By Alejandro A. Tagliavini *
A second term of the current president would bring more obstruction to trade and immigration, and no one is in favor of a «cold war», much less if this gets harder, with the increasingly authoritarian government of Beijing, and ends in a real war.
Speaking of Trump, upon leaving the hospital he tweeted “Don’t be afraid of Covid. Don’t let it dominate your lives… I feel better than 20 years ago! ”. In this exaggeratedly aggressive campaign the adversaries, blinded by anger, answer for example «Trump hurts.» So I asked, «Does a human being hurts because he feels good?» And he replied «it hurts to ask not to fear Covid, when many people have sufferedit so much». To which I replied: «not being afraid is good for mental health, being cautious is fine, being afraid is not.»
Anyway, Kamala Harris, nominated for the vice presidency along with Joe Biden, has said that she will return the economy, especially in social protection and equality, to the Obama era. Although «often, campaign promises are not kept», they recall from Pimco.
They promise a $ 1.3 trillion investment in infrastructure, an increase in the federal minimum wage to $ 15 an hour, and an increase in income, capital gains and corporate taxes. Businesses would go from paying 21% to 28% reversing half of Trump’s cuts, and other changes would be implemented such as an increase in taxes on global, intangible and low-tax income (“GILTI”). “This represents an average 5% drop in profits,” calculates the UBS Strategy Director.
The Democratic triumph, controlling the Senate and the House of Representatives, by the way, did not enamor the financial markets at the same time concerned by the chaotic style of Trump. But it began to change when traders, in light of the polls favorable to Biden, looked for arguments so that customers do not freak out and now say yes, that stocks will take a hit by raising taxes, but it will be offset by fiscal stimulus of at least $ 2 trillion that Democrats would push.
If it were that easy, politicians would have already solved poverty: it would be enough to take out the rich to give to the poor and to stimulate economic growth. But these policies have been in place for decades and things are getting worse. It is that, demagoguery aside, taxes always end up falling on the weakest since, the strong, have the ability to derive them, for example, by raising prices or lowering wages.
Going back to Harris, in 2019, in an interview on CNN, she proposed to “break” Facebook. And despite the fact that Trump – and the majority of the citizenry – have similar ideas, the Silicon Valley moguls breathe easy because they know they have power and that no one will finally impose themselves on them. It is no coincidence that «All the major tech companies lean to the left in their campaign contributions,» according to Mayersohn of the Center for Responsive Politics.
Let’s see, once again, the problem is not the lack of repressive intervention by the State, but, on the contrary, its excess – statism that those of Silicon Valley promote – of intervention, in this case, guaranteeing true monopolies through the “Intellectual property laws”, property that, on the contrary, should be left to market competition, ending monopolies.
* Senior Advisor at The Cedar Portfolio and Member of the Advisory Council of the Center on Global Prosperity, de Oakland, California