Donald Trump’s latest campaign ad is about the “Great American Comeback.” That aspirational slogan tells you all you need to know about how desperate he is to move past these last few months. A low unemployment rate was the best thing Trump had going for him, heading into his 2020 re-election campaign.
And then, he watched it vanish. To paraphrase Bruce Springsteen, these jobs are going, boys, and they ain’t comin’ back—at least not in time to help his re-election chances.
But don’t take my word for it, let’s look at some data points. On Friday, Trump proudly touted a 13.3 percent unemployment rate for May (that was the same time he said he hoped George Floyd was “looking down right now”—a statement that was widely interpreted as suggesting Floyd would be happy with the job numbers). But there was an unintentional “misclassification error.” The real unemployment number was 16.3 percent—which is horrible, but better than predicted, and much better than the 19.7 percent number for April.
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This is political death. Incumbent presidents like Gerald Ford, Jimmy Carter, and George H. W. Bush all lost re-election while presiding over high levels of unemployment over 7 percent. The exceptions were Barack Obama and Ronald Reagan, both of whom ran for re-election as the rate was declining from previously higher numbers. Obama presided over the highest unemployment rates in decades during his first term and won re-election with the rate at 7.7 percent; Reagan won a landslide in 1984 with a 7.4 percent.
While that might offer some level of consolation for Trump supporters, consider this: If Trump can cut the number in half these next four and a half months until November 3—a nearly impossible task!—he will still have a higher unemployment rate than all of the aforementioned presidents, winners and losers alike.
Keep in mind that, at the start of the New Year, America had a stunningly low 3.6 percent unemployment rate. No matter what he does, Trump can kiss goodbye to the chance of seeing those kinds of near “full employment’ numbers again.
But it gets worse for Trump. He doesn’t really have four-and-a-half months to turn things around. Around half of the U.S. will be able to vote as early as September. Even before COVID-19, around 40 percent of votes cast were done so before election day. And even if you assume most of the people who vote early or absentee will wait until October, that means he’s running out of precious time. This could be one of the reasons behind Trump’s vehement opposition to mail-in voting. It’s not that he’s worried about vote fraud—or even that mail-in voting generally favors Democrats—but that he’s worried about running out of time.
What gives the MAGA crowd a shred of hope is the fact that this downturn is different from past recessions and depressions. Rather than exposing fundamental flaws in the economy, what makes this situation unique is the fact that Trump’s own federal government told people to stay home in order to flatten the COVID curve, knowing that it would cripple the economy.
As such, some economists believe that this phenomenon is more akin to a natural disaster, which suggests a much faster recovery than normal—the kind that reportedly worries some Democrats.
Unfortunately for Trump, that’s not quite right. Just because the physical shutdown was self-imposed (in order to stem the spread of coronavirus) doesn’t mean the faucet can be magically turned back on. Some businesses (think restaurants—and all the people they employ) will never, ever reopen. The best way of explaining this two-pronged problem that I’ve heard is that “there is a suppression and there is a recession.”
The “suppression” stuff is the short-term losses that bounce back as soon as things like, say, the dentist’s office reopens, and they hire or re-hire employees. That can happen fairly quickly.
But recessions don’t recover overnight. If a local store closes downtown, it may never open back up.
What this suggests to me is that the improvement we saw in May constitutes is a product of the low-hanging fruit. In other words, even if things continue to improve, we will hit a point of diminishing returns.
According to David Frum, author of Trumpocalypse, every recovery since the Cold War ended has been slow. “It just takes us a much longer time to get back to full employment than it did before 1990,” he said during a recent podcast conversation.
“Probably,” Frum hypothesized, “that has to do with the fact that so many people work for service companies that are smaller companies that are easier to put out of business.
“This is not the kind of world where Bethlehem Steel lays you off, you live in a steel town, things get better, Bethlehem Steel calls you back,” Frum explains. “If you work in a restaurant, if you work in a hotel that goes out of business, you have to wait for the business to restart. And I think there’s just been enough damage to the companies that I don’t see us getting back to full employment so fast.”
Of course, one thing Trump has going for him is that the odds are decent that, no matter how bad the subsequent unemployment numbers look, the trend will be heading in the right direction.
But it’s not all peaches and cream for the president. The stock market has been up, based partly on the assumption that we may soon have a vaccine. There’s no guarantee that will pan out. What is more, despite massive unemployment, the average American’s overall income has, amazingly, increased due to governmental stimulus. That’s another reason the stock market is up.
The problem is that the extra $600 unemployment benefits from the CARES Act are currently set to expire at the end of July. Then what? Do fiscally conservative Republicans throw more free money at the problem? We’ll see.
In the meantime, Trump’s best move is to brag about the stock market and suggest that he personally “built the greatest economy in the world” and that he can do so again.
Like the girl who got away, he is going to use every tool at his disposal to win her back in time for the prom. And if that doesn’t work, he’ll still tell all his friends he’s “killing it” on the economy.
In a sense, this is already working. Although he’s being trounced by 14 points (!) in one recent poll, Trump retains a 5-point advantage over Joe Biden when it comes to his handling of the economy.
That’s an amazing statistic considering our economic state, but it also raises what might be the scariest conclusion for Trump: He may be in such bad trouble that a miraculous economic recovery won’t even save him.
This could be the first time in Trump’s life where he can’t buy or spend his way out of trouble.
