Forum Re-live: Isabella Weber on the influence of inflation on Donald Trump's election

Inflation and economic miscommunication were the critical factors in Donald Trump’s victory in the latest U.S. elections, says economist Isabella Weber. Speaking candidly, Weber criticized the Democratic campaign, led by Kamala Harris, for failing to address the economic concerns of swing voters effectively and for the lack of a clear economic narrative. Inflation, she said, was “clearly the most important question for voters”, yet the campaign offered no clear plan to tackle it.

Weber described the Democrats’ economic messaging as “vacuous,” accusing the campaign of leaning on weak rhetoric like the “opportunity economy” while ignoring the financial struggles of everyday people. High interest rates, rising rents, and skyrocketing credit card debt left voters feeling abandoned. Instead of emphasizing Biden’s economic successes, the campaign focused on portraying Trump as morally unfit and a threat to democracy, which turned out to be a poor strategy for winning over voters. At the same time Bidenomics, while a clear departure from trickle-down economics, focused too heavily on upstream, technocratic investments rather than addressing immediate hardships.

The economist also warned about the dangers posed by economic complacency and a lack of humbleness among experts, stressing the need for “antifascist economics” to counter the far-right’s appeal. She argued that the Democrats’ response to voter concerns often felt dismissive, prioritizing headline indicators over tangible hardships like food and housing costs. This disconnect created fertile ground for Trump’s populist resurgence. At the same time, she warned about the risks, in the current situation, of dismissing populism entirely, suggesting that populism also reflects public demands for better economic conditions. Germany faced a similar issue in early 2023 when warnings of a looming economic crisis were dismissed, leading to the government’s failure to suspend the debt break – a decision that triggered a Supreme Court ruling – unraveling the government coalition and coherent economic policymaking.

Looking ahead, Weber cautioned against underestimating Trump’s unconventional tactics, highlighting his willingness to break with economic orthodoxy, likely to transition into a form of war economy. She called for disaster preparedness in economic policies. In this era of climate change, escalating geopolitical tensions, and an increasing number of conflicts, we are bound to face more disruptions. If every shock is met with interest rate hikes – aimed, as some economists suggest, at increasing unemployment – it will become increasingly challenging to avoid this shift towards the extreme right. Hence a plea for humility among economists, urging a paradigm shift that prioritizes the needs of ordinary people over technocratic fixes.

Along similar lines, economic historian Harold James attributes Donald Trump’s recent electoral success to a combination of inflation, cultural divides, and the Democrats’ strategic missteps. According to James, Trump’s victory, while not overwhelming, was significant enough to underscore the Democrats’ inability to address voters’ core concerns. While James acknowledged the merits of Bidenomics, particularly the Inflation Reduction Act and green energy investments, he criticized its political shortcomings. Designed to appeal to working-class voters, the policy failed to resonate due to poor communication and mismanagement. Fiscal and monetary policy under both Trump and Biden exacerbated inflation, creating economic dissatisfaction that alienated voters and gave the perception of economic mismanagement, while overshadowing the long-term benefits of Biden’s agenda.

Trump’s victory must also be interpreted in light of this clear global voter tendency to turn against incumbents, driven by widespread dissatisfaction. This reflects a strong desire for new approaches and a paradigm shift. However, the radical experiments we are likely to witness in this period carry significant risks. The contradictions within Trump’s policies, such as rising costs from tariffs and the economic strain of deportation measures, could create massive shortcomings and a dysfunctional administration. Looking ahead, it is crucial to consider how we will navigate the coming months and years, particularly in terms of redefining economic strategies.