The Washington PostDemocracy Dies in Darkness

As economy spikes, Republicans are still waiting for the ‘Biden depression’ that Trump predicted

Stock market ‘collapse’ also has yet to materialize

President Biden during remarks on the American Jobs Plan at the Eisenhower Executive Office Building on April 7. (Demetrius Freeman/The Washington Post)

Throughout last year’s campaign, President Donald Trump issued a series of increasingly dark predictions about what would happen if Joe Biden were elected.

“If he gets in, you will have a depression the likes of which you’ve never seen. Your 401(k)s will go to hell and it’ll be a very, very sad day for this country,” Trump said in the Oct. 22 candidate debate.

Instead, the rebounding economy is headed for its best year since 1984, according to the International Monetary Fund. The U.S. economy likely expanded in the first quarter at an annual rate of 6 percent and should accelerate in the months ahead, economist Ian Shepherdson of Pantheon Macroeconomics told clients this week. More than 1.3 million jobs have been added since the election.

By Trump’s preferred metric — the stock market — Biden is outperforming his predecessor at this stage of his presidency. Last summer, the Republican said stock values would “collapse” under Biden. But through Friday, the Dow Jones industrial average was up nearly 17 percent since Nov. 7, when the Democrat was declared the apparent election winner, compared with a 10.5 percent gain over a similar period following Trump’s election.

“There wasn’t much behind President Trump’s predictions other than aspirations that he’d be reelected,” said economist Michael Strain of the American Enterprise Institute.

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Trump’s wild campaign claims of an imminent depression have complicated Republican efforts to develop an economic message that can dent Biden’s popular support. In an interview with Sean Hannity of Fox on Monday, Trump repeated his familiar boast of having built “the strongest economy in the history of the world” before the pandemic, while leveling only scattered charges against Biden.

Republicans have lashed Biden’s $1.9 trillion American Rescue Plan as unnecessary given the economy’s emerging strength and as being poorly designed, because some of the direct payments will go to households earning as much as $150,000 annually.

President Biden said that Americans broadly supported his coronavirus relief proposal as he discussed the economy with labor leaders on Feb. 17. (Video: The Washington Post)

But so far, none of the attacks have drawn much support beyond the GOP base. A Gallup poll last month found that 63 percent of Americans backed the Biden plan.

“They’re struggling to put together their message,” said Douglas Holtz-Eakin, head of the American Action Forum, a self-described center-right policy institute.

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Trump could rightly boast of having presided over the lowest unemployment rate in half a century, along with 12 consecutive quarters of growth.

But his flawed forecasting — including predictions of a stock market decline of up to 50 percent — reflected his habitual hyperbole. In December 2017, for example, he told reporters the economy could grow by up to “6 percent” a year. Instead, growth peaked at an annual rate of 3.9 percent in the final three months of that year.

And during an appearance earlier this month before the Republican National Committee at his Mar-a-Lago resort in Florida, Trump devoted most of a nearly hour-long talk to his complaints about Senate Minority Leader Mitch McConnell (Ky.) and other Republicans he said have not provided him sufficient backing.

“He makes everything personal,” said Holtz-Eakin, the chief economic adviser to senator John McCain’s 2008 presidential campaign. “He won’t provide a policy critique. He’ll criticize Joe Biden, and Joe Biden’s popular, so that won’t work.”

A spokesman for the former president did not respond to a request for comment.

With more businesses reopening and recalling workers to their jobs, the economy is expected to post impressive growth for the rest of this year. But as the boom inevitably fades, the opportunity will come for Republicans to attack, Holtz-Eakin said. Already, some public opinion surveys show unease over the administration’s deficit-financed social spending.

Ironically, Trump can claim partial credit for the robust recovery. He backed the bipartisan efforts last year to provide $3.4 trillion in coronavirus relief. He also appointed Jerome H. Powell, the chair of the Federal Reserve, who led the central bank’s efforts to keep financial markets operating smoothly and to make credit widely available.

“For where we are right now, I would give most of the credit to Trump,” said Strain. “The Trump administration did a lot to preserve the productive capacity of the economy and the incomes of households, and we’re seeing the benefits of that.”

Yet as Trump fixated late last year on unfounded allegations of election cheating, the economy wobbled. A renewed coronavirus surge interrupted business reopenings and led employers to trim 306,000 jobs in December.

The economy regained its footing in mid-January as Trump conceded defeat and the components of Biden’s first coronavirus relief plan came into focus.

That signature legislative achievement, the $1.9 trillion American Rescue Plan, has just begun feeding money into the economy. Its benefits are expected to become increasingly apparent over the remainder of the year.

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The real architects of the economic recovery may be those who did the most to fight the pandemic. The scientists and executives who developed the vaccines that are slowly enabling Americans to resume their normal activities deserve most of the credit for the economic rebound, economists said.

Meanwhile, the Republicans’ inability to craft an effective economic sales pitch is not unusual. The death this week of former vice president Walter Mondale, who lost the 1984 election to President Ronald Reagan, was a reminder that the opposition party often flails when times are good.

The economy grew that year at an annual rate of 7.2 percent, its best performance since the Korean War. Republican advertising boasted of “morning again in America,” and Democrats responded with an unpopular prescription for a tax increase to address the federal budget deficit that Reagan had used to fuel his boom.

“It is very difficult to campaign against a growing economy,” said William Galston of the Brookings Institution, who was Mondale’s policy director.

The Democrat lost 49 states that year.