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Economy to Overcome Other Issues in 2020, says Trump

President Donald Trump is hoping that simple message in 2020 will help foil his eventual Democratic Party challenger. 

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President Donald Trump
U.S. President Donald Trump attends a Keep America Great Rally at the Rupp Arena in Lexington, Kentucky, U.S. VOA

“It’s the economy, stupid” has been a catchphrase of U.S. presidential politics since the 1992 campaign, when Bill Clinton unseated incumbent George H.W. Bush. Nearly three decades later, U.S. President Donald Trump is hoping that simple message in 2020 will help foil his eventual Democratic Party challenger.

Trump — in tweets, at political rallies and in remarks to reporters — constantly emphasizes the performance of the U.S. economy, stock market surges, low unemployment rates and his tax cuts to boast he is doing a great job as president.

Economists and political analysts are divided on whether that message will enable the incumbent to stay in office beyond January 2021.

Culture war, partisan split

Ever since Clinton, “we’ve all kind of assumed that should be true. And I think for the most part, it is,” said Ryan McMaken, senior editor and economist at the Mises Institute, a politics and economics research group in Alabama. He cautioned, though, that Trump finds himself on one side of a culture war that his predecessors did not have to confront, as well as a deep partisan divide on consumer confidence.

Walmart Supercentre
Balo Balogun labels items in preparation for a holiday sale at a Walmart Supercenter, in Las Vegas. Black Friday once again kicks off the start of the holiday shopping season. But it will be the shortest season since 2013 because of Thanksgiving falling on the fourth Thursday in November, the latest possible date it can be. VOA

Policy analyst James Pethokoukis at the Washington-based American Enterprise Institute, a public policy research group, also is cautious about the economy prevailing over all other issues.

“Just having a strong economy is not going to guarantee you re-election,” he said. “People often point back to the 2000 election, which occurred after a decade of tremendous economic growth any way you want to measure it — gross domestic product, jobs and wage growth. And yet, [Clinton’s vice president] Al Gore still lost that election to George W. Bush.”

McMaken questioned whether voters in key swing states — such as Wisconsin, Michigan, Pennsylvania and Ohio — who cast ballots for Trump in 2016 were experiencing enough of the touted economic performance to vote again for the president.

Overall, however, “it’s not a bad economy to run on if you’re Donald Trump,” said Pethokoukis.

Trump, said to have concerns about the direction of the economy ahead of next November’s election, will likely push for more tax cuts, passage of a renegotiated North American trade pact and continued pressure on the country’s central banking system, the Federal Reserve, to lower interest rates.

A LB Steel LLC's employee manufactures a component
A LB Steel LLC’s employee manufactures a component for new Amtrak Acela trains built in partnership with Alstom in Harvey, Illinois, U.S. VOA

Trouble ahead?

There are rumblings of economic storm clouds on the horizon. The impact can be seen in Trump’s trade war with China, which has hurt U.S. farmers and raised prices for consumer goods. It’s also reflected in the Institute for Supply Management’s Manufacturing Index, an underperforming U.S. Private Sector Job Quality Index and a ballooning record national debt, in addition to the worrying level of money owed to creditors by middle-class Americans.

“We’ve actually been in a sort of a manufacturing recession, seen a shrinkage of factory jobs, the exact kinds of jobs that I’m sure that people voting for the president thought would be a lot better now,” said Pethokoukis.

So far, none of this has prompted a major stock market correction.

“There seems to be a lot of adaptations in the markets to Trump’s America. That may work to his advantage,” said the Mises Institute’s McMaken.

Analysts note a lack of emphasis on economic platforms so far by the leading Democratic U.S. presidential candidates seeking to oust Trump next year.

But such a platform is likely to be touted when the opposition party holds its convention next July in Milwaukee and picks its campaign ticket. Pethokoukis suggested the Democratic Party should devise a plan with a goal to boost American worker productivity, which has flatlined for years.

The great divide

McMaken pointed out that the widening chasm between the well-off and those struggling economically in the United States makes Trump vulnerable — something emphasized by left-leaning Democratic presidential contenders such as Bernie Sanders and Elizabeth Warren.

Donald Trump says the economy isn't doing well
Tents and tarps erected by homeless people are shown along sidewalks and streets in the skid row area of downtown Los Angeles, California, U.S. VOA

“On the ground level, I would say just in general, the economy isn’t doing as well,” concluded McMaken.

ALSO READ: Greed For Power May Demolish The Democracy

Amid an impeachment drive by the Democrats, Trump is repeatedly hammering on a specific message to those questioning his suitability for office while being impressed with the performance of their pension accounts during his presidency.

“Love me or hate me, you’ve got to vote for me,” Trump said at a rally in New Hampshire in August, warning that Americans’ investments portfolios would go “down the tubes” if he lost next year’s election. (VOA)

Next Story

Here’s Why Coronavirus May Have Severe Impact on Asia’s Economy

This time around Chinese tourism matters even more to Southeast Asia

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Coronavirus
The Coronavirus outbreak, which has so far caused 41 deaths in China, and caused the country to quarantine 16 cities, is causing comparisons to the 2003 spread of severe acute respiratory syndrome, or SARS, which decreased the value of the global economy by $40 billion. VOA

Southeast Asia’s proximity to China and dependence on that nation for a major share of its economy is raising concerns that the coronavirus outbreak  that started there will not only have health impacts but harm the region’s economies.

The outbreak, which has so far caused 41 deaths in China, and caused the country to quarantine 16 cities, is causing comparisons to the 2003 spread of severe acute respiratory syndrome, or SARS, which decreased the value of the global economy by $40 billion.

“Now that the Wuhan coronavirus has been found to be able to be transmitted from human to human, the economic consequences could be extremely concerning for the Asia-Pacific region,” Rajiv Biswas, IHS Markit Asia Pacific chief economist, said.

Sectors of the economy that are particularly vulnerable to a SARS-like virus epidemic that can be spread by human-to-human transmission are retail stores, restaurants, conferences, sporting events, tourism and commercial aviation,” he said.

Observers agree that tourism could be one of the hardest-hit industries, in part because of the millions of Chinese who usually travel now, during the Lunar New Year, and in part because China has grown so much in the last two decades that many neighboring nations depend on it for tourism.

That is only one of the economic differences between China today and the China of the SARS virus in 2003.

Coronavirus
The recent coronavirus outbreak originating from China to other countries including Singapore may impart some uncertainty to near-term business and consumer sentiments. VOA

China has since then become a member of the World Trade Organization and the second-biggest economy in the world. Its supply chain has become more integrated with the rest of the world than it has ever been, and it has become the biggest trading partner for many countries in the region.

The 2003 virus decreased China’s economic growth rate, but its effect was the same for Malaysia, Singapore, and Vietnam, Biswas said.

This time around Chinese tourism matters even more to Southeast Asia.

After Hong Kong, nations for which Chinese visitors’ spending accounts for the biggest share of gross domestic product are, from most to least, Cambodia, Thailand, Singapore, Vietnam, and Malaysia, according to statistics released by Capital Economics, a London-based research company, Friday. In many of these nations, businesses catering to tourists display signs in Chinese, accept China’s yuan currency, and use that country’s WeChat for mobile payments.

Major tourism events in the region add to the threat that the virus and its economic impact will spread, such as the Tokyo Summer Olympics, Biswas said. Vietnam will also host the Vietnam Grand Prix Formula One race this year, while Malaysia will host the Asia-Pacific Economic Cooperation forum.

Singapore is an island nation that depends heavily on foreign trade, including to facilitate trade and investment in China. Selena Ling, head of treasury research and strategy at Singapore’s OCBC Bank, said Friday she was expecting Singapore’s economy to stage a modest recovery from 2019, but that may change.

Coronavirus
Southeast Asia’s proximity to China and dependence on that nation for a major share of its economy is raising concerns that the coronavirus outbreak  that started there will not only have health impacts but harm the region’s economies. VOA

She said “the recent coronavirus outbreak originating from China to other countries including Singapore may impart some uncertainty to near-term business and consumer sentiments.”

ALSO READ: Here’s Why Automative Technology May Have Adverse Impact on Climate, Public Health

That could mean slower growth in the first quarter of 2020, she said. (VOA)