Donald Trump destroyed the economy
Just under a month ago, President Trump was crowing about positive economic data. Jobs data from May showed an uptick relative to the stupendous collapse seen in March and April, and so he and other Republican leaders declared victory. "I think we're going to have a very good upcoming few months," he said on June 8.
But it's increasingly clear that the economy is stalling out again, and things are going to get much, much worse if Republicans continue to refuse to support an extension of super-unemployment and other pandemic relief. The relatively strong economy of 2019 is not coming back for a good long while because Donald Trump is an incompetent oaf who has failed spectacularly at his job.
An important question about the economic collapse caused by the pandemic is how much of it was caused by state rules closing down bars, restaurants, and so forth, and how much was down to citizens staying home of their own volition. Many conservatives have insisted it was entirely the fault of the government rules, and that we could simply fix the economy by shoving people back to work and pretending as if everything is fine. In National Review on May 20, Rich Lowry praised Florida governor Ron DeSantis for refusing to implement a strict lockdown.
Unfortunately, this just isn't true. A recent paper by economists Austan Goolsbee and Chad Syverson examined county-level data to answer this question, and found that it was overwhelmingly the behavior of citizens that was responsible. "While overall consumer traffic fell by 60 percentage points, legal restrictions explain only 7 percentage points of this. Individual choices were far more important and seem tied to fears of infection," they write. The same result can be seen abroad in Sweden, where the government largely avoided a full lockdown, yet still experienced about the same economic downturn as its neighbors that did close down.
Conversely, states that attempted to bull through with premature re-openings are now experiencing giant surges in new COVID-19 cases. Hospitals are quickly filling up with patients in Texas, Florida, and Arizona, and other states are not far behind. Many states have halted or reversed their re-opening plans, and indicators like restaurant attendance are once again falling, particularly in the hard-hit locations. In Houston, for instance, reservations had recovered to half their pre-pandemic level in early June, but have since fallen to just a quarter.
In sum, the coronavirus recession has been caused by the virus, not the state response to it. And because the pandemic is once again out of control, the economy can not possibly return to full employment and production. A recovery is therefore not structurally possible until we reach herd immunity or a vaccine is developed and deployed, which won't happen until early 2021 at the earliest. The jobs reports in June or July may or may not show a fall in employment, but sooner or later things are going to stall out far short of recovery.
This is mostly Trump's fault. As I and many others have argued over and over, it is possible to contain the virus. With a lockdown to contain the initial surge, then a test-trace-isolate program to catch new outbreaks before they spiral out of control, countries can return to something like normal life. Countries across the world have demonstrated that this can work — even ones that were caught napping and had very severe outbreaks, like Italy and Spain, have now almost completely contained the virus.
But Trump didn't do any of that. On the contrary, he had previously done spectacular damage to the effectiveness of the American administrative state through inattention and by stacking it with his idiot cronies, and straight-up deleted much of the pandemic control system that President Obama had set up. When the virus hit, he did basically nothing besides deny the U.S. was in danger, promise it would vanish on its own, and complain testing made him look bad. Now that we're in the middle of a second giant surge of cases, he still refuses to even urge people to wear a mask. He thinks it's a "personal choice," per White House Press Secretary Kayleigh McEnany. His administration has also so far resisted further economic rescues, particularly extending super-employment. If that expires in July on schedule, the economy will plunge further.
For most of his presidency, polls have shown wide approval of Trump's economic performance, likely because unemployment happened to be at a 20-year low. Now that we're in the deepest recession since the 1930s, attitudes are souring — Gallup has his approval rating on the economy falling from 63 percent in January to 47 percent today. That is still remarkably high given his staggering incompetence and failure, but perhaps people are giving him the benefit of the doubt because other countries also struggled to contain the virus at first.
That may change as people begin to realize that America stands alone as the worst-performing rich nation by far. Where French and German folks have been increasingly going about their normal business for weeks, and New Zealanders are doing in-person sports again, it looks like Americans will not be able to congregate inside normally for the next six months at least. (Indeed, Americans are now banned from normal travel to the European Union, and rightly so.) As a result, our economy is going to remain in the toilet — with state income support needed simply to keep people from starving.
When you elect a narcissistic reality TV host to the presidency, this is what tends to happen.
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