Democratic U.S. presidential candidate and former Vice President Joe Biden speaks about the Trump administration’s handling of the coronavirus disease pandemic during a campaign event in Wilmington, Delaware, June 30, 2020.
Kevin Lamarque | Reuters
It’s ironic that we are starting to read reports about investors fretting over the possible election of Joe Biden as president. President Donald Trump and his accomplices in the GOP have broken every rule about what it takes to secure long term prosperity.
First, Republicans have increased the country’s deficit spending and resulting debt without any benefit for the vast majority of Americans. When Republicans supported Trump’s 2017 tax cut, they promised that the resulting economic gains would more than make up for lost tax revenues. They were wrong.
Instead, the tax cut provided a very temporary “sugar high” that employers used largely to buy back their own shares that will provide no particular long term, broad-based benefit.
Second, many of the regulatory changes enacted by the Trump administration may have led to short-term cost decreases for businesses but also to long term costs for working Americans. For example, environmental rollbacks and the resulting increase in greenhouse gas emissions could lead to thousands of additional deaths each year.
The EPA justified these changes by claiming they will “provide certainty for states, tribes and local governments.” Hardly. The real certainty is increased health care expenses, poorer health outcomes and investments to reverse these policies in a future administration.
U.S. consumers end up on the short end of these changes. As a report from Energy Innovation noted, “Freezing federal fuel economy and [greenhouse gas] emissions standards will harm U.S. consumers, who will pay more money to drive their cars the same distance.”
The Trump administration has also proposed rules to roll back protections for workers, ranging from coal miners to oil rig operators to those at meat-packing plants.
An analysis from the Center for American Progress estimates that the Trump Administration’s rollbacks on overtime eligibility and protections related to retirement advice could cost working Americans $18 billion annually.
So regular Americans will pay the price in poorer health, higher expenses and less savings as a result of Trump’s short-sighted policies to benefit a portion of the business community.
Third, investors value certainty. Trump provides none. How are investors or anybody else to predict what a second Trump term might look like when in the first term he tweeted his way out of the Paris accords and World Health Organization, pretended to battle China and Russia and then bowed to them and made policy on the fly on a weekly basis.
Will he start more trade wars or fewer? Will he respect science in any fashion or continue to proclaim himself as the only person smart enough to decide important issues?
Finally, the best employers know they have to build their businesses by partnering with a healthy and talented workforce. Yet Trump has closed our borders to skilled foreign workers and shredded the Affordable Care Act’s protections designed to keep our people healthy.
Long term prosperity doesn’t look anything like the economy Trump is trying to build.
Joe Biden’s plans would not only lead to greater long term economic growth; they would also spread the bounties of that growth much more broadly than Trump has done.
They also reflect a more sophisticated understanding than Trump’s about how to use the federal balance sheet to create long term growth for the economy in a way that will benefit a much broader swath of our population.
When Biden talks about reversing the 2017 tax cut by raising taxes on the wealthiest Americans, he makes it clear that families earning less than $400,000 annually won’t be affected. But he knows that there are more productive uses for these additional funds – like investing in infrastructure, improving educational opportunities, buying more American-made goods and advancing research and development – than facilitating share buybacks.
When he promises to bring supply chains back to the U.S., he isn’t only responding to the problems we’ve had accessing protective equipment in the battle against Covid-19. He’s also prepared to fix an almost unbelievable problem that Trump’s 2017 tax cut created: it rewarded companies that shifted profits linked to U.S. research and production to foreign countries.
And when he promises to be a friend to working people, making it easier for them to join unions, it’s because he knows that collective negotiation and collaboration are great ways for Americans to secure a better future for themselves and their families.
So indeed, it is ironic that investors worry about a President Biden. Stronger finances, shored up infrastructure, less pollution, more domestic manufacturing and more secure workers are a much better bet on future prosperity than anything offered up by the Trump administration.
After a career as a senior executive in the telecommunications industry, Jack Markell served as Governor of Delaware from 2009-2017 and as Chair of both the National Governors Association and the Democratic Governors Association.