Opinion | Deficit Man and the 2020 Election

None of this is happening. Corporations are getting to keep a lot more of their profits, but they’ve been using the money to buy back their own stock, not raise investment. Wages are rising, but not at an extraordinary pace, and many Americans don’t feel that they’re sharing in the benefits of a growing economy.

And this is probably as good as it gets.

I’m not forecasting a recession. It could happen, and we’re very badly positioned to respond if it does, but the more likely story is just a slowdown as the effects of the deficit splurge wear off. In fact, if you believe the “nowcasters” (economists who try to get an early read on the economy from partial data), that slowdown is already happening. For example, the Federal Reserve Bank of New York believes that the economy’s growth was down to 1.5 percent in the second quarter.

And it’s hard to see where another economic bump can come from. With Democrats controlling the House, there won’t be another big tax cut. The Fed may cut interest rates, but those cuts are already priced into long-term interest rates, which are what matter for spending, and the economy seems to be slowing anyway.

Which brings us back to the 2020 election.

Political scientists have carried out many studies of the electoral impact of the economy, and as far as I know they all agree that what matters is the trend, not the level. The unemployment rate was still over 7 percent when Ronald Reagan won his 1984 landslide; it was 7.7 percent when Obama won in 2012. In both cases, however, things were clearly getting better.

That’s probably not going to be the story next year. If we don’t have a recession, unemployment will still be low. But economic growth will probably be meh at best — which means, if past experience is any guide, that the economy won’t give Trump much of a boost, that it will be more or less a neutral factor.

And on the other hand, Trump’s awfulness will remain.

Republicans will, of course, portray the Democratic nominee — whoever she or he may be — as a radical socialist poised to throw the border open to hordes of brown-skinned rapists. And one has to admit that this strategy might work, although it failed last year in the midterms. To be honest, I’m more worried about the effects of sexism if the nominee is a woman — not just the sexism of voters, but that of the news media, which still holds women to different standards.

But as far as the economy goes, the odds are that Trump’s deficit-fueled bump came too soon to do him much political good.

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