WASHINGTON POST DAILY 202 / WASHINGTON POST
President Trump’s failure to negotiate a coronavirus relief deal with Congress before the election, record-breaking surges in new covid-19 infections, a tanking stock market, declining consumer confidence in battleground states and ominous layoff announcements appear to have taken at least a marginal toll on what has been his biggest polling advantage amid the pandemic: perceived competency at managing the economy.
A decline in the stock market has been one of several “October surprises” in this election. The Dow Jones industrial average fell 943 points Wednesday, closing about 9 percent lower than at the start of last month. The selloff has been driven by the rising number of new infections and the growing recognition that a gridlocked Washington will not deliver coronavirus relief anytime soon. The markets opened flat on Thursday after the GDP and jobs numbers were released because they were in line with expectations.
A Washington Post-ABC News poll released Wednesday showed Trump’s advantage on the economy receding in a vital swing state. In Wisconsin, 47 percent approve of how the president is handling the economy and 50 percent disapprove. Last month, the same poll had Trump’s economic rating net positive by seven points. “
The U.S. economy grew at 7.4 percent between July and September, recovering about two-thirds of its losses during the first half of the year. This is a number Trump will ballyhoo for the five days remaining until the election, but the gross domestic product is now about the size it was in the first quarter of 2018. Growing hospitalizations and deaths from the virus, combined with uncertainty about when another stimulus bill might pass, put dark storm clouds above the economy.
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“For the economy to recover all that was lost in the previous quarter, third-quarter GDP would have had to surge and hit 10 percent, and even more to make up for smaller first-quarter losses,” Rachel Siegel and Andrew Van Dam report. “Officials such as Federal Reserve Chair Jerome H. Powell have long said that a robust and stable recovery depends on controlling the pandemic. … Economists put the risk of a double-dip recession later this year or early next year at 30 to 35 percent, depending on the course of the virus, the prospects of another stimulus package and any trade tensions with China.”
Another 751,000 people applied for jobless claims last week, down about 40,000 from the week before, in the final unemployment report before the election. “Claims for Pandemic Unemployment Assistance, for gig and self-employed workers, went up slightly, to 359,000,” Eli Rosenberg reports. “All told, there were about 22.6 million people claiming some form of unemployment insurance … The economy has begun to flash more warning signs in recent weeks. Companies announcing layoffs in recent weeks include aerospace giant Raytheon, financial services company Charles Schwab, and Disney World. … An increasingly large group of people are transitioning off regular state unemployment insurance to a temporary federal program for people whose state benefits have expired — a sign of the growing duration of joblessness for many.”
Speaker Nancy Pelosi (D-Calif.) revealed Thursday that she and Treasury Secretary Steven Mnuchin have remained farther apart on key issues in their negotiations for a stimulus package than many believed. A letter to Mnuchin, released to the media, casts doubt on whether a deal can get done at all during the lame-duck session. “Pelosi listed a litany of outstanding issues including state and local aid, school funding, child care money, tax credits for working families, unemployment insurance aid, and liability protections for businesses sought by the administration but opposed by Democrats,” Erica Werner reports. “She also said that she was still awaiting a final answer from the administration on agreeing to the Democrats’ language on a national coronavirus testing strategy – something Mnuchin had said on Oct. 15 that he was prepared to accept subject to minor edits.”
Trump is trying to make this election more about jump-starting the economy than controlling the pandemic, which White House Chief of Staff Mark Meadows said over the weekend that they are not going to be able to do. “This election is a choice between a Trump boom and a Biden lockdown,” Trump said on Wednesday in Arizona.
Ultimately, the pandemic seems to be a higher priority in the minds of voters than the economy right now. A Monmouth University poll of Georgia on Wednesday showed Biden ahead 50 percent to 45 percent. Asked who they trust more to create jobs, Trump lead Biden by 10 points (49 percent to 39 percent.) Asked who they trust more to handle the pandemic, Biden led by 12 points: 49 percent to 37 percent.
“Trump in recent days has touted the stock market as central to his 2020 reelection bid, frequently pointing to Americans’ 401(k) accounts. … The stock market’s sharp decline clouds this characterization,” Jeff Stein reports. “Even some of the president’s allies acknowledge the challenge posed by the market decline, arguing that Trump must continue to blame Pelosi for the absence of a stimulus agreement. ‘It’s a big, big decline. … It’s very ugly,’ said Stephen Moore, an outside economic adviser to the White House. ‘Trump has to keep saying ‘Pelosi blocked the plan because she wanted the blue state bailout.’’ … [But] Trump kept trying to cancel and then un-cancel the negotiations, sometimes multiple times in a week. …
“Trump won the presidency on a pledge to engineer an economic turnaround in the Rust Belt. He hasn’t delivered,” Tory Newmyer writes in today’s Finance 202. “The forces weighing on the region predate Trump, but the president’s trade wars have also exacerbated pain for the farmers and manufacturers that make up key engines of the local economies. … Twenty-three of [Wisconsin’s] 72 counties flipped from supporting Obama in 2012 to Trump in 2016. They have not fared well, even before the pandemic struck: Just over a third experienced job growth from the first quarter of 2018 to that same period this year, according to data from the Economic Innovation Group. … Compared to similar voters in five other swing states, consumer confidence among those in Michigan ‘saw the largest drop from the beginning of the year to Oct. 15 at a 36.4-point decline,’ a Morning Consult analysis finds.”
“Across the industrial belt from Wisconsin to Pennsylvania, private job growth from the first three months of 2017 through the first three months of 2020 lagged the rest of the country — with employment in Michigan, Wisconsin and Ohio growing 2% or less over that time compared to a 4.5% national average,” according to Reuters.
Trump’s 25 percent tariffs on foreign-made steel did not fuel the revival for American steel that the president promised, the Wall Street Journal reports. “Initial job growth withers as demand and prices sink; older mills face a dim future.”
It will get worse before it gets better: States now face their biggest cash crisis since the Great Depression. “Nationwide, the U.S. state budget shortfall from 2020 through 2022 could amount to about $434 billion,” the WSJ reports. “The estimates [from Moody’s Analytics] assume no additional fiscal stimulus from Washington, further coronavirus-fueled restrictions on business and travel, and extra costs for Medicaid amid high unemployment. That’s greater than the 2019 K-12 education budget for every state combined, or more than twice the amount spent that year on state roads and other transportation infrastructure … Even after rainy day funds are used, Moody’s Analytics projects 46 states coming up short, with Nevada, Louisiana and Florida having the greatest gaps as a percentage of their 2019 budgets. … Hawaii, for example, is expecting fewer than half the visitors it took in last year in 2020, and state officials forecast its general fund revenues won’t recover to pre-pandemic levels until its 2025 fiscal year.”
The state of Michigan’s budget director, Chris Kolb, calculated that even if he eliminated 12 state departments—including education, environment and treasury—and used up every penny in state reserves, Michigan would still be short $1 billion needed to balance his budget. “We really have uncharted waters in front of us,” Kolb told the Journal. “The waves appear to be getting more choppy.”
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Joe Biden countered that America must get control of the contagion in order to revitalize the economy. The Democratic nominee has emphasized the uneven nature of what he calls a K-shaped recovery. The rich are bouncing back strong while the suffering of the poor only gets worse.
“Even if I win, it’s going to take a lot of hard work to end this pandemic,” Biden said in Wilmington, Del. “I’m not running on the false promise of being able to end this pandemic by flipping a switch. … We will deal honestly with the American people, and we’ll never, ever, ever quit. That’s how we’ll shut down this virus so we can get back to our lives a lot more quickly than the pace we’re going now.”
The Post-ABC polling showed Biden leading 57 percent to 40 percent among likely voters in Wisconsin and 51 percent to 44 percent in Michigan. When it comes to handling the pandemic, Biden is trusted more than Trump by double digits in both states.
Gloom settles over Europe as days darken and the virus surges.
“The clocks were dialed back an hour across Europe this week, and the long nights come early. The hospitals are filling up as the cafes are shutting down. Governments are threatening to cancel Christmas gatherings,” William Booth, Chico Harlan, Loveday Morris and Michael Birnbaum report. “As new coronavirus infections surge again in Europe, breaking daily records, the mood is growing dark on the continent — and it’s not even November. … Germany and France on Wednesday joined those announcing shutdowns to try to get the virus under control. The new measures are less restrictive than in the spring, and yet they are facing more pushback. People are no longer so willing to bunker down in their little apartments, stepping out in the evenings to applaud courageous nurses. Nobody is singing arias from their balconies anymore.
"Europeans remain scared of covid-19, but they are just as scared about jobs. They’re fried — and growing angry and belligerent, too. … Anti-riot squads in Italy this week fired tear gas to disperse violent crowds in Milan, who were protesting new lockdown measures. In Turin, demonstrators hurled gasoline bombs at police. In Germany, the streets swelled with protesters from the hospitality industry, while Chancellor Angela Merkel met with regional leaders to debate the partial lockdown, in which restaurants are closed but schools are staying open.” (A man shouting “Allahu akbar” killed three in a knife attack this morning at a church in Nice, France. President Emmanuel Macron is heading to the scene.)
- The presidential election matters less to the stock market than it might seem. Data shows the market actually cares more about which party controls Congress than the White House, and stocks typically do best when the two chambers of Congress are controlled by different parties. [USA Today / Jessica Menton]
Trump’s attempt to seed another “investigation” into his rival through the “discovery” of a compromising laptop has fizzled. Today, NBC News noted that a document purporting to show Democratic candidate Joe Biden’s son Hunter Biden in a corrupt relationship with Communist leaders in China was actually ghost written by an academic and published under a fake identity.
Meanwhile, a record number of 80 million early ballots have already been cast, and we are all parsing the polls for clues about who will emerge as the winner of the 2020 election.
What is clear is that, as we approach the end of the campaigns, each is reflecting its presidential candidate.
Trump’s willingness to defend his own interests at others’ expense is showing in the final days of his campaign. It is showing generally, with his willingness to expose his supporters to coronavirus infections at his rallies. It is showing more specifically with Trump’s refusal to support endangered Republican Senators who have stood by him and lost support because of it. At Trump’s recent visit to Maine, he did not mention Senator Susan Collins, who is in a tight race with her Democratic challenger, Sara Gideon.
In Arizona, Trump mocked vulnerable senator Martha McSally. “Martha, just come up fast. Fast. Fast. Come on. Quick. You got one minute!” Trump said, as the senator rushed to the stage for some airtime with the president. “One minute, Martha! They don't want to hear this, Martha. Come on. Let’s go. Quick, quick, quick. Come on. Let’s go.” Trump gave McSally just 60 seconds to speak before turning the microphone over to other national figures.
Trump has begun to muse about losing the election, and said he would like simply to drive away, or fly away, from the burden of the presidency. Yesterday, retired Brigadier General Peter B. Zwack wrote that, with his immense financial debts and pending legal issues, “Trump appears to be a classic flight risk.”
Still, though, the president continues to fire up his base with accusations that Democrats are engaging in voter fraud, and that counting ballots after November 3 will mean a stolen election. His rhetoric is so worrisome that business owners in Washington, D.C., are boarding up their windows and Walmart is pulling guns and ammunition from its shelves (although it will continue to sell them on request).
Tonight, both candidates are in Florida, and while Trump could have focused on today’s economic report showing 7% GDP growth in the third quarter, he went all-in with attacks on Hunter Biden and mused about losing.
In contrast to Trump’s erratic personality-driven campaign, Biden’s campaign remains smooth and professional. Unlike the Trump campaign, it has plenty of money, and is running fun, moving, and professional ads on social media emphasizing unity and healing for the country.
In addition to the many other groups breaking in Biden’s favor, early data suggests that young Americans are turning out to vote in record numbers. About 63% of voters from ages 18 to 29 say they support Biden, while only about 25% support Trump.
While the polls are suggesting there is little movement in the race, there has been a shift toward Biden in Georgia in the past few days. That shift will likely get a boost from an astonishing moment in a hard-hitting debate last night between embattled incumbent Senator David Perdue, a Republican, and his challenger, Democrat Jon Ossoff.
After Perdue attacked Ossoff for taking money from out-of-state donors who support a “radical socialist agenda,” Ossoff countered with a devastating takedown: “Perhaps Senator Perdue would have been able to respond properly to the Covid-19 pandemic if you hadn’t been fending off multiple federal investigations for insider trading,” he said. “It’s not just that you’re a crook, Senator, it’s that you’re attacking the health of the people that you represent.” Perdue seemed frozen. The clip has gone viral, and today Perdue pulled out of the final debate scheduled between him and Ossoff. Instead he will join Trump for a rally that night.
Biden and Harris are reaching out to Hispanic voters, whose support will matter a lot in southern states. In Florida tonight, at a drive-in event, Biden hammered on Trump’s approach to the pandemic, called for racial justice, and promised that he will not be too hard on Cuba or too soft on Nicolas Maduro, Venezuela’s president. Biden got a boost today from an op-ed in the Miami Herald by Hispanic business and economic leaders who endorsed Biden as the candidate who would build “a stronger, more dynamic economy that works for everyone.” With Hispanic voters extra-concerned about charges of “socialism,” the op-ed’s authors emphasized that Biden is the candidate of “free enterprise.”
Today, Biden wrapped together his pitch to Hispanic voters, an appeal to morality and a better future, and an illustration of how a Biden presidency will be different than its predecessor. He promised that, if he is elected president, he will immediately create a task force to reunite the families of the 545 immigrant children still separated from their parents.
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Notes:
https://www.cnn.com/2020/10/29/politics/donald-trump-senate-election-2020/index.html
https://www.politico.com/amp/news/magazine/2020/10/28/is-president-donald-trump-a-flight-risk-433313
https://www.cnn.com/2020/10/29/politics/donald-trump-senate-election-2020/index.html
https://www.reuters.com/article/us-walmart-guns-idUSKBN27E3HX
https://www.nytimes.com/live/2020/10/29/us/trump-biden-election
https://www.miamiherald.com/opinion/op-ed/article246808297.html
https://www.cnn.com/2020/10/29/politics/georgia-senate-debate-ossoff-perdue/index.html
https://www.cnn.com/2020/10/29/politics/biden-immigrant-children/index.html