Rajan Menon.
Okay, I admit it, I’ve been worried -- and no surprise there. In this world from hell, it’s not hard to worry about untold numbers of things going wrong. Let me, however, lay out my own large-scale version of worry about this America of ours. What if Joe Biden does win? The world -- at least the world I know and read and watch and talk to -- has one giant anxiety then: that Donald Trump will declare the election a “fake,” refuse to leave office, send the lawyers into the courts, the troops or the dreaded feds into the streets, and call out all those armed Trumpsters for support. You more or less know the scenario(s) yourself, I’m sure, and whether the U.S. military then would or would not decide to literally remove the president from office, it would indeed be a nightmare.
Still, something else has long been on my mind: not what Donald Trump could try to stop from happening, but what he could actually do between November 3rd and January 20, 2021. This is, after all, the head of an administration that has tried to roll back nearly 100 environmental regulations, turning this country into a potential hell on earth. His people, now undoubtedly fearing defeat, are already moving fast to make sure that the U.S. will, in the worst sense imaginable, remain Donald Trump’s land until that hell freezes over.
My worry: what, in those months, could The Donald do to ensure that, when Joe Biden sits at that desk in the Oval Office for the first time, he finds himself waist deep in you-know-what (including potentially a future Great Depression) that he and his crew might never be able to shovel themselves out of? With that in mind, I asked TomDispatch regular Rajan Menon to consider just what shape we might find ourselves in economically in the Biden moment (if it ever arrives). So get your shovel ready and dig in. Tom
So Trump Loses
What Happens Then?
By Rajan Menon
Donald Trump isn’t just inside the heads of his Trumpster base; he’s long been a consuming obsession among those yearning for his defeat in November. With barely more than a week to go before the election of our lifetime, those given to nail biting as a response to anxiety have by now gnawed ourselves down to the quick. And many have found other ways to manage (or mismanage) their apprehensions through compulsive rituals, which only ratchet up the angst of the moment, among them nonstop poll tracking, endless “what if” doomsday-scenario conversations with friends, and repeated refrigerator raids.
As one of those doomsday types, let me briefly suggest a few of the commonplace dystopian possibilities for November. Trump gets the majority of the votes cast in person on November 3rd. A Pew Research Center survey found that 60% of those supporting the president intend to vote that way on Election Day compared to 23% of Biden supporters; and a Washington Post-University of Maryland poll likewise revealed a sizable difference between Republicans and Democrats, though not as large. He does, however, lose handily after all mail-in and absentee ballots are counted. Once every ballot is finally tabulated, Biden prevails in the popular vote and ekes out a win in the Electoral College. The president, however, having convinced his faithful that voting by mail will result in industrial-scale fraud (unless he wins, of course), proclaims that he -- and “the American people” -- have been robbed by the establishment. On cue, outraged Trumpsters, some of them armed, take to the streets. Chaos, even violence, ensues. The president’s army of lawyers frenetically file court briefs contesting the election results and feverishly await a future Supreme Court decision, Mitch McConnell having helpfully rammed through Amy Coney Barrett’s nomination to produce a 6-3 conservative majority (including three Trump-appointed Supremes) that will likely favor him in any disputed election case.
Or the vote tally shows that Trump didn’t prevail in pivotal states, but in state legislatures with Republican majorities, local GOP leaders appoint electors from their party anyway, defying the popular will without violating Article II, Section I, of the Constitution, which doesn’t flat-out prohibit such a stratagem. That was one possibility Barton Gellman explored in his bombshell Atlantic piece on the gambits Trump could use to snatch victory (of a sort) from the jaws of a Biden victory. Then there are the sundry wag-the-dog plots, including a desperate Trump trying to generate a pre-election rally-around-the-flag effect by starting a war with Iran -- precisely what, in 2011, he predicted Barack Obama would do to boost his chances for reelection.
And that, of course, is just part of a long list of nightmarish possibilities. Whatever your most dreaded outcome, dwelling on it doesn’t make for happiness or even ephemeral relief. Ultimately, it’s not under your control. Besides, no one knows what will happen, and some prominent pundits have dismissed such apocalyptic soothsaying with assurances that the system will work the way it’s supposed to and foil Trumpian malfeasance. Here’s hoping.
In the meantime, let’s summon what passes for optimism these days. Imagine that none of the alarmist denouements materializes. Biden wins the popular vote tally and the Electoral College. The GOP’s leaders discover that they do, in fact, have backbones (or at least the instinct for political survival), refusing to echo Trump’s rants about rigging. The president rages but then does go, unquietly, into the night.
Most of my friends on the left assume that a new dawn would then emerge. In some respects, it indeed will. Biden won’t be a serial liar. That’s no small matter. By the middle of this year, Trump had made false or misleading pronouncements of one sort or another more than 20,000 times since becoming president. Nor will we have a president who winks and nods at far-right groups or racist “militias,” nor one who blasts a governor -- instead of expressing shock and solidarity -- soon after the FBI foils a plot by right-wing extremists to kidnap her for taking steps to suppress the coronavirus. We won’t have a president who repeatedly intimates that he will remain in office even if he loses the election. We won’t have a president who can’t bring himself to appeal to Americans to display their patriotism through the simple act of donning masks to protect others (and themselves) from Covid-19. And we won’t have a president who lacks the compassion to express sorrow over the 225,000 Americans (and rising) who have been killed by that disease, or enough respect for science and professional expertise, to say nothing of humility, to refrain from declaring, as his own experts squirm, that warm weather will cause the virus to vanish miraculously or that injections of disinfectant will destroy it.
And these, of course, won’t be minor victories. Still, Joe Biden’s arrival in the Oval Office won’t alter one mega-fact: Donald Trump will hand him a monstrous economic mess. Worse, in the almost three months between November 3rd and January 20th, rest assured that he will dedicate himself to making it even bigger.
The motivation? Sheer spite for having been put in the position -- we know that he will never accept any responsibility for his defeat -- of facing what, for him, may be more unbearable than death itself: losing. The gargantuan challenge of putting the economy back on the rails while also battling the pandemic would be hard enough for any new president without the lame-duck commander-in-chief and Senate Republicans sabotaging his efforts before he even begins. The long stretch between Election Day and Inauguration Day will provide Donald Trump ample time to take his revenge on a people who will have forsaken, in his opinion, the best president ever.
More on Trump’s vengeance, but first, let’s take stock of what awaits Biden should he win in November.
Our Covid-Ravaged Economy
To say that we are, in some respects, experiencing the biggest economic disaster since the Great Depression of the 1930s is anything but hyperbole. The statistics make that clear. The economy had contracted at a staggering annual rate of 31.4% during the second quarter of this pandemic year. During the 2007-2009 Great Recession, unemployment, at its height, was 10%. This year’s high point, in April, was 14.7%. Over the spring, 40 million jobs disappeared, eviscerating all gains made during the two pre-pandemic years.
There were, however, some relatively recent signs of a rebound. The Philadelphia Federal Reserve Bank’s survey of economic forecasters, released in mid-August, yielded an estimate of a 19.1% expansion for the third quarter of 2020. But that optimism came in the wake of Congress passing the Coronavirus Aid, Relief, and Economic Security (CARES) Act, on March 27th, which pumped about $2.2 trillion into the economy. The slowdown in job growth between July and September suggests that its salutary effects may be petering out. Even with that uptick, the economy remains in far worse shape than before the virus started romping through the landscape.
However, while useful, aggregate figures obscure stark variations in how the pain produced by a Covid-19 economy has been felt across different parts of American society. No, we aren’t all in this together, if by “together” you mean anything remotely resembling equalized distress. A Bureau of Labor Statistics (BLS) release, for instance, reveals that September’s 7.9% nationwide unemployment rate hit some groups far harder than others.
The jobless rate for whites dropped to 7%, but for Hispanics it was 10.3%, for African Americans 12.1%. Furthermore, high-skill, high-wage workers have gotten off far more lightly than those whose jobs can’t be done from home, including restaurant servers and cooks, construction workers, meatpackers, housecleaners, agricultural laborers, subway, bus, and taxi drivers, first responders, and retail and hotel staff, among others. For workers like them, essential public health precautions, whether “social distancing” or stay-at-home decrees, haven’t just been an inconvenience. They have proven economically devastating. These are the Americans who are struggling hardest to buy food and pay the rent.
More than 25 million of them fall in the lowest 20% of the earnings scale and -- no surprise here -- have, at best, the most meager savings. According to the Fed’s calculations, of the bottom 25% of Americans, only 11% have what they require for at least six months of basic expenses and less than 17% for at least three. Yes, unemployment insurance helps, but depending on the state, it covers just 30% to 50% of lost wages. Moreover, there’s no telling when, or whether, such workers will be rehired or find new jobs that pay at least as much. The data on long-term unemployment isn’t encouraging. The BLS reports that, in September, 2.4 million workers had been unemployed for 27 weeks or more, another 4.9 million for 15 to 27 weeks.
These disparities and the steps the Fed has taken, including keeping interest rates low and buying treasury bills, mortgage-backed securities, and corporate bonds, help explain why high stock prices and massive economic suffering have coexisted, however incongruously, during the pandemic. The problem with bull markets, however, is that they don’t bring direct gains to the chunk of American society that’s been hurt the most.
Nearly half of American households own no stock at all, according to the Federal Reserve Bank, even if you count pension and 401k plans or Individual Retirement Accounts -- and for black and Hispanic families the numbers are 69% and 72%, respectively. Furthermore, the wealthiest 10% of households own 84% of all stock.
Trump preens when the stock market soars, as he did on April 10th, when 16 million Americans had just filed for unemployment. Tweets trumpeting “the biggest Stock Market increase since 1974” were cold comfort for Americans who could no longer count on paychecks.
The Signs of Suffering
Even such numbers don’t fully reveal the ways in which prolonged joblessness has upended lives. To get a glimpse of that, consider how low-income workers, contending with extended unemployment, have struggled to pay for two basic necessities: housing and food.
Reuters reported in late July that Americans already owed $21.5 billion in back rent. Worse yet, 17.3 million of the country’s 44 million renter households couldn’t afford to pay the landlord and faced possible eviction. A fifth of all renters had made only partial payments that month or hadn’t paid anything. Again, not surprisingly, some were in more trouble than others. In September, 12% of whites owed back rent compared to 25% of African Americans, 24% of Asians, and 22% of Latinos. A May Census Bureau survey revealed that nearly 45% of African Americans and Hispanics but “only” 20% of whites had little or no confidence in their ability to make their June rent payments. (Households with kids were in an even bigger bind.)
The rent crunch also varied depending on a worker’s education, a reliable predictor of earnings. Workers with high school diplomas earned only 60% as much as workers who had graduated from college and only 50% of those with a master’s degree. And the more education workers had, the less likely they were to be laid off. Between February and August, 2.5% of employees with college degrees lost their jobs compared to nearly 11% of those who hadn’t attended college.
Those, then, are the Americans most likely to be at risk of eviction. Yes, the federal government, states, and cities have issued rent moratoriums, but the protections in them varied considerably and, by August, they had ended in 24 of the 43 states that enacted them; nor did they release renters from future obligations to pay what they owe, sometimes with penalties. In addition, eviction stays haven’t stopped landlords nationwide from taking thousands of delinquent renters to court and even, depending on state laws, seeking to evict them. The courts are clogged with such cases. Eventually, millions of renters could face what a BBC report called a potential “avalanche” of evictions.
Nor have homeowners been safe. The CARES Act did include provisions to protect some of them, offering those with federal-backed mortgages the possibility of six-month payment deferrals, potential six-month extensions of that, and the possibility of negotiating affordable payment plans thereafter. In many cases, however, that “forbearance” initiative hasn’t worked as intended. Often, homeowners didn’t know about it or weren’t aware that they had to file a formal request with their lenders to qualify or got the run around when they tried to do so. Still, mortgage forbearance helped millions, but it expires in March 2021 when many homeowners could still be jobless or have new jobs that don’t pay as well. Just how desperate such people will be depends, of course, on how strongly Covid-19 resurges, what future shutdowns it produces, and when it will truly subside.
Meanwhile, according to the Mortgage Bankers Association, the residential mortgage delinquency rate hit 8.22% as the second quarter of 2020 ended, the highest since 2014. Meanwhile, between June and July, mortgage payments overdue 90 or more days increased by 20% to a total unseen since 2010. True, we’re not yet headed for defaults and foreclosures on the scale of the Great Recession of 2007-2008, but that’s a very high bar.
As for hunger, a September Census Bureau survey reports that 10.5% of adults, or 23 million people, stated that household members weren’t getting enough to eat. That’s a sharp increase from the 3.7% in a Department of Agriculture survey for 2019. In July, the Wall Street Journal reported, 12% of adults said their families didn’t have enough food (compared to 10% in May). A fifth of them lacked the money to feed their kids adequately, a three-percent increase from May. Recent food-insecurity estimates for households with children range from 27.5% to 29.5%.
Meanwhile, enrollments in the Supplemental Nutritional Assistance Program (known until 2008 as the Food Stamp Program) grew by 17% between February and May, forcing the government to increase its funding. Food banks, overwhelmed by demand, are pleading for money and volunteers. In August, a mile-long line of cars formed outside a food bank in Dallas, one of many such poignant scenes in cities across the country since the pandemic struck.
What Happens After the Election?
For those who have lost their jobs, the CARES Act provided $600 a week to supplement unemployment benefits, as well as a one-time payment of $1,250 per adult and $2,400 for married couples. That stipend, though, ended on July 31st when the Republican Senate balked at renewing it. In August, by executive order, the president directed the Federal Emergency Management Agency to step in with three weeks of $300 payments, which were extended for another three. That, however, was half what they would have received had the CARES supplement been extended and, by October, most states had used up the Trump allotments.
In the ongoing congressional negotiations over prolonging supplemental benefits and other assistance, President Trump engaged, only to disengage. With a September ABC News/IPSOS voter survey showing that just 35% of the public approved of his handling of the pandemic, and Joe Biden having opened a double-digit lead in many polls, the president suddenly offered a $1.8 trillion version of the CARES Act, only to encounter massive blowback from his own party.
And that’s where we are as the election looms. If Trump loses (and accepts the loss), he will hand Joe Biden an economic disaster of the first order that he’s made infinitely worse by belittling mask-wearing and social distancing, disregarding and undercutting his administration’s own medical experts, peddling absurd nostrums, and offering rosy but baseless prognostications. And between November 3rd, Election Day, and January 20th, Inauguration Day, expect -- hard as it might be to imagine -- an angrier, more vengeful Trump.
For now, as his prospects for victory seem to dim, he has good reason to push for, or at least be seen as favoring, additional aid, but here’s a guarantee: if he loses in November, he won’t just moan about election rigging, he’ll also lose all interest in providing more help to millions of Americans at the edge of penury and despair. Vindictiveness, not sympathy, will be his response, even to his base, for whom he clearly has a barely secret disdain. So accept this guarantee, as well: between those two dates, whatever he does will be meant to undermine the incoming Biden administration. That includes working to make the climb as steep as possible for the rival he’s depicted as a semi-senile incompetent. He will want only one thing: to see his successor fail.
Once Trump formally hands over the presidency -- assuming his every maneuver to retain power flops -- he’ll work to portray any measure the new administration adopts to corral the virus he helped let loose and to aid those in need as profligacy, and as “socialism” and governmental overreach imperiling freedom. Last guarantee: he won’t waste a minute getting his wrecking operation underway, while “his” party will posture as the paragon of financial rectitude. It won’t matter that Republican administrations have racked up the biggest budget deficits in our history. They, too, will ferociously resist Biden’s efforts to help millions of struggling Americans.
And think of all of this, assuming Biden wins, as the “good news.”
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