Politics is riddled with ironies. It rhymes in poetic justice. So if Joe Biden wins the nomination, and if he is elected president, he could then find himself in the position of rescuing the economy for the second time.
The first time, of course, was in 2009 when the Great Recession ravaged jobs, financial markets, and retirement accounts, and home foreclosure signs sprouted like dandelions in suburban neighborhoods. The Obama administration spent two years of its first term in crisis mode, pulling the automobile industry from the brink of certain bankruptcy, propping up financial markets, and passing a much maligned stimulus program. The result was a slow but steady recovery from disaster in the economy.
The second time would come if he is elected in the midst of an economy reeling from the impacts of the coronavirus. This is not the fall of 2008, when the last financial crisis yanked the economy into a spiral, but it sure does feature some reminders. The early signs are concerning. The stock market has been swinging wildly. Five minutes after the open this week, trading was halted after the stock market plummeted. The S&P 500 fell almost 20 percent in only weeks. Such a “free fall” has “vaporized more than $5 trillion in stock market wealth,” the New York Times has written.
An airline trade group has projected total losses of up $113 billion for the industry worldwide, rippling to virtually every other facet of the economy, as executives to cab drivers feel the effects. The Federal Reserve enacted an emergency rate cut in the first such move since the Great Recession. Competition between Saudi Arabia and Russia has triggered the sharpest decline in oil prices since the Gulf War, and gold prices have been erratic.
A financial analyst told the New York Times there is “panic” and warned of a coming global recession. What if he is right? What if layoffs increase and wages decline? What if bankruptcies and foreclosures start to spread? My prediction is that the coronavirus will abate, as it seems to be doing so in China, and the economy will eventually return to normal. But we live in abnormal times where guesswork and punditry are quickly discredited.
These are the immediate questions for Democrats in this primary race. Which prescriptions will heal an ailing economy? Is it an experiment with socialism or the Obama era policies that worked before? If the economy is still soft this autumn, and the general election is between Donald Trump and Biden, this is the question. Do you trust the guy whose policies have kept us in this mess or the guy who has already gotten us out before?
The answers might surprise you. We live in such a polarized environment now that many Americans do not vote with their pocketbooks. They vote with their emotions toward Trump. The Trump lovers will believe they live in a booming economy even if it is going bust. The Trump loathers will believe they are living in a broken economy even if it is booming. What about the people in the middle? This election hangs with those voters, and without a strong economy to point to, then Trump will lose them.
Steve Israel represented New York in Congress for 16 years and served as chairman of the Democratic Congressional Campaign Committee from 2011 to 2015. He is now the director of the Institute of Politics and Global Affairs at Cornell University. You can find him on Twitter @RepSteveIsrael.