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A wounded Trump is an especially dangerous Trump: Thoughts on his proposed economic pivot.

Summary:
When I first heard that Trump and some other conservatives were making the case for punting on containment of the virus in the interest of reflating the economy, I ignored it because it made no sense to me. It still doesn’t, but from what I’m seeing, the idea seems potentially serious enough to warrant a response. There are at least three reasons this pivot idea is nonsensical. First, Trump may admire and aspire to emulate authoritarian leaders, but he has no such powers. He did not close my workplace and he cannot reopen it. To be sure, I’m not discounting his bully pulpit and he surely has the capacity to undermine containment efforts with deadly consequences by telling people to get back to work and go out to restaurants, etc. But especially if many more people get sick—the predictable

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When I first heard that Trump and some other conservatives were making the case for punting on containment of the virus in the interest of reflating the economy, I ignored it because it made no sense to me. It still doesn’t, but from what I’m seeing, the idea seems potentially serious enough to warrant a response.

There are at least three reasons this pivot idea is nonsensical.

First, Trump may admire and aspire to emulate authoritarian leaders, but he has no such powers. He did not close my workplace and he cannot reopen it. To be sure, I’m not discounting his bully pulpit and he surely has the capacity to undermine containment efforts with deadly consequences by telling people to get back to work and go out to restaurants, etc. But especially if many more people get sick—the predictable result of his pivot—and if other authorities, including governors, the CDC, school systems, etc. tell people to continue to distance, his admonitions won’t matter as much as he thinks they will. To put it succinctly, I ain’t going back to normal until Dr. Fauci says so, and I’m sure I’m not alone.

Second, he can’t stop a deep recession because it’s already here. The key indicators, like GDP and unemployment, are lagging but they will soon reveal that the U.S., if not the global economy, has already begun to contract. More timely indicators confirm this dire forecast. For example, claims for Unemployment Insurance are expected to reveal 3 million layoffs in the past week. At the worst of the last recession, we lost 2.3 million jobs in the worst quarter (2009q1). True, the length of the downturn is not yet known, but as the next point explains…

Third, any pivot would likely backfire and exacerbate the length and depth of the recession. A significant reduction of containment efforts that resulted in spiking cases of Covid-19 would lead us right back to where we are now, with people distancing to protect themselves, but this time, with an overwhelmed health care system and far more deaths than would otherwise occur. Not incidentally, from Trump’s skewed perspective, if I’m correct about this scenario, the markets would tank even further. The essential principle, and the sad truth, is that putting the economy in deep freeze is necessary to have an economy capable of rebounding once containment is achieved.

So, summarizing: Trump couldn’t enforce a return to normality even if he wanted to, it’s too late to stave off a recession, and any attempt to do so would likely lead to a longer and deeper downturn.

Of course, such logic, which appears to be shared by the majority talking about this, may not prevail. Trump’s populism has long been driven by his remarkable ability to identify and exploit this space where elites (e.g., the health professionals he’s now inveighing against) tell the masses to do something that’s costly to them. Trump then goes after these elites on behalf of the people, arguing that the elites think they’re better than the rest of us and we shouldn’t have to suffer because of their agenda. This has proven to be a powerful force in his ascendancy, and I hear it as a clear subtext in his tweets and statements advocating for the pivot. His alleged loss of patience with Dr. Fauci is an example of this dynamic.

But even more pointedly, Trump recognizes his reelection bid is at serious risk. He may be free of the virus, but it has wounded him politically, and a wounded Trump is an especially dangerous Trump. He’s clearly especially rankled by his inability to move the stock market around, something he’s done far more than any president. Right out of the gate, he made the rookie mistake of making the stock market his report card, and the massive selloff, wiping out all the gains over his presidency, has be driving him nuts.

Despite the faulty logic of the pivot, which is far more likely to backfire than enhance Trump’s fortunes, is it conceivable that he and his coterie would trade hundreds of thousands, if not millions, of lives to get re-elected?

Of course it is.

Jared Bernstein
Jared Bernstein joined the Center on Budget and Policy Priorities in May 2011 as a Senior Fellow. From 2009 to 2011, Bernstein was the Chief Economist and Economic Adviser to Vice President Joe Biden, Executive Director of the White House Task Force on the Middle Class, and a member of President Obama’s economic team. Prior to joining the Obama administration, Bernstein was a senior economist and the director of the Living Standards Program at the Economic Policy Institute, and between 1995 and 1996, he held the post of Deputy Chief Economist at the U.S. Department of Labor.

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