The latest presidential debate vividly captured how the 2008 financial crisis has reshaped the Republican Party by unleashing a potent populist strain that could further scramble an already unpredictable primary contest.
Candidates vying for the 2016 GOP nomination have grown distinctly more leery of big banks, corporations and international trade deals, and outright hostile toward the Federal Reserve.
Some of these impulses gave rise to the tea-party movement in 2009 and flared in the 2012 GOP primary contest, but they faded with the nomination of former Massachusetts Gov. Mitt Romney, a private-equity executive.
The debate in Milwaukee didn’t appear to fundamentally alter the state of the race. But with candidates heading off to Iowa and New Hampshire on Wednesday, it showed how their jockeying to carry the populist banner could intensify in the run-up to those states’ early nominating contests next February.
Candidates who have made full-on appeals for the antiestablishment mantle—businessman Donald Trump, former neurosurgeon Ben Carson and Texas Sen. Ted Cruz—are looking to consolidate that support as the field eventually narrows. Others, such as former Florida Gov. Jeb Bush, Ohio Gov. John Kasich and Florida Sen. Marco Rubio, are walking a finer balancing act to maintain broader appeal.
The populist undercurrent has upended the Democratic field as well, where Vermont Sen. Bernie Sanders, the self-described democratic socialist, has filled arenas while raising millions from small donors. Progressive party leaders have pushed front-runner Hillary Clinton to adopt more liberal proposals on everything from higher minimum wages to making Social Security benefits more generous.
“A nasty—and ignorant—anti-Wall Street climate prevails in both parties, and it’s something our industry has to worry about,” said Greg Valliere, chief global strategist at Horizon Investments, in a client note Wednesday.
The fourth GOP debate, sponsored by The Wall Street Journal and Fox Business Network, illustrated how Republicans are competing to bridge their populist message with the party’s traditional support for lower taxes and less regulation. Candidates castigated crony capitalism, questioned the value of a Pacific trade pact and bashed the Fed as a cause of the financial crisis and a tool of the Obama administration.
Carly Fiorina, the former chief executive of Hewlett-Packard, criticized President Barack Obama’s health-care overhaul for prolonging a “cozy little game between regulators and health-insurance companies.” She called on the government to require every health-care provider to publish “its costs, its prices, its outcomes, because as patients we don’t know what we’re buying.”
Mr. Cruz said his flat-tax proposal would end preferential treatment of the rich and well-connected. “No longer do you have hedge-fund billionaires paying a lower tax rate than their secretaries,” he said. “Giant corporations with armies of accountants regularly are paying little to no taxes while small businesses are getting hammered.”
Mr. Rubio found himself defending a proposal to boost child-care tax credits as a way to support low- and middle-income Americans against charges from Kentucky Sen. Rand Paul that it would run up big deficits and create a new entitlement program.
One notable exchange came when candidates were asked how they would handle failing banks during a hypothetical rerun of the 2008 financial crisis. During a back and forth with Mr. Cruz, Mr. Kasich chided candidates for issuing “philosophical” platitudes.
“When you are faced, in the last financial crisis, with banks going under and people who put their life savings in there, you got to deal with it,” Mr. Kasich said, who was booed by the audience at one point.
Mr. Cruz initially said he would “absolutely not” support bailing out big banks but later said there was a role for the Fed to serve as a “lender of last resort.”
The exchange “seemed yet one more example of how the wounds from the financial crisis have yet to heal, and those who try to talk rationally about it are disadvantaged against populists,” said Charles Gabriel, a financial-industry policy analyst at Capital Alpha Partners in Washington.
Candidates voiced concerns about the power of big banks, even as they promised to sweep away new regulations, including the Dodd-Frank financial overhaul that requires the biggest banks to raise more capital to withstand financial crises. They also heaped criticism on the Federal Reserve, which has taken unprecedented steps to spur growth in the seven years following the financial crisis—but has also consistently overestimated growth rates in its forecasts.
Mr. Paul said the Fed’s policies had hurt the poor by leading to higher prices and lower currency values. But inflation has remained under the Fed’s 2% target for more than three years with many economists concerned more recently about deflation. Also, the dollar has strengthened this year as U.S. economic growth looks comparatively better than in the rest of the world.
Mr. Cruz said the Fed had become “a series of philosopher-kings trying to guess what’s happening with the economy.” To manage inflation, he advocated a return to the gold standard, an idea widely dismissed by mainstream economists.
Milton Friedman, the late Nobel laureate who championed free-market policies, urged President Richard Nixon to abandon the system of fixed currency-exchange rates that emerged after World War II shortly before Mr. Nixon took office in 1968. Mr. Nixon scrapped the peg in 1971.
In Tuesday evening’s first debate, New Jersey Gov. Chris Christie criticized the Fed for keeping rates artificially low to support Mr. Obama. He then warned that rates were too low to revive the economy should it slide back into recession. “The Fed should stop playing politics with our money supply,” he said.
White House officials have rejected outright the idea that they would seek to influence monetary policy. Some analysts said the criticism of the Fed distracted from Republicans’ opportunities to offer more concrete pocketbook proposals.
“The most dismaying element” of Tuesday’s debate was that “none of the candidates appear to have read, much less absorbed, the innovative ideas” of “reform-minded conservative economists,” said Norm Ornstein of the American Enterprise Institute, a conservative think tank that has advocated many of those policies. “Instead, they all promoted ideas that appealed to the antediluvian base.”
Write to Nick Timiraos at email@example.com
When she bought her car, Tinker Martin-Bowen signed a contract with an arbitration clause that took away her right to a jury trial. Only later did she realize just what she had given up.
Deborah L. Pierce, an emergency room doctor in Philadelphia, was optimistic when she brought a sex discrimination claim against the medical group that had dismissed her. Respected by colleagues, she said she had a stack of glowing evaluations and evidence that the practice had a pattern of denying women partnerships.
She began to worry, though, once she was blocked from court and forced into private arbitration.
Presiding over the case was not a judge but a corporate lawyer, Vasilios J. Kalogredis, who also handled arbitrations. When Dr. Pierce showed up one day for a hearing, she said she noticed Mr. Kalogredis having a friendly coffee with the head of the medical group she was suing.
During the proceedings, the practice withheld crucial evidence, including audiotapes it destroyed, according to interviews and documents. Dr. Pierce thought things could not get any worse until a doctor reversed testimony she had given in Dr. Pierce’s favor. The reason: Male colleagues had “clarified” her memory.
When Mr. Kalogredis ultimately ruled against Dr. Pierce, his decision contained passages pulled, verbatim, from legal briefs prepared by lawyers for the medical practice, according to documents.
“It took away my faith in a fair and honorable legal system,” said Dr. Pierce, who is still paying off $200,000 in legal costs seven years later.
If the case had been heard in civil court, Dr. Pierce would have been able to appeal, raising questions about testimony, destruction of evidence and potential conflicts of interest.
But arbitration, an investigation by The New York Times has found, often bears little resemblance to court.
Over the last 10 years, thousands of businesses across the country — from big corporations to storefront shops — have used arbitration to create an alternate system of justice. There, rules tend to favor businesses, and judges and juries have been replaced by arbitrators who commonly consider the companies their clients, The Times found.
The change has been swift and virtually unnoticed, even though it has meant that tens of millions of Americans have lost a fundamental right: their day in court.
“This amounts to the whole-scale privatization of the justice system,” said Myriam Gilles, a law professor at the Benjamin N. Cardozo School of Law. “Americans are actively being deprived of their rights.”
Apple has recorded the biggest annual profit in corporate history, with record sales of the iPhone helping it to make $53.4bn (£35bn) in the last 12 months.
However, Apple warned that growth is likely to slow down significantly in the crucial Christmas period, and sales of the iPad fell by a fifth to their lowest level since 2011.
The company predicted that sales in the current quarter would be between $75.5bn and $77.5bn – as little as 1pc up on the same period last year – partially due to a strong dollar.
Apple has been facing questions about its ability to maintain the tremendous growth that propelled it to a $750bn value this year, as China’s economic troubles raise fears about customer demand for its pricey devices.
Analysts have also suggested that the Apple Watch, the company’s first new product category since Steve Jobs’ death four years’ ago, has got off to a slow start since launching earlier this year.
Nonetheless, Apple said revenue increased by 22pc to $51.5bn in the three months to September 26, the final quarter of its fiscal year. The company sold 48m iPhones, an 22pc increase, during the quarter, which included the first two days that its new 6s and 6s Plus models went on sale.
Android users are switching to the iPhone at a record rate, the company said.
Quarterly profits and revenue at big American companies are poised to decline for the first time since the recession, as some industrial firms warn of a pullback in spending.
From railroads to manufacturers to energy producers, businesses say they are facing a protracted slowdown in production, sales and employment that will spill into next year. Some of them say they are already experiencing a downturn.
“The industrial environment’s in a recession. I don’t care what anybody says,” Daniel Florness, chief financial officer of Fastenal Co. , told investors and analysts earlier this month. A third of the top 100 customers for Fastenal’s nuts, bolts and other factory and construction supplies have cut their spending by more than 10% and nearly a fifth by more than 25%, Mr. Florness said.
Caterpillar Inc. last week reduced its profit forecast, citing weak demand for its heavy equipment, and 3M Co. , whose products range from kitchen sponges to adhesives used in automobiles, said it would lay off 1,500 employees, or 1.7% of its total, as sales growth sagged for a wide range of wares.
The weakness is overshadowing pockets of growth in sectors such as aerospace and technology.
Industrial companies are being buffeted on multiple fronts. The slump in energy prices has gutted demand for drilling equipment and supplies. Economic expansion is slowing in China and major emerging markets such as Brazil, which U.S. companies have relied on for sales growth. And the dollar’s strength also has eroded overseas profits.
The drag on earnings and sluggish growth projections for next year come as the Federal Reserve considers raising interest rates for the first time in nine years, and could add momentum to those in favor of postponing any rate increase until next year.
Profit and revenue are falling in tandem for the first time in six years, with a third of S&P 500 companies reporting so far. Analysts expect the index’s companies to book a 2.8% decline in per-share earnings from last year’s third quarter, according to Thomson Reuters.