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Nevada Today

Nevada Today is a nonpartisan, independently owned and operated site dedicated to providing up-to-date news and smart analysis on the issues that impact Nevada's communities and businesses.

2020 ElectionCOVID-19News and informationThe Economy

Hindsight 2020: It’s the Economy… Or Is It?

Remember all those “hot takes” about how the state of the economy would be the ultimate determining factor in this presidential election? Yep, those did not age well.

Now with that said, there are clues in our immediate economic crisis and long-term economic trends that help explain why one shade of red ties so closely to another shade of red.

Is it really “the economy, stupid”?

In case you missed it on Tuesday, I took us down a rabbit hole that stretches all the way back to 2004, and even all the way back to 1992 at times, in order to better understand the political and sociodemographic trendlines that shaped this year’s election results. As I was wrapping up that story, I realized there was far more for us to discuss, but that story was already getting long.

So today, we’re crunching even more numbers. This time, we’re also examining the economics behind the election results.

How many times have we heard that famous quote from President Bill Clinton’s 1992 campaign strategist James Carville, “It’s the economy, stupid”? In the first few hours after polling places closed, that really seemed to resonate. But when we take a closer look at the economics and the geography, a more complex picture emerges.

Remember how I pointed out all those counties full of “Creative Class Voters” that were already starting to move in Democrats’ direction in 2004 produced big landslide wins for President-elect Joe Biden this year? Earlier this week The Washington Post also noticed this trend, and they noticed some eye-popping economic trends that, depending on how you assess the current state of the economy, either completely upends James Carville’s classic advice or reinforces it in a really weird way.

How about our economy? 
2020 Election, economy, Las Vegas Strip
Photo by Andrew Davey

Before we dive deeper into economic stats from elsewhere, let’s check on our own. Even though our current unemployment rate is below its March/April peak, we’re still deep in a world of hurt. At last week’s Nevada Economic Forum meeting, most of the economists who presented data admitted that Nevada’s tax revenue may not return to pre-COVID-19 levels for at least two more years.

Of course, during that same Nevada Economic Forum meeting, several of the speakers essentially engaged in wishcasting to soften the blow of their economic and tax revenue forecasts. They pointed to post-Labor Day traffic data showing that Californians were starting to drive to Vegas, Reno, and Tahoe again, but that was before California Governor Gavin Newsom (D) sent most of that state’s counties back into the most restrictive “purple tier” of shutdowns due to the current explosion of COVID-19 infections. Even beyond California, other states have also begun to reimpose stricter health safety rules due to the current COVID-19 resurgence.

Because Nevada’s economy is so heavily dependent on gaming and tourism, a pandemic that shuts down the vast majority of international travel hits us especially hard. But as long as COVID-19 continues to spread so far and wide, and as long as a critical mass of potential travelers continue to fear contracting COVID-19, our economy will continue to suffer, no matter how many or how few health safety rules the state maintains. As Sweden and other places with a more laissez-faire approach to COVID-19 are having to learn the hard way, if you reopen too soon, there’s no guarantee they’ll all return any time soon.

Seeing red, in more ways than one
Donald Trump, COVID-19, Corona Scams, This Week in Corona Scams, 2020 Election, economy
Photo by Andrew Davey

Now that we’ve checked up on our own economic picture, let’s jump back to that Washington Post analysis of the diverging economic outlooks of “Blue America” and “Red America”. Even though the election results back up prior polls showing that the vast majority of voters who named “the economy” as their top concern chose (now outgoing) President Donald Trump, Trump fared best in the regions where the economy has fared worst during Trump’s presidency.

Despite Trump’s failure to deliver on his 2016 campaign’s economic promises, such as bringing back manufacturing jobs that were lost during globalization and guaranteeing 4%+ annual GDP growth, Trump flipped Mahoning County, Ohio, into Republicans’ column this year, and he held onto places like Bay County, Michigan, and Dubuque County, Iowa, more former industrial hubs that flipped from blue to red in 2016 as Trump was making all these promises that are now mostly unfulfilled.

Joe Biden, 2020 Election, economy
Photo by Andrew Davey

On the flip side, areas that were already faring well during Barack Obama’s presidency and continued to prosper under Trump’s presidency (at least until COVID-19 hit) were mostly favorable turf for Democrats. Areas with economies that are fueled by college-educated workers in fields like technology, health care, logistics, and finance, such as the Raleigh-Durham metro region of North Carolina, the Atlanta metro region of Georgia, the Denver metro region of Colorado, and the Phoenix metro region of Arizona, all swung to President-elect Joe Biden. 

According to analysis from the Brookings Institution, the counties where Biden won account for at least 70% of America’s economic output. But as we can all see here, GDP numbers don’t vote in our elections – people do.

Surprise (but not really), authoritarian power grabs are not “good for the economy”.

As we’ve been warning on these pages for some time, Donald Trump’s presidency has been the ultimate stress test for our democracy. And for anyone out there who still asks why anyone should care about Trump’s authoritarian inclination, we have the receipts to explain why this matters.

For all of Trump’s hyping up the current state of our economy, the Economic Policy Institute’s Heidi Sherholz points out how initial unemployment insurance claims have surpassed those from the worst weeks of the 2007-09 Great Recession for 35 consecutive weeks this year. And yet, the CARES Act’s $600 weekly boost to unemployment aid expired in July, and House Democrats’ HEROES Act (which includes a restoration of expanded unemployment aid) has been stalled in the U.S. Senate since May. And for all Trump’s boasts of his executive action on unemployment, that amounted to a one-time $900 payment that’s already one-and-done.

As we’ve been explaining since March, and as some amazing journalists like those at The American Prospect and Vox have been pointing out since March, we have no realistic path to sustainable economic recovery without sufficient action to contain COVID-19. As we discussed earlier, a critical mass of otherwise prospective travelers will not book flights, reserve hotel rooms, make plans for dinner dates, and prepare “spending money” budgets for gambling and shopping outings as long as they credibly fear contraction of COVID-19.

As we can see from Vermont’s success thus far in holding down its COVID-19 outbreak, we need to make it affordable for Americans to do more social distancing and sheltering in place. And as we can see in nations like South Korea, New Zealand, and Germany, that have held down their respective tolls of COVID-19 infections, hospitalizations, and deaths (compared to ours), we also need to invest in more and better testing and contact tracing programs, along with thorough health safety rules that are actually enforced, in order to ensure a safe and sustainable reopening. But with the Trump administration threatening yet another federal government shutdown next month, and with Trump himself far more motivated to continue his attempt to steal the election than to do the job he still holds for another 62 days, public health authorities here in Nevada and elsewhere truly are being left behind to fend for themselves.

If it’s all about “the economy, stupid”, then why did they vote the way they did?

Here’s the $14 billion question. Increasingly, it appears that the key answers are, “It’s the optics, stupid,” and, “It’s the message, stupid.”

Even though Biden and his campaign did develop their “Build Back Better” plan and did talk about how they’ll address COVID-19 and the economy, so much of the Biden’s campaign messaging returned to the kind of “Battle for the Soul of the Nation” talk that appealed to Biden’s existing base and small slices of moderate Republicans and independents who could afford to care about esoteric character arguments. As we discussed on the first day after the election, “Battle for the Soul of the Nation” doesn’t mean much of anything to people who have to battle just to pay the rent and put food on the table. Even though Biden nonetheless won over more working-class and working poor voters than Trump, we can see that Democrats have plenty more room for improvement when it comes to convincing people to choose their concrete plan of action over Trump’s flimsy promises.

Joe Biden
Photo by Andrew Davey

Even though Trump’s actual economic record is not the kind of record that typically guarantees reelection, he nearly succeeded in spinning it all away through a combination of crude vote-buying, such as trade tariffs, farm subsidies, and those one-and-done unemployment checks via executive order, and flat-out lying, such as his extreme COVID-19 disinformation campaign and his stoking of excessive wishcasting for “stimulus checks” that Trump never had any actual plan to achieve. As mendacious as Trump was with his scheme, he did give people hope. As false as that hope was, it was an easier sell than the usual muddled message that a whole lot of Democrats used on the campaign trail.

Now that Biden is planning his presidency, he needs to develop a plan to solve the crisis of crises that he’s set to inherit on January 20, 2021. He will need to figure out how to pass a COVID-19 relief package to help people, businesses, and state and local governments survive, and he will need to find a way to sell it to the American people. In this crisis of crises, people are looking for reasons to hope, not a “return to normalcy“. If Biden wants his presidency to succeed, he needs to prove to the American people that they’ll be better off going forward than what they’re experiencing now.

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