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If there’s one major takeaway from the 2024 election, it’s this: Americans went to the voting booth with the economy top of mind.
By most economic measures, the economy has steadied since the COVID-19 pandemic. Gross Domestic Product (GDP) is growing at a steady clip, while the labor market is close to pre-pandemic levels. And remember the rampant inflation that was at its highest rate since the 1980s? Well in October that dropped to a three-year low, nearing the Federal Reserve’s target of 2%.
But the last four years have been an economic rollercoaster, to say the least. And with the “sticky” effects of inflation still in place, many voters decided to opt for the celebrity businessman once more and elected Donald Trump to be the 47th President of the United States.
With promises of deregulation, corporate tax cuts, and other austerity measures, Wall Street stocks soared to record highs, and the US Dollar jumped. The S&P 500 rose 2.5 percent, its largest single-day gain in nearly two years, while the Dow rose 3.6 percent. Meanwhile, the Russell 2000, which monitors smaller, highly volatile companies more sensitive to the economy’s overall health, jumped almost 5 percent, the largest one-day rise in approximately two years.
The short-term jump from Trump’s re-election could take a turn when markets factor in his long-term economic agenda. Or lack thereof.
And while the markets moved, independents haven’t. The concerns of the average American remain ever-present. Winning an election on the back of big expectations is one thing, following through is another.
Leading up to election day, our polling was clear: affordability remains a major concern. Not only are the price of eggs and gas a pain point, but larger items like purchasing a house feel painfully out of reach.
On the campaign trail, President-elect Trump made promises without a coherent economic strategy. From promising to remove taxes on tips to starting a trade war with China, his economics were as meandering as his famous public speaking style.
But the actual nuance of his economic agenda is yet to be seen. On September 21st, Trump was asked specifically about how he would tackle the affordability issue. What was his response? He claimed that Democratic nominee Kamala Harris was incapable of answering such a question.
“Concepts of a plan” might be able to help you win election, but they don’t help you govern.
Furthermore, the one certainty we do have regarding his economic policy, tariffs, are almost guaranteed to increase inflation. Sure, China might be adversely affected, but the burden is likely to disproportionately fall on the average American. Besides, China has been hedging its bets against a more hostile second Trump administration by deepening its economic ties to other BRICS countries and the Global South.
Welcome to the new global economy. Whether the US wants a part in it or not remains to be seen.
Political independents have a pretty good BS meter. They can tell when a proposal is more political football than actual policy. What’s more, independents are highly pragmatic. That’s why they helped deliver the 2016 election to Trump, the 2020 election to Biden, and the 2024 election to Trump again.
If this administration forgets about the affordability issues plaguing Americans, then independents will almost certainly flip in 2026 and 2028.
Sure, the stock market’s short-term growth is exhilarating. I personally enjoyed looking at my investment portfolio and seeing the Trump jump. But short-term excitement must not be mistaken for sound long-term economic health.
Independents are in the exact same spot that they were this past summer, grappling with how to pay bills and worried about the feasibility of buying a home. Stock market movement might make for a good headline, but it doesn’t resolve these issues.
As we head into the new administration, it’s our job to keep these issue front and center.
