No recession soon

Ross Douthat is at it again, predicting a recession that will cost Trump his reelection.

If there is one thing I have learned over the past three year or so, media narratives are almost always wrong.

For example: the narrative in early to mid-2018 was that the Trump tariffs would hurt the economy and boost inflation: neither of those things happened. The exact opposite happened, which no one saw coming: inflation expectations fell and bond market surged, and the US economy as measured by employment data, profits and earnings, exports, consumer spending, and GDP growth is still as strong as it has been in years.

First, the easy part: Donald Trump loses re-election. It will be ugly and flailing and desperate and — depending on recession-era geopolitics — potentially quite dangerous, but there is no way a president so widely disliked survives the evaporation of his boom. The rules of politics have changed, but they haven’t been suspended. Polarization will keep Trump from being defeated in a landslide, but not from being beaten handily, and in a recession the Democrats can nominate any of their candidates and expect to evict the president with ease.

Uhh…what are you talking about. According to 538, Trump’s approval rating has been in a very tight 2-percent band, of around 41-43%, for the past year, indicating no general change in national sentiment in spite of a political climate that seems angrier and more divided than ever.

Trump’s approval rating among conservatives has actually increased since being elected. In 2016=2017 there was apprehension by ‘establishment’ conservatives over Trump, but now they are mostly on board, so for 2020 Trump will have the endorsement of conservatives who in 2016 shunned him. I would put Trump’s odds of begin reelected at around 60% given his incumbency advantage and strong economy, which is sorta meaningless statistic, but to say that ‘Trump easily loses reelection’ is unsupported by any evidence.

But if the G.O.P. is reduced to a white working-class base at a time of increasing economic pain, there will also be incentives for Trump’s would-be successors to flesh out his populism rather than abandoning it. This will be the ground on which the next Republican civil war gets fought no matter what, but how long a recession lasts and how it gets interpreted will determine whether a serious post-Trump conservative populism is inevitable or stillborn.

More likely to be stillborn, recession or not. Trump’s supposed populism is more performance art and conveying sentiment of populism, than action.

But at the same time, the domestic trends that have already worsened despite a strong economy — drug overdoses, suicide rates, middle-aged mortality, the slumping birthrate — are likely to get even grimmer in a contraction. America’s social fabric hasn’t recovered from the rendings that followed 2008; a recession now would tear out the weakest stitching quickly.

I would wager the likelihood of increased social unrest in the already unlikely event there is a recession, to be low. These long-standing social trends such as drug use will persist, regardless. A recent study, however, found that “…a bad economy means fewer people drink and more take hallucinogens (mostly LSD and ecstasy), but there is no relationship between other kinds of drug taking and unemployment.”

Then in the commercial sphere, the venture-capital subsidy to American consumers will dry up. The Atlantic’s Derek Thompson summed up the peculiarities of this subsidy with a recent tweet: “If you work at WeWork, drive home with Uber, and then order food by DoorDash, you’re engaging with three companies that are projected to lose about $13 billion this year.” Those losses are supposed to end with an eventual leap into profitability; in a bad economy, they may end a lot more suddenly than that. Presumably a few of the many money-losing, long-game-playing Silicon Valley companies will survive a recession — but how many? Gather your Uber rides while ye may …

Companies such as Uber and WeWork, despite posting large losses, are not going away, even in a recession. Tesla survived the 2008-2009 crisis and went public just a year later in 2010, and despite losing lots of money, the stock has increased 1,000% since then. Naysayers underestimate the ability of these tech companies to raise capital cheaply and to turn things around when least expected. Amazon was nearly written off for dead in 2002-2003…so much for that.

Finally, to end close to home, my profession will be shellacked. As with the social trends noted above, the economic foundation for professional journalism has continued to erode amid relative economic plenty; midsize daily newspapers keep shrinking and closing, web start-ups struggle to find ad revenue, and the business of online subscriptions rewards giants like this newspaper but so far almost nobody else. For many newspapers and webzines struggling to make the economics of the business work, a slump now could be simply fatal. And academia, journalism’s comrade in “careers that made more sense in 1960,” could face its own reckoning, with midsize and small colleges closing and consolidating, like midsize and small newspapers.

The media has itself to blame for being wrong all the time. If the media is supposed to be an objective source of information and insight, it has failed massively in this regard. The media is already acting like Trump is going to lose and that there will be a recession soon, but the evidence does not portend to either of those things happening.

Being a practicing Catholic, virtue is probably very important to Mr. Douthat. He would probably agree that America is afflicted by a sort of neo-enlightenment amorality and banality. It’s not that Trump is evil or bad, because that would require effort and intentionality, but that he is a product of the times. I linked to it because I respect Mr Douthat as a social critic and he makes some good observations from time to time if one removes his overt anti-trump bias. The problem I have found is that the overwhelming majority of commentary of this nature tends to be anti-Trump. Can you find neutral or pro-Trump people that are as observant as someone like Ross Douthat. Not easily. There are of a very small minority. Kevin Williamson, David Brooks, Andrew Sullivan, Charles Murray, etc. all fall into this category of being right-of-center to varying degrees, articulate, prescient, but also strongly anti-Trump.