Donald Trump’s popularity, never that strong, is sagging, with the most noticeable trend being the growing intensity of negative sentiments he generates. His and the congressional GOP’s agenda is in shambles. Republican-ruled D.C. is a chaotic mess on good days and a rolling ball of madness on bad days. The GOP itself remains sufficiently divided to make party-wide messaging or early preparation for midterm general elections difficult. And a host of really dire future possibilities, from war with North Korea to revelations of Trump family corruption or Trump campaign collusion with Russia, remain just on the horizon of each news day.
To many liberals who were and remain horrified by Trump’s election, none of this is a surprise—though some are undoubtedly amazed that impeachment hearings haven’t begun, and that the minor GOP revolts against the president after his bizarre handling of the Charlottesville violence weren’t more consistent and purposeful. Expectations of a Democratic tsunami in 2018 are common. The idea of lightning striking twice with a Trump reelection in 2020 is from the realm of fiction.
But lurking beneath the confidence that Trump and his party are self-destructing is a gradually emerging issue that is a real nightmare for liberals: What if the economy neutralizes everything bad about the GOP regime in Washington?
At first it was just a booming stock market—which Trump pointed to incessantly—that provided a rare source of good news for the GOP. Then it was the regularly solid monthly jobs reports; through August, the economy has added an average of 176,000 jobs per month, very much in line with its performance in 2016. But just this past week, another positive data point about the economy emerged: official estimates of second-quarter GDP were adjusted upward to 3 percent—an impressive number in its own right, and not that far from Trump’s much-proclaimed target of 4 percent.
Here’s how MarketWatch assessed the situation:
The latest employment report reflects a rock-solid economy eight years after the end of the Great Recession. An influx of millions of new jobs has boosted the confidence of Americans, lined their pockets with more cash and induced them to spend more. That’s fueling one of the longest expansions on record.
That observation leads to a key political question: if the economy keeps churning along at this healthy pace for the next few years, would Trump and his party would get credit for it in 2020? Keep in mind that Hillary Clinton didn’t benefit from the healthy economy in late 2016.
Actually, there is good reason to think so: polling data shows that Republicans perceive the economy through a much stronger partisan lens than do Democrats. So the same economy that looked so bad to them when Obama was president suddenly looks very sunny. Democratic perceptions of the economy are slower to adjust—or depending how you look at it, are more objective—which gives any Republican president an advantage.
Almost every political science model for predicting presidential elections has an economic component, with GDP growth being the most common way of accounting for the economy (though some include personal income growth and even gasoline prices). It is generally assumed that perceptions of the economy may not match objective indicators, and that voters’ perceptions may be skewed by their own personal economic outlook. For example, current SurveyMonkey data shows Trump’s approval rating as closely correlated with “economic optimism,” which is significantly higher among those who are invested in the stock market. Among stock owners, Trump’s approval ratio is 47/52, while it’s 34/63 among non-stock-owners. Now the disparity may be more about partisanship than personal investment, but to the extent the optimism of stock-owners is at least mildly contagious via positive media coverage, a continuing stock boom could help Trump in 2020, while a slump would take away one of his own favorite talking points.
Another microeconomic factor to keep in mind is the particularly intense interest in the condition of the economy in the struggling heartland states that gave Trump his upset win last year. If perceptions of the economy become more positive in places like Michigan and Pennsylvania, Trump’s odds of reelection could go up even if the national economy is anemic. On the other hand, an anemic economy—much like we had in 2016, with low unemployment, steady if unspectacular growth, and stagnant wages—is unlikely to make much of a difference nationally if everything else about Trump and his party makes them unpopular. After all, the same conditions didn’t do much for Hillary Clinton in 2016 when her party was in charge.
An essential fact when looking at this question is that Trump’s approval ratings on the economy are already relatively strong. According to the RealClearPolitics polling averages, his approval ratio on managing the economy is dead even, at 45.5 percent approval and 45.5 percent disapproval. Yet RCP shows his overall approval ratio at 39/57. How much higher would assessments of the economy have to rise to drag Trump’s overall popularity into strong reelection territory? Pretty high, I’d guess. But then there’s always the chance Trump will again draw a Democratic opponent whose problems significantly lower his threshold for victory.
But how much help would a healthy economy offer the GOP in the 2018 midterm elections?
It certainly wouldn’t hurt. But the consensus of political scientists is that the performance of the economy does not have the kind of impact on congressional elections as it has on presidential elections. Rather, the effect of the economy is indirect: a strong economy increases president’s approval rating, which in turn brightens the electoral prospects of the president’s party. And it’s worth remembering that the president’s party almost always loses House seats in midterms (the only exceptions since the Great Depression, in 1998 and 2002, were at times when the president’s approval ratings were unusually high—a situation the highly polarizing Trump probably won’t enjoy no matter how well the economy is doing). But the extraordinarily pro-GOP Senate landscape in 2018 could well insulate Republicans from Senate losses next year, but a growing or even humming economy won’t necessarily protect GOP control of the House.
Fears about the economy helping Trump and the GOP reflect, I suspect, a deeper liberal anxiety: that among the investor class, sheer greed at the prospect of the regulatory relief and tax cuts on offer is offsetting the kind of jitters you would normally expect to become endemic about such erratic national leadership on Wall Street and in boardrooms everywhere. If the economy really does boom in the years just ahead, might conservative claims that “big government” was holding back the massive productive capacity of the private sector begin to ring true, even to people who might expect a pretty meager share of the profit bonanza?
For that scary proposition to be put to a true test, of course, Trump and his party are going to have to get an awful lot better at bringing home the bacon to investors and other well-heeled “job-creators.” There’s been some regulatory “relief,” but by and large, the avaricious dreams of the GOP for big high-end tax cuts and other reactionary policies are just that: dreams. Unless that changes, the liberal nightmare of an economy lifting Trump to a second term with strengthened Republican control of Congress won’t survive sunrise, no matter how much the president claims he’s made America great again.