What Will a Kamala Harris Economy Look Like?

Published Aug 22, 2024, 8:45 PM

The positive vibes are flowing at the Democratic National Convention, but what about policy proposals? On this special episode of Voternomics, Bloomberg Senior Executive Editor for Economics Stephanie Flanders heads to Chicago to find out how—if at all—a Kamala Harris presidency would alter the US government’s approach to the economy.

Flanders spoke with economist Heather Boushey, a member of President Joe Biden’s Council of Economic Advisors who has previously served as president and chief executive of the Washington Center for Equitable Growth. “What I see,” Boushey said, speaking in her personal capacity, “is the vice president putting together an agenda to make sure that the government is working to build the middle class, to make sure that prices are fair, to make sure that people have economic opportunities.”

Boushey cited price gouging, taxes and housing as three areas where Harris has discussed her economic plans. “We’ve seen challenges in insufficient housing supply. We’ve seen that it just costs too much for families,” said Boushey, adding that Harris has unveiled policies that would increase housing. She also pointed to the vice president’s statements regarding a “robust plan” to expand the child tax credit.

But how will Harris propose that Congress pay for these policies? “She is committed to making sure that we fix the tax system in the US so that it is more fair so that corporations pay their fair share,” Boushey said.

About the series: Each week, listen in as Stephanie Flanders, Bloomberg’s head of government and economics coverage, Allegra Stratton, author of Bloomberg’s The Readout newsletter and Bloomberg Opinion columnist Adrian Wooldridge help make sense of the elections that will affect markets, countries and economies like never before. 

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I have that two thousand and eight feeling. The excitement is real. I think it's happening from the ground up.

I feel two thousand and eight excitement right now, and I think we have a real opportunity here America.

Hope is making a comeback. Welcome to our Democratic National Convention edition of voter Nomics, the Bloomberg podcast where politics and Markets collide. All year, we've been talking and talking about how voters around the world have the ability to move markets, countries, and economies like never before in twenty twenty four, and we're focusing now on US voters ahead of the November election. I'm Stephanie Flanders, hosting from Chicago, where the convention is underway, and with me from the Bloomberg White House team. Very glad to say senior reporter Josh Wingrove, thanks for being here, Thank you for having me. Well, we're taking this on Wednesday, we should say, so it's more than halfway through the convention. I think we're knee deep in vibes. There's been a lot of discussion about the vibes. So it's not a week for policy wonts, but we have been doing our best to resist that with round tables with some key figures in the party and advisors to Kamala Harris at the Bloomberg Hub where we're sitting right now, which is just down the road from the convention hall. But inside, I would say it's been a week for Democrats to get all fired up and potentially excite some voters sitting at home with this just very recently improved ticket of Kamala Harris and Tim Walks. Josh, you are very young, but you're not so young. I think you probably still can remain the two thousand and eight is making a comeback here.

Not as young as I used to be. I remember two thousand and eight very well. Hope is making a comeback if you talk to the people here, which is to say, Democrats are indulging themselves and letting them speak aloud. This thought that, oh my gosh, could the sort of broad coalition that elected and swept Obama to power sixteen years ago come together again? And of course that's a big change from a month ago when Democrats were pretty despondent in sort of a public friendly war about whether to you know, dump or pressure Joe Biden to step away. But there is a sense that Harris has momentum, and in particular, I think we're seeing that sort of change expectations depending on what you ask. Certainly, in the House, Democrats seem very confident that they're going to have a really good shot at taking back the House of Representatives, making Kakim Jeffries the speaker. And from there it gets a little mess here. And so we you know, we've talked, for instance here with the Pennsylvania governor. He thinks his state is both the tipping point state, which is, you know, to say, the one that will decide things and a toss up. And so it just goes to show you, like how we're really down to the wire here. But you're right, from a policy perspective, it's you know, it's not just a ViBe's election at the convention. We're having a ViBe's election in general.

Yeah, And I was very struck watching the former President Obama on Tuesday night his speech here in Chicago, which definitely had allusions to the electrifying one that he gave in Boston in two thousand and four. As a little note, Senator I was lucky enough to that was the last convention I was at. But as you say, there's no getting around the fact, even with all these great vibes, the country is still split down the middle. And you have maybe forty six percent of voters who had died in the world supporters Donald Trump, maybe even a bit more enthusiastic now than they were a month ago, and something close to that, strongly supporting the Democrats and certainly opposing Donald Trump. So just that small middle ground to play for. You mentioned Governor Josh Shapiro. We had an event with him that you were at here in the Hub just this morning, and you know, he's the governor of the must win swingy as state of all and this is how he described the situation.

Our last two presidential election races in Pennsylvania settled by about a point or less forty four thousand votes and eighty thousand votes in a state of thirteen million people over nine million registered voters. So the fact that races are close in Pennsylvania is really not something that is surprising as we look forward with that history, I think it's important to note that the gap that existed between Trump and Biden has really been closed. I think your outlets have all done polling, maybe it's plus one minus one. I think we're statistically even at this point. And what I think Vice President Harris and Governor Wallas have done really effectively is build the coalition back together and be in a position where we're what seventy seven days seventy eight days out and really be, as I describe it, on the forty nine yard line in Pennsylvania. You can pick up forty eight or forty nine yards. It's that last yard and a half to get on the other side of the field that is really really tough. How do you do that? Obviously, we've got important urban centers in Philadelphia and Pittsburgh. The Philly suburbs are incredibly important, and as we proved in my election and others have as well, these rural areas are areas where Democrats have to compete. We know in twenty sixteen we didn't do as well as we needed to in those areas. I will tell you I think those rural areas are fired up for Donald Trump. I don't think we should pretend that they're not. But what I have experienced in just the last few weeks that Kama Harris has been leading the ticket is when I'm in those communities and I camp out there, I spend a lot of time there as governor. They'll come over to me and say, hey, what do you think of her? You know her, what's the deal? And I say that in no way to be disparaging. I say that because there's a genuine interest and curiosity in her candidacy. And that's a good sign. I'll tell you what else is a really good sign. She and Tim showed up there. What was it three four days ago? I think it was on Sunday, if I'm not mistaken. In Beaver County. They went to one of these rural communities, think like kind of rural area outside of Pittsburgh, and they went and talked about cutting costs, and they went and talked about economic issues. If you remember back, you know, we all remember Barack Obama having huge rallies in Philly. What a lot of people don't remember is his first rally was in Beaver County. That's a county the Democrats have been losing for years. I won, and that's an area where we have to be competitive. And so the fact that people are curious about her candidcy, the fact that she showed up there and talked about issues on their minds. Really really gives me a lot of hope and OPTI miser for that last that last yard and a half. It's so difficult to come by in our stay.

Gummor Shapiro was was sort of cautiously optimistic. He saw a lot of energy on the ground, but that there's a lot more for them to do, right.

Yeah, And Harris herself is trying to pump the brakes as well, because it's good to be confident, but complacency is a different animal. That's what they're worried about. You know, I think this is all happening at unprecedented speed. I think we shouldn't lose sight of that. I mean, you know, one of the arguments a month and a half ago was that they're simply for keeping Biden, was that there simply wasn't time to build the plane in mid air that they are now building. And so the you know, I think for Harris, she has inherited a party that has done a couple of things. Number One, rallied completely around her in the matter of an hour, it felt like on that Sunday. Another thing is that her position at the top of the ticket has also really taken a lot of states off board that were competitive now, so we're gonna have a more focused election, whereas previously Trump was thinking he was going to break through in you know, Minnesota, Virginia, maybe New York, New Jersey and what might be sort of a fantastical.

That's so we're going to see a lot of big rallies in.

So we're snabbing right back down to what it was about seven or eight swing states. I think broadly position for Harris now. The question is how much meat do I want to put on this bone. She has taken steps to keep doors open, not close them, including if that leaves egg on her face by saying forget what I said five years ago, I actually believe the opposite now. So I think that is the level set that we should expect for the next seven years so days whatever the campaign will be, which, by the way, in other states, it's only half that with early voting kicking in something soon here, I would expect her to continue to risk embarrassment by backtracking on policies to open pathways for her or leave open the question of what she things, rather than her pinning a policy list on the wall and saying this is what I stand for. It they don't think that's their path.

That was interesting. So we had We're sitting in the room where we've had some of these events at the Bloomberg Hub, and there were two quite senior policy advisers, d Kamala Harris who spoke to us, Harris who spoke to us just a few hours ago, one of whom had been her chief of staff when she was in the Senate. And it was striking how little information they could give when you talk about putting meat on the bones. We had this kind of sketch of her economic proposals last week. When are we going to find out how she's going to pay for this renewal of the child tax credit and the support for homeowners? And then I realized that they were referring to that speech as their most detailed speech that they were going to give, really and it just brought home to me how many questions there are unanswered, and crucially this debate with Donald Trump on September tenth. I mean, we were asking these advisers about foreign policy, Josh, do you expect to have any substance on what President Kamala Harris how she would approach foreign policy between now and the debate, I.

Think it's a coin flip about whether they're going to try to put something in the window before the debate. What they have said is look at her record, So let's talk about a record on foreign policy. Hawk on Ukraine, for sure, she would continue Biden's approach of seeing it as a priority for the US not only to send support to Ukraine directly, but to continue to try to muster an alliance and sort of global coalition to support Ukraine in its fight against Russia. So I think that one is clear. I don't expect an in daylight on that one. In Gaza, it's more murky. She has tried to sell the same policy as Biden in a different way. For instance, she calls for a ceasefire and then says Hamas has to agree to it, whereas Biden says Hamas has to agree to the ceasefire. So it's just little differences like this. But yeah, difference not really a difference. There's a rhetorical difference. But in their live's election, rhetoric is perhaps everything. But you're right, we were sitting here looking at, you know, this small bone with flicks of meat on it and saying where's the rest of it? And they're saying it's right in front of you. Enjoyed.

This is the detail to go back to where we started. But you had raised a wild card in that conversation with the advisors, which I have to admit I'd not been focusing so much on because it sounds so so much wishful thinking. But you know, this possibility that the Democrats could win the Senate and House of Representatives as well as the presidency, is that really plausible? I mean, certainly the people who had taught me through some of these races earlier in the year, it just looked like a big ass, particularly in the Senate, because every Senate seat being contested pretty much is democratic. They can't afford to lose even one.

Yeah, it's a bad map for them this year. They're going to lose West Virginia. They have fifty one seats.

Now, I guess we should just remind people outside the states way the elections.

Wait, yeah, why the map is the crowd? This is the grash course. They there are very few senators in America who represent a party other than the dominant party in that state. In other words, you got red states. You have blue states. They didn't have two red senators or two blue senators. Very few divided. West Virginia's divide and Joe Manchiin isn't running again, and that is no one expects that to seat to stick with the Democrats. It'll flip hard to the Republicans.

Because many people didn't consider him to be a temper correct correct.

He was sort of a dying breed of red state democrat. And so now that the starting point is fifty to fifty, it basically all comes down to more or less Ohio and Montana, two red states where Democrats have incumbent senators shared Brown and Ohio John Tester and Montana. We're trying to hold on basically running at arms length from Harris and even more and when it was Biden, they were running it miles length from Biden, trying to sort of squeak by still against Democratic headwinds that have been shifting. So can it happened for Democrats? Can this wave that is maybe building or maybe cresting, It's unclear. If it's just a building wave that will continue as momentum, then Democrats might become the dog that caught the car and then suddenly they in that scenario would be almost certain that they would have the House by a fairly healthy margin. Maybe Harris gets selected, and then of course, maybe they sweep by in the Senate with a fifty to fifty tie that the Vice President Tim Walls, Harris's running mate, could split ties in so they can ram stuff through. Suddenly they get what's called a reconciliation bill, which is a grab bag of stuff that they can push through. You can do one of those a year or so, and this, you know, now it's a question of wish list. Right So right now they're like quite a long way away from that, correct Right So, right now, beating Donald Trump is enough. And we have seen not a hint really of policy dispute among Democrats at this convention. They are perfectly fine to break out the same song sheet and you have a show of unity. They can continue to do that quite easily if Republicans hold at least one chamber, because you have a boogeyman, and by definition you're constrained by what has to be a by part as an agreement. If they catch the car, if they get all three, if this is some kind of wave that's been building, then Harris is going to have to decide what she.

I think lack of opposition is probably a problem that they would like to face. But I'm struck that it's the one thing, even with all these good vibes, it's the one thing that they do seem to be superstitious about even thinking about. In the UK and actually I think quite a lot of other countries, the custom in any election is not to jinx it and never talk as if you assume.

That you're going to win, or assume.

Here it's mandatory even if you don't have a chance in hell. You have to talk describe yourself as the next president or the next senator. So we will see, but gosh, thank you very much.

Thank you.

So on the sidelines of the convention, in my continued efforts to inject substance into the vibes, I sat down with Heather Bouchet, an economist who previously served as the president and CEO of the Washington Center for Equitable Growth and at the Center for American Progress, among other things. She does now currently serve as a member of President Joe Biden's Council of Economic Advisors, but she spoke to me very much in her personal capacity, and what I wanted to hear from her was what she thought about this ticket and the emerging economic plan in so far as we've seen it from Vice President Harris Heather, thank you very much for doing this. I should also ask you with this your first convention.

No, this is my second convention. But now I'm very excited to be here, and you know, God to hear the presidents speak last night and to see actually the Vice president speaking. You know, she talked a little bit about her economics. But it's very exciting to be able to be a part of this historic moment.

And did you always know you were coming? I just wondered whether if you, like me, were thinking a couple of months ago that this was not necessarily going to be a fun event to attend.

I had made my reservations many many months ago. I think it's important, especially for those on the ECON team in general. You know, I think about economics, to see what people are talking about in terms of the economy, what are the questions on people's minds, and that helps us think about what kinds of policy issues we want to focus on.

Now.

I mean, you are you're sitting in the White House or I guess adjoining the White House because most people end up there's no room in the White House for most of the officials who work there. I'm fascinated just on a personal level, how it's been to be sitting there the last few weeks as the election has just been turned on its head. I mean, how has that felt like on the inside.

Well, I can see a couple of things. I Mean, the reality is is that the economy is this huge HiT's this huge beast, and there's so much that has been moving forward, and so I have been really focused on, you know, watching where the numbers are coming in, what's happening with jobs and inflation and all of these sorts of questions, and you know, in thinking about how the policy agenda that the President and the Vice President put out many months ago when they put forth the budget, they are teeing up a whole set of policies that we want to do to make sure that we continue to see an economy that delivers for working families. So those are some of the questions that continue to be important in front and center.

Regardless of he's on the top of the ticket. All Right, it sounds like I'm not gonna be able to get you on all the sort of personal misgivings or not of what's happened. But I mean on that point, and you sounded a little bit like it even just then. You know, one criticism that's been leveled at the was leveled at the Biden Harris campaign was that there was too much focus in those campaign speeches on the past achievements, and he almost seemed to be sometimes telling people they should feel better about the economy than they actually were. I mean, do you recognize that as a criticism.

Gosh, looking back over the past four years, the United States and around the world, we've all been through the Ringer, this global pandemic. It upended economies. We saw how because of these global supply chains that were so fragile, we had these really big price bikes because you know, people couldn't get to work and things couldn't get made, and we saw all of these challenges, and I think what I've learned as an economist is that it takes a while for that to work through an economy. But it also you know, I think you hear people being frustrated that things aren't better as quickly as maybe they would like, or and I think this is really an important piece of the puzzle for a lot of people. The economy wasn't working before the pandemic. You know, here in the United States, we've had half century of rising economic inequality. Families were struggling with affording care and education and in housing and all of these things pre pandemic. And there was this moment during the pandemic where policymakers gay families a lot of support, and a lot of people change jobs, and there's a lot of opportunity. We've actually seen three years now of historic new business startups. And yet I think you know now that much of that aid has started to fade or has been pulled back. I think people are sort of like, well, wait a minute, how is this new economy going to work for me and my family? And so I think the fact that a lot of investments have been made, but they aren't quite being being felt yet.

Even in a normal circumstance, if you had vice president running for president, there's always that balance that he or she would have to strike between talking up the achievements of the administration they were involved with, but also pointing to the unfinished business. And I guess that I guess there's a feeling that with the Biden campaign that there was too much focus on all the great things you've done, the big bits of unfinished business. I mean, you've touched on some of them.

So first of all, I think one big piece of unfinished business that I think does need to be mentioned is that so much of this administration has done has been about investing in the United States all across America, investing in communities, investing in new manufacturing capacity, investing in making and clean energy economy. All of that needs to continue. But there are these big ticket items that we haven't been able to that still need work. And so one of those, of course is housing. We've seen challenges in insufficient housing supply. We've seen that it just did cost too much for families. It was really exciting to see the Vice President come out with a set of policies it would increase housing supply. We also need to make sure that for those families that have kids that in particular, that they get the help and the support they need. And so I was also really excited to see that the Vice President came out with a pretty robust plan to provide an expansion the child tax credit. For children in their first.

Year of RUSS but also quite expensive.

Certainly well supporting families.

You didn't talk about how it's going to be paid for.

She did talk about, though, increasing the corporate tax rate to twenty eight percent, which has been a part of the budget that she and the President worked one.

Pile of the budget before you committed to increasing the under the child tax credit.

It was, but I think it's signals that she has committed to making sure that we fix the tax system in the United States so that it is more fair, so that corporations pay their fair share. And you know, we'll have to see where her campaign goes and everything that certainly is a part of the budget. In that process which she has been a part of in the White House, there has been a robust agenda to raise taxes at the top. The President has long made this commitment to not increase taxes on I mean, making anyone making less than four hundred thousand dollars a year. But what the President is shown through those budgets is that you actually can do that math. It is possible to have a robust tax agenda to be able to pay for things like making sure that families have that tax benefit. And of course that's in contrast to the proposals that you know, Donald Trump is put forward, which are just you know, again and again tax cuts for the very wealthiest on the backs of the middle class that are not going to lead to the kinds of growth or improvements in middle class well being that I think we will see under.

I mean, one of his proposals which was not so directly focused on the rich and was many economists that just sort of greeted as being totally stupid, was about not taxing tips. And now Kamala Harris has also endorsed that proposal, So I mean, that is one that surely is an economist, you wouldn't necessarily think it was a good idea.

Well, certainly, you know the vice president's come out for the President's come out for it. I think that there has long been a challenge for low wage workers in this country, and you know, certainly both the President and Vice President been very clear that we need to raise them inimum wage. We need to make sure that those workers that you know serve food for us in restaurants alocassic country, and you know, make sure that you're.

Going to cut taxes just if it's called a tip, but not if it's called regular wages.

This is part of a larger package to make sure that those workers are paid a fair and days pay.

Another proposal that was in her speech in North Carolina recently, which was the sort of first hints at some of her economic proposals, was as a push against price gouging, which where she seemed to suggest certainly in the speech she talked about price controls in groceries and key goods. So I'm just again that's something where economists, even people who've done relatively little economists economics, just doesn't sound like a good idea when something is in short supply to stop producers from raising the price.

Yeah, So I mean, I'll see a couple of things on this. I mean, first of all, now I think what she was, what I heard her talking about the speech and the fact she and the stuff that she wrote about there is that you know, we know that prices are too high.

We know that.

You know, we've seen over the past year grocery prices have increased by just over percent one point one percent. That's down from increasing by thirteen percent, you know, back in twenty twenty two. So certainly there's been progress on that, but we have seen that the groceries have not brought prices down, And I think what she has been focused on is that there are too many corporate actors that have been acting in bad fate. They haven't been passing on their lower prices onto consumers. And of course it is the case that there are price gouging laws and states all across the country, including in Texas. And in fact, what she has proposed is similar to what Republicans in the Senate have proposed. Now we know that in this economy, making sure that markets are competitive so that they can benefit consumers and workers and families and communities is a really important part of the economic agenda. Things have become far tooconomically concentrated, and it does mean that making sure that bad faith actors can't take advantage of the situation is a really important part of the policy agenda.

I guess that just seems a bit of a disconnect because a lot of the discussions, the sort of explanations we've had since you know, she talked in the speech about price controls, we talked about groceries. It was in the context of talking about the kind of things you've just talked about, you know, the big rise in grocery prices over the last few years. But then when when her advisors have spoken about the details, she suggested that it would really only be in very specific sort of natural disaster hurricane in the local market. You stop the local grocery from like gouging the people there, and that's that we're doing that, which arguably you could do anyway with the rules that are already in place. It is very different from addressing the overall rise in the grocery prices over the last couple of years. So it sort of feels like there's a disconnect between the rhetorics surrounding it, and then when cornered what the proposal actually is.

Well, I think that we start from understanding that the pandemic was different, right. We know that that led to a lot of supply side challenges, and we know that, you know, and again there's there are laws around the country on price gouging, because at some points in time, there are challenges in these markets, in various kinds of markets. But it sounds like her proposal is focused on making sure that there aren't bad faith actors and that the federal government has the capacity to take steps. And again this is consistent with Senate, with proposals that Republicans in the Senate have also put forward.

You know, you look at some of these proposals, for example on housing, you know, many people would applaud it. They talk about it being a ymbi agenda, you know, saying yes in my backyard, pushing through building of housing and increasing the supply as well as helping on the demands of helping people of fort housing. It's a pretty activist agenda, and it involves kind of going into local areas and pushing through development plans. At the same time as you're putt quite a lot of money into people's pockets through the child tax credit. We don't know how it's going to be paid for. I mean, the criticism from the Republican side that this is a very progressive, quite interventionist, activist president, potentially Kamala Harris, that's right, isn't it.

Well, you know, I wouldn't. I wouldn't accept that criticism, right, you know, coming from the Republican side. And you look at the policy agenda that Donald Trump is put forward, and you know, you see him using the tools of government to benefit those at the top of the income distribution, to benefit the wealthy, him using the power of government to put in place policies that will raise costs for consumers all across the country. So it's it's in whose interest are you using these these tools in these levers? And you know what, I what I see the Vice President putting together an agenda to do in in a very robust way and consistent with the work that she's done over the past four years as Vice president, is to make sure that government is working to build the middle class, to make sure that prices are fair, to make sure that people had economic opportunities. So it's not a question of whether government is intervening, it's on whose behalf and in whose interest they're intervening.

Finally, very briefly, you said it was your second convention apart from Kamala Harris's speech, which I guess everyone's supposed to say, is that highlight the end of the week. Who are you looking forward to seeing?

I mean, I will say I worked on Hillary Clinton's transition team, and so I got to see her speak last night, and it was it was really beautiful and amazing, and to see how far we've come since she ran for office, and to see how excited everybody is about what's to come was just it was really moving to hear her speak.

I'm excited economist, Heatasha. Thank you very much, Thank you thanks for listening to this week's special Voter Nomics from Chicago. This episode was hosted by me Stephanie Flanders, who was produced by Samosadi, with production support and sound designed by Moses and Brendan Francis Noonan is our executive producer and Sage Bowman is head of Popcarve and special thanks in this episode goes to Josh Wingrove, Heather Bouchet, Christi Cally, and all of Bloomberg's team here in Chicago. Please, if you like the show, go rate and review it.

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