The economy is top of mind for American voters heading into the 2022 midterm elections. Prices keep going up while stock market indexes have gone south all year, and now, major companies are gearing up for large-scale layoffs.
It’s a bad look for the party in power, Democrats, as Republicans hope the economy will be a winning issue for them to take control of Congress.
“If the Republicans are able to take control of both the Senate and the House, I think we can basically see an end to further Democratic-initiated spending programs, spending will definitely be reined in. And any attempts that further regulation that would impose a break on business activity is likely to be blocked as well,” said John Quelch, dean of the University of Miami Herbert Business School.
He told Straight Arrow News that Democrats failed with overspending and the so-called Inflation Reduction Act.
“With respect to the Cares Act and the Inflation Reduction Act, the initial proposals in terms of the spending levels from Democrats were much higher than in the end, were approved,” Quelch said.
Quelch also said that what keeps America in the number one position in terms of global economy is its sheer will to innovate and engage in entrepreneurial activity, regardless of who happens to be in power in Washington.
“I always like to emphasize the entrepreneurial spirit and the innovative capacity of the American economy. And there is opportunity, there is a silver lining in every downturn in every recession,” Quelch said.
SIMONE DEL ROSARIO: Tonight there’s one election issue that’s number one on American’s minds. And that’s the economy prices keep going up while the stock market has gone south all year, and now major companies are gearing up for large scale layoffs. It’s a bad look for the party and power Democrats as Republicans hope the economy will be a winning issue for them to take control of Congress. Joining me now is Miami Business School Dean John quelch. Jack Welch, thank you for being here tonight. You know, the polls are showing that voters trust Republicans more right now to get the economy back on track. What’s their plan if Republicans do gain control? And do you think it’s going to have an impact on perhaps the biggest issue of all, which is inflation?
JOHN QUELCH | DEAN, MIAMI HERBERT BUSINESS SCHOOL: Well, certainly, Simone, the economy is the number one issue. And the exit polls, not surprisingly, given the inflation, unprecedented for 40 years that the electorate has had to bear. If the Republicans are able to take control of both the Senate and the House, I think we can basically see an end to further democratic initiated spending programs, spending will definitely be reined in. And any attempts that further regulation that would impose a break on business activity is likely to be blocked as well.
DEL ROSARIO: So there wouldn’t be I think, some slight boost that will come, at least in the perception and expectations of the business community broadly defined, if the Republicans take both houses, in your opinion, where have Democrats failed on inflation in the economy?
QUELCH: Well, I think number one, they’ve failed in terms of not understanding that that is the fundamental issue that is driving the electorate to do. The January 6 hearings, the threat to democracy, some of these other issues that were touted relatively recently as being a game changers for this election cycle, have simply used slid into the background and the economy has understandably taken center stage. So, you know, where did they go wrong? It probably over spending in the Kazakhs, and in the so called inflation Reduction Act, probably putting more into the economy than was necessary in order to prevent the post COVID downdraft .
DEL ROSARIO: Why didn’t Republicans do the same thing if they were in charge with tax cuts?
QUELCH: I think they would have, but perhaps not to the same degree. And if you remember, with respect to the Cares Act and the inflation Reduction Act, the initial proposals in terms of the spending levels from Democrats were much higher than in the end, were approved. And that was, of course, partly due to the internal opposition of Senator Joe Manchin in particular, let’s look at how politics plays into this in the long run here, because the Federal Reserve is so heavy, heavy handedly involved in bringing down inflation right now.
DEL ROSARIO: So how much control do politicians really have in this arena in the immediate term, and what should they be doing that they’re not?
QUELCH: It’s very simple as Simone, the Federal Reserve has control of monetary policy, essentially, how much money is pumped into the economy via the interest rates that it sets. And obviously, the Federal Reserve has tightened considerably and more tightening is yet in the offing. The Congress, on the other hand, is the budget authority and therefore all tax related matters. Go through Congress. So the two levers that are most often deployed, tightening of interest rates or adjustments to taxes as a way of moving the economy one way or another.
DEL ROSARIO: Right now in our economy, the house is on fire, if you will. But what is something that you know is brewing that we’re not talking about that you think could be a major economic issue or a major economic opportunity in the next few years?
QUELCH: Certainly the political, geopolitical challenges as that couldn’t erupt at a moment’s notice, whether it be in the Korean Peninsula or in the Gulf region, or magnified problems in Ukraine and Eastern Europe. These are all potential headwinds, of course. But I think the fundamental thing I always like to emphasize is the the entrepreneurial spirit and the innovative capacity of the American economy. And there is opportunity, there is a silver lining in every downturn in every recession, you can see company after company that disrupted and changed the face of an industry being founded, being conceived and founded during a recession or a downturn. And so that that is really what keeps America in the number one pole position in terms of the global economy is just the sheer will to innovate and engage in entrepreneurial activity, no matter who happens to be in power in Washington. Millions of people get up every morning in this country, determined to make money, regardless of who is in Washington.
DEL ROSARIO: I’m going to leave it on that note of optimism Miami Business School Dean John quelch, thank you so much for being with us tonight.
QUELCH: Thank you.
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