What happened to market fears of regulation and taxes under Biden?
- U.S. stock index futures are pointing to another positive open this
morning after the major averages ended the session higher on Wednesday
following Joe Biden's inauguration in Washington. Shares were buoyed by
hopes of his mega stimulus plan, all but forgetting the once prominent
fears of regulation and corporate taxes that ensued following his
election
in November.
- What happened? Treasury Secretary nominee Janet Yellen said this week
that Biden's current focus is relief for American families hit by the
coronavirus pandemic, not raising taxes, and it could be quite some time
before that discussion resurfaces. U.S. business leaders have also backed
the new president, signaling open dialogue will ensue that can shape
policy, while Corporate America has been increasingly embracing different
economic models.
- *Examples:* Automakers that had fought against tighter fuel economy
standards for decades had a change of heart in 2019, when Ford,
Volkswagen,
Honda, and BMW struck a surprise deal with California that would raise
the
fuel economy of their fleets to the state's standards rather than the
Fed's. Similar backlash was seen with methane rules and energy efficiency
deregulation. Social media has further welcomed some stronger regulation
of
the Internet and has gone through great lengths in recent weeks to police
its platforms.
- *Thought bubble:* Going along with social trends generates big
publicity for companies and shareholder value in the long term (think
Nike
and Colin Kaepernick). An attractive image not only appeals to investors,
but employees and the public as a whole, and firms that have invested
significant resources in complying with existing requirements continue to
reap benefits. Big companies can afford it, while small businesses and
startups cannot, and societal shifts are on their side.
|Today, 5:06 AM|18 Comments
- U.S. stock index futures are pointing to another positive open this
morning after the major averages ended the session higher on Wednesday
following Joe Biden's inauguration in Washington. Shares were buoyed by
hopes of his mega stimulus plan, all but forgetting the once prominent
fears of regulation and corporate taxes that ensued following his
election
in November.
- What happened? Treasury Secretary nominee Janet Yellen said this week
that Biden's current focus is relief for American families hit by the
coronavirus pandemic, not raising taxes, and it could be quite some time
before that discussion resurfaces. U.S. business leaders have also backed
the new president, signaling open dialogue will ensue that can shape
policy, while Corporate America has been increasingly embracing different
economic models.
- *Examples:* Automakers that had fought against tighter fuel economy
standards for decades had a change of heart in 2019, when Ford,
Volkswagen,
Honda, and BMW struck a surprise deal with California that would raise
the
fuel economy of their fleets to the state's standards rather than the
Fed's. Similar backlash was seen with methane rules and energy efficiency
deregulation. Social media has further welcomed some stronger regulation
of
the Internet and has gone through great lengths in recent weeks to police
its platforms.
- *Thought bubble:* Going along with social trends generates big
publicity for companies and shareholder value in the long term (think
Nike
and Colin Kaepernick). An attractive image not only appeals to investors,
but employees and the public as a whole, and firms that have invested
significant resources in complying with existing requirements continue to
reap benefits. Big companies can afford it, while small businesses and
startups cannot, and societal shifts are on their side.
|Today, 5:06 AM|18 Comments
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