It’s the economy, stupid.
Democratic strategist James Carville famously uttered those words first, during the 1992 U.S. presidential campaign. They’ve become the accepted political wisdom ever since.
What’s fascinating is that, in that election year, the economy should have worked against Carville and his candidate, Bill Clinton. In that election cycle, you see, Vice President George H.W. Bush’s verbal gaffes — “read my lips,” etc. — seriously damaged the Republican’s public image. But what is surprising, still, is that the GOP lost the White House despite significant GDP growth, plus approval ratings as high as 89% following victory in the Persian Gulf War in 1991.
Decades of data show that the state of the economy determines election outcomes, in the United States, Canada and across Western democracies. It’s the economy, stupid, as Carville said.
Incumbents — which Kamala Harris effectively was — almost always have an electoral advantage. But that isn’t true when there’s been a recession or some economic calamity. Like, say, a pandemic which retailers used as an excuse to gouge consumers.
As financial analysts Goldman Sachs observed a year ago, in what should have been a warning to the Biden-Harris administration: “Since 1951, when the constitutional amendment was ratified to limit presidents to two terms, the incumbent has lost when the election took place soon after a recession (in 1976, 1980, 1992, and 2020). The party in the White House also lost after a recession in two instances when the incumbent candidate was not on the ballot (1960 and 2008).”
Except, except, Democrats will protest: there wasn’t a recession in 2023-24! There actually has been lots of growth!
So why did the economy kill the Harris campaign, then? (And, make no mistake, it did: “Inflation is too high under the Biden-Harris administration,” was the number one cited reason why Americans voted for Trump, exit polls reported this week. People crossing the border illegally was the second-ranked reason.)
Sorry, Democrats: What voters think is the reality is the reality. Whether, um, it’s the reality or not.
Let us explain: What is apparent, now, is that the empirical data isn’t as important as the impressions of voters. Meaning, you could have avoided a recession (like Harris) or even had a booming economy (like Bush). But if voters feel — in their guts, not in their noggins – that eggs cost too much, you’re done like dinner, these days. You’re toast. Data be damned.
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Experts used to forecast election results pretty accurately, relying upon GDP and other established economic metrics. No longer.
Two days after election night, William Antholis, director of the Miller Center for Public Affairs at the University of Virginia said: “What was missing in that [analysis] was how the economy feels to middle-income people in middle age, with kids and are trying to buy a house.”
Antholos added polls and focus groups consistently showed those voters were unhappy, “particularly in swing states.”
If this sounds to you like emotions counting for more than rationality, you’re right. In fact, it’s a lot like how voters regard the issue of crime.
Violent crime has actually been going down across the West for many years now. But voters just don’t believe that. In fact, any politician foolish enough to say that out loud faces a backlash from voters who don’t want to be contradicted with facts. What their gut tells them matters more.
Now, other factors are, of course, in the mix. Not just the economy.
In every developed nation that held an election this year, for example, the incumbent lost vote share. That is reportedly the first time in history that has ever happened. Around the world, 2024 was a terrible, horrible no-good year for incumbent political parties and candidates.
Which is why the Conservative Party’s Pierre Poilievre is ahead as much as he is — as much as a whopping 20 points. One, voter perceptions of the Canadian economy are terrible. And, two, he is facing off against an incumbent which has been in power for almost a decade.
At this point, the Tory leader mostly needs to maintain a pulse to win.
At the end of the day, it’s the economy, stupid. Yes.
But it’s not what the economy actually is.
It’s what the voters think the economy is.