‘Trump is a threat to the economy’: Kamala Harris’ team warns executives

Kamala Harris’ campaign is actively warning business leaders about Donald Trump’s track record of undermining democracy and the rule of law, suggesting his potential return to the White House could jeopardize US economic growth. The message serves as a closing argument to highlight the potential consequences for both companies and workers if Trump wins the upcoming election.

However, Trump’s team refutes this theory, saying his victory will lead to lower prices and stronger economic growth. A billionaire with a background in real estate, Trump advocates raising tariffs to encourage domestic manufacturing and cutting taxes on the wealthy and corporations, arguing such policies would encourage investment.

The two candidates’ differing perspectives illustrate a fundamental divide in economic governance: Harris’ team argues that upholding the rule of law promotes the stability needed for markets and workers to thrive, while Trump emphasizes that raising tariffs and cutting taxes are key to economic growth.

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Gene Sperling, who has advised three Democratic presidents on economic policy and is now helping Harris’ campaign, is presenting what he calls a “common sense” argument to financial leaders about the dangers of a second Trump term. “A president who targets people, leaders, companies, journalists and the opposition could have a devastating impact on investment confidence that has been strong over the past four years and has been part of America’s strength since its founding,” Sperling said.

In contrast, Trump supporter John Paulson, a billionaire hedge fund investor who sees himself as a possible Treasury secretary, dismisses Harris’ criticism, arguing that the world was more stable under Trump and inflation was lower during his administration. “That’s a total lie,” he said, dismissing Sperling’s concerns about the rule of law. “When people make such statements, they are completely false. They are not based in reality. Trump is a brilliant businessman. He wants to cut wasteful spending and stimulate growth.”

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Trump criticized Harris’ economic management as “stupid,” predicting a stock market crash if he loses the election even though the S&P 500 has risen about 50% during President Joe Biden’s administration. “We will give our companies the lowest taxes, lowest energy costs, lowest regulatory burden and easy access to the best and largest market on the planet,” he said at a rally in Allentown, Pennsylvania. “The problem is if more of these idiots ran our country, you wouldn’t have a bigger and better market anymore because our nation is in decline.”

Harris’ campaign links the Jan. 6, 2021, insurrection at the U.S. Capitol to Trump’s history of using his platform to attack the Federal Reserve and various companies, including Amazon and John Deere. They argue that companies are less likely to make long-term investments if democratic principles are under threat and election results are disputed.

Corporate leaders also interacted with such prominent figures as Robert Rubin, former Treasury Secretary; Kenneth Chenault, former CEO of American Express; and Brian Deese, former director of the National Economic Council under Biden. The Harris campaign is not encountering significant opposition on the topic, according to a person familiar with the discussions. Many executives who typically remain apolitical have privately expressed their concerns about Trump’s presidency, with the source requesting anonymity to discuss those private conversations.

Vanessa Williamson, a senior fellow on governance at the Brookings Institution, noted that the Harris campaign may have underestimated the risks involved. “By and large, Americans have been able to take the basic rule of law for granted,” Williamson observed. “The kind of rampant cronyism and fraud that characterizes some other countries is truly unimaginable here – and that’s great. But it also prevents people from realizing how important government is to the functioning of markets.”

Both campaigns are vying for support from the business community. Trump has the backing of billionaire Elon Musk, while Harris is backed by figures such as Microsoft founder Bill Gates and entrepreneur Mark Cuban.

Much of the debate has focused on policy differences, with Trump arguing that higher corporate tax rates proposed by Harris would discourage investment. In contrast, Harris’ team criticized Trump’s plans to eliminate Biden-era incentives to build advanced manufacturing facilities as harming job creation.

The importance of democratic values ​​was heightened in October when three economists—Daron Acemoglu, Simon Johnson and James Robinson—were awarded the Nobel Prize in Economics for demonstrating that social institutions and the rule of law are critical to economic growth. Acemoglu was among 23 Nobel Prize-winning economists who signed a letter warning that Trump’s economic policies “will lead to higher prices, greater deficits and greater inequality,” arguing that “the rule of law and economic and political certainty” are vital to success. threatened by Trump.

Harris, a former California attorney general, has long been interested in the relationship between democracy and economic growth. Two people working in the White House recalled that Harris requested economic studies in 2022 to support her belief that eroding democratic standards could harm economic performance.

Likewise, during Biden’s candidacy, White House Chief of Staff Jeff Zients spoke to CEOs at the Business Roundtable, arguing that a Trump presidency would create uncertainty detrimental to economic growth, in contrast to Trump’s proposals for additional tax cuts.

Neither the Business Roundtable nor the U.S. Chamber of Commerce has endorsed candidates in the upcoming presidential election. The Business Roundtable prioritizes keeping the corporate tax rate at 21%, while Trump promises further rate cuts for manufacturers. Harris favors raising the rate to 28%, still below the 35% rate in effect before 2017.

The Chamber expressed its readiness to work with any administration in power. Business Roundtable CEO Josh Bolten said this month that the organization supports a peaceful transition of power. Trump has so far failed to adhere to this principle, falsely claiming that his 2020 defeat was due to a fraudulent election, a narrative that fueled the 2021 insurrection. “Talking the election results may take time, and we urge all Americans to respect the processes set out in federal and state laws for determining election results and an orderly transition,” Bolten said.