Source: Jeffrey Folks
Leftists have been licking their chops over 2020, citing a host of reasons why President Trump will definitely, definitely be defeated. Among these are the “crimes” in the newly released Mueller report; the supposed failure of the North Korea and China talks; and, most important of all, the anticipated decline of the economy ahead of the 2020 election — anticipated by the Left, that is.
A recent report by Regions Financial group, summarized in Barrons, belies that assumption. One of the reasons the economy might be slowing down, again in the minds of liberal economists, is data showing that the existing home market slowed in 2018. For those like Robert Schiller at Yale or Lawrence Summers at Harvard, this might appear to confirm an upcoming recession. A “significant risk” of a recession exists within two years, Summers told Fortune magazine in January 2019.
The Regions report notes that existing home listings have declined during peak season every year now for four years, including the last two years of the Obama administration. It is curious that liberal economists were not calling for a recession under Obama despite similar data. As soon as Donald Trump was elected — practically on election night — liberal economists started predicting a major recession and searching for data to confirm it. One of those data points was the drop in existing home sales.
What they failed to mention was the reason for that decline. According to Regions, existing home sales have declined because of improvement in the economy, not because of a slowdown pointing to recession. Essentially, existing home listings have declined because houses have been selling so well that there are fewer on the market. As Regions puts it, “[w]e have for some time pointed to supply constraints as the biggest problem in the existing-homes market.” The reason for this supply constraint, according to Regions, is improving “trends in job growth, income growth, and consumer confidence” — not exactly the signs of a recession “already in progress,” or one coming about anytime soon.
That’s a different picture from what one gets on CNN or MSNBC, or even in the comments from many respected academic economists. The Left is so eager to see President Trump defeated in 2020 that it is fabricating economic predictions out of thin air. Every sign of a “slowdown” is taken out of context and shouted from the rooftops. Even one-off monthly events, such as the decline in December retail sales (resulting from a sales calendar that pushed sales into November and followed by a partial government shutdown and a resulting drop in consumer confidence), are treated like confirmation of a painful recession just in time for the 2020 election.
Ironically, those declines in retail sales seem to have reversed. Liberals said declining sales signaled a recession. Well, now they are increasing strongly. According to the latest data from the Commerce Department published Thursday, retail sales for March grew at 1.6%, the biggest jump in 18 months. As for jobs, the March unemployment numbers came in at 3.8%, near 50-year lows. Unemployment is expected to fall to 3.5% by December 2019, according to Goldman Sachs. There has never been a recession accompanied by falling unemployment numbers.
As the economy continues to improve, expect liberal economists to look elsewhere for their confirmation of an impending recession. There’s no chance they will simply admit the truth: that President Trump’s reforms have brought about a remarkable economic expansion and that American workers are the primary beneficiaries of his tax and regulatory policies.
Indeed, progressives have already settled on a new data point: the fact that income tax refunds are down 17% this year — “a steep decline that promises more headaches for Republican lawmakers,” according to Politico. Yes, refunds are down — because, with lower tax rates, withholding was down to begin with. With less money withheld, less is being returned at the end of the tax year. One would think Ph.D. economists would be able to comprehend this fact, but not those so strongly biased against the president and his pro-growth, pro-worker policies.
The Left will just have to search harder. Perhaps the fact that smartphone sales are down — at least until the new 5G models start selling later this year. Or possibly a drop in lower-priced sedans — the result of a preference among consumers for larger, more expensive SUVs and trucks. What about the ominous signs of a brief inversion in interest rates? That inversion has now reversed. Or the December decline in consumer confidence? That too reversed in the January data. I can’t think of a single important, sustained data point indicating an imminent recession.
There’s surely no sign of a recession in Florida, where I live. There are plenty of jobs, construction everywhere, new businesses, widening of roads, and large new housing developments — all of it needed to accommodate the flood of migrants escaping states like New York and Illinois. Those residents are fleeing high taxes and a high cost of living (and the cold).
As for those existing-home sales, expect better numbers in Florida, and in New York, too. New Yorkers are selling to leave a state that can’t even approve a second Amazon headquarters. Floridians are building homes to accommodate them, and the economy is booming just as it is in most of the country.
President Trump’s chances of victory in 2020 are increasing every month. In March, he received his best rating on his handling of the economy with 50% approve versus 42% disapprove. Even Democrats who disapprove of Trump overall are starting to admit that the economy is improving. And in a presidential election, “it’s the economy, stupid.”
No president in modern times has failed to be re-elected while running with an expanding economy at his back. President Trump will definitely, definitely be re-elected.
Jeffrey Folks is the author of many books and articles on American culture including Heartland of the Imagination (2011).