This was the Inflation Election - so don't read too much into it

We should expect things to return to the norm in the future

In the week since the election, I’ve read a lot of takes about why the Democrats lost. I’ve read that they were too centrist, too progressive, too woke, not woke enough, and much else besides. I find a lot of these explanations unsatisfying because they could also have been applied to elections that the Democrats won, like 2020. I’ve written before about how the Democratic Party’s national brand has a “too liberal” problem, and others have written persuasively about how it has a “too establishment” problem. But this wasn’t really any different in 2020 - in fact, the party’s national brand was even more progressive that year.

It’s more useful to look at what was different about this year. And what was different was that the U.S. had just experienced a level of inflation unseen in nearly 45 years. It peaked out at 8% in 2022, and the last time it was that high was 1981. If we want to explain an election which produced some strange outcomes, then I think this is the better place to start than your favorite factional talking point from 2016.

U.S. inflation rate

I think that thinking about this as the Inflation Election helps to explain at least three aspects of the outcome which are unusual.

The first unusual outcome is that the Republican Party won the popular vote. This is actually only the second time that the party has achieved this in over thirty years. Strange as it may seem to say, Democratic popular vote victories have basically become the norm in recent decades, with Republicans only managing to achieve victory via the Electoral College. The last Republican popular vote win was 2004, when the country also experienced a sharp and uniform shift to the right as a result of 9/11. Incidentally, this was the last time we heard a lot of discourse about how “America is a fundamentally conservative country and so Democrats are doomed”. Four years later, that same country elected Barack Obama in a landslide.

This time around, inflation easily explains the Republican popular vote victory. It’s a phenomenon that hit every part of the country and every demographic, although the very wealthy were naturally the most insulated. In other words, it can explain the sort of uniform shift to the right - it was about a 6% swing - that would produce an unusual Republican popular vote victory.

The second unusual outcome of the election is that Republicans did better than normal with some non-white groups, particularly Hispanics. Again, inflation provides an explanation for this. Non-white Americans tend to be poorer, have less intergenerational wealth, and have lower levels of education. They are more vulnerable to the effects of inflation, especially coming hard on the heels of the pandemic lockdowns, which had a disproportionately hard economic impact on people who work in face-to-face service professions - as non-white Americans are more likely to do.

The third unusual outcome of the election is that Trump saw his biggest improvement in urban cores, including some surprising places on the coasts. For instance, New York City saw a relatively large swing towards the right. It was also one of the cities hardest hit by inflation over the last four years. Residents of large cities have already been under heavy economic pressure in recent years, not least due to housing costs. Many of the voters who live on the economic margins in these urban areas are non-white, and this wave of inflation hit them hard. It would be strange to think that this wasn’t a big reason for Trump’s improvement with lower-income voters.

Understanding this as the Inflation Election has a number of implications. Firstly, it means that we should be careful about drawing any conclusions about the next election. Republicans want you to believe that 2024 is the dawning of a new era in which the party will put together a multi-racial working-class coalition and rule the 50 states for evermore. We can’t conclusively rule out that some sort of realignment took place. But our default assumption should be that when the extraordinary circumstances disappear, the extraordinary outcome will disappear as well.

Secondly, none of this means Democrats should be complacent. A smart friend of mine pointed out that this election wasn’t just about election per se, but also the linkages that voters drew between inflation and other issues. Being seen as too close to the economic establishment or too “woke” might be things that voters can get past in normal times, but not in an Inflation Election. The former makes you look like you’re in the pocket of big business at a time when the little guy is struggling, and the latter makes it appear that you care more about non-material issues at a time when voters are struggling.

This matters, because this election has shown that Democrats fundamentally lack resilience. When the opposing force in American politics is a MAGA-ified version of the Republican Party, Democrats cannot afford to always be one bout of inflation or one small swing in the electorate away from losing. They need to have a more robust coalition and a more effective party apparatus. That requires changes.

But - thirdly and finally - I think it’s too soon to say exactly what changes are required. It is likely that the next four year will follow a predictable pattern - Trump will overreach and generate a backlash, creating an opportunity for Democrats to surge back in the 2026 and 2028 elections. If Trump implements his disastrous economic policies, then these will also be Inflation Elections - but with Democrats poised to benefit from the anti-incumbent mood. If that doesn’t happen, it’s a bit harder to predict in advance what issues they will be fought on. Trump is already making some woefully bad picks for Cabinet positions, setting up a bruising fight with Republican senators and public revulsion. These are the seeds of Democratic fightback.

The prescription for Trump opponents is, right now, pretty simple. Don’t read too much into what just happened, bide your time, and wait for the laws of regular political gravity to reassert themselves. My bet is that it would take more than one Inflation Election to fundamentally rewrite the rules of American politics.

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Did you know that Donald Trump has advocated the invasion of Mexico in order to “deal with” the country’s drug cartels? Last year, I wrote about why this would be a really bad idea. Click below to read.