It's still 'the economy, stupid'? How the rich moved to Harris, the rest elected Trump

Following the recent U.S. election, there has been a resurgence in interest for an iconic political phrase: "It's the economy, stupid." Originally coined by Bill Clinton's campaign strategist, this saying is being referenced as analysts seek to make sense of the unexpected outcomes from this year’s vote.

In the weeks prior, much attention was paid to specific demographic groups such as Latino voters, young men, Black men, and suburban, college-educated women. However, Donald Trump’s performance across a broad range of these groups has underscored another key factor: class. Kamala Harris saw unprecedented support among high-income households (over $100,000 annually) who, unlike other voters, leaned more left. However, these affluent voters represent only about one-third of the electorate. Trump, meanwhile, made significant gains with households earning between $50,000 and $100,000, improving his performance by a notable 20 points in this income range compared to the last election.

Despite positive economic indicators—higher wages, lower inflation, and reduced interest rates—the public's outlook on the economy remains bleak. Many Americans continue to struggle with housing costs, which have become historically unaffordable, particularly impacting working-class Latino voters. Latino voters, disproportionately in working-class roles and often entering peak home-buying years in their 30s, are acutely affected by these high prices. Some have attributed their economic frustrations to the policies of the current administration, particularly in light of the tough pandemic shutdowns and the slow recovery that followed.

One Latino organizer for the Republican Party was confident that Trump would break the record for Latino support within the party, potentially surpassing George W. Bush’s 44 percent share. "The most important issues in this election are: The economy No. 1, the economy No. 2, the economy No. 3," explained Jimmy Zumba, a Latino Republican organizer from Allentown, Pennsylvania.

Election postmortems can sometimes yield misguided conclusions. The 2004 election, for instance, led to a belief that only a candidate with a Bush-like approach could return Democrats to power; this notion was later shattered by Barack Obama’s success. Likewise, following the 2012 election, Republicans thought a more compassionate stance on immigration was necessary to attract voters, only to later see Donald Trump defy this expectation.

There are additional factors that the economy alone cannot explain. Exit polls indicate a dramatic shift among young men aged 18-29, who moved significantly toward Trump since 2020, with young women also leaning more rightward, albeit less dramatically. Trump reached out to these groups through popular, male-dominated podcasts and culturally resonant topics like UFC.

Another notable factor was Trump’s campaign advertisements on issues related to transgender policies, which proved controversial among some voters, particularly Black men. One advertisement targeting Harris’s support for taxpayer-funded gender surgery in prisons reportedly shifted voter support toward Trump by 2.7 percentage points among viewers. The Middle East conflict may have also influenced young voters, with some potentially sitting out the election in protest against U.S. support for Israel’s actions in Gaza. Democrats also recorded low support in Arab communities.

Beyond the U.S., this economic frustration is part of a global trend, with incumbent governments facing voter dissatisfaction. It’s evident that Harris’s challenge was not about Trump gaining votes but rather about her inability to match Biden’s turnout from 2020, leading to a shortfall of millions of voters who stayed home.

Within the Democratic Party, there is disagreement on how to interpret the results. Senator Bernie Sanders argued that Democrats lost working-class voters by shying away from transformative economic policies like Medicare for All, expressing that "a Democratic Party which has abandoned working-class people would find that the working class has abandoned them." In response, Democratic National Committee head Jaime Harrison countered that Biden has been a pro-worker president, highlighting his support for union workers, Buy American policies, and investments in U.S. manufacturing.

Some Democrats believe that more could have been done to effectively communicate economic policies that were initially part of Biden’s agenda, including childcare tax credits, daycare funding, and expanded drug pricing reforms. These policies were significantly scaled back after negotiations with Senators Kirsten Sinema and Joe Manchin, leading to a smaller package focused primarily on green energy and limited drug pricing changes.

Others argue that Democrats need to broaden their outreach strategy. Columnist Ezra Klein suggested that the party must consider less traditional avenues, such as engaging with Joe Rogan’s large podcast audience, which Trump has leveraged. Political analyst Ruy Teixeira, who previously forecasted a strong Democratic coalition, now emphasizes that relying on demographics alone is insufficient. He proposes the party revive progressive economic policies while adjusting their rhetoric on issues like race, patriotism, and policing.

In sum, the Democratic coalition appears in need of significant recalibration. As Teixeira puts it, "The Democratic coalition today is not fit for purpose."