President Joe Biden failed to convince voters that his policies led to one of the most surprising economic turnarounds in decades. Now that he’s no longer atop the Democratic ticket, party loyalists have to reckon with whether Vice President Kamala Harris can make a more effective case. “Republicans have had success in blaming Biden for inflation. Thus, it makes it easier for another Democrat to escape that branding,” said Brookings Institution senior fellow Aaron Klein, a former Treasury official and congressional economist. Still, while that may give Harris — or another Democrat — some flexibility to pivot away from the inflationary associations voters attached to Biden, they’ll have to lay out a clear economic vision to do so. “This is the threshold question to any Democrat who wants the nomination: What would you do differently than Biden?” Klein said. If they don’t have an answer, “it's going to be pretty difficult for you to escape some of the negatives associated with the president's economic agenda.” With voters consistently ranking the economy as a top issue of the 2024 campaign, Harris’s messaging on the topic will be one of the keys to shoring up party support and fending off any potential challengers at the Democratic National Convention in Chicago next month. The Trump campaign is already working to link Harris to the high prices that have pushed consumer sentiment to basement levels and kept it there. Ohio Sen. JD Vance, former President Donald Trump’s pick for Vice President, posted on X that Harris co-signed “open border and green scam policies that drove up the cost of housing and groceries. She owns all of these failures.” Democrats are hopeful that Harris can inject some life into the narrative that the administration’s economic policies have worked. Felicia Wong, a Biden-Harris transition adviser who leads a 501c4 linked to the progressive economic think tank the Roosevelt Institute, told MM that Harris’s track record going after big banks and mortgage lenders as California attorney general would pair well with her skills as “a very, very good storyteller.” If she campaigns on a message of making the “wealthy and corporations pay their fair share” to invest in services like child care, education and housing, “it's a great argument with respect to policy. It's a great argument with respect to politics,” Wong said. That may require expanding on the administration’s current economic policy vision, Tara Raghuveer, director of the Tenant Union Federation, told Katy. And if “Harris is smart and if the party is smart — in this moment — they [will] actually talk about Donald Trump as a union buster and a slumlord,” she added. She called on Harris to continue to pursue the 5 percent rent cap Biden proposed earlier this month. Harris might also benefit from economic tailwinds that never seemed to have a bearing on Biden’s approval ratings. Inflation has fallen steadily. The labor market is softening, but still healthy. The Federal Reserve is expected to cut interest rates in September. Collectively, that could give the Democratic candidate a boost going into the final weeks of the campaign, RSM principal and chief economist Joe Brusuelas told MM. Perhaps most importantly, for the first time in weeks, there are signs that corporate Democrats and donors are a little more optimistic about the party’s chances in November. Jeffrey Sonnenfeld, a professor of management at the Yale School of Management who regularly consults with top U.S. CEOs, told MM that business leaders in the technology and venture capital communities are “are exhilarated over this choice.” Reid Hoffman, the founder of LinkedIn and one of the party’s biggest donors, posted on Sunday that Harris was the “right person for the right time” and cited her leadership on economic issues as a reason why she’s uniquely positioned to push back on Trump. “Everyone is invigorated and excited for now,” Democratic Party strategist James Carville told Sam, adding that he thinks Democratic donors who had rebelled in the weeks following Biden’s disastrous debate performance on June 27 “are coming off their bench and grabbing their helmets.” “My advice to her would be: You’ve got to tell people who you are,” he said. “Don’t overthink this shit. Go out there.” IT’S MONDAY — So much for a peaceful Sunday. Are you a banker? Do you work in PE or the hedge fund world? What do you think a Harris administration would mean for your industry? Let me know at ssutton@politico.com and @samjsutton. And for all things housing and CFPB, contact Katy O’Donnell at kodonnell@politico.com.
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