Bloomberg: “It’s fashionable to think that, just like his former boss, President Barack Obama, president-elect Joe Biden is inheriting a damaged economy that will struggle to recover, perhaps for years. The reality is quite the opposite, with Biden stepping into a dream scenario for economic growth on the other side of the battle with the Covid-19 pandemic.”
“There is nothing fundamentally ‘broken’ in the economy that needs to heal. And unlike the last two cycles, there was no obvious financial bubble driving excessive activity in any one economic sector when the pandemic hit. There is no excessive investment that needs to be unwound and the financial sector has escaped largely unharmed. The indiscriminate nature of the shutdowns this past spring provides the economy with a solid base from which to grow. The economy collapsed in the spring because in the effort to get ahead of the virus, we shut down about a third of the economy on an annualized basis. That created a lot of opportunity to rebound when the unnecessary causalities of the shutdown came back online and began to grow around the virus. That process will continue.”