U.S. Economy 2019-July 2021

Trump administration: U.S. Economy 2019 Chapter III

Heather Cox Richardson July 11, 2021
On Friday, as President Joe Biden signed “An Executive Order Promoting Competition in the American Economy,” he echoed the language of his predecessors. “[C]ompetition keeps the economy moving and keeps it growing,” he said. “Fair competition is why capitalism has been the world’s greatest force for prosperity and growth…. But what we’ve seen over the past few decades is less competition and more concentration that holds our economy back.”
Biden listed how prescription drugs, hearing aids, internet service, and agricultural supplies are all overpriced in the U.S. because of a lack of competition (RFD TV, the nation’s rural channel, has a long-running ad complaining of the cost of hearing aids). He also noted that noncompete clauses make it hard for workers to change jobs. …
On Friday, Biden promised to use the power of the executive branch to rein in corporations, much as Theodore Roosevelt did during his terms of office. But there was more to Biden’s statement than that. His emphasis on restoring competition is from the next historical phase of antitrust action….
For 40 years, the Republican Party has offered a vision of America as a land of hyperindividualism, in which any government intervention in the economy is seen as an attack on individual liberty because it hampers the accumulation of wealth. Biden’s speech on Friday reclaims a different theme in our history, that of government protecting individualism by keeping the economic playing field level.

30 May
Wall Street struggles to sell Washington on Bitcoin for the masses
Bitcoin is the biggest of the virtual assets, which unlike the dollar are distributed outside of government control and often operate on a decentralized basis.
(Politico) Major financial industry players including Fidelity Investments and Anthony Scaramucci’s SkyBridge Capital are pressing the Securities and Exchange Commission to approve their plans to launch funds on public stock markets that would let small investors tap into the rise of Bitcoin prices.
Wall Street says it’s getting in the game and trying to launch so-called exchange-traded funds linked to cryptocurrency in response to surging demand, with the market for Bitcoin alone exceeding $670 billion. Firms are pouring money into lobbying to shape regulation and to convince skeptical policymakers that digital currency is viable for wider adoption for the masses.

28 May
Biden’s budget goes big on spending in bid to lift middle class
The request to Congress ties together the president’s infrastructure proposal, “families plan” and $1.5 trillion to fund the government for the upcoming fiscal year.
(Politico) Assuming a federal budget gap of more than $1 trillion for the next decade, the long-delayed document focuses on lifting the middle class, expanding the social safety net and boosting American competitiveness across the globe. It combines Biden’s $2.3 trillion infrastructure plan, his $1.8 trillion families proposal and $1.5 trillion in discretionary spending to fund federal agencies for the upcoming fiscal year.

19 May
Bloomberg CityLab: Just as the Biden administration prepares to unleash a historic $350 billion of aid for local governments as part of the president’s American Rescue Plan, states are seeing their finances bounce back from the pandemic. That’s given governors the unusual job of pumping billions of dollars into their economies to stoke the recovery or tackle racial and socioeconomic inequalities made worse by Covid-19, Bloomberg’s Amanda Albright reports.
Few governments have announced any specific plans for the funds, but some proposals have begun to roll out — with one of the most ambitious ones coming out of California. Surging incomes of its wealthiest residents is giving the state a $76 billion surplus, which Governor Gavin Newsom has proposed to spend on expanding universal preschool, tackling homelessness and giving out direct payments to Californians. “The goal in the past was to help states weather the losses they were going to face. This is not only reversing those losses, but putting states far ahead,” said policy analyst Marc Golden

7 May
Biden defends rescue package after disappointing jobs report
President Biden on Friday defended his $1.9 trillion American Rescue Plan after a disappointing jobs report, arguing that the new data prove the necessity of the legislation and that it would take more time for the economy to recover. … “It was designed to help us over the course of a year. Not 60 days, a year,” he said of the coronavirus relief passed earlier this year. “We never thought after the first 60 days that everything would be fine.”
Economy picked up just 266,000 jobs in April, well below expectations as economy struggles to rebound
The U.S. economy added just 266,000 jobs in April, a disappointing month of growth that fell well below economists’ estimates despite falling caseloads and increased vaccine distribution around the country.
The April unemployment rate remained relatively unchanged at 6.1 percent, although economists caution the number is misleadingly low, given how many people have dropped out of the labor force in the last year.
Weak U.S. jobs report raises questions about economic recovery
Hiring was much weaker than expected in April. Wall Street thinks it’s a blip, but it could be a sign of a much deeper rethinking of which jobs are needed and what workers want to do on a daily basis.

6 May
Analysis: How Biden plans to add $600 billion to the U.S. ‘care economy’
(Reuters) President Joe Biden’s $4 trillion plan to rebuild the U.S. economy aims a flood of cash at something millions of women in America do for low pay or no pay at all: taking care of other people.
Biden’s “American Jobs Plan” would boost an existing government program with $400 billion more over a decade, to give more elderly and disabled people basic care they need, while his “American Families Plan” creates free universal ‘pre-Kindergarten’ and adds other childcare to the tune of $200 billion.
The White House’s team of economists and economic advisers, many of them women, argue that this influx of government cash is essential to fix and grow the U.S. economy. It will get women back into the workforce who left because of the coronavirus, allow other stay-at-home caregivers to take jobs, and pay the people who do care-giving work as a job a more livable wage.
… Biden’s infrastructure plan calls for Congress to add some $40 billion each year to Medicaid, the nation’s public health program for people with low incomes, and $25 billion to upgrade and add new child-care facilities.
The additional Medicaid money would mean more people who need free or low-cost home and community-based care could get it, aiding a rapidly-growing population of older Americans, people with disabilities, and the people who take care of them.

Heather Cox Richardson May 4, 2021
In any normal era, the big story right now would be the country’s dramatic economic recovery from the recession sparked by the coronavirus. In the first three months of 2021, the economy grew by 1.6% as economic stimulus measures kicked in and people started to buy things again. Amazon posted profits of $8.1 billion for the first three months of the year; the same months last year brought the company $2.5 billion. Supply chains are still frayed, pushing prices upward, but those problems are expected to ease as the chains heal.
At the beginning of the year, economists predicted just 0.6% growth, because they did not expect vaccinations to go into circulation as quickly as they did, and they expected the recession to linger for months. If the current growth rate holds, it would mean an annual rate of 6.4% (it’s unclear, of course, if it will hold).
For the last three weeks, jobless claims have dropped. Restaurants and service industries are not in as good a shape as consumer goods, but they should recover as more and more people get vaccinated. We are still down about 8.4 million jobs lost during the pandemic, but employment is moving in the right direction.
This economic turnaround is possible because of the administration’s vaccine program. That’s another huge story.

23 April
Joe Biden is ready to make the richest share their wealth.
(Bloomberg Politics) He plans to propose almost doubling the capital gains tax rate for those who earn $1 million or more, ending a century-old precedent of taxing investments less relative to wages and salaries, Laura Davison and Allyson Versprille report.
The move, which would hit 3 out of every 1,000 people, would also help address 50 years of inequality in the U.S., with the gap widening because of the coronavirus pandemic.
After his multi-trillion dollar spending packages to revive the economy and provide Covid-19 relief for millions of Americans, Biden’s move signals another step away from the trickle-down economics that dominated politics for decades since the era of Ronald Reagan.
The richest 1% of U.S. households saw their net worth rise by some $4 trillion in 2020, about 35% of the national total. Most of the gains came in stock and mutual fund investments — 90% of which are owned by White households.
Biden is expected to release his proposal next week and will detail plans for new spending on children and education on April 28. That’s in addition to an initiative to raise corporate taxes to fund his $2.25 trillion infrastructure-focused package.

11 March
In some cities, the pandemic’s economic pain may continue for a decade
Mark Muro and Yang You
(Brookings) What will the COVID-19 aftermath mean for regional employment growth and local labor markets?

10 March
Somebody’s Taking a Huge Risk on Biden’s Bill. It’s Not Biden.
By Jonathan Chait
(New York) … here is the main point, one overlooked by the skeptics: It’s the economic effect of the bill that will matter, not the immediate response to its passage. And economists overwhelmingly predict that effect will be positive. Economists surveyed by The Wall Street Journal have increased their 2021 growth forecasts by a full point, to 5.95 percent. They believe inflation will rise slightly above the Federal Reserve’s target level this year, before settling back down in the following years. They are calculating that quickly restoring full employment will bring rapid wage gains to working-class Americans and produce a wide array of spill-off social benefits. …if the bill works as forecast, [Democrats] will reap the political benefit of prosperity. Republicans might find themselves in the position of having to explain why they opposed a popular bill that led to a fast recovery.

6 March
Senate passes Biden’s $1.9 trillion coronavirus relief bill after voting overnight on amendments, sends measure back to House
(WaPo) The Senate approved a $1.9 trillion coronavirus relief plan on Saturday. …  It will now fall to the House to consider the sweeping package once again before it can become law and any of the aid can be dispersed.
What’s in the Senate’s $1.9 trillion covid bill: Checks, unemployment insurance and more

1 March
Kamala Harris Pushes Plan to Strengthen City Infrastructure
The Biden administration is preparing a new stimulus proposal for Congress that would follow its coronavirus relief plan.
Vice President Kamala Harris said Monday that the U.S. has the “imperative to strengthen infrastructure in our cities and create good union jobs” as the Biden administration readies a sweeping stimulus package to follow its $1.9 trillion coronavirus relief proposal
The White House has begun work on an economic infrastructure package that President Joe Biden hopes to unveil after the Senate considers his legislation providing additional federal dollars for coronavirus vaccines, testing and protective equipment.

11 February
The Biden White House Is Tossing Obama’s Economics Playbook
By John Cassidy
For good or ill—and, in my view, it is very positive—the Biden White House is pursuing a bold and aggressive program of Keynesian economic management, the likes of which Washington hasn’t seen since the nineteen-sixties.
Treasury Secretary, Janet Yellen, … said that the possibility of inflation picking up as the economy rebounds from the pandemic was “a risk that we have to consider,” but she also insisted that policymakers have the “tools to deal with that risk if it materializes.” Delighting Democrats who want to break with the past, Yellen emphasized the need to pull the economy out of its COVID-19 slump rapidly and restore full employment.

6 February
Biden, Democrats Prepare To Go It Alone, Believing Most Of Country Is On Their Side
(NPR) Biden says he would prefer the [COVID-19 relief package] legislation be bipartisan, but Republicans are nowhere near being on board with the president’s $1.9 trillion proposal that includes money to speed vaccine distribution, aid small businesses, reopen schools, shore up state and local budgets, and get $1,400 checks out to individuals.
“They’re just not willing to go as far as I think we need to go,” Biden said in his clearest indication that he’s not waiting around for the Republican support he might never get — though his team appears to be looking outside Washington for some GOP support by appealing to state and local officials and business groups.

3 February
WallStreetBets is disrupting financial markets — possibly permanently
(The Conversation) The changes have been brought about by retail investors meeting and exchanging information online, such as on Reddit forums, Discord groups, YouTube channels, Twitter and Stocktwits, on how to perform the type of work traditionally done by financial sector advisers and analysts.
Instead of getting their investment education the usual way, via courses at colleges and universities, retail investors learned online, among themselves.
Consequently, retail investors have spurred changes in the work performed by professional financial advisers, analysts and educators, as well as institutional investors. Some have argued that the greater transparency regarding the investment techniques being discussed openly online could “force greater transparency on the institutional side.”
As of Feb. 1, there were about eight million members on Reddit’s WallStreetBets, but it’s only one of many online sites where retail investors are learning, interacting and sharing investment ideas. Together, these amateur investors are altering some long-held beliefs about investing and they’re gaining influence in the market in the process.

27 January
Biden’s Grand Opening
James K. Galbraith
With an economic rescue plan that is both ambitious and well targeted, US President Joe Biden and his team have demonstrated a clear understanding of the scale and range of action that the current situation requires. A broader reconstruction plan can and must come later; but crisis management remains the order of the day.
(Project Syndicate) The moment was ripe for Biden to tell the country about his own economic plans. And when he spoke, it was with focus, precision, and a clear sense of the scale and range of action that the situation requires.Biden has proposed a rescue plan that will advance a number of urgent objectives at once.
His first priority is public health, a long-neglected issue that can be met in part by creating community vaccination centers and medical clinics, and by training and employing at least 100,000 new public-health workers in the basics of epidemic control. Essential elements of this plan will reach into low-income and minority communities, as well as into prisons and jails.
A second goal of the Biden plan is income support, which will take the form of extra cash for households below a certain threshold, extended and expanded unemployment insurance, emergency paid leave, grants to renters and small businesses, and tax credits for childcare costs.
Third, the Biden plan aims to stabilize federalism with some $350 billion in support for state and local governments whose tax bases have imploded. Such funding is urgently needed to keep teachers, firefighters, police, and other essential public servants on the job – as is the additional $20 billion that would go to keep public transit operating through the crisis.
Finally, the Biden plan has a fair-play element, proposing a long-overdue increase of the federal minimum wage to $15 per hour, which would raise wages for some 30% of all American workers.

25 January
Senate confirms Yellen as first female Treasury secretary
(The Hill) The Senate on Monday confirmed Janet Yellen as the first woman to lead the Treasury Department, where her immediate priority will be addressing the coronavirus recession.
Yellen, a Democrat, was confirmed by the Senate 84-15, with broad bipartisan support. All 15 “no” votes came from Republicans.
The Senate Finance Committee unanimously approved Yellen’s nomination last week, with Democrats and even Republicans touting her qualifications despite GOP opposition to much of President Biden’s economic agenda.
During her confirmation hearing, she advocated for a $1.9 trillion relief package floated by Biden that includes enhanced unemployment benefits, $1,400 direct payments, funds for vaccine distribution, and aid to state and local governments.

22 January
Fact Sheet: President Biden’s New Executive Actions Deliver Economic Relief for American Families and Businesses Amid the COVID-19 Crises
(White House) Today, the President is issuing an Executive Order that will launch an all-of-government effort to provide equitable emergency economic relief to working families, communities, and small businesses across the nation.

20 January
Biden’s Econ Plan: 3 Indicators To Watch (audio)
(NPR) President Biden announced ahead of his inauguration a two-step plan of rescue and recovery. It has two prongs: immediate pandemic relief and longer term economic growth. It’s too early to know whether the plan will succeed, or even how much of it will get passed by Congress, but we discuss the indicators to keep an eye on to evaluate the plan’s effect on the economy.

2020

20-23 December
Buried in Pandemic Aid Bill: Billions to Soothe the Richest
The voluminous coronavirus relief and spending bill that blasted through Congress on Monday includes provisions — good, bad and just plain strange — that few lawmakers got to read.
(NYT) Tucked away in the 5,593-page spending bill that Congress rushed through on Monday night is a provision that some tax experts call a $200 billion giveaway to the rich. “High-income business owners have had tax benefits and unprecedented government grants showered down upon then. And the scale is massive,” said Adam Looney, a fellow at the Brookings Institution and a former Treasury Department tax official in the Obama administration, who estimated that $120 billion of the $200 billion would flow to the top 1 percent of Americans.
Here’s what’s in the new $900 billion stimulus package
Jobless benefits, aid to small businesses, stimulus checks and money for vaccine distribution are in.
The bill lacks new money for state and local governments. Democrats had initially pushed for $1 trillion in aid to state and local governments. Mayors and governors have been sounding alarms over budget shortfalls and the hard choices they may be forced to make without help from Washington. States that rely heavily on the tourism or energy industries are among those that have been hit hardest and are warning of tax increases, public-sector layoffs or spending cuts to public programs.
Still, negotiators are extending the deadline for states and cities to use unspent money approved for them by the Cares Act, giving governments until year’s end before the money must be returned.
Tucked into Congress’s massive stimulus bill: Tens of billions in special-interest tax giveaways
The electric motorcycle and beer industries were among those that emerged as big winners

7 December
Kudlow praises Biden’s economic team as Trump continues to wrongly claim victory.
(NYT) As President Trump on Monday continued to falsely claim that he won the election, his top economic adviser, Larry Kudlow, praised members of President-elect Joseph R. Biden’s economic team as qualified to help steer the U.S. economy.
Mr. Kudlow’s public comments underscore the reality that while Mr. Trump continues to deny his election loss and pursue fruitless legal challenges, his top aides are moving on and cooperating with the transition.
“I think the Janet Yellen pick at Treasury was a good idea,” Mr. Kudlow said of the former Federal Reserve chair, whom Mr. Biden has tapped as his Treasury secretary. Mr. Kudlow said Ms. Yellen, whom Mr. Trump did not reappoint as Fed chair, “did a decent job at the Fed” and has “very sensible views on the economy.”
Mr. Kudlow said he had also offered congratulations to Jared Bernstein, whom Mr. Biden picked for his Council of Economic Advisers and who Mr. Kudlow said was a personal friend.

5 December
Neera Tanden, Biden’s pick for budget chief, runs a think tank backed by corporate and foreign interests
She leads the liberal Center for American Progress
(WaPo) Now that President-elect Joe Biden has picked Tanden to run the Office of Management and Budget at the White House, her ties to some of the most powerful players in the U.S. economy are drawing scrutiny from some progressives and advocates for accountability in government.
The OMB acts as the nerve center of the federal government, executing the annual spending plan, setting fiscal and personnel policy for agencies, and overseeing the regulatory process across the executive branch. As OMB director, Tanden would have a hand in policies that touch every part of the economy after years spent courting corporate and foreign donors. These regulatory decisions will have profound implications for a range of U.S. companies, dictating how much they pay in taxes, the barriers they face and whether they benefit from new stimulus programs.

19 November
John Cassidy: What Kind of Economy Will Joe Biden Inherit?
The long-term macroeconomic environment that Biden will face has become a hot topic of debate among economists.
“We are going into a very dark winter,” the President-elect said. “Things are going to get much tougher before they get easier”
Biden was referring to the pandemic, but his remarks also apply to the economy, the fate of which is inextricably tied to the virus. In the short term, the economic prognosis is grim.
… although the optimists are surely right when they say that a vaccine will boost spending and growth, the magnitude and durability of this effect is hard to predict. Even as optimism rises, businesses from airlines to hotels to theme parks are warning that it could take years for activity in their industries to return to pre-pandemic levels. Some policymakers are issuing similar warnings. “The ascent out of this calamity is likely to be long, uneven, and highly uncertain,” Gita Gopinath, the chief economist at the International Monetary Fund, wrote in a blog post last month.
US weekly jobless claims rise to 742,000, more than economist forecasts as labor-market rebound falters
New US jobless claims for the week that ended Saturday totaled 742,000, the Labor Department said Thursday. The reading came in above the consensus economist estimate of 700,000 and showed an increase from the previous week’s revised figure.
Continuing claims, which track Americans receiving unemployment benefits, decreased to 6.37 million for the week that ended November 7. The reading came in slightly below economist estimates.

10 November
Biden-voting counties equal 70% of America’s economy. What does this mean for the nation’s political-economic divide?
Mark Muro, Eli Byerly Duke, Yang You, and Robert Maxim
(Brookings) Even with a new president and political party soon in charge of the White House, the nation’s economic standoff continues. Notwithstanding President-elect Joe Biden’s solid popular vote victory, last week’s election failed to deliver the kind of transformative reorientation of the nation’s political-economic map that Democrats (and some Republicans) had hoped for. The data confirms that the election sharpened the striking geographic divide between red and blue America, instead of dispelling it.
Most notably, the stark economic rift that Brookings Metro documented after Donald Trump’s shocking 2016 victory has grown even wider. In 2016, we wrote that the 2,584 counties that Trump won generated just 36% of the country’s economic output, whereas the 472 counties Hillary Clinton carried equated to almost two-thirds of the nation’s aggregate economy. A similar analysis for last week’s election shows these trends continuing, albeit with a different political outcome. This time, Biden’s winning base in 477 counties encompasses fully 70% of America’s economic activity, while Trump’s losing base of 2,497 counties represents just 29% of the economy.

28 October
Stock market slide muddles Trump’s economic message days before 2020 election
Selloff on Wednesday follows Monday’s sharp decline as the president tries to make a closing argument with voters
(WaPo) A sudden drop in the stock market threatens to muddle President Trump’s campaign message about America’s economic recovery just days before the Nov. 3 election. …a sharp market drop this week — which follow a sharp rise in coronavirus cases both in the U.S. and in Europe, as well as a continued gridlock over a stimulus deal in Washington — may complicate the president’s boasts of overseeing a rapid economic recovery. Trump has already begun to tout a report on America’s economic growth that is due Thursday, but investors fear a prolonged downturn in the stock market given that the virus is raging with increasing ferocity across much of the country.

Nouriel Roubini: The US Election’s Chaos Quotient
While hoping for a conclusive outcome on November 3 (or immediately thereafter), market watchers unfortunately must prepare for the worst. After all, US President Donald Trump and the Republicans are not even hiding their plans to steal the election.
(Project Syndicate) This degree of political instability could trigger a major risk-off episode in financial markets at a time when the economy is already slowing and the near-term prospects for additional policy stimulus remain grim. If an election dispute drags on – perhaps into early next year – stock prices could fall by as much as 10%, government bond yields would decline (though they are already quite low), and the global flight to safety would push gold prices higher. Usually in this type of scenario, the US dollar would strengthen; but, because this particular episode would have been triggered by US-based political chaos, capital might actually flee from the dollar, leaving it weaker.One thing is certain: a highly contested election would cause further damage to America’s global image as an exemplar of democracy and the rule of law, eroding its soft power. Particularly over the past four years, the country has increasingly come to be regarded as a political basket case. While hoping that the chaotic outcomes outlined above do not come to pass – polls still show a strong lead for Biden – investors should be preparing for the worst, not just on election day but in the weeks and months thereafter.

26 October
Bond defaults deliver 99% losses in new era of U.S. bankruptcies
Bankruptcy filings are surging, and many lenders coming to realization their claims are almost completely worthless
(Financial Post) While few could have foreseen the pandemic’s toll on the economy, the depth of investors’ pain from corporate distress was all too predictable. Desperate to generate higher returns during a decade of rock-bottom interest rates, money managers bargained away legal protections, accepted ever-widening loopholes, and turned a blind eye to questionable earnings projections. Corporations, for their part, took full advantage and gorged on astronomical amounts of debt that many now cannot repay or refinance.
It’s a stark reminder of the long-lasting repercussions of the Federal Reserve’s unprecedented easy-money policies. Ultra-low rates helped risky companies sell bonds with fewer safeguards, which creditors seeking higher returns were happy to accept. Now, amid a new bout of economic pain, the effects of those policies are coming to bear.

9 October
BCA’s Peter Berezin comments:
• Both public opinion polls and betting markets suggest that Joe Biden will become President, with the Democrats gaining control of the Senate and retaining the House of Representatives.
• Such a “blue wave” would have mixed effects on the value of the S&P 500. On the one hand, corporate taxes would rise under a Biden administration. On the other hand, trade relations with China would improve. The Democrats would also push for more fiscal stimulus, which the stock market would welcome.
• The odds of Republicans and Democrats agreeing on a major new stimulus deal before the November elections look increasingly slim. In a blue wave scenario, the Democrats will enact $2.5-to-$3.5 trillion in pandemic relief shortly after Inauguration Day. Joe Biden‘s platform also calls for around 3% of GDP in additional spending on infrastructure, health care, education, climate, housing, and other Democratic priorities.
• Unlike in late 2016, the Fed is in no mood to raise interest rates. Large-scale fiscal easing will push down the value of the US dollar, while giving bond yields a modest boost. Non-US stocks will outperform their US peers. Value stocks will outperform growth stocks.
• Looking further out, Republicans will move to the left on economic issues, leaving corporate America with no clear backer among the two major parties. As such, while we are constructive on equities over the next 12 months, we see grave dangers ahead later this decade.

Wall Street Got What It Wanted From Trump and Is Ready for Biden
Once upon a time, Wall Street was afraid of Donald Trump. It was 2016, and every time he got closer to winning, stock prices fell — then plummeted on Election Night when the unthinkable happened. Four years later, the markets have made peace with the human-wrecking-ball president, steadily climbing to new highs and even shaking off the coronavirus crash. So why aren’t they falling in tandem with Trump’s chances of reelection? As Intelligencer columnist Josh Barro explains, corporate America got what it wanted from him — an enormous tax cut — and even a Joe Biden landslide won’t dare take it all away.

Trump calls off aid talks
(Reuters) U.S. President Donald Trump, still being treated for COVID-19, abruptly ended talks with Democrats on an economic aid package on Tuesday, drawing criticism from presidential rival Joe Biden that he was abandoning Americans in the midst of a pandemic.
Trump’s tweet breaking off talks for a new round of stimulus spooked Wall Street, sending stocks down as much as 2% from their session highs and tarnishing one of the metrics that the Republican president has touted as a sign of his success.
Late Tuesday, Trump in a series of tweets urged Congress to quickly pass $25 billion in funding for passenger airlines, $135 billion for small businesses and provide $1,200 stimulus checks for Americans. “I am ready to sign right now,” Trump wrote.
Trump Turning Down Pelosi’s Stimulus Deal Is the Worst Political Blunder in History
In May, the House of Representatives passed a $3 trillion economic relief bill. Over the next four and a half months, Republicans in the White House and Senate dithered, alternating between good-faith engagement and lethargy. The apparent final blow came in the form of a series of tweets by President Trump announcing an end to negotiations.
It is possible Trump — who just yesterday declared his desire to cut a deal — intends this as one of his “clever” negotiating ploys, enabling him to turn around and make a deal that he can paint as a capitulation by his panicked foes. But even if that happens, the window to boost the economy in time to help him (obviously the only consideration Trump cares about) is closing fast. Walking away from the extended hand of an opposition party willing to pump trillions of dollars into the economy may go down as the single greatest political blunder in the history of presidential elections.

6 August
Paul Krugman: Coming Next: The Greater Recession
The suspension of federal benefits would create damage almost as terrifying as the economic effects of the coronavirus.
The 2008 financial crisis and the sluggish recovery that followed weren’t that long ago, and they taught us valuable lessons directly relevant to our current plight. Above all, experience in that slump demonstrated both that economic depressions are no time to obsess over debt and that slashing spending in the face of mass unemployment is a terrible mistake.
But nobody in the White House or on the G.O.P. side of Capitol Hill seems to have learned anything from that experience. In fact, not having learned anything from the last crisis almost seems to be a requirement for Republican economic advisers.
So at the moment we seem to be headed for a Greater Recession — a worse slump than 2007-2009, overlaid on the coronavirus slump. MAGA!

30 July
3 Months Of Hell: U.S. Economy Drops 32.9% In Worst GDP Report Ever
(NPR) The coronavirus pandemic triggered the sharpest economic contraction in modern American history, the Commerce Department reported Thursday.
Gross domestic product — the broadest measure of economic activity — shrank at an annual rate of 32.9% in the second quarter as restaurants and retailers closed their doors in a desperate effort to slow the spread of the virus, which has killed more than 150,000 people in the U.S.
The economic shock in April, May and June was more than three times as sharp as the previous record — 10% in 1958 — and nearly four times the worst quarter during the Great Recession.
Economy Shrank At 32.9% Rate In 2nd Quarter

July-August Issue
The Looming Bank Collapse
The U.S. financial system could be on the cusp of calamity. This time, we might not be able to save it.
(The Atlantic) American citizens are well aware of the toll [the coronavirus pandemic] has taken on the economy: broken supply chains, record unemployment, failing small businesses. All of these factors are serious and could mire the United States in a deep, prolonged recession. But there’s another threat to the economy, too. It lurks on the balance sheets of the big banks, and it could be cataclysmic. Imagine if, in addition to all the uncertainty surrounding the pandemic, you woke up one morning to find that the financial sector had collapsed.
After the housing crisis, subprime collateralized debt obligations (CDOs) naturally fell out of favor. Demand shifted to a similar—and similarly risky—instrument, one that even has a similar name: the CLO, or collateralized loan obligation. A CLO walks and talks like a CDO, but in place of loans made to home buyers are loans made to businesses—specifically, troubled businesses. CLOs bundle together so-called leveraged loans, the subprime mortgages of the corporate world.

10 June
Federal Reserve predicts slow recovery with unemployment at 9.3 percent by end of 2020
(WaPo) The central bank pledged to continue boosting the economy by keeping the benchmark U.S. interest rate near zero through at least 2022.
Federal Reserve leaders predict a slow recovery for the U.S. economy, with unemployment falling to 9.3 percent by the end of this year and to 6.5 percent by the end of 2021, after millions of Americans lost their jobs in the stunning recession caused by the coronavirus outbreak.
Fed Chair Jerome H. Powell stressed Wednesday that the economy is likely to need aid from the central bank and Congress for a long time. He repeatedly highlighted his concern that millions of Americans will become permanently unemployed during this crisis as companies that employed them go out of business or their old jobs are eliminated.
The Recession Started in February — and Is Probably Already Over
(New York) The economy seems to have bottomed out in April and has been growing again, as seen not just in reports from retailers and airlines and car dealers about business starting to grow again (from a much-reduced base) but also in Friday’s employment report, showing very strong job growth (also from a much-reduced base.)
That report surprised analysts…. Much of the attention has been on “misclassification error,” a real problem where some people who have been temporarily laid off from work give answers that lead the BLS to count them as absent from work but employed. But this problem was even more severe in April than in May, meaning that any way you slice the numbers, employment rose and unemployment fell from April to May. Barring a second coronavirus wave severe enough to cause a national reclosure of huge swathes of the country, the economy has returned to expansion after the shortest recession on record, lasting only two months.

6 June
Is This What a Recovery Looks Like?
Eric Levitz
(New York) Apparently, U.S. companies were better off with an uncontained epidemic paralyzing their Chinese operations than they had been months earlier, when the novel coronavirus was still just a twinkle in Satan’s eye. Morgan Stanley assured its clients that markets had nowhere to go but up. After all, the investment bank reasoned, “the pace of infection has slowed” and U.S. equities were “the appropriate asset to own if rates continue to fall so long as we don’t have a recession.”
Four months, $3 trillion in stimulus, and 100,000 U.S. coronavirus deaths later, Wall Street is sanguine once again. The 50 trading days between March 23 and June 3 were the best the S&P 500 has ever seen. A rally that began in tech stocks has spread to frontline sectors, with airlines and hotel chains finding renewed appetite for their shares. As American states reopen their economies, JP Morgan CEO Jamie Dimon  has declared that the U.S. boasts “pretty good odds” of a “rapid economic recovery.”
It isn’t that hard to see what Dimon does if you look from the proper vantage (through the window of a private jet, for example): Analysts had expected Friday’s jobs report to show the U.S. economy shedding 7.5 million jobs in May; instead, it showed employers expanding their payrolls by 2.5 million, as the first round of reopenings brought furloughed workers returned to their posts. Meanwhile, personal income in the U.S. rose by a record-high 10.5 percent last month, thanks to stimulus checks and enhanced unemployment benefits. As a result, millions of displaced workers actually gained purchasing power despite their ongoing joblessness. Which means that U.S. consumers are now flush with disposable cash that is sure to flood the economy the minute the pandemic has passed – or, perhaps, before.
A ‘misclassification error’ made the May unemployment rate look better than it is. Here’s what happened.
When the U.S. government’s official jobs report for May came out on Friday, it included a note at the bottom saying there had been a major “error” indicating that the unemployment rate likely should be higher than the widely reported 13.3 percent rate.
The special note said that if this “misclassification error” had not occurred, the “overall unemployment rate would have been about 3 percentage points higher than reported,” meaning the unemployment rate would be about 16.3 percent for May. But that would still be an improvement from an unemployment rate of about 19.7 percent for April, applying the same standards.
Ryan Cooper: Will Republicans doom Trump by declaring premature economic victory?
(The Week) the pandemic has not remotely passed. The easing of lockdowns appears to be backfiring in many states, including California, Texas, North Carolina, Arizona, South Carolina, Utah, and Alaska. The ongoing wave of mass protests and cavalier police brutality in response may further fuel infection. There is a strong chance that at least some social distancing measures will remain in place or be reimposed in most states over the coming months, especially after summer passes — further holding back recovery.
The most reliable rule of thumb in politics is that lousy economic conditions are bad for incumbent presidents and parties. If they had any sense, Republicans would be eagerly taking up Democratic proposals to get more money into the hands of the citizenry, so as to give Trump the best chance at winning re-election. But because this stimulus must come in the form of spending instead of tax cuts for the rich, Republicans have a strong ideological resistance to it. If no more stimulus is passed, and Trump loses thanks in part to a wretched economy, he will only have himself and his party to blame.

3 June
Politico: All of the awful elements plaguing us right now — the pandemic, the economy, police brutality, looting — have the potential to feed into one another, particularly if mass gatherings in the streets lead to a new outbreak of the coronavirus. That would extend and worsen the economic pain, not to mention the horrible health toll of the disease. Some small businesses are suffering from property damage, but the big economic concerns from the protests and clashes with police over the past week are driven by public health, not broken windows.

27 April
American Winner Treasury Secretary Steven Mnuchin embodies the plutocratic principle that a crisis is a terrible thing to waste.
A GOP president and Senate majority were always going to comfort the comfortable and toss crumbs to the afflicted. And when Congress approved $2.2 trillion in coronavirus relief funds last month, nurses were intubating patients without proper PPE, grocery-store clerks were jeopardizing their health to keep others fed, and delivery drivers were forfeiting the security of social distancing so others could more comfortably enjoy it. The legislation included zero dollars in hazard-pay benefits for those workers. It did, however, provide $90 billion in tax cuts to the owners of pass-through businesses, such as, for instance, the Trump Organization. Such “relief” was necessary, the American Enterprise Institute later explained, to mitigate the “penalty” on economic risk-takers.

16 April
Trump’s Coronavirus Economic Council Was a Disaster Before It Began
(New York) The origin story of the president’s Opening Our Country Council does not foretell success for the group. Last Friday, Trump announced that on April 14 he would debut a team full of “doctors and business people” to advise him in his rush to defibrillate the economy. Despite the five-day head start to assemble the team, the White House skipped a few recruiting basics for the group — like actually contacting council members to inform them of their membership, or sticking with the same name.
Trump’s ‘Opening Our Country Council’ Runs Into Its Own Opening Problems
Instead of a formal council, the president created several industry groups, and joined four calls with them. But some participants had no notice they would be included, and others could not join in.
(NYT) … the rollout of what the president referred to last week as his “Opening Our Country Council” was as confusing as the process of getting there. Instead of a formal council, what Mr. Trump announced on Tuesday was a watered-down version that included 17 separate industry groups, including hospitality, banking, energy and “thought leaders.” And on Wednesday, a bipartisan group of lawmakers received emails inviting them to join another task force.
In the first call of the day, Mr. Trump talked Wednesday morning with many of the big-name business leaders…but encountered some resistance to his enthusiasm for reopening the country quickly, even as the executives offered some praise for his administration’s response.
Mr. Trump opened the call by saying that “testing is under control” in the country. But after each executive was given a minute or two to provide his or her overview of what was needed to reopen the economy, there was a wide consensus that more testing was needed before the economy could reopen.
Another issue of great concern to the executives on the call, one participant said, was the need to address the liability companies could face if employees got sick after returning to work, given the possibility that workers who felt that they were brought back too soon — or were not placed in a safe environment — could sue en masse.

Battle between insurers and US business has just begun
(FT) Because of variance in contract wordings and uncertainty over the ultimate scale of losses, the potential insured business interruption losses for Covid-19 are hard to estimate. According to the American Property Casualty Insurance Association, a trade group, the prospective cost of paying business interruption coverage just for businesses with 100 or fewer employees would be in the range of $255bn to $431bn per month, or up to $5.2tn per year.
Such payments would eliminate the entire capital position of the industry in short order. Capital and surplus for the US industry was about $860bn at the end of 2019.
The insurers have prepared a defence in depth. The most significant and up-to-date contract language they have incorporated was developed by the Insurance Services Office, which provides actuarial services, in 2006 after the Sars epidemic. These boilerplate contract additions called “new endorsements filed to address exclusion of loss due to virus or bacteria” were intended to defend insurers from claims such as those for post-Covid-19 business interruption.
The claimants and their lawyers are not deterred. The Business Interruption Group, composed mostly of celebrity chefs such as Daniel Boulud and Jean-Georges Vongerichten, had a conference in late March with US President Donald Trump to make their case.
Mr Trump, some of whose properties incorporate restaurants, took BIG’s side. As the president said to the cameras: “When they [businesses] finally need it, the insurance company says, ‘We’re not going to give it.’ We can’t let that happen.”
Actually, under the US federal system, if any government power is going to let, or not let, non-payment on business interruption insurance due to exclusionary language it is the state courts and their judges and juries.
A number of state legislatures are working to amend their laws to effectively override the insurers’ exclusionary language. Trump’s opinion is not legally binding.

Seven U.S. states extend coronavirus shutdown to May 15, as Trump prepares to map out plan
(Reuters) – Seven Northeastern states on Thursday extended a shutdown to contain the coronavirus pandemic until May 15, even as President Donald Trump prepared to detail his plan to end the lockdown in the least-affected U.S. states as early as May 1.
Later on Thursday, Trump was expected to detail his strategy to begin reopening the devastated U.S. economy by May 1, despite concerns from health experts, governors and business leaders about the dangers of lifting restrictions without widespread testing in place.

15 April
Think This Pandemic Is Bad? We Have Another Crisis Coming
Addressing climate change is a big-enough idea to revive the economy.
By Rhiana Gunn-Wright, director of climate policy at the Roosevelt Institute.
Pandemics like the coronavirus may occur more often when climate change is unabated. Warming and changing weather patterns shift the vectors and spread of disease. Heavily polluting industries also contribute to disease transmission. Studies have linked factory farming — one of the largest sources of methane emissions — to faster-mutating, more virulent pathogens. The same corporations that exacerbated the climate crisis are literally helping to create deadlier diseases, more quickly, in a world that keeps changing how they spread.
Similarly, the same populations that are bearing the brunt of the health and economic effects of the coronavirus are the same populations that bear the brunt of fossil fuel pollution — which, in turn, makes them more vulnerable to serious complications.
If history is any indication, rebounding from an economic disruption this large requires an equally large spike in demand and production. Outside of war, climate change is the only issue large enough to provide such a spike. Now is the time to create policies that provide immediate relief to communities, such as federal assistance to transition homes and businesses to renewable energy; give “green” fiscal aid to states; and fuel economic recovery with the creation of federally funded green jobs. But none of this can happen so long as our leaders keep convincing themselves that the greatest country in the world cannot walk and chew gum at the same time.

6 April
Coronavirus Survey Round Two: Unemployment Doubles, More Americans Worried About Retirement
Two weeks after the first one was published, LendEDU’s second Coronavirus survey of 1,000 adult Americans also found that more consumers have dipped into their savings to cover expenses, while recent student loan changes may be helping.
Both worldwide and at home in the United States, COVID-19 cases and deaths have risen dramatically since LendEDU published our first Coronavirus survey on March 23rd.
Federal guidance was extended until the end of April at least, the largest economic stimulus package in American history was signed by President Trump, and a mind-numbing 6.6 million Americans applied for unemployment benefits in a single week.
With the situation being so fluid, LendEDU has again conducted a survey of 1,000 adult Americans to see how the finances of Americans are being impacted by COVID-19.
And compared to our first survey from two weeks ago, the financial situation for most Americans is getting a lot worse due to the outbreak. full survey results

30 March
The Fed Transformed: Jay Powell Leads Central Bank into Uncharted Waters
(WSJ) The 107-year-old institution has moved faster and farther in just weeks than it did during the entire 2008 financial crisis.
Max de Haldevang, Reporter at Quartz: The Fed has taken radical action to combat Covid-19. As Donald Trump dawdled, Fed chair Jay Powell began cutting interest rates to near zero, buying more than $1 trillion in debt, and propping up lending markets. The Wall Street Journal gives a blow-by-blow account of how the “mild-mannered,” guitar-playing lawyer has handled the crisis from his home in the Maryland suburbs—and won the begrudging praise of Trump, a longtime critic.
Pentagon watchdog tapped to lead committee overseeing $2 trillion coronavirus package
Glenn Fine will join nine other inspectors general on the new committee.
Fine will lead a panel of fellow inspectors general, dubbed the Pandemic Response Accountability Committee, and command an $80 million budget meant to “promote transparency and support oversight” of the massive disaster response legislation. His appointment was made by a fellow committee of inspectors general, assigned by the new law to pick a chairman of the committee.
The Pandemic Response Accountability Committee is one of three major prongs in the new law meant to provide oversight of the enormous sums to be doled out by the Trump administration. The others include a new “special inspector general” to oversee the Treasury Department’s disbursal of $500 billion in funds to support distressed industries and shore up the collapsing economy. Trump is slated to nominate that inspector general, who will then face Senate confirmation.

29 March
Trump Extends Social Distancing Guidelines Through End of April
The president, facing grim figures from his health advisers, starkly reversed an earlier upbeat assessment that the country could relax the guidelines by Easter.
The grim recommendation, which the president made in the White House Rose Garden, came just a day before the end of a two-week period in which the world’s largest economy has largely shut down with staggering consequences: businesses shuttered, schools and colleges emptied, and social life all but suspended.

28 March
The coronavirus recession is exposing how the economy was not strong as it seemed
A record-long expansion and years of ultra-low interest rates could make it harder to recover from a recession, economists said.
(WaPo) The coronavirus has left businesses from giant corporations to the corner bar struggling for survival. But along with dealing millions of Americans an unexpected blow, the pandemic exposed vulnerabilities that had accumulated during a record-long expansion and years of ultra-low interest rates — and which now could make it harder to recover from a recession, economists said.
… The record-high stock prices the president routinely touted became disconnected from companies’ underlying value, obscuring warning signs such as excessive borrowing, according to economist Michalis Nikiforos of the Levy Economics Institute of Bard College. Total corporate debt surged past $10 trillion, equal to nearly one-half the nation’s annual output.
On the eve of the crisis, one-quarter of the country’s largest companies had more cash going out than coming in, according to Goldman Sachs. The economic shutdown will quickly cause the share of American companies that are cash-flow negative to nearly double, meaning they could be in danger of starving for funds.
The unappreciated frailties did not cause the downturn. The pandemic is responsible for that. And no business can stockpile enough cash to ride out an indefinite shutdown.
But the financial weaknesses surfacing may determine how the United States weathers its worst economic calamity in a century — and which companies survive.

27 March

Trump signs $2 trillion coronavirus bill into law as companies and households brace for more economic pain

The new law amounts to the largest emergency spending measure in U.S. history.
President Trump on Friday signed a massive $2 trillion emergency spending bill into law, promising to deliver a tidal wave of cash to individual Americans, businesses and health care facilities all reeling from the coronavirus pandemic.
His signature came just hours after the House of Representatives passed the massive package by an overwhelming voice vote, and less than 48 hours after it received unanimous approval from the Senate.

26 March
How the Fed’s Magic Money Machine Will Turn $454 Billion Into $4 Trillion
The central bank takes Treasury Department loan guarantees and uses them to stand up huge programs. Here’s how that works.
(NYT) The Treasury and the Fed will work together to decide how the $454 billion should be deployed. The central bank designs and runs the programs, but Treasury consults on the broad-brush outline and must sign off on any plan.
The Fed has already announced a number of emergency lending programs in recent weeks, including one that supports corporate debt issuers and another meant to keep money flowing in the market for short-term business loans. It has said it will establish a “Main Street” lending facility for small businesses, though details on what that will look like are scant.

25 March
Frank Rich: What a Plague Reveals
Though coronavirus cases continue to climb in the U.S., a number of business people and commentators have begun to talk about “restarting” the economy, even at the cost of American lives. If even non-Trumpists are in part echoing Trump’s views on this, should we take them seriously?
when someone like Lloyd Blankfein proposes that we “let those with a lower risk to the disease return to work” in “a very few weeks,” it’s another story. They are revealing their arrogance, of course — masters of the universe know more than, say, a mere civil servant like Anthony Fauci — but also their own economic isolation from the masses they are purporting to help. It’s behavior reminiscent of the titans who tried to rally Wall Street after the 1929 crash by making a big show of buying large blocks of stock. And let’s face it: Most, if not all, of these public notables who are preaching get-back-to-work-soon schemes have a cushion most Americans don’t — the means and the clout to cut the line for a coronavirus test and to secure immediate and attentive medical care away from an overflowing public hospital.
POLITICO Playbook: We have a deal
By JAKE SHERMAN and ANNA PALMER
Here are the items Schumer’s team says they’ve secured in the last few days:
an extra month of unemployment insurance; $55 billion more for hospitals; $150 billion for states, localities and tribes; $10 billion in SBA grants of up to $10,000 for small business costs; $17 billion for SBA to cover six months of payments for businesses with current SBA loans …
… $30 billion in emergency education funding; $25 billion in transit funding; $30 billion for the Disaster Relief fund; the ban of stock buybacks for companies that received government assistance; real-time reporting of Treasury loans, investments and assistance; an IG for the $500 billion to lend to corporations; a tax credit that would encourage employers to keep workers on the payroll; a tax exclusion for people who are receiving student loan repayment from their employer.
Senate Democratic Leader Chuck Schumer has secured a provision in the agreement that will prohibit businesses controlled by the President, Vice President, Members of Congress, and heads of Executive Departments from receiving loans or investments from Treasury programs. The children, spouses and in-laws of the aforementioned principals are also included in this prohibition.
White House and Congress Reach $2 Trillion Stimulus Deal

23 – 24 March
Republicans are angry that Democrats want to do too much for the economy
(WaPo) …there’s one critical thing to understand about how this all played out: In almost every case and on every question, Democrats wanted to spend more and do more than Republicans did