First off I am not an economist, although I don’t know which is more of the dismal science – economics or my specialty political science. But if I am not an expert at economics, I do know my alphabet. The good nuns who trained me in penmanship at St. John’s in Milwaukee showed me how to make a proper V and a W, but shied away from explaining supply and demand.
But in this pandemic crisis all of a sudden the alphabet comes into play. Will the economic recovery look like a V – a sharp decline like we are experiencing now followed by a huge uptick, a perfect V. On the other hand the economic recovery could look like a W – a sharp decline, a huge uptick, then another decline ( likely caused by a return of the Covid-19 virus) followed by another uptick ( likely caused by a vaccine to end the threat of the virus).
Not surprisingly, economics and the alphabet intersect with politics. President Trump and his advisers are convinced that the V is the future of capitalism in this country as the uptick begins to take shape during the latter days of the presidential campaign giving the incumbent chief executive an edge over Joe Biden. Even some Democrat strategists are worried about the V as a fast economic rebound is not out of the question.
It you believe in the public health officials and the scientists, a W is more likely in our future – a rebound that is weakened by a return of the virus sending the economy into a second tailspin. A second uptick could occur but that would not come until well into 2021. President Trump dreads the W and the Democrats silently agree that the chances of Joe Biden taking the golden ring of the White House would be enhanced by the W.
Of course economists just like political scientists have no grand predictive powers about the future of the economy, but winning the presidential election is likely based on whether we are in store for a V or a W recovery. It would be great if our great engine of capitalism in the United States would take us toward another skyrocketing economic boom in a matter of a few months, but there are just too many unknowns about how the Covid-19 will act, how Americans will join together to defeat the virus, and how our political leaders will respond to the public health crisis. The virus remains in control of our fate as a people, but the election of our president is dependent in large part on two letters – V or W.