Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

With 10 days to go, time and history are not on Donald Trump's side

With 10 days to go, time and history are not on Donald Trump's side

Covid has tanked the gains he made in the economy and any new stimulus could be too late

It all looked so simple for Donald Trump as he took the stage at the World Economic Forum in Davos in January this year. At the start of an election year, the annual gathering of the global business elite was an opportunity to launch his campaign.

It was one Trump eagerly seized. The next 30 minutes was one long boast, detailing how a US economy that had allegedly been on its knees under Barack Obama had been transformed under his stewardship.



“Today I’m proud to declare that the United States is in the midst of an economic boom the likes of which the world has never seen before,” Trump told a packed hall. “We’ve regained our stride, we discovered our spirit and reawakened the powerful machinery of American enterprise. America is thriving, America is flourishing and, yes, America is winning again like never before.”



Trump knew his history. Most incumbent presidents since the second world war had seen off their challengers, and the ones that hadn’t – Gerald Ford in 1976, Jimmy Carter in 1980 and George Bush Sr in 1992 – were not helped by an underperforming economy. So, with the stock market at a record high and unemployment at its lowest since the Apollo space missions of the late 1960s, the president thought the path to victory would be smooth.



Trump had been briefed about Covid-19 and the first US case was reported on the day of his Davos speech. But he did not think for a moment that his re-election campaign would be fought against the backdrop of a global pandemic and for some time appeared to be in denial about the importance of the virus, claiming it would soon go away.

That proved to be wishful thinking. Before Thursday’s head-to-head debate with Joe Biden, the pandemic had led to more than 200,000 deaths in the US and infection rates are still rising. Unemployment rocketed to 15% as large parts of the economy closed in the spring. Far from presiding over an economic boom, the International Monetary Fund estimates that the world’s biggest economy will contract by more than 4% this year. Put into context, the last time the economy shrank by more than 4% in a presidential election year was in 1932, the depths of the Great Depression, when Herbert Hoover was in the White House. Hoover did not get a second term.

Mohamed El-Erian, the former chief executive of the US investment firm Pimco and now president of Queens’ College, Cambridge University, says that back in January Trump looked like he would avoid Hoover’s fate but now faces an uphill struggle to defeat his Democratic challenger, Biden.

“Going into Covid-19, Trump would have won on two themes: the greatest economy in the history of the US and the greatest stock market in the history of the US,” El-Erian says. “Unemployment had fallen in every section of the population, the US had outperformed other advanced countries, there had been a series of records broken on Wall Street.”

Although the economy recovered after contracting by almost 10% in the second quarter, the official unemployment rate remains at 7.9% – double its pre-crisis level. What’s more, the stubbornly high level of new jobless claims suggests the recovery has started to run out of steam as Americans self-isolate in the face of new outbreaks of the virus.



Wall Street has bounced back sharply after its sell-off in February and March but El-Erian says this is not entirely good news for Trump. “As the weeks go by the disconnect of financial markets from the economy is slowly becoming a political issue. It is the rich who are doing better.”

Unable to make the claim that he is presiding over the strongest US economy of all time, for the past few weeks Trump has been trying another tack: that he is the candidate best placed to secure recovery. The president is eager to get a fresh stimulus bill through Congress before election day.

David Blanchflower, an economics professor at Dartmouth College in New Hampshire and a former member of the Bank of England’s monetary policy committee, says the US is suffering from unemployment and underemployment, and that the official jobless figures do not truly reflect the state of the labour market. “The real unemployment rate went from 4% to 20% in six weeks,” he says.

For months, Trump has been trying to get a fresh stimulus package through Congress but Blanchflower says he has allowed the Democrats to spin out the talks for too long. “Even if a deal is agreed, voters are not going to feel the impact before the election,” he says.

With less than two weeks to go, time and history are not on the president’s side. Nor is the pandemic. As El-Erian says, this election is not only about who is best at running the economy but also who will be the best at tackling Covid-19 and who can keep Americans safe.

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Altman Says GPT-5 Already Outpaces Him, Warns AI Could Automate 40% of Work
Russian Research Vessel 'Yantar' Tracked Mapping Europe’s Subsea Cables, Raising Security Alarms
Global Cruise Industry Posts Dramatic Comeback with 34.6 Million Passengers in 2024
U.S. Demands Brussels Scrutinize Digital Rules to Prevent Bias Against American Tech
Private Equity’s Fundraising Surge Triggers Concern of European Market Shake-Out
Tokyo’s Jimbōchō Named World’s Coolest Neighbourhood for 2025
European Officials Fear Trump May Shift Blame for Ukraine War onto EU
The Personality Rights Challenge in India’s AI Era
Italy Considers Freezing Retirement Age at 67 to Avert Scheduled Hike
Italian City to Impose Tax on Visiting Dogs Starting in 2026
Study Finds No Safe Level of Alcohol for Dementia Risk
Trump Says Ukraine Can Fully Restore Borders with NATO Backing
Europe Signals Stronger Support for Taiwan at Major Taipei Defence Show
Germany Weighs Excluding France from Key European Fighter Jet Programme
Cyberattack Disrupts Check-in and Boarding Systems at Major European Airports
Björn Borg Breaks Silence: Memoir Reveals Addiction, Shame and Cancer Battle
When Extremism Hijacks Idealism: How the Baader-Meinhof Gang Emerged and Fell
JWST Data Brings TRAPPIST-1e Closer to Earth-Like Habitability
Trump Orders $100,000 Fee on H-1B Visas and Launches ‘Gold Card’ Immigration Pathway
France’s Looming Budget Crisis and Political Fracture Raise Fears of Becoming Europe’s “Sick Man”
Three Russian MiG-31 Jets Breach Estonian Airspace in ‘Unprecedentedly Brazen’ NATO Incident
European manufacturers against ban on polluting cars: "The industry may collapse"
Turkish car manufacturer Togg Enters German Market with 5-Star Electric Sedan and SUV to Challenge European EV Brands
Christian Brueckner Released from German Prison after Serving Unrelated Sentence
World’s Longest Direct Flight China Eastern to Launch 29-Hour Shanghai–Buenos Aires Direct Flight via Auckland in December
New OpenAI Study Finds Majority of ChatGPT Use Is Personal, Not Professional
The conservative right spreads westward: a huge achievement for 'Alternative for Germany' in local elections
Pope Leo Warns of Societal Crisis Over Mega-CEO Pay, Citing Tesla’s Proposed Trillion-Dollar Package
Poland Green-Lights NATO Deployment in Response to Major Russian Drone Incursion
U.S. and China Agree on Framework to Shift TikTok to American Ownership
Le Pen Tightens the Pressure on Macron as France Edges Toward Political Breakdown
Czech Republic signs €1.34 billion contract for Leopard 2A8 main battle tanks with delivery from 2028
Penske Media Sues Google Over “AI Overviews,” Claiming It Uses Journalism Without Consent and Destroys Traffic
Indian Student Engineers Propose “Project REBIRTH” to Protect Aircraft from Crashes Using AI, Airbags and Smart Materials
One in Three Europeans Now Uses TikTok, According to the Chinese Tech Giant
Could AI Nursing Robots Help Healthcare Staffing Shortages?
NATO Deploys ‘Eastern Sentry’ After Russian Drones Violate Polish Airspace
The New Life of Novak Djokovic
German police raid AfD lawmaker’s offices in inquiry over Chinese payments
Volkswagen launches aggressive strategy to fend off Chinese challenge in Europe’s EV market
France Erupts in Mass ‘Block Everything’ Protests on New PM’s First Day
Poland Shoots Down Russian Drones in Airspace Violation During Ukraine Attack
Apple Introduces Ultra-Thin iPhone Air, Enhanced 17 Series and New Health-Focused Wearables
Macron Appoints Sébastien Lecornu as Prime Minister Amid Budget Crisis and Political Turmoil
Vatican hosts first Catholic LGBTQ pilgrimage
Apple Unveils iPhone 17 Series, iPhone Air, Apple Watch 11 and More at 'Awe Dropping' Event
France joins Eurozone’s ‘periphery’ as turmoil deepens, say investors
France Faces New Political Crisis, again, as Prime Minister Bayrou Pushed Out
Nayib Bukele Points Out Belgian Hypocrisy as Brussels Considers Sending Army into the Streets
France, at an Impasse, Heads Toward Another Government Collapse
×