Donald Trump’s victory a few weeks ago threw the political science world into turmoil. As far as we know, most of the truly serious pollsters went into the election with numbers that suggested Hillary Clinton was highly likely to win—perhaps one reason why the Clinton camp failed to make needed investments in the swing states that threw the election Trump’s way.
We, too, were guilty of being lulled into a false sense of certainty by these numbers. And as such our economic forecast was largely based on the premise that the nation would have four more years of an administration that looked a lot like the last one—meaning there would be little change in government policies that could alter the underlying dynamics of economic growth.
The surprise election of Donald Trump has dramatically changed Beacon Economics’ forecast. The problem is we aren’t quite sure how yet. (For more see our latest quarterly outlook, Beaconomics.)
Trump’s election promises during the campaign ranged from being modestly economically stimulating to being downright recession-causing dangerous. Since the election, his views have shifted on numerous levels, and his picks for his administration have varied from completely mainstream to perilously fringe. We simply don’t know what the priority of the new Trump administration will be so it is very hard to see how things will pan out.
It is worth remembering that Presidents do not rule by fiat. Rather, they must abide by the laws of the United States and the powers of the other two branches of government—branches that will have a lot to say about any attempt to dramatically shift U.S. policies. At this point, the best we can do at Beacon Economics is monitor developments carefully and continually adjust our national, state, and regional forecasts accordingly.
Uncertainty about how the next four years will develop is worrisome enough. But what is far more worrisome is the growing disconnect between political debate and reality.
That politicians have a strained relationship with the truth is well known—twisting facts and contorting logic are must-have debate skills. But no presidential candidate (at least in my time) has ever been so blatant about telling and retelling complete falsehoods despite massive and obvious data to the contrary. And to be clear, not only were there no political repercussions for Trump doing this, you might go so far as to suggest he won because of it.
While Trump’s untruths run the gamut, his statements about the economy and economic policy have been our focus. His claims of U.S. economic decline (the U.S. economy is now in its 7th year of economic expansion – it has been growing at a below average pace), including the supposed negative impacts of trade, Federal Reserve policy, energy industry regulations, immigration, and the Affordable Care Act, all fly in the face of an even basic analysis of the data.
Donald Trump won the election on a promise of fixing problems that don’t really exist, as he largely ignored very real problems that do exist. Misplaced policy priorities will only make the nation’s real challenges harder to deal with in the future.
This election was, at best, the triumph of ‘miserabilism’ (an idea I’ve written about) over reason, of shallow sound bites over logical discourse. Such a victory defies logic in a world where access to data and scientific research has never been easier. I personally don’t understand why this disconnect is occurring—clearly it is an important question for social scientists to answer.
In short, the election of Trump has created massive uncertainties in our economic outlook But one thing I do know is that if Americans continue to be unable or unwilling to navigate the difference between fact and fiction, bad things will happen in our economy to the detriment of everyone.