As political strategist James Carville famously quipped in 1992, “It’s the economy, stupid.” Three decades later, that statement still resonates, particularly in the wake of Donald Trump’s decisive victory in the 2024 election, including here in North Carolina, where Trump won 51% to 49%. Despite predictions of a tight race, Trump swept the battleground states, securing both an electoral and popular vote win — a first for a Republican candidate since 2004. Voters also handed control of Congress and a majority of state legislatures to Republicans, emphasizing a clear shift in the political landscape.
This result wasn’t due to a sudden ideological shift, but rather a focus on economic issues. Republican turnout hit unprecedented levels, while broadening their traditional GOP voter bases with black men, Latino men, and working-class Americans — who showed up in droves. Notably, 24% of Hispanic voters were casting their ballots for the first time, and 38% of the electorate were first-time voters. Far from benefiting Democrats, this turnout tilted the scales in favor of the GOP, with the economy at the heart of voters’ decisions.
While Democrats focused on issues like the Jan. 6 insurrection, transgenderism, and abortion rights, Trump stayed laser-focused on the economy. Kamala Harris aimed to cast doubt on Trump’s character and raised alarms about threats to democracy, but Trump’s simple question resonated more powerfully: Are you better off today than you were four years ago? Overwhelmingly, voters were drawn to a candidate who promised economic improvement.
This was seen in Carolina Journal’s polling during the election on which issue was most important to voters, where inflation consistently held the top spot. Economy/jobs, abortion, and immigration vied for a distant second.
Ironically, the “bad” economy narrative doesn’t fully align with economic indicators. GDP is up, unemployment remains low, consumer confidence is high, manufacturing is expanding, gas prices have declined, interest rates are dropping, and inflation is under control. But the sharp rise in prices over the past four years hasn’t normalized, creating an enduring perception among voters that the economy is weak. According to a CNBC poll, 99% of voters said the economy played a significant role in their voting decisions, and half of them believe the president directly influences their personal financial situation.
Prices impact daily life in everything from rent and groceries to fuel and travel, and voters seem to equate these price hikes with the president’s performance, whether or not that correlation is accurate.
In reality, neither candidate offered concrete solutions to high prices. While Harris sidestepped the issue, Trump vaguely promised to “fix it.” However, addressing inflation is far more complex. The president has limited control over prices, which are largely driven by supply and demand. In essence, lowering prices requires either an increase in supply (more competition) or a decrease in demand (less consumption). There’s no other way around it.
The fact is, Jerome Powell, as the Fed chair, directed the country’s financial response to COVID-19. Trump initially appointed Powell, but neither administration’s policies were without complications. Both Trump and Biden responded to COVID-related economic challenges with massive fiscal stimuli. Trump’s corporate tax cuts and stimulus packages, followed by Biden’s additional stimulus, flooded the economy with money, creating intense consumer demand. But as supply chains and production caught up, companies held onto higher prices, leaving voters still feeling the pinch.
While many may wish for prices to drop, that would mean deflation — a phenomenon often more damaging than inflation, as it indicates a weakening economy and can lead to layoffs and reduced consumer spending.
Trump’s proposal to impose 20% tariffs in an attempt to encourage onshore jobs illustrates a challenging reality: tariffs function as taxes on imports, potentially pushing prices even higher. If enacted, this policy could add as much as $300 to the price of an iPhone, impacting consumers directly.
Ultimately, the lesson here is that while the economy remains at the forefront of American concerns, solutions aren’t always as straightforward as political promises. Presidents may campaign on economic prosperity, but the forces driving prices and financial stability go beyond the Oval Office, influenced by a complex web of policy, markets, and global factors. For now, though, the lesson of “It’s the economy, stupid” prevails — reminding future candidates that voters’ wallets still rule the ballot box.