On the economic front, Kamala Harris and Donald Trump are promising Americans an interventionist government that will give them the policies they demand. And whether those solutions are clear or vague, good or bad, seems secondary.
Economic issues are almost always at the top of the list of major topics Americans want to hear about during elections. Polls show that the upcoming presidential election will be no exception, with inflation, family purchasing power and housing consistently among voters’ top concerns.
Donald Trump and Kamala Harris have understood this and have been working, for months for the former and for a few weeks for the latter, to explain what they intend to do to meet economic expectations and what sets them apart. True to his usual style, the Republican often makes statements that are as vague as they are spectacular, where it is not always easy to distinguish concrete proposals from simple toga effects. Less well-known, the new Democratic candidate has begun to explain how she intends to distinguish herself, not only from her thunderous opponent, but also from the one she has just replaced at short notice, Joe Biden, whose vice-president she has been for a little over three years.
Common points
There are obviously many differences between the two candidates. But there are also common points. Starting with the fact that they present themselves as the champions of the average American.
Those who have remembered that the United States is the homeland of laissez-faire economics will also be struck by how both candidates, from the right and the left, promise to interfere in the functioning of markets.
And then there is this vagueness in the proposals of the two candidates. In the case of Trump, this is not a surprise. We have understood, for a long time, that the politician likes to play by ear, that he is not afraid to say one thing and its opposite and that he does not care about the opinion of experts or simple reality.
In Harris’s case, we have had less chance to see her in action. Her allies call her pragmatic, that is, less driven by the desire for ambitious reforms than concerned with making more modest but concrete progress on important issues. Her opponents describe her alternately as a left-wing ideologue, even a “communist,” or, on the contrary, as a politician who can change her ideas according to fashions and popular moods.
Cost of living, housing, commerce…
For months, the Democratic camp has been telling Americans that their economy is not doing as badly as they think, and that all you have to do is look at the numbers on economic growth, employment, and even inflation to see that Joe Biden’s United States is doing much better than most other developed countries. In a sign of the failure of this approach, Kamala Harris seems to have chosen to largely ignore this record of her own administration in favor of putting forward proposals aimed at addressing voter dissatisfaction and malaise.
To do this, Harris promises to ensure that there is more competition between grocery stores and to prohibit them from making abusive profits. She wants to reinstate the tax credits for families with children put in place during the pandemic. She even proposes to triple them for the first year of a newborn’s life. On the housing front, she promises to build three million new homes, thanks to a combination of tax breaks for builders and the relaxation of zoning rules, in addition to $25,000 in assistance for first-time buyers.
Trump, for his part, has pledged to rapidly reduce the cost of car insurance and cut energy prices in half, but has not specified how he will do it. He, too, has promised to build more housing, while noting that deporting millions of illegal immigrants would make room for others. He has also promised to rein in the U.S. Federal Reserve, which has raised interest rates to curb inflation but which he blames for the problem.
The former president says he is counting on economic development to improve the lot of his fellow citizens. To do this, he promises to renew his significant tax cuts for businesses and wealthy individuals from 2018, which will soon expire. He even proposes to lower corporate taxes a little further. He also plans to relax environmental and energy regulations.
Having always viewed international trade as a zero-sum game, he also promises to impose minimum tariffs of 60% on all imports from China and 10% — or perhaps 20% — on imports from all other countries, including Canada.
Harris rejects this approach. But not entirely. She has no intention of renewing Trump’s tax cuts, except for those that applied to Americans earning less than $400,000 a year and only a portion of the corporate tax cuts. As for trade, she calls Trump’s potential tariffs a massive tax on American businesses and consumers (estimated at nearly $4,000 for a middle-class family).
That hasn’t stopped Joe Biden from maintaining most of the tariffs his predecessor had already put in place. Or even from adding more in certain sectors, such as electric vehicles and microprocessors. Nor has Kamala Harris said she might impose new ones in certain “targeted” areas.
The sigh of the experts
Pundits have greeted many of these ideas with a great sigh of discouragement and resignation. Even though many people believe it, they say, it is false to say that food inflation has been caused primarily by corporate profiteering and that protectionism serves the interests of households. Moreover, Trump’s tariffs would be inflationary.
It would be a good idea to help build more housing, but giving new buyers $25,000 before they get started will only fuel the price hike. As for central banks, they are more effective at controlling inflation when they are free from political pressure than when they are free from political pressure. And if nothing is changed, all of these measures, especially those of Donald Trump, will only increase the already problematic federal government deficit.
But most importantly, our experts explain, most of these proposals are so vague that it is difficult to know what to think of them. More details may come in the coming weeks, but it is better not to have too many expectations, they say. American presidential elections have not accustomed us to going beyond broad guidelines and political slogans.