Swamponomics: Economy Still Short Millions of Pre-Pandemic Jobs

Larry Summers (Photo by Robin Marchant/Getty Images)

President Joe Biden has celebrated his jobs record in 2021, declaring that the United States is “back to work.” Some Democrats claimed that he had created more jobs in seven months than any of his predecessors in history. In 2021, it was the highest of highs and lowest of lows on the labor front, with the best report coming in July (1.091 million jobs) and the worst happening in November (210,000 jobs). But the president has failed to add any net new jobs over the last year, compared to before the crisis.

The U.S. economy lost about 22 million jobs at the height of the first wave of the coronavirus pandemic. In the aftermath of the nationwide lockdown, President Donald Trump oversaw millions of jobs coming back to the marketplace. Since arriving at the Oval Office, President Biden has witnessed a 6.1 million bump in payrolls. Still, it is estimated that the labor market is short about three to five million positions.

Put simply, these are no net new jobs but rather it is the return of pre-pandemic employment. And, if you wish to dive deeper into the economics of it, some of these positions were produced because of government spending and misallocation of resources. It is Fredric Bastiat’s “Broken Window Fallacy”: “Because he has had to replace the window, he will have to go without the suit.” This means that if Biden hired 100,000 workers to manufacture windmills, that is 100,000 fewer workers to

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