Moneybeat: What the candidates should say

MARY REICHARD, HOST: Next up on The World and Everything in It: the Monday Moneybeat.

NICK EICHER, HOST: It’s time to talk business, markets, and the economy with financial analyst and adviser David Bahnsen. He’s head of the wealth management firm The Bahnsen Group, and he’s here now.

David, good morning!

DAVID BAHNSEN: Well, good morning, Nick. Good to be with you.

EICHER: First thing I’m curious about, David, is a story last week in The Wall Street Journal, front page, so it’s by the news division and considerably more supportive of corporate woke policies. But the report is interesting. Headline: Ford, Coors Light, and Other Brands Retreat From a Gay-Rights Index. Subhead: Human Rights Campaign used a ranking of companies to advance same-sex benefits; now an activist is using the index to pressure CEOs.

The story points to several companies: the big automaker Ford along with Harley-Davidson, Lowe’s, rural retailer Tractor Supply, distiller Brown-Forman, and brewer Molson Coors.

It notes that “Nearly all of them had ranked well on [the gay-rights] index. Some of the companies said they would stop [cooperating] with [the Human Rights Campaign] after they had been targeted by [a] social-media activist [called] Robby Starbuck.”

What can you tell us about this, David?

BAHNSEN: Yeah, there's a number of perspectives here. It's there's a few moving parts that I've been following for some time, and I do think that the bulk of it has to do with, particularly in this case Ford, I think to a lesser degree some of the other companies The Wall Street Journal named, but you're going to see it across the board with a lot of other companies too. And it does not necessarily mean companies that are wanting to be outside of left wing social engagement. It means they don't want to be a pawn in somebody else's activism, and that they now have cover to just sort of get out of it.

And so, what has happened is there was a big push from this Human Rights Campaign to get people to participate in what was a very far left initiative and kind of blackmail them with “You're going to do certain policies or we're going to score you negatively.” But then there was a backlash to that, with a big campaign against the people who were participating in that campaign, and I think it's caused them to say, “Okay, now we can just simply argue we're pulling out not because we want to oppose LGBT or because we want to support LGBT, but because we just simply don't want to be used in the midst of this kind of culture war back and forth between competing social and cultural agendas.

Now, of course, the way to not get pulled into these campaigns to begin with is to not enter into these campaigns to begin with, and I would far rather companies just recognize what's going on with a lot of the DEI, certainly some of the more extreme culture war issues out there that many of them are being used and threatened. You know, there's a sort of soft blackmail at play where that you will risk reputational damage if you don't try to play ball and set certain policies that we think will be in line with this agenda.

What you're seeing here right now is not the final step in all this. I think we're in earlier innings of the pendulum shifting back away from a far left cultural agenda to a more market oriented agenda where companies say we're no longer willing to risk the ire of people who feel differently on these issues, and therefore we would rather have no score at all than a good score from your index that creates a bad score in another index. I just want to remind everybody, there is no neutrality.

EICHER: Alright, debate night is tomorrow night, probably the only one we’ll get. Last time the former president stepped in the ring was the last time for the current president, so lots of anticipation politically. What I’d like to hear from you is what you’re looking for in terms of economic policy from each of the combatants and let’s begin with President Biden’s replacement, Vice President Kamala Harris. What do you hope to hear from her?

BAHNSEN: Well, what I would like to hear from her, we're not going to hear, which is a little more unpacking as to why she has gone back on so many of the far left agenda items from 2020. And of course, the reason why is because it isn't a mystery. It isn't like I'm over here confused. She can't say what the reason is, and the reason is that it's politically untenable to hold to the positions that she held to four or five years ago, around eliminating private health insurance, around the Green New Deal, and trillions of dollars of public spending projects that are environmentally driven. People could think that there's good or bad in some of the policies, but they're not politically tenable, and that's the reason she's gone away from them.

So, what would be great out of a debate like this is for a candidate to have to give an explanation as to why their worldview has changed, and what their worldview really is now. But politically, that's impossible for her to do, because, you know, they're pretty smart people involved in the campaign that realize there are positions here that jeopardize her electoral prospects.

So, I expect you're going to get a lot of platitudes and a lot of generic rhetoric about helping the middle class, about an Opportunity Society, and mostly solutions tied to that rhetoric that center around government handouts, whether it's price controls on groceries or subsidies on housing. But I don't think you're going to get anything more meaningful than that. And I don't think you're going to see her or her opponent address anything to do with national debt, with government spending and with ongoing deficits.

And so, the fact that we will very likely have a big debate on Tuesday night that does not get into the issue of $35 trillion in national debt that is going up by 1 to 2 trillion per year without a recession, that's the real shame of this. That no one is willing to tackle the fact that debt has grown far higher than GDP for the last 10 years.

EICHER: Alright, and what about former President Trump?

BAHNSEN: Well, I would love for him to address the various issues that he addressed in 2016 where there was a vision for making America more competitive by reducing what was then our extremely high corporate tax rate. I think the lowest hanging fruit for a supply sider, like myself, in the, you know, suboptimal parts of American economic policy is that we are running at far too high deficits, that we have really destructive entitlement commitments that have to be addressed for the future, and that there's always a need for more incentives via deregulation, optimized tax policy and energy independence.

Some of these things are things that President Trump is very sympathetic to philosophically, but there's a lot less meat on the bone this time around than there was in 2016. So, rather than more about child tax credits and various things, the government will spend money on some of the things that, very candidly, sound like pandering to me, like no tax on tips that may or may not be good politics. It is obviously, though not broad based supply side, you know, incentive driven reform. That's what I'd really love to see.

And President Trump's already said he's not going to talk about entitlements. And that's a political decision he made. I think it's the wrong one, both as in terms of leadership and the politics, I think it needs to be discussed, but we're not going to get that out of them. He has said that they're going to get rid of the national debt, and I don't really have any idea how he's planning on doing that. But I wouldn't mind hearing what the kind of version 2.0 of the supply side agenda is – where there's meaningful tax reform possibility, where there is ability to make the corporate tax code more competitive or the regulatory.

So, you know, again, he's not immune either from the criticism that some of us have with Vice President Harris, for lack of specificity. There was a website in 2016 with dozens of policies. There's a lot less of that this time, and maybe some more of that will come out in the debate. And it would be, it would be helpful to see if it can follow up on, rather than big government solutions to some of the economic component, where there might be ideas for getting the government out of the way.

EICHER: Ok, David Bahnsen is founder, managing partner, and chief investment officer of The Bahnsen Group.

Check out David’s latest book Full Time: Work and the Meaning of Life at fulltimebook.com.

Have a great week, David!

BAHNSEN: Thanks so much, Nick.

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