James Carville, the veteran political strategist, still has sharp instincts about elections, but he admits he’s not as in touch with today’s political climate as he once was. His famous phrase, “It’s the economy, stupid!” still rings true, especially as economic issues dominate the political landscape.
For Donald Trump, the economy has always been a crucial part of his campaign. His business background and years in the spotlight, particularly from reality TV, helped him gain the trust of voters who were ready to support someone with no political experience. Had the positive economic trends of his first term—characterized by low unemployment and strong GDP growth—continued, many believe he would have won reelection, though perhaps not by a wide margin. Unfortunately, the onset of the pandemic disrupted this momentum.
As Joe Biden’s presidency progressed, many voters began to yearn for the economic stability of 2019. Inflation surged to 9.1 percent, the highest in over four decades. Although the economy still showed growth and unemployment rates remained low, the rising cost of living overshadowed these positives. Many voters recognized that the economic downturn in 2020 was largely due to pandemic lockdowns, which Trump reluctantly supported. They wanted to return to the pre-pandemic economic conditions. Polls indicated that voters trusted Trump more than Biden or Kamala Harris to manage the economy.
This sentiment was reflected in the recent election results. Trump captured 81 percent of voters who prioritized the economy, along with 70 percent of those who felt the economy was doing poorly. Among those who described the economy as "just poor," he won 88 percent of their votes.
While Trump has always focused on issues beyond the economy—like immigration and cultural battles—there are growing concerns about how a Trump-led economy would perform now. Economic indicators, including the stock market, have shown signs of decline. The tariffs he has implemented are less focused than in his first term, and there is ongoing uncertainty about their impact. Unlike before, tax cuts and deregulation are not at the forefront of his agenda.
Trump aims to be associated with a prosperous economy, hoping to restore and even improve upon the economic conditions of 2019. He has ambitious plans to reindustrialize parts of the country and bring jobs back to America. However, many economists worry that his goals may be too ambitious.
This situation draws parallels to Ronald Reagan’s presidency. In the early 1980s, Reagan faced criticism for implementing tax cuts during a time of high inflation, which many thought would worsen the economic situation. Despite initial challenges, including a recession that saw unemployment peak at 10.8 percent, the economy eventually rebounded, leading to significant growth and Reagan’s reelection in a landslide.
Today, some draw comparisons between Biden’s spending policies and the economic challenges of the past. Critics argue that increasing federal spending as the pandemic waned added fuel to the inflation fire, impacting Biden’s presidency early on.
While historical comparisons can provide insight, the future remains uncertain. Trump likely prefers to see himself as a continuation of Reagan’s success rather than a repeat of Biden’s struggles. As the political landscape evolves, the focus on economic issues will undoubtedly remain a central theme in upcoming elections.