Everyone was surprised by the magnitude of President-elect Donald Trump’s victory in the electoral college and popular vote landslide over Vice President Kamala Harris. This was despite the Harris campaign outspending Trump two-to-one. Now, the chorus of accusatory post-mortems dominates among Democrats and their supporters. The finger-pointing has surfaced a realization offered long ago by opinion researchers Frank Luntz and Diane Hessan—that the focus on cultural issues has diverted the Democrats from addressing the specifics of the economic message voters wanted.
Shockingly, a New York Times report this weekend cited populist advocates from the left as blaming the business community for throwing off the Harris campaign by focusing on economic issues, which was actually the missing ingredient in the campaign. And yet, economic pain was precisely the top issue for Trump voters.
The complaint was that Trump wanted to cut taxes on the wealthy to 15% while Harris only wanted to raise them from 21% to 28% in line with EU competitors. The unfair indictment was that “Ms. Harris neither abandoned nor fully embraced key liberal goals for confronting corporate power and raising taxes on the rich.”
In reality, CEOs were eager to help the Harris campaign, not the Trump campaign, which had the lowest corporate support for a Republican candidate in a century. Large numbers of prominent CEOs often and publicly endorsed Harris’s economic goals. However, their efforts to help the campaign were largely rebuffed by staffers fearful of the association with business. Even this weekend, a group of 20 major recent CEOs gathered to lament the garbled Harris team’s economic message and their unwillingness to embrace business voices to explain recent economic triumphs—and ways to address lingering high prices.
At the same time, Trump’s remarkably diverse vote revealed that Harris underperformed President Joe Biden’s prior returns in every major demographic segment regardless of race and gender, except Black women and Jewish voters. Unsurprisingly, exit polls showed that the number one issue for those voting for Trump was the economy.
How could this have been a surprise? Political consultant James Carville famously advised presidential candidates that “it’s the economy, stupid.” But the Democrats’ campaign operatives didn’t get the memo. It was not the fault of Harris as a sudden candidate with only 100 days to campaign or her predecessor President Joe Biden.
I know firsthand that the top advisors to both these leaders never understood or cared to understand how to explain the genuine profound strength of the U.S. economy but instead accepted as accurate the Trump campaign’s distorting attacks on the overall economy, apologizing for its success and missing opportunities to address the targeted areas where average voters authentically were struggling financially.
As an informal (unpaid) advisor to five U.S. presidents three Democrats and two Republicans, I am very frustrated. I have written roughly 50 related cautionary constructive commentaries in prominent publications over the past two years co-authored with renowned economists, prominent financiers, and major CEOs, showing that the economy is as strong as it has been in US history, let alone in the lifetime of all current voters across age groups.
The U.S. economy is the envy of the world as we showed the campaign team repeatedly by reporting the actual data below:
- 80% of the World Bank’s global growth forecast is anchored in America’s astounding GDP growth—and last year’s feared “hard landing” never happened.
- The Federal Reserve confirmed this week that inflation has fallen to the targeted healthy 2% range, with virtually all commodities dropping in price and increases in consumer goods down or stable.
- Wage growth shows workers at last handily beat inflation by over 4%. Major new contracts and huge salary increases were negotiated with help from the Biden/Harris administration for dockworkers, machinists, auto workers, truckers, and others.
- The unemployment level is at a record low of 4%. Thanks to full employment, immigrants are not displacing anyone’s jobs but often performing the needed agricultural, construction, and hospitality services work native-born Americans shunned—not to mention skilled immigrants who help us pioneer cutting-edge new technologies across industries.
- Fully 2.7 million jobs were lost under Trump, while 15 million new jobs were created under Biden/Harris.
- The financial markets set an unrivaled 80 new record highs.
- The U.S. Federal deficit had tripled under Trump to $3.1 trillion but receded to $1.8 trillion under Biden/Harris.
- And yes, housing prices were too high due to an unprecedented series of 12 Federal Reserve rate hikes that drove up mortgage rates, preventing people from putting houses on the market. The Biden Administration failed to hold the Fed accountable for their damaging overkill for fear of looking like they were trying to politicize the Fed. Thus, the public never understood that housing prices had nothing to do with Biden’s fiscal policies.
- Even in energy production, the “drill baby drill” Trump campaign mantra falls flat as under Biden/Harris the U.S. became the world’s largest energy producer—by a third!
Sadly, the elitist Biden and Harris advisors bought into the false Trump economic narrative rather than confidently and clearly explain the actual economic facts. Being so disconnected from their voters, they thought this would help them appear more sensitive, as I was constantly assured by top White House and campaign staffers.
The “Sleeper Effect” is a term coined by Yale researchers in the 1950s that showed how unfounded messaging becomes believed by persistent repetition as the message lingers and people stop asking for proof. That Trump’s team employed it was understandable. That the Biden and Harris teams never countered it was professional malpractice.
Even now, the post-mortem by many party leaders is to blame one group of voters for their disloyalty or bigotry ranging from blaming the “weak sisters” (white women voters), the angry bro culture, the alleged lack of support from Black male voters, or the genuine growing conservatism of Hispanic voters (with nearly half of them now voting Republican). The magnanimous President Biden who stepped aside despite his strong track record following his debate debacle was also blamed by many for not dropping out of the race sooner—all while Pennsylvania Senator John Fetterman blamed those who forced Biden to quit his campaign.
Following the brutal primary election battle between Jimmy Carter and Ted Kennedy which bled into the fractious Democratic party’s last contested convention, Arizona Congressmen Mo Udall wryly observed the self-flagellation within the party, complaining that “when Democrats organize a firing squad, they form a circle.”
Jaime Harrison, the chairman of the Democratic National Committee (DNC), has denounced independent Senator Bernie Sanders for saying the Democrats had "abandoned working-class people." Harrison responded to Sanders by arguing that President Joe Biden has been "the most pro-worker" president of his lifetime and said that several policy proposals from Harris would have "fundamentally transformed" the country in ways that would have helped working-class people. Speaker Emerita Nancy Pelosi has agreed that Sanders was incorrect, saying “I think the message that Bernie Sanders has put out is not the winning message for the American people. I love him. I think he’s great.”
Similarly, Congressman Richie Torres who represents much of the South Bronx has chastised campaign advisors and other plutocrats who attack centrist policies and drive a wedge in the party to the advantage of the political right. He posted that “Donald Trump has no greater friend than the far left, which has managed to alienate historic numbers of Latinos, Blacks, Asians, and Jews from the Democratic Party with absurdities like ‘Defund the Police’ or ‘From the River to the Sea’ or ‘Latinx.” The Financial Times has revealed data showing that the verbiage of the “woke” progressive elites screwed further left than their minority constituents. Maureen Dowd of The New York Times labeled it a case of “mistaken identity.”
I attended all 26 hours of the Democratic Convention over four days in Chicago. Immediately, I contacted senior campaign leaders to alert them to what was missing: very few speakers addressed the genuine economic context. Senator Elizabeth Warren, Senator Sanders, and UAW boss Sean Fein did so—but with an anachronistic 1930s throwback to class warfare with a distinct “which side are you on” theme. They should have read economist Thorsten Veblen’s classic 125-year-old Theory of the Leisure Class, which explained that Americans don’t resent those who succeed but hope to emulate them. That is what all those hardworking new GOP voters strive for in their admiration of the image Trump and his team project.
Without foundation, Senator Elizabeth Warren forced a false diagnostic narrative into the campaign at the DNC echoing her prior misleading ideological vilification of business: “In plain English, giant grocery stores and massive food conglomerates are ripping people off. And they can get away with it because there is not enough competition to keep them in check.” Senator Sanders echoed identical themes of price gouging while also vilifying those who were successful.
This charge of grocery store price gouging was a canard based on a misreading of facts. As we revealed in this original financial data analysis to stubborn Harris and Biden advisors, their economic messaging here was false. The truth is that retail grocers have some of the lowest profit margins of any going-concern business. This includes the largest retail grocers, Kroger and Albertsons, who have faced increased scrutiny by the Federal Trade Commission for an attempted merger of the two. As you can see, they have not even eked out 2% profit margins on average in the last decade. Even the much-cited cost of eggs is not due to a market failure in grocer profits. Rather, market efficiency drove prices up in response to an unprecedented wave of avian flu that caused the unfortunate loss of 100 million hens and a third of the U.S. egg supply.
The assertion that price-gouging and corporate profiteering caused inflation—an assertion that Harris does not believe—is dangerously wrong. To contain inflation, the federal government must focus on countercyclical macroeconomic measures, the independence of the Federal Reserve, skilling and growing the labor force, and fostering competitive, resilient, and secure global supply chains that led to price jumps due to the surge of demand as the economy reopened post-COVID. This combination of policies is currently bringing the U.S. economy to a soft landing as inflation cools rapidly and the economy keeps growing. This should have been celebrated.
When Biden's economic officials appeared in the media, they opened by apologetically stammering through complex parenthetic statistics in dense research documents and undermining their triumphs as if they were presenting at scholarly seminars. Business TV anchors and political reporters were bewildered that the Harris campaign team similarly coached the candidate to retreat to these confusing cautious circular comments and avoid simply celebrating America’s economic success.
Former Democratic presidential candidate Andrew Yang has accused the campaign leaders of “political malpractice” for not scheduling Harris on the Joe Rogan Experience, the No. 1 podcast. When Trump appeared on that show on Oct. 25, his appearance garnered 47 million views on YouTube alone. Meanwhile, the Harris campaign reportedly had to spend hundreds of thousands of dollars building a set to appear on a much smaller “Call her Daddy” sex advice podcast. Rogan offered Harris to come on his massive platform for the same price as he charged Trump—free of charge!
Harris's campaign aids followed up with irrelevant bromides such as tax incentives for starting a new business (when that was not the goal of most workers and their families). As was pointed out in a Fortune Commentary piece on Friday, the message on the need to significantly raise the minimum wage was only made at the close of the campaign and lost in the blur of confusing pledges. Average voters had genuine financial concerns—and were told by Trump it was due to a failed economic system. That was not the truth. But the remedies the Harris team offered were like giving someone who had a sprained ankle a cough drop.
Fortunately for the American public, the next president is about to inherit a remarkable economy with major payoffs in productivity from private and public sector investment—which means high growth and low inflation.
As President Biden wistfully explained in his post-election remarks: “We’re going to see over a trillion dollars’ worth of infrastructure work done, changing people’s lives in rural communities and communities that are in real difficulty… We’re leaving behind the strongest economy in the world. I know people are still hurting. But things are changing rapidly. Together, we’ve changed America for the better.”
If only his lieutenants and Harris’s advisors had been making that case with compelling evidence and simple declarative pronouncements in recent months—minus the populist finger-pointing and vilification of success—the election’s outcome would surely have been different. This failed economic messaging was an unforced error that cost the Democrats the election and will have profound historic consequences on U.S. governance, future economic policies, and global diplomacy.
Mass communications philosopher Marshall McLuhan advised 60 years ago, “The medium is the message,” anticipating the role of platforms delivering electronic images, sound bites, slogans, and memes. How you deliver content is as important as the content itself. Instead of looking for internal villains these past few days, Democrats must acknowledge they somehow got both the message and the medium wrong—and paid the price.
More must-read commentary published by Fortune:
- Former Intel CEO Craig Barrett: Splitting up America’s leading chipmaker is a bad idea
- Americans paid $100B since 2008 to access their own money. I am petitioning the Fed to end this racket
- British fintech founder who moved to U.S.: U.K. tech’s problem isn’t taxes—it’s ambition
- As activist Starboard engages constructively, here’s a potent prescription for Pfizer’s future success under Dr. Bourla’s watch
The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.
