Confounding and confusing events 1/10/22
The US created 199,000 jobs in December, not the 422, 000 that were expected which means:
Democrats are quite upset at Senator Manchon and are attempting to reinvigorate their proposed spending bill. One of the ironies of this entire process is, of course, the vilification of Senator Manchon versus the praise heaped on Senator McCain. I am sure you will remember that Senator McCain voted famously and dramatically “no” on healthcare legislation which effectively killed Republicans chances of doing away with Obamacare, at least through the legislative process. Democrats praised McCain for acting in a way that reflected high moral and ethical values, at the same time it appears to me that what Senator Manchon is doing may rise to essentially the same standard. We, Democrats, however, treat him like a turncoat in the same way that Republicans, particularly Mr. Trump, turned on Senator McCain. I think it is important that we reflect on these realities, and measure our responses.
In good news for dairy farmers, Canada has boosted its demand for cream and butter, in particular. This is in spite of the fact that Canadian milk production was up 2.8% year over year, while demand is also growing apparently at a greater rate, thus, opening the door for imports. Cheese imports by Canada are also on the rise, all of which bodes well for American dairy farmers. Let’s hope the trend continues.
We have spoken many times about softwood lumber and the electric vehicle tax credit. It appears that Canada has now decided it will challenge through the USMCA (Free Trade Agreement) lumber prices utilizing the mechanisms available in the treaty. This, in many senses makes great sense, and certainly for American consumers, home builders, and commercial construction businesses the reduction in the tariff would be good news and good business. It seems odd to me that the Biden administration is following the same track as the Trump administration, and doing nothing but hurting US consumers at every level. It appears to me that there must be a strong lobby working for the wood products folks, nothing else explains this.
It appears that the State of Michigan, through an independent commission, adopted by the voters has, in fact, found a way to “un-jerrymander” its various legislative maps, including the Congressional map making many of the districts into competitive districts. This, of course, follows the actions taken by the Republican Michigan Legislature over the last ten years which have heavily jerrymandered districts in favor of Republicans and, thus, insuring control over the State House, at least at the legislative level. It appears now that many of those districts will be in play, and we will see something closer to a purple state. This is a good outcome at many levels.
The New York Times carried an interesting article about a website which ranks hockey teams as far down as 9-year-olds, and focused on one particular game in which the 498th ranked and 763rd ranked teams competed. This ranking is out of 18,000 teams that are evaluated and then it is determined whether or not to rank them. In my view, this is a bit over the top, and talk about hovering parents, what could be worse than having every game you play evaluated at this level of scrutiny at nine?
The US current account (balance of trade) deficit jumped to a 15-year high in the 3rd quarter, and passed 1 trillion in the 4th quarter with a surge in imports and a decline in exports. Much of the increase in imports is accounted for by businesses attempting to replenish depleted inventories as strong demand continues in the US, with much of the production of those inventories occurring overseas, particularly in China. In absolute numbers, that means that the deficit (imports to exports) accelerated by 8.3% to 214.8 billion in the 3rd quarter, which is the largest since the 3rd quarter of 2006. It is also interesting to note that this deficit constitutes 3.7% of gross domestic product, which is the largest share of GDP since the 4th quarter of 2008, and this was up 3.5% in the 2nd quarter. This may well be a short-term phenomenon, but clearly needs to be watched. By the way, Canada’s trade surplus swelled to a 15 year high in November 2021 and 3.1 billion. Looks like we’re going in opposite directions.
A USMCA trade panel of Arbitrators has ruled that Canada’s dairy quota system (as regards lower duty imports) violates the USMCA. This hopefully sets a precedent to attack the entire dairy quota system utilized by Canada. Guess who’s taking credit – our 2 senators and Congresswoman. Obviously, none of them understand the USMCA’s dispute resolution mechanism. They had no impact.
The Wallstreet Journal published two articles from Republicans last week which I urge, in particular, Congresswoman Stefanik to read, one by Holman Jenkins dated January 7, 2022 with the caption “Why the January 6 ‘Big Lie” Narrative will Fail”, and the second by Karl Rove dated January 5, 2022 captioned “Republicans January 6 Responsibility”. These two well-known Conservative figures castigate Republicans – like Ms. Stefanik – and present a compelling analysis that should embarrass those who continue to “believe”.
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.
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