In retrospect, launching a pro-inflation agenda was a bold call.
This story is adapted from the Slatest newsletter. You can sign up here to get it in your inbox every day.
You’ve probably heard the phrase It’s the economy, stupid. The basic idea is that the country’s economic health correlates closely with which candidate or political party ends up winning elections. But it’s increasingly clear that voters prize certain aspects of the economy more highly than others, at least right now. Stocks are booming, and unemployment is relatively low, yet Americans seem to care much more about what things cost and whether their wages make it possible to afford those things. And on that score, two data points out today show why Donald Trump and his party are probably in for a drubbing in next month’s midterms.
What data points are you talking about?
The first is the latest inflation figure. According to the Labor Department, consumer prices rose by 3.7 percent over the year ending in September—a sharper rate of increase than the month before.
Video from Slate
In fairness, didn’t inflation peak at over 9 percent a few years back? So isn’t this latest figure pretty good?
You might think so, but most voters disagree. For one thing, inflation is on the wrong trajectory: It was 3 percent on an annual basis when Trump took office last year, and today’s reading is up from 3.4 percent in August. A second factor is psychological. Inflation spiked after the pandemic, and many of us remember what food, rent, and other basic necessities cost before it. So while sticker prices are rising less quickly than they once did, they still register to many Americans as unacceptably high. Lastly, that 3.7 percent figure is an average increase across a range of goods and services. Gas, which costs $4.33 per gallon nationwide on average, is about 40 percent more expensive than it was a year ago.
Is inflation the only factor driving voters’ economic anger?
No, which brings us to today’s second data point: real wages, a measure of how much people can buy with the wages they bring home. For real wages to go up, people’s earnings have to outpace inflation. The opposite is happening. As of September, price increases have outpaced average hourly wage growth for six straight months. In real (inflation-adjusted) terms, the typical earner effectively takes home the same amount today that they did when Trump returned to office. That isn’t much of a record for him or his party to boast about.
OK, but is it fair to blame this on Trump?
Not entirely; wages and prices are influenced by a host of macroeconomic factors outside any president’s control. But Trump certainly hasn’t helped. He got reelected in large part because voters were unhappy with high inflation under Joe Biden, then proceeded to make a series of policy moves that raised prices. That began with tariffs, but the more recent (and likely more salient) factor is Trump’s war of choice in Iran, which directly boosted energy prices. Americans aren’t happy: Most say he’s focused more on growing his own personal wealth than on growing theirs.
Fair. But isn’t the economy often Americans’ most important voting issue? So why should Republicans be more worried this year?
It’s a good point, but there’s at least one major difference this time: Back in 2018, when the GOP last faced voters midway through a Trump term, gas was $2.76 a gallon and annual inflation was running at a cool 2.2 percent. Many Americans were unhappy with the president over issues like healthcare and immigration, but majorities still viewed his economic record favorably. Democrats nevertheless managed to net 41 seats in the House that year, their biggest gain since Watergate. Today, the economic winds have reversed. In several recent polls, Democrats lead when voters are asked which party is better equipped to tame inflation, handle the economy, or keep the country prosperous, a turnabout from recent elections in which those issues have been top of mind.
OK, so what’s the bigger takeaway?
The next few weeks will bring a whirlwind of news stories, polls, and other developments that may well affect how some Americans vote. And although political consultants and journalists like to think of campaigns as clashes of ideas and candidate personalities, the truth is that the economic fundamentals that drive most electoral outcomes are baked in at this point.
Higher inflation is an unhappy trend, but my colleagues have taken note of a few fun ones that might pique your interest—and help get your mind off how much you’re paying at the pump these days:
An a-Muse-ing trend: The newest creations from Silicon Valley are hyper-adorable digital assistants, most notably Meta’s Muse and OpenAI’s Dots. Alex Kirshner argues that the rise of these cute little mascots is “a natural pivot point in not just A.I. design but public messaging.”
What comes after “wine moms”: When Susannah Bradley was raising her young children, wine was many mom’s vice of choice to help them cope with the stresses of parenting. Now that Susannah’s kids have grown into teens, she has noticed that the moms in her life are beginning to dabble in drugs instead. What’s going on?
Some autumnal ale: It can be delightful when craft breweries churn out seasonally inspired flavors, but what happens when we start being served pumpkin beer in August, or Christmas beer before Halloween? Courtney Iseman renders a verdict on this particular type of seasonal creep.
An action-packed supernatural thriller: Netflix’s new No. 1 show, Below, stars Josh Hartnett as a brooding Newfoundlander haunted by something supernatural lurking in the ocean’s depths. Rebecca Onion declares that the miniseries is a bracing delight, akin to “kissing a dead fish and taking a shot”—and that’s a compliment!
With that strange mental image firmly embedded in my brain, it’s time for me to dip out. Hope you have a great evening, and we’ll see you back here tomorrow!