The following is Friday’s status check of developments in the U.S. that can influence economic, health and political outcomes from Mace News:
- A long week about over and in an evening news conference the president of the United States says, “We’re having it out. We’re finally having it out.” He was talking about the Democrats, of course, and the crucial showdown under way to see who blinks. Within his Bedminster golf club, polo-shirted members were told to wear masks and at the end of the news conference they joined to boo reporters and applaud when the president said political events are exempted from a mask mandate.
Far from the golf links, Americans who have been assuming Congress would come through with extended unemployment benefits with booster payments had to wonder if they’ve been wrong. Trump stopped just short of saying he is signing executive orders that extend the benefits, extend the moratorium on evictions from federally-backed property and student loan payments and suspends payroll taxes for employers and employees. He also did not answer a question about how big the unemployment benefit enhancement would be should he sign the EO. About that payroll tax, which supports Social Security, whatever he does will likely be challenged in court but it bears mentioning it would not be a tax cut, just a deferral, meaning down the line there will be catch-up payments.
Just prior to the news conference economist Kevin Hassett told CNN the executive orders were being prepared at the White House more than a month ago, when he still worked there.
Trump repeated all the talking-point name calling versus the Democrats that his negotiators, Treasury Secretary Mnuchin and Chief of Staff Meadows also repeated earlier when an hour and a half of negotiations ended with the two sides still a trillion to a trillion and a half dollars apart.
The negotiators and Trump repeated they will continue to bargain “in good faith” and Mnuchin said there were many areas where both sides agreed. Trump said the big item he won’t approve is help for state and local governments he said are being run badly by Democrats. There is actually many billions of dollars already allocated to states in the CARES Act and the federal government can lend more to supplement jobless benefit funds.
Trump said again that the primary reason the US has so many more virus cases is that it does more testing, that with only 4% of the world’s population it has done 25% of the tests. He did not use the metric of health experts, that with 4% of the population the US has 25% of the virus deaths, and that cases far outstrip the increases in tests. “It’s going to disappear,” Trump repeated, in his 27-minute monologue that preceded the few questions that technically made the event the news conference promised.
There seemed to be a gathering darkening of the metaphorical skies where the peripheries of American society increasingly succumb to catastrophic outcomes that will spread evictions, lengthen food pantry lines, multiply bankruptcies and all the other direct consequences of the national failure to control the virus enough for universal economic re-openings. In New York state, where the infection rate on average is only 1%, Governor Cuomo said school districts can decide to reopen. But in those New York zip codes where the infection rate is as high as 50%, they would be wise not to.
The optimists say the vaccine is almost assured for the end of the year or thereabouts. A vaccine, they say, has always been the only realistic antidote to Great Depression-level catastrophe in a country so deeply divided it can’t muster the unity to actually control the virus and make universal school and commercial re-openings far less risky.
The pessimists, on the other hand, are counting down to when social unrest starts to spread as angry crowds of the unemployed and hungry make the Portland violence look tame.
- As to the virus itself, over the weekend the total deaths will top 161,000 and the University of Washington IHME projection is that there will be 295,011 deaths by Dec. 1. The very high peak of infections nationally seems to be on the down slope, off 16% from two weeks ago. It still way above 50,000 new cases a day, averaging 55,297 a day over the past week. As one or another expert seems to repeat every day, in all of China, there are perhaps 50 new cases a day. In Germany rising alarm about the daily case count topping 1,000 for the first time in three months. If a traveller from the US entering Germany refuses a virus test, the fine is up to $29,500.
- What was the presumptive Democratic candidate doing? Fox News, ever on the alert to catch Biden in some gaffe, reported he spent the day out of sight but not in his basement. Instead he spent 2 hours and 20 minutes secreted out of range of Fox cameras in the nearby Chase convention centre. The speculation was, they said, he was meeting with a prospective running mate. Earlier in the week Fox had settled on Susan Rice and Kamala Harris as the top candidates for the job. The WSJ reported Rice has sold a significant proportion of Netflix stocks she got since becoming a company director three years ago.
- In upcoming economic data next week, some biggies. Retail sales, the CPI and the PPI plus industrial production. Government statistics, lagging by a month or more, get a lot less attention in these days of shifting perceptions with the exception of weekly jobless benefit claims. Instead “high frequency” data like credit card transactions, cellphone mobility data and various E-commerce measures are followed closely and seem to show the economic activity rebound has paused. The morning’s monthly jobs report showed private payrolls rose by 1.46 million when 1.58 million was expected. Government employment was boosted by more than 300,000, mostly teachers added back after being mistracked because of the pandemic’s disruption in their seasonal layoff pattern. The unemployment rate “improved” to 10.2% from 11.1%. However 58% of the jobs lost in the spring have not been recovered.
- Speaking of credit cards, the New York Fed published its study showing cardholders paid down their balances by $82 billion in the second quarter, an amount unprecedentedly large since at least the year 2000, confounding expectations.
- Social media erupted as all those who think poorly of White House’s Kudlow spread the news that he ran into a maybe unprecedented buzz saw of an interview on CNN. Anchor Poppy Harlow refused to accept Kudlow’s cheery assertions, challenging them with real facts repeatedly. Kudlow said he resented her “nit picking.”