The bottom dollar on recession, Trump’s base, and his reelection prospects

Two popular but misguided questions about Donald Trump’s reelection prospects and the economy are: What will be the implications of a recession next year, and how will it play with the president’s white, non-college-educated base?

A recession before the election, the best economic analysts project, is unlikely, though not out of the question. An economic showdown next year, is probable. Even a sluggish economy won’t dissuade Trump’s hard-core base; more relevant is the impact on what Illinois Rep. Cheri Bustos, famously labels the “Trump triers,” the soft 2016 Republican voters.

While Trump energizes his base with immigration bashing and projecting a tough-guy stance on trade and tariffs, his camp believes the key mantra to reelection is jobs up, wages up, crime down.

Today the economy looks very good. Unemployment at a half-century low, no discernible inflation, wages and the stock market climbing. Unemployment for African-Americans, while much higher than for whites, is at an historic low.

Not surprisingly, Democratic presidential candidates focus more on health care, climate change or education and child care. Republicans in competitive congressional races argue Okay Trump may not be a day at the beach, but we’re doing well economically.

Yet Trump’s numbers on the economy aren’t great, wages are creeping up, but not that much — especially in a tight labor market and not clearly felt by many workers. No matter employment, few African-Americans will overlook Trump’s pervasive racism. Crime is down continuing a trend begun in the Obama Administration.

The odds over the next year of a recession, officially defined as two consecutive quarters of negative growth, are probably no more than 45 percent. There was fear that Trump’s tariffs might precipitate a downfall, but predictably he backed off his threats to slap huge levies on Mexican goods, falsely claiming that the Mexicans capitulated. Those tariffs would have had a much more severe economic impact than the ones on Chinese goods.

But the average growth of a little less than 3 percent over the last year will slow, reduced in half next year. That would suggest unemployment ticks up, wage growth ticks down. This alters bragging rights for Republicans.

How much would that affect Trump? “Slowing the economy definitely affects Republicans, but I’m not sure it affects Trump,” says Fred Yang, a top Democratic pollster. “Conventional measures didn’t affect him in 2016, why should we think they will in 2016?”

Neil Newhouse, a top Republican disagrees: “The importance of a positive economy for Trump cannot be overstated. If it stays strong, I like our chances.”

It’s tough when two respected experts offer different takes on something so basic. I suspect Yang is closer to the mark, that Trump’s larger than life persona transcends these metrics.

Pennsylvania, a key battleground, is illustrative. If the economy remains as strong as it is today, I doubt Trump will do any better in the populous Philadelphia suburbs where even some lifelong Republicans see him as an embarrassing fraud. Conversely, if the economy falters, those culturally conservative, economically challenged Western Pennsylvania counties around Pittsburgh — like Washington and Westmoreland — aren’t going to desert him.

The two incumbents who’ve lost in modern times offer contrasting lessons. Jimmy Carter, in 1980, faced the headwinds of negative economic growth. But when George H.W. Bush was defeated in 1992, the economy that year grew at more than a 3.5 percent clip — but it started too late to help him.

Trump, naturally, will blame others for any economic slowdown: The Federal Reserve and man he appointed as chair, Jay Powell; foreigners; Democrats; or, if convenient, greedy Wall Street bankers. He already is warning if a Democrat is elected there will be recession and a “market crash the likes of which has not been seen before.”

Worse than 1929? No one believes that.

The reality is: Over the last half century the economy usually grows faster under Democratic Presidents. The stock market, during the Bill Clinton and Barack Obama Administrations, grew more than twice as fast as it has under Trump.

Albert R. Hunt is the former executive editor of Bloomberg News. He previously served as reporter, bureau chief and Washington editor for the Wall Street Journal. For almost a quarter-century he wrote a column on politics for the Wall Street Journal, then the International New York Times and Bloomberg View. Follow him on Twitter @alhuntdc.