by Greg Valliere, AGF Management Ltd.
Insights and Market Perspectives
Author: Greg Valliere
December 9, 2021
The Failure of the Progressive Agenda
December 9, 2021
THERE’S BEEN SO MUCH MAJOR NEWS coming out of Washington lately that a significant development was largely overlooked earlier this week — the withdrawal of leftist Saule Omarova to become Comptroller of the Currency.
THIS WAS ONE OF MANY FAILURES of the progressive agenda, which is now widely viewed among Democrats as an albatross for the party.
OMAROVA WAS PORTRAYED BY SOME REPUBLICANS AS A COMMUNIST, but the more credible attacks focused on her support of oppressive regulation of the economy; virtually every banking association opposed her and — most significantly — a handful of moderate Democrats effectively blocked her nomination.
OTHER BIDEN ADMINISTRATION NOMINATIONS, including Richard Cordray to serve as the Federal Reserve’s top banking regulator, face intense criticism in the Senate, where only one or two Democrats can kill a nomination. Cordray, like most of Biden’s financial nominees, is supported by progressive firebrand Elizabeth Warren.
OMAROVA’S REJECTION was a metaphor for the progressives’ failed agenda, on issue after issue:
Defund the police: Most Democrats support robust funding for the police, but noisy progressives have hijacked this issue. They failed in the Minneapolis election last month, and polling shows overwhelming support for the police. Many Democrats we talk with are eager to embrace the incoming New York City mayor, Eric Adams, a former police officer who’s tough on crime.
The urban exodus: A related issue is the massive migration out of progressive cities like New York and San Francisco, with high crime and high taxes, to cities like Nashville and Charlotte. Check out the fascinating article in this morning’s Politico on the stunning migration out of Chicago by African Americans, fleeing the city’s horrific gun violence.
Wealth tax: Sen. Warren and Senate Finance Committee Chairman Ron Wyden are itching to tax passive gains that are held by wealthy investors, but it’s not going to happen. The progressive agenda of taxing Wall Street transactions, estates, and capital gains has failed.
Anti-fossil fuels: There’s no question that climate change is wreaking havoc throughout the world, but tough new restrictions on oil, coal and natural gas have hit a roadblock: Sen. Joe Manchin. The press makes a huge deal of Manchin’s opposition to new spending, but his biggest concern is energy policy. Eventually the progressives’ desire to curb fossil fuels will succeed, but that will come much later, not sooner. For now, the world needs more fossil fuels.
Packing the Supreme Court: The high court’s tilt rightward — thanks to Donald
Trump’s appointments — has horrified progressives, who want to increase the number of justices on the court. Chances of this happening: zero.
Filibuster reform: The Senate’s rules are maddening, designed to slow progress on legislation from the right and left. Progressives are still determined to change filibuster rules, but legislation to accomplish that would be blocked by — you guessed it — a filibuster.
Illegal immigration: The progressives’ tolerance of illegal immigration is overwhelmingly opposed by the public. We’re sympathetic to the argument that more immigration is needed to cope with an acute labor shortage, but this is an easy issue to demagogue; immigration will be a major theme of Donald Trump’s comeback campaign.
THIS RECORD OF PROGRESSIVE FAILURE has emboldened Republicans, who are likely to capture the House in next fall’s elections. Our unsolicited advice to the GOP: don’t over-play your hand, the public wants to raise taxes on the rich and highly profitable corporations, and there’s overwhelming support for abortion rights.
BOTTOM LINE: The progressive agenda — pro-regulation, with a high tax climate, seems unlikely to prevail, because the Democrats need a few more votes in the Senate and the House. But they’re likely to lose seats next year, and progressives face a blow-back from moderate voters who think the Democrats have veered too sharply to the left.
The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The forward looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward looking statements. The information contained in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to the circumstances of the individual.
AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), AGF Investments America Inc. (AGFA), AGF Investments LLC (AGFUS) and AGF International Advisors Company Limited (AGFIA). AGFA and AGFUS are registered advisors in the U.S. AGFI is a registered as a portfolio manager across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.
About AGF Management Limited
Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.
For further information, please visit AGF.com.
©2021 AGF Management Limited. All rights reserved.
This post was first published at the AGF Perspectives Blog.
