by Mitch Kokai
Senior Political Analyst, John Locke Foundation
Current unemployment rates show the US job market is bouncing back from the coronavirus recession far faster than experts recently predicted. That stands in stark contrast to 2009, when Americans experienced much higher unemployment rates than projected by proponents of the Obama stimulus plan.
As Democrats’ February 2009 stimulus law was in its final drafting stages, the lead economists for the incoming Obama-Biden administration released a report summarizing their expectations for the “Job Impact of the American Recovery and Reinvestment Plan.” That January 2009 report included a memorable chart showing projected unemployment rates with and without the stimulus legislation (the blue lines below). But when reality didn’t match those projections, Congressional Republicans turned the chart into a political cudgel, regularly adding actual unemployment rates (the red line) to show how Democrats’ stimulus wasn’t delivering jobs as promised. …
… So omnipresent was “the chart” — accompanied by chants of “where are the jobs” — that if you do a Google images search for “Obama stimulus” today, the chart above is still one of the first results.
The slower-than-projected jobs recovery became a political disaster for Congressional Democrats, who lost the House majority in November 2010. As outgoing Speaker Pelosi admitted then in defeat, “Nine-and-a-half-percent unemployment damaged the majority.”
Fast forward to 2020. The state of the US economy is likely to have a powerful effect on this fall’s elections, too. But there are several key differences this time, including that the March 2020 coronavirus stimulus plan was approved by overwhelming bipartisan majorities, and the Trump administration opted against releasing updated forecasts for the economy’s recovery. Still, estimates released by the nonpartisan Congressional Budget Office (CBO) on May 19, 2020 reveal what may be the most important difference between the Great Recession experience and today: unemployment this time has improved far faster than experts projected.