It’s difficult to not have at least one eye on US politics at the moment. As the Presidential election nears and Trump apparently makes a miraculous recovery from covid-19, the campaign appears to have returned to the same fire and brimstone politics before the President got infected. There is a spat about when or if the next debates will be held and the format of those debates, about the President’s unwillingness to state clearly that he will step down if he loses the election, and – less remarked upon but perhaps much more important – about Trump’s decision to blow up a possible economic stimulus deal with the Democratic controlled House of Congress.
Why is a stimulus deal important now? Because the US economy, after a slight recovery in May and June, is labouring once again, with the post-lockdown fall in unemployment now levelling off, tens of millions struggling to pay bills and in arrears, and corporate bankruptcies rising sharply. The last aid package was in the Spring. The stimulus deal, if agreed between Congress and Senate, could have been worth $2.2 trillion in total, and would have included direct payments of $1,200 to millions of low-income Americans, enhanced unemployment benefits, billions in small business aid, and a de facto bailout for many corporates, like airliners that are on the verge of collapse after the last bailout expired.
As political polling analyst Nate Silver has written, Trump’s one and only advantage over Democratic nominee Joe Biden among Americans is on the economy. Remarkably, considering the economic collapse the country has suffered since March, 51 per cent of voters approve of Trump’s economic handling, compared to 47 per cent who disapprove. Silver shows that the Spring stimulus package actually led to a sharp increase in disposable income for most Americans, but those gains had virtually all disappeared by ‘the fall’, as they call it in the US. So Trump has thrown away perhaps his one and only trump card of economic stimulus, and done so in a way that makes it clear it was he, not the Democrats, who took a wrecking ball to the negotiations.
There are rumours inside the White House that this was an act of steroid-induced manic behaviour as Trump was still on one of the special drug cocktails cooked up by his doctors (and not available to the average American) to fight covid-19, and that the President would now like to come back to the negotiating table. But if that’s the case, he comes back with a much weaker hand to play than when he left, spurning a small window of opportunity to push a bipartisan agenda following his hospitalisation.
The polls do not look good for Trump. There has been no sympathy bounce from his spell in hospital; if anything the polls show Americans have taken a dim view of the chaos in the White House. Silver rates his chances of winning the election at 17 per cent, the lowest rating all year.
“The economic index was responsible for part of that 17 per cent, however,” Silver writes. “Now, though, with voters possibly encountering news of layoffsinstead of renewed growth, Trump may have undermined his best comeback strategy.”
There is of course a lot of unpredictables between now and 3 November, but – – even in the Trump era – ‘what is happening in the economy?’ is never not going to be a relevant question at election time.
Source Direct is a free morning newsletter providing you with all the latest Scottish news in your inbox each morning, including:
- Analysis of the key stories
- A summary of what’s in the Scottish papers
- The latest on Source
- Interesting opinion pieces from around Scottish media
To sign-up for Source Direct, click here.