Thursday morning, the government will release a number, and Donald Trump and his flunkeys will jump all over it. It will be the official level of GDP growth in the third quarter of this year, and it’s going to show a huge number, like 30 percent.
You can hear him now, and Larry Kudlow, and all the rest of them. Thirty percent! The biggest quarter of economic growth ever, by far! (Unlike everything else Trump says, this will be technically true, even.) The economy is back, baby! V-shaped recovery! The economy is again the greatest in the history of the country, the Western Hemisphere, the world, the solar system, the known universe, the mind of God!
That’s what they’ll say. Don’t buy it. I write this column as a public service to explain to you why this is a massive and desperate lie. The number will be the last piece of good pre-election news Trump will get. In a week when polls are reinforcing the idea that he’s sliding, he’s flailing around at his rallies attacking Ilhan Omar and Borat, getting his supporters sick, stranding them in 32-degree weather for three hours, he’ll seize on this as good news. But it isn’t anywhere near as good he’ll be trying to spin.
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Here’s why. Yes, the economy is expected to grow by about 30 percent (on an annualized basis; actual number for the quarter will be more like 7 percent). But remember: It shrunk by 32.9 percent in the second quarter, which was the worst-ever quarter in the history of these calculations.
That was April, May, and June, when everything closed down and a lot of the country was on lockdown. Economists knew the GDP was going to tank, but everyone also predicted that it would recover quickly as it reopened. The question was how quickly.
With Thursday’s number, we get an answer to that question, and if the number is in the expected range, the answer will be fairly quickly but not nearly quickly enough.
Here’s why: As economics correspondent Ben Casselman explained in The New York Times, a drop of 33 percent followed by an increase of 30 percent doesn’t mean we’re about back to even. That’s because the increase is measured against the shrunken base. So, if I have $1 million to start with and lose 33 percent, I’m down to $666,667. Then, if I gain 30 percent on that $666,667, that’s an increase of $200,000. So I’m not back up to, or near, $1 million. I’m at $866,667, which is 13.3 percent down from the starting point.
Trump & company will surely spend Thursday and Friday crowing that they’ve now made up all the lost ground. It will not be true.
And remember this also. Everyone who makes these predictions believes that for the year 2020, GDP “growth” will be around minus 3.5 percent. That’s the number of the Conference Board, which is the standard here. Morgan Stanley’s in the same ballpark.
Morgan Stanley. Funny I should mention them. They announced a month ago that they were slashing their growth expectations for the fourth quarter from a hefty 9.3 percent to 3.5 percent. Wanna take a guess as to the reason?
No second stimulus package. In late September, that was only a fear. It wasn’t until Oct. 6 that Trump made his announcement that I then called “one of the dumbest things I’ve seen a politician say”—that he was cutting off stimulus negotiations. Now we know there won’t be a deal before the election, and, if Trump loses, there won’t be a deal before next year, because if he loses he’s going to stop caring about everything except his grievances, to the extent that he cares about anything else now.
He blames Nancy Pelosi. But come on. He’s the president. If he wanted a deal, he could have forced Pelosi and Mitch McConnell to make a deal. But he didn’t, and doesn’t, care.
What he cares about is the adoration of his crowds. That’s pretty much what the presidency is to him at this point. There are certain things he likes to do, if they’re easy. He likes negotiating half-assed deals that he can brag about in a way that can make him look good to gullible idiots for 10 minutes. He said in Lansing the other day, “Nobody’s done for Michigan what I have. You have car plants being built all over, and you didn’t have a plant built in 42 years. You have them all over.” Of course, none of this is true. Three new plants have been announced in Michigan during his presidency but none have opened yet, and only one is a substantial assembly facility with a lot of jobs. More generally, there was more automaker investment activity announced over the last three years of the Obama presidency than the first three years of Trump.
But basically he hates the actual job, because the actual job is hard. You have to read. You have to listen. You have to have an attention span greater than a dog’s. And your lies catch up with you.
So he’ll lie about this GDP number. It will be his last Hail Mary pass, to convince voters that all the lies he tells his crowds and himself are true. But with each new dawn, it feels more and more as if maybe, finally, most of us have had enough.
