IA “FACT” recently wrote about the political tandems Trump-Vance, Harris-Waltz, about the fact that the fight for victory in the American elections is not fought alone, but “partners in the race”, in fact, teams from which a synergy effect is expected.
Today we will focus on the stakes in the economic development of the United States in their campaign programs that Kamala Harris and Donald Trump make. In what ways are they and the parties they represent strong in economic matters, and in what moments do they sag and sin with outright populism. It is worth noting that behind the opinion mass media, the candidates will primarily fight for the votes of the so-called independents, that is, independent voters who do not associate themselves with any of the parties.
What are American “elephants” and “donkeys” betting on in the election race?
Many analysts agree that the economy is not Kamala Harris’ strongest point. It is rather a “grasshopper” of Donald Trump, which actively brings him bonuses in the form of votes from the electorate. By the way, Biden is even less concerned about economic issues than Kamala. Moreover, he is accused of increasing inflation. But this accusation is not entirely correct. After all, Trump and his administration, who started the money machine, are responsible for inflation. But since inflation blossomed with a magnificent light precisely during the reign of Biden, he was appointed guilty.
Public opinion has formed a stereotype that Democrats are not strong in the economy, they are more focused on inclusiveness and protection of people’s rights. Trump cleverly distanced himself from his competitors by playing on this weak point of the Democrats, focusing the public’s attention on the fact that during his reign the stock market indices rose and in general trust in Trump was high.
Probably, Harris should have also made a bet on economic issues, promising the electorate that she would be able to hear and satisfy all their economic expectations and be able to compete with Trump on this issue. Such a tactic could sway undecided voters to her side.
Why are Democrats populists?
Modeling Kamala’s future tactics should she be elected to high office, it is always worth noting that she is a democrat. And the Democrats always advocate for the expansion of social spending, the increase of the budget and budget programs. That is, they adhere to left-wing or left-centered politics. Republicans, on the other hand, are in favor of reducing budgets, for a strong market that will create jobs and provide the population with acceptable incomes and a standard of living.
It is important to take this context into account and understand that voters expect high macroeconomic and macrofinancial results from both candidates. It is important for the electorate to know that the policies of those for whom they will vote will be quite consistent, and that the desire of the Democrats to expand something, and the Republicans to reduce, in general, will not affect the general economic policy of the country too much. From the point of view of the American citizen, it is very understandable to wish that the savings accumulated by him throughout his life would not depreciate and that a stable and secure old age would await him.
Inconsistencies and deviations in the pre-election promises of Harris and Trump
Not so long ago, Trump characterized cryptocurrency as a bogus asset that he does not believe in. But when it came to the election race to maximize the number of votes and funding for his participation in the election, he changed his mind. Now he stated that he plans to legalize crypto and that crypto currency adepts are his like-minded people.
At the same time, Kamala can appoint by the Minister of Economy and today’s Head of SEC Gary Gensler, who is not popular in the crypto community. In her campaign speeches, Kamala focused primarily on several points important to her voters: reasonable food prices, utility bills, and medical expenses. The leitmotif of these messages was her confidence that all this would improve the living conditions of the middle class.
Kamala also declared her intention to introduce a federal ban on raising food prices. Rumors are circulating on the sidelines about her readiness to introduce prosecutorial prosecution of unscrupulous market participants who raise prices for products. Here it is worth mentioning the prosecutorial past of the presidential candidate, including 6 years as the attorney general of California, when she actively worked on reforms in the field of criminal justice and consumer protection. It is like a witch hunt, where some committee or procedure will monitor the presence of sellers who inflate the prices of their products and punish them.
And in general, according to economic theory, such a policy of protectionism and price restraint can ultimately provoke a new round of inflation and destroy a competitive market system. However, these populist slogans have many supporters among Kamala’s electorate.
According to experts, another attempt by the Democrats to build socialism from the beginning is doomed to failure. Therefore, a relatively recent story from domestic practice can be an example – the situation with Ukrainian fuel in 2022. One of the reasons for the fuel shortage was the effect of fuel price restrictions, when gas stations found themselves in a situation where they would have to operate at a loss. That is, no one – neither consumers nor sellers – benefited from such protectionism.
That is, Harris’s populist promises mean her intention to fight not the cause, but the consequences. Perhaps this populism will give her votes, but it is an absolutely economically inept strategy.
At the same time, Harris, who is considered by many to be a moderate, wants to raise the corporate tax rate to 28%. This is an unprecedented increase in this tax over the past 40 years. But by raising the corporate tax, politicians will inevitably hit corporate activity and the economy in general. That is, this initiative is a failure.
On medicine, the Democrats promise to promote transparency and competitiveness of the pharmaceutical industry, and this is a constructive intention. Also, Harris plans to pick up Biden’s baton in lowering the price of popular medical drugs to make them more affordable for the population. This will be done through Medicare and other popular federal programs.
And, finally, the traditional practice of Democrats to maintain their popularity among the masses is to write off debts for education and medicine. Also, “donkeys” plan to introduce assistance for newborns in the amount of 6,000 dollars and 3,600 benefits for the birth of babies. Here, she is trying to fend off accusations from the far right that Democrats have failed to care enough about American families.
Another emphasis in their election campaign is on housing financing. Harris calls for the construction of 3 million housing units during his term as president. As part of this program, a bill has been created that will create tax benefits for those who purchase their first home. It is also planned to create an innovation fund of 40 billion dollars for companies that build affordable rental housing.
Seems like a great program that includes benefits and innovation and attempts at deregulation. It seems that such social programs should be, if they correlate with market logic. But social initiatives should strengthen the economy, not drag it to the bottom. Instead of educating the population to create the conditions for savings, Kamala is pandering to people who have very ambiguous leftist views.
Prosecutorial malpractice dictates the need to seek, find and stop the conspiracies of landlords and investors, thus reducing the number of those who invest in real estate. To implement the construction programs of the budget, it is necessary to collect 2,700 billion dollars for the next 10 years. This will inevitably lead to a deficit in the budget, which is already in deficit.
Stability in the economy is above all else
The economic narratives of the former prosecutor speak for themselves. But in reality, those who influence the macroeconomic situation in the country are primarily required to maintain a stable exchange rate, a stable currency, and stable inflation. In such a macroeconomic context, the market will be able to self-regulate. And where he cannot, antimonopoly legislation will come to his aid.
Tatyana Morarash
