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U.S. Economy
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In 1992, when James Carville was the campaign manager and chief strategist for Bill Clinton's presidential campaign, he famously urged his staff to shift their focus from distractions—such as defending the candidate from accusations of scandal—to economic concerns that were of paramount importance to voters. Carville's directive remains relevant today: Democratic Party candidates would have a better chance of winning elections if they concentrated on the financial concerns of voters, including job security, income growth, non-wage worker compensation such as health insurance and pensions, and the prices of essential consumer goods and services like groceries, transportation, housing, health care, and education.
Carville emphasized this point by writing on a blackboard: “It's the Economy, Stupid.” (He was paraphrasing the KISS principle—Keep It Simple, Stupid—a military maxim advocating for equipment and strategies to be designed for ease of repair and modification, even with limited tools and sophistication available during battle.)
Economic Performance: Democratic vs. Republican Administrations Since 1949
Since household economics—the prices of gas, housing and favorite items at the grocery store, like eggs and ground beef—are influenced by the performance of the overall economy, it's useful to compare the long-term economic performance under Democratic versus Republican presidencies.
The Economic Policy Institute (epi.org), using government data from 1949 to 2024, found that real GDP (adjusted for inflation) grew 1.2 percentage points faster during Democratic administrations than Republican ones, 3.8% versus 2.6%. Total job growth averaged 2.5% under Democrats compared to 1% under Republicans, resulting in an average of 2.4 million more jobs per year since 1949. Additionally, incomes of families in the bottom 20% of the income distribution grew 188% faster under Democratic administrations. Under Carville's maxim, the Democrats' failure to communicate these achievements was a key shortcoming in their 2024 campaign.
Biden Handed Trump the Best Economy in Decades
Economist Dean Baker (via Patreon) provides recent data showing that Trump inherited a very strong economy from Biden. In Biden's last quarter in office, GDP grew at an annual rate of 2.3%, bringing the average growth rate for his presidency to 3.2%, the highest since Clinton’s second term.
By January 2025, the unemployment rate had fallen to 4.0%, maintaining a stable range of 4.0 to 4.3% since May 2024. Consequently, the average unemployment rate during Biden’s term was 4.1%, the lowest since Johnson's last term over fifty years ago.
Trump's second term began with an inflation rate of 3%, reduced from its Covid-induced high of around 10%. The U.S. has had the best post-Covid recovery among developed nations, with productivity growing at 2% in 2024. Alarmingly, Trump's fixation on tariffs threatens to undo this progress.
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Follow the Tariff Money
Contrary to Trump's claim that other countries, such as China, will bear the cost of tariffs when American consumers buy their products, the tariff is actually paid by the importing company when these products enter the US. These companies then recover their tariff expenses by raising the retail prices that consumers pay. The revenue from any tariffs paid by the importing companies will go to the U.S. Treasury to help offset the income tax cuts Trump has planned for upper-income groups.
Consequently, U.S. consumers end up paying twice—once when they buy imported products and again through a transfer of income from average taxpayers to the wealthy. Democrats should show voters how to follow the money: the revenue from this tax on consumers could go either to the U.S. Treasury where it can finance a deficit reduction, justified by pointing to the large 36.5 trillion debt; but in a bait and switch, in accordance with the Project 2025 plan being implemented by the Trump Administration, the revenue will go to finance a tax cut for those in the top income tax bracket.
The Carville Corollary: Duty to Inform and Protect the Record
If the voting public had been better informed with readily available data on how well the economy was performing relative to the rest of the world as well as national norms, the outcome of the 2024 election—a loss by 1.5 percent—might have been different. That record also provides the point of comparison for future examinations of Trump's handling of the economy; Trump clearly understands this because he falsely denigrates the Biden economic record on a daily basis. Moreover, it is essential to warn voters that Trump's efforts to implement Project 2025’s imposition of tariffs, deportation of productive workers and indiscriminate firing of federal workers threaten to derail the Biden economy that he inherited.
