 | | Andrew Harnik/Associated Press |
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At the beginning of this year, Wall Street was almost sure that Donald Trump would be re-elected. A Citigroup poll of fund managers found 70 percent believing that Trump would win. As late as April major investors still expected a Trump victory. |
At this point, however, the upper hand is on the other foot. As the bumper stickers don’t quite say, stuff happens, and Trump could still pull this off — or simply try to steal the election, say by blocking the counting of mail-in ballots, a possibility that keeps many of us up at night. But Joe Biden is in a far stronger position than Hillary Clinton was at this point; two new polls from Pennsylvania, the most likely tipping point state, both gave Biden a nine point lead, suggesting that a repeat of 2016 — in which Trump lost the popular vote, which he will almost surely do again, but squeaked through to an Electoral College victory with narrow leads in rust belt states — is becoming unlikely. |
What changed? The pandemic, obviously. But also, this year it’s pretty clear that it’s not the economy, stupid. |
Expectations for a Trump victory were based mainly on the belief that voters would give him credit for job growth during the first three years of his administration. Since then, however, two things have happened. First, the economy has faded as an issue, overshadowed by the pandemic and, to some extent, by Black Lives Matter and the administration’s mailed-fist response. Second, Trump’s advantage on the economy also seems to have faded. |
Thus, a recent Washington Post poll found voters almost equally divided on the question of whether Trump or Biden can better handle the economy. A New York Times poll didn’t ask that question, but did ask voters whether Trump is responsible for the coronavirus recession; 53 percent said that he was indeed mainly or somewhat responsible. |
But did Trump ever deserve to be considered better on the economy? As many people have pointed out, economic growth during his first three years basically represented a continuation of a trend that began under Barack Obama. Consider this chart showing job growth since 2010. If you didn’t know that there was an election in 2016, you wouldn’t have any reason to think anything changed. |
More broadly, a look back suggests that the widespread perception that Republicans are better for the economy has no basis in reality. If anything, it’s the opposite. Here’s the growth rate of real GDP per capita under the last six presidents: |
 | | Do Dems do it better?Bureau of Economic Analysis |
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Basically, the economy did as well under Clinton as it did under Reagan and no better under Trump, even pre-pandemic, than it did under Obama, while both Bushes presided over some serious bad times. |
What about looking forward? Recently Moody’s Analytics, a nonpartisan consulting firm, created a bit of a stir with an assessment of the likely macroeconomic effects of the election. It argued that Biden would do substantially better — that if there’s a Democratic sweep, by the end of 2024 real GDP would be 4.5 percent higher and there would be 7.4 million more jobs than if Trump holds on. |
What drives these conclusions is Moody’s belief — which I share — that the big problem we’ll face after the coronavirus recedes will be persistent weakness in investment. Trump’s 2017 tax cut was supposed to fuel a business investment boom, but didn’t. Biden, by contrast, is proposing large-scale public investment, which would take up the slack, while Trump’s repeated declarations of “infrastructure week” have become a running joke. And public investment is what we need. |
So this election won’t be about the economy. But even if it were, Trump shouldn’t have the advantage. |
Why do many people think Republicans do better? Blame the hack gap. |
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