“For many, the epitome of incompetence would be the president of the United States. The US has experienced exceptional death rates in relation to population. But its economy has got off relatively lightly: the US is expected to outperform Germany in minimising the damage with an expected fall of around 5 per cent in GDP, very painful but hardly in the territory of the Great Depression when GDP fell 30 per cent from peak to trough. The United States has benefited from the enormous monetary stimulus provided by the Federal Reserve as well as the big, bipartisan, fiscal stimulus from Congress (at least until the impasse of the last few weeks). But we also have to ask: did Trump help or hinder?
Trump played the role of the hapless, incompetent, joker: the denials, the quack medicine, the apparent failure to understand notions like “herd immunity”, the contempt for masks and social distancing. But it now emerges, from the telephone interviews with the journalist Bob Woodward, that Trump knew exactly what was going on and fully understood the risks of the pandemic. He made a calculated, cynical but rational, decision: to resist announcements and actions which might damage consumer and investor confidence and undermine the economy. Minimising economic damage would be the best way to safeguard his re-election chances, even if it meant more deaths. Not nice, but not stupid.
With only a few weeks to go to the election, it looks as if he may have called it right, politically if not epidemiologically. There is a strong recovery taking place (though whether it is sustainable remains to be seen). The stock market, which he equates with economic success, is having the biggest bull-run in living memory buoyed up by technology stocks. The jobless rate is high (8.4 per cent in August) but well below the levels of a few months ago (almost 15 per cent in April). Three months ago, I predicted in this column, to widespread disbelief and disgust, that Trump would pull it off in large part due to economic improvement. Now, the consensus around the election is closer to 50:50.
Trump understood that there is a trade-off: death rates versus economic (and re-election) damage. The Covid deaths of 200,000 Americans (under 0.1 per cent of the population, mostly poor, older people in states unlikely to vote Republican) were – for him – a price worth paying. However, much we may deplore the president’s lack of moral compass, he understands these judgements.”
Sir Vince Cable, “When it comes to handling coronavirus, were the political ‘bad guys’ right all along?”, the Independent
Governments around the world are facing a tough choice, do they prioritise the wider economy or the suppression of Covid death rates? Locking down societies, with all the resulting economic damage, may save thousands of lives but at huge economic, social and political cost.
The UK Government is being torn apart by these internal divisions, with the hapless Prime Minister Boris Johnson – who nearly died from Covid-19– between the Rock and the hard place. The Rock being the scientists, who advocate ever more draconian restrictions to suppress the virus and his Chancellor Rishi Sunak and the wider Tory party increasingly aghast at the damage these lockdown measures are having.
The developing world, where the majority of the world’s population lives, has already given up lockdown-type measures and have effectively accepted the logic of herd immunity. The deaths from malnutrition and starvation will be far higher in any case then the lives saved by trying to stop the spread of the pandemic.
Hundreds of millions have already been pushed to the brink by the global recession, triggered by Covid-19 and the wider government measures to suppress the pandemic. The United Nations warned in June that 265 million people could be pushed to the point of starvation by the end of this year.
Global food calories per capita is already dropping as forecast in the Limits to Growth business as usual modelling. The Covid-19 pandemic was the trigger for the wider systemic descent of our industrial civilisation into the Long Descent.
I have quoted at the top of this blog post an extract from a recent article written by Sir Vince Cable. Many of you will be wondering who he is. Sir Vince is a left-leaning Liberal Democrat (in American terms within the liberal tradition of the Democratic Party) and he is certainly no fan of Donald Trump.
And that is why his comments are so interesting. I agree with him that President Trump chose to prioritise the economy in his wider approach to the virus. It is a perfectly rational decision, taking into consideration the human and economic costs of an extended period of lockdown that are devastating for the wider private sector economy.
Trump, being a former real estate businessman, understand that in a way that many politicians don’t who have never had a job outside the political and media bubble. The challenge for other governments is whether they effectively embrace the Trumpian approach of living with the virus or carry on trying to suppress the spread of the virus. President Macron in France has flirted with this recently and vetoed his own government scientists recommendation of further lockdown-lite measures. It’s a tough choice but politicians, going forward, will have to navigate these competing pressures.
What doesn’t help their cause is the fearmongering promoted by elements of the mainstream media. A good example is the recent rise of new cases of Covid in the United States.
Bank of America
The graphs show a steady improvement in the situation in the States which bodes well for President Trump’s prospects of getting re-elected on 3rd November 2020.
According to a recent FT poll, “60% of Americans believe the outbreak is either staying the same or getting better in their local communities, the most optimistic outlook since the summer outbreak began.” Even more interestingly, for the first time in months more people than not think they are better off since President Trump was elected.
I continue to monitor the polls closely. Florida, a key swing state, is showing increasingly tight polls with even the “mainstream” polling showing a very tight race there.
A recent ABC News poll reports that Trump is beating Biden in Florida with rising Hispanic support partly behind that surge. Potentially far more significant was the fact that this poll showed that the majority of white senior voters preferred Trump to Biden. That goes against polling to date that shows Biden consistently ahead among white seniors on the back of Trump’s poor handling of the Covid pandemic.
In the Rust Belt states, Biden is still ahead, in some cases comfortably, with even the Trafalgar Group show Biden ahead by 2.2 points in Pennsylvania (PA). Interestingly, the undecided voters polled in PA favoured a strict constitutionalist for the next Supreme Court position by 58%, something that may favour Trump in winning over these critical voters in the coming weeks.
So, to summarise, the current state of play is that Trump is probably just ahead of Biden in Florida but is still trailing in the Rust Belt states. I remain reasonably confident that by election day Trump will win, winning over a broad swathe of the Rust Belt and Sunbelt battleground states, on the back of a recovering economy.
John Greer, who successfully forecast Trump’s 2016 victory, has forecast on his blog that Trump will win by 350 or more electoral votes. That might sound fantastic to some given that most data models show Trump is unlikely to win the minimum 270 seats to get re-elected. But Greer has a superb track record and I wouldn’t be surprised in the least if the that ends up being the result on election night.
You have been warned.