Redefining the term, “economy.”

As the dust settles from the 2024 presidential election and yesterday’s Federal Reserve 25-basis point cut in the federal funds rate, I have been thinking about how the Democratic Party missed the opportunity to win votes based on how many Americans view the economy.

According to data compiled by Pew Research, in September 2024, 81% of registered voters considered the economy as their number one issue. Sixty-eight percent of Harris supporters considered the economy as their number one priority while 93% of Trump supporters cited the economy as their number one issue.

Both Harris and Trump discussed the economy on the margins. Harris harped on the idea of $25,000 grants to first time home buyers and going after price gougers while Trump pounded away on the issue of placing tariffs on friends and foes alike. To Trump’s credit, the tariff policy was one that a president would have more control over, given the powers granted to a president under the Tariff Act of 1930. The Act delegates to the President a level of trade protection authority that allows the President to make modifications to tariff rates and other policy without the approval of Congress.

On the other hand, Ms. Harris’ economic policy proposals would have all required Congressional approval and based on this alone, some voters considered her proposals dead on arrival, especially given the probability of a split Congress that would have impeded her legislative agenda.

The policies promoted by both candidates would likely increase consumer price levels with Ms. Harris’ policies requiring an elevation in the money supply for sure. But as the media pointed out the concern that Americans have with kitchen table issues, the candidates, particularly Ms. Harris, could not define economy within the four corners of that table.

Politicians who approach discussions on the economy by referencing aggregates such as unemployment rates, inflations rates, and interest rates are then tempted to choose low hanging fruit policy recommendations. “Oh, my! Housing prices are high. Let me send you a check for $25,000.” Or “Good god! The price of chicken wings is too much. Let’s get more chickens in every pot.” They couch policy in “goody bag” terms where they promise voters political policy packages that the voter can consume.

Voters eat this up because for most of us, politics is not about seizing power. It is about voting for a representative that can give us things. There is nothing fundamentally wrong with wanting those tax dollars we expend being used to give us tangibles, but for the politician, the “I can do this for you” approach can be costly in terms of creating a disconnect between the politician’s message and the voters’ need and perceptions of reality.

Harris and to a lesser extent Trump fail to appreciate that there may be no such thing as an “economy” for the average person, at least not in terms of the aforementioned aggregates. For us, the economy is closer to what was once termed as “home economics.” What is the value of the dollar that I have in my pocket, right here, right now? Can I personally negotiate a wage increase for the job that I am working? If I walk into the grocery store, the shoe store, and the pharmacy, can I enter into a transaction for stuff with a T minus zero settlement time? In other words, can I avoid putting stuff on credit or layaway?

And at the end of the day, was I able to flip the dollar I had at 8:37 am into a dollar and fifty cents by dinner time? To me, that is the core meaning of home economy. Can I make that T-0 trade.

The real “economy” is on the micro level. The real economy is about the trade. To reach the voter, the politician needs to look at the micro. By focusing on the macro, politicians are telling me that they cannot get that granular. So, why listen to them?

Alton Drew

8 November 2024

The Campaign for Real Money

I have launched an advocacy campaign called “The Campaign for Real Money.” This campaign calls for the Congress to recognize individually issued currency backed by valuable assets and bank issued currency backed by valuable, employment-creating assets.

The United States’ monetary policy encourages the issuance of deflated dollars based on the issuance of IOUs backed by no productive value. If the United States is to maintain a currency that attracts investors, while competing against the currencies of resource-based countries, the U.S. must issue currencies backed by real money, by productive energy.

The cost of advocating before Congress and the Executive branch is expensive. Your donations will allow me to provide the most effective advocacy. Thank you for your support.

Meet Alton Drew