Today’s Theme — Unity — Will Be Difficult to Attain
Author: Greg Valliere
January 20, 2021
AFTER THE PAST FOUR YEARS, it’s nearly certain that the temperature will drop in Washington, starting this noon at the battle-scarred Capitol.
JOE BIDEN’S THEME will be unity, an admirable goal — but there’s an impeachment trial coming and most Republican voters believe the election was fraudulent.
WE WOULD LOVE TO BELIEVE THAT UNITY will prevail, and Biden is determined to seek it. He’s one of the few politicians who could pull it off — he’s deeply religious, patriotic, likable, reasonably moderate and has a normal-sized ego, which will be refreshing.
BUT THERE ARE TWO ISSUES that make us skeptical about hopes for unity:
1. Impeachment: The trial will begin within days, and it won’t help Biden. A bitter trial will complicate his agenda; it could deepen the nation’s political fissures as Donald Trump’s allies portray him as a martyr; and the final vote probably will be to acquit. So why go through a trial after Trump has already left town?
2. The economic prescriptions: Republicans made it clear during Janet Yellen’s testimony yesterday that they think the latest Biden relief package is too expensive. This issue will become a major source of disunity, as the parties return to their age-old differences on taxing and spending.
IF THERE’S A DEAL, probably below Biden’s $1.9 trillion proposal, it will be a product of negotiations between him and Mitch McConnell. The latter made it clear yesterday that he blames Trump for the Capitol riot, and McConnell is committed to confirming Biden’s nominations — including, obviously, Yellen.
BUT McCONNELL ALREADY IS THINKING about the 2022 elections — sorry, that’s how Washington works — and the Republicans will hammer away against huge new spending and the tax hikes that will take shape by summer. The Democrats will need all of their 50 Senators to enact the party’s aggressive economic program, and we’re not sure all 50 will be on board.
THE KEY FOR BIDEN WILL BE THE VIRUS: New cases and hospitalizations are finally trending lower despite the horrific spike in fatalities. Last night’s moving remembrance sent a clear signal that rolling out vaccines will be Biden’s top priority.
JOE BIDEN will be a transitional president, undoubtedly a one-termer. As Covid subsides on his watch, the nation may return to a more normal climate, not as ferociously partisan, as politicians in both parties seek to lower the temperature. They have a long, long way to go, starting this noon.
The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The forward looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward looking statements. The information contained in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to the circumstances of the individual.
AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), AGF Investments America Inc. (AGFA), AGF Investments LLC (AGFUS) and AGF International Advisors Company Limited (AGFIA). AGFA and AGFUS are registered advisors in the U.S. AGFI is a registered as a portfolio manager across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.
About AGF Management Limited
Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.
For further information, please visit AGF.com.
©2021 AGF Management Limited. All rights reserved.