It’s Still The Economy, Stupid

Following a heated election, it can be easy to forget the kinds of ideas that were treated as gospel truth in the lead-up to the vote, as either the warm glow of victory or the bitter taste of defeat reset the minds of the electoral combatants and the commentariat class.

One such narrative appears to have quickly slipped from public consciousness; the idea that Vice President Harris would be buoyed by the strong economy created by her and President Joe Biden. Voters, after all, vote with their wallets, so Harris running on what was dubbed “the strongest economy in the world” would be a huge boost to her campaign in a razor-tight election.

Given the amnestic effect elections have, it’s worth revisiting just how strong this claim was. A quick refresher:

• An Axios headline a week out from election day read: “New economic data could aid Democrats’ case in election.” 
• Yahoo Finance upgraded Biden’s economic grade to an A as it “overcame” inflation.
• CNN, a week before the election, published the headline, “America’s economy just achieved the rare feat of a soft landing,” dutifully repeating a White House staffer claim that “annual average economic growth during the Biden-Harris administration has been stronger than any administration this century.” 
• Reuters cautioned that we weren’t yet appreciating the economy Biden created in a piece that opened with “U.S. President Joe Biden may not have gotten much credit politically for the thousands of grants and public investments his administration showered across the country, with airport or road projects in places like South Carolina and Wyoming…” 
• A Politico headline announced: “’Surprisingly strong’: Economy shows robust growth in final report before election.”

These headlines all redounded to Harris’s benefit. Another Politico piece declared: “Job growth blows away expectations, in boost for Harris.” MSNBC didn’t mince words: a headline declared, “Economic growth remained strong over the summer, boosting Harris,” followed by a sub-head hyping, “the combination of healthy growth, low unemployment, shrinking inflation, record highs on Wall Street, and low gas prices paints a striking picture.” The New York Times crowed, “Jobs Report Adds to Economic Momentum for Harris.”

There were plenty of other headlines and of course Twitter commentary. Harris tried to turn it to her advantage. Biden even weighed in during the closing days of the campaign to repeat the “strongest economy” claim.

The claim wasn’t invented out of thin air. The topline numbers of the U.S. economy were all flashing green. Wages were up. The stock market was booming. Inflation had cooled. A new (and part of a slew of eventual downwardly revised) jobs report was strikingly strong. Economists were seemingly unanimous: Harris’s plan, based on Biden’s success, would keep these seemingly good times going.

And then, Harris lost. And not in a squeaker—Trump won not just the Electoral College but also the popular vote. The narrative imploded.

So what gives? Did the timeless economic wisdom take an election cycle off? How did Harris run on such a seemingly strong economy and lose so thoroughly?

The short answer is that, no, it still was about the economy. The problem is that the expert consensus on the economy was wildly out of sync with the actual economic conditions experience by real, voting Americans.

That experience under Biden-Harris has been much bleaker. American voters consistently said the economy was a problem, that they were struggling to make ends meet, and that they were anxious about their financial futures. Media outlets couldn’t understand what these people weren’t getting.

But the truth was right there in front of them all along. Inflation was crushing people, as everyday Americans were beset by higher and higher prices for groceries, gas, and other essentials. Adjusted for inflation, real median household income declined under Biden and Harris, meaning a dollar simply didn’t go as far for an American family as it used to. The poorest Americans were hardest hit. The average American worker would need to work 62 weeks-per-year to support a family of four; a mathematically untenable arrangement. 

As Annie Lowery points out in The Atlantic, this made more apparent and painful the increases in big-ticket items like homes and childcare:

Indeed, the biggest problem, one that voters talked about at any given opportunity, was the unaffordability of American life. The giant run-up in inflation during the Biden administration made everything feel expensive, and the sudden jump in the cost of small-ticket, common purchases (such as fast food and groceries) highlighted how bad the country’s long-standing large-ticket, sticky costs (health care, child care, and housing) had gotten. The cost-of-living crisis became the defining issue of the campaign, and one where the incumbent Democrats’ messaging felt false and weak.

It all adds up to financial feelings of malaise hanging over the American electorate. 

And the anxiety tied to these issues is made worse because so many Americans lack the security of a reliable job. American Compass polling from late 2023 found that only 40% of respondents had a “secure job”—one that paid a living wage and provided time-off and regular hours. That number drops to 30% for those without a bachelor’s degree. 

It’s part of why so many voters, once demographically considered reliable Democratic voters, couldn’t pull the lever for Harris. All one needed to do to find that out was ask them, which is something we at American Compass did in the lead up to the election. When asked about what the American Dream means to them, respondents were split between a message of dynamism (one can go as far as their talents can take them) vs. security (rootedness and stability are key to flourishing), but we also found that respondents believed that this security was absent in today’s economy. Whatever else the experts say the economy is, it isn’t working for the millions of Americans who feel this way. The news may come as a shock to journalists and experts toeing the party line, but anyone paying attention to our data would’ve seen these results coming from a long way off. 

While Lowery’s focus is on the rhetorical, a Trump administration should advance policy to address the very real concerns of voters by finally prioritizing the American worker against foreign competition and corporate interests. Doing that will require rethinking the way we approach trade, too—abandoning the failures of unrestricted free trade and implementing tariffs against China and others who have taken us to the cleaners for years. And this will mean revitalizing the ability to make things here in the United States. 

As journalists and commentators rend their garments about the working class “voting against their economic interests,” or the racism and sexism that supposedly delivered Trump to victory, they should pause and reflect on this far cleaner explanation. The idea that people vote based on their pocketbook is truer than ever. The “experts” might want to invest a little energy in figuring out what that really means for next time.