The Economy Is Not Like the Weather

Weather metaphors for the economy abound. We face “economic headwinds,” we “weather the economic storm,” and we hope for “sunny skies ahead.” Although visually compelling, comparing the economy to the weather is misleading. We can’t change weather conditions, but we can change conditions in the economy.

Take our sky-high unemployment rate. A survey released this week shows that nearly two out of three Americans believe policymakers can’t do anything to bring down the jobless rate. Instead, they say, “we just have to wait until the private-sector economy improves” – hunker down and ride it out, like waiting for a hurricane to pass. Not true. When the private sector isn’t hiring, public dollars keep the economy going. And they have: The nonpartisan Congressional Budget Office estimates that between 1.4 million and 3.3 million people nationwide owe their jobs to the American Recovery and Reinvestment Act of 2009 (ARRA). In other words, without the swift efforts of policymakers early last year, the unemployment rate would be even higher and the devastation of the recession far greater.

Why don’t many people realize that we have the ARRA to thank for preventing an even deeper downturn and an even weaker job market? Christina Romer, who just stepped down as chair of the President’s Council of Economic Advisers, suggests it’s “because the [ARRA] was a mixture of hundreds of measures, many of which don’t come with Recovery Act signs or easily identifiable links to the Act….” For example, one of the “best-kept secrets” of the recovery act is the TANF Emergency Fund, which California counties have successfully used to put thousands of families back to work, while also helping businesses stay afloat or expand during tough economic times.

Recovery efforts have pumped much-needed dollars into cash-strapped local communities, as we’ve documented here, but those dollars are starting to run out, and state and local budget cuts present the greatest threat to continued recovery. In fact, data released this morning show that nationwide, state and local governments cut another 10,000 jobs in August. That’s why it’s more important than ever that policymakers do more to keep the recovery going. Congress could start by extending the TANF Emergency Fund, which is set to expire at the end of the month. By doing so, policymakers will ensure that thousands of California families – and thousands more families in other states – are able to keep their jobs.

— Alissa Anderson

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