Here’s a quick summary of what to expect from the Trump administration, Congress, the Fed, big banks, and the election consequences stemming from the coronavirus and the recession that we are now in.

·      The Fed has already lowered short-term interest rates to zero. They are also making $700 billion available to big banks to help stimulate the economy. These actions will have little effect on the economy. Why? Rational people will stop all unnecessary spending. They will hunker down—from fear of both the coronavirus and the failing economy. Economists call this effect the “liquidity trap.” It takes a huge amount of money to get out of it.

·      Big banks, however, will see all that new money waiting for them at the 12 regional Federal Reserve banks as "manna from heaven." They will take it all and do this with it: First, they will take care of themselves with huge bonuses. Then they will make lots of interest-free money available to their own investment accounts.  Some will use that money to buy back stocks at bargain prices. They will also lend nearly interest-free loans to large corporations, who will also pay themselves huge bonuses, while also buying back their stocks at bargain basement prices. Last, and only after a huge public outcry, they will lend a few dollars to small businesses and to a few individuals at higher interest rates. Basically, only a trickle of that $700 billion will get into the hands of small businesses where 70 percent of everyone works. We will need a lot more than $700 billion.

·      New levels of inflation await us. How much is hard to say. The Fed will be caught between a rock and a hard place. Too much money chasing too few goods is the classic definition of “demand-pull” inflation. All 300 economists at the Fed and many more iprofessors in our universities understand this potential outcome. Trump and his advisors do not have a clue.

·      If Trump wins the election (by hook or by crook), all hope will be gone. A razor thin outcome (either way) will end up being decided by the Supreme Court. And their decision is a foregone victory for Trump. But he will then have oversight of an economy that has been decimated beyond all recognition. It could take a decade or more to recover from it. 

·      Recession in an election year is deadly to any president. You remember the Clinton mantra: “It’s the economy, stupid.” As a rule, people vote according to what is in their pockets. Trump will spend and spend campaign money to let us know that he had nothing to do with the recession. It was all the democrats’ fault. His 46 percenters will say “OK.” He will also solicit any and all other countries who are inclined to help him to tamper, text, hack, or otherwise poison the election waters by misleading U.S. voters in every way they can. Voting jam ups will occur in a large number of key precincts where democrats vote. What should be a landslide loss by Trump et. al will likely turn out to be a razor thin election that could go either way.

Trump and his loyalists will be in charge of a set of conditions that would try the skills of very competent people. There are none in decision-making positions in the Trump administration. That is the consequence of appointing dullards to positions beyond their levels of competency. And that outcome flows from the dishonest elections of 2016. Both sets of circumstances are the logical outcomes of a flawed electoral system, better known as the “sausage grinder.” You put in a 3 million vote plurality for one candidate, and out comes a hefty electoral win for the candidate that the majority did not want nor voted for. And just a few votes on the margin in a handful of states (all jimmied and poisoned by Russians) made that outrage possible.

What do the elections of 2020 portend for us? At worst: death, destruction, chaos, and a whole lot of voters’ remorse for a very long time to come.  At best:  If concerned citizens vote in extraordinary numbers against Trump and all his loyalists, we will have a fighting chance to lift ourselves up from this swamp, drain it, and rebuild the country we once knew.  

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Note:  I make separate mailings of my essays to about  20+ large organizations and to very influential persons with a lot of clout, to the extent that anyone has clout in this day and age in which logic and traditional values have any meaning in the marketplace of ideas.