The Economy, and Everything Else: Biden and Trump Face Off in First Debate Since 2020
All eyes will be on CNN at 9 p.m. Eastern as President Biden and Donald Trump clash in their first debate since 2020. The stakes are high, and executives and investors are eager for insights into how each candidate plans to navigate the economy and business should they win a second term. Beyond policy pronouncements, the way they speak, their demeanor, and even their choice of running mate will be carefully scrutinized.
Key Takeaways:
- The Economy Takes Center Stage: While both candidates claim economic success, voters are grappling with inflation, high living costs, and the uncertain future of the markets. Biden’s plan to raise corporate taxes may not sit well with business leaders, while Trump vows to revive his 2017 tax cuts.
- Trade Warfare Continues: Both Biden and Trump aim to boost tariffs on Chinese goods, though Trump’s broader, more aggressive approach could worsen inflation and hurt the economy.
- Intangibles Matter: Business leaders are eager to see how Biden’s age and Trump’s temperament play out on stage.
- The Show Around the Show: Trump’s choice of running mate is a critical factor, and some major donors are holding out for an answer before pledging support.
- A Data Point to Watch: The Personal Consumption Expenditures (PCE) price index, released on Friday, could reveal whether inflation has cooled and what that means for interest rates.
- Big Tech Receives Legal Boost: The Supreme Court’s decision rejecting a lawsuit against the Biden administration for pressuring social media companies to censor conservative content gives Big Tech a significant legal win, potentially shaping future content moderation policies.
- Debate Bingo: Prepare for buzzwords like "shrinkflation," references to the Nobel Prize, and Trump’s warnings about an "inflation nightmare."
The Economy: A Battleground of Numbers and Rhetoric
Inflation, a household issue that’s dominated kitchen-table conversations, will likely be a central focal point. While Biden can tout slowing inflation, many Americans continue feeling the pinch at the grocery store and gas pump. His focus will likely be on cracking down on "corporate greed," targeting so-called "junk fees" and taking on price gouging. Trump, meanwhile, will likely capitalize on the nostalgia for the pre-pandemic economy, highlighting the economic conditions during his first term.
Beyond inflation, the debate could delve into tax policy, with Biden’s proposals for higher corporate taxes looming over business profits.
Trump’s focus on extending his 2017 tax cuts and lowering the corporate rate may gain traction, especially if corporate earnings and economic growth take center stage.
Trade tensions between the US and China will also be a hot topic. While both candidates favor tariffs on Chinese goods, Trump’s proposed across-the-board levies raise concerns among economists, warning of further inflation and economic damage.
Beyond the Policy Points: The Intangibles of Leadership
The debate will be a stage for more than just policy positions. It will also be a showcase for each candidate’s leadership qualities – and how those qualities resonate with business leaders and voters alike.
Biden’s age will likely fuel concerns about his fitness for office. A sharp, forceful performance could alleviate these concerns, projecting an aura of continued vigor. Trump’s demeanor, particularly his potential for abrasive behavior, will also be under scrutiny. His ability to project stability and competence, amidst accusations of potential erraticism, will be crucial for gaining the trust of a jittery business community.
The Shadow of the Running Mate
The debate could provide a glimpse into the potential running mates for each candidate, with Trump’s choice of a VP being a pivotal point of interest. Some major Republican donors are openly waiting for this key announcement before opening their wallets. The selection could shift the campaign narrative, impacting the trajectory of the election and influencing the kind of financial support the candidates receive.
Inflation: A Data Point That Could Shake the Market
The PCE price index report, due on Friday, could have a significant effect on the stock market. Economists expect a cooling trend for inflation, building on the recent drop in the Consumer Price Index, suggesting that the Fed’s rate hikes are slowing demand and suppressing price pressure.
A strong "cool-down" reading could be interpreted favorably by investors, indicating that the Fed may be poised to lower borrowing costs. However, the Fed itself has stressed the need for more evidence before easing rates, creating potential for volatility in the market.
Big Tech’s Supreme Court Victory
The Supreme Court’s decision in favor of the Biden administration is a significant win for Big Tech, potentially influencing how social media companies are regulated in the future.
The justices rejected the claim that the administration pressured social media platforms to censor conservative content, effectively giving Big Tech a green light to continue moderating content without government interference. This decision, coupled with the court’s previous rejection of cases challenging Section 230 of the Communications Decency Act, underscores the Supreme Court’s stance on guarding Big Tech from potentially detrimental legal challenges.
However, the court’s upcoming decision on similar laws in Florida and Texas, which limit social media companies’ ability to remove content, could alter the landscape once again, potentially chipping away at the legal protections enjoyed by social media platforms.
The Debate: Expect the Unexpected
The upcoming debate promises to be a high-stakes event, filled with sharp policy clashes and potentially unpredictable moments. From the economic battleground to the intangible factors of leadership and the potential influence of running mates, various factors will shape the narrative and resonate with voters, investors, and executives alike.
This debate will not just be about policy; it will be about the very nature of leadership and the future direction of the nation.
