By Rudy Barnes, Jr.
The coming year will likely see major changes in religion and politics that are reminiscent of 1992. George H.W. Bush was then president and had a 90% approval rating in March 1991. But America was moving into a recession, and by August 1991 64% of Americans disapproved of his job performance. Why? It’s the economy, stupid.
That political aphorism is as true today as it was when coined in 1992 by James Carville, a campaign strategist for Bill Clinton. We know how 1992 turned out. In 2019 it’s Trump rather than Bush seeking re-election in the coming year, and Trump has made the booming economy the hallmark of his regime--even as many economists are predicting a recession.
Timing is everything, and Trump is a master at obfuscating unfavorable facts. But even Trump can’t hide the job losses and other negative consequences of a recession. Currently American consumer confidence and buying power is holding up a weak global economy; but that consumer confidence could quickly dissipate with damaging results.
Trump has already begun dissembling on an economic downturn. On August 15 he told supporters in Manchester N.H. that Americans “have no choice” but to vote for him, otherwise he told them the stock market will collapse. That was the day after the stock market had its worst day of the year and fell by 800 points (about 3%); but it rebounded somewhat since then.
It’s too early to tell what’s going to happen to the economy, and when it will happen; but most economists predict that a recession is coming before 2022 and that it will have negative consequences. What are the indicators for a recession, and how would it affect politics if it comes before the election in 2020? And is religion a factor in a recession?
The signs of an incipient recession are evident, with an overpriced and unstable stock market, a tariff war with China, inverted rates for short and long term bonds, a shaky world economy, ballooning corporate and consumer debt, reduced spending by manufacturers, and interest rates too low to give the Fed much leverage to combat a recession.
Religion will be a political factor in a recession. Trump’s base is an unlikely coalition of evangelical white Christians who believe in “the prosperity gospel”, and the super-rich who are followers of Ayn Rand’s objectivism. They share a belief in material blessings, and a recession would undermine such beliefs and disrupt the disparate Republican coalition.
A recession would result in economic hardships for everyone, especially “the least of those.” Providing for the common good would become a political priority. Evangelical Republicans will likely oppose public welfare, while Christians who follow the altruistic teachings of Jesus will likely support the welfare of the needy as a priority of their faith and politics..
A recession will change the political priorities of voters, and if it comes before next summer, it will spell Trump’s defeat--so long as Democrats nominate a centrist rather than a leftist (aka “progressive”) candidate for president. But if the election is between a leftist Democrat and Trump, don’t bet on Trump being defeated.
We should have a good idea of what’s likely to happen after the South Carolina primary on February 29, 2020. In past years the early primaries have predicted the Party’s nominee. Since there’s no contest in the Republican primary, the Democrat primaries are critical. But as in 1992, the economy will be the deciding factor on election day in 2020.
Notes:
The Dow closed down 623.90 at 25,628.90 on August 23, 2019. Stocks tumbled after Trump ordered American companies to start looking for “an alternative to China” and called both China and Fed Chair Powell our “enemies.” https://www.cnn.com/2019/08/23/investing/dow-stock-market-today/index.html.
August has been a traumatic month for the U.S. economy, with chaotic responses from Trump. See https://www.washingtonpost.com/business/2019/08/22/trump-economy-month-chaotic-response/?wpisrc=nl_headlines&wpmm=1.
Citing [the failing] Economy, Trump Says That ‘You Have No Choice but to Vote for Me.’ See
Ross Douthat has described what happens in a recession. “First, the easy part: Donald Trump loses re-election. What comes next? In Washington, the centrists get a surprising opportunity.” But, “it’s still going to be red-state Democrats and blue-state Republicans holding the balance of power in the Senate. The left-wing revolution won’t be canceled, ...but it will be postponed till after 2022 or 2024. ...Meanwhile, the right will have to decide whether it wants to be an opposition or an alternative. ...If the G.O.P. is reduced to a white working-class base at a time of increasing economic pain, there will also be incentives for Trump’s would-be successors to flesh out his populism rather than abandoning it, ...but how long a recession lasts and how it gets interpreted will determine whether a serious post-Trump conservative populism is inevitable or stillborn.
...The immigration crisis will diminish, while the social crisis gets worse. ...Fewer jobs here will gradually take some pressure off the southern border. But at the same time, the domestic trends that have already worsened despite a strong economy...are likely to get even grimmer in a contraction. America’s social fabric hasn’t recovered from the rendings that followed 2008.
...Then in the commercial sphere, the venture capital subsidy to American consumers will dry up.
Those losses are supposed to end with an eventual leap into profitability; in a bad economy, they may end a lot more suddenly than that.
...So a recessionary America would find the center-left enjoying some kind of power but probably struggling to govern, a right tearing itself apart in civil war, our downscale social crisis worsening, [and] Silicon Valley delivering substantially less than promised. Having guaranteed Trump’s removal from office, in other words, the recession would also set the stage for Trumpism’s eventual return.
Victor Dergunov has proclaimed, Oh Yes!, the Recession Is Coming, citing the elements for a recession and the bottom line, that there are simply Too Many Red Flags to Ignore: “The signs are clear, and most are pointing towards the materialization of a recession and a bear market in the U.S. Since bear markets typically precede recessions by about 6 months, we could be in a bear market already.
Signs of the upcoming recession include but are not limited to:
Inverting yields in the U.S.; record negative yielding debt around the globe; longer-term treasuries at or near all-time lows; iIncreased demand for “safe-haven” assets (gold, treasuries/bonds, defensive sectors, etc.); bearish sector performance/rotation; significant underperformance in small-caps (Russell 2000);
worsening economic data; especially in housing, manufacturing, fright/trucking/railroad sectors;
record low, but rising unemployment rate; worsening consumer confidence; worsening corporate profits; extreme amounts of consumer, government, and corporate debt; prolonged Trade War tensions that will likely cause corporate profits to decline further and will make Chinese made goods more expensive for U.S. consumers; signs of higher inflation; the Fed may be behind the curve; expensive valuations in the SPX and in most stocks/sectors in general; and a very troubling technical image.
These negative developments imply that the U.S. economy is slowing substantially, and is likely to slow down more rapidly than is currently anticipated. In fact, a recession within the next 6-18 months seems extremely likely in my view. As bear markets typically precede recessions by about 6 months or so, the S&P 500 and stocks in general are likely in the early stages of a bear market right now. See https://seekingalpha.com/article/4286282-oh-yes-recession-coming.
American consumers are holding up the global economy, but for how long? See https://www.washingtonpost.com/business/economy/american-consumers-are-holding-up-the-global-economy-but-for-how-long/2019/08/17/9eb20740-c066-11e9-a5c6-1e74f7ec4a93_story.html?wpisrc=nl_headlines&wpmm=1.
Corporate earnings show trade war straining U.S. economy as companies lean on shoppers. See https://www.cnbc.com/2019/08/22/lackluster-q219-earnings-growth-raises-pressure-on-consumers-to-keep-spending-amid-us-china-trade-war.html.
On interest rates dropping to below zero, see Kyle Bass on where the economy is headed. “This is insane.”
On soaring deficits that could put Trump in a corner if there’s a recession, see https://thehill.com/policy/finance/458334-soaring-deficits-could-put-trump-in-a-corner-if-theres-a-recession.
Related commentary:
On Christianity and capitalism:
(3/8/15): Wealth, Politics, Religion and Economic Justice
(8/9/15): Balancing Individual Rights with Collective Responsibilities
(10/18/15): God, Money and Politics
(1/30/16): The Politics of Loving Our Neighbors as Ourselves
(6/4/16): Christianity and Capitalism: Strange Bedfellows in Politics
(10/1/16): The Federal Reserve, Wall Street and Congress on Monetary Policy
(2/11/17): The Mega-Merger of Wall Street, Politics and Religion
(3/11/17): Accountability and the Stewardship of Democracy
(9/9/17): The Evolution of the American Civil Religion and Habits of the Heart http://www.religionlegitimacyandpolitics.com/2017/09/the-evolution-of-american-civil.html.
(9/16/17): The American Civil Religion and the Danger of Riches
(12/16/17): Can Democracy Survive the Trump Era?
(1/20/18): Musings of a Maverick Methodist on Morality and Religion in Politics
(1/27/18): Musings on Conflicting Concepts of Christian Morality in Politics
(3/8/15): Wealth, Politics, Religion and Economic Justice
(8/9/15): Balancing Individual Rights with Collective Responsibilities
(10/18/15): God, Money and Politics
(6/4/16): Christianity and Capitalism: Strange Bedfellows in Politics
(10/1/16): The Federal Reserve, Wall Street and Congress on Monetary Policy
(2/11/17): The Mega-Merger of Wall Street, Politics and Religion
(3/11/17): Accountability and the Stewardship of Democracy
(9/9/17): The Evolution of the American Civil Religion and Habits of the Heart http://www.religion
(9/16/17): The American Civil Religion and the Danger of Riches
(2/17/18): Musings of a Maverick on Money, Wall Street, Greed and Politics
(4/27/19): Musings on the Legitimacy of Crony Capitalism and Progressive Capitalism
(6/29/19): Musings on a Politics of Reconciliation: An Impossible Dream?http://www.religionlegitimacyandpolitics.com/2019/06/musings-on-politics-of-reconciliation.html
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