Almost instantly following the re-election of Donald Trump in November, a number of political and social commentators began talking about the “stupidity” of the voting public. The same happened immediately upon Doug Ford’s recent re-election as Ontario premier. Focusing on the US election, Greg Godels critiques this narrative and argues that electoral results like these are better understood as an affirmation of the centrality of class to capitalist society and politics.
After the last US election, Democratic Party functionaries were puzzled that voters – usually attuned closely to the economy – failed to show proper appreciation for the Biden economic miracle. They cited the billions in federal money flowing toward economic growth; they repeated aggregate growth figures more robust than other advanced economies; they showed that consumer spending continued to show surprising vigour; they noted that aggregate incomes grew faster than inflation; and they reminded us of the often-mentioned markers of rising stock market and housing values.
Baffled by the voters who shunned Bidenomics and complained about the economy, Democratic Party pundits are convinced that voters are simply ignorant of the facts.
Today, perhaps more than ever, the failure to recognize social-class divisions produces ill-informed, arrogant judgments like those prominent within Democratic Party circles. While aggregate numbers may tell one story, they fail to tell the story of the economic well-being of the classes and strata that make up the aggregate, even the by-far-largest segment of that aggregate.
Could it be that Biden’s economic victory was a victory for the wealthiest, the most generously compensated among the US population, while leaving the majority of US citizens (and voters) in the rear-view mirror?
The answer is an unequivocal ‘yes.’
And the answer comes, not from a left-leaning think tank, but from Federal Reserve data by way of Moody’s Analytics and summarized in The Wall Street Journal.
As reported in the WSJ, the top 10 percent of “earners” – those households reporting $250,000 in income or more – are responsible for 49.7 percent of consumer spending. In other words, nearly half of all consumer spending is accounted for by those in the top 10 percent of all those reporting their incomes.
This is the largest share for this elite segment since the Federal Reserve began tracking in 1989. In just three decades, the top 10 percent’s portion has increased from over a third to nearly half of all consumer spending.
According to the WSJ:
“Taken together, well-off people have increased their spending far beyond inflation, while everyone else hasn’t. The bottom 80 percent of earners spent 25 percent more than they did four years earlier, barely outpacing price increases of 21 percent over that period. The top 10 percent spent 58 percent more.
“Between September 2023 and September 2024, the high earners increased their spending by 12 percent. Spending by working-class and middle-class households, meanwhile, dropped over the same period.”
Democratic Party consultant James Carville likes to say, “it’s the economy, stupid!” that decides US elections. If he is right, the celebration of Bidenomics was widely off the mark. During the Biden years, for 80 percent of US voters, their economy was stagnant, at best. In that light, the election results are far more understandable as reflective of pocketbook issues.
US economic growth is often portrayed by the major media as driven by household consumption (around two-thirds of gross US economic activity comes from household consumption). However, these reports are deceptive if they fail to acknowledge that nearly all the consumption growth impacting GDP growth comes from the wealthiest 10 percent of the population. Arguably, so-called luxury spending is the driving force behind economic growth in the US in our time.
Thus, the widely heralded mantra of capitalist apologists that “a rising tide lifts all boats” has it backwards. In fact, the privileged 10 percent of all boats that rise constitute the tide.
Economy 101 preaches that working people spend nearly all that they make (or need to borrow more to make ends meet). That same conventional wisdom tells us that the rich reinvest or save most of their earnings. Both may be and are true, though inequality of income has grown so much that the richest 10 percent can save and reinvest while spending lavishly and conspicuously.
Since late 2021, the excess savings of the bottom 90 percent has dropped from about $1.1 trillion dollars to $300 billion at the end of 2024. In roughly the same period, the uppermost 10 percent has maintained an excess savings of about $1.3-1.4 trillion, according to Moody’s Analytics. Clearly, the bottom 90 percent was forced to draw down savings over the last four years in order to get by.
It is important to notice that the concept of the “bottom 90 percent” masks the reality that each successive lower decile of household income below the top 10 percent has fewer means and lesser savings to meet a reasonably adequate standard of living. In short, the pain induced by a system maintaining such vast income inequality grows more acute as the level of income declines.
While not a proper class analysis of US society (not to be expected from official government statistics), the Federal Reserve data, as interpreted by Moody’s Analytics, provides a material basis for understanding the most recent US election.
As opposed to dire conclusions of a fascist mentality sweeping the country or wild celebrations of the revival of a mythical conservative past, the economic unraveling of the last period fed the electorate’s profound thirst for change, any change.
In the wake of a deep economic collapse in the first decade of a new century – a crisis unlike any seen for generations – US voters turned, at that time, to a fresh-faced Democrat promising change. He won voters with his earnest, unbounded hope. He produced little change, but more of the same blindness to inequality.
Now, in the wake of the economic stagnation and hardship for the majority 90 percent struggling through the Biden years, another snake oil salesman returns, capturing one of the two decadent parties with another message of change – Make America Great Again.
And again, voters act out of desperation.
Don’t blame the voters, blame the bankrupt two-party system and the economic system dominated by and for the rich and powerful.
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