The Democratic candidates, especially Warren, hope to do just the opposite. Some favor stronger regulation and antitrust enforcement concerning Big Tech, while Sanders and Warren advocate breaking up the sector’s largest companies. All support the $10 trillion Green New Deal, an economically, scientifically, and numerically illiterate program, or even more radical plans. A Democratic president could also be expected to tighten financial regulation, and potentially even introduce radical changes to corporate law.

On trade, Trump has placed a high priority on changing dynamics that he considers unfair. It is on these grounds that he negotiated a modest revision to the North American Free Trade Agreement (NAFTA), which awaits congressional approval, and introduced escalating tariffs on China.

But the trade war against China that Trump launched last year has become a drag on business investment, dampening the positive effects of his tax and regulatory reforms. Fortunately, the US and China recently reached a temporary agreement forestalling further tariff hikes while a more comprehensive deal is negotiated. Although the Democrats have often criticized Trump’s approach, they are not proposing further trade liberalization.

A final question to consider when assessing the US presidential candidates is whom each would appoint as the next chair of the US Federal Reserve. Trump – who has repeatedly criticized current chair Jerome Powell for pursuing too little monetary-policy easing – would probably select a dovish candidate.

A left-leaning Democrat might do the same, given the left’s fascination with risky ideas that promote massive amounts of Fed-funded debt. Center-leftists – Biden, Amy Klobuchar, Pete Buttigieg – might reappoint Powell, who has done a good job, or select a moderate Democratic economist, such as former Fed Vice Chair Alan Blinder or former Treasury Secretary Larry Summers.

With so many candidates still on the field, investors and financial markets seem to be awaiting stronger signals about the political future and the considerable, but different, economic and financial risks that a victory by each would entail.

Michael J. Boskin is professor of economics at Stanford University and Senior Fellow at the Hoover Institution. He was chairman of George H. W. Bush’s Council of Economic Advisers from 1989 to 1993, and headed the so-called Boskin Commission, a congressional advisory body that highlighted errors in official U.S. inflation estimates.

​©Project Syndicate

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