Center for American Greatness • Donald Trump • Economy • Elections • Post • the Presidency

Will the Good Economy Be Enough to Carry Trump to Reelection?

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The conventional wisdom treats presidential elections partly as referenda on the economy. If things are going well, the incumbents usually win. It remains to be seen if this takes Trump across the finish line a second time.

Bill Clinton famously won in 1992 by pointing to the effects of the recession then underway: “It’s the economy, stupid.” Ronald Reagan won in 1980 at the height of the stagflation crisis under President Carter. His reforms stopped inflation, and, while his inflation hawk policies initially set off a deep recession, a roaring recovery began and unemployment dropped by 1984. He won an enormous landslide for his second term, frequently asking during the campaign, “Are you better off now than you were four years ago?”

Obama also won reelection in 2012, but the anemic recovery following the stock market crash and recession of 2008 was not the main issue of that election. He later stated that significant economic growth in the future would require a “magic wand.” Hillary defended this mediocre record, emphasizing her ability to be a stable caretaker in the face of a risky Trump. But she did not prevail. Trump’s persona as a brash and successful businessmen combined with his economic and culturally nationalist message exposed the uneven distribution of benefits from Obama’s “tech economy” and commitment to globalism.

Trump’s economic policies have included standard Republican tax cuts, indifference to cutting deficits, and some strong-arm tactics against competitors on trade. He has also reduced the burden of Obama’s aggressive environmental and regulatory policies, as well as the expensive “individual mandate” of Obamacare. The economy, already in the midst of a mature recovery, has exceeded expectations, with the stock market, unemployment, and wages reaching record highs. If this continues through 2020, he will have the results—relative peace and a strong economy—with which to counter the Democrats’ calls for changing course.

That said, the economy may matter less than in elections past.

The Uneven Economy
Several generations ago, politicians spoke mostly of the “standard of living.” Around 1970, the “economy” became the term of choice. The switch concealed the relative stagnation of working class wages. An economy could grow by adding more people or through wages accruing to recent immigrants, even as the fortunes of large cohorts within the heritage nation lost ground. The Trump victory illuminated this phenomenon.

While the economy certainly was better in 2016 than it was in 2008—the product of a long and slow recovery from a global recession—many of the gains went to those already established, particularly stockholders in the middle and upper-middle class who had 401Ks, as well as the mega-rich in finance and Silicon Valley. The traditional manufacturing sector and the working class remained in decline.

The elite’s indifference to the fortunes of the middle and working class was fertile ground for Trump. The working class correctly blamed their fortunes on globalism, which was indifferent to outsourcing of jobs and wage pressure from immigration. While many homeowners faced foreclosure, voters saw that Obama, in spite of his stated economic populism, provided large banks relief unavailable to middle America and did little to punish wrongdoers on Wall Street. Hillary Clinton exemplified the elitism and lack of empathy of the Democratic Party. Even Obama’s signature health care law was perceived by many of those with jobs as an expensive swindle that led to fewer choices and higher costs. It created some winners, but many losers.

A Changing Electorate
Government workers, as well as the large dependent class, are less impressed by the economy than they might have been in 1984 or 1992. Both are insulated from economic cycles and benefited from declining prices during the 2008 recession. One barely noticed the last recession in the Washington D.C. area, where well paid government workers and their entourage of lobbyists and lawyers enjoyed the fruits of stable employment and above-market wage. These government-dependent voters remain a core Democratic constituency and have become proportionally a larger part of the electorate than in the days of the Reagan miracle or the Clinton economic boom.

The economy also may have less impact on the nation than in years past due to the decline of education and critical thinking. While the president only has some impact on the economy, and there is a business cycle only partially impacted by policy, broadly speaking the president and his policies do matter for the economy. It is treated, however, as something out of his hands—or entirely his fault—depending upon the partisan biases of the media. Whereas Obama’s mediocre employment and economic growth numbers were touted as products of his greatness, Trump’s much better numbers are alternately denied or downplayed.

The Republican Party also has become less articulate on the low regulation, low tax message of the Reagan years, while ignoring emergent phenomena that have impacted the middle class standard of living. Republicans now engage in rote repetition of the slogans from the Reagan era, but they are no longer able to connect them with the broader conflicts of the Cold War. More important, while free market beliefs have been the de rigeur Republican philosophy since Reagan, other challenges have arisen, including a great deal of uncertainty, stagnant wages, and rising healthcare costs among the working and middle classes. Trump’s policies certainly have helped, and they, along with a broader increase in confidence, have much to do with the Trump boom. But there still remains a great deal of economic anxiety, and, as in the Obama years, many of the gains of the Trump boom have accrued to immigrants, the very wealthy, and groups otherwise ill-disposed to Trump.

Culture War Issues Cut Both Ways
Finally, the country has become more political and embroiled by culture wars conflicts than in decades past. One’s economic station only partially predicts voting patterns. Well-heeled professionals, particularly on the coasts, care a great deal about gay rights, abortion, multiculturalism, affirmative action, gun control, and other fault-line issues that have little to do with tax rates or a president’s impact on the economy.

In addition, racial and cultural identity renders the perceived honor accorded to one’s affinity group as being more important than unemployment and tax rates, as well as other indications of economic good health. Here too, Trump’s 2016 victory is illustrative. While he emphasized economic issues, he also emphasized issues of identity, decrying the replacement of “Merry Christmas” with “Happy Holidays,” the need to build a wall, and the legitimacy of American heroes like Andrew Jackson and Robert E. Lee. There is a mirror image series of “dog whistles” employed on the Left, to include issues like police brutality, global warming, and, now, the transgender craze. In a more unified America, bread and butter issues like economic health predominated. But, as in periods of rift like the 1850s and the 1960s, broader issues of identity eclipse nearly everything, including a record economic performance that has only partially alleviated the economic and social malaise of Middle America.

Trump can and should campaign on his economy. It is an issue that appeals to the less partisan and independent voters in the middle. But, as his own 2016 victory showed, there is a lot of conflict and rift within the nation. His election, far from bringing the country together, has encouraged his supporters while fomenting demonic hatred among his opponents on the Left. Their hatred for him is pure and intense, as he is a symbolic stand-in for all they aim to erase in the older America, which they deem unjust and unworthy of preservation without radical change. For them, the good economic results will matter little, and for the undecided this news will have to compete for notice with the daily reports of his gaffes, tweets, and malapropisms.

The winning strategy of 2016 was not a traditional Republican message of tax cuts, whose benefits chiefly accrue to the wealthy, but rather a rededication to the flourishing and dignity of the nation’s economic and geographic middle, which has endured more costs and enjoyed fewer benefits from the bipartisan commitment to free trade, open borders, and globalism. Trump should keep this in mind, both rhetorically and with regards to policy, as 2020 comes into view. So far, he has governed as an effective Republican president. But he was elected to be a radical rejection of both parties’ anti-American globalist consensus and to share some of the prosperity of the coasts and of the globe with the forgotten “deplorables” of Middle America.

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Photo Credit: Chip Somodevilla/Getty Images

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