It's the cost of living, stupid

A post-pandemic reset, pessimism on hard work, what workers want, a simple explanation for the rise of populism, democracy vs. autocracy, redistricting roundup, a shrinking US population

Sep 05, 2025

No. 374 | September 5th, 2025

🗣️ Public Opinion

During Donald Trump’s first term, he was Mr. Economy — so much so that economic perception immediately improved upon his taking over from Obama.

Views of the state of the economy haven’t rebounded in the same way during Trump 2.0. The same apolitical swing voters frustrated with the cost of living under Biden have transferred that frustration onto Trump. Among swing voters, it’s Trump’s worst issue — just like it was for Joe Biden.

Part of this is a new post-Covid structural pessimism. Since the pandemic, consumer confidence has stayed low even when economic statistics were good. Democrats complained about this under Biden, but now they’re benefiting from this phenomenon under Trump.

This comes as part of a Wall Street Journal story titled “Americans lose faith that hard work leads to economic gains.” I still think there are some questions about whether switching from phone to online surveys hasn’t exaggerated the extent of this downward trend, but we also found a sharp drop in 2025 on this exact question of whether hard work leads to economic success.

All of this comes on top of today’s jobs report showing just 22,000 jobs created. Baseline economic perception is going to be an even bigger challenge for the White House than it already was, one that’s going to be harder to push against with a narrative focused on cultural wins, like the drop in border crossings.

In the immortal words of James Carville, it’s the economy, stupid.

And what would make workers feel better about the state of the economy? The answer is pretty simple from the latest EIG / Echelon Insights American Worker Survey: get the cost of living under control and make housing more affordable.

Also notice what workers least wanted politicians to prioritize: tariffs and immigration control from the right, and unionization from the left. There seems to be a pretty big disconnect here between what workers want and what politicians think they want.

Talking to Latino voters in North Jersey — ground zero for realignment in 2024 — the Christian Science Monitor finds these cost of living concerns front and center:

Mr. Barbadillo was the local GOP nominee for state Senate in 2021, and won just over a quarter of the vote in the heavily Democratic district. By 2024, however, he says neighbors in the town, which is more than three-quarters Hispanic, started quietly telling him that they planned to vote for Mr. Trump. The biggest reason? Spiraling costs.
But now, Mr. Barbadillo worries that support might be slipping – as prices under the Trump administration have continued to rise – and he’s worried that the president’s tariffs will push costs even higher.

The vector for frustration about higher costs right now is electricity costs, which the various abundances have ready-made answers to: spin up new energy infrastructure and embrace all of the above energy. Republicans can tout natural gas, coal, and nuclear, and Democrats can tout solar and wind.

The challenge here will be that as long as we are locked in a cycle of negative economic perception anchored in rising costs, what the price increase du jour is (remember eggs?) will seem to be all-important. Breaking this cycle will mean a persistent and sustained campaign to lower costs as the central focus and mission of this administration — more important than immigration, more important than tariffs.

Yglesias sheds light on a new paper finding that immigration and crime politics is what’s actually responsible for the rise of the populist right — an analysis I wholly agree with. That’s in contrast to more indirect academic explanations: trade politics or “racial resentment.”

The Good Authority blog puzzles over how people can simultaneously express support for democracy and a strong leader who doesn’t have to bother with the legislature and elections. This latter position reeks of the sort of euphemistic phrasing academic pollsters use to try and induce respondents to say they support odious positions like racism or autocracy.

As a result, they end up overestimating public support for autocracy. Why not just ask if autocracy is good or dictatorship is good, just like you ask if democracy is good? Under this position you get almost no one expressing pure opposition to democracy and support for a “strong leader,” but you do get a lot of people saying they support democracy and a “strong leader.” That suggests something wrong with the construct: are people really saying they’re for an autocrat — or do they just like the concept of a “strong leader?” And sometimes there are valid reasons for leaders to not have everything they do subject to a parliamentary or public vote. That’s not autocracy, but republicanism.

🗺 Redistricting

Nate Cohn runs the math on redistricting, finding that Democrats would need a 2-3 point popular vote advantage to win a House majority. Even if Texas and California cancel each other out, red states have more levers than blue states.

DDHQ has its own state-by-state tally of possible shifts:

Pew takes a look at the historic patterns of mid-decade redistricting, which have usually come about as a result of court rulings, not legislative action.