Bill Owens: Confounding And Confusing Events 1/27/20 | WAMC

Bill Owens: Confounding And Confusing Events 1/27/20

Jan 27, 2020

An Iranian lawmaker apparently has placed a $3 million bounty on President Trump’s head.  The is certainly an escalation of the conflict and raises substantial questions about the ethnicity of assassinating General Soleimani, and whether or not that puts many of our leaders at risk.

The Supreme Court has decided not to hear the most recent challenge to the Affordable Care Act in which the 5th Circuit found that the government cannot force most consumers to buy health insurance because Congress eliminated the tax penalty used to enforce the requirement in 2017.  This Appeals Court sent the case back to the lower court to determine whether or not the remainder of the law could stand on its own.  The Supreme Court refused to hear an interlocutory appeal essentially allowing the case to go back for further consideration by the district court, and thus, meaning that this matter would not be on the court’s docket during an election year.  It looks like everyone has a strategy and an agenda. 

And some good news, the USS Abraham Lincoln returned to its new home port in San Diego this week after a 10-month deployment which is the longest deployment since Viet Nam.  The primary focus in the news reports was, of course, those sailors who were meeting their children for the first time.  It was also reported that the families who greeted them in San Diego had to move from Norfolk Virginia to San Diego on their own.  This story truly captures the sacrifice that the soldiers, sailors and marines as well as their families make on behalf of all Americans. 

On the trade front an analysis of tariffs has been done and reported on in the Wall Street Journal.  The report basically indicates that American consumers are paying these tariffs, and that the Phase I deal recently signed and promoted by POTUS leaves those tariffs in place, thus, continuing the increased cost.  This is particularly important to note because the principal issues that we entered into the trade war about have not been resolved in our favor.

On the USMCA front, Canada voted on the USMCA this past week and approved it.  The Chicago AG futures Market has not seen as increase in soy bean prices.  The significance of this, of course, is the Chinese promise to purchase billions of dollars in soy beans which should have moved the market, and hasn’t.  Commentators are speculating that futures traders do not believe the Chinese will make this level of purchase, and therefore, prices will not move upward.  I tend to rely on what the market says, rather than what the politicians say. 

An interesting article in the Wall Street Journal this week about how voters are choosing their candidates.  In the past, the axiom, it is the economy stupid, has always held true.  The study in the Wall Street Journal article demonstrated that counties where Mr. Trump is popular are not, in many cases, counties that have benefited from the uptick in the economy, while counties that have benefited are frequently very anti-Trump.  This raises a whole host of concerns for both parties as they must attempt to figure out how voters will respond to various messages.  It also reflects why the Republican message on the economy is not taking hold as the divisiveness Mr. Trump has created seems to have over powered a strong economy.  It may also be that the economy is weak in many areas where Mr. Trump is popular reflects the realities of the economy, that is not everyone is benefiting. 

A story in the Wisconsin State Farmer postulate, that as POTUS touts the US MIA and the Chinese Phase 1 seal- remember Shoeless Joe Jackson and “say it ain’t so”.  The chaos of the last several years created enormous uncertainty in almost every aspect of American businesses.  Phase 1 might not lead to Phase 2, and into production in US will be more expensive making that sector less competitive globally.  Can we expect substantial growth from these two agreements-- the experts don’t think so and I’m betting with them.

Blackrock, one of the largest global investment management and risk firms announced recently in their annual investor letter that they were going to focus on ensuring that companies disclosed environmental risks to their business.  This is a different approach as the environmental movement has largely been associated with “tree huggers” and environmental activists.  This changes the level of interest and also confirms that analysis is being done to determine what the changes that are occurring in our environment will do eventually to business and our economies. 

On the economic front, the Consumer Price Index for 2019 increased 4/10 of 1% from 1.9% in 2018 to 2.3 in 2019, leaving the Fed without a clear indication of what steps to take in monetary policy as there is no clear indication of where the economy is headed.  Job growth was reported to be essentially stable with the economy creating in December about 143,000 jobs.

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.

The views expressed by commentators are solely those of the authors. They do not necessarily reflect the views of this station or its management.