How will the economy affect the US election?
“It’s the economy stupid,” said Bill Clinton’s campaign mastermind James Carville during the 1992 presidential election. It has always been a simple rule of thumb: when the economic numbers are good, the party that holds the White House wins.
Not necessarily. By most of the metrics used by economists, the US is booming. Productivity is soaring. Markets are buoyant. Job growth is healthy. The country is racing ahead of its competitors in Europe and Asia. So why do Americans tell opinion pollsters that the economy is terrible? One word: inflation. Consumers – especially low and medium income ones – have been hit by cost of living increases that outstrip their wage rises. In a country where a huge number of people live paycheck to paycheck, that causes anger and uncertainty. It has depressed support for the Democrats among traditional voting blocs – Hispanics, black men, under-30s – and it ultimately derailed Joe Biden’s hopes of a second term (along with concerns over his age). It also feeds into a narrative – enthusiastically promoted by Republicans – that Democrats are no longer the party of the working and middle classes.
The economy remains the single biggest issue for voters. It has also been one on which voters have preferred Donald Trump to the Democratic nominee, whether that’s Joe Biden or Kamala Harris. However, Harris is narrowing the gap as she starts to distance herself from the record of the Biden administration. While she has been slow to unveil precise details of her plans for middle-class tax cuts and assistance for homebuyers, these have been gathering momentum as we head into the final stages of the campaign. Meanwhile, she is accelerating attacks on Donald Trump’s proposals for punitive tariffs on foreign imports, which she says will push inflation up even further.
Thirty two years on from that famous quote, James Carville now thinks Harris has an opportunity to win on the economy by rejecting Trump’s depiction of the US as an economic basket case and persuading Americans that she can address their cost of living issues without the chaos and confusion of a second Trump presidency.
He was correct in 1992. We’ll soon know if he’s right in 2024.
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