Bill Gross reveals that he did not vote for either “establishment party’s candidate” in the Nov. 8 presidential election, and so in his monthly investment outlook for Janus he writes he was “amazed [with] almost amused bewilderment” of the “extraordinary fury” of the American populist electorate who “‘unwittingly’ (lack of wit)” let “the Trumpian Fox” enter the “Populist Henhouse.”
Donald Trump’s tenure as president, Gross writes, “will be a short four years but is likely to be a damaging one for jobless and low-wage American voters.” Why? Because of “Middle America’s misinterpretation of what will make America great again.” While Trump was apparently successful at luring voters with his promise of more jobs, Gross argues that the promised Trump policies of heavy spending on infrastructure improvements and defense “combined with lower corporate taxes to invigorate the private sector continue to favor capital versus labor, markets versus wages, and is a continuation of the status quo.”
In his monthly epistle, Populism Takes a Wrong Turn, Gross counters the conventional wisdom that lowering corporate tax rates and encouraging repatriation of American companies’ foreign profits will provide a major boost to the U.S. economy.
While “Republican pleas for tax reform are centered around the argument that America has one of the highest corporate tax rates in the world at 35%,” it’s just “not so,” Gross writes, saying at an average corporate tax rate of 24%, “U.S. corporations rank among the world’s most lightly, as opposed to heavily, taxed.”
As for repatriation of profits from overseas, Gross says that “the logic that the money will be spent for investment here in the U.S” is “doubtful,” since “the last time such a ‘pardon’ was put into law in 2004, no noticeable pickup in investment took place.”
Make no mistake, Gross is not a Hillary Clinton fan and doubts that a President Clinton would be much better for real economic growth. “Both the Clinton Democrats and almost all Republicans represent the corporate status quo that favors markets versus wages; Wall Street versus Main Street,” he declares.