There’s been a lot of buzz about the fresh analysis of the 2024 elections by Democratic data hound David Shor, so I tried to summarize his findings and their implications at New York:
Arguments over how Trump won and Democrats lost in 2024 remain in the background of today’s political discourse: Trump fans are focused on exaggerating the size and significance of the GOP victory, and Democrats are mostly settling scores with one another. But there’s also some serious analysis of hard data underway. And this week, an election diagnosis from Blue Rose Research’s David Shor, who was interviewed by Vox’s Eric Levitz and the New York Times’ Ezra Klein, is drawing particular attention.
Shor’s findings largely confirm the conventional wisdom about how Trump won in 2024, including three main points: (1) Trump made significant gains as compared to his 2020 performance among Black, Latino, Asian American, immigrant and under-30 voters; (2) Trump did better among marginally engaged voters than did Kamala Harris, reversing an ancient assumption that Democrats would benefit from relatively high turnout; and (3) inflation was the overriding issue among persuadable voters, even as Democrats overemphasized the threat to democracy posed by Trump’s return to power.
It’s Shor’s explanation of why these trends occurred that’s most interesting. Among every Trump-trending slice of the electorate, unique pressures related to the COVID-19 pandemic and the dramatic inflation that followed undermined support for the incumbent Democratic Party. But there were some other things going on. For example, the non-white-voters trends reflected, Shor told Levitz, a delayed ideological polarization that had hit white voters decades ago:
“If we look at 2016 to 2024 trends by race and ideology, you see this clear story where white voters really did not shift at all. Kamala Harris did exactly as well as Hillary Clinton did among white conservatives, white liberals, white moderates.
“But if you look among Hispanic and Asian voters, you see these enormous double-digit declines. To highlight one example: In 2016, Democrats got 81 percent of Hispanic moderates. Fast-forward to 2024; Democrats got only 57 percent of Hispanic moderates, which is really very similar to the 51 percent that Harris got among white moderates.
“You know, white people only really started to polarize heavily on ideology in the 1990s. Now, nonwhite voters are starting to polarize on ideology the same way that white voters did.”
To put it another way, non-white voters were disproportionately loyal to the Democratic Party for many years, and that loyalty inevitably began to wear off. The intense ideological polarization of the 2024 election sped that process along, even though one might expect that Trump’s barely concealed racism and overt nativism would slow it down. Why didn’t they? Mostly, Shor suggests, because Trump-trending voters weren’t viewing or reading media coverage of the 45th president’s horrific views and conduct:
“People who are the least politically engaged swung enormously against Democrats. They’re a group that Biden either narrowly won or narrowly lost four years ago. But this time, they voted for Trump by double digits.
“And I think this is just analytically important. People have a lot of complaints about how the mainstream media covered things. But I think it’s important to note that the people who watch the news the most actually became more Democratic. And the problem was basically this large group of people who really don’t follow the news at all becoming more conservative.”
The massive impact of diverse media consumption is most evident in Shor’s analysis of the single-most-stunning finding about the 2024 results: the huge gender gap among young voters, with Trump doing exceptionally well among young men, as he explained to Klein:
“18-year-old men were 23 percentage points more likely to support Donald Trump than 18-year-old women, which is just completely unprecedented in American politics …
“If you look at zoomers, there are some really interesting ways that they’re very different in the data. They’re much more likely than previous generations to say that making money is extremely important to them. If you look at their psychographic data, they have a lot higher levels of psychometric neuroticism and anxiety than the people before them.
“If I were going to speculate, I’d say phones and social media have a lot to do with this.”
Klein suggests some very specific points of divergence between young men and young women that Shor agrees with entirely:
“It seems plausible to me that social media and online culture are splitting the media that young men and women get. If you’re a 23-year-old man interested in the Ultimate Fighting Championship and online, you’re being driven into a very intensely male online world.
“Whereas, if you’re a 23-year-old female and your interests align with what the YouTube algorithm codes, you are not entering that world. You’re actually entering the opposite world. You’re seeing Brené Brown and all these other things.”
Finally, Shor provides some definitive evidence that Democratic messaging about Trump’s anti-democratic characteristics fell on rocky ground. By an astonishing 78 percent to 18 percent margin, voters said “delivering change that improves Americans’ lives” was more important than “preserving America’s institutions.” This finding suggests that in 2024, and right now, Democrats should exploit Trump’s broken promises about the economy and other practical concerns instead of focusing on how Trump has broken those promises. This isn’t a binary choice as much as a perspective on how to talk about outrages like Elon Musk’s assault on the federal government, which negatively affects the benefits and services Americans rely on and is intended to benefit Musk’s fellow plutocrats via skewed tax cuts and paralysis of corporate oversight, as Shor told Levitz:
“Trump and Elon have really spent the first part of their term diving into the biggest weaknesses of the Republican Party — namely, they’re trying to pass tax cuts for billionaires, they’re cutting essential services and causing chaos for regular people left and right, while trying to slash social safety net programs. It’s Paul Ryan–ism on steroids.”
I think everyone should be very skeptical of the Paulson plan. Here’s why:
The root cause of the credit “freeze” is the inability of the market to determine the correct price of mortgage-backed securities, not the increase in the number of foreclosures. [If mortgage-backed securities didn’t exist, then the market would know exactly which securities were at risk and assign an appropriate price to them. While many companies and individuals would suffer real financial loss, markets and the broader economy would continue normally.] Without price clarity, risk is assessed at a “worst-case” level across all assets that involve collateralized debt securities, and buyers become scarce or non-existent. Without buyers (i.e., without a market price), per accounting rules, financial institutions are forced to write-down CDS’s at “fire-sale” prices. This triggers a series of actions that are either required by federal and state regulations (e.g., minimum capital requirements for banks) or market logic (e.g., risk aversion). A vicious downward spiral is thus set in motion, with the end result being that those with money don’t want to loan it to those who want money, and the economy slows to a halt.
Here are ten questions Henry Paulson should answer before any plan is approved:
1. Given the opacity of collateralized debt securities, how in the world can we – or the entities holding them – truly understand the problem we face?
2. Given that less than 3% of all mortgages are in foreclosure – an historically high and therefore troubling number, but certainly not a disaster – why are we having this problem at all? Why don’t the markets discount mortgage-backed securities by 10-25%, or whatever number seems appropriate to the level of risk? Are these securities so inscrutable that we can’t even determine a ballpark risk level? I find it illogical and ludicrous that smart, capable financial minds cannot figure out a financial instrument created by one of their own.
3. What is the scope of the “freeze”? What percentage of the debt markets is affected? What are the characteristics of the affected sections, e.g., commercial banks, investment banks, hedge funds?
4. What other solutions to the credit freeze were considered and why were they rejected?
5. Why is $700B to $1T the “right” number? How was that determined?
6. Are there smaller, less severe stop-gap measures that can be quickly implemented to buy more time to fully consider all options and/or think through all the potential consequences of the current solution?
7. If your proposal is implemented as is, or close to it, what ability would the Treasury have to deal any future monetary threats?
8. If your proposal is implemented, how will you determine the price at which to buy the troubled assets? Be as specific as possible.
9. What can you say to the 97% of mortgage holders who are not in foreclosure, who have made sacrifices to maintain their mortgages in good standing? Why should they be happy with this proposal, or confident that potential future threats can be adequately addressed?
10. Why can’t we implement a mortgage refinancing plan to address at-risk mortgages without bailing out the financial institutions that created, sold and/or bought them? In other words, why is it essential that CDS assets must be removed from the books before they can be accurately assessed?
Congressional Democrats, including Barack Obama, have not proven they truly understand the problem, nor are they offering any real alternatives. Like the Iraq War, we are facing a murky issue and are totally dependent on the opinion of a few people for both the facts and possible solutions.
All Democrats should push for 1) more time, 2) more facts, 3) more specifics about the bailout plan, 4) more oversight, and 5) more deliberation of alternatives. I’m not convinced that the economy will crash if this specific bailout plan isn’t approved by Friday. And I believe there’s a better way to open up these derivatives and accurately assess their value. In the end, no matter what we do, the economy is going to suffer. It’s just a matter how much and for how long.
I saw this brewing yesterday as well, glad you touched on it. The best that can come of scrapping the Paulson Plan and the Dems pushing a tough-on-Wall-St. plan is the potential for taxpayers to earn back off of their investment…
Say, for instance, the market does recover, America has a Green Industry explosion (or whatever will fix our industry/economy) and then when these bailed-out banks and companies eventually turn huge profits we’ll have a huge infusion to the government to rebuild and refocus our infrastructure. A powerful and calculated plan to generate revenue for the country, based loosely on the idea of ‘bailouts’ and coinciding with a national push to recovery could actually be, in a decade’s time, a beautiful silver lining to this debacle.
Here’s hoping.