You don’t have to have a Ph.D. in political science to know that Donald Trump’s re-election prospects hinge on a growing economy. And while it’s a myth that Americans only vote their pocketbooks, it certainly doesn’t hurt the incumbent president if unemployment is low and economic growth is steady.
In addition to hysterical denunciations of Trump, Democrats have concocted an impeachment narrative that doesn’t have a chance in hell of succeeding but will send their base of loony lefties into paroxysms of ecstasy.
They’re going to need every single one of those votes.
While the left wallows in impeachment, the rest of America is wondering what all the hub-bub is about. Unemployment is at lows not seen in the lifetimes of many economists reporting on it. Economic growth projections show a steady upswing, consumer and business confidence is high, and the Federal Reserve is keeping interest rates low.
This is a recipe for a Trump re-election and Democrats know it.
“Fears about an imminent recession have faded considerably,” the Wells Fargo economists wrote in a report on Wednesday. “The Fed has shown that it will do what it takes to offset the headwinds from slower global economic growth and continued uncertainty around U.S. trade policy.”
The Fed was faced with a delicate task: Cut rates enough to stimulate a slowing economy, while preserving its firepower in case it was needed to render assistance in a more severe downturn. Economists define a recession as two consecutive quarters of GDP contraction.
Even with last year’s series of hikes in the Fed rate that put it at 2.5% in December, that’s a fraction of what prior Fed policymakers had at their disposal to stimulate the economy during previous slowdowns. In other words: The Fed didn’t have a lot of wiggle room.
You may recall last summer it was the end of the world when the Feds’ yield curve “inverted” — short-term bonds were paying more than long-term bonds. “Recession!” shrieked liberal economists. “It’s coming!”
In the immortal words of Defense Secretary Nimziki from Independence Day, “That’s not entirely accurate.”
“Worries about an impending recession have diminished considerably since this summer when the yield curve briefly inverted sending financial markets into a frenzy and sparking fears that this record-long business expansion was near its end,” the Wells Fargo report said.
“While data from the manufacturing sector remain weak, the overall macro data have continued to come in slightly better than expected, with job growth remaining strong and real GDP expanding at a 1.9% pace during the third quarter,” it said.
For Trump to lose. history would have to be turned on its head.
Engulfed in an impeachment inquiry and facing eroding support, Trump has turned to the strength of the U.S. economy as a sign that he is likely to be reelected. Since World War II, no U.S. president has lost reelection when the unemployment rate was below 7.4 percent. No president has even run for reelection when the jobless rate was as low as it is now – 3.6 percent.
Trump will soon test this precedent. His poll numbers remain very weak, and his support in suburbs has eroded steadily. A number of political experts say traditional measures of economic success may not prove decisive enough for voters to give Trump a second term.
No, Trump will not be a shoo-in for re-election. But if the Democrats are eager enough to nominate a candidate who wants to spend $52 trillion over the next 10 years and blow up the American health insurance industry, they’re more than welcome to try.