The Lost Rust Belt

If you’ve ever watched the film Nomadland, you’ll recall the poignant tale set against the backdrop of the 2008 financial crisis. Fern, who, after the 2008 financial crisis, loses her job at a US Gypsum plant in Empire, Nevada. Unable to sustain herself, she sells her belongings, buys a van, and sets out on a nomadic journey, picking up odd jobs along the way. Fern’s story reflects the harsh realities of free trade and the financialization of U.S. policies, echoing the broader struggles of the Rust Belt.

The Rust Belt, once the industrial heartland of America, including parts of New York, Pennsylvania, Ohio, Indiana, Michigan, Illinois, Iowa, and southeastern Wisconsin. This region thrived due to its geographic advantage, which stretched across the Great Lakes, facilitating the development of roads, canals, and railways. These transportation networks seamlessly linked the iron ore of northern Minnesota, Wisconsin, and Michigan's Upper Peninsula with the coal of the Appalachian Mountains, creating robust clusters of automotive and steel industries. By the mid-20th century, cities like Pittsburgh, Detroit, and Chicago had become industrial giants, with the Rust Belt accounting for over 45% of the nation’s GDP and more than half of its industrial workforce in the post-war boom of the 1950s.

However, the rise of economic globalization and free trade in the 1980s began to erode this industrial stronghold. A strong U.S. dollar made American goods expensive abroad, leading to a decline in exports. Capital fled to regions with cheaper labor, and the 1990s saw NAFTA accelerate the migration of manufacturing jobs to Mexico. As countries like Japan and Germany outpaced American manufacturing technologies, the Rust Belt’s industrial towns fell into decline, leaving behind abandoned factories, deserted bars, and rusting machinery—a stark reminder of their lost prosperity.

Despite its decline, the Rust Belt remains a critical battleground in U.S. elections. On July 15, following his nomination as the 2024 Republican presidential candidate, former President Donald Trump announced his running mate: J.D. Vance, a U.S. Senator from Ohio. Vance, hailing from Middletown, Ohio—a quintessential Rust Belt town—grew up in a working-class family. In his memoir, Hillbilly Elegy, Vance vividly recounts his tough upbringing in the Rust Belt and the hardships faced by the working white class who, after dedicating their lives to factory work, find themselves struggling in the wake of lost jobs and limited educational opportunities that trap them in socio-economic stagnation.

Trump and Vance's choice to focus on the Rust Belt is a strategic move to reclaim this pivotal region in the electoral map. They aim to galvanize support in key swing states like Wisconsin, Michigan, and Pennsylvania, spotlighting the struggles of Rust Belt communities as they seek to reassert their political influence.

The Association with Democrats

The Rust Belt was once a stronghold of the Democratic Party. Its deep-rooted connection to the party dates back to the New Deal era of the 1930s. Under Franklin D. Roosevelt, the New Deal introduced sweeping reforms that revitalized industrial growth and empowered labor unions, granting workers the right to organize. As the industrial powerhouse of America, the Rust Belt naturally became a bastion of Democratic support, with Roosevelt securing sweeping victories in the region during the 1932 and 1936 elections. The New Deal’s focus on economic security and social welfare resonated deeply with the Rust Belt’s working-class communities, forging a lasting allegiance to the Democratic Party.

However, this strong bond began to fray towards the end of the 20th century, particularly during Bill Clinton’s presidency. Despite Clinton's initial promises to revitalize industrial policy and support labor, his administration ultimately prioritized free trade and financial deregulation. These policies hastened the decline of the Rust Belt’s manufacturing base, with NAFTA and other trade agreements leading to significant job outsourcing. Financialization favored Wall Street over Main Street, leaving Rust Belt communities struggling with economic hardship.

Clinton’s administration promoted asset ownership—such as stocks and homes—as a replacement for the secure, well-paying manufacturing jobs that were disappearing. However, this promise proved hollow. The burst of the tech bubble in 2000 led to significant stock market losses, and the 2007 foreclosure crisis resulted in widespread home loss. These financial crises further undermined the Rust Belt’s economic stability and intensified the region’s sense of abandonment. As the Democratic Party shifted its focus towards coastal elites and minority rights, many in the Rust Belt felt increasingly neglected and marginalized, leading them to reassess their political loyalties.

Despite this growing disillusionment, some voters in the Rust Belt swing states still cling to their party loyalty. They remember with gratitude the New Deal legacy that once supported their communities and shaped their identity. his is especially the case in the upper Midwest, like Michigan and Wisconsin. This mix of historical sentiment and contemporary frustration has transformed the Rust Belt from a dependable Democratic stronghold into a crucial swing region, where voters' allegiance is now fiercely contested in national elections.

Rust Belt's Shift Away from the Democrats

The Rust Belt’s shift away from the Democratic Party came into sharp focus during the 2016 election when a significant number of voters in the region turned to Donald Trump. Trump not only secured decisive victories in traditionally Republican states like Ohio and Indiana but also narrowly flipped the long-standing Democratic strongholds of Michigan, Pennsylvania, and Wisconsin, winning them by razor-thin margins of 0.2%, 0.7%, and 0.8%. This Rust Belt support was instrumental in propelling Trump to victory, reflecting a deep-seated frustration that had been brewing for decades as the region’s industrial backbone crumbled and the sense of abandonment by the Democratic Party grew.

Over time, the once-strong institutional ties between the Rust Belt and the Democrats—embodied in unions and local governance—began to fray or were actively dismantled. This disconnection left the region increasingly open to Republican appeals, and Trump masterfully tapped into the anger and resentment of white working-class voters who felt left behind by a party they believed had shifted its focus to minorities and elites. For many, it wasn’t just about the economic hardship; it was also a perceived loss of social status and identity.

Hillary Clinton’s proposals—like tax credits and job training programs—were seen as more of the same empty promises that had failed to deliver real change during her husband’s presidency. In contrast, Trump’s outsider message, promising to "Make America Great Again" by reversing the trends that had devastated the Rust Belt, resonated deeply. His appeal turned the region into a battleground that ultimately tipped the election in his favor.

By 2020, however, the Rust Belt swing back towards the Democrats. Trump’s promised economic revival had not materialized as many had hoped. The manufacturing boom he touted remained elusive, and the COVID-19 pandemic only worsened the region’s economic fragility. Joe Biden, sensing the growing dissatisfaction, positioned himself as a centrist, emphasizing economic recovery, infrastructure investment, and a return to stability—messages that struck a chord with voters weary of Trump’s leadership.

The pandemic played a crucial role in reshaping voter sentiment. Trump’s downplaying of the virus and the resulting economic fallout were widely criticized, in stark contrast to Biden’s cautious and empathetic approach. This contrast, combined with a growing disillusionment with Trump’s unmet promises, helped shift the Rust Belt back towards the Democrats. In the end, these factors narrowed Trump’s margins in key states, playing a critical role in securing Biden’s victory.

Focus on the 2024 Election in Rust Belt

As the 2024 U.S. election heats up, the Rust Belt's swing states once again emerge as the critical battlegrounds where both parties are fiercely competing for control. Currently, Kamala Harris holds a slight edge over Donald Trump in Wisconsin and Michigan, leading by 1% and 2%, respectively, while Trump narrowly leads Harris by 0.2% in Pennsylvania. Last Saturday, Trump returned to Pennsylvania for a rally, aiming to galvanize support and win over undecided voters.

On the policy front, Harris’s aggressive stance on housing subsidies could resonate with Rust Belt voters who are grappling with economic pressures and housing challenges. She advocates for a substantial increase in affordable housing supply and proposes generous subsidies for first-time homebuyers—contrasting sharply with the Republicans' limited focus on housing aid. In the realm of social welfare, Harris’s “Lowering Costs” initiative aims to alleviate the impact of inflation on low- and middle-income Americans. Her proposals include affordable healthcare, curbing corporate price-gouging, providing free preschool education, forgiving student loans, raising the minimum wage, and controlling rent prices. These policies are likely to appeal to the less affluent working class in the Rust Belt, potentially boosting their inclination to support the Democratic ticket. Furthermore, her commitment to clean energy aligns with the desires of Rust Belt regions seeking to transition from traditional industries to sustainable alternatives.

However, the Rust Belt has long been a stronghold of the blue-collar white working class, and Harris’s status as a woman of color—though historic—might not be as warmly received by some voters in these traditionally conservative areas. Nonetheless, the deep-rooted Democratic identity in parts of the Midwest might mitigate this potential bias, encouraging voters to support the party of their forebears despite any reservations about Harris’s background.

On the other hand, Trump's policies are tailored to appeal to the traditional economic and cultural values of the Rust Belt. His emphasis on protecting the manufacturing and energy sectors through aggressive trade policies and a commitment to fossil fuels resonates with the region's industrial legacy. Trump's stance on immigration, which includes prioritizing American workers over foreign labor, building a border wall, and cracking down on sanctuary cities, is likely to attract voters concerned about job security and national sovereignty. His proposal to increase tariffs on Chinese goods to protect domestic manufacturing further aligns with the Rust Belt’s interests.

However, Trump faces a challenge: his first term left many Rust Belt voters disillusioned. To regain their trust, he needs to invest significant resources and demonstrate a genuine commitment to the promises he made during his first campaign. The addition of Vance to his ticket is a strategic move to reconnect with disaffected voters in the region. Vance, with his deep roots in the Midwest and personal narrative of overcoming adversity, helps Trump’s campaign resonate more deeply with Rust Belt voters. Together, they aim to rekindle the "Make America Great Again" spirit and promise a revitalization of American manufacturing, striving to bring the Rust Belt back into the Republican fold.

Next Big Thing – The televised debate between Harris and Trump - tentatively scheduled to take place on Sept. 10^th. But wait… Given concerns on ABC’s impartiality, Trump could pull out from the debate last minute.  Nonetheless, the show must go on - we shall see…