WASHINGTON (MaceNews) – The following is Tuesday’s status check of developments in the U.S. that can influence economic, health and political outcomes.
Another day, another tweet, another reversal that surprises everyone, especially the stock markets. No new pandemic relief until at least sometime after Election Day.
So now money left over from the CARES Act stays locked up, and no new money to expand testing. Or for those individual checks, or more Paycheck Protection money, or for a few hundred extra dollars in unemployment benefits. Airlines will be shrinking more than they hoped would happen and sooner. Many small minority-owned businesses which were Treasury Secretary Stephen Mnuchin’s stated top target for the next round will go broke faster than otherwise.
As Federal Reserve chief Jay Powell told economists listening on-line earlier in the day, “A lot of the urgency we’ve been feeling … is to do what we can as quickly as we can so that we can avoid those problems,” he said. The problems, bankruptcy and temporary layoffs that turn into permanent layoffs.
By pushing back the timing of any pandemic relief it becomes one of those often seen and aptly named political footballs. Like masks. Its chances, its size and scope now depend on whether Republicans or Democrats control one or both of the houses of Congress and which party gets the White House. From something that seemed on track to something that seems derailed makes a bigger and bigger difference as the fourth quarter progresses, looking nothing like the rebounded third quarter. The Lame Duck session of Congress keeps getting more interesting.
Why? Why did President Trump go from tweeting cheers for stimulus a few days ago, as in: “OUR GREAT USA WANTS & NEEDS STIMULUS. WORK TOGETHER AND GET IT DONE. Thank you!” – to suddenly killing it? Let’s speculate since nobody seems to know for sure.
Maybe Trump was in a bad mood because son Eric, who’s the titular head of the Trump organization these days, was dragged into sitting still for interrogation by the New York Attorney General’s office investigating whether the company inflated the value of four of its properties, a potential violation of bank lending regulations. Eric has withheld documents for months. Incidentally, speaking of inflation, according to the Independent newspaper, Eric told a North Dakota radio interviewer last week his father “literally saved Christianity.”
Or maybe, as House Speaker Nancy Pelosi was reported to have told colleagues, “There are people who thought, who think that steroids have an impact on your thinking.”
Or maybe it’s just the mutual loathing. Trump hates strong women, is the accusation, specially those who tell him off to his face, and specially those who actually have the last word on his legislative wish list. Pelosi says she prays for Trump, which infuriates him even more, as he’s indicated on occasion. She says she doesn’t hate Trump but she’s made it clear she doesn’t respect him either.
Or maybe it’s a negotiating tactic to soften up the Pelosi team. Or maybe it’s Trump’s way of putting his Treasury secretary in his place, after Mnuchin has put so many hours into the negotiations, raising his profile considerably.
Or maybe Senate GOP leader Mitch McConnell – with whom Trump was on the phone right before his tweet declaration – told him it’s hopeless, that he can’t rustle up the votes no matter what Mnuchin and Pelosi agreed to. Why try to pass something and be embarrassed when Republicans vote a new package down.
Or maybe Pelosi calculated that promising a bigger stimulus package than the White House could help her hold on the House and perhaps get back the Senate so she spiked the negotiations with something she knew couldn’t fly.
Or maybe all the signaling and political calculus in the Speaker’s office and in Mnuchin’s office and wherever in the White House Trump is hanging out was always going to be insufficient to overcome the impression among Senate Republicans the economy’s third-quarter snapback means it’s clear sailing for the fourth quarter and beyond.
Or maybe Fed Chair Powell’s increasingly strident importuning earlier in the day in his NABE speech, saying speed is important for another round of stimulus to keep the economy from descending into a recessionary groove, rankled Trump whose view of the Fed can change week to week.
Or maybe President Trump was taking a principled stand against more spending, having become more concerned about mounting deficits and concerned how that could stifle the economy in the budget out years, in 2027 and 2028 and 2029. Actually nobody assumed that.
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The president, assumed to still be actively contagious, suggested he’s looking forward to the next presidential debate in mid month. The vice presidential debate is still on for Wednesday night. Vice President Mike Pence is reported not to be a fan of the Plexiglas shield proposed to separate him from Sen. Kamala Harris.
Elsewhere at the White House there are almost two dozen staff who have tested positive, including top aide Steven Miller and the aide who carries the nuclear “football,” the control mechanism for launching nuclear war. Miller’s wife, the vice president’s spokeswoman, had been the canary in the virus mine, first in the White House to contract the virus in May, a messenger disregarded. President Trump’s tweets that COVID-19 is less dangerous than influenza were removed as misinformation by Facebook and Twitter after hours of display – and rebutted by Dr. Anthony Fauci.
At the Pentagon the top echelon at home in quarantine after one of their own, Coast Guard Vice Commandant Charles Ray, with whom they had met, tested positive. The Pentagon said national security is not at risk as the chairman of the Joint Chiefs is networked in from his home office.
Meanwhile, on Capitol Hill, vacated by most of the House and Senate, Big Tech got called out by Big Government. Facebook, Amazon, Google (Alphabet) and Apple are stifling competition, The Democrats on the House Antitrust Subcommittee were only worried about monopoly power, not looking into the concerns of some other critics who see Facebook as a divisive social force, reinforcing and amplifying hate speech and organization. Republicans on the committee worried but have less extreme remedies in mind, short of breaking up the firms. The report may help threaten the hegemony of Big Tech someday in the distant future but their shareholders were only mildly concerned judging by the day’s share prices.
Upcoming economic data includes the MBA’s weekly report on mortgage applications at 7a ET, the EIA’s oil stocks report at 10:30a. At 2p the Federal Open Market Committee minutes from its most recent meeting are published, with little new insight expected beyond that already disclosed in the post-meeting Powell news conference. And eight Fed officials speak, likely to echo the chairman’s talking points.
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