China, debt and Disney: Three economic themes that will dominate the Republican primaries

By CNN Newsource

Published January 11, 2024 4:01 am

Analysis by Nicole Goodkind, CNN

New York (CNN) — A version of this story first appeared in CNN Business’ Before the Bell newsletter. Not a subscriber? You can sign up right here. You can listen to an audio version of the newsletter by clicking the same link.

Republican presidential candidates Nikki Haley and Ron DeSantis sparred on a wide range of economic issues during the CNN GOP presidential debate on Wednesday evening.

Topics ran the gamut from Nancy Pelosi’s investment strategy (DeSantis is not a fan) to Social Security funding (“You would cut Social Security benefits for 70-year-olds while you pay the pensions of Ukrainian bureaucrats,” said DeSantis. “You’re so desperate, Ron, you’re just so desperate,” retorted Haley).

But as Haley and DeSantis duked it out to crown themselves the most fiscally prudent candidate, some clear economic themes began to emerge that will likely have a big influence on the upcoming Republican primaries and beyond: China, debt levels and the government’s role in business.

The Iowa caucus is just days away, on January 15.

Let’s dive into it.

China

Both Haley and DeSantis sought to prove how tough they could be on China.

Haley said that she would “end all normal trade relations” with Beijing. She also criticized Donald Trump, who is currently leading the field in Iowa but did not participate in Wednesday’s debate, for being too soft on China.

DeSantis promised that he would decouple the United States from China’s economy altogether.

But as my colleague Elisabeth Buchwald points out, the US and China are the first- and second-largest economies in the world. China is America’s third-largest trading partner.

DeSantis said he would minimize the pain of decoupling by offering “tax and regulatory” incentives in the US. “I want to make things here again,” he added.

President Joe Biden has also made reducing economic dependence on China a platform in both his 2020 and 2024 campaigns. His Inflation Reduction Act is already boosting US manufacturing and jobs.

Tensions have been growing between the US and China for reasons including trade, escalating disagreements over high-tech chips and artificial intelligence, tighter investment curbs and geopolitical disputes.

US debt

Haley and DeSantis didn’t agree on much, but they did both take the time to blame Trump for record-high government debt.

The former president, said DeSantis, needs to explain, “why he added $7.8 trillion to the debt” while in office. Both candidates in part blamed the government’s runaway spending for the post-pandemic inflation crisis.

They also leaned on their experience as state governors to explain how they would manage the federal budget.

Haley said that South Carolina, the state she governed from 2011 to 2017, required a balanced budget. DeSantis said the debt in Florida, where he is currently governor, has gone down under his watch.

Haley and DeSantis both said they would bring down the US budget deficit and curb spending.

As president, Haley said, she would focus on “clawing back” government spending and vowed to “veto” spending that significantly increases the debt limit.

Business and government

Perhaps one of the greatest divides between DeSantis and Haley (economically speaking) is their approach to government involvement in private businesses.

DeSantis is in an ongoing fight with the Walt Disney Company, which stemmed from the company’s criticism of a law that restricts public education on sexual orientation and gender. (DeSantis signed that bill into law in March 2022.) That fight has arguably cost his state thousands of jobs.

Haley said on Wednesday that she wouldn’t let her politics get in the way of business. “When [Disney] went and criticized him, he got thin-skinned and suddenly started to fight back,” she said.

“We don’t need government fighting against our private industries … I will always invite businesses to come to South Carolina,” she added. “Government doesn’t bully our businesses.”

DeSantis replied that he had no regrets and was standing up to the “800-pound gorilla in the state.”

“We need to stand up for the people and not bow down to woke corporations, and we know Nikki Haley will cave to the woke mob every single time,” he said.

FBI is investigating the SEC hack after its fake bitcoin post

The FBI is investigating the hack of the Securities and Exchange Commission’s social media account that rocked the cryptocurrency world earlier this week ahead of the regulator’s approval of the first spot bitcoin exchange-traded funds.

“The SEC continues to investigate the matter and is coordinating with appropriate law enforcement entities, including the SEC’s Office of the Inspector General and the FBI,” an SEC spokesperson said in a statement.

The SEC said that the “unauthorized content” on the agency’s verified account on X (formerly known as Twitter) was “not drafted or created by the SEC.”

Bitcoin prices briefly jumped on Tuesday after the SEC’s account on X posted a message saying the regulator had approved multiple bitcoin ETFs.

However, 15 minutes later SEC Chair Gary Gensler said the agency’s account was “compromised,” allowing for an “unauthorized” tweet to get posted.

“I’m concerned that unauthorized access to SEC accounts could undermine our markets and the agency’s mission,” Sen. Sherrod Brown, chairman of the Senate Banking Committee, said in a statement on Wednesday.

Brown said he expects the SEC to keep the committee updated and encouraged the Office of the SEC Inspector General to look into the incident as well.

The false announcement could have had huge, market-moving implications: ETFs for bitcoin could drive as much as $100 billion in investment this year if approved, said Nick Smart, director of intelligence at Crystal Blockchain.

Bitcoin and other digital assets experienced significant price fluctuations after the fake message was posted Tuesday: Bitcoin prices shot up by more than 2.5% before falling again as the news crossed and misinformation quickly spread across various media platforms.

The financial community is closely monitoring the SEC’s response to this breach, which could lead to significant changes in how financial information is disseminated in the digital age.

It’s Taylor Swift’s world

One in every 78 US audio streams was a Taylor Swift song in 2023, according to Luminate. The entertainment data company reported 1.2 trillion on-demand US audio streams in 2023, up 12.7% from the year prior.

In 2023, Swift released two re-recorded albums: “1989 (Taylor’s Version)” and “Speak Now (Taylor’s Version).” The deluxe “Midnights (The Til Dawn Edition)” album came out in 2023, following the album’s original release the year prior.

Spotify crowned Swift its top artist last year with more than 26.1 billion global streams in Wrapped, the streamer’s annual collection of individual user listening habits, reports my colleague Ramishah Maruf.

“Taylor Swift: The Eras Tour” had the highest-grossing concert film domestically for an opening weekend, according to AMC. The tour itself became the first tour ever to cross the billion-dollar gross mark, according to Pollstar Boxoffice reports.

In October, the superstar became a billionaire, according to the Bloomberg Billionaires Index, one of the few entertainers to reach that status based on just her music and performance.

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