Don’t root for a recession to knock out Trump
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Version 0 of 1. SAN DIEGO — If you’re rooting for a recession to take out President Trump, stop. You’re actually rooting to punish the most vulnerable Americans — and to scar them with years of pain, deprivation and even, as one new study shows, a greater likelihood of dying young. Over the past few months, anti-Trumpers have often asked me (hopefully, wistfully) about the likelihood that the economy will crater. After all, conventional wisdom says a strong economy in an election year helps the incumbent; if the economy tanks, perhaps Trump’s reelection chances would, too. This is a misplaced and ghoulish fantasy, given new research discussed here at the annual meeting of the American Economic Association. Recessions tend to be short, averaging less than a year over the postwar period. So perhaps most people believe the pain wreaked by downturns is fleeting. Cheerleaders for recession, anyway, seem to assume that households affected by any Trump-era downturn would bounce back whenever the business cycle resets. There’s a lot of research, though, showing that assumption to be flat-out wrong, especially for young people. Earlier studies had shown that workers who graduate from school during a period of high unemployment suffer lower earnings for about a decade. When job openings are rare, new grads take whatever positions they can; they then get stuck on a lower-paying trajectory, with fewer opportunities to move up. So we already knew the scarring effects of recessions could be bad. But, says University of California at Berkeley economics professor Jesse Rothstein, “We see over and over again that recessions are worse than we thought.” Rothstein recently released a working paper examining the longer-term consequences of the Great Recession. He finds that young college graduates who entered the job market in the downturn and its immediate aftermath are doing worse than previous models of recession scarring would have predicted. A decade later, the employment rates of this “Lost Generation” remain far behind those of slightly older cohorts who graduated into a stronger economy, even after adjusting for the age difference. Worse, another new study finds that recessions leave lasting effects not only on early career outcomes, but on health well into middle age. The working paper, by Hannes Schwandt of Northwestern University and Till von Wachter of the University of California at Los Angeles, looked at the cohorts that graduated into lousy labor markets in the early 1980s, when the country experienced painful double-dip recessions. The authors found that these cohorts have been dying younger than counterparts who graduated during better economic conditions. That is, their mortality rates during their late 30s through age 50 (the oldest age the authors had sufficient data for) are significantly higher. These higher mortality rates were mostly driven by deaths from certain behaviorally linked diseases, including some of the “deaths of despair”: heart disease, lung cancer, liver disease and drug poisoning. Why is unclear; perhaps young workers, facing economic desperation at an impressionable age, adopted unhealthy behaviors they had trouble shaking later on. The continued economic and social challenges they faced after the recession ended likely made adopting healthier habits harder, too. The same paper also found that these unlucky cohorts had higher divorce rates, fewer children and a persistent earnings gap with cohorts who graduated into stronger economies. You might argue that whatever its regrettable long-term consequences, a recession is coming eventually. It might as well come at a politically convenient time. But this logic ignores the fact that wage growth comes predominantly during expansions — especially later in expansions, when unemployment has fallen low enough that even lower-skilled and more marginal workers get to benefit. Or as Rothstein told me: “It’s a once-in-a-generation thing to get this tight a labor market, and you want to let it rip for as long as it can.” Even without an economic collapse, there’s plenty of room for Democrats to run against Trump on economic issues. Democrats might emphasize those left behind by the current expansion, as Trump gave tax cuts to the wealthy. Or they might promote the need for more automatic stabilizers (such as food stamps) to kick in whenever the economy does turn. Or they might highlight the structural financial challenges Americans face even when jobs are plentiful — such as the high costs of child care and health insurance. There are lots of ways to challenge Trump on this economy that are more productive than wishing for (or talking up) recession. Trump and his political career might be able to recover from a sudden economic collapse. Less fortunate Americans — including the ones the left claims to prioritize — wouldn’t. Read more: Robert J. Samuelson: The business cycle ain’t dead yet Catherine Rampell: Happy 10th birthday to the economic expansion. Don’t count on an 11th. Megan McArdle: The best gift Americans got this year? A good economy. Lawrence H. Summers: The right policy as recession looms Robert J. Samuelson: Europe is quietly drifting toward a recession. It might be bad news for us all. |