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Andy Puzder: Let the economy recover from covid-19, then watch it roar back

If anyone is wondering whether the end of the pandemic will slow the Democrats' efforts to "fundamentally transform" America, wonder no more. According to President-elect Joe Biden's recent statement on the November jobs report, "we remain in the midst of one of the worst economic and jobs crises in modern history" requiring "urgent" government action. He's encouraged by the bipartisan negotiations in Washington for a $900 billion relief package, but Biden views it as insufficient — "just the start" — with more government spending needed in January to "control the pandemic, revive the economy, and build back better than before."

Clearly, legislation to help small businesses stay afloat and see their out-of-work employees through this crisis is important. Congress should get a bill that does so to the president's desk as soon as possible. But that's far different from vast additional government spending to "revive the economy" and fund Biden's government-heavy agenda. He doesn't put a price tag on it, but if $900 billion is "just the start," then he probably has trillions in mind.

The problem with both the U.S. economy in general and the labor market in particular is not a lack of government stimulus — it's the coronavirus. People are either afraid to work or state governments, to fight the virus, are locking down the businesses where they would work.

As a result, more than 10.7 million people remain out of work and the unemployment rate sits at a relatively high 6.7 percent (although down from 14.7 percent in April). The lockdowns have been particularly hard on the small businesses that employ many of these people. For example, 110,000 restaurants have closed permanently and 500,000 others are in serious trouble, according to a recent National Restaurant Association survey.

Full coverage of the coronavirus pandemic

But that doesn't mean the economy's underlying fundamentals are in crisis. The economy doesn't need massive government spending or programs to revive growth and create jobs. It needs an effective vaccine that finally puts this virus in the rearview mirror.

With the Food and Drug Administration's emergency use authorization for Pfizer's vaccine on Friday and the approval of Moderna's vaccine on track, we are looking at months rather than years before anyone who wants a vaccination can get one. So, are we really in "one of the worst economic and jobs crises in modern history," necessitating the gargantuan new government spending Biden wants?

While the labor market is certainly not as vibrant as it was in 2019, both the number of people unemployed and the unemployment rate are at about the same level they were in early 2014, a full five years into President Barack Obama's administration and 4½ years after the recession ended. I doubt that then-Vice President Biden thought that was a jobs crisis.

Even during the pandemic, the economy has generated a historic increase of 12.3 million jobs since April. The third quarter's 33.1 percent gross domestic product growth rate was an unexpected historic high, and the Atlanta Fed's GDPNow model is forecasting a very strong growth rate, 11.2 percent, for the fourth quarter. The economy is still recovering, but it simply isn't in as bad shape as Biden and his Democrat allies would suggest.

There are already jobs available that could be filled if people felt safe working. At the end of October (the most recent month for which data is available), the economy had 6.7 million job openings. That's more than in any month during the entire Obama administration, and over a million more than when Obama and Biden left office. The real crisis is a lack of workers, not a lack of jobs.

According to the National Federation of Independent Businesses' monthly survey for the end of November, finding qualified employees was the No. 1 problem businesses faced. Nearly half of these businesses hired or tried to hire employees, and nearly 90 percent of them reported few or no qualified applicants.

The good news is that businesses are reporting an inability to find employees as their major problem, rather than citing the burden of taxes or regulations (as was the case throughout the Obama administration's second term). That may well change should a Biden administration apply regulatory shackles to the economy, and if Democrats gain control of the Senate — and the power to rubber-stamp Biden's wish lists — with the coming runoff elections in Georgia.

For now, though, with the approval and widespread distribution of coronavirus vaccines, the U.S. economy would be free to soar as Americans return to work, with no need for even more government stimulus spending. But that will happen only if the next president resists the urge to use the pandemic to "fundamentally transform" America by implementing programs that swell the government rather than the economy.

Andy Puzder is the former chief executive of CKE Restaurants and the author of "Getting America Back to Work."

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Posted: December 14, 2020 Monday 08:00 AM