J.D. Vance first came to public attention with his 2016 memoir. Hillbilly Elegy” is a populist rallying cry about Appalachia, accusing the elites of betraying the white working class. Since then, Vance has groomed some of tech and venture capital’s wealthiest elites, including former Google chairman Eric Schmidt and billionaire venture capitalist Peter Thiel, to help him win election to the U.S. Senate and secure the Republican vice presidential nomination in July.
With Donald Trump’s popularity on the rise, business observers may be wondering what approach Vance would take if voters elected him to the White House. Will it be a radical populist agenda? Or will he deliver on the priorities of his wealthy friends in Silicon Valley? Of course, it’s too early to tell. But judging by his track record, Vance’s economics seems indifferent to, or even hostile to, the traditional business priorities that have been the bedrock of the Republican platform for more than a century, such as laissez-faire industrial policy and easy access to goods and labor.
Under normal circumstances, there would be little interest in the vice president’s opinion. First-term president John Adams described the vice presidency as “the most insignificant office that man has ever invented.” But the 2024 election will be no ordinary one. With a chief executive who turns 83 in his final year in office, Vance will likely be at the heart of the presidency. And with Trump hoping to groom a new generation of MAGA leaders to succeed him in 2028, he may give Vance broad authority to pursue his own agenda.
“This is one of the few times the vice president is worth covering, like Dick Cheney was,” said former economics editor David Wessel. The Wall Street JournalHe currently directs the Fiscal Policy Center at the Brookings Institution.
Wessel believes that once in the White House, Vance will be aggressive in crafting domestic economic policy, particularly tariffs, to protect U.S. manufacturing and severely restrict immigration. That would fit with the themes of Vance’s speech at the Republican convention in July, in which he railed against Wall Street and vowed to revive Rust Belt factories. (In his home state of Ohio, Vance stood on a picket line with UAW workers.) Wessel’s prediction also dovetails with the handful of bills Vance introduced during his brief senator tenure, including a clawback provision on executive compensation that he co-wrote with progressive Sen. Elizabeth Warren (D-Mass.) that attracted attention but never became law.
Worker rights and limits on CEO compensation aren’t necessarily top priorities for venture capital donors like Thiel (who gave Vance a massive $15 million for his 2022 Senate run) and David Sachs, yet these same backers reportedly played key roles in persuading Trump to pick him as his running mate. So what’s in it for venture capitalists?
The philosophical answer is a shared interest in America First economic nationalism. The lip service answer is a lot of money. Many of the VCs backing Trump-Vance are heavily invested in cryptocurrencies, including the founder of Andreessen Horowitz. They presumably think that Vance, who owns Bitcoin, will help push for crypto-friendly regulations. More broadly, VCs backing Trump denounce the Biden administration’s antitrust scrutiny of big tech companies, which has slowed the M&A activity that provides venture firms with many of their most lucrative startup “exits.”
$165 million
Donations from the venture capital community to federal candidates in the early stages of the 2023-24 election cycle.
Source: OpenSecrets. Note: Through June 21, 2024. Includes donations from individuals and PACs.
Vance may introduce more favorable regulations in the crypto space — a regulatory win for Biden given he’s an avowed fan of FTC chairwoman and antitrust firebrand Lina Khan — but venture capitalists and business leaders more broadly could pay a heavy price in other areas of economic policy if Republicans take the White House.
Richard M. Reinsch II, an editor at the American Institute for Economic Research and a self-described conservative, sees Vance as a well-rounded thinker. But he also has concerns about Vance’s support for Khan and his desire to block the Japanese steel company Nippon Steel from buying a Cleveland steel plant. “His economic approach is [1980s Democratic candidates] “Walter Mondale and Michael Dukakis are pro-labor parties based on government intervention and economic control,” Reinsch said.
Vance economics could actually have a major impact on the labor market. Like Trump, Vance has called for significant restrictions on immigration, which could make it harder for U.S. companies to hire both seasonal workers and highly skilled workers from overseas. Meanwhile, Vance’s comments about the role of women in society could lead to further employment hardship. In particular, his calls for a nationwide abortion ban and increased incentives for parents to raise large families represent a philosophy that could make it more difficult for women to remain in the workforce.
Many economists believe the combination of protectionism and a shrinking workforce will be a formula for higher wages and inflation. (See “Biden Economics vs. Trump Economics: What Can Businesses Expect from the Next President?”) While these factors could pose major headaches for employers in the non-digital economy, they’re the kind of “external forces” that don’t have much impact on the technology companies that Vance’s venture capital alliance oversees.
Predictions about Vance’s potential economic influence come with a big qualification: his age. Vance, who turns 40 on August 2, will be the youngest vice president since Richard Nixon was elected with Dwight Eisenhower in 1952. His youth means he’s more likely to evolve his thinking on anything, including economic policy, than older figures like Trump or Joe Biden. Business leaders trying to predict what Vance will do will have to wait and see. Meanwhile, those nostalgic for the Republican Party’s traditional pro-business policies may be worried.
“As progressives have often said to conservatives, let’s hope he’s the right man for the presidency,” Reinsch said.
This article appears in the August/September issue luck With headinge. “Vantheonomics: How President Trump’s Vice Presidential Election Will Affect Business”
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