| August 15, 2019 11:40 AM
Between poor economic news coming out of China and Germany, the inversion of the yield curve, and trade negotiations with friend and foe alike that have no guarantee of ending positively, signs are mounting that next year’s economy might not be as upbeat as today’s. With the presidential election a little over a year away, the potential of a recession looms large over President Trump’s reelection prospects.
The president’s job approval rating on the economy tends to outpace his overall job approval by around ten percentage points. Consumers still feel fairly good about things, even as their avocados and health insurance premiums get more expensive.
If this holds, it bodes reasonably well for Trump’s reelection chances. Presidents are often assigned, fairly or unfairly, a lot of blame or credit for economic conditions. Many presidential forecasting models use economic indicators like GDP growth as a factor in determining whether an incumbent will be returned to office or whether voters will say it is “ time for change.”
But one thing the president has always excelled at, from a communications perspective, is setting up scapegoats and fall guys in case things go south. He is adept at trying to take all the credit but none of the blame. As some signals suggest a potentially shakier economy in 2020, I expect to hear the president tout the economic boom of the present while laying the groundwork for who to blame when it ends, by increasing his complaints about three of his key foils: Congress, China, and the Fed.
First, there’s Congress, an institution with a job approval much lower than the president’s and with more broad based disdain. Lots of voters like President Trump, and very few really like Congress. While many voters are not deep in the weeds on an issue like trade, and aren’t familiar with the ins and outs of something like the USMCA, many believe it is important to get us a better deal on trade and are glad President Trump took steps to get those better deals.
Opposition to USMCA in Congress comes overwhelmingly from the progressive wing of the Democratic Party, and if Congress ultimately scuttles the deal, Trump will have more of an ability to try to push blame for an economic slowdown onto the Democrats. It’s not hard to imagine the tweet: “I tried to get a better deal, but the left-wing Democrats shut it down and are wrecking our beautiful economy. Sad!”
Second, there’s China. American views of China are the most negative since Pew Research Center began asking the question in the early 2000s. In fact, American favorability toward China has crashed down to only 26%, a severe drop in just the last two years. This is more about China’s growing military power than their economic strength, and more people in that same poll say they think a growing Chinese economy is a good thing for the U.S. — and they’re right. But as Americans’ views toward China continue to sour in bipartisan fashion, it will give Trump more of an ability to blame China for the trade dispute and its cascading negative impact on Americans’ pocketbooks.
Finally, there’s the Fed. Every presidential tweet calling for an interest rate cut creates heartburn, because it violates important norms about keeping the Federal Reserve above the political fray. But there’s a reason Trump is happy to pitch those norms overboard and publicly call for Fed action: To setup the argument that a slowdown in 2020 could have been avoided if only rates had been cut faster and further. If the economy is fine into next year, most voters won’t remember or care about the tweets, but if the economy is in a slump, he will have an “I told you so!” response and point to Jerome Powell as the man to blame.
Unemployment is below 4%, wages are growing, and the stock market has soared since Trump’s inauguration. But the party can’t last, and plenty of warning alarms are beginning to sound. You can expect Trump to go out on the stump and tout the current economic strength, but to also continue laying the groundwork for where to point the finger if things turn sour.