Tangle - The Latest On The Economy

Starting point is 00:00:00 Based on Charles Yu's award-winning book, Interior Chinatown follows the story of Willis Wu, a background character trapped in a police procedural who dreams about a world beyond Chinatown. When he inadvertently becomes a witness to a crime, Willis begins to unravel a criminal web, his family's buried history, and what it feels like to be in the spotlight. Interior Chinatown is streaming November 19th, only on Disney+. The flu remains a serious disease. Last season, over 102,000 influenza cases have been reported across Canada, which is Chinatown is streaming November 19th, only on Disney+. yourself from the flu. It's the first cell-based flu vaccine authorized in Canada for ages six months and older, and it may be available for free in your province. Side effects and allergic reactions can occur, and 100% protection is not guaranteed. Learn more at flucellvax.ca.

Starting point is 00:01:00 From executive producer Isaac Saul, this is Tangle. Good morning, good afternoon, and good evening, and welcome to the Tangle podcast, the place we get views from across the political spectrum, some independent thinking, and a little bit of my take. I'm your host, Isaac Saul, and on today's episode, we're going to be talking about the latest on the economy. Kamala Harris, Donald Trump have issued some new economic proposals. We got a new job report. Just all in the last 48 hours of last week, basically Thursday to Friday, a bunch of stuff

Starting point is 00:01:43 broke and we tried to combine it all into one podcast edition. So you guys could get all caught up without having to read three newsletters or listen to three podcasts. And I think we did a pretty good job. So I'm excited for this one. It's going to be good. Lots of information coming your way. Buckle up. Going to pass it to John and I'll be back for my take. Thanks, Isaac. And welcome, everybody. Hope you had a great weekend. Here are your quick hits for today. First up, Donald Trump's sentencing in the so-called hush money case in Manhattan will no longer take place before the presidential election. Instead, he'll be sentenced on November 26th. Number two, Hunter Biden entered

Starting point is 00:02:30 a last-minute plea deal in his tax evasion case, avoiding a trial. Biden faces up to 17 years in prison. The sentencing for the tax charges is December 16th, and the sentencing for his previous gun crimes will be in November. Number three, the district attorney of the Piedmont Judicial District charged the father of the shooter who killed four people at Appalachee High School last week with four counts of involuntary manslaughter, two counts of second-degree murder, and eight counts of cruelty to children. Number four, the Harris campaign says it raised $361 million in August, nearly tripled the $130 million raised by Trump's campaign last month. And number five, Boeing and its largest union reached a labor agreement to avoid a strike

Starting point is 00:03:12 that was planned for the end of the year. The deal could raise pay by 25% over four years for tens of thousands of workers. Today in New Hampshire, Vice President Kamala Harris unveiled more of her economic plans, proposing tax breaks for new small businesses and a change to the capital gains tax. Former President Donald Trump is sharing more details about what his economic policies will look like if he's re-elected. In New York City, he promised low taxes, low regulations, and low interest rates. He's also proposing a corporate tax cut from 21 percent to 15 percent for companies that make their products in the U.S.

Starting point is 00:03:57 In the past week, the August jobs report and a series of new proposals from Vice President Kamala Harris and former President Donald Trump have put economic issues front and center in the presidential race. With the Federal Reserve expected to cut interest rates at their meeting later this month, both candidates have sought to outline their visions for continued economic growth while keeping inflation in check and mitigating recessionary risks. On Friday, the U.S. Labor Department announced that the economy had added 142,000 jobs in August, lower than economists expected, but an improvement from July. The unemployment rate decreased from 4.3% to 4.2%,

Starting point is 00:04:32 and the July payroll growth was revised down to 89,000 from 114,000. The construction sector led employment gains with 34,000 new jobs. Government payrolls also increased by 24,000, but manufacturing employment dropped by 24,000. The jobs report sets the stage for the Federal Reserve to cut federal interest rates for the first time since 2021. Between February 2022 and August 2023, the Fed raised rates by 5.25 points, keeping the benchmark borrowing rate in the 5.25% to 5.5% range for the past year. The data that we've received in the past three days indicates to me that the labor market is continuing to soften but not deteriorate, and this judgment is important to our upcoming decision,

Starting point is 00:05:18 Fed Governor Christopher Waller said. The Federal Reserve Board will meet next week. Amid the latest economic data, both presidential candidates have sought to sell an economic vision to the country on their campaign trail. On Wednesday, Vice President Harris announced several economic proposals while campaigning outside Portsmouth, New Hampshire, including an expansion of the small business tax credit from $5,000 to $50,000. Harris said her goal would be to receive 25 million new small business applications in her first term. Harris also called for taxing long-term capital gains at 28%, breaking from President Biden's proposal of 39.6% capital gains tax for Americans making more than $1 million a year. The vice president framed the moderate rate proposal as a means for broader economic growth,

Starting point is 00:06:02 saying, when the government encourages investment, it leads to broad-based economic growth and it creates jobs, which makes our economy stronger. Additionally, Harris endorsed a plan put forth by President Biden to tax stock holdings as their value increases for people whose net worth is at least $100 million. At an address to the Economic Club of New York on Thursday, former President Trump also announced a number of economic proposals. Trump said he would cut the corporate tax rate

Starting point is 00:06:28 from 21% to 15% for companies that produce their product in America. He further announced his intention to make the tax cuts passed during his presidency permanent and affirmed that he would not tax Social Security benefits. Finally, Trump said he would create a government efficiency commission led by Elon Musk, who would oversee a financial and performance audit of the entire federal government. Broadly, Trump outlined a vision for lowering prices by increasing tariffs and cutting

Starting point is 00:06:55 regulations to boost energy production, claiming that tariffs in particular would raise trillions of dollars to support his agenda. I am promising lower taxes, lower regulations, lower energy costs, lower interest rates, secure borders, low, low crime, and surging incomes for citizens of every race, religion, color, and creed, Trump said in his speech. Today, we'll share perspectives from the left and the right on the latest economic numbers and each candidate's recent proposals, and then Isaac's take. We'll be right back after this quick break. Based on Charles Yu's award-winning book, Interior Chinatown follows the story of Willis Wu, a background character

Starting point is 00:07:45 trapped in a police procedural who dreams about a world beyond Chinatown. When he inadvertently becomes a witness to a crime, Willis begins to unravel a criminal web, his family's buried history, and what it feels like to be in the spotlight. Interior Chinatown is streaming November 19th, only on Disney+. It's the first cell-based flu vaccine authorized in Canada for ages six months and older, and it may be available for free in your province. Side effects and allergic reactions can occur, and 100% protection is not guaranteed. Learn more at flucellvax.ca. All right, first up, let's start with what the left is saying. The left is concerned by the latest jobs report, but says the Fed can help the economy with an aggressive rate cut.

Starting point is 00:08:49 Many back Harris's economic agenda, but say she can do more to win over undecided voters. Others criticize Trump's recent proposals, arguing they would undermine the strength of America's economy. In the Washington Post, Heather Long said, The U.S. economy looks fragile. There's an easy way to fix that. The United States is not in a recession, but there's a real chance it could be soon. The Herculean economy of 2023 is past, and the situation is now fragile. The economy is cooling. Growth is slowing. Consumers are no longer splurging. They're value hunting, Long wrote.

Starting point is 00:09:21 Friday's jobs report underscored the thin ice conditions. Hiring was weaker than expected in August, and job growth for June and July was revised way down. There's an easy way for the Federal Reserve to stop this deterioration and prevent a recession. Cut interest rates decisively. I think it is very likely that Powell will choose the modest option of a 25 basis point cut. He and other Fed leaders will say the economy still looks solid and they don't want to scare anyone. They will rationalize that they can take a first small step and follow it with more cuts later this year if the labor market worsens, Long said.

Starting point is 00:09:53 This is a mistake. The biggest risk lies in not doing enough. By making a larger cut this month, the Fed could signal that it is taking the warning sign seriously and wants to prevent the worst case scenario. It would quickly restore America's confidence in the economy. In The American Prospect, Harold Meyerson wrote about how Harris targets the middle class

Starting point is 00:10:12 in both her taxing and spending policies. Harris's new proposals laid out in a speech delivered in New Hampshire last week are rather staid, which, under the circumstances, is not a criticism. Strategically, she's chiefly been targeting the middle class in both her taxing and spending policies, Meyerson said. But by bringing down the extent of the increase to taxes on investment, she reinforces the impression that she'd be friendlier to at least some of the Silicon Valley gazillionaires who've been backing her since her initial San Francisco electoral campaigns. As of now, her proposals to

Starting point is 00:10:44 make child-rearing more affordable and give a boost to new small businesses have a particularly positive impact on some large but distinct subsets of the electorate, young women and aspiring small business proprietors, a group in which Latinos and Asian Americans are very well represented. She needs a more direct economic appeal to the male working class, which at this point is the sector of the electorate that's the most challenging for Democrats to win over. In The Guardian, Joseph Stiglitz argued, Trump would make the U.S. economy weaker, less competitive, and less equal. Trump has no interest

Starting point is 00:11:15 in creating a more just, robust, and sustainable economy. Instead, the Republican ticket is offering a blank check to coal and oil companies and cozying up to billionaires such as Elon Musk and Peter In Harris, the U.S. has someone who would be thoughtful and pragmatic in weighing the tradeoffs and devising balanced solutions. In Trump, we have an impulsive narcissist who thrives on chaos and rejects scientific expertise. Trump has adopted the extreme position of threatening the Fed's independence. Another Trump presidency thus would introduce a persistent source of economic uncertainty, depressing investment and growth, and almost certainly increasing inflation expectations, Stiglitz said. Trump's proposed tax policies are equally fraught.

Starting point is 00:12:00 Recall the 2017 tax cut for corporations and billionaires, which failed to stimulate additional investment and merely encouraged share buybacks. But Trump, ignoring the evidence that trickle-down tax cuts don't work and don't pay for themselves, wants to renew and then deepen the 2017 cut. All right, that is it for what the left is saying, which brings us to what the right is saying. The right suggests the latest jobs data portends an economic downturn. Some praise Trump's economic agenda as a blueprint for future prosperity. Others criticize Harris's tax plan as counterproductive.

Starting point is 00:12:45 In hot air, Ed Morrissey called the jobs report, meh. Count this as another miss on expectations and at a particularly poor time for an incumbent administration seeking another term. Economists expected a mediocre return to normalcy in the job market for August after July's report showed only a shocking 89,000 jobs added. The consensus set the mark at 161,000, a figure that would barely be above economy maintenance levels, Morrissey said. That's not looking good, no matter how much spin the media will give today's numbers.

Starting point is 00:13:14 With the exception of a fourth-month burst last winter, job creation has trended mainly downward over the last two years. The data clearly shows that July's report wasn't an outlier, but part of a decline in the job market. Today's data, even if it holds up after next month's revision, is nothing more than job creation keeping pace with popular expansion. Bidenomics is running out of gas, if it ever had any.

Starting point is 00:13:36 And that has implications for both the election and the Federal Reserve, Morrissey wrote. With the personal consumption expenditures index still above 2%, expect a more modest cut in September. Powell will be sensitive to accusations that a more aggressive policy will be for the political benefit of the incumbent administration. And besides, inflation has not yet been fully tamed. The New York Post editorial board said Trump will juice the economy, curb inflation. Donald Trump's economic vision, which he outlined Thursday, couldn't be a more radical and encouraging change from the Harris-Biden economic horror show. The ex-pres wants to return to the days when he presided over low inflation and low unemployment

Starting point is 00:14:16 by unleashing domestic manufacturing and energy production, ending wasteful Green New Deal spending, ditching onerous regulations, and making his tax cuts permanent. That sure beats Kamala Harris's socialist price controls, multi-trillion dollar tax hikes, and more inflation-boosting Bidenomics. True, Trump may be unable to meet all of those lofty goals, especially if Democrats control Congress. Yet he'd push the nation in the right direction after years when Harris-Biden policies drove up energy and grocery prices and sky-high interest rates made homes unaffordable, the board wrote. Honestly, who wants more Bidenomics misery, even if imposed by Kamala Harris, plus potentially a $5 trillion tax hike, trillions in wasteful green new pork on top of that, and yet more federal debt? Few elections

Starting point is 00:15:03 will turn on the candidates' economic plans more than this year's. Trump just showed why. National Review's editors wrote, the tax lady cometh. Raising the level paid by U.S. corporations to 28%, and that's before considering state taxes, would damage the ability to compete internationally, hitting the growth prospects and, by extension, those of the U.S. as a whole, something that would hurt all Americans, not just those making $400,000 a year or more, the editor said. Moreover, while increases in corporate taxes are, of course, technically paid by corporations, the real cost will be felt elsewhere, by the shareholders, customers, and workers, as dividends

Starting point is 00:15:41 are hit and companies look to offset higher taxes with higher prices and tighter controls of wages and staffing levels. There are other attacks on American business included in the vice president's plans for companies, including an increase in the minimum tax paid by the largest corporations from the 15% established under the Inflation Reduction Act to 21%, yet another reminder that a once relatively modest change that increases taxes introduced, it tends not to stay modest for long, the editors wrote. Yet another reminder that a once relatively modest change that increases taxes introduced, it tends not to stay modest for long, the editors wrote. These proposals and others not mentioned here together represent a massive assault on incentives to work harder, to save, to invest, to innovate, and to pass on the fruits of a lifetime's effort to the next generation, incentives that have been key to America's extraordinary

Starting point is 00:16:22 success. All right, let's head over to Isaac for his take. So in the span of 48 hours last week, Trump and Harris each released new proposals and we got an important jobs report. So there is a lot to catch up on today. I decided to give 12 quick reactions to the latest on the economy and the proposals from Trump and Harris. So let's start with number one. Defining when the economy is in a recession is surprisingly difficult. Pundits have been worrying over whether we are already in one for months, while several also went out on the same limb in 2023

Starting point is 00:17:09 and fell off badly. Defining and describing the economy is one of the ways the press has a tremendous amount of influence. For now, Harris continues to face headlines about a slow jobs report or an economic downturn, which I think is the kind of framing her campaign can survive.

Starting point is 00:17:26 Number two, it seems unlikely that a consensus forms that we are in a recession before election day. If that happened though, or if we had some kind of genuine stock market crash, I think it would all but end her campaign. But with six weeks to go until election day, none of that seems likely, even with another bad jobs report.

Starting point is 00:17:46 Number three, Trump continues to release policy proposals that are more digestible than his Democratic counterparts. I think there is something about the perception of him as a non-politician that allows him to propose simple, creative, and memorable ideas, even if they are impractical. The no tax on tips proposal is a great example and an idea compelling enough

Starting point is 00:18:05 for Harris to just take it. And the corporate tax rate cut for companies who make their products in the U.S. is the kind of thing every voter can understand and will remember. Number four, speaking of Trump's policies, it is really hard to find an economist who supports tariffs, partially because we already experienced Trump's tariffs in 2018 and 2019. The Tax Foundation estimated that those tariffs equated to $80 billion of new taxes on Americans, amounting to one of the largest tax increases in decades. Trump's 2024 proposal would be roughly five and a half times more impactful, tariffs that could amount to roughly $524 billion of new taxes on American consumers annually. Number five, Trump keeps saying that tariffs are a tax on a foreign country.

Starting point is 00:18:52 He is wrong. Tariffs are technically taxes on foreign importers, but those taxes are paid by U.S. companies importing Chinese goods, who then pass a portion of those higher costs on to consumers. If I want to sell a candle in China, and China decides to tax my candle, they don't tax me. They tax the Chinese importer. That importer then either charges me more, which results in me raising my prices, or they charge the consumers more. Consumers then refuse to buy the candle,

Starting point is 00:19:19 which is a win for China, who is imposing the tariff to hurt me or protect their own candle industry, or consumers decide to buy the candle anyway, in which case China just raised prices on its own consumers. Either way, I'm not the one paying. It is hard to know if someone has misled Trump into believing that the real costs of tariffs are paid by foreign countries, or if he believes this is a good way to sell the idea to voters. Either way, it isn't true. Number six, before all the Biden Harris supporters prepare their attacks, you should know that the Biden administration has kept most of the Trump administration's tariffs in place and recently announced tariff hikes on another 18 billion dollars of Chinese goods like electric cars and semiconductors. Number seven, a lot of

Starting point is 00:20:02 conservative institutions are very worried about Trump's proposed economic policies I don't know how representative of mainstream Republican thought places like the American Enterprise Institute are anymore but I think this is an undertold storyline of the 2024 election Number eight, like most people I believe the government wastes

Starting point is 00:20:20 an incredible amount of money each year One great way to lower the deficit is to make the government more efficient. I'd start with the military. But I have to say, I couldn't help but laugh when I heard that Trump and Elon Musk's idea to address government fraud and waste was to create a new government commission.

Starting point is 00:20:36 Here we have the supposed most private sector president of all time and the king of the private sector putting their minds together to solve government fraud and waste. And the best that they can come up with is another new government body to solve the problem of too much government. Does anyone else find this incredibly ironic or is it just me? Number nine, Harris proposed a 28% tax on long-term capital gains. Those are assets owned for more than a year on households making more than $1 million annually. This is one of her first notable economic policy breaks

Starting point is 00:21:06 from Biden, who had proposed lifting this tax from 20% to 39.6%. If Harris had stuck to Biden's plan, it actually would have been quite extreme. The sum total of Biden's proposals would make the U.S. an outlier internationally in how it taxes the wealthy. Moderating the rate was probably smart,

Starting point is 00:21:23 and it represents a trend to monitor. Where will Harris try to moderate her policies from Biden's, and where is she going to move left? So far, she looks to be moving to the center on business issues. Number 10. Despite being more moderate, Harris's capital gains tax proposal has all the same flaws that Biden's did. It raises revenue in an uneven fashion since capital gains are unpredictable. It punishes people for responsibly investing money since it's a tax on long-term gains. It might be unconstitutional.

Starting point is 00:21:51 And finally, she is never going to get it passed if Republicans flip the Senate and or hold the House. She may not even be able to do it if Democrats have a slim majority. Number 11, Trump's 2017 tax cuts spurred growth and helped average Americans. The question now is if we can afford them. When the cuts went into effect,

Starting point is 00:22:08 I was making about $70,000 a year. Those cuts saved me over $1,000 annually, which made a big difference in my life. These cuts are set to expire in 2025, and it's unclear how Harris will address them. If she allows a personal income tax cut to die, a lot of people who forgot about those cuts eight years ago are going to be very unhappy. Losing $50 on a paycheck out of the blue is the

Starting point is 00:22:31 kind of thing middle-class Americans will notice. Number 12. As a small business owner, I'm intrigued by Harris's expansion of the small business tax credit from $5,000 to $50,000. I also love her goal of receiving 25 million small business applications in her first term. But I think there is a very good argument that she is targeting the wrong small businesses in the wrong way. Rather than helping existing small businesses by extending tax cuts, limiting regulatory measures, and investing in existing programs, she is focused on subsidies for new businesses, even though startups are already flourishing. The sweet spot is a combination of free market policies with government assistance in the areas

Starting point is 00:23:09 the free market needs some juice. This does not seem like one of those areas. We'll be right back after this quick break. right back after this quick break. Based on Charles Yu's award-winning book, Interior Chinatown follows the story of Willis Wu, a background character trapped in a police procedural who dreams about a world beyond Chinatown. When he inadvertently becomes a witness to a crime, Willis begins to unravel a criminal web, his family's buried history, and what it feels like to be in the spotlight. Interior Chinatown is streaming November 19th, only on Disney+. The flu remains a serious disease. Last season, over 102,000 influenza cases have been reported across Canada, which is nearly double the historic average of 52,000 cases. What can you do this flu

Starting point is 00:24:00 season? Talk to your pharmacist or doctor about getting a flu shot. Consider FluCellVax Quad and help protect yourself from the flu. It's the first cell-based flu vaccine authorized in Canada for ages six months and older, and it may be available for free in your province. Side effects and allergic reactions can occur, and 100% protection is not guaranteed. Learn more at FluCellVax.ca. All right, that is it for my take, which brings us to your questions answered, which is actually about my take. This one is from Chris in Osceola, Indiana. I think I'm saying that right. I apologize if I'm not. Chris said, I enjoy hearing our point of view, but is it necessary to be as long as a read of the left and right point of view? I

Starting point is 00:24:50 appreciate your opinion, but not as much as mine and theirs. Okay, so I actually really appreciate this question, and I think there are a few things that are worth keeping in mind. One, I do not think my opinion is more important than the right or left sections in the newsletter. I just think it's a good way to make the newsletter or the podcast more personal and add some unique writing. I strongly recommend reading or listening to the entire podcast from top to bottom. I actually didn't have my take in the early editions of Tangle, but it was something people asked for, which I thought would be a fun addition. Sometimes I do have pretty strong opinions or some fresh things to say I'm not seeing said elsewhere, so I feel like I can be additive. I believe sharing my take is an act

Starting point is 00:25:30 of transparency since it gives readers insight into the person and the team providing them the news. On the whole, though, here's a promise I can make. If I don't feel equipped to have an opinion, I won't try to form one. If I don't think I can say something unique or fresh, I won't try to force it. And if I'm not sure how I feel about something, I'll say so rather than just trying to manufacture a quote unquote take. The good news is I have great editors who are always sure to check me.

Starting point is 00:25:56 All right, that is it for your questions answered. I'm gonna send it back to John for the rest of the pod, but appreciate you guys tuning in. We'll be back here same time tomorrow. Have a good one. Peace. Thanks, Isaac. Here's your under the radar story for today, folks.

Starting point is 00:26:11 Youth vaping quietly hit a 10 year low this year, a positive sign on a public health issue that has sparked widespread concern across the country. A joint survey from the FDA and the CDC shows that teen vaping rates fell to under 6%, down from 7.7% in 2023, and from its peak of 27% in 2019. The drop in vaping didn't coincide with the rise in other tobacco industry products, such as nicotine pouches. Vaping was unchanged among middle

Starting point is 00:26:38 schoolers, with 3.5% still reporting having used e-cigarettes in the past month. This is a monumental public health win, FDA's tobacco director Brian King said, but we can't rest on our laurels. There's clearly more work to do to further reduce youth use. The Associated Press has this story, and there's a link in today's episode description. All right, next up is our numbers section. The percentage of registered voters who say the economy and jobs are the most important issues facing the U.S. is 27%, according to a July 2024 Harvard-Capps-Harris poll. The percentage of registered voters who say the U.S. economy is on the wrong track is 61%. The percentage of U.S. adults who trust former President Donald Trump more than Vice President Kamala Harris on economic issues is 46%, according to an August 2024 poll from ABC News Ipsos. The percentage of U.S. adults who trust Harris more than Trump on the economy is 38%. The increase in the unemployment rate between August 2023 and August 2024 is 0.4%. The approximate increase in the number of unemployed people

Starting point is 00:27:47 between August 2023 and August 2024 is 800,000. The top bracket capital gains tax rate for individuals between 1972 and 1977 and in 1979 is 35%, the highest rate in US history. The top bracket capital gains tax rate for individuals proposed by Vice President Harris is 28%, up from the current maximum rate of 20%. The estimated amount that former President Donald Trump's tax and spending proposals would add to the U.S. deficit over 10 years is $5.8 trillion, according to the Penn-Wharton

Starting point is 00:28:22 budget model. And the estimated amount that Vice President Kamala Harris' tax and spending proposals would add to the U.S. deficit over 10 years is $1.2 trillion. All right, and last but not least, our Have a Nice Day story. Basketball Hall of Famer Charles Barkley recently made a donation of $100,000 to a high school in New Orleans, Louisiana, the first of 10 donations from Berkeley to St. Mary's Academy for a combined donation of $1 million.

Starting point is 00:28:50 After hearing that two students at the high school, Kelsia Johnson and Nakia Jackson, had completed a new proof for the Pythagorean theorem that had baffled mathematicians for 2,000 years as part of a math competition at the school, Berkeley felt inspired and pledged the donation. Afrotech has this story, and there's a link in today's episode description. All right, everybody, that's it for today's episode. As always, if you'd like to support our work,

Starting point is 00:29:15 please head over to retangle.com and sign up for a membership. We'll be right back here tomorrow. For Isaac and the rest of the crew, this is John Wall signing off. Have a great day, y'all. Peace. Our podcast is written by me, Isaac Saul, and edited and engineered by Duke Thomas.

Starting point is 00:29:29 Our script is edited by Ari Weitzman, Will Kabak, Daily Saul, and Sean Brady. The logo for our podcast was made by Magdalena Bokova, who is also our social media manager. The music for the podcast was produced by Diet75. And if you're looking for more from Tangle, please go check out our website at readtangle.com. That's readtangle.com.

Tangle - The Latest On The Economy

There aren't comments yet for this episode. Click on any sentence in the transcript to leave a comment.