Trump, Harris make economic pitch to voters.

I’m Isaac Saul, and this is Tangle: an independent, nonpartisan, subscriber-supported politics newsletter that summarizes the best arguments from across the political spectrum on the news of the day — then “my take.”

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Today's read: 13 minutes.

Quick hits.

1. Donald Trump's sentencing in the so-called "hush money" case in Manhattan will no longer take place before the presidential election. Instead, he'll be sentenced on November 26. (The delay)
2. Hunter Biden entered a last-minute guilty plea in his tax evasion case, avoiding a trial. Biden faces up to 17 years in prison; sentencing for the tax charges is December 16, and sentencing for his previous gun crimes will be in November. (The plea)
3. The district attorney of the Piedmont Judicial District charged the father of the shooter who killed four people at Apalachee High School last week with four counts of involuntary manslaughter, two counts of second-degree murder, and eight counts of cruelty to children. (The charges)
4. The Harris campaign says it raised $361 million in August, nearly triple the $130 million raised by Trump's campaign last month. (The fundraising)
5. Boeing and its largest union reached a labor agreement to avoid a strike that was planned for the end of this week. The deal could raise pay by 25% over four years for tens of thousands of workers. (The deal)

Today's topic.

The latest on the economy. In the past week, the August jobs report and a series of new proposals from Vice President Kamala Harris and former President Donald Trump have put economic issues front and center in the presidential race. With the Federal Reserve expected to cut interest rates at their meeting later this month, both candidates have sought to outline their visions for continued economic growth while keeping inflation in check and mitigating recessionary risks. 

On Friday, the U.S. Labor Department announced that the economy added 142,000 jobs in August, lower than economists expected but an improvement from July. The unemployment rate decreased from 4.3% to 4.2%, and July payroll growth was revised down to 89,000 from 114,000. The construction sector led employment gains with 34,000 new jobs. Government payrolls also increased by 24,000, but manufacturing employment dropped by 24,000. 

The jobs report sets the stage for the Federal Reserve (Fed) to cut the federal interest rate for the first time since 2021. Between February 2022 and August 2023, the Fed raised its rate by 5.25 points, keeping the benchmark borrowing rate in the 5.25%-5.50%  range for the past year.

“The data that we have received in the past three days indicates to me that the labor market is continuing to soften but not deteriorate, and this judgment is important to our upcoming decision,” Fed governor Christopher Waller said. The Federal Reserve Board will meet next week.

Amid the latest economic data, both presidential candidates have sought to sell an economic vision to the country on the campaign trail. On Wednesday, Vice President Harris announced several economic proposals while campaigning outside Portsmouth, New Hampshire, including an expansion of the small business tax credit from $5,000 to $50,000. Harris said her goal would be to receive 25 million new small business applications in her first term. 

Harris also called for taxing long-term capital gains at 28%, breaking from President Biden’s proposal of a 39.6% capital gains tax for Americans making more than $1 million a year. The vice president framed the moderated rate proposal as a means for broader economic growth, saying, “When the government encourages investment, it leads to broad-based economic growth and it creates jobs, which makes our economy stronger.” Additionally, Harris has endorsed a plan put forth by President Biden to tax stock holdings as their value increases for people whose net worth is at least $100 million.

At an address to The Economic Club of New York on Thursday, Former President Trump also announced a number of economic proposals. Trump said he would cut the corporate tax rate from 21% to 15% for companies that produce their product in America. He further announced his intention to make the tax cuts passed during his presidency permanent and affirmed that he would not tax social security benefits. Finally, Trump said he would create a "government efficiency commission" led by Elon Musk, who would oversee a financial and performance audit of the entire federal government.

Broadly, Trump outlined a vision for lowering prices by increasing tariffs and cutting regulations to boost energy production, claiming that tariffs in particular would raise “trillions of dollars” to support his agenda.  

"I am promising low taxes, low regulations, low energy costs, low interest rates, secure borders, low, low crime and surging incomes for citizens of every race, religion, color and creed," Trump said in his speech.

Today, we’ll share perspectives from the left and right on the latest economic numbers and each candidate’s recent proposals. Then, my take.

What the left is saying.

• The left is concerned by the latest jobs report but says the Fed can help the economy with an aggressive rate cut. 
• Many back Harris’s economic agenda but say she can do more to win over undecided voters. 
• Others criticize Trump’s recent proposals, arguing they would undermine the strength of America’s economy.

In The Washington Post, Heather Long said “the U.S. economy looks fragile. There’s an easy way to fix that.”

“The United States is not in a recession, but there’s a real chance it could be soon. The herculean economy of 2023 is past, and the situation now is fragile. The economy is cooling. Growth is slowing. Consumers are no longer splurging; they’re value-hunting,” Long wrote. “Friday’s jobs report underscored the thin-ice conditions. Hiring was weaker than expected in August, and job growth for June and July was revised way down… There’s an easy way for the Federal Reserve to stop this deterioration and prevent a recession: Cut interest rates decisively.”

“I think it is very likely that Powell will choose the modest option of a 25-basis-point cut. He and other Fed leaders will say the economy still looks solid, and they don’t want to scare anyone. They will rationalize that they can take a first small step and follow it with more cuts later this year if the labor market worsens,” Long said. “This is a mistake. The biggest risk lies in not doing enough. By making a larger cut this month, the Fed could signal that it is taking the warning signs seriously and wants to prevent the worst-case scenario. It would quickly restore Americans’ confidence in the economy.”

In The American Prospect, Harold Meyerson wrote about how Harris targets the middle class “in both her taxing and spending policies.”

“Harris’s new proposals, laid out in a speech she delivered in New Hampshire last week, are rather staid, which, under the circumstances, is not a criticism. Strategically, she’s chiefly been targeting the middle class in both her taxing and spending policies,” Meyerson said. “But by bringing down the extent of the increase to taxes on investment, she reinforces the impression that she’d be friendlier to at least some of the Silicon Valley gazillionaires who’ve been backing her since her initial San Francisco electoral campaigns.”

“As of now, her proposals to make child-rearing more affordable and to give a boost to new small businesses have a particularly positive impact on some large but distinct subsets of the electorate: young women and aspiring small-business proprietors (a group in which Latinos and Asian Americans are very well represented). She needs a more direct economic appeal to the male working class, which at this point is the section of the electorate that’s the most challenging for Democrats to win over.”

In The Guardian, Joseph Stiglitz argued “Trump would make the US economy weaker, less competitive and less equal.”

Trump “has no interest in creating a more just, robust and sustainable economy. Instead, the Republican ticket is offering a blank cheque to coal and oil companies and cosying up to billionaires such as Elon Musk and Peter Thiel. It is a recipe for making the US economy weaker, less competitive and less equal,” Stiglitz wrote. “In Harris, the US has someone who would be thoughtful and pragmatic in weighing the trade-offs and devising balanced solutions. In Trump, we have an impulsive narcissist who thrives on chaos and rejects scientific expertise.”

“Trump has adopted the extreme position of threatening the Fed’s independence… Another Trump presidency thus would introduce a persistent source of economic uncertainty, depressing investment and growth, and almost certainly increasing inflation expectations,” Stiglitz said. “Trump’s proposed tax policies are equally fraught. Recall the 2017 tax cut for corporations and billionaires, which failed to stimulate additional investment and merely encouraged share buybacks… But Trump, ignoring the evidence that ‘trickle-down’ tax cuts don’t work and don’t pay for themselves, wants to renew and then deepen the 2017 cut.”

What the right is saying.

• The right suggests the latest jobs data portends an economic downturn.
• Some praise Trump’s economic agenda as a blueprint for future prosperity.
• Others criticize Harris’s tax plan as counterproductive. 

In Hot Air, Ed Morrissey called the jobs report “meh.”

“Count this as another miss on expectations, and at a particularly poor time for an incumbent administration seeking another term. Economists expected a mediocre return to normalcy in the job market for August after July's report showed only a shocking 89,000 jobs added. The consensus set the mark at 161K, a figure that barely would be above economy-maintenance level,” Morrissey said. “That’s not looking good no matter how much spin the media will give today's number. With the exception of a four-month burst last winter, job creation has trended mainly downward over the last two years.”

“The data clearly shows that July's report wasn't an outlier, but part of a decline in the job market. Today's data — even if it holds up after next month's revision — is nothing more than job creation keeping pace with population expansion. Bidenomics is running out of gas, if it ever had any, and that has implications for both the election and the Federal Reserve,” Morrissey wrote. “With the [Personal Consumption Expenditures] Index still above 2%, expect a more modest cut in September. Powell will be sensitive to accusations that a more aggressive policy will be for the political benefit of the incumbent administration, and besides, inflation has not yet been fully tamed.”

The New York Post editorial board said “Trump will juice [the] economy, curb inflation.”

“Donald Trump’s economic vision, which he outlined Thursday, couldn’t be a more radical — and encouraging — change from the Harris-Biden economic horror show. The ex-prez wants to return to the days when he presided over low inflation and low unemployment — by unleashing domestic manufacturing and energy production, ending wasteful Green New Deal spending, ditching onerous regulations and making his tax cuts permanent. That sure beats Kamala Harris’ socialist price controls, multi trillion–dollar tax hikes and more inflation-boosting Bidenomics.”

“True, Trump may be unable to meet all those lofty goals, especially if Democrats control Congress. Yet he’d push the nation in the right direction after years when Harris-Biden policies drove up energy and grocery prices and sky-high interest rates made homes unaffordable,” the board wrote. “Honestly, who wants more Bidenomics misery (even if imposed by Kamala Harris), plus potentially a $5 trillion tax hike, trillions in wasteful new green pork on top of that… and yet more federal debt? Few elections will turn on the candidates’ economic plans more than this year’s. Trump just showed why.”

National Review’s editors wrote “the tax lady cometh.”

“Raising the level paid by U.S. corporations to 28 percent (and that’s before considering state taxes) would damage their ability to compete internationally, hitting their growth prospects and by extension those of the U.S. as a whole, something that would hurt all Americans, not just those making $400,000 a year or more,” the editors said. “Moreover, while increases in corporate taxes are, of course, technically paid by corporations, the real cost will be felt elsewhere, by their shareholders, customers, and workers as dividends are hit and companies look to offset higher taxes with higher prices and tighter control of wages and staffing levels.”

“There are other attacks on American business included in the vice president’s plans for companies, including an increase in the minimum tax paid by the largest corporations from the 15 percent established in the Inflation Reduction Act to 21 percent, yet another reminder that once a (relatively) modest change that increases tax is introduced, it tends not to stay modest for long,” the editors wrote. “These proposals (and others not mentioned here) together represent a massive assault on incentives to work harder, to save, to invest, to innovate, and to pass on the fruits of a lifetime’s effort to the next generation, incentives that have been key to America’s extraordinary success.”

My take.

Reminder: "My take" is a section where I give myself space to share my own personal opinion. If you have feedback, criticism or compliments, don't unsubscribe. Write in by replying to this email, or leave a comment.

In the span of 48 hours last week, Trump and Harris each released new proposals and we got an important jobs report — so there is a lot to catch up on today. I decided to give 12 quick reactions to the latest on the economy (and the proposals from Trump and Harris).

1. Defining when the economy is in a recession is surprisingly difficult — pundits have been worrying over whether we are already in one for months, while several also went out on the same limb in 2023 (and fell off, badly). Defining and describing the economy is one of the ways the press has a tremendous amount of influence. For now, Harris continues to face headlines about a "slow jobs report" or an "economic downturn," which I think is the kind of framing her campaign can survive.
2. It seems unlikely that a consensus forms that we are in a recession before Election Day. If that happened, or if we had some kind of genuine stock market crash, it would all but end her campaign. But with six weeks to go until Election Day, none of that seems likely — even with another bad jobs report.
3. Trump continues to release policy proposals that are more digestible than his Democratic counterparts. I think there is something about the perception of him as a non-politician that allows him to propose simple, creative, or memorable ideas — even if they are impractical. The "no tax on tips" proposal is a great example, and an idea compelling enough for Harris to just take it. The corporate tax rate cut for companies who make their products in the U.S. is another, and one every voter will remember.
4. Speaking of his policies, it is really hard to find an economist who supports tariffs, partially because we already experienced Trump's tariffs in 2018 and 2019. The Tax Foundation estimated that those tariffs equated to $80 billion of new taxes on Americans, "amounting to one of the largest tax increases in decades." Trump’s 2024 proposal would be roughly five and a half times more impactful — tariffs that could amount to roughly $524 billion of new taxes on American consumers annually.
5. Trump keeps saying that tariffs are a tax on a foreign country — he is wrong. Tariffs are taxes on foreign importers, but those taxes are paid by U.S. companies importing Chinese goods, who then pass a portion of those higher costs on to consumers. If I want to sell a candle in China and China decides to tax my candle, they don’t tax me — they tax the Chinese importer. That importer then either charges me more, which results in me raising my prices, or they charge the consumers more.  Consumers then refuse to buy the candle (a win for China, who is imposing the tariff to hurt me or protect their own candle industry) or consumers decide to buy the candle anyway (in which case China just raised prices on its own consumers). Either way, I’m not the one paying. It is hard to know if someone has misled Trump into believing that the real cost of tariffs are paid by foreign countries, or if he believes this is a good way to sell the idea to voters. Either way, it isn't true. 
6. Before all the Biden-Harris supporters prepare their attacks: You should know that the Biden administration has kept most of the Trump administration’s tariffs in place and recently announced tariff hikes on another $18 billion of Chinese goods (like electric cars and semiconductors).
7. A lot of conservative institutions are very worried about Trump's proposed economic policies. I don’t know how much places like the American Enterprise Institute represent mainstream Republican thought anymore, but I think this is an undertold storyline of the 2024 election.
8. Like most people, I believe the government wastes an incredible amount of money each year. One great way to lower the deficit is to make the government more efficient (I'd start with the military). But I have to say... I couldn't help but laugh when I heard that Trump and Elon Musk's idea to address government fraud and waste was to create a new government commission. A former president from the private sector and the king of the private sector put their minds together to solve government fraud and waste, and the best they can come up with is another new government body to solve the problem of too much government! Does anyone else find this incredibly funny, or is it just me?
9. Harris proposed a 28% tax on long-term capital gains (assets owned for more than a year) on households making over $1 million annually. This is one of her first notable economic policy breaks from Biden, who had proposed lifting this tax from 20% to 39.6%. If Harris had stuck to Biden’s plan, it actually would have been quite extreme; the sum total of Biden’s proposals would make the U.S. an outlier internationally in how it taxes the wealthy. Moderating the rate was probably smart, and it represents a trend to monitor: Where will Harris try to "moderate" her policies from Biden's, and where is she going to move left? So far, she looks to be moving to the center on business issues.
10. Despite being more moderate, Harris's capital gains tax proposal has all the same flaws as Biden's: It raises revenue in an uneven fashion, since capital gains are unpredictable. It punishes people for responsibly investing money, since it's a tax on long-term gains.. And finally: She is never going to get it passed if Republicans flip the Senate (and/or hold the House) — she may not even be able to do it if Democrats have a slim majority. It’s also worth noting that some of her proposals on taxing unrealized gains might be unconstitutional.
11. Trump’s 2017 tax cuts spurred growth and helped average Americans. The question now is if we can afford them. When the cuts went into effect, I was making about $70,000 a year. Those cuts saved me over $1,000 annually, which made a big difference in my life. These cuts are set to expire in 2025, and it's unclear how Harris will address them. If she allows the personal income tax cut to die, a lot of people who forgot about those cuts eight years ago are going to be very unhappy. Losing $50 on a paycheck out of the blue is the kind of thing middle class Americans will notice.
12. As a small-business owner, I'm intrigued by Harris's expansion of the small business tax credit from $5,000 to $50,000. I also love her goal of receiving 25 million small business applications in her first term. But I think there is a very good argument that she is targeting the wrong small businesses in the wrong way. Rather than helping existing small businesses by extending tax cuts, limiting regulatory measures, and investing in existing programs, she is focused on subsidies for new businesses — even though start-ups are already flourishing. The sweet spot is a combination of free-market policies with government assistance in the areas the free market needs some juice. This does not seem like one of those areas. 

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Your questions, answered.

Q: I enjoy hearing “our point of view” but is it necessary to be as long a read as the Left and Right point of view? I appreciate your opinion but not as much as mine and theirs.

—Chris from Osceola, IN

Tangle: I really appreciate this question. I give my take the weight it has based on a few factors: 1) I do not think my opinion is more important than the right or left sections of the newsletter; I just think it’s a good way to make the newsletter more personal (and add some unique writing). I strongly recommend reading the entire newsletter from top to bottom. 2) I actually didn’t have “my take” in the early editions of Tangle, but it was something people asked for — which I thought would be a fun addition! 3) Sometimes I do have pretty strong opinions, or some fresh things to say I’m not seeing said elsewhere, so I believe I can be additive. 4) I believe sharing “my take” is an act of transparency, since it gives readers insight into the person and the team providing them the news.

On the whole, though, here is a promise I can make: If I don’t feel equipped to have an opinion, I won’t try to form one. If I don’t think I can say something unique or fresh, I won’t try to force it. And if I’m not sure how I feel about something, I’ll say so, rather than just try to manufacture a “take.” The good news is that I have great editors who are always sure to check me.

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Under the radar.

Youth vaping quietly hit a 10-year low this year, a positive sign on a public health issue that has sparked widespread concern across the country. A joint survey from the FDA and CDC shows that the teen vaping rate fell to under 6%, down from 7.7% in 2023 and from its peak of 27% in 2019. The drop in vaping didn’t coincide with a rise in other tobacco industry products, such as nicotine pouches. Vaping was unchanged among middle schoolers, with 3.5% still reporting having used e-cigarettes in the past month. “This is a monumental public health win,” FDA’s tobacco director Brian King said. “But we can’t rest on our laurels. There’s clearly more work to do to further reduce youth use.” The Associated Press has the story. 

Numbers.

• 27%. The percentage of registered voters who say the economy and jobs are the most important issues facing the U.S., according to a July 2024 Harvard CAPS/Harris poll. 
• 61%. The percentage of registered voters who say the U.S. economy is on the wrong track.
• 46%. The percentage of U.S. adults who trust former President Donald Trump more than Vice President Kamala Harris on economic issues, according to an August 2024 poll from ABC News/Ipsos. 
• 38%. The percentage of U.S. adults who trust Harris more than Trump on the economy.
• 0.4%. The increase in the unemployment rate between August 2023 and August 2024.
• 800,000. The approximate increase in the number of unemployed people between August 2023 and August 2024.
• 35%. The top-bracket capital gains tax rate for individuals between 1972 and 1977 (and in 1979), the highest rate in U.S. history.
• 28%. The top-bracket capital gains tax rate for individuals proposed by Vice President Harris (up from the current maximum rate of 20%). 
• $5.8 trillion. The estimated amount that former President Trump’s tax and spending proposals would add to the U.S. deficit over ten years, according to the Penn Wharton Budget Model.
• $1.2 trillion. The estimated amount that Vice President Kamala Harris’s tax and spending proposals would add to the U.S. deficit over ten years. 

The extras.

• One year ago today we had just written a piece asking if Ukraine’s recent counteroffensive was working.
• The most clicked link in Thursday’s newsletter was the hiker rescued in Washington state.
• Nothing to do with politics: New Hampshire governor saves man choking on lobster roll at seafood festival.
• Thursday’s survey: 1,189 readers responded to our survey on whether the U.S. should allow Ukraine to strike deeper into Russia with 86% in support. “As the war has progressed, some have feared that Putin would escalate. But each time the feared response has not occurred,” one respondent said.

Have a nice day.

Basketball hall-of-famer Charles Barkley recently made a donation of $100,000 to a high school in New Orleans, Louisiana, the first of ten total donations from Barkley to St. Mary’s Academy for a combined donation of $1 million. After hearing that two students at the high school, Calcea Johnson and Ne’Kiya Jackson, had completed a new proof for the Pythagorean Theorem as part of a math competition at the school, Barkley felt inspired and pledged the donation. AfroTech has the story. 

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