What would a Biden economy look like?

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If you're wondering what a Biden presidency would mean for the economy, look to Biden's last financial crisis, said Jeffrey Taylor at Bloomberg. In 2009, as vice president, Biden approached the crisis from a middle-class, Rust Belt viewpoint, aggressively pushing for an auto bailout while championing tighter restrictions on banks and arguing against Wall Street in key debates. While today's situation is obviously different from the Great Recession, Biden sees "common threads" that could help him pursue an agenda focused on addressing income inequality and promoting public works. His top priority is a massive $3.5 trillion infrastructure, manufacturing, and clean-energy program "that appears likely to grow substantially if he is elected." He plans to pay for the program by raising the corporate tax rate from 21 percent to 28 percent and increasing taxes on wealthy real-estate investors. In the wake of the pandemic, Biden has "edged away from the moderate economic approach he advocated last year," but he is still not likely to "embrace punitive demands from the Left."

"There is nothing 'moderate' about Biden's tax plan," said Mark Bloomfield and Oscar Pollock at The Wall Street Journal. For taxpayers with income above $1 million, Biden wants to tax capital gains as ordinary income. Combined with an upper-income tax increase, that would make top capital gains tax surge from the current 20 percent to 43 percent, exceeding the rate in "every one of the 10 largest economies." We are not going to compete with China by adopting "tax policies that discourage those who are best able to invest, take risks, and start companies."

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Certain industries are sure to be in Biden's crosshairs, said Anne Sraders at Fortune​. "Trump's fight to lower drug prices will likely be carried on," meaning "potential headwinds for Big Pharma." And energy and "environment-sensitive industries" such as oil and gas production could underperform under a Democratic administration. But the naming of Kamala Harris as his vice-presidential nominee "might actually be good for Big Tech" because of her ties to Silicon Valley. For the first time in a decade, Wall Street donors are actually giving more to Democrats than to Republicans, said Jim Zarroli at NPR. Trump "still has friends in finance," but many investors have "soured on his management style," which makes it hard for them to make long-term plans.

Whatever the outcome, investors are starting to worry about "stock-market mayhem" surrounding the November election, said Gunjan Banerji and Gregory Zuckerman at The Wall Street Journal. "Markets tend to be volatile ahead of elections," but pessimism about what might unfold appears "even more intense this time around." One adviser is urging clients to insure themselves against losses by buying options that will profit if the S&P 500 index plunges more than 25 percent through December; other firms are telling clients to bet on gold. The behind-the-scenes anxiety is unfolding even as markets hit a record high. "October and November tend to be the wildest months of the year" in any case, and market uncertainty could skyrocket if in the days after the election there is no clear winner.

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