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Big money beat bigger money in the US Election
Trump was re-elected despite being outspent by Harris and GOP interest groups and donors gained a remarkable return on their investment.
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Global impact: Pedestrians wait to cross the street as a large digital display shows images of US Republican candidate Donald Trump (top right) and US Democrat candidate Kamala Harris (top left), outside a train station in central Tokyo on Nov. 6. (AFP/Richard A. Brooks)
M
uch has been written in recent decades about the growing influence of money on politics and elections in the United States, including 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, undermine 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 political action committees (PACs) 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, which kept him competitive in key swing states. He also managed to attract 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 gross domestic product (GDP) grew by 2.8 percent in the third quarter of 2024, above the long-run growth rate. The unemployment rate remained historically low and 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 percent during Trump’s presidency, compared to only 1.4 percent 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 percent under Biden. Of course, many forget that Trump inherited from Barack Obama a strong economy with the longest employment expansion on record.
