From the moment he was told about the Pandemic up until and including today, Donald Trump has defended his so-called ‘response’ to the problem by claiming that his primary responsibility was to keep the economy from going down the drain. Od course, what he really meant by that was his fear that a weak economy would wreck his chances of re-election, which undoubtedly it did.
But a new study about the economic downturn last year makes we wonder again how someone could become President of the United States and be so dumb. I mean, this guy may have known how to build an apartment building or gussy up a golf course here and there, but when it came to understanding how the world really works, he didn’t have a clue.
The study comes out of the Bureau of Economic Analysis, which is a bunch of data-nerds in the Department of Commerce who really know their sh*t. Want to know what’s really going on in the economy? Ignore the blabbers on Fox, MS-NBC and CNN and get the daily news releases from the BEA.
So, here’s what happened to the U.S, economy from April through June last year, a.k.a., Q2. These three months were when lockdowns took place, people stopped travelling, many white-collar employees started working from home and overall, it was a mess. In real dollars, the 2020 GDP dropped more than $2 trillion bucks, from $21.6 to $19.5 trillion, with the quarterly drop being more than 30%.
But as bad as those numbers appear to be, if you go into the details of the BEA report and look at both how different economic sectors performed, as well as what happened in different states, you have to wonder how someone who was trying to keep the economic collapse from wrecking his political campaign could have mis-read things as much as Trump did.
To begin, every state took a big GDP hit in Q2, but some states were much worse than others, in particular, Hawaii, Nevada and Tennessee. In the case off the Volunteer State, the 40.4% drop in economic activity during Q2 was due to the shutting down of mining and related tasks. The 42.2% GDP drop in Hawaii and Nevada reflects the degree to which the economy of both states is dependent on vacation dollars which weren’t being spent.
The two largest economic sector declines were accommodation/food services which experienced the greatest drop in 17 states, and health and social assistance services which led the way downward in 18 states. The one economic category which not only didn’t decline during Q2 but actually showed a 4% rise was finance, which tells you how much those Wall Street guys need to work out of a fancy office downtown.
Here was Trump’s problem, whether he knew it or not. In order to stay in the White House past January 20, 2021, Trump needed to keep all the 2016 red states red in 2020 and flip Michigan, Pennsylvania, and Wisconsin again. All three states saw a Q2 dip in GDP that was higher than the national number, with Wisconsin and Michigan both losing significant activity in manufacturing/durable goods.
On the other hand, and this is where the rubber really meets the road, of the 17 states whose biggest economic decline was in the accommodations/food services category, there were states like Vermont and New Hampshire which aren’t known as big tourist states in April through June, but still suffered significant declines in people renting motel rooms and eating out.
Next time you walk into a McDonald’s take a look who’s working back in the kitchen or bringing out the Happy Meals and the other trays of food. You’ll notice that most of the staff in fast-food locations happen to be school-age kids. And the fact that the burger joints had to lay off lots of staff isn’t the same thing as what happens when a factory in a small town closes down.
The fact that accommodation/food services occupy such an important category in the U.S. economy is testimony to how strong the national economy happens to be, Pandemic or no Pandemic. Want to know what the phrase ‘service economy’ means? It means telling a customer coming through the McDonald’s drive-thru lane that for another buck he’ll get two quarter-pounders with cheese instead of just one.
You show me someone who won’t grab a second quarter-pounder for a dollar, and I’ll show you someone who doesn’t eat meat.
Don’t get me wrong. I’m glad that Donald Trump couldn’t figure out how to pull his 2020 Presidential campaign out of a paper bag.
Which is why I really hope he runs again in 2024.