If the people around Hillary Clinton are in danger of getting a bit too giddy over the bizarre meltdown that seems to be striking their Republican opponent, you don’t have to go too far to discover dark clouds on the horizon. The Wall Street Journal has a buzzkill for the next president:
Economists in The Wall Street Journal’s latest monthly survey of economists put the odds of the next downturn happening within the next four years at nearly 60%.
That is not an assessment that the next U.S. president will cause a downturn. Rather, it is a recognition that throughout its history the American economy has never grown for more than a decade without a recession. Over the course of the next four years, something—whether exhaustion of the economy’s cyclical momentum, a policy mistake from the Federal Reserve or some outside shock—could knock the economy off course.
In other words, a recession during the next four years is a better-than-even bet no matter what the president and Congress do or don’t do. And in the most likely case of a Democratic president in a state of perpetual gridlock with a Congress at least partially controlled by Republicans, the odds of any coherent action outside the Fed to head off or mitigate an economic downturn are very low. Keep in mind that each party’s idea of what causes or inhibits economic growth is in polar opposition to the other’s. Back in 1971 Republican president Richard Nixon famously said: “We are all Keynesians now,” referring to the then-dominant belief that federal fiscal stimulus could boost employment and economic output. We are all not-anything-in-particular anymore when it comes to economics.
The economists predicting relatively high odds for a recession could be wrong, of course. We could have a downturn that is brief and mild, too, like the two the U.S. experienced during the Eisenhower administration. In terms of the politics of recession, the country went into a very painful recession during Ronald Reagan’s first term, and he managed to eke out a 49-state reelection victory in 1984. Other presidents struggling through recessions saw recoveries that began too late to save them, though: Gerald Ford in 1976 and Poppy Bush in 1988. It’s always possible, moreover, than events could occur that make GDP numbers pale by comparison. And short of very deep or enduring periods of negative growth, there are other fundamentals that can offset recessions, such as the demographic trends that currently seem to be favoring Democrats.
All in all, Team Clinton should not let worries about the future spoil its election-night party if things keep going as well for her as they have the last couple of weeks. But somewhere inside the Beltway or in New York, wherever the advance planning for a Clinton administration’s economic policy is underway, it would be a good time to begin thinking about countercyclical measures that could either bypass or seduce Paul Ryan.