Pirate's Cove

Poll after poll show a lack of faith in Sleepy Joe and his administration when it comes to economic matters, along with concerns about the state of the economy and the recovery. And in comes the NY Times

Will the Delta Variant Wreck the Recovery?

The good economic news, when it comes to the ascendant Delta variant of the coronavirus, is that it puts the economy at risk in only two ways. The bad news: They are supply and demand.

So far, the recovery remains robust by most available data. Real-time indicators of business activity show little evidence that Americans are pulling back their economic activity in any meaningful way.

But while there is no reason to expect a repeat of the huge disruption of 2020, the new variant puts at risk the kind of rapid recovery that has been underway for months. Just as major parts of the economy were figuring out how to return to full functioning, this may amount to throwing sand in the gears.

The emergence of the variant has already caused several wobbly days on Wall Street. And the chairman of the Federal Reserve, Jerome Powell, is likely to face questions about the economic implications of Delta in a news conference Wednesday afternoon after a meeting of the Fed’s policy committee.

At the White House, officials are monitoring the variant closely, but see no evidence that it is hurting the recovery — or that policymakers will need to inject another dose of short-term fiscal stimulus anytime soon.

So, at the moment, there’s no widespread concern from the Delta variant seriously disrupting the economy. But, they are putting it out there in case they need to flip to protect Biden from his crappy handling of the economy. However

As economists and policymakers game out the nature of those risks, what stands out is not the chance of a major shutdown. Instead, the concerns are the constraints on the availability of workers and on the supply and demand for many services.

This gives Democrats a chance to push for significantly raising the minimum wage, and for more government control of the economy.

On the supply side, there are already severe disruptions in many supply chains, especially those that rely on goods imported from Asia. These create ripple effects for the United States, such as a shortage of computer chips that is in turn hindering automobile production and contributing to high inflation.

Shockingly, some people still don’t know this. They show up and are like “where are all the new and used cars? Why do I have to put a deposit down and wait for the new car I want?” It gets tedious explaining this.

All of that means that the policy response to the Delta variant, as for Covid all along, relies more heavily on getting the best possible public health outcomes, with conventional economic policy a secondary concern.

Just when it seemed that the pandemic policy story was finally winding down, in other words, it is starting to repeat itself.

And there you have it. The ending is showing that the economy might go south again, and all this is meant to protect Biden from criticism. And, let’s be honest, it wouldn’t be all his fault, just like it wasn’t Trump’s fault. Trump wasn’t mandating this and that, locking people down, saying they couldn’t buy seeds for the garden or go out and exercise. He wanted the economy moving. Most was done at the state level. Joe seems to be mandating and pushing at the federal level. So, he bears more responsibility, and his economic recovery plans have not been working.

Read: NY Times: Delta Variant Could Totally Slow Economic Growth/Recovery »