One of Trump’s favorite talking points these days is that if we just get the economy open again, it will “come roaring back, better than ever”.
Well, that is not going to happen. First thing to note is don’t go by the stock market. That is being propped up with trillions of dollars in free money, from Congress and the Fed. And the market will only rise if that continues. Stop the free money, the market will tank.
But let’s look at the “real” economy on main street. Main street has been in free fall for nearly the entire first quarter. Restaurants are getting what they can from take out. Most hardware stores, craft stores, general retail outlets, and boutiques are locked up altogether.
Millions of people are out of work and if I were them, I would not count on this being temporary. Rebooting a business is not just a matter of turning a switch back on. Supply chains have changed. Customer attitudes have changed. Costs have changed. Trump has no idea how to make this work because contrary to all of his bravado, he did NOT build this economy and he doesn’t have a clue how to rebuild this one.
The economy has been very good for a long time – it predates Trump by several years. But there is a flaw within the base structure of our economy right now – it is almost completely dependent on consumer spending. Goods and services have kept the money circulating, but this pandemic has completely disrupted that type of economy. Consumers stopped on a dime. Travel ended. Consumer outlook plummeted. These are all things that may come back, but cautiously and over a longer period of time than Trump is prepared for.
If Trump wasn’t so busy with his economic happy talk, he could listen to the economic consensus and make preparations for a concerted recession. If he doesn’t proceed with some different ideas, we will most likely go into full depression.
This economy has had its back broken. The recovery will be long and painful and we our habits and tendencies have all changed.
We will need a more realistic and strategic approach and I am convinced that this will take a new President come January.