The famous line out of the successful 1992 election campaign of Bill Clinton was “It’s the economy, stupid”. Then we had an incumbent President, GHW Bush, who only a year and a half before his re-election run had a National approval rating of 89%! Yet when November 92 rolled around Bush couldn’t garner more than 37% of the vote. Clinton, of course, was right. The “…stupid” part of the line was merely to point out that it’s always right.
The reality is that an American President gets the credit or the blame for economic conditions. The reasons for a given economy, good or bad, likely stretch back years during which a current President may have had little input. It is a touch of irony in our representative democracy that, for example, Donald Trump excitedly wets himself with glory over an economy built by Obama, his psychological nemesis.
My greatest takeaway from earning a degree in Economics 44 years ago is something that has been, more or less, lost over those years, especially in the facade of economic science meant to dazzle the general population. As quantifications, calculations, formulas, and statistics have dominated the discipline it has been essentially exhibited as an exact science, such as Biology, Geology or Astronomy. Nothing could be further from the truth. Economics is a behavioral science. It exists, or more aptly floats, in the quagmire of human interaction. It is a far closer relative to the discipline of Philosophy than to Biology and less predictable than 19th century weather.
Yet even 130 years ago, on a warm sunny day one could see storm clouds rising and barometers falling and be fairly confident what to expect.
You would think that Trump’s impact on our near economic future would be minimal since his time and efforts have been almost entirely devoted to Twitter composition and golf. However, what he has done is faithfully carried out the agenda of Mitch McConnell and (probably) Vladimir Putin. The brunt of this faithfulness will be felt by us all and sooner than we’d like.
Trump signed into law a tax bill that pumped a ton of money into US businesses, of which the greatest amounts were used for stock buy-backs, increasing equity share for the very wealthy and driving up stock prices. This was paid for with debt, as our deficit under Trump has exploded.
The storm clouds are out there; a flat yield curve, ridiculous P/E ratios, anemic growth, health and education inflation, unsafe infrastructure (especially power grids), under employment, and (worst of all) lack of predictability.
On top of that Trump has delivered to us tremendous instability in international relations. He has weakened the ability of the United States to maintain some control over the world economy. He is managing to accomplish what Stalin, Khrushchev, Gorbachev, and now Putin could only dream about: the neutering of American influence through abandoning treaties and Western cooperation.
Since Richard Nixon, the myopic Republican Party has, with each victory in the White House, turned an improving economy into economic calamity. With Trump it is not a question of whether the US economy will tank or not. The only questions are how soon and how bad? The instability caused by Trump and the overblown equity markets created by the Republicans will impact the “how bad” much more than the “how soon”. Further, Trump’s painful incompetency will undoubtedly make a bad situation even worse if he is reelected.
If the economy is unchanged prior to the Presidential nomination process, Democrats better think carefully about whom their standard bearer will be.
Trump will not run on a “good economy”. His obvious modus operandi is to use fear as his tool of choice. His campaign will target the Democratic nominee as Lucifer entering the American economic Garden of Eden. Whether its big undefined spending programs (Warren), Socialist labels (Saunders), inexperience (Buttigieg), or Congressional ineffectiveness (Biden & Klobucher), any one will be targeted to generate the fear of changing the status quo for the unknown.
There is only one candidate I see who can neutralize that fear factor and thus be able to move the debate to issues and character…Michael Bloomberg. Not only can he claim legitimate business success (his father was a bookkeeper for a dairy company), he also brings to the table extensive political administration experience. He is not particularly charismatic, but he carries the gravitas of someone people will listen to. He can turn the economic fear factor right back onto Trump…where it belongs. He also might be the best choice in dealing with economic downturn when it happens.
He’s fiscally conservative and socially liberal, which is the only combo that has a chance of lessening National divisiveness. On top of that he’s smart, short, and Jewish, all of which score big points in my book, but that's just me. I like Mike. Buttigieg in 2028.
