How will Trump cope when the American economy slows down?
ANTHONY W Orlando writes for ‘The Washington Post’ about the economic fortunes of US counties that voted for Trump: “Trump counties continue to fall farther behind the rest of the country economically. The story of America’s economy, like the story of its politics, continues to be a story of division and divergence.
The average Trump county added 1.13pc more jobs, while the average Clinton county added 0.49pc. These increases are quite small, especially considering that significantly fewer jobs existed in Trump counties to begin with.
“Housing prices tell a similar story, with even more data stretching into 2018. Regardless of how I compare the counties, Clinton supporters consistently come out on top.” None of this should be surprising, because President Donald Trump hasn’t done much of anything for these Americans. His tax cuts for the rich and for corporations didn’t help them. Moreover, Trump’s trade policy has hurt rural America.
In the Trump economy, the rich get richer, while the poor and the poor locales in the United States get poorer. (“Statistically, there appears to be no significant improvement in job growth.
The gap in housing price growth actually widens. In fact, the larger the Trump electorate and the larger the degree of Trump support, the worse the county’s economic performance.”)
If Trump had anything resembling a rural development policy or an infrastructure plan or a meaningful worker training policy, we might see improvement in Trump country. Instead, we see the toll of income inequality in which the gap between rich and poor – as well as between rich and poor regions – grows.
Moreover, this is all happening in the context of a very strong economy. What happens when the economy cools? Economic prognosticators see the economy slowing down as the sugar high from the tax cuts wears off. Goldman Sachs, for example, sees GDP growth at “2.9pc in 2018, 2.5pc in 2019, 1.6pc in 2020, and 1.5pc in 2021”. Couple that with Trump’s tariff war and an already softening housing market, and you will get the full impact of Trump’s economic policies. (“The National Association of Home Builders on Monday said its housing-market index dropped by eight points to a reading of 60 in November, well below economists’ expectations and the lowest in more than two years.”)
“More than a third of top forecasters believe the US economy will enter a recession in 2020; and a new Reuters poll of economists found they think the probability of a recession in the next two years is rising, to a median 35pc,” ‘The Washington Post’ reports.
That, politically speaking, is potentially disastrous for Trump and even his most dogged fans in red states. Economically insecure Americans will feel the pain first and most acutely, so when Democrats ask them and other Americans whether they are better off than they were in 2017, the answer could well be ‘no’.
Former car czar Steven Rattner noted Trump already performed worse politically than predecessors given the economy. “As President Trump has often bragged, he went into this election with consumer sentiment at a historically high level,” Rattner said.
“Indeed, only one other president (Bill Clinton in 1998) enjoyed such strong sentiment on the eve of a midterm election. But unlike Mr Clinton, who was handed a pick-up of five seats in the House, Mr Trump will end up losing about 39.”
Despite Trump’s false bravado, “that is the third worst showing since this consumer confidence series was first compiled in the late 1970s. During this four-decade time period, seven incumbent presidents saw their party perform relatively better, despite consumer sentiment levels lower than Mr Trump’s”.
Now imagine Trump’s 2020 performance if the economy is weaker than it is now. In sum, Trump’s economic promises to his rural base haven’t been kept. (© Washington Post)
Trump counties continue to fall farther behind the rest of the country