It’s Not About the Economy

The outcome of the U.S. presidential election is greatly influenced by the state of the economy at the time of the election. If the economy is doing well, then the incumbent usually wins. If the economy is doing poorly, the incumbent usually loses. If you think that Donald Trump will be a disaster for the economy, then you might think that he is sure to lose in 2020, and therefore we need not exert ourselves too much to prevent him from winning a second term. I think this complacency is wrong, for two reasons.

The first is that what predicts election results is not the state of the economy over an entire presidency, but the growth in real disposable income in the two quarters prior to the election. That is, Trump could tank the economy in the second and third years of his presidency, but if there’s a recovery in the final year, people will remember only that and thank him for it at the ballot box.

There’s another reason to be skeptical of the theory that economic mismanagement will ensure Trump’s demise in 2020: I’m not at all sure that Donald Trump will be a disaster for the economy. Presidents do not have much control over the nation’s economic success. Economists are terrible at predicting economic outcomes. Nobody should have any certainty that Donald Trump’s policies — whatever they end up being — will lead to an immediate downturn in the U.S. economy. Even the absolute worst regimes can produce long periods of economic success. GDP grew quite briskly in 1930s Axis Powers (Germany, Italy, Japan):

A lot of this was driven by a huge run-up in military spending. But U.S. government spending is also almost sure to increase over the next four years, since Republicans control all branches of government. An infrastructure bill is likely, just as a start. Military spending will probably surge and recover from the sequester cuts over the past few years. There’s also no more debt ceiling uncertainty to worry about. There are plenty of reasons to think that the next four years will actually be quite good for the U.S. economy. After cratering on election night, the stock market has recovered and does not seem to fear a Trump presidency.

I’m not saying that the economy will surely be good for the next four years. I don’t know. Nobody knows. But there’s a very good chance that at some point over the next four years, the economy will be doing well, and Trump will enjoy popularity because of it.

This will not prove that we were all wrong about Trump. The reason I think Trump is so bad for the country is not so much that I think he will destroy the economy. I think he is bad for the country because of his weakening of the first amendment, his politics of dominance and vengeance, his misogyny, and his sowing of fear and hatred towards anyone who isn’t a straight white Christian. These threats will not go away, even if the economy is doing well. Moreover, while an economic downturn usually lasts a few years at most, civil rights, political institutions, and norms of good governance take decades to rehabilitate once they have been weakened.

You might think that if Trump is mired in corruption scandals, or continues to attack minority groups and women, or limits freedom of speech and freedom of the press, as he is likely to do, then he will lose in 2020 no matter what the state of the economy. Maybe. But historically, it’s been “the economy, stupid” that predicts election outcomes. It’s up to everyone to remind themselves and others that greater values are at stake.

The greatest risk of Trump’s presidency is not the loss of American economic or military dominance. Rome didn’t collapse when Caesar crossed the Rubicon. The Roman Empire ruled the Mediterranean for centuries after the Republic ended. The United States has tremendous economic and military might, and will for many decades to come no matter who is in charge of the country and what our system of governance is. The United States is special not because of that might, but because of the ideals that it represents, and has struggled towards in fits and starts for its entire history. It is to this struggle, not to the American economy, that Trump represents the gravest danger.