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Thursday, Oct 22, 2026

With 10 days to go, time and history are not on Donald Trump's side

With 10 days to go, time and history are not on Donald Trump's side

Covid has tanked the gains he made in the economy and any new stimulus could be too late

It all looked so simple for Donald Trump as he took the stage at the World Economic Forum in Davos in January this year. At the start of an election year, the annual gathering of the global business elite was an opportunity to launch his campaign.

It was one Trump eagerly seized. The next 30 minutes was one long boast, detailing how a US economy that had allegedly been on its knees under Barack Obama had been transformed under his stewardship.



“Today I’m proud to declare that the United States is in the midst of an economic boom the likes of which the world has never seen before,” Trump told a packed hall. “We’ve regained our stride, we discovered our spirit and reawakened the powerful machinery of American enterprise. America is thriving, America is flourishing and, yes, America is winning again like never before.”



Trump knew his history. Most incumbent presidents since the second world war had seen off their challengers, and the ones that hadn’t – Gerald Ford in 1976, Jimmy Carter in 1980 and George Bush Sr in 1992 – were not helped by an underperforming economy. So, with the stock market at a record high and unemployment at its lowest since the Apollo space missions of the late 1960s, the president thought the path to victory would be smooth.



Trump had been briefed about Covid-19 and the first US case was reported on the day of his Davos speech. But he did not think for a moment that his re-election campaign would be fought against the backdrop of a global pandemic and for some time appeared to be in denial about the importance of the virus, claiming it would soon go away.

That proved to be wishful thinking. Before Thursday’s head-to-head debate with Joe Biden, the pandemic had led to more than 200,000 deaths in the US and infection rates are still rising. Unemployment rocketed to 15% as large parts of the economy closed in the spring. Far from presiding over an economic boom, the International Monetary Fund estimates that the world’s biggest economy will contract by more than 4% this year. Put into context, the last time the economy shrank by more than 4% in a presidential election year was in 1932, the depths of the Great Depression, when Herbert Hoover was in the White House. Hoover did not get a second term.

Mohamed El-Erian, the former chief executive of the US investment firm Pimco and now president of Queens’ College, Cambridge University, says that back in January Trump looked like he would avoid Hoover’s fate but now faces an uphill struggle to defeat his Democratic challenger, Biden.

“Going into Covid-19, Trump would have won on two themes: the greatest economy in the history of the US and the greatest stock market in the history of the US,” El-Erian says. “Unemployment had fallen in every section of the population, the US had outperformed other advanced countries, there had been a series of records broken on Wall Street.”

Although the economy recovered after contracting by almost 10% in the second quarter, the official unemployment rate remains at 7.9% – double its pre-crisis level. What’s more, the stubbornly high level of new jobless claims suggests the recovery has started to run out of steam as Americans self-isolate in the face of new outbreaks of the virus.



Wall Street has bounced back sharply after its sell-off in February and March but El-Erian says this is not entirely good news for Trump. “As the weeks go by the disconnect of financial markets from the economy is slowly becoming a political issue. It is the rich who are doing better.”

Unable to make the claim that he is presiding over the strongest US economy of all time, for the past few weeks Trump has been trying another tack: that he is the candidate best placed to secure recovery. The president is eager to get a fresh stimulus bill through Congress before election day.

David Blanchflower, an economics professor at Dartmouth College in New Hampshire and a former member of the Bank of England’s monetary policy committee, says the US is suffering from unemployment and underemployment, and that the official jobless figures do not truly reflect the state of the labour market. “The real unemployment rate went from 4% to 20% in six weeks,” he says.

For months, Trump has been trying to get a fresh stimulus package through Congress but Blanchflower says he has allowed the Democrats to spin out the talks for too long. “Even if a deal is agreed, voters are not going to feel the impact before the election,” he says.

With less than two weeks to go, time and history are not on the president’s side. Nor is the pandemic. As El-Erian says, this election is not only about who is best at running the economy but also who will be the best at tackling Covid-19 and who can keep Americans safe.

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