The Journal. - The Economy: Trump vs. Harris

Episode Date: August 19, 2024

Last week, the two presidential candidates put forward some specific policy proposals about the economy. WSJ’s Andrew Restuccia breaks down what each candidate is proposing. Further Reading: - Harris Calls for Expanded Child Tax Credit, 3 Million New Housing Units  - Harris, Trump Propose Divergent, Costly Solutions for Inflation  Further Listening: - Is the Trump Campaign Going Off Track?  - 'Phony' and 'Weird.' Trump and Harris Size Each Other Up  Learn more about your ad choices. Visit megaphone.fm/adchoices

This year, most voters are focused on one thing. The economy is far and away the top issue for voters across the board. That's our colleague Andrew Resducha. It's been shown time and time again, poll after poll. Voters are particularly focused on cost of everything from groceries to rent. And it's an issue that comes up time and time again in the interviews that I do with voters around the country. Grocery prices and rent and the cost of utilities and the cost of everything that people need to pay for have increased.

And so voters are still quite frustrated by the amount that they're paying every time they go to the store. For instance, I went to the store the other day, bought three things. Lemons, cucumbers, and feta. 12 bucks. It's a lot. It's a lot. Yeah. Cucumbers and feta? 12 bucks. It's a lot. It's a lot, yeah.

And so both presidential candidates, Donald Trump and Kamala Harris, have been talking about the economy a lot. I will end the devastating inflation crisis immediately, bring down interest rates. Prices for everyday things like groceries are still too high. Gasoline has gone way up.

The bills add up. Food, rent, gas, back to school clothes, prescription medication. We're going to have 10 to 20 percent tariffs on foreign countries. I will make it a top priority to bring down costs and increase economic security for all Americans. What you're seeing is Kamala Harris trying to explain, I get it, things are bad and here's my plan for how to fix it. And you have Donald Trump saying, things are bad and Democrats are to blame. and Democrats are to blame.

Welcome to The Journal, our show about money, business and power. I'm Kate Leinbach. It's Monday, August 19th. Coming up on the show, one economy and two candidates' plans for how to fix it. time to change the outcome. But pre-diabetes does. Take the one-minute risk test today at doiheprediabetes.org. Brought to you by the Ad Council and its pre-diabetes awareness partners. Hello, family and friends. On Friday, Vice President Kamala Harris flew to North Carolina for a campaign event. Why was this particular speech an important one? So Harris was thrust into this sort of historic kind of chaos when Joe Biden stepped aside and she took over at the top of the ticket. And so what she's having to do is strike this really interesting and complicated

balance between endorsing the proposals that she helped oversee as vice president and telling voters, and here's what else I'll do. So Harris unveiled kind of the first round of her economic policy platform last week. unveiled kind of the first round of her economic policy platform last week. And her big picture theme message is that she's going to continue working to lower prices in every way she possibly can and lower more broadly costs for families. And then she's also really leaning into this idea that there's unfairness that

the market itself is being driven by corporate greed, just big corporations unnecessarily excessively raising the prices of certain items to make a big profit. And she says, I want to make sure that companies aren't ripping you off and that she's going to be really looking out for middle class, low income families across the board. OK, so let's dig in on that. What are some of her policy ideas for how to help those kinds of families?

One of the biggest ones is a pretty massive expansion of the child tax credit, which is a tax credit that exists currently that families can get to help raise their children. In 2021, at sort of one of the worst moments of the pandemic, Congress got together and expanded this child tax credit. And it actually really transformed child poverty

in the country, lifting millions of children out of poverty. So there was this sort of one year period where child poverty was cut almost in half in the United States as a result of this tax credit. But it expired at the end of 2021. So she wants to bring that child tax credit back. But on top of that, she wants to expand it pretty significantly that would give families

with babies one year old or younger up to a $6,000 tax credit. Think what that means. That is a vital, vital year of critical development of a child. And the cost can really add up, especially for young parents who need to buy diapers and clothes and a car seat and so much else.

And there would be lots of restrictions on that based on income and other things. But she's essentially saying that in the first year of a child's life that a family can get up to $6,000 from the government to use to help raise that child. What is she hoping to achieve with this? I think what she's saying is, you know, raising a family in the United States is too difficult, whether you are at the lowest, you know, range of the income spectrum to the middle of it, and that the prices that are affecting families, the high prices, are making it too difficult to raise a child without

help. And she's saying here's a lifeline. What about the Trump campaign? Do they have a position on a child tax credit? So it's one of the rare instances where the policies of the Trump world and the Biden-Harris world are overlapping. So JD Vance, the senator from Ohio who's Trump's running mate, has proposed a $5,000 child tax credit. So it'll be interesting to see over the coming months how much Vance's influence affects their policy.

But essentially, you have two campaigns proposing a really similar, although different on the details, broad idea to help families raise children. So let's look at another promise from the campaign trail from Harris on housing. Tell us about this policy that Vice President Harris has put forward. Yeah, I've talked to probably hundreds of voters over the last few months. Housing has gone from like a fourth or fifth in the rating of what the most significant prices are to like second over the last couple years. As other prices have gone down, housing has been the stubborn cost that most significant prices are to like second

over the last couple years. As other prices have gone down, housing has been the stubborn cost that people get increasingly frustrated over. So she's put forward a bunch of new tax incentives, including a new proposal for home builders who build homes for first-time buyers. She's put forward a goal of building three million new housing units over the first four years of her term. And she's also saying she would like to give first-time home buyers $25,000 in down payment

assistance. And she wants to crack down on alleged price fixing among landlords and Wall Street companies that buy up a ton of houses and then jack up the costs. And so it's really a multi-pronged proposal here. Are there criticisms of Harris's plan? I think the main criticism is the cost, which is likely in the hundreds of billions of dollars,

if not more. And then the other one is there's One criticism is the cost, which is likely in the hundreds of billions of dollars, if not more. And then the other one is there's a little bit of a conflict here because she's trying on the one hand to address the housing supply shortage, which everyone says is the cause of the high prices in part. encouraging new people to enter the housing market, first-time home buyers. And so how do you balance flooding the market with new buyers and then also having a housing shortage? What is Trump's approach on housing? So Trump has, again, not put forward as detailed a plan as Harris has.

He has called broadly for additional tax incentives for housing to help people buy homes. He hasn't been particularly detailed about that. He has called for building housing on federal land, which would be sort of an innovative approach to housing policy. But the Biden administration has tried to do that as well. And then he has sort of framed the rest of his pitch around just lowering costs broadly and addressing inflation broadly. After the break, inflation and what both candidates are planning to do about it. If only life had a remote control, you could pause or rewind. Well, life doesn't always give you time to change the outcome, but pre-diabetes does.

Take the one-minute risk test today at DoIHavePreDiabetes.org, brought to you by the Ad Council and its pre-diabetes awareness partners. So we've talked a lot about Harris. What about Trump? What's his overall message on the economy? His overall message is blame Biden and Harris, effectively. She breaks everything just like she broke the border, broke our economy. But soon we are going to fix every single problem Kamala Harris and Joe Biden have created.

He points to the massive inflation that we've seen over the Biden administration's time in office. And he said, look, they're destroying the economy. This is their fault. He has essentially blamed them for inflation, which we of course are seeing on a global basis. Kamala's inflation nightmare continues to cost the average American family $1,100 every single month. $1,100. And his pitch to voters is, I'll fix it.

It's like if I come into office, I'll lower prices. Inflation will be just a memory and the economy will be booming again. Last week, Trump hit on his economic plans at a press conference at his golf club in New Jersey. He stood next to a table full of everyday grocery items. Pastries, milk, bacon, boxes of cereal. Like the Cheerios. I haven't seen Cheerios in a long time. I'm going to take them back with me. Bacon is through the roof.

They're all through the roof. The milk, everything is bad. And we're going to straighten it out. We're going to bring prices way down. And we'll get it done fast. And he went on a pretty extended tirade about costs. And he talked about how much individual products had increased and the burden that Americans are facing.

What is his plan to combat rising prices? So his plan broadly focuses on several things. So rolling back regulations, cutting taxes, expanding oil drilling, and imposing a series of sweeping tariffs on imports from other countries. And that fourth piece is really sort of at the core of his economic philosophy. Tariffs are something that he embraced in a big way

in his first term, particularly as a sort of negotiating tactic with China. And he's gonna bring it back big bigly as he would say in a second term. He has proposed a 10% and at times he's even set up to 20% across the board tariff on all US imports. So that's anything that comes into the United States from any country, as well as up to a I think a 60% tariff on imports from China. His argument is that we need to protect US industries,

and so we need to build up the American manufacturing sector, but in the meantime, most economists say that it would actually increase prices for American consumers. This is an argument that Trump and his advisors absolutely reject. They won't acknowledge that it could raise prices, but almost every economist says that it would. consumers. This is an argument that Trump and his advisors like absolutely reject. They

won't acknowledge that it could raise prices, but almost every economist says that it would. And he, you know, as always talks in the broadest possible terms about his proposals and rarely sort of gets into detail. I mean, so his sort of go to answer when you ask him what he's going to do to lower prices is to quote drill baby drill. And we will drill baby drill. We're going to drill baby drill. That's going to bring down prices of everything because energy brought it up.

He wants to expand massively oil drilling and natural gas drilling in the United States. The economists of course say that that would only maybe have minimal effect on prices, particularly gasoline prices. I suppose that is the most direct one, in part because the price of oil is set on a world market. And one US president's ability to control prices directly through drilling is pretty limited. What does Harris say she will do about rising prices? So she says broadly that she's going to go after companies

that are trying to make excess profits off the backs of working people. And she's going to put forward a bunch of tax credits and other measures to lower prices across the board, from drug prices to the prices of groceries. So believe me, as president, I will go after the bad actors. Yeah! CHEERING AND APPLAUSE

And I will work to pass the first-ever federal ban on price gauging on food. CHEERING AND APPLAUSE Will a federal ban on price gouging work? So she's saying that she's going to put in place a new set of rules that will prevent companies from making excessive profits that hurt consumers. And I think like most economists say, price gouging on its own isn't really the central reason for high prices. Trump's team has really latched on to this proposal from Harris and alleged that Harris

is envisioning a world in which the United States imposes price controls and tries to tinker with the free market and creates almost like a Venezuela-like system. That of course is an exaggeration. That's not exactly what Harris is proposing, but it's given the Trump campaign an easy sort of attack line to criticize Harris as this sort of excessive, almost socialist. So both candidates are talking about the economy

and saying inflation is a problem. How will voters differentiate? Well, it's a good question, honestly, and it's difficult to ascertain exactly how voters are making sense of this. I think so much of this election has come down to vibes and talking points and slogans. You know, the average campaign rally from either candidate is sort of really heavy on atmospherics and emotion and I feel your pain and kind of light on the policy specifics that we at the Wall Street Journal and economists and others have been craving. And like I said, I think that's partly by design because

voters are in a lot of ways voting on the one hand with their pocketbooks, but they're also voting on these vibes and feelings and just sort of a gut instinct of which candidate is gonna do a better job. That's all for today, Monday, August 19th. The Journal is a co-production of Spotify and The Wall Street Journal. Additional reporting in this episode by Tarini Parti. Thanks for listening. See you tomorrow.