Getting Back to Business
It is now 15 days since the presidential election, and the official outcome is still in dispute. Biden vs. Trump has become the third rail of polite conversation, and I want to be careful here lest I get myself electrocuted.
Most bankers have probably reacted to the election, however, with a sigh of relief — and not because of its apparent outcome. In Bank Director’s 2021 Bank M&A Survey, which polled respondents about two months before the election, 69% said they were planning to vote for President Donald Trump compared to just 21% for president-elect Joe Biden. The remaining 11% selected “other,” explaining that they were undecided or planned to vote for someone else.
Republicans have a good shot at maintaining control of the U.S. Senate, a prospect which will hearten most bankers. That outcome will require Republicans to capture at least one of two Senate seats in Georgia, where the winners will be determined in a special runoff on Jan. 5. Georgia turned a light shade of blue in the presidential contest, but I would be surprised if Democrats captured both of the Peach State’s Senate seats, particularly since they fell short of their expectations in several key Senate races against supposedly vulnerable Republicans.
Many American voters may have decided they want divided government.
Republican control of the Senate should spare the banking industry from such progressive regulatory proposals as a cap on credit card interest rates, and the creation of both a postal banking system and a public credit reporting agency — initiatives that Democrats would pursue if they commanded the Senate. Nor is a hike in the corporate tax rate likely under a Republican majority. Banks should probably expect tougher regulation by the Consumer Financial Protection Bureau under a Biden Administration, but the broader impact on banking would be much greater if Democrats controlled all levers of power in Washington.
What I hope — and I believe that many other Americans feel the same — is that we can get back to business in 2021. We need to get our economy back on track. This would require that we bring the pandemic to heel through the successful distribution, and widespread acceptance, of an effective vaccine. And yet many Americans are wary of a fast-tracked Covid-19 vaccine, and their hesitation will prolong our national recovery if enough people forego inoculation.
In the meantime, we’re going to have to rely on preventive measures like masks and social distancing until vaccines (there could be more than one approved for use) can start moving the population toward herd immunity. These strategies have become highly politicized. Many people believe that mandatory mask requirements infringe on their individual liberties while others believe they simply don’t work, despite scientific evidence to the contrary. I believe, based on my own extensive reading, that social distancing, masks and general caution could help limit the spread of the virus until effective vaccines have been widely deployed — without shutting the economy down again. That’s a personal opinion. Many of you may disagree.
But if enough boards of directors agreed, banks could play an important role here. Public support for masks, social distancing and vaccines from such an important industry could help move the country toward an effective national strategy to fight the virus. It is certainly in the industry’s self-interest to do so. Without a healthy economy, the industry’s recovery will be restrained.
