TRT World - World in Focus: US Election Race & Economy

It’s the economy, stupid’ “It’s the economy, stupid”... This phrase was a reminder for then-governor Bill Clinton in the 1992 presidential elections- that led him to the White House. A reminder that the economy actually determines politics… And 2016 is yet another election year in the US, in which economic issues play a major role. Voters tend to name the state of the economy as one of their biggest sources of concern, and candidates also place great importance on these issues. Republicans are known to defend free enterprise, lower taxes and minimum level of government involvement in the economy. Democrats on the other hand, support the idea of big government and spending of public resources. But Professor Murat Ferman says this year’s presidential race is considered to be the most economically unrealistic presidential race of all times… Why the most economically unrealistic race? But why do economists accuse both Democrat and Republican candidates of being severely disconnected from economic reality?The US economy has performed well under President Barack Obama. When he first took office in 2009, the unemployment rate was 7.8%. And now it’s below 5% with sustained job growth. But this year’s Democrat candidates don’t seem to follow Obama’s path. Bernie Sanders has set his sights on big financial corporations, millionaires and billionaires…He wants to redistribute wealth from the rich to everyone else, by tax hikes. And he shouts out that he is dangerous for Wall Street: The other Democratic candidate, Hillary Clinton avoids making big specific promises when it comes to the economy. She says her priority is to raise wages and insists that boosting wages is more important than growth targets… And then there are the Republican candidates… Donald Trump says ‘make America great again’. But he doesn’t really explain how… He says he would renegotiate all US trade deals which are not advantageous for the US and negotiate better deals. Trump also doesn’t shy away from the idea of applying a 45 percent tariff on Chinese exports… And then there is ‘the wall’…: Ted Cruz, who actually played a major role in the government shutdown in 2013, says the whole tax system should be radically changed. He proposes the ‘Simple flat tax plan’ where every citizen would be paying the same ratio of their incomes… Professor Ferman says candidates should refrain from being too radical: How markets currently react Democrats keep reminding voters that it was under Republican president George Bush that the US economy was hit by the worst recession since the Great Depression. According to statistics, the US economy has performed better when the president has been a Democrat rather than a Republican. And Democratic presidents are often credited with better stock market returns than Republicans. But recently, politics has been overshadowed by the policies of major central banks like the Federal Reserve or the European Central Bank. They seem to have a bigger and more direct effect on stock market performance. Former Fed Economist Erkin Sahinoz says upcoming elections are not priced in yet. This may be one of the most unwanted elections in US history pundits claim. But the results will determine how the world’s largest economy is going to shape up over the next few years, in terms of politics and economics... Facebook: https://www.facebook.com/trtworld Twitter: https://twitter.com/trtworld Youtube: https://www.youtube.com/c/trtworld GooglePlus: https://plus.google.com/+trtworld