In the weeks after Trump’s election, political pundits across America predicted doom and gloom on a scale heretofore unknown. In an article written for the New York Times the day after the 2016 election, Paul Krugman wrote:

If the question is when markets will recover, a first-pass answer is never.

Most stocks around the globe had dropped overnight, and DOW futures had, at their lowest, dropped 900 points. Almost no one had predicted a Trump victory, and the people on Wall Street were no different. Krugman went on:

Under any circumstances, putting an irresponsible, ignorant man who takes his advice from all the wrong people in charge of the nation with the world’s most important economy would be very bad news. What makes it especially bad right now, however, is the fundamentally fragile state much of the world is still in, eight years after the great financial crisis…. So we are very probably looking at a global recession, with no end in sight. 

NYtimes, Paul Krugman: The Economic Fallout

What four years ago made for a sobering read now reads rather comically, and serves as a cautionary tale against hubristic, premature prognostications; if Krugman had just waited until the end of the day to publish his article, he would have seen the markets rebound to approach their historic highs. That rebound started one of the greatest periods of economic prosperity in recent memory.

A Smooth, Running, Beautiful Machine

From the beginning of his candidacy to the present, Trump has based his legitimacy as president on his ability to stimulate the economy, and for good reason. History shows that incumbent presidents under flourishing economies tend overwhelmingly to be reelected. This year will likely be no different; 84% of registered voters said that the economy was extremely or very important to their ballot decisions in a gallup poll conducted earlier this year.

Attempting to tap into this all-important voter issue, Trump has often touted his economic policies as spurring the current epoch of economic prosperity. In his 2020 State of the Union Address, Trump boasted of America’s booming economy:

Importantly, the President was not alone in his optimism. Consumer confidence had been steadily rising ever since he took office:

From his inauguration in January of 2018 to last month, February of 2020, the percentage of American’s who saw the country’s economic conditions as “excellent” had steadily increased from 8% to 24% and those who rated it as “good” increased by 3% (from 36 to 39%), while those who believed it to be “only fair” decreased from 38% to 28% and those who rated it as “poor” decreased from 18% to 9%.

The President hasn’t been shy to take credit for the booming economy. In a rally in New Hampshire last year, he said this to his supporters:

Polling shows that Americans by and large agree that Trump has handled the economy well. According to a Fox News poll conducted in February, 54% of Americans approved of Trump’s handling of the economy.

A Wrench– the Invisible Enemy

The COVID-19 pandemic has thrown a wrench into America’s economic machinery, and it has quickly come to screeching halt. Data from the state department shows that number of Americans that have applied for unemployment benefits has risen to 3.3 million, shattering the previous record of 695,000 applicants. The stock markets have plunged to wipe out nearly all of the gains they made since Trump took office. In a matter of months, the strongest pillar of Trump’s re-election campaign has been nearly wiped out.

Yet despite this bad news, Trump’s is enjoying the highest approval rating of his presidency. Why?

The Rally ’round the Flag Effect

Political scientists call the tendency for leaders to increase in popularity during times of crisis the “rally ’round the flag effect,” an effect which Trump seems to be benefiting from right now.

The most striking and memorable of such instances in modern political history is the great leap President George H. W. Bush’s approval took immediately following 9/11.

Within 10 days of September 11th, Bush’s approval rating skyrocketed an astounding 48%.

Similarly, Trump has enjoyed a boost, if a much smaller one, during his time as (to borrow his terminology) “a wartime president,” reaching an approval rating of 49%, tying for the highest of his presidency.

Sources:
money.cnn.com/investing/dow-jones-trump-wins-election
money.cnn.com/global-markets-stocks-trump-clinton-us-presidential-election
cnn.com/stocks-erase-trump-gains