Trump’s Economic Plan Sparks Concerns on Growth, Rule of Law

Trump’s Economic Plan Sparks Concerns on Growth, Rule of Law \ Newslooks \ Washington DC \ Mary Sidiqi \ Evening Edition \ Vice President Kamala Harris’s campaign warns that Donald Trump’s disregard for democratic principles could undermine U.S. economic stability if he regains the presidency. While Trump promises lower prices and strong growth, Harris and economic experts argue that a stable rule of law fosters market confidence and long-term investment, contrasting with Trump’s calls for high tariffs and corporate tax cuts.

The Economic Clash: Harris vs. Trump – Key Points

• Rule of Law and Market Stability: Harris’s team argues that Trump’s actions threaten democratic norms crucial for economic stability, saying businesses need reliable governance to thrive.
• Diverging Economic Visions: Trump promises to lower prices through tariffs and tax cuts, focusing on incentives for the wealthy and corporations, while Harris emphasizes stability through the rule of law.
• Expert Perspectives: Economic advisors like Gene Sperling warn against Trump’s approach, while Trump supporter John Paulson counters that economic conditions were stronger during his presidency.
• Business Community’s Divided Support: While Harris has backing from leaders like Bill Gates and Mark Cuban, Trump draws support from figures like Elon Musk.
• Endorsement Uncertainties: The Business Roundtable and Chamber of Commerce have refrained from endorsing either candidate, but stress the importance of a stable economic environment.

Deep Look

The Harris campaign is actively cautioning business leaders that former President Donald Trump’s record on democracy and the rule of law poses a serious risk to U.S. economic growth. As part of her closing arguments to American corporate leaders, Vice President Harris contends that Trump’s repeated disregard for democratic norms and attacks on the pillars of government could disrupt the nation’s economic stability, threatening businesses and workers alike if he returns to the White House. This stark warning stands in contrast to Trump’s economic promises, with his campaign touting policies aimed at lowering costs and stimulating growth through increased tariffs and corporate tax cuts.

The message from Harris’s team is clear: a healthy economy is rooted in trust, stability, and adherence to the rule of law. Gene Sperling, a veteran economic advisor who has served under three Democratic presidents, is one of Harris’s top advisors making the case to Wall Street and corporate executives. Sperling argues that Trump’s approach risks long-term harm, as a leader who targets companies, journalists, and other opponents could drive down investment confidence, which has remained robust under current democratic governance. “A president who targets people, CEOs, and companies could devastate investment confidence,” he stated, emphasizing that this has historically been a strength of American democracy.

In response, Trump and his economic supporters are pushing back. Hedge fund billionaire John Paulson, a staunch Trump ally and potential candidate for Treasury secretary, has argued that the U.S. economy was stronger and more stable during Trump’s administration, with lower inflation rates and a more predictable business climate. Paulson dismissed Harris’s claims as unfounded, insisting that Trump’s background as a successful businessman equips him to manage the country’s economy, cut wasteful spending, and stimulate growth. “Trump is a brilliant businessman. He wants to bring down wasteful spending and encourage growth,” Paulson said, emphasizing that Trump’s leadership would restore stability.

Trump’s pitch to voters centers on his background in real estate and his track record of aggressive economic measures, including high tariffs intended to boost U.S. manufacturing and corporate tax cuts aimed at fostering investment. Speaking at a recent rally in Allentown, Pennsylvania, Trump promised businesses lower taxes, reduced energy costs, and fewer regulatory burdens. He argued that maintaining these policies would keep the U.S. market strong and competitive globally, in contrast to what he described as “stupid” economic policies under his opponent’s party. “If we had more of these idiots running our country, you won’t have a big and best market anymore because we’re a nation in decline,” Trump stated.

Meanwhile, Harris’s campaign has focused on Trump’s repeated assaults on democratic institutions and norms as a threat to business confidence. The campaign has linked Trump’s rhetoric to the January 6, 2021, Capitol attack and cited his criticisms of the Federal Reserve and companies like Amazon, Merck, Comcast, and John Deere as examples of erratic governance. Harris’s advisors argue that such conduct undermines democratic values and makes it difficult for companies to feel secure in their long-term investments. They emphasize that when democracy is stable, markets are predictable, which benefits businesses and their workers alike.

In addition to Sperling, other prominent figures supporting Harris’s view have engaged in discussions with the business community, including former Treasury Secretary Robert Rubin, ex-CEO of American Express Kenneth Chenault, and former National Economic Council Director Brian Deese. According to insiders, many business executives are privately expressing concerns over Trump’s potential return to office, noting that the erosion of democratic norms could significantly impact market stability. These discussions reveal that corporate leaders—often seen as neutral—are voicing concerns that Trump’s approach could stoke economic uncertainty rather than growth.

Vanessa Williamson, a governance expert at the Brookings Institution, pointed out that the Harris campaign might even be downplaying the risk. She noted that Americans often take the rule of law for granted, which can obscure its importance to market stability and deter cronyism and fraud that could arise from weakened democratic oversight. “The kind of rampant cronyism and fraud that is endemic in some other countries has really been unimaginable here,” Williamson explained, warning that democratic erosion could make it harder for Americans to realize the true value of secure governance for economic health.

While both campaigns court business sector support, they also differ on key economic policies. Trump advocates maintaining low corporate taxes, seeing Harris’s proposed tax increases as a deterrent to business investment. Harris’s team counters by criticizing Trump’s plan to eliminate Biden-era incentives that promote job creation in sectors like semiconductor manufacturing and electric vehicle production. This policy debate underscores the candidates’ divergent strategies for fostering U.S. economic growth.

Adding weight to the debate over democracy and economic health, the Nobel Prize in Economics was recently awarded to economists who underscored the importance of democratic institutions and the rule of law in driving economic growth. Daron Acemoglu, one of the Nobel laureates, was among 23 Nobel-winning economists who signed a letter warning that Trump’s plans would likely “lead to higher prices, larger deficits, and greater inequality,” posing a threat to the stability needed for economic success.

The conversation is personal for Harris, who previously served as California’s attorney general and has long held that democracy and economic stability are intertwined. Former White House aides recall that in 2022, Harris requested economic research that linked democratic erosion to economic decline. They shared that this connection has been central to Harris’s understanding of economic policy, with her team stressing that the rule of law is vital for markets to function predictably and productively.

President Biden’s administration has similarly raised these points with the business community. White House Chief of Staff Jeff Zients has echoed Harris’s concerns in his outreach to the CEOs in the Business Roundtable, arguing that a Trump presidency would bring uncertainty to the market, contrasting sharply with Trump’s promises of additional tax cuts. Neither the Business Roundtable nor the U.S. Chamber of Commerce has made an endorsement in the election, though they continue to advocate for policies that ensure a stable economic environment.

Josh Bolten, CEO of the Business Roundtable, issued a statement supporting the peaceful transfer of power as essential to economic continuity. Despite pressure to commit to this democratic principle, Trump has refrained from promising a peaceful transition, repeating unsubstantiated claims that his 2020 election loss was rigged. This refusal raises further concerns among business leaders who value democratic stability for its contribution to predictable, growth-oriented market conditions. Bolten’s recent statement emphasizes the need to respect electoral processes as outlined in U.S. laws, warning that deviations from these norms risk harming market confidence.

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