- Business and Employment
How the US Presidential Election Impacts on the Economy
There are clear economic policy differences between the Dems and the GOP!
Government and Regulations Central to Democrat Economic Strategy
Democrats and Republicans are about to lock horns once again in the battle for the White House. Both parties seek to capture the hearts and minds of their constituents and more importantly, the independents. For the most part, Democrats are in favor of expanding government and social services to facilitate economic growth, reduce the differences between the haves and have-nots, and implementing legislation to facilitate job creation and rising standards of living. Democrats are in favor of sustained economic growth, preventing US companies from shipping jobs overseas and strengthening the middle-class. The pro-growth policies of the Democrats are focused on manufacturing and production in the US. To this end, the overall objective is increased competitiveness, decreased unemployment and the long-term success of the US economy. The measures by which the Democrats hope to achieve these strategic objectives include the following:
- The implementation of a nationwide manufacturing strategy that benefits American producers and manufacturers by way of tax incentives, support for infrastructure growth and development and ongoing education and skills training
- Export promotion by way of improved telecommunications infrastructure, government assistance in order to compete on an equal footing with other markets and the enforcement of regulation to facilitate trade
- Creating a workforce that operates in the 21st-century by way of innovation, technological efficiency, skilled labor, promotion of education and training, and meeting the challenges and exigencies of a fast-growing global economic system
- Democrats also seek to encourage all initiatives that maintain US economic dominance in the world. At the heart of this initiative is the desire to entice US multinational corporations to repatriate business operations back to the US to help grow the economy, boost employment and bring innovation and dynamism back to the US.
- Wage equality is high on the agenda for Democrats and in this vein they are focused on ensuring that women receive equal pay for equal work. Presently, the wage gap between males and females is $11,084 for those who are working full-time. The Democrats are seeking to address this issue by closing that gap. Other issues that are of paramount importance include paid sick leave and paid maternity leave. Democrats also have it high on their agenda that quality childcare services must be made affordable to everyone so that mothers can go to work without having to worry about their children. To facilitate this, proposals are being drafted for increased child tax credits.
Election Campaign Promises for Dems
The presumed nominee for the Democrats is Hillary Rodham Clinton. Assuming that the Federal inquiries into her Department of State e-mail probe do not reveal anything untoward, she will likely receive the nod from the Democrats. Her focus is on a combination of economic and social issues, with deference to minorities and women. Mrs Clinton's policies are not dissimilar to President Barack Obama’s: expansion of social welfare programs to those in need, reduction of US military presence overseas with concomitant cuts in military spending, expansion of healthcare services, social welfare services, increased taxation on the top percentile of earners in the country, tax breaks for the middle-class, closure of tax loopholes for Wall Street, and increased taxation where necessary. The Democrats have a mantra that everyone must pay their fair share and those with more should pay more. Liberal policies dominate the Democrat agenda, and as such the party caters to a broad base of historically disempowered or marginalized voters which includes Hispanics, African-Americans, the gay community and other minorities.
This begs the question: Are Democrats good for Wall Street or not?
The fact of the matter is that Democrats and Republicans both cater to the corporate sector in their own way. It is the big money on Wall Street that funds the super PACS that power the campaigns of congressmen, senators, representatives, assemblymen and presidential candidates. Big business has a vested interest in the political establishment in Washington, and the many backdoor deals that take place are designed to give an advantage to companies, industries, sectors and so forth. Sometimes the correlation between the corporate sector and the political elite is limited to picking a side that dovetails with business interests. For example Democrats are pro-environment and anti-Keystone Pipeline drilling as a result. The coalmining industry is another example that is coming under increasing pressure as a result of regulations, taxation and environmental concerns. The Democrats are seeking sustainable energy sources as a means of steering the US economy away from its dependence on Middle East oil. So, the Dems are deeply invested in things like climate change, the environment, alternative energy, and the like. Democrats are also intently focused on maintaining the collective bargaining power of workers by way of unions. While the focus appears to be targeting big business at one level, Democrats also court big business for its ability to be a driver of change from the top down.
The election of Democrats to the highest office will be a preponderance of the status quo. That means expanded healthcare and social services, increased government expenditure, and a bigger role of government in maintaining and growing the economy.
The Republican Perspective
The Grand Old Party (GOP) has always represented itself as a limited government party which seeks to take government out of everyday people's lives as much as possible. The GOP is focused on the individual, small businesses and the middle-class. The GOP is largely ideological in its approach in the sense that it believes in a renewal of American values, the Constitution above all else American exceptionalism. In the run-up to the 2016 presidential election, the GOP has produced an impressive number of candidates running for office, including Senator Rand Paul, Dr Ben Carson, Donald Trump, Governor Chris Christie, Senator Marco Rubio, Governor Mike Huckabee, Governor Jeb Bush, Carly Fiorina, and others. In comparison to the rather anaemic field of Democrats, the Republicans have plenty of diversity in their ranks. This has allowed them to offer a multitude of opinions vis-a-vis economic growth, strategic direction and policy-related issues. Overall, the consensus among Republicans is that military expenditure is an absolute necessity. In fact Republicans are all for an expansion of US military might as a deterrent force. While the GOP is not in favor of putting boots on the ground in conflict zones around the world, it sees a more active and robust role for the US military. As far as veterans are concerned, the GOP wants to overhaul the Veterans Affairs Department and ensure that veterans have access to immediate medical services of the highest quality.
In terms of healthcare, the GOP is in favor of removing the influence of the Federal government and allowing the states to determine what is best for them. They prefer the creation of competitive exchanges to allow for a fair market price to be determined for medical insurance. Further, they seek to tackle the issues that have caused exorbitant costs in the medical arena. The national debt is an area of particular concern to Republicans – at least on the ticket. With between $18 trillion and $19 trillion in national debt, and massive demands being placed on Social Security, it is possible that these welfare services will face bankruptcy in the future. Republicans are concerned about preserving Social Security and welfare services by creating means tests to ensure that only those who need assistance will receive it. The GOP focus as it relates to energy and mining is America first. Since the US sits on some of the world's largest stockpiles of oil, the GOP is seeking to fast-track the construction of the Keystone Pipeline, utilize America's massive coal supplies, cut America's reliance on Middle East oil and continue to safely drill offshore for the benefit of the US economy. Republicans often run into challenges with Democrats in mining and energy when it relates to environmental preservation.
The GOP platform is interesting in that the focus is on the Constitution, families and the economy. Republicans believe in American exceptionalism at home and abroad. They believe that America is a force for good in the world and should not shy away from its duties and responsibilities, or from taking unilateral action if it is required. This is in sharp contrast to the Democrat approach which is largely multilateral in nature and which sees America as part of a global community of nations – not a lone warrior. There are other differences between the GOP and Dems, notably the issue of gun control. The Dems are pushing for mandatory background checks, the banning of certain weapons or ammunition and stricter measures as they relate to the ownership and possession of firearms. Republicans are staunchly against any infringement on the right to bear arms.
But the focal point of the GOP ticket is a government that stays out of the lives of everyday people. Progressives and liberals find fault with Republicans in the form of the GOP perception of traditional marriage as the mainstay of American society. The GOP is all about reducing bureaucracy, cutting government expenditure and planning for the next generation. To an outside observer, the GOP could possibly be viewed as the equivalent of a private sector player in the public sector. In other words they seek greater transparency, accountability and efficiency in the running and management of government. The GOP is pro-life and as such is vehemently opposed to abortion.
The GOP and Wall Street
The misguided perception of the GOP is that it is a party of the rich for the rich. However, both Dems and Republicans court Wall Street in different ways. All of the Republican contenders for the White House are in favor of an overall the tax system, the closure of loopholes, the repatriation of jobs from abroad, massive investment spending on small, medium and large enterprises, tax breaks for self-employed people and the fostering of a culture that is conducive to free-market enterprise. Generally, the relationship between Wall Street and the GOP is sound. Typical Wall Street companies pay 15% in corporate taxes, while the tax burdens on self-employed people are substantially higher. Wall Street is focused on GOP candidates who are looking to balance the budget and remove as much of the debt burden as possible. As far as the Federal Reserve Bank goes, the GOP wants as little government involvement in monetary stimulus or monetary tightening as possible. The Fed is simply less trusted by grassroots level GOP supporters. Wall Street is all for a Republican president, should it come to pass, provided he/she can articulate the future direction the US economy is to take.
As it stands, the battle for supremacy between Republicans and Democrats will likely be a race for the White House between Hillary Clinton on the left and anyone of the following Republican candidates: Marco Rubio, Ben Carson or Donald Trump.