The Washington PostDemocracy Dies in Darkness

Flying blind on the economic effects of the pandemic

The many uncertainties looming this fall

A man holds a banner outside the Wisconsin Center in Milwaukee, the site of the Democratic National Convention, which is being held virtually during the coronavirus pandemic. (Brian Snyder/Reuters)

Last week, FiveThirtyEight published its prediction model for this fall’s election. Consistent with 2016, the model predicts Joe Biden has a decent chance of winning but was much less bullish on that probability than other prediction models.

On Sunday, Nate Silver explained why there was so much uncertainty in the model. It boils down to two factors: 1) It’s still August and a lot can happen; and 2) The pandemic has injected a huge amount of economic uncertainty into the picture. Silver writes, “Depending on which variables you look at (gross domestic product or disposable income?) and over what time period (third quarter or second quarter?) you could predict anything from the most epic Biden landslide in the history of elections to a big Trump win.”

There is another complicating factor, which is the failure of Congress and the Trump administration to agree to a follow-up of the Cares Act. To its credit, the House of Representatives passed such a measure in May, but Senate Republicans and the Trump White House are opposed for myriad reasons. President Trump signed a bunch of executive actions designed to bypass Congress, but observers agree that they are weak tea at best.

With the pandemic persisting and no vaccine available for the rest of the calendar year, what does this mean for the economy this fall?

Here I need to acknowledge an awkward truth: The pandemic has not affected me or mine all that seriously. I am affluent enough to have not received any money from the original Cares Act. My spouse and I, as professionals with a decent-size house, were able to transition to working from home without too much inconvenience. There are ways in which we have saved money, because of less travel. My point is that the economic effects of the pandemic on my family have been marginal at best.

This accords with my economic class, as my Post colleague Heather Long pointed out in an excellent story over the weekend. Her lead makes the obvious point: “U.S. stocks are hovering near a record high, a stunning comeback since March that underscores the new phase the economy has entered: The wealthy have mostly recovered. The bottom half remain far from it.” She notes that some economists are calling the current situation “a K-shaped recovery” because of the diverging economic prospects for the rich and poor.

Economists Laura Tyson and Lenny Mendonca reach a similar conclusion: “The COVID-19 crisis is falling hardest on the most vulnerable: people of color, people with disabilities, immigrants, women, the less educated, and other workers trapped in precarious, non-standard, and low-wage jobs without health insurance or benefits.”

It is not just the failure to pass another rescue package that has a disproportionate impact on the less well-off in America. Trump’s obsession with defunding the Postal Service has similar effects. As Vox’s Catherine Kim noted in April: “The service’s accessibility and affordability are especially important to rural communities that live in poverty and to people with disabilities, who can’t afford the cost of a private business to deliver their daily necessities. (In 2017, the rural poverty rate was 16.4 percent, compared with 12.9 percent for urban areas.)” Regardless of whether the Postal Service is able to mail ballots, the poor rely on the service for other critical needs far more heavily than those of us who can afford to FedEx things.

So it would seem as though at least half the country is about to feel the effects of the pandemic and the Trump administration’s poor response to it even more acutely than in the spring. What does this mean for the election? It depends on whether you believe that greater economic deprivation will lead to a surge in voting against the incumbent. Intuitively, the answer is yes.

There are two important caveats to that intuition, however. First, sometimes people get so exhausted and impoverished that they simply give up on political action and focus on mere survival. Articles about “an exhausted, exasperated nation … suffering from the effects of a pandemic that has upended society on a scale and duration without parallel in living memory” make me worry that those made worse off simply will not vote out of general fatigue.

Second, no voter only votes because of their economic circumstances. Trump, after all, is polling the worst among college-educated voters, which is the group benefiting the most from pandemic economic policies. Rural whites who rely on the Postal Service could very well decide that whatever Trump’s flaws, he remains the better option.

My real fear is that we may not know the political and economic effects for quite some time. The economic divide could be exacerbated by the concomitant divide in press coverage. To put it gently, I don’t expect the Bloomberg reporter who wrote about the joys of interviewing a hedge-fund manager to be able to cover how the pandemic is affecting the poorer parts of the country.

Half of the country is about to experience severe deprivation and stress, and we have no idea how that will affect their lives or their votes. Welcome to 2020.