October 15, 2020

Why Democrats are better for the economy than Republicans

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Donald Trump and his supporters must be swept from office, for countless reasons, many of which have been highlighted by the coronavirus pandemic. In broadest terms, these include:

Much in our country needs healing and repair.

Many Americans agree, and favor Democratic candidates, for their intent to govern with decency, empathy, and reliance upon established facts. And so Democrats expect success in the election now underway. Even so, one major Democrat/Republican comparison may still be worth spelling out.

In a nutshell, Democrats are much better and safer for the economy than Republicans, especially but not only in the growth industries that provide so much of our wealth, exports, and favorable career opportunities. Republican propaganda often claims the contrary. But the pro-Democratic view is supported by all of:

Let’s drill down.

1. (History) For the past 30 years, Democrats have done better for the economy than Republicans. In particular:

And of course we’re in economic catastrophe now.

2. (Economics) This is all more than just coincidence or luck. Orthodox Republican economic predictions have been consistently wrong over those same three decades. In particular, and with only minor exceptions:

The biggest hole in Republican orthodoxy is this: Making more money available for investment – as tax cuts and the relaxation of regulations are said to do – doesn’t actually cause much investment spending. For example, the recent Republican corporate tax cuts went mainly to dividends, stock buybacks, and increased executive pay. Importantly, this point explains why the stock market is uncoupled from the actual economy. Increasing after-tax profits by allowing pollution or cutting corporate tax rates may be good for stock prices, but nobody EXCEPT fortunate stockholders and investors are likely to much benefit.

3. (More economics) And so it is likely that Democrats will be better for our future economy than Republicans would. For unlike Republican pledges, Democratic ones tend to actually come true. In particular:

4. (Common sense) Democrats’ advantage doesn’t just lie in simple macroeconomic realism. Rather:

Key reasons include:

Support for these points includes:

Immigrants are crucial to today’s leading tech companies, including founders of Google and eBay, Microsoft’s most important non-founder engineer, Oracle’s most important current engineer, Intel’s most famous CEO, and current CEOs at Microsoft, Oracle, and Alphabet/Google. And of course, immigrants are also critical to our least glamorous businesses, performing hard, low-paid work in areas such as farming, meat-packing and household services.

5. (Common sense, continued) Republicans make untrue claims that Democrats are committed to policies much more progressive or “socialist” than is really the case. But even if those claims WERE true, Democrats could still be economically superior to Republicans. After all, more generous policies around health care, child care, education, etc. imply:

In theory, it is possible to be too far left for entrepreneurial growth and economic health. But such policies would be left even of current Western European norms, and vastly further left than anything the United States is at any risk of adopting.

About the author: For almost 40 years, Curt Monash has been an adviser to and observer of many of the world’s greatest entrepreneurs. He was voted by investors as the #1 stock analyst of the computer software and services industry. He has consulted to a large fraction of the world’s important technology companies, often at the CEO level. Before entering business, he was a research fellow in public policy at Harvard’s Kennedy School of Government. His Twitter and Facebook usernames are CurtMonash, and his public email address is curtmonash@monash.com. His official bio is at http://www.monash.com/curtbio.html.

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3 Responses to “Why Democrats are better for the economy than Republicans”

  1. Democrats are much better for the economy than Republicans, and this is unlikely to soon change : The Monash Report on October 15th, 2020 6:07 am

    […] Longer and more extensively reasoned. […]

  2. Much of the electorate is still undecided (about whether to vote at all) : The Monash Report on October 15th, 2020 6:11 am

    […] Longer and more extensively reasoned. […]

  3. Open letter: In 2020, please vote a straight Democratic ticket : The Monash Report on October 21st, 2020 7:34 am

    […] and http://www.monashreport.com/2020/10/15/why-democrats-are-better-for-the-economy-than-republicans/ In particular, I explained why the central myth of Republican economics – that giving money to […]

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