Bill Owens: Confounding And Confusing Events 10/19/20
My I-phone flashed a news release which read “Stunning new details of Prince William and Prince Harry’s estrangement”. I wondered out loud why that news, given everything else that we are facing in the United States, and for that matter in Britain. It is a great curiosity to me why anyone would pay attention to people who have virtually no substantive impact on the United States. This fascination with royals is so contrary to everything which we fundamentally believe as to make it absurd.
The Supreme Court this week allowed the Trump administration to shut the Census down early. This is another piece of evidence of the drift of the court, and their complicity in voter suppression because it will likely change the make-up of Congress moving more members to what appear to be red states, at this juncture, than blue states. These are decisions that are based upon the courts view of politics, not the law.
On the Canadian front, some commentators are indicating that the K-shaped recovery that we are now in creates opportunities for Canadian businesses. They are highlighting food, agriculture, technology, health and e-commerce as areas of the Canadian economy they can benefit from this K-recovery in the US. (A K-recovery is defined as one where different parts of the economy come back at different speeds and magnitude.) Canada is also viewed globally as being reliable in trade relations, rule of law, cultural openness with high product safety standards while the US is viewed as the polar opposite. There is a particular emphasis on food production due to the COVID crisis continuing likely well into 2021, which should create substantial opportunities for the export of AG products by Canadians.
Israel is back in the news as tens of thousands of protesters assail Prime Minister Netanyahu for his handling of the COVID crisis as the result of reopening too quickly. The infection rate has soared, the economy is in very poor shape, and, of course, he is on trial for fraud, breach of trust and accepting bribes arising out of a series of scandals. Will this lead to yet another election, likely; will Mr. Netanyahu resign, probably not? Mr. Netanyahu, in describing the protest, refers to them as leftists and anarchists, he and Mr. Trump must share the same script.
President Trump, early this week again changed direction after having switched several times with regard to a new stimulus package. He advanced a very small package which would have simply moved a few hundred million dollars from the funds directed towards small business, but that seems unlikely to go anywhere as the Democrats will not pass another bill without securing funding for a number of other issues including hospitals, state and local governments, extended unemployment insurance, etc. Then POTUS abruptly increased his offer getting closer to the Democratic proposal. What is really confusing and confounding about this is that Chairman Powell, who actually knows something about the economy, as compared to Mr. Trump and Mr. Mnuchin, is strongly urging a significant stimulus package and they are ignoring him. It is difficult to understand how Mr. Mnuchin and Mr. Trump, and it appears, Mr. Meadows (the President’s Chief of Staff) can argue against Powell given his credentials. Then again, they seem to ignore anyone who has serious credentials on virtually every subject – think COVID.
A number of commentators are indicating that the sustained strength of the stock market, albeit, somewhat volatile, is the result of Wall Street’s perception that there is a greater likelihood of a clear outcome on election day then previously existed. Wall Street, as we all know, likes certainty and if it appears that Mr. Biden will prevail, then that gives a certain level of calm to the market. It is interesting, of course, that at the same time there is some concern about increased tax rates, but Mr. Biden seems to be indicating that that would apply to only people making over $400,000, which is, in fact, a very small percentage of Americans. The real question from my perspective is will he increase taxes on business, and if so, to what extent? Nonetheless, the fact that Wall Street is going up, at least in part, because of a belief that the election outcome is clearer, is a pleasant surprise.
New job claims rose to 898,000 this week.
Prime Minister Trudeau announced that the border will stay closed until the US gets control of COVID. Canada is also seeing a surge that is slightly less on a proportional basis (60,000 / 350,000,000 versus 4100 / 35,000,000).
Thursday evening was supposed to be the second Presidential debate, but because the Presidential Debate Commission converted it to a virtual event, Mr. Trump declined. The candidates, thus, proceeded down their own Town Hall paths. One can only surmise that Mr. Trump did not want a virtual debate because that deprives him of his ability to interrupt, yell, bully and otherwise be disruptive and unlikeable. You think he would have learned after the last one, and the reviews it got amongst non-core Trump supporters, that it was obnoxious and inappropriate.
In Thursday’s Wall Street Journal, there was an interesting article by John Hilsenrath, who laid out a before and after COVID analysis of the economy. The general gist of the article was that prior to March of 2020, the economy was going extremely well, which it was. He also noted that the economy was doing well under the Obama administration, and that attempts by Mr. Trump to take sole credit are inaccurate. Trump offering inaccuracies! The article did tend to be more favorable to Mr. Trump, but it is the Wall Street Journal, after all, but on balance it was a fair and fact-based article. It’s worth the read, and I think it’s particularly worth a read for those inclined to dismiss the positive economic impacts from the democratic side of the aisle. It is important to face reality, learn from it and adopt some of the steps taken by Mr. Trump. Clearly, there are disagreements about the benefits of the tax cuts, and Mr. Hilsenrath concedes that and points out that they were short-lived in terms of capital investment by businesses.
A few shorts -
Recent polling shows 60% of Canadians now have an unfavorable view of the US. During the Obama administration, it was 27%. Thank you, Mr. Trump.
Cancer screenings have dropped during the pandemic reports The Wall Street Journal, this is a long-term issue. Governor Christie on leaving the hospital after a bout with COVID stated: “I believe we have not treated Americans as adults, who understand truth, sacrifice and responsibility.” He urged Americans to wear masks.
Budget deficits tripled to $3.1 Trillion, so much for a businessman running the country.
Bill Owens is a former member of Congress representing the New York 21st, a partner in Stafford, Owens, Piller, Murnane, Kelleher and Trombley in Plattsburgh, NY and a Strategic Advisor at Dentons to Washington, DC.
The views expressed by commentators are solely those of the authors. They do not necessarily reflect the views of this station or its management.