After much prognostication, the Fed cut rates by half of a percent. This is clearly an important step and we will see how the economy, consumers, and the Stock Market respond.
The European Central Bank lowered interest rates by .25 point, which is the second cut in three months, which puts them in the same ball park at this point as the Federal Reserve .
Microsoft announced that it is laying off 650 employees from its video game business in a move to cut costs. This is the tech giant’s latest cost reduction move after its $75 billion acquisition of Activision Blizzard last year. Interestingly, the layoffs effect mostly workers in corporate and support roles, as opposed to engineers and studio production workers. The global game industry has slowed dramatically after the pandemic with particular attention being paid to the declining consumer spending in this area.
The Treasury Department published a rule consisting of 603 pages to address the corporate alternate minimum tax, which based upon the Treasury’s projections will affect 100 companies and appears to result in a 2.6% tax rate, not 15% as the statute called for. It seems like this could have been done more simply, that said it still could have an enormous revenue impact for the Treasury, likely in the range of trillions of dollars.
The issue of the economy remains a hot topic for both campaigns. Many economists, including those at Wharton, think that Mr. Trump’s economic plan, particularly the utilization of tariffs as he has laid out, will have a detrimental effect to the economy and will increase inflation. Mr. Trump ignores, as do his supporters, all of these commentaries, because as is typical, if it doesn’t fit their desired outcome they ignore it.
On the sports scene, the San Diego Padres acquired a player who went most recently 141 at bats without striking out, and has only struck out 27 times in over 300 at bats which is the lowest ratio, by far, of anyone in the major leagues. This is one of those interesting facts that demonstrates the potential talent of professional athletes. It would certainly make the game more exciting if more balls were put in play and everyone wasn’t trying to hit home runs.
The Republican majority in the House last week sank for the second time, although this time with a full floor vote, a continuing resolution which would have kept the government going even though it was likely dead-on arrival in the Senate, and certainly at the President’s desk. Then this past weekend, Mr. Johnson the Speaker, announced a new deal that excluded the various poison pill elements of what he had previously offered. This will get him likely Democratic votes and there will be sufficient numbers voting in favor to allow us to avoid a government shutdown. Mr. Johnson indicated that one of his reasons was polling, that he found that should the Republicans be responsible for a government shutdown, wouldn’t play that well for them, so this is not someone thinking about the country. This is someone thinking about his Parties’ election chances.
The explosions that have occurred in various devices in Lebanon are an extraordinary technological feat, highly problematic for Hezbollah and frightening to the people of Lebanon. Will it succeed in eliminating Hezbollah or Hamas? It won’t.
In a recent column, Gene Lyons quoted Lincoln when he stated, “As a nation we began by declaring that all men are created equal. We now practically read it, all men are created equal except negros. When the know-nothings get control, it will read, “All men are created equal except negros and foreigners and Catholics.” This sounds much like Mr. Trump’s rhetoric, and unfortunately, much of the Republican Party. To say that they are know-nothings is being kind.
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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