As I write this, presidential politics is dominating our traditional and social media. The post-convention phase of the campaign has started, and we have more than a passing familiarity with the candidates’ talking (or screaming) points. Amid all the noise and heat, could we inject some quiet, calm discussion of the issues that are important to advisors and their clients, please?
During the latter stages of the presidential primary campaigns, my wife Darlene and I attended a screening of “Weiner,” the documentary about Anthony Weiner’s ill-fated 2013 campaign for mayor of New York. After watching the film and participating in a question and answer discussion with the film’s co-director, Josh Kriegman, we were stunned at the differences between the public view of Weiner as a punchline for jokes, and the more nuanced view of him portrayed in the documentary.
The documentary points out the divide between perception and reality in political campaigns, and is instructive as we observe a presidential campaign dominated by insults rather than thoughtful policy stances. Donald Trump rarely offers substantive answers to the voting public, and is frequently evasive (and rude) when asked probing questions about his policies. Hillary Clinton offers a much more transparent set of policies, but at times fails to fill in critical details.
June’s Brexit vote in the U.K. is a reminder that geopolitical developments can have very real economic consequences. Advisors need more substance from both candidates so that they can make informed decisions for client portfolios. The questions that follow attempt to address the issues with the most potential influence on the financial markets.
Questions for the Candidates
1. What will you do to promote a healthy economy? Unemployment is below 5%, a level typically considered to be full employment. However, many workers are dissatisfied with their current employment or prospects for future employment. Wage growth has been stagnant for several years, many workers who would prefer full-time work are in temporary jobs, and many workers have left the workforce entirely. In addition, income inequality is a concern for many Americans.
Both candidates have campaigned as skeptics of global trade, and Clinton’s campaign is closely aligned with unions. Anti-trade and pro-union policies are often cited as hindering economic growth in countries such as France, Italy and Japan. Consequently, it’s logical to question how anti-trade, pro-union policies will improve the health of the U.S. economy given the apparent negative impact of similar policies elsewhere in the world.
2. How will you pay for the entitlement programs that represent 41% of federal spending? Medicare is projected to exhaust its reserves by 2028 and Social Security by 2034, significant challenges for an aging America. Bernie Sanders made an expansion of entitlements a central aspect of his platform, calling for free health care and free public college education. Clinton’s platform includes a promise that no student would need to borrow to pay tuition, room and board for public colleges in their state, while committing to hold colleges and universities accountable for controlling costs. With my children Matt and Emma both in college, I welcome the idea of “cost control,” but question how the country will pay for it.
Both candidates have promised to protect the current level of Social Security benefits, but provide little guidance as to how to bring the program back into balance without raising the retirement age, cutting benefits or raising taxes on the middle class.
3. What is your vision for the role of immigrants in American society? Please discuss the factual data that helped you form your point of view. Given the social and political divisiveness of the immigration debate, how will you gather the support necessary to implement immigration reform? Immigration is arguably the most contentious issue in the campaign, with Trump promising to build a wall between the United States and Mexico and to dramatically change immigration policies. Trump places blame on immigrants for “destroying the middle class,” and for crime and terrorism.
Clinton has a very different approach to immigration reform, focusing on creating a pathway to citizenship and keeping families together. She’s had less to say about her policies toward students and “skilled” workers entering the U.S. on student or H1-B visas.
My son Matt and I attended the Argentina-Venezuela Copa America soccer game at Gillette Stadium earlier this summer. The evening highlighted for me the melting pot that is America: fans supporting each country by singing songs and carrying banners, soccer parents and kids there to see the amazing Lionel Messi, someone dressed as the Pope, and a few stray New England Patriots fans waving “Free Brady” banners.
Former Secretary of State Colin Powell, the son of two Jamaican immigrants, recently said: “We are all immigrants, wave after wave over several hundred years. And every wave makes us richer: in cultures, in language and food, in music and dance, in intellectual capacity. We should treasure this immigrant tradition, and we should reform our laws to guarantee it. In this political season, let us remember the most important task of our government: making Americans. Immigrants — future Americans — make America better every single day.”
How would each candidate respond to the sentiments expressed by General Powell, and to the statistics he cites that challenge common misconceptions about immigration? How can we preserve the positive aspects of immigration that are so central to American history and culture, while avoiding the type of refugee crisis experienced in many European countries today?
4. What is your philosophy about tax policy, and how will that philosophy influence your personal and business tax proposals? My federal and state tax returns totaled 271 pages last year, a staggering number given the simplicity of my family’s finances. Trump’s statement about his tax returns: “I have very big returns, as you know, and I have everything all approved and very beautiful and we’ll be working that over in the next period of time.” My taxes are neither beautiful nor interesting, and despite a master’s degree and multiple professional designations, I’m often confused by the complexity of the tax code. I’d be interested in hearing what each candidate would do to simplify personal taxes.