Voters show they know economics better than the New Right

On Tuesday, Republicans were routed at the ballot box, losing — as of Wednesday night — a net of seven Senate seats, 38 House seats, and five governorships.Democrats are celebrating. Republicans are pointing fingers. And a discussion is taking place on how Republicans blew a historic opportunity to correct the course of the country after President Donald Trump pulled off arguably the greatest political comeback in American history. (More on that in a minute.)While most attention has focused on the GOP’s drubbing, less attention is being paid to some crucial votes that took place on initiatives across the country that saw voters embrace tax relief, say no to a “free” universal school lunch program, and reject a massive tax on wealth. In the Golden State, Proposition 40, a proposal that would have implemented a “one-time” 5% tax on wealth above $1 billion, appears headed for certain defeat. Yes votes for the policy, which likely would have triggered massive capital flight and resulted in less state revenue, were trailing no votes by more than 850,000 as of Wednesday afternoon.In neighboring Arizona, voters passed Proposition 316, a statute that bans local governments from passing grocery taxes without voter approval and caps new or increased grocery taxes at 2%. The vote was a landslide, with more than 61.4% voting in favor, with 83% of the vote reported.Perhaps the biggest surprise was Florida, where voters cleared the 60% threshold to pass Amendment 3, a constitutional provision that will increase the $50,000 homestead property tax exemption to $250,000 by 2028. The amendment will result in property tax relief for millions of Florida homeowners. (Yes, economists warn that capping property taxes could shift political power toward state governments, but property taxes are deeply flawed, and less revenue for local governments could encourage them to find more efficient ways to deliver services.)Meanwhile, voters in North Dakota rejected a ballot measure that would have required public schools to provide “free” breakfast and lunch to all students, regardless of their household income. Those meals would not have been free, of course. The program would cost taxpayers an estimated $129 million in new and ongoing biennial expenditures, and the policy likely would have been accompanied by other unintended consequences.The list goes on: In Iowa, an amendment was passed making it more difficult to hike income taxes.The success of these ballot initiatives shows that Tuesday didn’t have to be a disaster for the GOP. The party’s drubbing was driven by its own bad policies, mistakes, and failed promises.On election night in 2024, Trump said, “I’m not going to start a war. I’m going to stop wars.” Instead, he launched a war with Iran that led to a surge in gasoline prices, a conflict even his friends at Fox News said was avoidable.The president repeatedly pledged to “end inflation on Day 1.” Instead, inflation went up, in no small part because of the president’s reckless use of tariff powers, which increased the price of consumer goods and damaged trade relationships.The president wants to blame Fox News for his loss. But the truth is, his policies made the affordability crisis worse. (The president’s shady financial dealings that saw his net worth increase by $2 billion did not go over well with voters, either.)And then there’s Vice President JD Vance, who saw fit to not just criticize “laissez-faire” economics, but pro-market figures like Ronald Reagan, Margaret Thatcher, and the Nobel Prize-winning economist Milton Friedman.“American economic policy on the Right is now much more Alexander Hamilton than it is Milton Friedman,” said Vance.The vice president missed the mark on Hamilton, who was hardly the “tariff-and-subsidy nationalist” he portrayed him to be. But what’s astonishing is that, amid an explosion of socialism in the Democratic Party, Vance would champion tax hikes, economic protectionism, and central planning as the solutions to America’s woes. (He also referred to the U.S. dollar’s status as the world’s global reserve currency as a “resource curse.”)Trump and Vance were not on the ballot on Tuesday, but their brand was, and voters rejected it.Voters are often accused of being “irrational,” and not without reason. They often support policies that are clearly economically harmful.Yet on Tuesday they did the opposite: Down the ballot, they wisely rejected eat-the-rich and “free” lunch schemes, while passing tax caps and tax cuts that strengthen property rights and protect economic freedom.CRYING ‘SOCIALISM!’ ISN’T A STRATEGY — AT LEAST NOT A WINNING ONEIt turns out that sound economic ideas, which the New Right was keen on throwing out in favor of economic populism, are more appealing to voters than politicians realize.Recognizing that will be the first step toward not just rebuilding the GOP, but fixing the financial mess the U.S. faces.