ABC News
The state of the economy will be a central issue in her debate with Trump on September 10.
The Wall Street stock market crash on «Black Monday», August 5, was partially reminiscent of the dot-com crisis of 2000, when investors who had invested in Internet companies lost $5 trillion in one fell swoop. The NASDAQ index fell about 50% from its peak. Today, shareholders panicked by gloomy predictions about the future of the U.S. economy have sold some of their assets.
The largest IT companies lost a trillion dollars in market capitalization. There was no chain reaction, no mass bursting of stock market bubbles, but a signal was sent about the instability of the so-called «new economy».
In the Republican campaign, the Wall Street earthquake was dubbed the «Kamala Crash». This turned into a propaganda attack against the Democratic candidate, spreading as yet another insulting meme that has been Donald Trump’s trademark since his verbal sparring with Hillary Clinton in 2016.
Democratic Party political strategists are trying to neutralize the «Kamala Crash» meme by pointing to the so-called «Project 2025» of the Republican right wing, which proposes to reform the federal government to consolidate executive power in the hands of the U.S. president. Democrats have naturally seen these plans as an attempt by Trump’s team to purge the government of their appointees and influence peddlers.
Why «Project 2025» might have frightened investors and caused them to sell IT stocks is not explained by Harris’s campaign, which offers this thesis as a matter of faith.
Meanwhile, a serious analysis is needed to understand why Apple’s stock fell nearly 7%, Nvidia’s fell 11.5%, and Intel’s simply collapsed 30%. The version that investors have lost faith in the added value of implementing artificial intelligence (AI) technologies is insufficient.
A recent study by the Rockefeller-funded Council on Foreign Relations (CFR) claims that tax avoidance by IT companies in the United States has played a role. Giants like Microsoft, Apple, Oracle, and IBM are registered in foreign jurisdictions (read: offshore, like Ireland) and pay a modest percentage of their profits there.
Over the past 20 years, according to the CFR study, two of the three largest U.S. semiconductor manufacturers have focused on overseas markets. For example, Applied Materials, a major supplier of semiconductor manufacturing equipment, generates 7–8 times more revenue from foreign sales than from domestic sales.
A classic example of luring IT companies back to the U.S. is the agreement between the U.S. government and Nvidia, a major maker of graphics cards and mining peripherals, which did not pay a dime in taxes from 2016 to 2022. Since last year, there is a gentleman’s agreement: Nvidia pays, but at a rate of 13.125%, while the current corporate tax rate is 21%.
In early August, Intel, a major computer component manufacturer, announced that it would freeze its dividend for the first time in 30 years and also planned to lay off 15% of its workforce.
The macroeconomic indicators are no less alarming. This year alone, $1.14 trillion will be needed to service the national debt, or 76% of the taxes collected.
It is worth recalling that the United States is formally bankrupt, as the national debt increases by $1 trillion every 90–100 days and has already reached an astronomical level of $35 trillion. The budget deficit will reach $2–2.5 trillion this year.
The debt ceiling is scheduled to be raised on January 2, 2025. It is clear that the new U.S. administration may turn on the printing press again, unless inflation gets out of control and the inevitable recriminations during the change of power in the White House (the inauguration of the new president traditionally takes place on January 20) do not lead to new incidents such as the storming of the Capitol by angry voters of the losing side.
Forecast: In any case, the state of the economy, and by extension the well-being of citizens, will be one of the key issues in the upcoming televised debate between Trump and Harris on September 10.
Meanwhile, as reported by Fox News, «Half of American parents say they will have to sacrifice necessities like groceries and utility bills to buy back-to-school supplies. A third admit they simply cannot afford them».
The opposing camps are already gearing up for an epic battle on live television. In a sharp exchange on the pro-Trump Fox News channel between well-known host Sean Patrick Hannity and economist Stephen Moore, it was suggested that Kamala Harris would destroy the U.S. economy if she took the throne.
The argument? Among other things, her team proposes doubling the capital gains tax and imposing a tax on unrealized capital gains. This means, says Stephen Moore, that Harris is «the most anti-business presidential candidate of our lifetime» and that she will lead to the destruction of the «working class».
Dedicated to the «green agenda», Harris opposes modern oil and gas drilling methods, particularly the technology of hydraulic fracturing and horizontal drilling that has allowed the U.S. to become the world’s largest producer and exporter of shale oil and gas. Stephen Moore sarcastically remarked, «I don’t think this lady even knows what hydraulic fracturing is», adding that the shale revolution now provides 75% of the country’s energy needs.
Stephen Moore also criticized the use of cheap credit and helicopter money to stimulate the economy: «Joe Biden and Kamala Harris are fiscal pyromaniacs. They have brought our country to the brink of bankruptcy with their massive spending».
Systemic Democrats in power hoped that supporting Kamala Harris would prevent swing voters from going to Donald Trump. But now they are desperate. Much of their desperation is self-inflicted. In early August, the Biden-Harris administration announced its intention to ban the use of single-use plastics in government facilities. South Dakota Senator Mike Rounds was quick to quip: «The world is burning, and they’re worried about plastic forks».
A rhyming meme appeared on the One America News (OAN) channel: «Trump Cash vs. Kamala Crash».
On a readers’ forum, someone nicknamed Gurg delivered a categorical verdict: «Personally, I wouldn’t trust Kamala with my 6-year-old VW GTI. Why would I trust her with the keys to the country?» A response from a reader nicknamed MMA1227 followed: «I wouldn’t trust her with my dog!»…