Wall Street Votes: Voters Queasy Over Economy

We're looking forward to this election and whichever it is doing at this point, We do increasingly hear very different points of view between, on the one hand, Bidenomics, which I think did take a departure from some of the neoliberalism, sort of less deregulation, less government involvement on the one hand. And then President Trump now is talking about things that sounds like mercantilism. He wants it all to be tariffs. Give us your sense as somebody, a veteran of both Wall Street and Washington, What's at stake here? Well, there are, as you say, 2 very different visions, and voters will have the chance to render a verdict, so to speak, on President Biden's record because it's right now, whereas President Trump's was a few years ago. It seems to me that there are two main takeaways from the question of Biden's record. On the one hand, I think most presidents, including the two I served David would be very proud to have the basics of his record. 16,000,000 new jobs created. An unemployment rate below 4% for one of the longest stretches in American history. Huge increases in private investment and consistent growth even at this very moment, four years after this recovery began, which would have been in the second-half of 2020 as COVID lessened it a bit. We're growing at about 2.7, two, .75% right this minute. And to be doing that this late in a recovery is remarkable. On the other hand, we can see that voters are queasy or sour about the economy and at the moment rating Trump more highly than President Biden on the economy. And why is that? And I think the answer is this much discussed topic of affordability, where it is true that grocery prices, gasoline prices, shelter costs have all risen in the low 20% range since President Biden took office. And I'm talking about absolute levels of increase. In other words, grocery prices in generally are about 21% higher today than they were when President Biden took office. And voters are unhappy about that. Fortunately for President Biden, we're seeing some better news on that. Grocery prices actually fell last month. The inflation rate is coming down handsomely or nicely. Core PCE, which is the Fed's favorite measure, is already below 2% based on the latest data. And the Biden team is working overtime on a series of initiatives to do better Medicare, prescription drugs, insulin costs, junk fees and A and A and a list of things which they are working hard on to lower costs for everyday Americans. And they fully admit that prices are still too high for middle class families. So it's a bit of a split screen question. And we have 4 1/2 months, months to go roughly before Election Day. And that seems to me the core question is, by the time Election Day really comes, will voters have a better view of the Biden economy than they do right now? The very latest polls, and you've probably seen more than I have, suggest improvement in this one category, but still a ways to go for President Biden on this question. And with voters saying that the economy is their number one issue, it's really important if he's going to get reelected that he closed the gap further. So, Roger, that's a really helpful and thoughtful analysis of the voters point of view, which Jack, after all, is what's important in November. But let me ask you a slightly different question. You deal with American business day in and day out. You know, the people who run American business, How do they feel about the Biden record? Because we hear sometimes from some parts of business, some parts of Wall Street that they're concerned. They like the growth, they like the stock market. They're concerned about the extent to which the government has gotten involved in the economy. Well, a few comments on that. I served twice in the treasury at length and part of my responsibilities involved interacting a lot with business and the business community always wants certain change. That's the nature of that interaction. I think you put your finger pretty well on it. The macro from the business community's point of view is very good. At this very moment all the major stock indices are around all time highs. The last few weeks have been a pretty major rally in fixed income markets. The yield on the 10 year treasury is about 40 basis points lower than it was three or four weeks ago. That's pretty big change and we're still seeing consistent growth as I mentioned. So the macro from a business community's point of view is good. Yes, there are a lot of people in the business community that think the Biden administration is doing too much from a regulate, regulation point of view. They don't like the stance of the FTC and the Justice Department, for example, on any trust. And some, of course, in the energy industries don't like some of the regulation that the Biden administration has promulgated in that area. However, sitting CEOs, David, of major companies do not, as a rule, endorse presidential candidates. That's not new. They don't historically do it. And by the way, today most boards of directors of major public companies wouldn't permit their CEO to make a endorsement of a presidential candidate. So they're not going to take a position publicly one way or the other. But when they look at the Trump agenda, I think a number of them don't like it. And let me be specific. The two, well, the New York Times published, I thought, are quite a helpful and concise summary of their understanding of the Trump agenda about a week or 10 days ago on the front page of the Times. And the first two items were deportation and tariffs. So let's talk about those, and we'll start with tariffs. So President Trump is proposing a new 10% tariff on all imported goods, with a 60% tariff specifically on goods imported from China. The impact of that, according to the Peterson Institute for International Economics, which is nonpartisan, would be $1700 per average American family. Think about that a minute, $1700 a year. Now, if you want to ask, and I haven't done this, but I'm pretty sure I know the answer, The CEOs of companies like Walmart or Procter and Gamble or Costco or Home Depot, whether they think that's a good idea, their answer is going to be in private. Absolutely not. Then on deportation, President Trump is proposing to deport a little over 11,000,000 individuals currently living in this country on an undocumented basis. Well, the problem is that most of the adults, I'm sure it's about 80% or 90% of the adults in that cohort, are working. Now. We have a 4% unemployment rate today, and many corporations say publicly that they can't find enough workers. I recently heard from the CEOs, for example, of Marriott and Bechtel to that effect. So the idea of taking let's say 8 million workers out of the country when we have a labor shortage already is an economically destructive one. And if you were to ask in private CEOs what they think of that, most of them, I can't say, all of them would say no, that's a terrible idea. So in terms of the Trump agenda, I don't think there's a lot of of support, although of course it's a big community, the business community. There is some very conservative elements and I'm sure there are quite a few who like the overall ideology of President Trump. But in terms of the economic platform itself, I don't see much support for it.