Helena Dolderer/picture-alliance/dpa/AP Images
That’s a euro in there, but you get the idea.
This has been a banner year for elections; nearly half of the population of the world has gone to the polls in 2024 in a rare aligning of the calendar. The temperature of the world has been taken. And with a few notable exceptions, and to the extent that those elections were free and fair, the result has been largely the same: Virtually every party that was the incumbent at the time that inflation started to heat up around the world has lost.
This has held regardless of the political ideology of that incumbent party, and regardless of the state of inflation in that country at the time of the election. The incumbent may not have lost power entirely. Narendra Modi is still the Indian prime minister, though his party lost 60 seats. Ursula von der Leyen remains the head of the European Parliament, though those elections saw a lurch to the right. In other cases, the ruling party lost power: in Indonesia, in Japan, in Britain, in Austria, in Finland, in the Netherlands, in New Zealand, in Portugal. In French legislative elections, the dominant centrist party lost the most seats to a leftist popular front, and only maintains power due to Emmanuel Macron’s presidency and the vagaries of French politics. Macron himself is rather unpopular, as is Canada’s Justin Trudeau, as is Germany’s Olaf Scholz. And this has held for a couple of years; see Lula over Bolsonaro in Brazil and Meloni in Italy in 2022, or Milei in Argentina in 2023.
There are a couple of exceptions to the rule; Claudia Sheinbaum in Mexico, for example. Inflation there was high pre-pandemic so maybe the new round was not as scarring, but Sheinbaum should be studied more. Other parties lost ground but maintained power as prime ministers by adopting new coalitions (see the Socialists in Spain). Yet whatever the specifics to each particular country, the general trend is the same: Populations experienced the shock of the pandemic and the further shock of high prices, grew angry, and took it out on the ruling party. And if you ask voters why they lunged in that direction, most would probably say the same thing: Prices went up.
This is irrespective of the causes of that price increase. The whipsawing of lockdowns hit supply chains hard, and they crunched further after reopening because of 40 years of outsourcing, financialization, monopolization, deregulation, and just-in-time logistics, all introducing hidden risk that boiled over spectacularly. The climate crisis has in many ways exacerbated this; one major cause of 2022 supply chain breakdowns was not COVID but heat in China. The method that most industrialized nations use to combat inflation, raising interest rates to cool off the economy, also happens to hurt individual pocketbooks, if they want to borrow for any reason. In the U.S., at least, banks did not return the favor from high interest rates to depositors, while charging them more for credit, a trillion-dollar-plus transfer to finance.
Some would add here ramped-up demand from social spending; if your point is that nations didn’t allow locked-down citizens to starve, I guess I could agree. The debates over macroeconomic management in the United States will last forever, but the bottom line is that inflation subsided here faster than any other country, without sacrificing employment.
But here—and I swear I’m getting around to the election in a moment—we must say two things. First, people don’t appear to give ruling governments credit for “taming” inflation if they were around for its rise. The price level is permanently higher than people think is fair. Second and more fundamental to the U.S., the recent bout of inflation lies atop a much more widespread cost-of-living crisis, in housing, in health care, in child care, in a host of necessities for middle-class families. This is effectively the argument that a law professor named Elizabeth Warren and her daughter made in the book The Two-Income Trap. Americans haven’t been spending more on food, or clothing, or appliances, than they did in past generations. But these other strains have required that both parents enter the labor force, robbing families of the safety valve they once had.
This is a very long way to say that Donald Trump’s comeback to win the 2024 election was in some ways overdetermined. The small but consistent swing to his side matches up with global discontent about inflation and the aftermath. The particularities of the U.S. made that inflation hurt more. This discontent was interrupted by a different form of anger over the Dobbs decision in 2022, but Democrats still lost the House that year, and the House popular vote. (Democrats could still conceivably win back the House, but that’s a true toss-up at this hour.)
The frippery alongside this is an unprecedented switch-out of Joe Biden for Kamala Harris, Biden’s generally good macroeconomic management, and all the insanity and bad feelings surrounding Trump. This muted the ultimate red shift. But it didn’t extinguish it, and maybe we should never have expected such an outcome.
When an unemployment crisis hits, millions of families, maybe 10 to 15 million in a really bad crisis, are affected. When inflation hits, everyone is affected, or at least everyone not fabulously wealthy enough not to notice. It’s scarring to political coalitions.
Maybe there are other circumstances at work here. But I think “inflation is bad” probably has enough explanatory power.
