It's Time To Start From Scratch
Let's accept that the simplistic liberal view of the relationship between the economy and elections was wrong. It cost the world dearly, and it's time for a rethink.
The New York Times has finally come clean about the happy reality of life in Joe Biden’s America, straining the concept of “better late than never.”
“[B]y many traditional metrics,” Peter Baker acknowledged, “the America that [Donald] Trump will inherit from President Biden when he takes the oath for a second time, two weeks from Monday, is actually in better shape than that bequeathed to any newly elected president since George W. Bush came into office in 2001.”
For the first time since that transition 24 years ago, there will be no American troops at war overseas on Inauguration Day. New data reported in the past few days indicate that murders are way down, illegal immigration at the southern border has fallen even below where it was when Mr. Trump left office and roaring stock markets finished their best two years in a quarter-century.
Jobs are up, wages are rising and the economy is growing as fast as it did during Mr. Trump’s presidency. Unemployment is as low as it was just before the Covid-19 pandemic and near its historic best. Domestic energy production is higher than it has ever been.
This might have had real utility two months before the election rather than two months after. Back then, the Times and really most participants in public discourse would scoff at any recognition that things in the U.S. were going well. They were instead fixated on inflation, long after inflation had returned to normal. The Times’ executive editor even justified this coverage priority by citing public-opinion polling, which showed inflation among the voting public’s top concerns, completing what turned out to be the most fateful circle jerk in the history of mankind.
In reality this has been a time of unusual prosperity. Not perfect, obviously, but no economy ever is, and there was no reason for Americans to risk it all on a bet that fascism might work out OK this time.
We should hope that Baker’s important concession will shake liberal faith that, say, sectoral economic weakness explains Trump’s victory, or that Biden irreversibly poisoned some economic well. If we’d done things just a little differently…
All the while, and through to this week, liberals and Democrats have searched together under their trusty streetlamp for a simple economic story that explains why they lost to Donald Trump. Perhaps we finally reaped the whirlwind of globalization, or maybe the planned drawdown of years-old pandemic-era income support came back to bite.
They’ve blinded themselves to another important development—one a vocal minority of us anticipated well in advance.
With the election finished, and Democrats defeated, people are becoming happy about the economy again. Nothing of any significance has changed about the economy in the past two months, mind you. And Trump isn’t even in office yet! But economic opinion is improving across a number of metrics, even as there seems to be widely shared concern that Trump’s policies will be inflationary.
Consumer sentiment is as high as it’s been since April. People still say, as they did all through the vibecession, that their personal economic circumstances are solid. But as
noticed a couple weeks back, many people have abruptly changed their view of whether they’re better off now than they were in 2019, the last time the public was broadly happy about the economy.
Just before the election, a plurality of survey respondents claimed they were worse off now than they were five years ago. Immediately afterward, that finding flipped.
We should dwell on this because it bears heavily on politics going forward. In the immediate term, as Greg Sargent mused this week, an abrupt change in sentiment creates a real risk that voters will give Trump credit for national prosperity that rightly belongs to Biden and Democrats, providing him the political insulation he might need to crush democracy and the rule of law.
But if there continue to be free and fair elections in America, the fact that economic sentiment does not appear to be a natural outgrowth of economic fundamentals poses an enormous challenge to the entire left-of-center, which has staked vast sums of money and strategic resources and intellectual debt on the idea that economic growth, rising wages, and middle-class job security are skeleton keys to political power. It is apparently not quite so simple.
INFORMATION, RULING THE NATION
I get frustrated by this tenacious faith that something tidy must explain why Kamala Harris lost, but it’s also hard to blame the people who’ve gone diving in the data for an indicator that makes sense of it all.
People on the true left sort of have to believe she was destined to lose for dialectical reasons. Prosperity without socialism is a mortal threat to their ideological project. Harris’s defeat salvages their worldview and their grip on political relevance. If she’d won they’d have a lot of explaining to do; instead they can simply assert: more socialism and she wouldn’t have lost.
But the story’s surprisingly similar among mainline Democrats and liberals, for different reasons. They internalized and built whole politics around academic research and models that showed a tight relationship between incumbent performance and economic growth in quarters prior to an election.
The 2024 election dealt the strategic value of those findings a severe blow. I wrote about it here on November 8.
And if I had to articulate a hypothesis to explain why, it would be this: