8 November 2020

For free marketeers, this was the ideal election result


For economic liberals the usual instinct — mourning the loss of a Republican presidential ticket — does not apply to Donald Trump’s defeat. He may have cut taxes and red tape, but Trump was a big spending, debt-increasing, trade protectionist who rejected core free market principles.

Americans voted for Joe Biden to get rid of Trump, while thoroughly rejecting the socialist extremes of the Democratic Party. But they have also left Republicans in an unexpectedly strong position.  Trump will be replaced by a moderate centrist. Biden himself is, of course, no free marketeer. He will try to spend even more than Trump, use executive power to strangle businesses with red tape, and is no champion of free trade.

Nevertheless, Biden’s victory defenestrates the socialist wing of the Democratic Party, who claimed a moderate would never succeed. Antifa’s extreme politics, hidden by ‘resistance’ to Trump, will look ridiculous under a Biden presidency and a Kamala Harris vice-presidency. The American public, even in progressive heartlands like Seattle, are less likely to tolerate rioting and looting in future.

The ‘Blue Wave’ failed to materialise. Democrats were expected to pick up at least a dozen seats in the House of Representatives and win a majority in the Senate. In reality, Republicans have already gained net five seats (8 won, 3 lost) in the House and will most likely hold on to the Senate after run-off elections in Georgia. This will make Biden the first President since 1968 to enter the White House without also controlling the Senate — providing an important check on power and meaning he is very unlikely to repeal Trump’s sweeping tax cuts.

Democrats are, rightly, seeing these congressional results as a repudiation of the loudmouth socialist ‘Squad’ in the House of Representatives. Narrowly re-elected Abigail Spanberger (D-Virgina) was fuming on a three hour conference call with House Democrats last Thursday. “We need to not ever use the words ‘socialist’ or ‘socialism’ ever again,” she said. “It does matter, and we have lost good members because of that.”

Democrats also failed to flip any state legislatures despite spending big. Republicans won the Montana governorship and majorities in the New Hampshire House and Senate (a state that went convincingly for Biden). Republicans will hold 24 of the 36 states in which legislatures draw district lines for Congress. This solidifies Republican power in redistricting after the 2020 census, which sets the terms for the next five congressional cycles. Constitutionally, the House is the source of tax policy and most fiscal bills.

There was also a lot of good news on ballot initiatives. As my colleague Daniel Pyror has written, this election was a victory for drug policy reform, with legalisation of cannabis and psychedelics, and decriminalisation of all drugs in Oregon. In California, that supposedly unbeatable progressive heartland, ballot initiatives backed flexible employment for Uber, Lyft, and other gig economy workers. Those trusty Californians also rejected an affirmative action amendment that would have effectively legalised discrimination — a rejection of critical race theory when actually put to a voting public, even without a major public campaign.

This result, despite some of the mood music in recent days, was no victory for Trump. Indeed, if the presidential election was a referendum on Trumpism, it lost emphatically – by a big margin in the popular vote and a decent amount in the electoral college. Biden was not a particularly strong candidate, but won by simply being ‘Not Trump’.

Nevertheless, Republican ideas are clearly still popular and the party outperformed Trump’s vote across the country. Trump lost Maine by 10 points, but the state’s Republican Senator, Susan Collins, won her race by eight points. Trump lost New Hampshire by seven points, Republican Governor Chris Sununu won by 32 points.

There were other significant bright spots for the party. In a rejection of the ‘woke’ identity politics agenda, Republicans expanded their support among women, African Americans and Latinos. Trump showed expanding economic opportunity, highlighting decades of mismanagement of Democrat-controlled cities, reducing black unemployment to historically low levels and backing charter schools, is a strategy that can attract all sorts of voters. There is no reason other Republicans cannot replicate this model, putting them in a good position to take back the House of Representatives in 2022 and the presidency in 2024.

The essential question now for Republicans is what they choose to take out of this election. With Trump rejected, this would be an ideal opportunity to put the party back on the side of sensible economic policies. Republicans in Congress have displayed unprincipled silence about Trump’s gigantic spending and national debt increases. This is their opportunity to rediscover their backbones with a Democrat in the White House.

Overall, not too shabby a result.

Click here to subscribe to our daily briefing – the best pieces from CapX and across the web.

CapX depends on the generosity of its readers. If you value what we do, please consider making a donation.

Matthew Lesh is Head of Research at the Adam Smith Institute.

Columns are the author's own opinion and do not necessarily reflect the views of CapX.