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It’s the economy, whatever that may mean

Americans may have their grocery cart in mind when they vote in November


A shopper looks at an item in the dairy section of a Kroger grocery store in Richardson, Texas. Associated Press/LM Otero

It’s the economy, whatever that may mean
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We should expect to hear more of the famous line from James Carville’s strategy for Bill Clinton, then running for the White House in 1992, “It’s the economy, stupid.” With then-President George H.W. Bush enjoying popularity following the successful Gulf War of 1991, Carville notoriously reminded the Clinton campaign repeatedly that economic ambiguity out of the 1990 recession was the key issue of the 1992 campaign. More than just a campaign slogan, the phrase, “It’s the economy, stupid,” has become embedded wisdom for how presidential campaigns think about priorities every four years. Economic experience is known to be a paramount issue for voters and campaigns ignore this truth to their own peril.

Equally famous in campaign folklore is Ronald Reagan asking in 1980, “Are you better off than you were four years ago?”—a question that the vast majority of voters answered no to when they ousted incumbent, Jimmy Carter. It is noteworthy that both “It’s the economy, stupid” and “Are you better off than you were four years ago?” were lines or themes used successfully by challengers against presidential incumbents, in times of challenging economic circumstances. Jimmy Carter and George H.W. Bush became one-term presidents, not a common thing in American political life.

It was the economy, indeed.

The problem with the conventional wisdom of economic priority in an election season is that there is not always perfect clarity of how the economy is doing. It was pretty easy for Ronald Reagan to describe “morning in America” in 1984 with the massive economic growth the country was experiencing then. It was equally easy for the Obama campaign to make the case of economic hardship in 2008 as the country suffered through its worst recession since the Great Depression. But sometimes the economy can be more mixed than clear, and that generates challenges for campaign communications.

This all leads to the 2024 presidential cycle and how the economy will be featured in the campaign to come. On one hand, the country has very low unemployment and wages have steadily increased for the last four years, but on the other hand the 2021-22 inflation period rings loud in the ears of voters. The cost of food and groceries is stuck around President Joe Biden’s neck, and inflation is a big political liability.

What makes this year unique is that voters are not merely assessing the economic record of an incumbent president, but doing so against the record of a challenger who has an economic record as an immediate past president. Voters not only have to assess the economic record of the current president, but they have to do so against some memory of the president who came just before him.

Presidents always get too much credit and too much blame for what happens in the economy.

Most polls indicate that voters feel the economic conditions under President Trump were better for them than the economic conditions of the last few years. While the 2020 COVID recession is not as directly attributable to President Trump in the minds of voters, the price inflation of 2022 is more attributable to President Biden. The positives in the economy from 2017-19 are generally credited to President Trump (a growing stock market, good economic growth, corporate tax cuts, deregulation), whereas the positives in the economy now (strong employment conditions and good 2023 economic growth) are less attributed to President Biden.

None of this has to do with what is fair. It just has to do with what is. President Biden tried to pass $5 trillion of tax increases (the Build Back Better legislation of 2021), though it failed in a bipartisan Senate. President Trump did oversee skyrocketing deficits even before COVID, yet his corporate income tax legislation resulted in a trillion and a half dollars coming back to the United States previously held offshore. President Biden was a vocal opponent of U.S. energy independence while President Trump advocated for greater U.S. production and export capacity. Small business optimism increased under the Trump administration while sentiment in small business the last couple of years has been restrained.

Presidents always get too much credit and too much blame for what happens in the economy. Both of these candidates added more to the national debt than the 43 presidents before them—combined. Many of the policies blamed for the 2021-22 inflation were passed in 2020 before the Biden administration came to office. There is very little daylight between what they each have practically done regarding China. And both candidates have campaigned on a status quo approach to entitlement spending, as well.

Nevertheless, President Biden advocates a greater spending apparatus still, and he frequently appeals to “tax the rich” mantras in laying out his economic worldview. His instinct for the administrative state has produced efforts that have been anti-business on multiple levels, from trying to block key mergers and acquisitions to advocating for huge new regulations in consumer fees. His ideological extremism around electric vehicle mandates is problematic for many Americans and reflects a deep disconnect between the administration’s priorities and the pocketbook issues of the American people.

Immigration, abortion, and campus protests may prove to be more significant issues in 2024 than economic ones. James Carville wouldn’t agree. And if it is the economy in 2024, this is far more likely to come down to how voters feel about the past two administrations than any specific data point.

At the end of the day, all the talk about debt-to-GDP and real wage growth may just take a backseat to a far simpler question: Is your grocery bill higher than it was four years ago?


David L. Bahnsen

David is the founder, managing partner, and chief investment officer of The Bahnsen Group, a national private wealth management firm. He is consistently named one of the top financial advisers in America by Barron’s, Forbes, and the Financial Times. He is a frequent guest on Fox News, Fox Business, CNBC, and Bloomberg and is a regular contributor to National Review and WORLD. He appears weekly on The World and Everything in It discussing the week’s economic and market news. He is the author of several bestselling books including Crisis of Responsibility: Our Cultural Addiction to Blame and How You Can Cure It (2018), The Case for Dividend Growth: Investing in a Post-Crisis World (2019), and There’s No Free Lunch: 250 Economic Truths (2021). David’s newest book, Full-Time: Work and the Meaning of Life, was released in February 2024.


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