Plus, a question about coronavirus.
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Today’s read: 7 minutes.
Obama steps back into the arena, Bloomberg qualifies for the debate, and a coronavirus question.
Yesterday, I told you how the spotlight was on Michael Bloomberg and how his chances were growing to qualify for Wednesday’s debate in Nevada. He hit the threshold last night after a new NPR/PBS Newshour poll found him in second place nationally with 19% of the vote (Bernie Sanders led with 31%). As Axios’s Jim VandeHei said: “Billionaire Michael Bloomberg is duking it out with Billionaire Donald Trump, often on Billionaire Jack Dorsey’s Twitter and in ads on Billionaire Mark Zuckerberg’s Facebook, all chronicled in Billionaire Jeff Bezos’ Washington Post.” Bloomberg also picked up an unexpected ally in Stacey Abrams, the up and coming African-American politician who almost won Georgia’s governor race last year. Abrams defended Bloomberg’s spending on The View, saying at least we knew where the money was coming from. Small (big) note: Abrams is also angling for a VP spot with whoever wins the nomination and one of her political groups received $5 million from Bloomberg. The debate will begin at 9 p.m. EST.
What D.C. is talking about.
The economy. Yesterday, President Barack Obama took the rare step of claiming some credit for the booming economy. And he did it on President Trump’s favorite medium: Twitter. Obama blasted out this tweet:
Since stepping out of office, it’s been rare for Obama to directly tout a political accomplishment tied to current events. He’s picked his spots sparingly, most notably when he posted a lengthy Facebook post to defend the Affordable Care Act that the Republican-led Senate eventually voted to keep partially intact thanks to Sen. John McCain. But with 2020 in full-force, the tweet is a sign that Obama and other Democrats recognize Trump has a strong economy to run on — and they’re going to do everything they can to cut into the support he can build around that single-issue message. Trump responded with his own tweets:
What the right is saying.
Give me a break. Barack Obama oversaw a slow recovery that was 8 years of stagnation and only saw its full potential because of Trump. 7 million new jobs have been created since Trump took office, black unemployment rates are the lowest they’ve ever been and last spring, wage growth hit 3.4% — the fastest it’s grown since 2009. Basically anyone who invested in the market when Trump entered office has seen unthinkable growth in their stock holdings, 401ks and retirement funds are growing, and every time a famed economist predicts a recession or the floor coming out the train just keeps moving forward. Remember all the dire predictions that the market would crash under Trump? Never happened. Remember Obama saying you couldn’t just “wave a magic wand” to bring back manufacturing jobs? Well, they’re coming back. And yes, Obama created jobs. Yes, Obama oversaw economic growth. But he did it after a recession. It’s a lot more difficult, historically, to keep the economy growing when there is no “slack” and near-full employment rates. And yet… that’s what Trump is doing. Unemployment rates are at 50-year lows, wages continue to rise and productivity is growing at the fastest pace in nine years. How many different metrics does Trump have to be “winning” for Democrats to just admit he has a strong economic record?
What the left is saying.
When President Obama took office, he was picking up a mess created by the Republican president that preceded him. The country was suffering from the worst economic crisis of most Americans’ lifetimes, and it was Obama who put the pieces back together and steadied the ship. We’re at a record streak of economic growth, the majority of which took place while Obama was in office. The low unemployment rates are just a continuation of the trends that started under Obama. Trump’s incredible “growth” and “added jobs” are actually lower than or on par with a lot of the growth rates that took place under Obama, who hit 4% GDP growth four times (Trump hasn’t done that once). There are dozens of charts and graphs to demonstrate this. Not only that, but Trump has also stymied his own success with trade wars and belligerent tweeting that has hurt farmers and repeatedly tanked the stock market he so desperately cares about. He’s also dynamited federal spending, surpassing $1 trillion in deficit spending and that’s projected to hit $1.9 trillion over the next decade — all adding to the national debt for the cause of giving rich people tax cuts.
It takes two to tango. There’s no point in arguing whether Obama or Trump are responsible for strong economic indicators because neither are — and our economic indicators are fundamentally broken. Obama deserves credit for the recovery act and absolutely deserves recognition for what he inherited. Our country was bleeding hundreds of thousands of jobs a month and unemployment rates were at 10% when he took over. But that’s also what gave Obama so much room to grow the economy — it was in crisis when he got it. So comparing Obama’s job numbers or rates of GDP growth is a bit of a false dichotomy. It’s also true that the recovery was slow, arduous and required a lot of federal spending. Trump was gifted a stable and healthy economic picture and poured gasoline on it with tax and regulatory cuts. He owes Obama some credit for not handing over the same mess Obama got and he also deserves credit for not fulfilling all the calamitous predictions economists like Paul Krugman made about what would happen when he became president. Trump has overseen historically good unemployment rates, strong GDP growth and spurts of wage growth. That being said, deregulatory action has often has very bad long-term outcomes — so maybe we should wait and see how things continue to play out. Trump also seriously overplayed his hand by pretending this economy is the best of all-time or even close — it isn’t.
And yet, all of this totally ignores the fact that GDP growth, unemployment rates and stock market gains are fundamentally dumb ways to measure today’s economy. Unemployment rates are at a 50-year low, but half the country is working low-wage jobs that pay $18,000 a year or less. 53 million Americans in low-wage jobs are in their prime working age. Yes, GDP rates are strong. But millennials are being crushed under the weight of student loan debt and can’t buy houses or raise families. Yes, your 401k is growing, but 21% of Americans don’t save any of their annual income. Close to 8 million people work two jobs to make ends meet. 15 million households and an estimated 40 million Americans are “food insecure” or don’t know where their next meal will come from. 45 million Americans rely on SNAP to eat. In the meantime, 50% of equities are owned by just the top 1% of Americans.
All this is to say: Obama and Trump both deserve credit for the strong economic indicators we have today. Those economic indicators do little to tell the story of how Americans are actually doing, and by any reasonable measure — in my opinion — they’re dated and archaic. They do nothing to tell us about the rising cost of health insurance or growing debts people own, which are the biggest economic issues of our time. I’d much rather know how many people couldn’t pay a medical bill this month or had to borrow money to eat food instead of how strong Q3 was for Amazon.
Your questions, answered.
Note: You can ask questions too. All you have to do is reply to this email and write in. I’ll get to it as soon as I can.
Q: I know it’s not political, but I’m surprised that you haven’t really covered the coronavirus at all. What do you make of it? Any thoughts on how it will impact the U.S.?
- Eric, Norfolk, VA
Tangle: I’ve tried to avoid the hysteria around this story for weeks, but things are becoming a bit too tangible to ignore. First, the quick overview in case you haven’t been following: The coronavirus, also called Covid-19, is a type of coronavirus that has never been encountered in humans before. Like similar viruses, it originated in animals, spread to humans, and is now being transferred in human-to-human contact. Some experts believe the virus came from seafood that was sold in the center of the Chinese city Wuhan.
Similar virus epidemics have happened in China before. The Sars virus spread to 37 countries in 2002, set off a global panic and killed more than 750 people. The coronavirus has now become more deadly and has infected far more people. Yesterday, a neurologist who ran the Wuchang Hospital in Wuhan, China died after contracting the virus, marking one of the most high-profile deaths yet. Eight frontline workers have died from the virus and more than 3,000 have been infected. 542 passengers aboard The Diamond Princess cruise ship in Japan, which has been quarantined, have been infected. 14 of those were Americans who flew back to the U.S. 1,868 people in mainland China have died already and 72,436 cases have been confirmed.
All this has had a global impact politically and economically. Apple gave a rare warning to investors on Monday that it expected to fall short on revenue expectations due to production issues caused by the virus. Their stock, one of the largest in the world, fell early this morning as a result. Millions of Chinese residents are on lockdown and many factories have been closed across the country, which has impacted global output on production as China provides the world’s largest labor force. Travel has also been inhibited as airports across China are being shut down or are running strict vetting to check who is coming and going.
Americans have, indeed, felt the impact. Many on the right have been clamoring for President Trump to close down all travel from China or countries where the virus has spread. Sen. Tom Cotton sparked a controversy this week when he floated a conspiracy theory that the virus was related to a research center in Wuhan, China — suggesting it was manmade. While Cotton accepted there was no evidence for his idea, he’s repeatedly insisted we needed to figure out its origin and referenced a Cellular Level Biosafety laboratory in Wuhan. “There’s absolutely nothing in the genome sequence of this virus that indicates the virus was engineered,” a professor of chemical biology at Rutgers University told The Washington Post. “The possibility this was a deliberately released bioweapon can be firmly excluded.”
As I’ve said before, I’m pretty torn on the coronavirus panic. On one hand, this entire thing is insane. Cities larger than New York are being essentially shut down in China. Cruise ships are being quarantined. The virus was swept under the rug by officials and is certainly worse than we initially thought. On the other hand, things like the flu still seem far more dangerous (on the numbers alone) and kill far more people annually than the coronavirus will. The threat, excitement and fear over this largely have to do with the unknown nature of it. Which I get. But there is still a part of me that feels it’s being a bit overblown.
Either way, I’m sure things could continue to develop in a way that makes me want to eat my words and delete this post from the internet. But it’s a situation I’m keeping an eye on — and definitely one that could further impact the U.S. economy and U.S.-China relations. I also know I have some readers from China and readers who are experts on China, so I’d be thrilled to hear your thoughts and include them in an upcoming newsletter!
CNN reporter Andrew Kaczynski re-surfaced this photo over the weekend. From left to right, that’s Rudy Giuliani, Donald Trump, Michael Bloomberg, Bill Clinton, Joe Torre and Billy Crystal.
A story that matters.
Specially trained officers from the border patrol are being sent to cities like Chicago, New York, San Francisco, Los Angeles, Atlanta and Boston to help supercharge arrest operations of undocumented immigrants. The agents, which essentially amount to the border patrol’s version of SWAT teams, are tactical units that will help ICE coordinate arrests and deportations from February through May. Included in the deployed agents are members of BORTAC, an “elite tactical unit” equipped with “additional gear such as stun grenades and enhanced Special Forces-type training, including sniper certification, the officers typically conduct high-risk operations targeting individuals who are known to be violent, many of them with extensive criminal records.” Immigrants rights activists say the deployment will result in increased fear amongst immigrant communities and emphasize how dangerous it is to send BORTAC into cities, where they are not trained to operate and have no experience. Trump administration officials say sanctuary cities have made it impossible for them to do their jobs and say the operation will “enhance the integrity of the immigration system, protect public safety, and strengthen our national security.” Click.
- 60%. The percentage of Republicans who say they rely on Fox News for their political news.
- 53%. The percentage of Democrats who say they rely on CNN for their political news.
- 29%. The percentage of voters who said the most important issue in 2020 is the economy, according to Gallup.
- 26%. The percentage of voters who said the most important issue in 2020 is health care, according to Gallup.
- 35,000. The number of jobs that the global bank HSBC plans to cut, shrinking its workforce from 235,000 employees to 200,000.
The latest Democratic rankings, according to an NPR/Marist/NewsHour national poll:
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Have a nice day.
Yesterday, Jeff Bezos committed $10 billion to help study and fight climate change. He’s calling it the Bezos Earth Fund. I’m typically quite skeptical of billionaire donations or charitable actions, but Bezos is worth about $130 billion and this is a considerable chunk of his net worth. It’s also for a good cause: the money will be divvied out in grants to help scientists and activists study and raise awareness about the issues facing our planet. Even if you’re a “climate change skeptic” when it comes to the cause of our changing environment, there’s no argument to be made about the fact our environment is changing rapidly — and critical parts of the earth are being depleted or destroyed. Any effort to preserve this planet for future generations is good news in my book. Click.