They included titles such as The Best Congress Money Can Buy and The Best Democracy Money Can Buy. But has Donald Trump’s victory over Vice President Kamala Harris, whose campaign had a huge funding advantage, undermined that narrative?

In 1835, Alexis de Tocqueville warned of the threat that big money poses to the US system of governance in his book Democracy in America. Wary of the influence of oligarchs and plutocrats, Tocqueville wrote: “The surface of American society is […] covered with a layer of democracy, from beneath which the old aristocratic colors sometimes peep.”

Today, it is the billionaire class leveraging its financial resources to influence elections and policymaking, consolidating more power at the expense of the vast majority of ordinary citizens, further widening America’s wealth inequality, and weakening Americans’ trust in national institutions. The floodgates were opened by Citizens United v. Federal Election Commission (2010), in which the Supreme Court reversed campaign-finance restrictions, enabling corporations and other outside groups to “spend unlimited amounts” on elections. The money being channeled into campaigns has since soared, with super PACs (political action committees) raising nearly $4.3 billion this year, up from $89 million in 2010.

But the vast amount of money that poured into the 2024 race did not have a decisive effect on the outcome. Trump was re-elected despite being outspent by Harris, and GOP interest groups and donors gained a remarkable return on their investment. In addition to winning the presidency, Republicans also retained their majority in the House of Representatives and won back the Senate, giving the party full control of the legislative and executive branches.

Many factors contributed to Trump’s resounding victory, with the GOP nominee sweeping all seven highly-contested battleground states. For starters, as he shuttled between courtrooms and campaign stops, his base of conservative support was seemingly unshakable. Trump set new records for the Republican Party, making inroads into unions, which have historically leaned Democratic and kept him competitive in key swing states, and attracting more Black and Latino voters than any other GOP presidential nominee in recent history.

Despite her fundraising prowess, Harris faced strong political headwinds, not least the unpopularity of President Joe Biden. Many voters saw the election as a referendum on “Bidenomics,” which they associated with high inflation, the attendant cost-of-living crisis, and erosion of household purchasing power. Even though the US Federal Reserve brought down inflation without triggering a recession – annual real GDP grew by 2.8% in the third quarter of 2024, above the long-run growth rate, and the unemployment rate remained historically low – the Democrats paid the political price for what Trump called a “Kamala Harris inflation tax.”

Voters were nostalgic for the economy under the first Trump administration. Real average hourly earnings rose by 6.4% during Trump’s presidency, compared to only 1.4% during Biden’s. Data from the Federal Reserve Bank of Atlanta show that the share of household income needed for housing costs fell under Trump and increased by nearly 50% under Biden. Of course, many forgot that Trump inherited from Barack Obama a strong economy with the longest employment expansion on record.

Trump also entered the race leading on several issues that American voters say they care about most – inflation, immigration, and crime. After months of campaigning, Trump was still ahead on all three in the weeks before the election. According to a YouGov poll conducted at the end of October, 49% of Americans thought that Trump would do a better job on immigration, whereas 35% thought Harris would. In a Gallup poll conducted in September, the former president had a nine-point lead over the vice president on the question of who would be a better steward of the economy. Voters also had more confidence in Trump’s ability to handle the Russia-Ukraine war and the Gaza war, with 70% believing that he has experience in foreign affairs.

But that is not to discount the power of ultra-rich donors. Trump returns to the White House at a time when the US is deeply divided and highly unequal – more so than at any time since the post-Civil War era. The increasing influence of wealthy individuals and groups over the electoral process and policymaking has undoubtedly contributed to this widening gap between rich and poor. The wealth of the top 1% of US households grew from 36 times to 71 times that of those at the 50th percentile over the past 60 years, and now exceeds the wealth of the middle 60% of households.

Economic and political inequalities are closely related. The surging power of the extremely wealthy minority has left most Americans poor and voiceless, fueling class-based discontent. Bridging this divide may require breaking the chains that have kept policymakers beholden to the donor class for decades and undertaking a democratic shift toward broad-based accountability and more inclusive policies that strengthen individual agency, expand economic opportunities, and improve the income distribution. More than increasing the rate of upward mobility, these policies will rekindle the American dream and foster social cohesion.

The future of our democracy and shared prosperity depends on steps that upcoming administrations must take to rebuild trust in our institutions and create a fairer distribution of political and economic power. As former US Supreme Court Justice Louis Brandeis put it, “We must make our choice. We may have democracy, or we may have wealth concentrated in the hands of a few, but we can’t have both.”

Hippolyte Fofack, a former chief economist and director of research at the African Export-Import Bank, is a fellow with the Sustainable Development Solutions Network at Columbia University, a research associate at Harvard University’s Center for African Studies, and a fellow of the African Academy of Sciences.

Copyright: Project Syndicate, 2024.
www.project-syndicate.org