WSJ What’s News - Harris’s Economic Plan Comes Into View

Episode Date: August 16, 2024

A.M. Edition for Aug. 16. Vice President Kamala Harris plans to call for the construction of 3 million new housing units and new tax incentives to build homes for first-time buyers when she outlines her emerging economic agenda today. Plus, colleges rewrite their campus rules in a bid to outmaneuver protesters. And, the WSJ’s Elizabeth Findell tells us lower taxes and more affordable housing are luring financial firms to Texas’ Y’all Street. Kate Bullivant hosts.  Sign up for the WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

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Carmela Harris plans new initiatives aimed at first-time buyers. Plus, as students prepare to return to campus, colleges work to head off another round of protests. And a booming financial hub down south looks to rival New York. Texas is seen as a low tax, low regulation state. Businesses like to be there for that reason. Employees can own a house much cheaper there than in New York or many other coastal cities. It's Friday, August 16th. I'm Kate Bulevant for the Wall Street Journal filling in for Luke Vargas. And here is the AM edition of What's News, the top headlines and business

stories moving your world today. Vice President Kamala Harris is set to call for three million new housing units to be built in her first four years in office. That's according to campaign officials who say Harris will also introduce a new tax incentive for companies that build homes for first-time buyers when she outlines her economic plan in a speech later today. With voters citing rental costs and high mortgage rates as an increasing concern, housing is one of the thorniest economic issues for the Democratic nominee. With tight inventory pushing home prices to record highs, Harris' plan aims to provide

incentives to expand supply, especially for first time buyers. Her proposals build on previous plans by President Biden, who has previously called for the construction of two million new homes. The vice president's speech is also expected to focus on alleged corporate price gouging and lowering costs for families. And in the latest sign that low housing stock is keeping prices elevated, despite high mortgage rates putting off some buyers, the share of million-dollar homes in the US has hit a record high.

That's according to new analysis by brokerage Redfin, provided exclusively to the Journal, which shows 8.5% of US homes have an estimated value of $1 million or more. That's more than double the 4% recorded before the pandemic. And with the fall semester just weeks away, university administrators are making preparations to preempt another term of explosive demonstrations over the war in Gaza. The University of Denver is banning protest tents and adding workshops on freedom of expression

to its orientation. Indiana University wants to limit the hours and locations in which rallies can be held, and at Harvard, demonstrators will need advance approval to use bullhorns or sidewalk chalk. Journal reporter Melissa Korn told us some of these rule changes have already drawn criticism from free speech advocates and that administrators run the risk of reinvigorating activism with some of these moves intended to bring calm. We've got this kind of collision of forces here with administrators at universities trying really hard to not have a repeat of last spring, to minimize disruption to classes, minimize

protests, minimize encampments, certainly minimize violence. There's an element of self-protection here. They don't want to be the next president shown the exit door. At the same time, students and faculty remember what happened in the spring and they're still bitter about the way that some of these encampments were broken down. They're frustrated by the disciplinary action against protesters and they're frustrated that their universities still have not followed their requests to divest from companies that do business with Israel to publicly call for a ceasefire. It really is a delicate dance for presidents right now to try to appease

or let alone please a lot of different constituents with a lot of different viewpoints on a complicated combustible issue. Elon Musk spins a lot of plates and he's no stranger to harvesting resources from his empire to give life to new ventures. And most recently, he's been funneling talent data and hardware, including at least 11 Tesla employees and, according to our reporting, computer chips leased from his social media company X toward his artificial intelligence startup XAI, in the hope it can rival the likes of OpenAI and Google. But that has drawn the ire of some Tesla shareholders. At least three of

them have filed lawsuits claiming that resource shifting is hurting investors in the carmaker, Musk's only public company. Journal technology reporter Megan Barbarowski told the journal's tech news briefing podcast about it. Generally, Elon has said that resource sharing between his companies is a good thing and that in order to retain talent and keep talent from going to competitors, he had to hire people at XAI, people who wanted to work on artificial general intelligence as opposed to full self-driving at Tesla or

something else. It's not illegal on its own to be sharing resources. What's illegal is when one company is being helped to the detriment of another company. So both companies are not having a mutually beneficial outcome here. And that is what Tesla shareholders who are suing Elon are claiming is that Tesla is not benefiting here. XAI is benefiting, but Tesla is not. To hear more on this story, check out the Tech News Briefing podcast. Let's take a look at what's happening in markets today.

The SIBO Volatility Index, better known as Wall Street's FEAR gauge, is on track to end the week roughly 25% lower, a sign that FEAR has quickly dissipated from the markets after this month's meltdown. Stock markets in Asia have ended the day higher after yesterday's US stock market rally and US stock futures a little changed ahead of new residential construction data for July due out at 8.30 a.m. Eastern. And investors might also be on the lookout for a potential bid for Paramount Global and its parent company from media executive Edgar Bronfman Jr.

According to our reporting, his offer could come together in the coming days during a window of time offered to potential buyers to bid on Paramount, whose owner agreed to sell it to Skydance Media earlier this summer. Coming up from lower taxes to better work-life balance, we'll look at what's driving a finance boom in Texas. That story after the break. Because at TD Insurance, we understand that your business is unique, so your business insurance should be too. Whether you're a shop owner, a pet groomer, a contractor or a consultant, you can get customized coverage for your business. Contact a licensed TD Insurance advisor to learn more. Is Dallas the new Wall Street? Or, as journal reporter Elizabeth Findell puts it, your street? Well, with the likes of JPMorgan and Goldman Sachs setting up shop in the Lone Star State,

you would be forgiven for thinking so. Our Luke Vargas spoke to Elizabeth to find out more about this trend. Elizabeth, North Texas and Dallas in particular, it's a wealthy part of the country. Dallas also one of America's biggest cities. A number of major businesses were already headquartered there, but you report we've been seeing a shift of late with financial firms in particular following tech companies in moving to Texas. Tell us about the scale of what you've seen occurring.

Yeah, it's really tremendous. You see so many companies under construction and a big one is the Goldman Sachs Tower under construction there. There are new towers underway for Wells Fargo, for Charles Schwab, for Deloitte. One of the ones that I failed to mention was Bank of America also has a big facility that they're expanding there. JP Morgan has a large campus north of Dallas. So they're big companies coming in the Bureau of Labor Statistics data shows that employment in Texas investment banking and securities specifically has increased 111% in the last 20 years and 27% since the pandemic. That's very high. New York also saw some growth, but significantly lower. The number of people employed in finance overall has jumped 13% in Texas since the pandemic, compared with 3% growth nationally. And that puts Dallas second to New York in metro areas with the

number of workers employed in finance. And what is it about Texas specifically that has become a draw? On a broader scale, there's a shift of a lot of financial services wanting to be less concentrated in one place such as New York and wanting to be close to their customers. And Dallas is a very central city. They're right in the middle of the United States. They have the biggest airport in the country. So that makes them very attractive if you're trying to be close to people all over the country. Whether things could change long term, one of the things we're looking at is this new Texas stock exchange, which was launched and is kind of a long shot

initiative to compete with the New York Stock Exchange and the NASDAQ. And I talked with people who had different views about whether it was really a sort of serious thing or mostly a statement because it started in part in response to some of the diversity requirements on boards and things like that that some of the New York stock exchanges had. So there is a little bit of that mentality of wanting to get away from regulation. And in terms of whether this is ultimately successful, Elizabeth, I would imagine the cost of living situation in North Texas might have something to do with this in terms of figuring out whether companies are going to be successful in filling up these offices.

What are you hearing on that? Yeah, absolutely. And they are getting full. The J.P. Morgan campus I mentioned already has more people there than it's supposed to. It's supposed to be a campus for 11,000 people and they've got more than that. low tax, low regulation state. Businesses like to be there for that reason. Employees can own a house much cheaper there than in New York or many other coastal cities. And people who are moving to Dallas really like the fact that they can buy a house with a pool and have some space. And I talked to someone who moved there from New York because she wanted to raise kids somewhere

where they would have a yard. So you hear those kinds of things. People who work in all sectors in Dallas will often talk about how it's such an easy city to live in. You can drive wherever you want to go. It's kind of sprawling, but you don't have to think about a lot of logistical things. Some of the more, some of the more conservative or libertarian types, like what

they see as a vibe of freedom, as some of them would describe it. And I also heard from people that just the mentality there being more personal, more neighbor-oriented, family-oriented than places they had worked in the past made it easier for them to have a work life that balanced with their family life, those kinds of things. I've been speaking to Wall Street Journal reporter Elizabeth Findell. Elizabeth, thank you so much. Thank you. I appreciate it. And that's it for What's News for Friday morning. Today's show was produced by Daniel Barck with supervising producer Christina Rorke. And I'm Kate Bulevant for the Wall

Street Journal, filling in for Luke Vargas. We'll be back tonight with a new show. And until then, thanks for listening.