Democratic presidential nominee U.S. Vice President Kamala Harris attends a campaign rally at Michigan State University in East Lansing, Michigan, U.S., November 3, 2024. REUTERS/Carlos Osorio
Impact of Inflation on U.S. Election: A Persistent Challenge for the Harris Campaign
Overview
Since early 2021, inflation has remained a prominent and challenging issue for the Biden administration, and it now shadows Vice President Kamala Harris as she campaigns as the Democratic presidential nominee. Despite initial successes with economic recovery and high approval ratings above 50%, persistent inflation has contributed to a prolonged dip in approval ratings, hovering around 40%. Former President Donald Trump, Harris’s Republican opponent, has effectively leveraged inflation concerns to build voter support in the closing days of the election.
Voter Concerns and Economic Perception
Polling data reveals that inflation remains a significant issue for many Americans. Gallup’s Justin McCarthy reports that around 15% of respondents identify inflation as the top issue, a reduction from earlier peaks but still higher than historical norms. The broader economy also looms large, with over 40% citing it as their primary concern. In a Reuters/Ipsos poll of voters in seven swing states, 68% felt that the cost of living was “on the wrong track,” and 61% expressed similar sentiments about the economy. The same poll showed that voters preferred Trump’s economic approach over Harris’s by a margin of 50% to 37%.
Harris Campaign’s Response to Inflation
The Biden administration, and now the Harris campaign, has sought to address inflation through a mix of policy initiatives and messaging. President Biden introduced the “Inflation Reduction Act,” which, despite its name, primarily focused on subsidies for clean energy and electric vehicles. The administration also proposed measures to cap rent increases and introduced tax incentives to boost affordable housing. Nonetheless, these efforts have yet to fully assuage voter concerns about high prices, especially in essential areas like housing and groceries.
Historical Context of Inflation Management
Inflation control has been a longstanding policy challenge, with previous administrations attempting a range of approaches. In 1971, President Richard Nixon froze wages and prices temporarily to curb inflation, but this strategy had limited success and inflation surged following the 1973 oil embargo. Later, President Jimmy Carter advocated for voluntary wage and price limits, but inflation reached 14% by the time he lost the election to Ronald Reagan.
Eventually, the Federal Reserve adopted a strict anti-inflation stance, leading to two recessions in the early 1980s before inflation settled near the Fed’s long-term target of 2%. This historical backdrop underscores the difficulty elected officials face in directly addressing inflation, a responsibility largely handled by the Federal Reserve’s management of interest rates and credit conditions.
Pandemic-Driven Inflation and Economic Recovery
Economists generally agree that inflationary pressures began during the pandemic when demand surged amid federal stimulus measures. Restrictions on services and disruptions in manufacturing and delivery led to scarcity in goods like vehicles and appliances. This demand was fueled by roughly $5 trillion in federal stimulus under both the Trump and Biden administrations, a level of support that some economists believe may have intensified inflationary pressures. Although the Fed began raising interest rates in March 2022 to counter inflation, the initial price increases had already impacted consumer sentiment.
Long-Lasting Effects on Public Sentiment
Research shows that inflation has a deep, lasting impact on the public mood, especially as it complicates daily financial decisions and introduces uncertainty. A survey by researchers from Bocconi University and Harvard University found that inflation “significantly complicates household decision-making,” contributing to economic insecurity. Importantly, inflation is generally perceived as an “unambiguously negative” phenomenon, with most voters hoping it can be addressed without trade-offs.
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