 8 million people lost all their unemployment benefits with the expiration of two federal programs that covered gig workers and people who have been jobless for more than six months. Those emergency programs were created in March 2020, when the pandemic first tore through the economy.”
For the American economy to fully recover, lawmakers in Washington should pursue pro-growth policies that remove barriers to entry and cut red tape for job creators. Massive stimulus bills and increased spending may have seemed like good solutions in the short term, but the impacts of those misguided policies are now stifling growth and opportunity.