Christopher Lucero | How Will the Economy Do Under Biden?

Letters to the Editor
Letters to the Editor

Correlation is not causation, but, any review of U.S. thrift and economic vitality shows that U.S./World GDP and the stock markets do quite well under Democratic presidents.

This is not to say that those presidents are to credit for the result in any way except being in the right place at the right time. Being lucky.

In our last six experiences with Republican presidents, the U.S. has done remarkably better by these measures under Democratic presidents. It is likely because unlucky Republicans suffer from circumstances that are somewhat not within their control. Some damage may be self-inflicted, though.

Richard Nixon/Gerald Ford suffered the oil crisis at the hands of OPEC.

Ronald Reagan, who probably navigated crises better than all his cohorts here, suffered by his policy of deficit spending, mostly to eliminate the Cold War threat from the Soviet Union. In his tenure, the U.S. achieved (temporary) elimination of what had lingered as a problem since World War II. He achieved what resulted in a reunification of Germany, fostered the creation of the European Union, and resulted in a “peace dividend” a few years later for Bill Clinton.

George H.W. Bush suffered from our typical U.S. interventionism when Saddam Hussein invaded Kuwait, then suffered from a split-party vote when Ross Perot attracted a contingent of conservatives away from his platform, resulting in his single-term tenure.

Dubya, well…double whammy for him. First the 2001 attacks on New York, Pennsylvania and Virginia, and then the mortgage crisis of 2007. Barack Obama had nowhere to go but up as the U.S. emerged from that spate of bad fortune.

Now, we have this pandemic. And another single-term Republican who suffered awful luck to be in office when it came about. And we have another Democrat moving in to be at the helm while we, and the entire world this time, emerge from this crisis.

There is one potential common cause that may be leading to grief among these Republican executives: tax relief. The institution of tax reductions never seems to reduce the deficit or trickle down in the hypothetical ways that conservative economists advocate. (To read a Reagan appointee’s take on it, read Even with two terms, somehow the presiding exec angers a regime and a war starts or something like that. Wars and international discord are expensive. Lesson? Palliatives are better than cautery.

In our history, exiting the earlier pandemic of the 1918-1920 pandemic, the U.S. entered the roaring ’20s. If you can take all these correlations at face value and discount any causative attribution, you might conclude that we are about to enter an amazing recovery period, worldwide.

Prognostication is typically folly, but here goes…

I estimate our return to thrift will occur in late 2021 and run for about six years as “pent-up demand” and the institution of lessons learned from our global stress test come to pass. There will be big changes in social tolerance, equality, education, economics, energy and health care that we will all benefit from. Productivity gains in all these areas will redefine our lives both at work and at home.

We are likely to come out of this with a lot more leisure time, on average. A LOT more; can you handle that? Ask any retiree about this conundrum.

With any luck, we will be able to cause a flourish of art and science, maybe a second enlightenment and renaissance. I clearly feel we are about to experience a second instance of this social rise, as long as we don’t waste it on petty grievances like politics.

Just remember, though: Following the ’20s party came another crash, and a depression that for years was the benchmark low in our economic history. The “Great Depression” is now relegated to the second worst problem, since we are living through the worst.

They say that challenge brings resilience. Let’s get through this and uncork some bubbly, soon.

Christopher Lucero


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