Donald Trump’s demagoguery against immigrants may not be the deciding factor. Inflation and related psychological phenomena are said to be decisive.
November 20, 2024 06:52November 20, 2024 06:53
Niklaus von Tobel/ch media
Shortly after Donald Trump was re-elected, his victory seemed to have an explanation. The bad economic situation is a determining factor, especially high inflation. This seems to confirm what one of Bill Clinton's strategists once said:
“It's the economy, idiot!”
But many experts immediately dismissed that claim, especially those close to Democrats. Prices have risen sharply, but wages have risen even more. Unemployment is lower than it has been in 50 years, and Joe Biden and Kamala Harris have accomplished a lot for the middle class and the “working class.”
Winning — and looking for a reason: Donald Trump.Image: trapezoid
Instead, Trump’s incitement stoked underlying racism or xenophobia. Or because of the media, such as the New York Times or X, Fox News and other media that are closely related to Trump. They badmouthed Biden's economy, so Trump ultimately won by misleading voters. Racism, propaganda—these are sad explanations.
But they could be wrong. Although the economy is booming and wages are rising faster than prices, inflation may be the deciding factor. Here's what a new study suggests, providing a new answer to an old question:
Why don't people like inflation?
Inflation may not actually matter as long as wages rise at the same rate as or more than prices rise. Everything might be more expensive at Aldi, Lidl, Migros or Coop, but why would I care if my salary increased by the same amount – I could still buy the same amount of stuff. This in itself is logical. But that's not the case.
People think differently, the study said. People are seeing all kinds of things becoming more and more expensive, and at the same time their wages are increasing. But they are convinced that wages are not keeping up and are lagging behind prices. They have the impression that their purchasing power is declining, they are getting less and less for their money, and have to limit themselves.
Fear and anger are fueled
Where does this knowledge come from? According to this study, people are convinced that employers and companies are taking advantage of them as customers and employees. These people will use their power to resist fair wage increases and increase their profits. This is why inflation ultimately comes at the expense of consumers.
Anger over inflation is fueled by the perception that wage increases do not compensate for rising prices. Nor are they seen as the result of an economic boom, in which inflation is high but there are many jobs, few unemployed people, and high wage growth.
Wage increases have nothing to do with inflation. In people's minds, they are rewards for their income, job performance, or promotion. This is especially true for people who change jobs during a period of high inflation.
All in all, inflation is politically toxic. It can trigger emotions such as anger and fear. Less well-off people are especially worried about their future and buy fewer or worse goods. They argue that inflation is unfair because higher-income people are better able to cope with inflation or may receive larger wage increases. People blame the government for all this.
In this year's U.S. election, voters are also likely to blame incumbents for high inflation. Economist Paul Krugman wrote on the social media service Bluesky that when it comes to wage increases, voters believe they have earned it; however, when it comes to inflation, “Biden That's what it does.” So it's almost a miracle that Harris isn't at a significant disadvantage.
The place has now become big enough to do what Maskran once did – give me a sense of what smart people are thinking and, more importantly, give me a sense of what they don't know. For example, it turns out that many people don’t realize that most people don’t link wage increases to inflation 1/
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— Paul Krugman (@pkrugman.bsky.social) November 16, 2024 at 1:15am
Given all this, I don't have much patience for the finger-pointing among Democrats. It's almost a miracle that they got that close. The real mystery of American politics is how the Republican Party was taken over by such terrible people 5/
— Paul Krugman (@pkrugman.bsky.social) November 16, 2024 at 1:27 am
Landing on the incumbent's grave
The global situation fits the argument of politically toxic inflation. A data reporter at the Financial Times (FT) mined the ParlGov database, which contains election results in democracies over the past 120 years. As it turns out, there has never been a political year like 2024 before.
In 2024, ten major countries will hold national elections. In addition to the United States, there are Japan, India, France and the United Kingdom. Those in power are punished by voters every time. They lost votes. every time. The Financial Times headline read:
“American Democrats will end up in the graveyard of the 2024 incumbents.”
If existing businesses around the world are failing, the explanation is likely to be global trends. Post-coronavirus pandemic inflation is one such trend. This is the issue that people in nearly 30 countries are most concerned about in the past two years. As a result, the Financial Times writes that the current environment is more unfavorable for incumbents than at any time in history. (aargauerzeitung.ch)
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