Trump’s Stimulus Strategy Has Already Failedby Jonathan Bernstein



Trump’s Stimulus Strategy Has Already Failed

by Jonathan Bernstein, bloomberg.com

August 12, 2020 06:33 AM

Think this one through.

Photo by: Photographer: Shawn Thew/EPA/Bloomberg

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Last week, I said that President Donald Trump would only walk away from stimulus-bill negotiations and attempt self-destructive executive actions if he somehow thought that the economy would thrive without new federal support, a dubious proposition according to most economists.

As it turns out, Trump wasn’t bluffing. But there’s now another theory about what he — or at least what his chief of staff, Mark Meadows — is up to. And it’s even more concerning than bad economics.

Politico reported on Tuesday that “the administration feels confident they have the upper hand politically. One official said the White House feels it has Democrats in a ‘real pickle’ and if they try and block the executive actions they will look like they are trying to hurt people.”

Got it? Team Trump thinks that they’ve set the perfect trap for Democrats to walk into. First, remove the support that’s propping up the economy. Then claim that executive action, even if it’s not necessarily legal, can fix everything. Then wait for Democrats to challenge it in courts, and … Boom! Democrats get the blame for economic collapse.

You may have noticed a few problems with this plan. In fact, it’s all problems.

One is that it’s not clear that Trump’s executive actions are actually going to work. Employees may never see the effects of the payroll-tax holiday he has proposed. His idea for expanded unemployment-insurance benefits may never get off the ground. And his protection against evictions, which Trump touted at his press conference Tuesday as a substantial accomplishment? It’s just a suggestion to the bureaucracy to look into the issue. Hard to see how Trump’s orders are an effective trap against Democrats if they fail of their own accord.

Another problem is the one I talked about last week: Even if they’re more or less successful, Trump’s actions aren’t likely to impress voters. Trump can brag about them all he wants, but even if his orders are implemented, unemployed workers will be seeing their benefits cut from previous levels. They’re hardly likely to reward Trump for that. And the payroll-tax holiday is an invitation to Democrats to attack him for harming Social Security, something that former Vice President Joe Biden's campaign was quick to do.

But the biggest problem with this strategy is that spin doesn’t matter; results matter. If a failure to reach a deal on new pandemic relief and stimulus measures leads to a worse economy, then the incumbent will almost certainly suffer, no matter how clever his attempts are to blame everybody else. Everything we know about voters suggests that (in the aggregate) they reward incumbents for good times and punish them for bad times. They don’t care who blames who; that’s mostly Washington noise, especially for those most likely to shift their votes or to not vote at all, who tend to be the least likely to carefully follow political news.

Is Trump really following this strategy? It’s not clear what he’s thinking. But it’s no surprise that Meadows, who’s pushing the plan, would engineer a train wreck that he mistakenly thought would help his side politically; after all, he often did so while in the House. And that suggests one of Trump’s biggest weaknesses as president. It doesn’t seem likely that he chose Meadows as his fourth chief of staff in order to relive the 2018 government shutdown, which was one of the low points of his administration. It’s more likely that Trump picked him because Meadows flattered him in person or on TV, or that he looked the part in Trump’s mind. But personnel are policy, and when you choose someone as chief of staff who favors schemes that don’t make sense even if they go right, you wind up with schemes that don’t make sense even if they go right.

The result is bad news for the economy and, most likely, for Trump’s re-election chances.

1. Chryl Laird on Senator Kamala Harris and Black women in U.S. politics.

2. Dan Drezner on the trade war with China.

3. Tom Holbrook on convention bumps.

4. Eric McGhee and Jennifer Paluch on the census.

5. Caroline Kitchener speaks with Nadia Brown about Harris.

6. Ryan Goodman and Asha Rangappa on Senator Ron Johnson and disinformation.

7. And Reid Wilson on Harris as the first politician from west of the Rockies on a Democratic national ticket. At least, as he notes, if you don’t count President Barack Obama, who is from Hawaii but represented Illinois. This is partly just happenstance, but it also is a good reminder of how the Democrats were a Southern-based party for a long time — and how, even after that, they put a lot of effort into retaining Southern votes.

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This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

To contact the author of this story:

Jonathan Bernstein at jbernstein62@bloomberg.net

To contact the editor responsible for this story:

Timothy Lavin at tlavin1@bloomberg.net

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