Bill Owens: Confounding And Confusing Events 5/18/20
The reopening of America is a complex calculation, comprised of the need for a recovering economy and a significant health risk. There has been little clear information about a number of factors that are troubling to me and I hope they may be of at least concern to you. With 30 million plus people out of work as the enhanced unemployment expires, what will the citizens be able to pay for, obviously, it will be significantly diminished as compared to their recent consumer history. Will businesses that open have enough customers to survive, or will these business owners deplete their last remaining resources to open and then find that they are in a worse economic position a few weeks into this process? Given the fact that no state has met the criteria for testing, we will only know the results- more, less cases or the same. The latter would be an interesting result. Will the public simply stay away in large numbers, will there be a mix of all of these things occurring simultaneously throughout the country with different outcomes in regions, counties, cities, etc.?
Continuing with the pandemic conversation, in talking to the surgeon at my home this week, we were discussing the fact that all of the countries of the world are in essentially the same relative economic position, this conversation was related to our increasing level of deficits and debt. Will that relative position soften the economic impact worldwide or worsen it? Again, this is not a conversation that has been had in the media, or in any other public forums that I am aware of. What we were saying is that if in relative terms other countries were in a similar deficit and debt situation to the US, then their monetary systems would be under the same stress and would not have the ability to leverage our debt against us. Just something to consider.
The extension of the CARES Act has been received with much less enthusiasm by small business owners then the initial legislation. Unfortunately, the SBA keeps changing the game through alteration of the rules, making decisions for small business very difficult and leaving many with the idea that the PPP program a bit of a bait and switch. Many are now investigating the tax credits that are available in lieu of PPP, and some have even gone so far as to pay the money back to ensure that they have no untoward consequences. It is difficult to know if Congress is paying attention to the bureaucratic acts of the SBA, but they should.
POTUS continues to poke at the Chinese asserting either a deliberate or negligent release of the virus from a Chinese lab. He is using this as a vehicle to create anti-Chinese sentiment, much like he did during his first campaign which was then, of course, centered on trade. Since POTUS has so badly managed the trade policy achieving almost nothing of consequence in his first four years, he reverts to the usual form of being a bully, and making assertions that are likely untrue. In fact, our intelligence community does not agree with that assessment, nor does Dr. Fauci, based, I believe on his briefings from our intelligence community. Some may argue that the USMCA was a trade victory, it was not. It was important to secure stability in US/Canada/Mexico trade, but a new agreement was not needed. A simple renegotiation of NAFTA would have accomplished the same trade goals, but not Mr. Trump’s political goals.
In another sign that the recovery will be slow, Americans are slashing their spending and hoarding cash, as well as shrinking their credit card debt as even those still employed have fear of job loss in the future. US credit card debt fell by the largest percentage for more than 30 years in March, while savings rates climbed to levels unseen since Ronald Reagan was in the White House. Economists are pointing out that although this behavior makes sense from an individual basis, the failure to spend in the economy will likely prevent a V-shape recovery since well over 60% of our GDP comes from consumers. This will require the development of a sophisticated strategy that will give comfort to US consumers, allowing them to spend dollars, and thus, helping the economy, and ultimately, themselves over time. This is a long-term gambit versus short-term fear.
Mitch McConnell recently was quoted as saying that President Obama should “keep his mouth shut”, relative to the Trump administration. Mr. McConnell completely ignores the fact that Mr. Trump has gone after Mr. Obama on numerous occasions with ridiculous claims including that Obama didn’t do enough to prepare for COVID, which as I pointed out before in my commentaries, did not exist in 2017 when he left office. More importantly, Mr. McConnell would never have said this about a former white President.
In a move that is not really a surprise, Judge Emmet Sullivan overseeing the Flynn case indicated that he was putting a halt to the termination of the case until he said that individuals and organizations who will seek to intervene in the case to what are known as Amicus briefs, or friend of the court, are heard. What is most tellingly is his characterization of the need for Amicus briefs occurs when “a party is not represented or….”. The party not represented in this instance appears to be the American people, and possibly even more pointedly, the government of the United States. This is truly calling Mr. Barr to task in the only way that could possibly have an impact on this totally politicized process. You may have noted that over 2,000 former DOJ senior officials signed on to a letter criticizing Mr. Barr and calling for his resignation as a result of this latest afront to the legal process and the standing of DOJ.
The Supreme Court heard from the President this week that he is absolutely immune from any form of investigation, much less prosecution, whether that is coming from a state level official or from Congress. It will be interesting to see how the Court resolves those issues in light of the Nixon and Clinton decisions which forced both Presidents to provide either documents or testimony. This Court, unfortunately, is another animal as it has become the most political court in my lifetime with four justices who have a profoundly warped view of their role, and one justice who waivers periodically.
Politico published a piece recently about a statute on the books since 1789, in (31 USC 3331(d)) which requires the Treasury Secretary to provide the House or Senate with any information they request, and it reads, “The Treasury Secretary shall report to either House of Congress, in person or in writing, as required on matters referred to the Secretary by that House of Congress”. The author of the article concludes that Secretary Mnuchin could be compelled to investigate and report on the President’s taxes, and he would have to obey. This is very interesting as I doubt even if this were cited to the Trump administration that they would comply, it does pose a dilemma for the originalist on the Court, because this was enacted so early on as to be deemed by Constitutional experts to reflect the view of the framers. These battles will never be over as long as Mr. Trump is President, and will persist into the future so long as Presidents continue to move in the direction that has been followed for the last 30 years of concentrating power, and immunity in the Executive Branch.
Canada US border will remain closed through June 21, 2020. It slips each month.
The US tells Britain its US (excuse the pun) or China.
POTUS seeks to include a clause similar to one in the USMCA which prohibits member country’s from doing trade deals with non-members which was specifically intended to focus on China.
Now for the most absurd and embarrassing, POTUS announced late last week that we were developing a “super duper missile” while unveiling the space flag for a new DOD entity. Really, super duper it cannot get much sillier – forgot this is Donald Trump.
Bill Owens is a former member of Congress representing the New York 21st, a partner in Stafford Owens in Plattsburgh, NY and a Senior Advisor to Dentons to Washington, DC.
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