In the first UBS ElectionWatch 2020 virtual event, held on 22 July, Bob McCann, Chairman of UBS Americas, and Tom Naratil, Co-President of UBS Global Wealth Management and President UBS Americas, were joined by Paul Ryan, 54th Speaker of the US House of Representatives, and Jennifer Granholm, former two-time Michigan governor. Together, they addressed some of the most pressing issues facing voters.
At the start of 2020, the US economy was about to enter its 11th year of a bull market, even as trade and international tensions dominated the news cycle. But no one could have predicted what would come next. COVID-19 brought with it a healthcare crisis, lockdowns and a recession, while the death of George Floyd sparked a national reckoning with racial inequality. In the first of five virtual events leading up to the US presidential election, former Governor Jennifer Granholm and former Speaker Paul Ryan shared insights into how this year's unprecedented challenges may affect voter choices in November.
How should the government help businesses and workers?
The COVID-19 pandemic steered the US economy into a recession, leaving roughly one in five Americans without a job. Voters are likely to consider the effectiveness of the Trump administration’s economic stimulus package, and the government’s overall response to the country's unemployment situation. Ryan and Granholm agreed that stimulus provided thus far has had a positive impact on American wallets and the economy overall, but both also shared critiques.
“I don't think the additional $600 is a good idea,” said Ryan, referring to the $600 per week in additional unemployment benefits authorized under The CARES Act . “It pays 83% of workers more than they would make at work. You’ve got to allow employers to get the workers back. If you deny labor to small businesses, those small businesses will collapse. I think reemployment accounts are a smarter idea.”
Granholm, however, believes the unemployment benefits should be extended. “Had there been no CARES Act, no $1,200 stimulus checks, and no expansion of unemployment [benefits], the poverty rate would have risen from 12.5% to over 16% this year, according to a forecast from Columbia University,” she said, adding “I think they need to extend some extra help or we'll see an increase in poverty.”
For Granholm, it's important that any future government relief program reach "truly small businesses and minority- and women-owned businesses." She noted that 90% of minority- and women-owned business did not get access to the PPP (Paycheck Protection Program), the business loan program established by the federal government. "The documentation required from small businesses to receive forgiveness is really complicated, which means that small businesses without accountants, lawyers, or a compliance staff, face additional challenges." She pointed out that existing banking relationships also played a big role in how likely a business was to apply for, or have success in getting a loan via the PPP. "However, many small businesses owners don't have relationships with lenders. This inequity needs to be addressed, in addition to making sure that there's transparency on reporting," said Granholm.
What has the pandemic revealed about the US healthcare system?
Healthcare has long been a concern for many Americans and the current health crisis only increased attention to the issue. Ryan believes the current US healthcare system handled the crisis well but could have done better on things like PPE (personal protective equipment) access and medication storage. As for the way forward, “I don’t think 'Medicare for All' is going to work,” he said. “Neither will dismantling the healthcare system we have in place. I think that the secret sauce here is a universal coverage plan that centrists can come together and solve with respect to healthcare.”
How will the current reckoning with racial inequality impact the election?
The death of George Floyd in May, and other tragic race-related incidents this year, have led to nationwide protests. Granholm and Ryan agreed that the surge in calls for racial equality is encouraging and that a battle for votes is taking place on this issue in the suburbs.
“70% [of white people] believe that racial injustice is a big problem in the United States,” says Granholm. “To me, that's incredibly important and positive. Suburban women, in particular, are uncomfortable with divisive language. And any sort of furthering of that division will impact the election. I do think that there are a lot of people uncomfortable with divisive language, but there is a battle for the suburbs, suburban women in particular.”
“I'm excited that people are waking up to this,” Ryan added. “We just have to get past the election in my opinion to have a really proper dialogue, which is a calm civil dialogue, about what we are going to do about it.”
What to expect in the first 100 days?
The first hundred days of an administration is often seen as indicative of the direction of each presidential term. Ryan and Granholm discussed what the country might see in the first 100 days of a Trump second term or a Biden presidency.
Ryan expects Trump will feel vindicated in his disputes with China. “He's a gut guy,” said Ryan. “And he will say, ‘My gut proved what was right.’ That means he's going to play out the fight with China.” Ryan also thinks Trump will reenter the Trans-Pacific Partnership (TPP) . “Something I'll say that may surprise you is I think he'll do TPP,” added Ryan. “Because we already have the USMCA [United States-Mexico-Canada Agreement]. We just did a deal with Korea. We did a bilateral with Japan. So you are only one or two steps away from TPP.”
Granholm believes the first 100 days of a Biden presidency will be focused on aggressively addressing COVID-19 and distributing a vaccine once it’s available. Biden would also undo Trump’s immigration agenda by reversing family separations and reinstating DACA. Another important focus, she said, will be clean energy. “He will reenter the Paris Accord. He really wants to focus on clean energy as a way to create jobs in manufacturing in the Midwest and across the country. He's talked about jump starting the economy with a $2 trillion clean energy job and infrastructure investment in those first 100 days.”