What Kamala Harris Brings; Stimulus Chaos Persists

Insights and Market Perspectives

Author: Greg Valliere

August 12, 2020

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KAMALA HARRIS, THE SMART PICK: Joe Biden helped his cause by picking Kamala Harris, who will add a half point — or maybe even a point — to the party’s vote total in states like North Carolina, Georgia and Florida. Hillary Clinton had disappointing results from African-Americans in those states; the Biden-Harris ticket will not.

EVEN HARRIS’ ALLEGED FLAWS WILL HELP BIDEN: She’s aggressive and sharp-elbowed, her detractors say, but he’s perceived as slowing down. She’s not popular on the far left (she likes Silicon Valley and is a moderate on police reform), but that makes it difficult for Republicans to attack her as a radical.

IN THE FINAL ANALYSIS, this is Biden’s election to win or lose; Harris won’t make a huge difference. But she’s different — half Indian, half Jamaican, sharp and feisty. And when hit, she will hit back hard, like Trump.

NO ELITISM? Harris is a graduate of Howard University in Washington — neither she nor Biden is an Ivy League grad (no winning ticket since 1976 has been without one; maybe a respite would be a good idea).

THIS ELECTION JUST GOT EVEN MORE INTERESTING: Biden is good for a gaffe a week, and his agenda of tax hikes and huge new government programs is risky. But the campaign needed a fresh face and Harris can provide some pizzazz and eloquence in ways that Biden can’t. His chances of winning the presidency have improved a bit.
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THE STIMULUS MESS: In the wake of Trump’s executive orders, chaos reigns. Most states, including those run by Republicans, are out of money; they don’t want to kick in anything for unemployment relief. Corporations aren’t sure whether they should withhold payroll taxes.

THIS IS A PERFECT PRESCRIPTION FOR LAWSUITS — but as we predicted on Monday, the Democrats have been out-maneuvered; the last thing they want is to be portrayed as suing to prevent aid to millions of Americans. Democrats are looking for surrogates who can take this to court.

BUT THIS RAISES A MAJOR CONCERN: Lawsuits could take months to resolve, and the lack of any benefits for at least a few more weeks could weaken the economy and confuse the markets. Trump knows this, so he will gladly resume negotiations (while threatening even more executive action if Democrats don’t come to the table).

MITCH McCONNELL, LARGELY ABSENT FROM THE TALKS, also wants to jump-start the negotiations, in part because it looks like he’s in a tight re-election fight in Kentucky. Most members of Congress have left town, but the key negotiators could resume talks in the next few days. It’s too early to conclude that there won’t be a deal; the Democrats need a new strategy.