Center for American Progress

Uncertainty can ruin an economy. The bungled covid-19 response just adds to it.
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Uncertainty can ruin an economy. The bungled covid-19 response just adds to it.

Jacob Leibenluft writes about the significant economic implications of the Trump administration's response to COVID-19.

During the last economic crisis, conservative critics of President Barack Obama had a diagnosis for why jobs weren’t coming back faster: uncertainty. Higher deficits, Obamacare and regulations protecting workers or the environment were all, the argument went, creating devastating uncertainty that was holding back growth and costing jobs. “Uncertainty over the regulatory-and-tax rules of the road is exactly what has buffaloed business and stifled the animal spirits that are so necessary for investment and job creation,” wrote Larry Kudlow — now President Trump’s National Economic Council director — in 2010.

Back then, there was little evidence to back up these claims — and, in fact, they were typically used to rebuff additional stimulus that could have brought jobs back sooner. In the current downturn, however, things are different: Today, uncertainty — caused now by the interplay between a public health crisis and an economic one — really is keeping the economy back, and it threatens to stall any recovery unless it can be countered by an effective policy response.

The above excerpt was originally published in The Washington Post. Click here to view the full article.

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Authors

Jacob Leibenluft

Senior Fellow

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