Is it really the economy (stupid)? - White Like Heaven Presents...

At the time of writing Kamala Harris the former vice president turned Democratic front runner, has conceded and Donald Trump has once again become the president of the United States of America. While there are some parallel’s to 2016 where Donald Trump pitted himself against a clearly waning lineage politician, there are some notable differences. Not least the scale of the defeat with Donald Trump on target to win the popular vote for the Republican’s for the first time in two decades. While the Republican’s also stand poised to seize control of the senate. Additionally unlike Clinton, Kamala Harris after all is not from a political dynasty, her father Donald Harris largely made his name in economics and development whilst her mother Shymala Gopalan specialized in biomedical science. She was however the inheritor of a political legacy that of Joseph Biden, a man who has been in politics for over fifty years since representing the state of Delaware as a United States senator in 1973.

It is this that perhaps proved too great a burden to shake as throughout her relatively short campaign Harris appeared to find it difficult to set out a platform significantly different from Biden’s, in a, by now infamous clip on the US talk show The View in October when quizzed about what she would do differently from Joe Biden, Harris stated “There is not a thing that comes to mind in terms of – and I’ve been a part of most of the decisions that have had impact, the work that we have done,” and then later when pressed stated “You asked me, what’s the difference between Joe Biden and me? Well, that will be one of the differences. I’m going to have a Republican in my cabin, because I don’t, I don’t feel burdened by letting pride get in the way of a good idea,”. Her comments were quickly seized on by rivals in the Republican camp who accused her of continuing Biden’s record on what have perhaps been the main pillars of the Republican campaign national security, immigration and inflation.

The latter appeared to weigh heavily on the minds of voters of people going to the polls who named the economy as one of the main priorities for them as the vote approached. However at this point the picture becomes more complicated. While Biden presided over a steep decline in consumer sentiment, which measures how consumers feel about the state of the economy, their finances and their overall wealth. This appeared to be out of sync with the suggested macroeconomic picture which suggested record stock market performance, consistent wage growth and low levels of unemployment. Some commentators looked to disposable incomes to explain this inconsistency and indeed, from 2017-2021 American’s saw their disposable incomes grow by 12 percent. While Biden oversaw around 4 percent over the course of his presidency. Inflation, which was around 4 percent at the end of the Trump presidency hit 9 percent during Biden’s tenure. Of course this is somewhat explained by Trump benefitting from a growing economy after the great recession whilst the economy Biden inherited was in significantly worse shape not least after COVID which caused a real terms drop of around 11.3 percent of GDP in the second quarter of 2020 and then still down 5.2% in 2021 based on the congressional budget office’s 2020 projections.

The target for those critical of the inflation seen under Biden’s presidency has typically been the American Rescue Plan (ARP) which committed around 1.9 trillion dollars of spending into a beleaguered economy. These included $1400 dollar stimulus checks, expanded unemployment insurance, child tax credits and hundreds of billons of dollars committed to state and local budgets. Due to the fact that many if not most American’s pay did not rise to meet inflation, 2022 witnessed one of the sharpest declines in real wages seen in four decades. While it’s unlikely the inflation was solely related to the stimulus package, US inflation remained stubbornly high for a period and well above countries in the Euro area peaking at around 9%. While the interest rate rises correspondingly seemed to have cooled the economy without forcing the US economy into a recession this wasn’t without issue as it forced up the cost of mortgage repayments which despite the subsequent rate cuts have continued to climb. In addition to this was a substantive increase in the poverty rate in 2022 as the Democrats sought to unwind some of the specific pandemic relief programmes introduced over the last year. This was despite the fact that the CDC have indicated that around 18 million Americans still suffer from some form of Long COVID symptoms perhaps partly reflected in a Bureau of Labour Statistics report showing there were in 2022 record levels of workplace absences. To place the blame solely on the Democrats for this would be somewhat unfair however as in 2021 Trump’s budget which cut funding for safety net programs, K-12 education, healthcare services and environment in order to preserve a commitment to tax cuts essentially set the stage for austerity in the future bar a move towards a more radical spending plan which was not forthcoming.

The subsequent impact of this on the vote seems also clear with much of Trump’s support being drawn from a significantly lower income percentiles than Harris’s with many citing higher prices as a reason their vote had gone to Trump. Car purchases, in particular largely reliant on additional financing also were significantly impacted by the rise in interest rates and also had a significant impact on working class support for Harris. Whilst many have targeted the stimulus as being largely responsible for the USA’s inflation woes they are not solely responsible with the US also being heavily impacted by supply side issues caused by a global pandemic and the actions of a violent kleptocratic regime. However the lack of the kind of targeted support potentially including the much derided price controls to counter the effects of opportunistic price-gouging, highlighted by the somewhat controversial economist has meant the broader effects of higher prices across the economy has resulted in the negative wage growth being felt across the greater part of the US working population. In a useful collection of data visualizations the co-founder of the Security Policy Reform Institute SPRI Stephen Semmler made these observations even more starkly pointing out that for regular American citizen the measurement of how well the economy is doing is not found in record stock market performances but quite simply in how affordable are the basic commodities of every day life. Something which the Harris campaign spent very little time on but became a cornerstone of the Trump campaign, despite the fact that the latters much vaunted tariff’s are unlikely to address this.

Simply stating the macroeconomic conditions that may have stalled the Democrats campaign however can only ever form a part of the analysis. The demagogic populism embodied within the Trump campaign is not solely about being less well off but rather this seemingly austere initial trajectory eventually leading to financial both personal and societal ruin. In an event in Pennsylvania Trump warned rural voters that in the event of a loss they “won’t have a farm for very long” meanwhile perhaps his most infamous supporter during the current election cycle Elon Musk, warned voters that a failure to lend Donald Trump would mean that “This will be the last election in America”. It would also be churlish to ignore Trump’s ever present rhetoric over the border and the national interest writ large also hinted at by Elon Musk who spoke of Democrats importing voters en masse in order to swing the results of the election. Despite Harris barely speaking about LGBT issues, it is worth noting the incredible amount of money, around 215 million spent on campaigns specifically targeting trans rights. The aim seemingly to paint the movement for trans liberation, as something insidious and corrupting to the nations youth, but also to paint the democrats as overly concerned with minority groups. Both appeared to have cut through somewhat with polling conducted by the Democratic think-tank Blueprint suggesting swing voters who voted Trump were primarily moved by the idea that Kamala Harris was disproportionately influenced by “cultural issues like transgender issues rather than helping the middle class” and “Too many immigrants illegally crossed the border under the Biden-Harris administration”.

In a recent article for the Atlantic the staff writer Franklin Foer reached out to the staff in the inner circle around Biden and asked for their analysis on the failures of the Harris campaign, the subsequent article said that whilst the staff were unwilling to say anything too negative about Harris they pointed out the economic populism that had Harris attacking Donald Trump as the face of corporate interests was abandoned part way through her campaign with the report suggesting that Tony West, Uber’s chief legal political officer and the Harris’s brother-in-law being somewhat responsible for this change in tactic. I suspect it is unlikely that this decision was solely down to West’s influence but what it does reveal is the same trend laid bare by neoliberal politicians of many different stripes and a stark warning to perhaps for politicians and political projects still looking to win over the favour of the public in the current age. A failure to engage with politics as a broader phenomenon namely as Ralph Miliband expressed “the ways and means in whereby social conflict and notably class conflict are manifested” an unwillingness to tackle undemocratic institutions and break with with the mute compulsion of the economic power of capital will continue to leave the path open for opportunists who promise to do both, whilst ultimately offering little but a watered down version of the same neoliberal programme with a nationalistic, authoritarian face.

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