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Economics as Perception
Trump bets against a social science doctrine.
The Trump campaign seems to have an ace up its sleeve.
Down in the polls, Trump and his surrogates have begun to float the idea that an economic report about third quarter gross domestic product, set to be released a few days before the election, can revitalize the campaign and carry Trump across the finish line to victory.
The economic report for the second quarter, released a few days ago, was rather grim. It showed the US economy shrank 9.5 percent from April to June. For perspective, the worst quarter of the Great Recession saw a shrink of about 2 percent. If the economy shrank at this rate for an entire year, the annual rate of decline would be a staggering 32.9 percent. As an economist for the New York Times noted, the economic report showed “a collapse that wiped out five years of economic growth, with no bounce in sight.”
Perhaps the third quarter numbers will be improved, as Trump and his fellow optimists push the idea of a “v-shaped” recovery. The idea, however, that some economic report published by the Commerce Department will somehow alter the 2020 presidential race is misguided.
First, the economy won’t fully recover until the virus is under control. And the virus is most certainly not under control.
