>Economics is the part of the vice-president’s game that requires most work.
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>Don’t get me wrong: Kamala Harris made mincemeat of Donald Trump on Tuesday night. It was among the most one-sided debates I have ever watched. History may settle on September 10 as the turning point in the 2024 election and therefore as Trump’s real Waterloo (he’s had a few false ones). I sincerely hope so. In the meantime, Harris has an election to win. Nothing about America’s cognitive polarisation gives me confidence that her victory would be anything other than close. Which means that the health of the US economy, and voter perceptions of Harris’s grasp of it, remains just as critical to the outcome as before. Economics is Harris’s Achilles’ heel. She is as halting in discussing kitchen-table economics as she is fluent on Trump’s unfitness to be president, or the righteousness of Ukraine’s cause. Thankfully for Harris, Trump failed to bring that out in Philadelphia on Tuesday. Her skill at messing with Trump’s head brought her a reprieve. But she will need repeatedly to check that economic box in the next 52 days. Can she do it?
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>Before answering, let me clear up one easy misperception. Whatever the weaknesses in Harris’s economic pitch, nothing she has proposed would come close to the damage Trump’s plans would wreak. His “Trump tariff” agenda would push up US inflation, hit middle-class incomes, and cost potentially millions of jobs — not to mention the geopolitical fall out from full speed ahead deglobalisation. Then there are his plans to deport more than 10mn undocumented immigrants, as well as his loathing of the US Federal Reserve’s independence. Cumulatively, Trump’s misguided missiles could tip the US into recession in 2025. Nothing Harris is floating would come close to the damage of Trump 2.0. But she still needs to make the sale.
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>I have observed Harris’s various economic announcements with some puzzlement. A few of her proposals, such as renewing the child tax credit, make both political and economic sense. Some, such as her plans to tackle price gouging in the supermarket industry, could make political sense but are terrible economic ideas. The same applies to her opposition (via Joe Biden) to Nippon Steel’s acquisition of US Steel. Biden’s veto puts a bomb under the whole concept of “friendshoring” without doing anything for US employment. But it has doubtless helped cement Harris’s various union endorsements. Others, such as her proposal for a wealth tax on those worth more than $100mn, depend very much on the details. Wealth taxes are notoriously hard to administer but fit in with most people’s sense of social equity (including mine). It made political sense for Harris to propose a lower increase in the capital gains tax on the highest earners, setting it at 28 per cent compared to Biden’s 39.6 per cent. Given that Trump is trying to paint Kamala as a Kalifornia Kommunist, she needs to signal centrism.
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>What I am missing in all of this is a coherent overarching message. It is not enough to talk about rebooting the “opportunity economy” and backing the “dreams of the American people”, as Harris did in her opening answer on Tuesday night. These sentiments are fine but she needs to make her case more tangibly than that. To be sure, she is handicapped by her inability to distance herself too much from Bidenomics, which remains unpopular even though its track record is pretty good. Harris cannot repudiate her boss without bringing her own role as vice-president into question. Nor, given the polling numbers, which remain good for Trump on the economy, can she embrace continuity. Hers is a difficult needle to thread. She may get some help next week when the Fed cuts interest rates — although given the stubbornness of core inflation, probably by only a quarter of a percentage point. But she also needs to help herself. Right now, all I see is a confusing jumble of populist gimmicks, centrist reassurances, soothing rhetoric and a lot of shape-shifting. Economics is the part of Harris’s game that requires the most work.
1 Comment
>Economics is the part of the vice-president’s game that requires most work.
>
>Don’t get me wrong: Kamala Harris made mincemeat of Donald Trump on Tuesday night. It was among the most one-sided debates I have ever watched. History may settle on September 10 as the turning point in the 2024 election and therefore as Trump’s real Waterloo (he’s had a few false ones). I sincerely hope so. In the meantime, Harris has an election to win. Nothing about America’s cognitive polarisation gives me confidence that her victory would be anything other than close. Which means that the health of the US economy, and voter perceptions of Harris’s grasp of it, remains just as critical to the outcome as before. Economics is Harris’s Achilles’ heel. She is as halting in discussing kitchen-table economics as she is fluent on Trump’s unfitness to be president, or the righteousness of Ukraine’s cause. Thankfully for Harris, Trump failed to bring that out in Philadelphia on Tuesday. Her skill at messing with Trump’s head brought her a reprieve. But she will need repeatedly to check that economic box in the next 52 days. Can she do it?
>
>Before answering, let me clear up one easy misperception. Whatever the weaknesses in Harris’s economic pitch, nothing she has proposed would come close to the damage Trump’s plans would wreak. His “Trump tariff” agenda would push up US inflation, hit middle-class incomes, and cost potentially millions of jobs — not to mention the geopolitical fall out from full speed ahead deglobalisation. Then there are his plans to deport more than 10mn undocumented immigrants, as well as his loathing of the US Federal Reserve’s independence. Cumulatively, Trump’s misguided missiles could tip the US into recession in 2025. Nothing Harris is floating would come close to the damage of Trump 2.0. But she still needs to make the sale.
>
>I have observed Harris’s various economic announcements with some puzzlement. A few of her proposals, such as renewing the child tax credit, make both political and economic sense. Some, such as her plans to tackle price gouging in the supermarket industry, could make political sense but are terrible economic ideas. The same applies to her opposition (via Joe Biden) to Nippon Steel’s acquisition of US Steel. Biden’s veto puts a bomb under the whole concept of “friendshoring” without doing anything for US employment. But it has doubtless helped cement Harris’s various union endorsements. Others, such as her proposal for a wealth tax on those worth more than $100mn, depend very much on the details. Wealth taxes are notoriously hard to administer but fit in with most people’s sense of social equity (including mine). It made political sense for Harris to propose a lower increase in the capital gains tax on the highest earners, setting it at 28 per cent compared to Biden’s 39.6 per cent. Given that Trump is trying to paint Kamala as a Kalifornia Kommunist, she needs to signal centrism.
>
>What I am missing in all of this is a coherent overarching message. It is not enough to talk about rebooting the “opportunity economy” and backing the “dreams of the American people”, as Harris did in her opening answer on Tuesday night. These sentiments are fine but she needs to make her case more tangibly than that. To be sure, she is handicapped by her inability to distance herself too much from Bidenomics, which remains unpopular even though its track record is pretty good. Harris cannot repudiate her boss without bringing her own role as vice-president into question. Nor, given the polling numbers, which remain good for Trump on the economy, can she embrace continuity. Hers is a difficult needle to thread. She may get some help next week when the Fed cuts interest rates — although given the stubbornness of core inflation, probably by only a quarter of a percentage point. But she also needs to help herself. Right now, all I see is a confusing jumble of populist gimmicks, centrist reassurances, soothing rhetoric and a lot of shape-shifting. Economics is the part of Harris’s game that requires the most work.