In 1992, James Carville, a top strategist in the presidential campaign of Arkansas Gov. Bill Clinton, coined the phrase “It’s the economy, stupid.” That short sentence summed up the macro winds of that election year and has since become one of the most oft-repeated political phrases — and for good reason.
Except in times of war or other external threats, the economy is the top concern of the American electorate. Issues such as that over constructing a White House ballroom are merely a sideshow to the economic well-being of the average voter.
President George H.W. Bush initially saw his popularity soar to record heights after leading a coalition of nations in the Persian Gulf War against Iraq. At home, however, the economy stalled. As election day approached, voters viewed Bush as being more concerned with foreign affairs than kitchen table economics. His popularity plummeted. Clinton heeded Carville’s advice, focused on the economy, and defeated the incumbent president.
Fast forward to 2024, and the nation was reeling from hyperinflation, high energy prices, and saddled with the cost of dealing with a massive influx of illegal immigrants flooding over the southern border. Polls consistently showed the economy and immigration to be voters’ top concerns. After replacing the incoherent Biden atop the Democrat ticket, Vice President Kamala Harris could not articulate any change in direction, resulting in the election of Donald Trump.
With the 2026 mid-term elections just weeks away, the economy once again has emerged as the top issue. The Trump Administration has dealt successfully with the immigration crisis, effectively stopping the flow of illegal immigration. Despite the Left’s preoccupation with the administration’s aggressive removal of illegals, the issue has receded into the background.
Like Bush, Donald Trump has become embroiled in a Middle East conflict. The difference is President Trump has simultaneously focused on reshoring manufacturing with significant high-profile wins such as the recent announcement heralding the investment of $15 billion to build a new steel plant in Iowa. Over the past two years, such investment announcements have become almost routine.
While Trump has been winning the macroeconomic battle — most statistical measures of economic performance are relatively good — he is losing at the kitchen table. The economic statistic most people see is not the current GDP or even the Consumer Price Index — it is the cost of a gallon of gasoline posted on signs along every highway.
That high prices are a result of the 21.4% cumulative inflation during the Biden presidency is lost because current inflation builds upon that, pushing prices ever higher. The conflict with Iran has prevented the inflation rate from falling, as disruption in the global oil supply has sent gasoline prices back to Biden-era levels.
Trump and Republicans in Congress have made substantial strides in helping the family bottom line. Passage of the One Big Beautiful Bill Act, renamed the Working Families Tax Cut Act, has resulted in considerable tax savings. It expanded deductions, increased the standard deduction, enhanced the Child Tax Credit, and provided tax credits resulting in no taxes on tips, overtime, or Social Security income.
But the higher cost of energy and resulting inflation has offset those economic gains. Preventing a tax hike is mostly invisible, and while significant, simply preserves the status quo. This has diluted the political benefit for Trump and Republican congressional candidates.
President Ronald Reagan defeated incumbent President Jimmy Carter in 1980 due to Carter’s economic “malaise.” Reagan set about implementing the policies needed to turn the economy around. But the U.S. economy is like a giant ocean liner — it takes time for it to reverse course. Reagan’s policies did not have time to take full effect before voters went to the polls in the 1982 midterms, and the GOP suffered significant congressional losses.
This year, Trump and congressional Republicans are fighting the historical tendency for the party of the president to lose seats in the following midterm elections. And, like Reagan, Trump is putting into place the policies that will eventually result in a booming economy. As in the 1980s, such a turnaround will take time. And the GOP has been off message for months given the military conflict with Iran.
Unlike 1982, aggressive gerrymandering has resulted in few true battleground congressional districts. Republicans hold slim majorities in both the U.S. Senate and the U.S. House of Representatives; thus, a large shift is both unlikely and not necessary to flip party control.
In the remaining days of the campaign, the party that messages most effectively on affordability issues will secure a congressional majority. Trump and Republicans should heed Carville’s sage advice and focus on one issue only: It’s the economy, stupid.
Lowman S. Henry is Chairman & CEO of the Lincoln Institute and host of the weekly Lincoln Radio Journal and American Radio Journal. His e-mail address is lhenry@lincolninstitute.org.
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