Despite President Trump’s unpopularity, he does have one big
thing going for his re-election campaign. If history is any indicator, the
Democrats may have a difficult time overcoming the president due to the
continued strength of the economy.
Axios pointed out earlier this year that every incumbent president since FDR who has
avoided a recession in the runup to an election has been re-elected. On the surface,
that would appear to be good news for Donald Trump, who has presided over an
economy that grew 2.2 percent in 2017 and 2.9 percent in 2018 and a consistently
low unemployment rate. Voters have typically rated Trump’s handling of the
economy much better than his overall performance as president.
A recent focus group of swing voters, also reported by Axios,
showed that many voters who switched from Obama to Trump, liked Trump’s economic
policies, including his tariffs, even though they were put off by his behavior.
“His antics, mannerisms, and personality I could do without,”
a member of the focus group said, “but I feel like there are a lot of good
things happening in the country that people don’t like to admit.”
“Our economy would have to really crash for me to vote
against him,” he added.
At only 12 participants the focus group’s size was too small
to represent a statistical sample of voters, but their responses do elicit a
number of questions. The most obvious is why, when the economy is seen as his
strong point, Donald Trump chooses to focus on immigration and picking fights
with low-level Democrats, strategies that seem to be hurting his standing with
most of the electorate.
Headlines recently reported that the president reached an all-time
average approval rating. The buried lede was that Trump’s all-time high was
an embarrassing 42.7 percent. A comparison with the approval rating of other
presidents (going back to Truman) at this point in their term by FiveThirtyEight finds Trump’s approval below every other president except Jimmy Carter, who
went on to lose his re-election campaign.
Interestingly, George Herbert Walker Bush, the other incumbent
who failed to win re-election, had a 70 percent approval rating at this point
in his presidency. In 1991, the first Bush was riding high after winning Desert
Storm, the first Iraq war, but a recession
from July 1990 to March 1991 sparked by high gas prices after Iraq’s
invasion of Kuwait and interest rate hikes by the Federal Reserve led to his defeat
the following year. Two other factors, Bush’s decision to raise taxes despite a
promise of “Read
my lips: no new taxes” and a third-party challenge Ross Perot, also contributed
to the election of Bill Clinton in 1992.
The second important point from the focus group is that if
the economy falters swing voters could quickly abandon President Trump. The
most serious threat to the Trump economy is something that his supporters view
favorably: his trade wars.
Already, there signs that the Trump economy is not as strong
as advertised. A growing number of economists see the potential for a recession
before the election. Fortune notes that “the greatest downside risk is trade policy and increased
protectionism.” This is especially true since trade
talks between the United States and China, one of our largest trading
partners, have been unproductive.
The concern about a recession is echoed by corporate financial
officers surveyed by Duke University. CNN reported that almost 70 percent of CFOs cite the trade war and a shortage of skilled
workers, which is exacerbated by President Trump’s
restrictive immigration policies, as reasons that there will be a recession
before the end of 2020.
The recession jitters are not unfounded. New data from the Federal
Reserve released this week shows that US manufacturing is already in a
recession after six consecutive months of declining production. The
manufacturing slump is a direct consequence of the trade war. The decline in
manufacturing spells trouble for Trump’s hopes of reclaiming the Rust Belt
states that pushed him to victory in 2016.
There are other indications that Trump is in trouble on the
economy as well. Despite the backing of participants in the focus group, a
recent poll from The
Associated Press-NORC Center for Public Affairs Research found that Trump’s
standing on the economy may already be slipping. The poll showed that majorities
now disapprove of Trump’s handling of the economy in general as well his positions
on taxes and trade negotiations. While two-thirds said that the economy was
good, only 17 percent believed that they got a tax cut and only 15 percent saw
the tariffs as beneficial.
As recession fears mount, Donald Trump faces a situation
similar to the one that dashed the electoral hopes of the first President Bush.
Trump’s tariffs, which are literally tax increases on trade, have offset
the economic stimulus of the 2017 tax reform and are acting as a drag on
the economy. Likewise, Trump may well have a strong third-party challenger who
can siphon the votes of disaffected Republicans. If the economy slows to a
recession, the situation will be very similar to the one that took down a much more
The flip side is that the Fed has indicated that it will cut
interest rates in the near term. The expected cuts may goose the economy
enough to drag Trump across the finish line.
Finally, there is the possibility that, as his supporters
often say, that Donald Trump has created a new dynamic in Washington but not necessarily
the way that they mean. Several polls over recent months have indicated that more
than half of voters refuse to support President Trump for re-election for
any reason. The aversion to Trump’s behavior, which one focus group member said
is not “where it should be for a president,” may be strong enough that even a
good economy will not assure his re-election.
With 16 months to go until the election and with no
Democratic candidate holding a lock on the nomination, there are too many
variables to predict how the election will turn out. Democrats should be
cautious in their expectations about taking on an incumbent in a good economy. Trump’s
economy might well sink into recession before the election, however, and, even
if it remains strong Trump may have alienated so many voters that he loses
President Bush’s experience should be a lesson for President
Trump. Clinton’s mantra during the campaign was “it’s the economy, stupid”
while Bush allowed himself to be distracted. Just as importantly, Bush laid the
seed of his own defeat with his tax increase, without which, the 1990 recession
and the sluggish growth that followed might never have happened. Trump’s tariff
taxes, which are slowing the economy, his focus on his unpopular immigration
policies, and his unpresidential behavior may be the seeds of his own defeat.