Kamala and The Glass Cliff
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Posted 31/07/2024
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Kamala Harris is the new Democratic Presidential hopeful that could beat Donald Trump. She is the 2nd Female Democratic candidate, with Trump defeating Hillary Clinton in the 2016 election. But watching the U.S. debt clock hit $35 trillion yesterday, with an additional US$1.3 trillion likely to be spent before the end of Bidens presidential term – was Kamala just handed the poison chalice – and is she aware of the gender biased glass cliff?
If this is an indication of what is to come – with inflation dropping rapidly and an 18-month estimated lag between interest rates and effects on the economy, will the timing of a possible Kamala Presidency at the beginning of 2025 lead to the sacrifice of the Democratic Kamalamb?
What is the Glass Cliff?
So, what is a glass cliff and why does it affect females? The glass cliff was first coined in 2005 by Michelle Ryan and Alexander Haslam, 2 professors at Exeter University. The Researchers examined the performance of the FTSE 100 companies before and after the appointment of new board members, finding that woman were more likely to be appointed to the board of companies that had experienced consistently bad performance. Unlike the glass ceiling the glass cliff, means the dangers of a ‘transparent edge’ rather than the glass ceilings ‘unobtainable elevated positions’. Examples of the glass cliff have been shown several times since the study, including;
- a 2006 law study showing female law students were more likely assigned to high-risk cases
- a 2010 study found male politicians were more likely to be picked for a ‘safe seat’ and a females candidate selected if the seat was seen as ‘hard to get’
- a 2014 analysis of Fortune 500 leadership found that firms with weak performance were more likely to promote a woman into the CEO position over a man.
For some recent Australian ‘Glass Cliff’ examples:
- Michele Bullock has been put in the impossible position of RBA head
- Jacinta Allen in charge of the Victorian Labor Party with the recent revelation of the CFMEU scandal
- Vanessa Hudson appointed to Qantas, after the apparent ‘success’ of Alan Joyce. Nationals Senator Bridget McKenzie summarised the plight of Vanessa Hudson perfectly ‘Bring a Bucket and a Mop’ to clean up Alan Joyce’s mess
The Glass Cliff doesn’t mean they will fail, but it means they are put in positions that are more likely to lead to their failure, and Kamala Harris appears to be the U.S. Presidential equivalent.
U.S. Debt – the poison Chalice
U.S. Debt has just hit US$35 trillion, and with an estimated US$1.3trillion to be borrowed by Treasury before the end of the year. During the COVID-19 pandemic – nations around the world were accused of spending too much and creating inflation, with Trump spending US$7.8 trillion at the time. With an additional US$1.3 trillion in spending, the Biden government will outdo Trump with spending reaching US$8.5 trillion before the presidential poisoned debt chalice is handed over to Kamala.
With inflation rapidly dropping, and Trufaltion now estimating real inflation at 1.62% below the Fed inflation target of 2%, has the Federal Reserve held interest rates too high for too long, and are we about to see a rapid drop in interest rates with an incoming recession? As Henrik Zeberg put it ‘the economy is rolling over!’ – just in time for Kamala.
With deflation incoming and interest rates likely to plummet the next presidency is going to be bumpy, and a good time to be holding some of those real assets.