As an outside observer of the US elections, that have just given Donald J Trump a second term in the Oval Office, it is interesting to note what the economic differences were between the political Parties and what the ultimate causes of the huge voting shift were.
That there has been a seismic shift, is without contention, with the Republican party taking the House, the Senate and the Presidency in one fell swoop.
This being only the second time there has been a president return for a second term after having lost their initial bid after the first term and that happened way back in 1893 when Grover Cleveland won a second term in office after losing his seat in 1888 to Benjamin Harrison.
There are also some similarities in Cleveland’s and Trumps first term losses that were influence by them both looking to stop government graft and policies that favoured big business. Both have won a large majority of the popular vote in their second election campaigns.
The Economics of the Elections
But by far the biggest factor in this 2024 US election, was the effect of economics, with the Biden administration getting behind a war in the Ukraine financially to the tune of over $174 billion with additional amounts having recently been allocated to be spent.
In addition, the overall government spending has been flaming inflation and a definitive spike in spending happened since 2020 when Biden took office. This inflation has had severe impact on the ground with the middle class unable to maintain their lifestyle and having to cut back on expenses just to meet their basic needs.
Federal spending jumped from $4.45 trillion in 2019 to $6.21 trillion in 2023, according to the Congressional Budget Office. That is a 40 percent increase in four years.
This has essentially been an administration driven inflation that has resulted in the public being punished through higher interest rates and fuel costs.
Many also questioned why there had been zero attempt at resolving the Ukraine conflict via mediation, as this would be preferable to the appalling loss of life and unnecessary expenditure of American Tax Dollars.
There was also a question of security with the Biden administration spending billions by literally importing illegal immigrants, which has resulted in devastated communities and cities while there are people without work and crime rates have risen sharply.
Numerous Biden policies are hard to comprehend and were seen as anti- American whereas the Trump administration, while not the most popular internationally, was all about putting America first with economic policies and international policies that strengthened the local economy and drove job creation, sometimes at the expense of big corporates who had exported jobs to countries where they paid lower wages.
The Democratic Desertion
The final economic nail in the coffin for the Democrats, was the desertion of many top business people from the democratic party to support the Trump election bid. A string of senior businessmen in the US with high profile billionaires such as Bill Ackman and Elon Musk, who were previously solid democrat supporters, had crossed the political floor to the Republican camp, signalling a loss of credibility and financial stability becoming a central issue for many.
The Democrats seemed to double down on their existing policies and only late in her presidential campaign, did Kamala Harris start talking about reducing taxes on working people’s wages such as the tax on tips, that Trump had already announced and it was a matter of too little too late.
Economic Impact for Africa
With Trump’s America First policy, there may well be economic implications for African nations, many of whom have been cosying up to Russia and China recently. The recent BRICS summit in Russia and the China Summit in Beijing in October where 50, African heads of State gathered, would not have gone without thoughts of policy change from the USA.
The US needs to strategically still have ties and alliances in Africa, but they are big importers of both food and other goods from Africa and in the case of South Africa are their second largest trade partner.
The AGOA trade agreement between the US and Africa is a large contribution towards African trade growth in the US and should these be revised it could have severe consequences.
