Trump’s trump card

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Bi­den is lead­ing the in­cum­bent on al­most ev­ery poll met­ric – ex­cept man­ag­ing the econ­omy

Joe Bi­den is rid­ing high in the polls with 10 weeks to go be­fore the US elec­tion – but one num­ber will fur­row brows in his camp more than any other. Don­ald Trump is given a big thumbs-down on his han­dling of Covid-19, for­eign pol­icy, the direc­tion of the coun­try and over­all job ap­proval. But even dur­ing the big­gest eco­nomic cri­sis in liv­ing mem­ory, Amer­i­cans back his cap­tain­ing of the US econ­omy.

Trump’s econ­omy ap­proval rat­ing re­mains in pos­i­tive ter­ri­tory at +8, ac­cord­ing to YouGov. More con­cern­ing still for Camp Bi­den is that just 34pc of Amer­i­cans be­lieve the econ­omy would get bet­ter un­der his pres­i­dency. A to­tal of 39pc fear it would get worse.

If the “it’s the econ­omy, stupid” mantra still holds strong, Novem­ber’s elec­tion could be tighter than Bi­den’s cur­rent nine-point lead sug­gests. Can the for­mer vice pres­i­dent get vot­ers to back Bi­de­nomics?

De­spite his rep­u­ta­tion as a mod­er­ate who can reach across the aisle, Bi­den’s plat­form is seen by ex­perts as the most ex­treme pro­posed by a Demo­cratic pres­i­den­tial chal­lenger in decades.

“If we com­pare to pre­vi­ous Demo­cratic plans or Trump’s plan, it is a pretty rad­i­cal change,” says Stephen Gal­lagher, US econ­o­mist at So­ciété Générale. “But if we com­pare to the of­fer­ing of the other Demo­cratic can­di­dates, it is more mod­er­ate com­pared to Bernie San­ders, El­iz­a­beth War­ren or even Ka­mala Har­ris.”

There was a fairly se­ri­ous risk that the shift would have been even more crash­ing had the man Trump de­rides as “Sleepy Joe” not come out on top in the pri­maries, Gal­lagher says.

Four years of Trump have pushed the Demo­cratic Party fur­ther Left as the coun­try be­comes in­creas­ingly po­larised. Bi­den has fol­lowed his party, be­ing forced into a num­ber of key pledges to curry favour with Left-wing Democrats who have grown in stature.

The field of can­di­dates in this year’s Demo­cratic pri­maries have re­sponded to the pop­u­lar­ity of the party’s Left­ists, such as fire­brand so­cial­ist Bernie San­ders and lib­eral pol­icy wonk El­iz­a­beth War­ren. Ul­ti­mately Demo­cratic vot­ers opted for a can­di­date who they be­lieve is best­placed to de­feat Trump – electabil­ity was a top con­cern, polling sug­gests – but the race has left its mark on Bi­den’s plat­form.

Per­haps most im­por­tant for the econ­omy has been the for­mer vice pres­i­dent’s prom­ise to do “what­ever it takes” to tackle Covid-19.

“I would shut it down. I would lis­ten to the sci­en­tists,” he said last month. States rather than the pres­i­dent ul­ti­mately have the power to shut down and re­open their economies, as Trump has found to his frus­tra­tion. But a new Oval Of­fice stance on the virus could still be sig­nif­i­cant for the econ­omy.

Be­yond Covid, Bi­den has a num­ber

‘It’s go­ing to be the wealthy that are go­ing to be pay­ing the tax rises’ ‘If Bi­den gets a clean sweep we are go­ing to see a sig­nif­i­cant shift in pol­icy’

of Left­ist poli­cies he claims will help Amer­ica “build back bet­ter”.

He wants to al­most dou­ble the fed­eral min­i­mum wage to $15 (£11.27) an hour, up from $7.25. Many states al­ready have a higher min­i­mum wage but Bi­den is seek­ing to bring the US closer to pay floors seen else­where. “It’s go­ing to hurt more ru­ral pop­u­la­tions where the min­i­mum wage is not nearly that high and it would be an abrupt change,” says Gal­lagher.

Work­ers will also be bol­stered by his plans to make it eas­ier to or­gan­ise unions and col­lec­tively bar­gain, al­though some vot­ers are likely to fear this will hit the coun­try’s fa­mously dy­namic labour mar­ket. He wants uni­ver­sal paid sick days and 12 weeks of paid fam­ily and med­i­cal leave, while so­cial se­cu­rity pay­ments will be $200 higher per month.

Bi­den has promised to cre­ate 5m new jobs in man­u­fac­tur­ing and in­no­va­tion and has vowed to spend $2 tril­lion over four years on clean en­ergy in­fra­struc­ture, aim­ing for a car­bonzero power in­dus­try by 2035. He has promised no new taxes on those earn­ing less than $400,000, while

Trump’s cor­po­rate tax cuts will be par­tially re­versed. The cor­po­rate tax rate will rise from 21pc to 28pc.

“It’s go­ing to be the wealthy that are go­ing to be pay­ing the tax rises and you get more in­come for the poorer peo­ple,” says James Knight­ley, ING chief in­ter­na­tional econ­o­mist.

Trade pol­icy is likely to be­come less com­bat­ive while ex­perts say the tech ti­tans could face a clam­p­down amid ris­ing com­pe­ti­tion wor­ries.

Bi­den has not made tech reg­u­la­tion a key plank of his cam­paign as ri­vals such as War­ren did, but the Demo­cratic party has de­ci­sively shifted to­wards stricter rules on Sil­i­con Val­ley be­he­moths.

Sam McGowan of Bea­con Pol­icy Ad­vi­sors, a re­search firm fo­cused on Wash­ing­ton, says a Bi­den ad­min­is­tra­tion is likely to re­flect a grow­ing scep­ti­cism of Sil­i­con Val­ley.

“If Bi­den wins, there’s go­ing to be a lot of in­flu­ences out there that are go­ing to shape the kinds of the pol­icy that they’re go­ing to put in place. And I re­ally think the con­ver­sa­tion will shift to­wards more strin­gent en­force­ment.” McGowan says that even if a Bi­den ad­min­is­tra­tion does not aim to break up Big Tech, it will cer­tainly make preda­tory ac­qui­si­tions harder and en­force com­pe­ti­tion.

How­ever, Bi­den’s Left-lean­ing agenda faces key hur­dles. The 77-year old needs to win big against Trump to push through the most rad­i­cal parts of his agenda.

The Democrats cur­rently hold the House of Rep­re­sen­ta­tives but the other half of Congress, the Se­nate, is con­trolled by the Repub­li­cans. Many of Bi­den’s eco­nomic plans would be scup­pered un­less the Democrats win the three or more seats needed to take the Se­nate.

“One ques­tion is whether he might be lim­ited by Con­gres­sional op­po­si­tion. The bat­tle for Se­nate con­trol looks tight,” says Philip Shaw, In­vestec econ­o­mist.

Knight­ley says: “If Bi­den gets a clean sweep and the Democrats win the House and Se­nate, we are go­ing to see a very sig­nif­i­cant shift in pol­icy. Much more tax­a­tion, more spend­ing and more reg­u­la­tion of en­ergy, fi­nan­cial ser­vices and big tech.”

His am­bi­tions could also be lim­ited by the state of pub­lic fi­nances he in­her­its. Trump was run­ning high deficits at close to 5pc even be­fore Covid struck and sent debt soar­ing.

“When we get in, the pantry is go­ing to be bare,” warned Ted Kauf­man, a lead­ing fig­ure in Bi­den’s tran­si­tion team. Economists also ar­gue that his plat­form could be harm­ful for the econ­omy in the longer term.

Gal­lagher says Bi­den’s poli­cies would slow the econ­omy or limit its po­ten­tial, de­spite ris­ing in pop­u­lar­ity among vot­ers. “It’s not un­til the econ­omy slows that these vot­ers will aban­don their sup­port for all these changes,” he says, high­light­ing Bi­den’s health­care and en­ergy plans.

Shaw adds that Bi­den’s tax pledges could have a sig­nif­i­cant im­pact on in­vestor con­fi­dence, while the roar­ing re­cov­ery on the US stock mar­ket could be de­railed by an an­titrust crack­down.

Bi­den has framed the 2020 elec­tion as a “bat­tle for the soul of the na­tion”. His plans would be trans­for­ma­tive for the world’s largest econ­omy – but polling sug­gests Amer­i­cans may be re­luc­tant to give up on Trump’s vi­sion just yet.

The rate Bi­den will set the min­i­mum wage if he wins of­fice, up from $7.25 an hour The num­ber of new jobs Bi­den has pledged to cre­ate in man­u­fac­tur­ing and in­no­va­tion The per­cent­age of Amer­i­cans who be­lieve the econ­omy will get worse un­der a Bi­den pres­i­dency, ac­cord­ing to a YouGov poll The amount Bi­den has promised to spend on clean en­ergy in­fra­struc­ture in the next four years The deficit Trump was flirt­ing with be­fore Covid struck, lim­it­ing Bi­den’s room for ma­noeu­vre $15 5m 39pc $2 tril­lion 5pc

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