Trump adviser criticised for calling US workers ‘our human capital stock’

Kevin Hassett was reassuring CNN host that economy will rebound rapidly once coronavirus pandemic eases

With US unemployment levels surging to nearly 40 million people, White House economic adviser Kevin Hassett suggested on CNN that the US is ready to reopen and rebound sooner than feared, and that the US’s “capital stock” — that is, its workforce — has not been depleted.

“Our capital stock hasn’t been destroyed, our human capital stock is ready to get back to work, so there are lots of reasons to believe that we can get going way faster than we have in previous crises,” he said.

Mr Hassett has drawn fire not only for his relatively upbeat predictions about reopening the economy at a time when many Americans remain trepidatious, but for his phraseology, which evokes a dark period in human and American history.

The term “human stock” has long been associated with eugenics, a discredited pseudoscience that enjoyed some mainstream credibility in the early 20th century. Many of its adherents, who believed that selective breeding was a self-evident way to better the human race, argued for limiting or cutting off the reproductive capacity of those showing “undesirable” traits.

Author H.G. Wells, whose early views on the hierarchy of racial groups are notorious, wrote in 1904 that “the way of nature has always been to slay the hindmost, and there is still no other way, unless we can prevent those who would become the hindmost being born. It is in the sterilisation of failure, and not in the selection of successes for breeding, that the possibility of an improvement of the human stock lies”.

The idea was so influential that in 1927, the US Supreme Court itself passed a verdict, in Buck v Bell, that compulsory sterilisation “for the protection and health of the state” did not violate the 14th amendment.

While it is not to be implied that Mr Hassett was advocating for the sterilisation of the disabled and “feebleminded”, the furore caused by his phrasing itself testifies to the depth of offence caused by the resurfacing of eugenicist ideas and phraseology.

And besides that, the vocabulary he used indicates to some that his perspective on the US’s situation may not be grounded in wisdom. As economist Justin Wolfers remarked on Twitter: “When you don’t think of them as ‘people,’ you’re probably also doing the economics wrong.”

Meanwhile, on the economy writ large, Mr Hassett gave a somewhat sunnier assessment of the speed at which the US job market could rebound to its pre-coronavirus level than has been heard in some quarters.

While acknowledging that unemployment data could yet show a 20 per cent rate by the end of June, Mr Hassett predicted that by the end of 2020, “all the signs of economic recovery are going to be raging everywhere”.

“The only thing we’re going to really be debating, as economists, is, are we going to get back to where we were, or is it going to be kind of a long haul to get there? I have two very close friends, both conservatives, both Harvard professors, and one of them thinks it’s going to take many, many years, and the other one thinks that it is going to happen virtually overnight.

“And that other friend, Robert Barro, has said that he thinks it looks a little bit like, at the end of World War II, the countries that didn’t have their capital stocks destroyed by the war, that, when the war ended, they pretty much got their economies going at a rate of 40 or 50 percent a year.”

However, he also conceded that it is quite possible unemployment could be at least as high as 9 per cent at the end of this year— worryingly high for a president facing an election.