Who will own the recovery? Biden or Trump?


By Josh Ellerbrock - jellerbrock@limanews.com



Pratt Industries welcomed President Donald Trump last year to highlight the influence of foreign direct investment on the local region.

Pratt Industries welcomed President Donald Trump last year to highlight the influence of foreign direct investment on the local region.


Craig J. Orosz | The Lima News

Construction workers prep the property on Commerce Parkway for Logoplaste, a plastics manufacturing company expected to bring 51 jobs into the region by 2024. Manufacturers have weathered the pandemic well with despite the disruptions.

Construction workers prep the property on Commerce Parkway for Logoplaste, a plastics manufacturing company expected to bring 51 jobs into the region by 2024. Manufacturers have weathered the pandemic well with despite the disruptions.


Craig J. Orosz | The Lima News

Fivethirtyeight.com is one of the most trusted sources of aggregate political polling data currently available.

Here’s their rundown on how it works:

“Our philosophy is to use all the polls we can find — provided that we think they’re real, scientific surveys. However, we use a formula that weights polls according to our pollster ratings, which are based on pollsters’ historical accuracy in forecasting elections since 1998 and a pair of easily measurable methodological tests.”

LIMA — Voters have a lot of questions to consider come this November.

Greatest economy ever? Or worst since the Great Depression? V-shaped or K-shaped recovery? Hoax or pandemic?

In a normal year, economic concerns almost always act as some of the most important factors that determine who wins a presidential election. 2020, however, is not a normal year.

As November nears, both political campaigns have been firing broadsides at the other around economic issues. If they’re hitting each other is another matter entirely.

The numbers

Luckily for those who like to vote based on number, there’s plenty out there about the 2020 economy. Due to some conflicting political information, however, it’s kind of complicated.

“If you look at unemployment rates, for example, people who are making more than $60,000, they basically have had no change in unemployment rates. Basically none. Those in bottom 25%, they’ve had the biggest drop in unemployment with unemployment rates going up 20%, and for higher income American workers, there’s basically no change,” Bluffton University Economics Professor Jonathan Andreas said. “That’s actually pretty typical (for a recession), but there’s more inequality than usual.”

In 2020, the wealth divide in the United States between the rich and poor has been the highest it has ever been since the U.S. Census Bureau began tracking wealth inequality, and it’s definitely not shrinking anytime soon as the pandemic exacerbates the gap between those at the top and those at the bottom.

In real numbers, the big problem is between each class’s share of total income made in the United States. In 1970 a middle-class income for a three-person household came in at $58,100. In the last five decades that number has improved to $86,600, which is a 49% increase. For upper-class incomes, the increase has been from $126,100 to $207,400, or a 64% increase.

Over time, that means the share of aggregate income between the upper and middle has basically changed hands. Roughly one-fifth of the total U.S. Income has moved from the middle class to the upper class since 1970, according to a Pew Research Center analysis of Census data.

The trend shows no sign of stopping.

Those watching the numbers can see this trend play out in real time as economic data pours in and blurs the answer to how the economy is actually faring.

On one hand, some industries are barely keeping afloat. Restaurants are a good example. An estimated 11% of restaurants in the state have already closed for good, and half are worried they’ll close within the next nine months if economic trends continue, according to the Ohio Restaurant Association.

Relatedly, the number of unemployed remains relatively high when compared to historical averages. Ohio’s unemployment rate was 8.6% in July, which is on its way down from April’s record setting 17.6%.

Meanwhile, the Dow Jones is on the edge of an all-time high. According to Federal Reserve data, the top wealthy 10% own more than four fifths of stock equity.

“The stock market hates uncertainty, and the stock market is acting like it’s been great, never been better, and that seems bizarre,” Andreas said.

What each presidential campaign has been saying has targeted particular demographics affected by this divide, and their messaging has reflected that.

Manufacturing

When President Donald Trump visits Ohio, it’s usually to talk about manufacturing and jobs.

During a visit to Clyde’s Whirlpool this past August, Trump said: “Your company became a shining example of how tough trade policies and smarts can bring jobs and prosperity into communities like Clyde.”

At Pratt Industries in Wapakoneta in September of last year, the president remarked: “Since the election, we’ve created more than 6 million new jobs. We’ve created nearly 90,000 new jobs right here in Ohio, and almost one quarter of those jobs are in the manufacturing, which everybody said will never come back to the United States.”

At the Joint Systems Manufacturing Center in Lima on March 20, Trump said: “After so many years of budget cuts and layoffs, today, jobs are coming back and pouring back, frankly, like never before. Companies are coming back into our country; they want the action. Production is ramping up in the biggest way.”

Such lines have been repeated consistently over the last four years by Republicans in relation to the Buckeye State, and Democrats, in response, have worked to combat the message that Trump saved manufacturing. To win Ohio, both campaigns know that they need to control the narrative to win blue-collar workers.

For example, while Trump was in Clyde, Joe Biden’s campaign held a few digital meetings with union members and Ohio politicians, including Mayor David Berger, to re-focus the discussion on wage growth and Sen. Sherrod Brown’s “dignity of work” message in an effort to repeat Brown’s statewide win back in 2018.

But what does the data on manufacturing say?

Again, it’s complicated, as situations outside of political slogans tend to be.

Today’s story of manufacturing, however, starts in the past. Twenty years ago, the manufacturing industry started to leak jobs at a rapid pace, and by the time the Great Recession hit, the industry had shrunk considerably. In Allen County alone, the manufacturing sector lost just over 4,000 of its 11,725 jobs from 2001 to 2009.

Jobs began to return after the Great Recession with steady gains leading into Trump’s term, but the number of manufacturing jobs is still not close to where it was before 2001 during Bill Clinton’s presidency. The latest data from the Bureau of Labor Statistics estimates that Allen County had 9,233 jobs in manufacturing as of 2019 before the pandemic hit, or 2,500 less jobs than 2001.

That doesn’t mean that manufacturers weren’t bringing in dollars. From 2001 to 2018, the manufacturing industry’s GDP in a six-county region — which includes Allen, Auglaize, Hardin, Putnam, Mercer and Van Wert counties — grew by 171% ignoring inflation, according to the Bureau of Labor Statistics.

What that means in real terms is that manufacturers got a whole lot more productive.

Politicians, however, have recast these data points to benefit their narratives. Part of the problem is that there’s no perfect answer as to why manufacturing’s story played out as it have. Trump and Republicans tend to point to unfair practices by China and the increase in globalization as the primary cause, but while there’s definitely some truth to that, automation has also played a role.

Andreas said economists continue to argue about the root causes of manufacturers decline and rise in the last two decades. While there’s little doubt that an interplay between globalization and automation led to the phenomenon, trying to find which problem caused the brunt of the damage is where the argument continues.

Obviously, each political party has a point to make.

Andreas said the success of other country’s manufacturing sectors also complicates the issue. While a lot of focus has been put on the United States manufacturing sector’s relationship with China’s, American manufacturers also have to out-compete the companies in countries that already are net-exporters of manufactured goods, such as Germany and Japan, which rely on completely different societal structures when it comes to training, education and infrastructure.

“Looking over the past year, manufacturing has recovered basically in terms of output which is amazing given that unemployment is so high” Andreas said. “In terms of this recession, manufacturing is one of the most optimistic sectors. They had a huge drop and off and steep recovery, but it looks like they’re okay if everything else stays the same. If we want to look longer term, it’s not such an optimistic picture.”

Does the data matter?

In some ways, the economy has always been a major deciding factor in presidential elections. OSU-Lima Political Science Professor Bill Angel recalled President Ronald Reagan’s now-famous debate line as an example.

“He looked right into the television camera and said ‘One thing you have ask yourself when you get to the voting booth. Were you better off today than you were four years ago?” Angel said.

As Americans faced a major gas shortage at the time, the line hit home and Reagan rolled into office based off the country’s sentiment.

In 2020, however, the political narratives have gone off the rails. There’s a lack of common ground between the parties anymore, and Reagan’s line would probably be quickly shuffled under the bus by the ever-quickening news cycle and ever-angering electorate.

“We used to have a bridge,” Ohio Northern University Media Studies Professor Jennifer Walton said. “We used to even have a Venn Diagram and not a whole lot of difference between the two parties. Now, you’re either with me or against me, and the circles are so far about, they haven’t made a bridge strong enough yet.”

A good example is the politicization of the coronavirus. Conspiracy theories have sprung up every which way since March, and there’s been a lack of faith in the institutions that would normally deal with a worldwide pandemic despite more than 180,000 American’s deaths being attributed to the novel disease.

Social media and information bubbles haven’t helped the situation.

“Everyone says they’re tired of it, but they’re still participating,” Walton said. “They’re still unfriending their family and putting out outrageous statements. It gets a lot of people fired up for the wrong reasons.”

Angel said the part of the problem in today’s politics is due to an increased fervor for celebrity and branding, which had been hyper-charged in the Obama years.

“Obama was a television star before (Trump) was. Obama could have these adoring crowds,” Angel said. “There’s this element of celebrity, and our campaigns may be different from now on with a greater emphasis on reality television and a cult of personality. It’s not just going to be a one-off. (Sen. Bernie) Sanders was kind of that way. He had that cult following. We have had a number of these cult figures show up in our national politics.”

Walton compared such behaviors with the buying patterns of customers who identify with a certain kind of brand, like Apple aficionados.

“Even though Trump has had some original supporters fall off, he still has his core base that will follow him,” Walton said. “I see so many Trump signs, Trump flags and that is due to his brand. (Trump’s followers) love the product despite the bugs.”

And so, while the economy could decide elections in the past, 2020 has re-shuffled the deck. With so much confusion, disinformation, politicization, distrust, fear and anger clouding the conversation, the two parties now can make economic outlooks yet another political talking point to be translated according to one’s political affiliation.

Some proof of such can be seen in Trump’s approval rating. Aggregate polling tracked by fivethirtyeight.com show that throughout the last four years, Trump’s average approval rating has hovered around 40% with almost no major bumps or troughs despite historic spikes and dips happening in the economic data. Even when the federal government announced it would hand out $1,200 to every qualifying adult in the county this past April, Trump’s aggregate approval rating jumped to an all-time high of just 45%.

In comparison, the aggregate approval ratings of past presidents show that the American people had no problem changing their opinions about whomever was in the White House.

“Economics have faded into the background,” Angel said. “It’s become this sort of disturbing phenomenon of Trump versus Biden and which one is worse than the other. It’s uncomfortable for most voters. We want to turn our TVs off, but we can’t. It’s like watching a train wreck.”

Pratt Industries welcomed President Donald Trump last year to highlight the influence of foreign direct investment on the local region.
https://www.limaohio.com/wp-content/uploads/sites/54/2020/09/web1_Pratt-Industries_01co.jpgPratt Industries welcomed President Donald Trump last year to highlight the influence of foreign direct investment on the local region. Craig J. Orosz | The Lima News
Construction workers prep the property on Commerce Parkway for Logoplaste, a plastics manufacturing company expected to bring 51 jobs into the region by 2024. Manufacturers have weathered the pandemic well with despite the disruptions.
https://www.limaohio.com/wp-content/uploads/sites/54/2020/09/web1_New-plastic-company_01co.jpgConstruction workers prep the property on Commerce Parkway for Logoplaste, a plastics manufacturing company expected to bring 51 jobs into the region by 2024. Manufacturers have weathered the pandemic well with despite the disruptions. Craig J. Orosz | The Lima News
https://www.limaohio.com/wp-content/uploads/sites/54/2020/09/web1_Election-logo.jpgCraig J. Orosz | The Lima News

By Josh Ellerbrock

jellerbrock@limanews.com

Fivethirtyeight.com is one of the most trusted sources of aggregate political polling data currently available.

Here’s their rundown on how it works:

“Our philosophy is to use all the polls we can find — provided that we think they’re real, scientific surveys. However, we use a formula that weights polls according to our pollster ratings, which are based on pollsters’ historical accuracy in forecasting elections since 1998 and a pair of easily measurable methodological tests.”

Reach Josh Ellerbrock at 567-2342-0398.

Reach Josh Ellerbrock at 567-2342-0398.

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