Election 2024: Key Considerations for Business Leaders
On Wednesday, September 18th, the CFO Forum held its third-quarter program featuring distinguished speakers Chris Giancarlo and Jason Carter, who provided invaluable insights. The event was moderated by Kristin Adams, EVP of Aon, and Chris White, CFO Forum Co-Founder. Chris and Jason engaged in a timely discussion on key topics relevant to the upcoming election, including:
Federal Reserve’s Influence on the Economy: Chris Giancarlo emphasized that while political candidates and their policies (e.g., tax rates) matter, the Federal Reserve's decisions—especially concerning interest rates—have a much larger and more immediate impact on the economy than political rhetoric. He referred to the Fed as the "whale" in the economy. The discussion highlighted how market expectations often hinge on short-term interest rate changes, making the Fed a critical factor for business leaders to track.
Shift in Trade Policy: Chris Giancarlo and Jason Carter discussed how both political parties have shifted away from traditional free trade policies, becoming more open to using tariffs as economic tools. Under President Trump, tariffs were employed transactionally, targeting specific goals beyond economic sanctions, including creating a sovereign wealth fund. Despite Democrats traditionally opposing tariffs, they have maintained some of Trump’s tariffs. Jason Carter noted the breakdown of the traditional bipartisan consensus that trade benefits the economy. He explained that while Democrats are critical of Trump's retaliatory use of tariffs, they have proposed their own barriers in industries like semiconductors.
Impact of Cryptocurrency and Blockchain: Chris Giancarlo presented the idea that cryptocurrencies and blockchain technologies represent a shift in how value is stored and transferred. Traditionally, assets have been recorded by proprietary institutions like banks, but crypto introduces the possibility of recording value on globally accessible distributed ledgers. While older generations may find this concept foreign, younger generations, already accustomed to digital transactions, are embracing it. Giancarlo warned that the U.S. risks losing its currency dominance if it fails to develop a central bank digital currency or regulate stablecoins, likening inaction to “losing World War 3.”
Generational Divide in Digital Adoption: Giancarlo pointed out that the adoption of digital technology is more generational than partisan. While older generations grew up with assets stored in commercial banks, younger people intuitively understand the digital economy and expect 24/7 digital access. Jason Carter emphasized the generational divide in adapting to digital finance, particularly around blockchain and cryptocurrency. He noted that policymakers are lagging behind in confronting the digital revolution, underscoring the need for preparation for widespread adoption.
Regulation vs. Deregulation: Chris Giancarlo explained Trump’s deregulatory agenda, including a proposal to eliminate 10 regulations for every new one enacted, an increase from the previous 3:1 ratio. He noted that while independent agencies like the Commodity Futures Trading Commission (CFTC) are not technically subject to these executive orders, they were still held accountable by the Office of Management and Budget. Jason Carter expressed skepticism about this “gimmick,” arguing that reducing regulations for the sake of it could create more bureaucratic complications rather than benefits for businesses.
Corporate Taxation and Economic Growth: Giancarlo outlined Trump’s two major tax proposals: maintaining the current 21% corporate tax rate and reducing it to 15% for companies that manufacture goods in the U.S. He also discussed a proposal to maintain the $16 million estate tax exclusion. Jason Carter highlighted Democrats’ focus on middle-class tax cuts, such as doubling the child tax credit, one of the most significant middle-class tax cuts in U.S. history. Both parties, however, are concerned about the national deficit and debt, though they approach taxation and spending differently.
Prosecutorial vs. Regulatory Approach: Jason Carter suggested that Kamala Harris, with her background as a prosecutor, might prioritize prosecuting corporate wrongdoing over imposing widespread regulations. This could reduce the burden of blanket regulations while deterring specific bad actors. Carter highlighted this prosecutorial focus as a potentially more targeted and effective alternative to heavy-handed regulation.
Big Tech and Antitrust: The speakers discussed concerns over the concentration of power in big tech companies, particularly in digital advertising. Both Republicans and Democrats are uneasy with the influence these companies wield. Carter noted the increased focus on antitrust enforcement, particularly under Kamala Harris's potential leadership, suggesting that we might see more aggressive actions against monopolistic practices in the tech sector.
Concerns about the U.S. Dollar’s Future: Chris Giancarlo warned that the U.S. risks losing the reserve currency status of the dollar if it does not lead in developing digital currencies and related financial technologies. He criticized the U.S. for its lack of participation in international discussions on global standards for digital finance, noting that China is currently leading in this effort.
Cash and the Economy’s Marginalized: Chris White and others noted that certain communities, such as the elderly, immigrants, and low-income populations, still rely heavily on cash. As digital transactions grow, these marginalized groups may be left out of the economy. The speakers expressed concern that a lack of cash acceptance may further isolate vulnerable populations from essential services as cashless transactions expand.
About the Speakers:
J. Christopher “Chris” Giancarlo: J. Christopher “Chris” Giancarlo is a renowned leader in financial regulation, having served as the 13th Chairman of the U.S. Commodity Futures Trading Commission (CFTC), where he played a pivotal role in regulating the futures, options, and swaps derivatives markets. He is recognized as one of the "most influential individuals in financial regulation" and has served in several key positions, including the U.S. Financial Stability Oversight Council and the Executive Board of the International Organization of Securities Commissions. Giancarlo is currently Senior Counsel at Willkie Farr & Gallagher, co-founder of the Digital Dollar Project, and an active board director, advisor, and investor across various technology and financial services companies. He is also the author of CryptoDad: The Fight for the Future of Money.
Jason Carter: Jason Carter is a distinguished attorney with a strong record of public service and leadership. He balances a successful litigation career with his role as Chair of the Carter Center's Board of Trustees. From 2010 to 2015, he served in the Georgia State Senate and was the Democratic nominee for Governor of Georgia in 2014. Carter has been named to Georgia Trend's list of the 100 Most Influential Georgians and has been consistently recognized as a Super Lawyer by Atlanta Magazine.