Week in Review

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Week in Review

08/29/2020

For the week 8/24-8/28

[Posted 10:00 PM ET, Friday]

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Edition 1,115

First off, another week, another weather disaster to write of.  Our thoughts and prayers go out to the people of Louisiana and East Texas, death toll rising, in the wake of Hurricane Laura, which cut a devastating path through the region.  At first, some breathed a sigh of relief the storm surge* from the historic Cat 4 storm wasn’t as bad as first feared, but winds of 130-150 mph across a broad area are more than capable of producing total devastation and the folks in Lake Charles and elsewhere will be recovering for a long, long time.

*Some experts say the 15-20 foot storm surge did indeed materialize, just not where everyone was looking for it (Cameron).

It was also a week for the Republicans to take center stage with their convention and now after we have heard from both parties, it’s game on.  We’ve also learned how much Americans hate each other.  The Divider-in-Chief has accomplished his goal, and as commentator Van Jones said last night, we are “spiraling away from each other.”

It’s scary, sad and sickening.

One side needs to speak up more against the rioting and looting, while the other side only looks to exploit rather than heal racial divisions.

The week started with President Trump appearing down in Charlotte following the roll call where he was formally nominated and he went on for about 50 minutes on how mail-in balloting will lead to the “most rigged election in history.”  He insists on deliberately sowing fear and delegitimizing the vote.

“The only way they can take this election away from us is if this is a rigged election,” the president said.

He spoke of states’ responses to Covid-19 in starkly partisan terms, casting lockdowns and other steps recommended by public health officials as attempts to influence voting in November.

“What they’re doing is using Covid to steal an election,” Trump said.  “They’re using Covid to defraud the American people – all of our people – of a fair and free election.”

It was a small in-person proceeding in Charlotte, yet already four have tested positive.

Over the weekend, Trump accused members of the “deep state” at the Food and Drug Administration, without providing evidence, of working to slow testing of Covid-19 vaccines until after the election.

In a Twitter post, Trump said the deep state “or whoever” at the FDA was making it very difficult for drug companies to enroll people in clinical trials to test vaccines and therapies for the novel coronavirus.

“Obviously, they are hoping to delay the answer until after November 3rd.  Must focus on speed, and saving lives!” Trump wrote, tagging FDA Commissioner Stephen Hahn in the tweet.

So then the next day, the FDA issued an emergency waiver to authorize the use of a blood-plasma treatment with no clear evidence it works.  Several clinical trials are examining the use of so-called convalescent plasma for Covid-19, but none have been completed and results aren’t expected for at least several more weeks.

Yet there was Stephen Hahn, standing alongside the president Sunday afternoon, touting how the treatment could reduce deaths by as much as 35%, which just wasn’t true, and wouldn’t you know, Hahn spent the rest of the week  walking it back.

It seems there is little doubt the president’s “October Surprise” is release of a vaccine to buoy his chances on Nov. 3.  The FDA and other top government scientists maintain only science and data will be taken into account when deciding if a vaccine is accepted, but look what happened Sunday.

So it was on to the RNC’s largely virtual convention and on Monday, Mark and Patricia McCloskey, who recently drew wide attention for brandishing firearms at peaceful Black Lives Matter protesters in their St. Louis neighborhood, spoke from their home and turned to barely veiled racial rhetoric.

“Your family will not be safe in the radical Democrats’ America,” warning that Joe Biden wanted to “abolish the suburbs.”

Kimberly Guilfoyle then appeared on the screen, and as the New York Times’ David Brooks put it, the former Fox News host and current campaign fund-raiser and girlfriend of Donald Trump Jr. “seemed like a bellowing lunatic.”

“Rioters must not be allowed to destroy our cities,” she shouted at us, her ample breasts heaving like a storm surge across the land.  “They want to destroy this country and everything we hold dear.  They want to steal your liberty, your freedom. They want to control what you see and think and believe, so they can control how you live!  They want to enslave you to the weak, dependent, liberal victim ideology, to the point that you will not recognize this country or yourself!” 

Guilfoyle was screaming so loudly, I hid under the desk, afraid the television screen was about to explode. 

Thankfully, South Carolina Sen. Tim Scott wrapped things up the first night.  He had a hard message, but he’s all class.

Tuesday bored me to tears.

Wednesday, Vice President Mike Pence went to the birthplace of the “Star-Spangled Banner,” Fort McHenry, offering an unequivocal defense of police and his administration’s handling of racial unrest, even as turmoil continued to grip the nation; the NBA, for one, launching an unprecedented boycott of its playoff games that day because of the shooting of Jacob Blake in Kenosha, Wisconsin.

Pence depicted Trump as a bulwark against those threatening “law and order on the streets of this country,” praised Trump’s handling of the coronavirus, national security and the economy.  He accused Joe Biden of being weak and wrong throughout his political career, so much so that his election would pose an existential threat to America itself.

“The truth is: Our economic recovery is on the ballot.  Law and order are on the ballot,” Pence said. “The choice in this election is whether America remains America.”

Pence never mentioned Blake by name and dismissed claims that the nation’s law enforcement ranks were guilty of systemic racism.  He accused Biden of advocating “the very policies that are leading to violence in America’s cities.”

“The hard truth is you won’t be safe in Joe Biden’s America,” Pence said.

[Biden said: “Protesting brutality is a right and absolutely necessary.  But burning down communities is not protest, it’s needless violence, violence that endangers lives, violence that guts businesses and shutters businesses that serve the community. That’s wrong.”]

Pence also argued that Trump’s stewardship of the pandemic was under-appreciated, criticizing Biden for depicting the country as enduring a period of “darkness” as the coronavirus raged.  The Veep touted the U.S. testing program, distribution of personal protective equipment, and progress toward a vaccine to cure the coronavirus.

“Last week, Joe Biden said, ‘no miracle is coming,’” Pence said.  “What Joe doesn’t seem to understand is that America is a nation of miracles.”

“Our country needs a president who believes in America. Who believes in the boundless capacity of the American people to meet any challenge, defeat any foe, and defend the freedoms we all hold dear.”

Pence attacked Biden’s record, calling him a “career politician who presided over the slowest economic recovery since the Great Depression” and labelled him “nothing more than a Trojan horse for the radical left.”

“We stand at a crossroads, America,” he continued.  “President Trump set our nation on a path to freedom and opportunity from the very first day of this administration.  Joe Biden would set America on a path to socialism and decline.”

Thursday, in his acceptance speech, President Trump launched a direct attack on his Democratic rival, calling out Joe Biden’s name 41 times in a 70-minute diatribe, noting this is “the most important election in the history of our country.”

“At no point before have voters faced a clearer choice between two visions, two philosophies or two agendas…whether we save the American dream or whether we allow a socialist agenda to demolish our cherished destiny.”

“Joe Biden is weak. He takes his marching orders from liberal critics,” Trump declared to the assembled crowd of approximately 1,500 invited guests on the South Lawn at the White House…a crowd not socially distanced, 95% of them not wearing masks.

“Biden’s record is a shameful roll call of the most catastrophic betrayals and blunders in our lifetime,” Trump said.

He has been “the destroyer of America’s jobs, and if given the chance he will be the destroyer of America’s greatness.”

“No one will be safe in Biden’s America.  My administration will always stand with the men and women of law enforcement…We can never allow mob rule.”

Dan Balz / Washington Post

“(Trump’s) message of law and order and Republican warnings of a bleak future of chaos in the streets under a Biden presidency contrasts with the fact that the unrest this summer is happening on his watch and that while he has promised from Inauguration Day forward that he would stop it and ‘stop it right now,’ he hasn’t done so.”

Opinion…all sides…

Michael Goodwin / New York Post

“And on Day 4, there was no more Mr. Nice Guy!

“Republicans spent the better part of three nights in their convention presenting softer and gentler sides of President Trump, but the president gets the final word and he came out Thursday in a fighting mood.

“His acceptance speech detailed his successes and offered promises aplenty for a second term, but the emphasis and energy were committed to a scorched-earth attack on Joe Biden and the Democrats.  Trump threw so many punches at his opponent that, had it been a real heavyweight boxing match, the referee would have stopped it in the middle round out of mercy….

“After saying Biden had buckled to the demands of the socialists in his party, Trump asked: ‘If he can’t stand up to them, how is he going to stand up for you.’

“Many of the lines echoed Ronald Reagan, and the two men share key traits, perhaps the most important being a willingness to take on Washington from the inside without ever losing their outsider’s perspective.  If there was any doubt, Thursday night settled the question of whether four years in the White House have warmed Trump’s heart to the Beltway.

“No, no, a thousand times no.

“Instead, he detailed numerous examples of where he believed he was fighting the entire establishment to get things done for the American people, including standing up against China’s theft of jobs and intellectual property and stopping illegal immigration.  In his mind, he is often a lonely warrior.

“While Reagan’s folksy charm belied a core of steely conviction, Trump generally prefers to dispense with the niceties and get down to business.

“And make no mistake: Thursday’s speech was all business. He came not to debate Joe Biden, but to bury him.

“On the merits, it was an effective argument on every front, from the economy to foreign policy to law and order. The routine was for Trump to cite his own first-term accomplishments as more than Biden had done in his 47 years in Washington.

“The only question was whether the pounding was too brutal for those swing voters in the swing states the president is courting.

“Some are disaffected Trump supporters and some are undecideds, often because, polls show, they don’t approve of the president’s bull-in-a-china-shop conduct.

“The issue is so important that Ivanka Trump, in introducing her father, casually noted that his communications ‘are not to everyone’s tastes,’ and added that his tweets can feel ‘unfiltered.’  Of course, the acknowledgement was aimed at giving people permission to support the president despite their misgivings.

“Moreover, the campaign long ago learned that Trump will be Trump and made its bet that the public will put results over any qualms about style, taste and personality.

“And while the speech on the White House lawn had a rally feel about it, the attacks on Biden were substantive and policy-based.

“While Democrats want the election to be about the president’s handling of the virus, another key issue has emerged that could prove more decisive. The riots, looting and crime surges in the nation’s cities have become a political flashpoint.

“One reason is that nearly all the cities are run by Democratic mayors. Another is that Biden and the party didn’t say a single word about the destruction at their convention, instead embracing Black Lives Matter and treating the protesters as new-age heroes.

“Trump and the GOP have been jumping on the error ever since, and it became a major focus of the convention. The president cited it numerous times last night as another disqualifying action, or inaction, by his opponent.

“Already, the polls have started to reflect public unease with the chaos, and while Dems had hoped they could use it as a reason to turn the tide against the president, they seem to realize they made a serious miscalculation.

“Biden has spoken out twice in recent days about the violence, a clear sign that he sees the danger. Still, his words have been more pleading than the president’s, who is eager to send in federal troops if local governments and police can’t gain control of the streets.

“The spreading violence is scaring Americans everywhere, with the situation in Kenosha, Wis., perhaps more frightening than what’s been happening in Portland, Seattle and elsewhere….

“The issue is undercutting a key feature of the Dems’ plan.  They used their convention to portray Biden as empathetic, someone who feels the pains of others because he has suffered enormous personal tragedies.

“But Trump is trying to recast that quality as a weakness, saying that Biden is not tough enough to combat the current wave of lawlessness.

“In effect, Trump is asking: Who would you rather have on your side in a street fight – a tough puncher like Trump, or a guy like a Biden who feels the opponent’s pain?

“Before the conventions, Biden had a significant lead in most polls.

“It’s likely the race has tightened, but this is a heavyweight match with many more rounds to go.”

Editorial / USA TODAY

“Four years ago, at the Republican National Convention in Cleveland, Donald Trump portrayed an America beset by violence and economic ruin. After setting that stage, and in one of his most messianic moments, he declared that crime would end and that only he could deliver the nation from these ruinous calamities: ‘I alone can fix it.’

“In point of fact, over the past 3 ½ years, he has not so much delivered us from these things as he has delivered these things to us.

“When Trump spoke in 2016, the unemployment rate was under 5%. Today it is 10.2%. When he spoke in 2016, the nation had just been through an Ebola scare, which the Obama administration had handled with great skill and very little loss of life. Today, more than 180,000 Americans are dead from Covid-19, the highest toll of any nation and a number far higher than it would have been under more competent stewardship in Washington.  When he spoke in 2016, the crime rate was quite low. Today, it is still low.  But Trump is intent on using unrest in select cities to paint a picture of rampant lawlessness, asserting that ‘no one will be safe’ in Joe Biden’s America and that Democrats would ‘demolish’ the suburbs.

“As he took to the South Lawn platform Thursday night…to accept the Republican Party’s nomination for a second term, the most responsible words Trump could have uttered would have been: I’m sorry.

“Alas, no such luck.  Instead, Trump, inappropriately using the White House as backdrop for a political speech, and in front of a mostly maskless crowd that was not  socially distanced, delivered a sometimes listless, sometimes blistering account that could have been titled: I alone am still the only one who can fix it.

“As an exercise in logic, it is the equivalent of a quadruple axel, something like: You have to vote for me to solve the problems that I created or exacerbated….

“Trump has spent much of his first term claiming that the sun rises in the West and water flows uphill.  On Thursday, he even laughably claimed to have ‘done more for the African American community than any presidency since Abraham Lincoln.’  Never mind that his factually challenged 70-minute address was long on support for law enforcement and short on references to incidents of police brutality that triggered the recent protests.

“Even Trump seems to realize that Biden can’t be labeled as a wild-eyed leftist, so the president tried to make the case that the Democratic presidential nominee will be a puppet of progressives. Yet as progressive Democrats know well, Biden played a key role in some of the ill-conceived crime-fighting legislation of the ‘90s and supported the Iraq War.  His agenda, meanwhile, could hardly be called radical, though it has been drifting left in recent years.

“It’s most salient feature is a yearning for the world that existed before Trump tried to fix everything.”

Editorial / Wall Street Journal

“When Donald Trump won the Presidency four years ago, half of America gnashed its teeth or cried and even supporters who cheered weren’t sure what to expect. Four years later our verdict is that he has been better on policy than we feared but worse on personal behavior than we hoped. Whether Americans re-elect him depends on how they assess that political balance sheet.

“We realize that even considering the Trump Presidency in these conventional terms is offensive to some readers. Don’t we get that he’s a would-be authoritarian, a Russian plant, or at least so deeply flawed as a human being that he can’t be trusted with power?  Yet our democracy survives, and the Constitution’s checks and balances are intact.  Americans who heard him ask for a second term Thursday night were trying to make sense of what has been a raucous and disruptive Presidency.

***

“This week’s virtual GOP convention has spent hours educating voters about Trump Administration successes, and many are real, starting with the pre-Covid-19 economy that we examined this week.  The political irony is that this success was due to Mr. Trump’s adoption of conventional GOP economics, not his trade or immigration agenda.

“The President contracted out tax reform to Congress, especially Paul Ryan in the House and Pat Toomey in the Senate, and they delivered.  Mr. Trump also hired a cast of deregulators who liberated the economy from burdens on energy and more. The economy kicked into higher gear, and the resulting tight labor market produced strong wage gains for lower-skilled workers left behind by the Obama-Biden years.  Note that this happened without the income redistribution schemes favored on the left and increasingly the right.

“Mr. Trump’s tariff onslaught in 2018 hurt what was a boom in new manufacturing jobs as supply chains were upset, input costs rose, and uncertainty increased.  But he has avoided the full-scale trade war we feared. His battles with China achieved less than advertised with tariffs, but more on Huawei and attention to Chinese cyber and IP theft.

“Mr. Trump is also the first president since Ronald Reagan to try to rein in the administrative state.  This can seem like an abstraction but it has real consequences in people’s lives.  Betsy Devos’ repeal of Joe Biden’s ‘guidance’ for handling sexual assault cases on campuses will spare many young people from unfair ruin. The repeal of the Waters of the U.S. rule will spare farmers and property owners from bureaucratic harassment.

“These policies are more likely to be sustained by the more than 200 conservative judges Mr. Trump has appointed.  These judges are more attentive to the abuses of the regulatory state, harm to the separation of powers, and limits on religious liberty. The latter explains this enduring support for Mr. Trump from evangelicals and church-going Catholics.

“Mr. Trump failed to repeal ObamaCare and has now defaulted to promoting drug price controls that would limit the development of new cures. He also failed on what could have been a landmark immigration reform, trading some legislation for more border security.  His televised naturalization service this week clashes with his often harsh limits on even legal immigration.

“Foreign policy was one of our biggest fears, and his record is mixed. His disdain for convention led him to useful decisions that no other GOP President would have made – withdrawing from the Potemkin Paris climate accord and Iran nuclear deal, and moving the U.S. Embassy to Jerusalem.  That latter two have contributed to a breakthrough in Arab-Israeli relations that eluded the last five Presidents.

“Yet his bullying and impulsiveness have needlessly soured relations with allies, especially Germany, and raised doubts about U.S. commitments.  Most offensive is his personal courtship of dictators, such as Kim Jong Un, Vladimir Putin, Turkey’s President Recep Tayyip Erdogan, and for a while, Xi Jinping.  He seems to think he can charm these hard men, and he has little to show for his pursuit.

***

“Which bring us to character.  Americans knew when they voted for Trump that he wouldn’t adhere to convention, but they also hoped his manners would rise to the respect due the office.  They too often haven’t.  He is needlessly polarizing, luxuriates in petty feuds, and trashes aides who served him well as they walk out the door.  He seems not to care if what he says is true, which has squandered his ability to persuade in a crisis.

“He often hurts himself by crashing through proper norms as with his near-invitation of the Taliban to Camp David and his threat to withhold aid if Ukraine didn’t investigate Joe Biden.  Both were stopped by advisers, but the latter got him impeached.

“His narcissism is his own worst enemy, which the public has seen to its worst effect in the pandemic.  Mr. Trump brawled with governors and the press and bragged relentlessly about his success when Americans wanted candid realism.  His Administration’s anti-Covid record is better than Mr. Trump has made it sound….

“Before Election Day in 2016, we wrote that the biggest gamble of a Trump Presidency wasn’t the fantasy that he was a Mussolini from Manhattan.  It was that he’d face a hostile press and bureaucracy that his inexperience and erratic management would be unable to navigate.  So it has often been, and in 2018 the resulting tumult cost Republicans control of the House.

“Americans now know Mr. Trump isn’t going to change, but then he isn’t running only against himself.  He has a chance to win another four years if voters conclude that his disruption is less risky than the Biden-Sanders Democratic agenda.”

As the week comes to a close, here’s the bottom line.  The post-convention polls should show Trump with a bigger bounce than Biden.  The race is a total toss-up.  It’s about turnout.

Joe Biden made a big mistake this week when he floated the idea of shutting down the economy over the coronavirus should his medical experts recommend it, which no one wants or will agree to.  He, and Kamala, also must speak out more forcefully against the violence in the streets.

But this is going to be the longest 67 days of our lives.  Today’s story could be history by tomorrow morning.  Each day will truly bring something new.  The real campaign has begun.

Covid-19 death tolls (as of tonight)….

World…840,661
USA…185,901
Brazil…119,594
Mexico…63,146
India…62,713
UK…41,486
Italy…35,472
France…30,596
Spain…29,011
Peru…28,471
Iran…21,249

Source: worldometers.info

U.S. daily death tolls…Sun. 430; Mon. 510; Tues. 1,291; Wed. 1,289; Thurs. 1,143; Fri. 1,105

South Dakota, North Dakota, Iowa, Minnesota, and Kansas were among those states hitting new highs in cases this week, some of it directly related to the recent Sturgis Motorcycle Rally.

So one wonders what we’ll see from the president’s South Lawn shindig Thursday, as well as from today’s March on Washington.

And with America’s colleges opening up, there have already been a reported 8,700+ cases on campus in 36 states that we know of thus far.

In my now regular look at President Trump’s claim that countries that have received credit for the great job they did in suppressing the virus, but are now spiking, using Wednesdays for comparison, this week the euro six (Germany, France, Italy, Spain, the UK and Belgium, population 336.3 million) had a combined 13,221 cases and 83 deaths vs. the United States’ (330 million) 44,637 and 1,289.

This was week four of my little exercise. Week one saw 55,148 cases and 1,319 deaths for the U.S. and 7,281 and 100 for the euro six.

Again, yes, Europe is worried about their new spike, while on the case #s front, the U.S. has indeed made some progress, but there is still no comparison whatsoever.  What will be interesting is to see how these figures play out come December.  By then someone might have a vaccine, but how widely available will it be and how many will take it?

Covid Bytes

--France registered its highest number of cases since March 31 on Thursday, 6,111, and then exceeded that with 7,379 today, and now wearing a face-mask in public has become mandatory across Paris and several surrounding areas.  The number of “red zones” where the virus is in active circulation has risen from two to 21. 

French Prime Minister Jean Castex said he wanted to avoid another general lockdown, but that the coronavirus was “gaining ground” across France, and that if the government did not act fast infection growth could become “exponential.”

Despite the sharp rise in cases, however, the daily death toll has remained low.

--Italy reported its highest number of cases today, 1,462, since May 2, and this comes as Italians, especially younger ones, return from holidays at home and abroad.

--German Chancellor Angela Merkel started her annual summer address with a personal appeal to Germans, warning them that the situation will get tougher as the summer draws to a close.

“There are indications that things will become more difficult in coming months,” she said.  “It’s serious, unchanged serious.  Continue to take it seriously.”

Germany has been running at a daily infection rate that is the highest since late April.

--I detail Lebanon’s many issues down below, but on the Covid front, caretaker Prime Minister Hassan Diab said on Wednesday that his country was at risk of losing control over the outbreak after a rise in the number of cases following the explosion at the port of Beirut on Aug. 4. Cases doubled in the two weeks following the blast as infections spread in hospitals where victims were being treated.

Lebanon registered a record number of deaths on Tuesday, 12, and Thursday reported a record number of cases, 689 (676 today).  Aug. 4 the total was 209.

--South Korea urged businesses on Thursday to have employees work from home after reporting the highest daily number of coronavirus cases since March.  The country reported 441 new cases as of Wednesday, the Korea Centers for Disease Control and Prevention reported.

However, South Korea, population around 52 million, has recorded just 316 deaths.

--Ukraine hit new highs in cases and deaths today.

--On Thursday, the Trump administration unveiled a $750 million deal to buy 150 million rapid Covid-19 tests from Abbott Laboratories, a move that would substantially expand the nation’s capacity for rapid testing.

The Food and Drug Administration on Wednesday granted emergency-use authorization to the company for a $5 rapid-response Covid-19 antigen test that is roughly the size of a credit card. The test could be administered in a doctor’s or school nurse’s office and uses technology similar to home pregnancy tests.  It returns results in about 15 minutes.

But today, Dr. Michael Osterholm, the noted infectious disease expert out of the University of Minnesota, basically called the Abbott test ineffective, given its track record in diagnosing influenza…meaning the test could miss a ton of people who are indeed infected with Covid.

--This news came after the Centers for Disease Control and Prevention quietly modified its coronavirus testing guidelines this week to exclude people who do not have symptoms of Covid-19 – even if they have been recently exposed to the virus.

Many were furious after the new guidelines were released.  “This is potentially dangerous,” said Dr. Krutika Kuppalli, an infectious disease physician in Palo Alto, Calif., told the New York Times.  Restricting testing to only people with obvious symptoms of Covid-19 means “you’re not looking for a lot of people who are potential spreaders of diseases,” she added.  “I feel like this is going to make things worse.”

50% of transmissions are caused by people who are asymptomatic. 

“I think it’s bizarre,” said Daniel Larremore, a mathematician and infectious diseases modeler at the University of Colorado Boulder.  “Any move right now to reduce levels of testing by changing guidelines is a step in the wrong direction.”

Previously, the CDC explicitly stated that “testing is recommended for all close contacts” of people infected with the coronavirus, regardless of symptoms.

It was clear the CDC buckled under pressure from the Trump administration as it desperately seeks to lower the case tally ahead of the election.

By week’s end, the CDC was walking it back.

--Dr. Anthony Fauci warned against rushing out a Covid-19 vaccine before it has been proven to be safe and effective.  In an interview with Reuters, Fauci – head of the National Institute of Allergy and Infectious Diseases – warned rushing out an untested vaccine could damage other trials.

“The one thing that you would not want to see with a vaccine is getting an EUA (emergency use authorization) before you have a signal of efficacy.  One of the potential dangers if you prematurely let a vaccine out is that it would make it difficult, if not impossible, for the other vaccines to enroll people in their trial.”

--Two European patients are confirmed to have been re-infected with Covid-19, raising concerns about people’s immunity to the coronavirus. The cases, in Belgium and the Netherlands, follow a report this week by researchers in Hong Kong about a man there who had contracted a different strain of the virus four and a half months after being declared recovered – the first such second infection to be documented.

Of course this raises concerns about the efficacy of potential vaccines against the virus.

Racism in America

It was another searing week across the land, as alluded to above.  Reacting to the video of Jacob Blake’s shooting by police in Kenosha, Wisconsin, Los Angeles Clippers basketball head coach Doc Rivers was asked to comment and he launched into an expanded tirade about the state of policing in America and the appropriation of fear by the Republican Party.

“What stands out to me is just watching the Republican convention and viewing this fear, right?  All you hear is Donald Trump and all of them talking about fear. We’re the ones getting killed.  We’re the ones getting shot. We’re the ones that are denied to live in certain communities. We’ve been hung, we’ve been shot. All you do is keep hearing about fear.  It’s amazing to me why we keep loving this country and this country does not love us back.

“It’s really so sad.  I should just be a coach and it’s so haunting, reminded of my color.  It’s just really sad.  We’ve got to do better. We’ve got to demand better.  It’s funny, we protest and they send riot guards. They send people in riot outfits.  They go to Michigan with guns and they’re spitting on cops and nothing happens.  The training has to change in the police force. The unions have to be taken down in the police force.  My dad was a cop. I believe in good cops. We’re not trying to defund the police and take all their money away. We’re trying to get them to protect us, just like they protect everybody else.

“If you watch that video, you don’t need to be black to be outraged.  You need to be American and outraged.  How dare the Republicans talk about fear?  We’re the ones that need to be scared.  We’re the ones having to talk to every Black child.  What white father has to give his son a talk about being careful if you get pulled over?  It’s just ridiculous.

“Breonna Taylor, no charges, nothing.  All we’re asking is you live up to the constitution.  That’s all we’re asking, for everybody.”

L.A. Lakers star LeBron James and the ongoing calls for reform:

“It’s what we’ve been talking about.  And it’s what we’re gonna continue to talk about.  Having two boys of my own, and me being an African American in America, and to see what continues to happen with the police brutality towards my kind, continue to see what goes on with the injustice – it’s very troubling. It’s very troubling.

“We play a beautiful game which brings so many families together, and people being able to rejoice and enjoy it,” James added.  “But at the same time, never losing track of what’s really going on in our world, especially here in America.  My prayers go to their family, and hopefully we can have some change.”

Trump World / RNC

--David Ignatius / Washington Post

“Secretary of State Mike Pompeo’s speech to the Republican National Convention was short but revealing: He touted Trump’s ‘bold initiatives in nearly every corner of the world.’  But he couldn’t cite many concrete achievements produced by Trump’s flashy, disruptive personal diplomacy.

“Pompeo’s address to the GOP faithful disdained the traditional dictums about not mixing politics and foreign policy.  And his embrace of the president came from the distinctly unconventional setting of Jerusalem, a transcendent symbol for fellow evangelical Christians in the Republican base.

“The Jerusalem location for Pompeo’s convention address was perhaps its most striking aspect, and an example of his daily interweaving of politics, foreign policy and religion.  He may be the most overtly religious secretary of state in our modern history.  His wife, Susan, said last month in introducing him to an Iowa audience that although he’s seen as ‘calculating and strategic,’ his life has been entirely shaped by ‘the hand of God.’

“Pompeo has been dinged for addressing the convention at all, but this criticism has been overblown: Secretaries of state often contribute to presidential reelection politics. In any event, his short speech was hardly a full-throated political roar. He was in Jerusalem on a Middle East tour that, in addition to Israel, included Bahrain and Oman, the two Arab nations most likely to follow the United Arab Emirates in normalizing relations with the Jewish state. Any progress on that front – or in drawing Saudi Arabia toward a symbolic handshake – would be the biggest political gift Pompeo could deliver to the president.

“Even by Pompeo’s account, however, the record of presidential success so far is thin.  Pompeo invoked China, for example, but in the absence of a trade deal or any of the other gains Trump had wanted in 2017, his list of accomplishments was largely negative.  Trump ‘has pulled back the curtain on the predatory aggression of the Chinese Communist Party’ by blaming China for the coronavirus, jailing Chinese spies and toughening the U.S. stance on trade, Pompeo said.

“On North Korea, ballyhooed by Trump two years ago as a breakthrough, Pompeo reported only a modest achievement: ‘The president has lowered the temperature and, against all odds, got the North Korea leadership to the table.’  He also credited Trump for halting Pyongyang’s nuclear and long-range missile tests. He made no mention of the 2018 Singapore summit’s promise of denuclearization.

“Pompeo ignored the fallout from Trump’s erratic diplomacy.  ‘Because of President Trump, NATO is stronger,’ he contended.  NATO allies may be paying more for collective defense, which is a plus, but many analysts see a sharp deterioration in trust and confidence among key NATO allies.

“Pompeo wisely didn’t attempt to parse the relationship with Russia, which continues to assault U.S. interests around the world – even as Trump advertises his desire for better relations and describes evidence of Russian intelligence assaults as a ‘hoax.’

“The Middle East was the final example of progress that Pompeo cited, but here, again, the record is problematic.  Pompeo touted the drone attacks that killed Qasem Soleimani, head of the Islamic Revolutionary Guard Corps’ elite Quds Force, and Abu Bakr al-Baghdadi, the leader of the Islamic State.  But Trump’s ‘maximum pressure’ campaign against Iran hasn’t brought Tehran to the negotiating table, as Trump predicted it would. And he has abandoned the Syrian Kurdish forces that were the United States’ key ally against the Islamic State.

“Pompeo mentioned one genuine Middle East breakthrough: the normalization of relations between the United Arab Emirates and Israel.  But that’s hardly the Palestinian-Israeli peace ‘deal of the century’ that Trump once imagined.  Indeed, a lasting settlement of the Palestinian issue seems further away than ever.

“Pompeo is probably the most talented – and certainly the most politically ambitious – member of Trump’s Cabinet.  The Pompeo paradox is that he often seems to know what’s right, even if he ends up doing the opposite.  According to John Bolton, the former national security adviser, Pompeo would often grumble privately that the president’s ideas were mistaken but trim his sails to avoid offending the boss. When Trump gave an order, Pompeo’s default response was: ‘‘Yes, sir, roger that,’’ Bolton wrote in his memoir, ‘The Room Where It Happened.’

“One intriguing question after Pompeo’s brief convention speech is whether he will be along for the ride in a second term if Trump is reelected – knowing better now the limits of his ability to influence this president.

“And you couldn’t help wondering Tuesday night: Does Pompeo imagine addressing a future Republican convention as a presidential candidate himself?

“Trump’s foreign policy record is one of unfinished business.  On all the major issues – China, Russia, Iran, North Korea – the future policy options are a mystery.  Pompeo is a loyal acolyte.  But even he couldn’t find many successes to praise Tuesday night. Surely he suspects that he could do better.”

It does need to be said that Pompeo had told U.S. diplomats through an official cable that presidential appointees may not take part in any such partisan political activity.

According to the Office of Special Counsel, an independent federal agency which polices the 1939 Hatch Act, the law limiting political activities of federal employees seeks to make sure federal programs are administered in a nonpartisan fashion, protect federal employees from political coercion and ensure they advance based on merit rather than political affiliation.

--The House, in special session, last Saturday voted 257-to-150 to provide $25 billion to the U.S. Postal Service and explicitly prohibit any operational changes amid widespread Democratic fears that the Trump administration is trying to disenfranchise millions of Americans casting mail ballots this November.

The vote was largely along party lines as Republicans accused Democrats of manufacturing “baseless conspiracy theories” about delays in postal deliveries to undermine President Trump’s reelection bid. The Republican Senate has no plans to act on the legislation, which the president would veto anyway.

Both the Senate and House called Postmaster General Louis DeJoy to testify on changes at the agency, DeJoy assuring his detractors that the Postal Service will deliver “the nation’s election mail fully and on time.”

DeJoy announced he was suspending cost-cutting operational changes before Election Day, said the agency will continue to prioritize ballots over other mail, as it has in past elections, and expressed support for the practice of voting by mail.

But there is no doubt the process is going to be a mess.  The Washington Post reported that more than 534,000 mail ballots were rejected during primaries across 23 states this year – nearly a quarter in key battlegrounds for the fall, not because of fraud but because of missed deliveries, inadvertent mistakes and uneven enforcement of the rules.

It is simply easier to make a mistake on a mail-in ballot than if you cast a ballot in person.  One common issue is your signature, most of whose change significantly over the years.  It’s easy to reject those, and you can’t blame the officials.  It’s that you forget how your signature looks like in the voter registration record so you can’t replicate it accurately.

We’re only two months from Election Day and the states must step up and bring in extra personnel to process the coming deluge.  And we also have the obvious issue of finding workers to man the polls, the vast majority of them elderly, many of whom will opt out due to the coronavirus.  After I graduated from school, I worked the polls a few times.  Young people, do the same. Step up.

--Fox News host Tucker Carlson stood by the vigilante teen accused of fatally shooting two people and injuring another during the protest in Kenosha, Wisconsin, Tuesday night.

Kyle Rittenhouse, 17, faces a first-degree intentional homicide charge and would be charged as an adult under Wisconsin law.

“We do know why it happened, though.  Kenosha devolved into anarchy because the authorities abandoned the people,” Carlson said.  “Those in charge, from the governor on down, refused to enforce the law. They’ve stood back and watched Kenosha burn. Are we really surprised that looting and arson accelerated to murder?”

Carlson aired graphic social media footage that appeared to portray the incident involving Rittenhouse.  He painted the teen as a victim who “tried to run from the mob,” adding that Rittenhouse’s actions may qualify as “self-defense.”

“How shocked are we that 17-year-olds with rifles decided they had to maintain order when no one else would?” Carlson said.

--The New York attorney general is investigating President Trump’s private business for allegedly misleading lenders by inflating the value of its assets, the AG’s office said Monday in a legal filing.

In the filing, signed by a deputy to Attorney General Letitia James, the attorney general’s office said it is investigating Trump’s use of “Statements of Financial Condition” – documents Trump sent to lenders, summarizing his assets and debts.

The filing asks a New York state judge to compel the Trump Organization to provide information it has been withholding from investigators – including a subpoena seeking an interview with the president’s son Eric.

The attorney general’s office said it began investigating after Trump’s former lawyer and “fixer,” Michael Cohen, told Congress in February 2019 that Trump had used these statements to inflate his net worth to lenders.

The filing said that Eric Trump had been scheduled to be interviewed in the investigation in late July, but abruptly canceled.  He is now refusing to be interviewed.

--President Trump’s older sister, Maryanne Trump Barry, a former federal judge, was secretly recorded by her niece, Mary Trump, who recently released a book denouncing the president, “Too Much and Never Enough: How My Family Created the World’s Most Dangerous Man.”  Mary Trump said Saturday she made the recordings in 2018 and 2019.

In one recording, Barry, 83, says she had heard a 2018 interview with her brother on Fox News in which he suggested that he would put her on the border to oversee cases of immigrant children separated from their parents.

“His base, I mean my God, if you were a religious person, you want to help people.  Not do this,” Barry says.

At another point she says: “His goddamned tweet and lying, oh my God.”  She adds: “I’m talking too freely, but you know. The change of stories.  The lack of preparation.  The lying. Holy shit.”

Trump said in a statement: “Every day it’s something else, who cares.  I miss my brother, and I’ll continue to work hard for the American people.  Not everyone agrees, but the results are obvious.  Our country will soon be stronger than ever before.”

--So who is running to replace Donald Trump as the head of the Republican ticket in 2024?  We saw ‘em all this week…Donald Trump Jr., Ivanka, Nikki Haley, Mike Pompeo, Kristi Noem, Tim Scott (he won’t run…he shouldn’t…stay a senator and become the new conscience of the institution…) and…let’s see, who am I missing?  Oh yeah, Mike Pence…who is already saying, ‘Don’t forget about me!’

The Don Jr. / Ivanka dynamic is fascinating.  I’ve written on all the stories between these two.  Dad obviously wants Ivanka.  The ‘base’ (aka Fox News) wants Don Jr.  Pompeo and Haley can only shake their heads in disgust (and there are big issues between these two as well).

--There was a pathetic moment on Jake Tapper’s Sunday show when acting secretary of Homeland Security, Chad Wolf, refused to tell Jake if he had brought up Russia to Trump re election interference, even though Wolf knows it’s taking place; Wolf proving the point that no one is allowed to bring up the topic of Russia with the president.

--Trump tweets:

“We will NOT stand for looting, arson, violence, and lawlessness on American streets.  My team just got off the phone with Governor Evers who agreed to accept federal assistance (Portland should do the same!)…

“…TODAY, I will be sending federal law enforcement and the National Guard to Kenosha, WI to restore LAW and ORDER!”

“Success: Since the National Guard moved into Kenosha, Wisconsin, two days ago, there has been NO FURTHER VIOLENCE, not even a small problem.  When legally asked to help by local authorities, the Federal Government will act and quickly succeed.  Are you listening Portland?”

“Why would Suburban Women vote for Biden and the Democrats when Democrat run cities are now rampant with crime (and they aren’t asking the Federal Government for help) which could easily spread to the suburbs, and they will reconstitute, on steroids, their low income suburbs plan!”

“Just In: Chinese State Media and Leaders of CHINA want Biden to win ‘the U.S. Election’.  If this happened (which it won’t), China would own our Country, and our Record Setting Stock Markets would literally CRASH!”

“Despite biggest ever job gains and a V shaped recovery, Joe Biden said, ‘I would shut it down,’ referring to our Country. He has no clue!”

“Representatives of the Post Office have repeatedly stated that they DO NOT NEED MONEY, and will not make changes.  This is all another HOAX by the Democrats to give 25 Billion unneeded dollars for political purposes, without talking about the Universal Mail-In Ballot Scam….

“….that they are trying to pull off in violation of everything that our Country stands for.  Vote NO to the Pelosi/Schumer money wasting HOAX which is taking place now. Then fight the $51 [Ed. sic] million unasked for Ballots.  Only ABSENTEE BALLOTS are acceptable!”

“So now the Democrats are using Mail Drop Boxes, which are a voter security disaster.  Among other things, they make it possible for a person to vote multiple times. Also, who controls them, are they placed in Republican or Democrat areas? They are not Covid sanitized.  A big fraud!”

[Ed. Twitter then said the above “violated the Twitter Rules about civic and election integrity.”]

“Actually, I think I’m leading in the Polls! @FoxNews @OANN”

“Great Ratings & Reviews Last Night. Thank you!”

Wall Street and the Economy…Trade

The Federal Reserve on Thursday adopted a historic shift in its approach to interest-rate policy that places more emphasis on boosting employment and allows inflation to rise above the Fed’s longstanding 2% target during economic expansions, keeping rates lower for longer.

As in zero for years to come.  As in, yes, more fuel for the stock market, bubbles welcome, until the market decides they aren’t.

In a speech to the Fed’s annual conference in Jackson Hole, Wyoming, conducted virtually this year, Fed Chair Jerome Powell said, “Forty years ago, the biggest problem our economy faced was high and rising inflation.”  Now, however, Fed officials have become convinced that “a robust job market can be sustained without causing an outbreak of inflation,” he said.

The sweeping changes to the Fed’s “monetary policy framework” are rooted in an economy that has been growing more slowly in recent years and inflation that has remained stubbornly below the Fed’s 2% target despite an unemployment rate that fell to a 50-year low of 3.5% before the pandemic.

Under the new policy, the Fed will target inflation that averages 2% over time, meaning it will allow inflation to run “moderately over 2% for some time,” Powell said.

Powell said paltry inflation typically prompts very low interest rates, giving the Fed less room to cut rates if the economy turns south.

“Many find it counterintuitive that the Fed would want to push up inflation,” Powell said.  “However, inflation that is persistently too low can pose serious risks to the economy.”

By the Fed conveying that short-term rates will stay lower longer, it is hoping to spur more borrowing and economic activity.

It is expected that when the Fed meets in September, or perhaps November, literally days after the election, that it will formally vow to keep rates near zero until the economy returns to full employment and inflation reaches 2% over the long term, paving the way for above 2% yearly price increases for a period. Goldman Sachs is now forecasting the Fed will keep rates near zero until about 2025.

As for the economic data on the week in the U.S., housing numbers continued to impress with new-home sales in July rising to 901,000 annualized, far above expectations, though the June S&P CoreLogic Case-Shiller home price index was unchanged over May, with the 20-city benchmark up 3.5% year-over-year.

A reading on July durable goods was up a strong 11.2%, though 2.4% ex-transportation and 1.9% on the core capital goods component, which is still very solid.

July personal income was up a better than expected 0.4%, while consumption rose 1.9%, after June was revised upward to 6.2%.

The Chicago PMI for August came in at a less than forecast 51.2 (50 the dividing line between growth and contraction).

And a first revision of second-quarter GDP came in at -31.7%, with the personal consumption component down 34.1%.

That’s the rearview mirror look, and President Trump wants you to forget it all…as in he hasn’t mentioned the number once.

Nope, it’s all about the third quarter and it is going to come in like gangbusters, currently +28.9%, according to the Atlanta Fed’s GDPNow barometer.  The first official look at Q3 is released Oct. 29, right before Election Day, and this will be a big deal for the president.

By the way, this doesn’t necessarily mean we have a V-shaped recovery.  For that we need to see what happens in the fourth quarter and early next year.  The unemployment rate, for one, will remain stubbornly high, witness the latest figure on weekly jobless claims, again over one million (1,006,000).

Editorial / Wall Street Journal

“Mr. Biden and the economic left claim Mr. Trump inherited a long expansion, and nothing much changed.  But recall that Mr. Trump was able to win in 2016 in part by running against the ‘secular stagnation’ that liberals said was inevitable.  The Obama-Biden recovery was the slowest in decades, and by the second half of 2015 it was losing steam and came close to a recession in 2016.

“Mr. Trump promised to spur growth again, and his win immediately revived animal spirits….

“In its first two years, Mr. Trump pursued two major policy shifts.  Instead of raising taxes as Obama-Biden did, he cut them.  The 2017 Tax Cuts and Jobs Act passed by a GOP Congress restored global competitiveness to the U.S. corporate tax code, years after even European governments cut their marginal rates. Rationalizing taxation of overseas profits encouraged companies to repatriate foreign earnings to fund investment, increase wages, or return to shareholders for other uses.

“Tax reform also encouraged business investment by allowing immediate 100% expensing of capital spending.  The result of these measures was a capex surge, with job creation and productivity gains in its wake.

“The other track was deregulation. The Administration eased restrictions on new energy pipelines, opened new areas to exploration, and rationalized emissions rules in the energy industry. This spurred a boom in gas and oil production. America is now a net exporter of petroleum products, allowing Washington new freedom to advance American interests in the Middle East and elsewhere.

“The Trump Administration also freed banks of the more pointless elements of post-2008 regulation, such as investigations into racial discrimination in auto lending based solely on borrowers’ last names. And wouldn’t you know, the financial system still looks set to survive the Covid-19 shutdown.  Republicans killed another 16 Obama-era rules through the Congressional Review Act.

“These policies delivered what they promised, which was a burst of growth. From the end of 2017 through September 2018 the economy grew by more than 3%.

“Work also increased.  The unemployment rate fell to 3.5% by September 2019.  Many liberal economists had assumed the 4.7% unemployment of November 2016 was a floor.  More impressive, this rate declined even as the number of people working increased.  Labor participation among the prime working-age population increased to 83.1% as of January this year, a rate not seen since 2008.  Participation among working-age men exceeded 89% in early 2018 for the first time since 2010.

“Wage growth, adjusted for inflation, accelerated after years of stagnation.  The improvement was especially pronounced among low-skilled and minority workers left behind by the Obama economy.  Median weekly full-time earnings for blacks increased 19% in Mr. Trump’s first three years, to $806.  That followed a period of 11% growth during Obama’s seven post-recession years in office.

“The Obama-Biden policy mix of easy monetary policy, higher taxes and hyperregulation skewed economic gains toward highly educated workers in industries such as tech and finance at the expense of other workers; toward asset owners at the expense of labor income; and toward larger companies at the expense of smaller. These inequities began to unwind under the Trump Administration.

“Mr. Trump’s main policy mistake has been trade, which added costs by disrupting supply chains, raising tariffs and adding uncertainty. Tariffs on industrial inputs such as steel bogged down what could have been a bigger manufacturing boom.  He made Nafta marginally worse but didn’t blow it up. Economists differ on the costs of this trade friction, but a Federal Reserve study put it at about 1% off annual GDP.

“Mr. Trump deserves credit for challenging Chinese trade abuses and intellectual-property theft. But he has been less effective by refusing to build trade alliances, not least his withdrawal from the Trans-Pacific Partnership trade deal that excludes China.  His immigration restrictionism has also hurt an economy that needs more workers to grow.

***

“It’s easy to forget this record after the hell millions of Americans have suffered in recent months, and Democrats hope you do.  Never before has a government suddenly shut down an entire economy, and Mr. Trump shares the blame.  At least he soon reversed course and urged a reopening, while Mr. Biden still says he might lock the country down again.

“Amid the Covid nightmare, Mr. Trump has also gone along with Speaker Nancy Pelosi’s demands for Keynesian income supports for individuals to survive the shutdown. But income transfers are no more than a palliative, and the deficits and debt will hang over the economy for decades.

“The issue for the election is which candidate and party can best lead America to a sustained post-Covid expansion.  Both will rely too much on easy monetary policy. But Mr. Biden would return to the Obama-Biden policy mix, with a Bernie Sanders lurch left: Much higher taxes, much more regulation, trillions in more spending with perhaps a little less protectionism.

“Mr. Trump is no free-marketeer, but he’ll try to make his tax cuts permanent, block further regulation, and wouldn’t nationalize health care or the energy industry. He prefers faster growth to raise wages instead of income transfers or welfare. If voters look past the ravages of Covid-19, Mr. Trump has the better case.”

Meanwhile, we have the topic no one wants to address anymore….the exploding federal budget deficit and debt.

Robert Samuelson / Washington Post

“Joe Biden’s emotionally powerful acceptance speech at the Democratic convention stayed away from the details of policy for good reason.  His proposals, if adopted, would constitute the largest growth of government since 1965, when Congress created Medicare and Medicaid, federal health insurance for the aged and poor.

“Now Biden urges, among other things: tripling federal aid to K-12 schools in poor areas; making two years at a community college free; lowering the age of Medicare eligibility to 60 from the current 65; and launching a $2 trillion program (over a decade) to curtail global warming.

“Some of these are good ideas.  Some aren’t. But most are popular, especially among Biden’s progressive and liberal supporters, and they are not free.

“From a variety of sources – campaign releases, independent analyses, media stories and the Congressional Budget Office – I have constructed a rough estimate of what it would cost to cover all the new benefits.  The additional 10-year spending totals $7.74 trillion.   Here’s a breakdown:

1. More economic stimulus: $2 trillion

2. Health care: $1.5 trillion

3. Climate change: $2 trillion

4. K-12 schools: $850 billion

5. Higher education: $750 billion

6. Housing: $640 billion

TOTAL: $7.74 trillion

“But wait, we’re not finished yet. To these costs ought to be added the projected budget deficits under existing policies. For the period 2021 to 2030, CBO figures that’s another $13 trillion. The grand total comes to $20.7 trillion (the $13 trillion, plus the $7.7 trillion).

“Even for Washington, this is a lot of money.  It brings to mind the quip commonly attributed to Republican Sen. Everett Dirksen of Illinois: ‘A billion here, a billion there, and pretty soon you’re talking about real money.’  Substitute ‘trillion’ for ‘billion,’ and that’s where we are today.

“The amounts are so stupendous that it’s hard for ordinary people to discuss them intelligently.  Still, let’s try.  Let’s concede that these estimates are very preliminary. They could be off by a few trillion dollars.  But the error could be an underestimate of debt, not an overestimate.

“Here’s an example: To his credit, Biden has proposed a tax increase to help close the budget deficits.  In an exhaustive analysis, the Committee for a Responsible Federal Budget, a nonpartisan watchdog group, projected that the tax increases would amount to $3.35 trillion to $3.67 trillion over the decade.  Most would fall on the top 1 percent, whose tax increases would average $300,000 annually.

“But I have already incorporated this extra tax revenue on the assumption that a Democratic-controlled Congress would do most of Biden’s bidding.  His larger purpose is clear: to buy peace among the so-called progressive and liberal wings of the party by endorsing many of their expensive proposals. The amounts are gigantic.  For example, the $8 trillion is roughly equivalent to half the existing federal debt held by the public.

“There must be some means of paying for these proposals.  There are three basic choices, or some combination of them: (1) borrow the money – that is, further run up deficits and debt; (2) cut other programs, from defense to farm subsidies to Social Security; (3) raise taxes.  It seems inevitable that some – or all – of these proposals will have to be scaled back.

“I’m not saying it’s impossible to finance all these programs.  But it is next to impossible.  It’s true that many economists, including some of the heavy hitters, have concluded that the United States (and some other countries) can borrow indefinitely as much as it wants by selling Treasury securities. The argument, simplified, is that low interest rates make it easier for the United States to repay its debts and, therefore, reassure lenders that it’s okay to lend.

“It’s politically expedient to borrow, because the costs are less visible than either higher taxes or spending cuts.  But this argument comes with a large historic caveat: In the 1970s and early 1980s, many economists argued that ‘a bit more inflation’ wouldn’t hurt the economy.  But repeated episodes of ‘a bit more inflation’ evolved into ‘a lot more inflation’ – by 1980, consumer prices were rising at about 13 percent a year – that clearly hurt the economy.  The same might be true of debt financing.  At some point, rising deficits might become unsustainable and trigger a backlash from lenders.  They cut their lending: interest rates rise.

“All that seems certain is that the size of government will grow, reflecting the aging of society and the clamor for more spending for ‘worthy’ causes.  Between 2020 and 2030.  Social Security and Medicare spending, as a share of the economy, is projected to grow by almost one third.  If Biden wins, he and his advisers will have plenty to keep them awake at night.”

---

Lastly, there were very mixed messages on trade this week.  Despite progress in the levels of China’s U.S. agricultural ‘buys,’ such as in purchases of American soybeans and corn, tensions continue to rise over issues like the South China Sea, which I get into below.

And then there was President Trump on Thursday saying that if he was re-elected, his administration would impose tariffs on any company that leaves the United States to create jobs elsewhere.  “We will impose tariffs on any company that leaves America to produce jobs overseas,” Trump said in his acceptance speech.  “We’ll make sure our companies and jobs stay in our country, as I’ve already been doing. Joe Biden’s agenda is Made in China. My agenda is Made in the USA.”

Last Sunday, in an interview with Fox News, Trump raised the possibility of decoupling the U.S. economy from China, saying “we don’t have to” do business with China, and then later saying: “Well it’s something that if they don’t treat us right I would certainly do that.”

Europe and Asia

August has traditionally been the month when Europe took off and vacationed, and while the coronavirus is severely limiting travel between nations, government agencies took this final week of the month off so no major data, but that will change in a big way next week with the release of all the PMI figures and other economic updates.

Brexit: Nothing new here, except the EU trade commissioner, Phil Hogan, was forced to step down for violating Ireland’s Covid protocols in attending a golf dinner and all sides are in agreement that his expertise, amidst the final negotiations between the UK and the EU, will be sorely missed.  As has been said this week, he was able to see Brexit on an Irish and British scale and now we could be headed to a hard border between North and South that might be catastrophic, i.e., it could reignite “The Troubles.”

Hogan’s resignation also impacts EU trade negotiations with the U.S. and China.

Turning to Asia…there was zero economic news out of China of real consequence this week, but we will be getting a slew of PMI data in the coming days, which is expected to show a further recovery from the severe lockdown of early in the year.

But in Japan, last week I told you that Prime Minister Shinzo Abe may have to resign “sooner than later” due to ongoing health issues and today, Friday, Abe did just that, ending his tenure as the country’s longest serving premier.

Abe said he had suffered a relapse of his chronic ulcerative colitis, which he has been battling for years, and the deterioration in his health had caused him to lose much of his energy and strength.

“I have been struggling with my illness and I have to get treatment.  Poor health should not lead to wrong political decisions. I should continuously produce results,” Abe said in a press conference.

He suggested that he would continue to support his replacement but did not want to comment on how his Liberal Democratic Party (LDP) would elect its next leader, or who this new leader might be.

“I thank the Japanese people for all your support,” he said.

The prime minister’s condition had forced him to end his first term as PM in 2007 after just a year in the job.  He returned to power in 2012, saying he could keep his condition in check with medicine that had become available, and he’s been in office ever since.

Until Abe, Japan had a history of political instability and constant changes in government. It is expected an election for the LDP leader, and by extension, the post of prime minister, will be held in the next few months.  You then might see a new general election next September after the new leader has some time to cement his credentials.  [Shigeru Ishiba, a hawkish 63-year-old former defense minister, is the early favorite.]

One of Abe’s big regrets is not being able to guide the nation through the Tokyo Olympics.  As for the economy during his tenure, growth was minimal, but he can at least claim that his policy of Abenomics ended decades of deflation.  But now the country is in the midst of a severe recession as the pandemic emptied shopping malls and crushed demand for cars and other exports.

Street Bytes

--Stocks capped the week with new highs on the S&P 500 and Nasdaq, continuing an amazing run, and the Dow Jones is finally in positive territory for the year as well.  The Federal Reserve’s new inflation approach provided another tailwind for stocks globally, while investors pin hopes on developments on the vaccine front for the pandemic.

The Dow Jones added 2.6% to 28653 and is now less than 1,000 points from its all-time high, while the S&P gained 3.3% and Nasdaq 3.4%, Nasdaq now up 30% on the year.

--U.S. Treasury Yields

6-mo. 0.10%  2-yr. 0.13%  10-yr. 0.72%  30-yr. 1.50%

The Fed’s reassurance on zero interest rates did lead to a rise in the longer end of the curve as more money flowed from bonds back into equities.

--Crude oil prices hit five-month highs on Tuesday as Hurricane Laura was intensifying in the Gulf of Mexico.  84% of Gulf oil production and 61% of natural-gas output was shut in because of the storm, with the Gulf home to about 17% of total U.S. crude oil production, according to the Energy Information Administration.  But the damage on this front proved to be minimal.

Oil stockpiles declined for a fifth consecutive week, with the EIA reporting Wednesday that inventories of crude oil fell by 4.7 million barrels to 507.8 million barrels in the week ended Aug. 21. Inventories were about 15% above the five-year average for this time of year.

--TikTok CEO Kevin Mayer quit after just two months in the job ahead of an impending ban by President Trump.

The Chinese-owned firm has been accused of being a threat to U.S. national security by the Trump administration.

Mayer had joined TikTok after leaving his role as Disney’s head of streaming services.

TikTok was given 90 days to be sold to an American firm or face a ban in the U.S.

“In recent weeks, as the political environment has sharply changed, I have done significant reflection on what the corporate structural changes will require, and what it means for the global role I signed up for,” Mayer said in a letter to employees.

“Against this backdrop, and as we expect to reach a resolution very soon, it is with a heavy heart that I wanted to let you all know that I have decided to leave the company,” Mayer added.

Both TikTok and Chinese messaging app WeChat face bans in the U.S. as tensions rise between Washington and Beijing over a wide range of national security concerns.

So Thursday, CNBC reported that TikTok may be announcing a sale of its U.S. operations in the next few days, the company in talks with Microsoft and Oracle.  Then Walmart announced it was joining Microsoft’s bid.

“We are confident that a Walmart and Microsoft partnership would meet both the expectations of U.S. TikTok users while satisfying the concerns of U.S. government regulators,” Walmart said in a statement.

--As I noted last week, related to the above, U.S. businesses are pushing back against the administration ban on Tencent Holdings’ WeChat app, with the American Chamber of Commerce in Shanghai warning of an “enormous negative impact” on U.S. companies with international businesses if the order, whose scope has yet to be revealed, was enacted too broadly.

The Chinese app is a ubiquitous commercial platform as well as a messaging app, and should the ban extend to China and U.S. companies and citizens there, almost nine in 10 companies surveyed by AmCham Shanghai said the ban would hurt operations in China by hindering their ability to effectively communicate with staff and local authorities.  More than half of those polled said it would result in a loss of competitiveness in the market, and 42% of the respondents say extending the WeChat ban to China would result in revenue loss.

Beyond interpersonal communication, consumers in China use the app to pay for goods and services, while companies including Starbucks and McDonald’s use WeChat as a key marketing tool and e-commerce platform.  There is also no good alternative in China to WeChat, should the platform be banned.

--Back to TikTok, in an investigative report, the Wall Street Journal reported that Facebook CEO Mark Zuckerberg has been raising alarm about the threat from Chinese tech companies, most specifically, TikTok, in meetings at the White House and with influential senators, such as Tom Cotton (R., Ark.)

“In a private dinner at the White House in late October, Mr. Zuckerberg made the case to President Trump that the rise of Chinese internet companies threatens American business and should be a bigger concern than reining in Facebook.”

Yet few tech companies have more to gain as Facebook from TikTok’s travails.

“TikTok has gained more than 100 million U.S. users and become the biggest threat to Facebook’s dominance of social media… In the first quarter of 2020, TikTok became the most downloaded app in a single quarter, according to research firm Sensor Tower. Facebook, by comparison, had 256 million monthly users in the U.S. and Canada as of the end of June.”

Last month in a blog post, CEO Kevin Mayer publicly accused Facebook of trying to unfairly quash competition.

“At TikTok, we welcome competition,” Mayer said.  “But let’s focus our energies on fair and open competition in service of our consumers, rather than maligning attacks by our competitor – namely Facebook – disguised as patriotism and designed to put an end to our very presence in the U.S.”

--Salesforce.com plans to cut about 1,000 jobs, a move intended to streamline its business even as it reports record quarterly revenue and forecast further gains.  The cuts are taking place in more than a dozen Salesforce locations around the world, including in Canada.

On Tuesday, while some employees were being told via videoconference that their positions would be eliminated, Salesforce reported that revenue climbed 29% to $5.15 billion.  The company also raised its forecast for annual sales, signaling the deepest effects of the pandemic-fueled recession may be behind the software maker, with revenue of about $5.25 billion in the October quarter.

“It’s humbling to have had one of the best quarters in Salesforce’s history against the backdrop of multiple crises seriously affecting our communities around the world,” CEO Marc Benioff said in a statement.

But Benioff said in a Bloomberg TV interview that the decision to cut jobs has always been difficult.

“There is no lifetime employment at Salesforce,” he said.  “Everything is performance-based. We are going to make job changes and shift and evolve as our markets shift and as our customers shift.”

--So speaking of Salesforce, it is going into the Dow Jones Industrial Average, along with Amgen and Honeywell International in the biggest reshuffling of the benchmark in seven years.

Exxon Mobil, Pfizer and Raytheon Technologies Corp. (the name after the merger with United Technologies) are being booted.

The actions were prompted when Apple Inc. – currently 12% of the 30-stock index – announced a stock split that reduced the sway of computer and software companies in the price-weighted average.

The changes mark a stunning fall from grace for Exxon, the world’s biggest company as recently as 2011,* whose ejection reflects the steady decline of commodity companies in the U.S. economy.  They represent an equally significant embrace of tech firms, whose giant rallies have caused the Dow to trail other indexes this year.

*Exxon was worth $525 billion in 2007 and more than $450bn as recently as 2014.  But the stock has fallen in four of six years before 2020 and is down another 40% since January. It’s market cap is now down to about $170 billion.

Amgen is among the world’s biggest biotech companies with a market value of about $150 billion.

Honeywell is returning to the average after being ousted 12 years ago to make way for Bank of America and Chevron.

Seven years ago, Visa Inc., Goldman Sachs Group and Nike Inc. displaced Bank of America, Hewlett-Packard and Alcoa.

--American Airlines said on Tuesday its workforce will shrink by 40,000, including 19,000 involuntary cuts, in October as the pandemic continues to weigh on air travel…unless the government extends aid for airline employee payrolls. 

Airlines received $25 billion in government stimulus funds in March meant to cover payrolls and protect jobs through September.  As the money runs out without a travel recovery in sight,* airlines and unions have lobbied Washington for another $25 billion, but talks have stalled as Congress has struggled to reach agreement on a broader coronavirus assistance package.

American had 140,000 employees before the pandemic. The planned job cuts comprise 17,500 furloughs of union workers – including 1,600 pilots and 8,100 flight attendants – and 1,500 management positions.  American now plans to fly less than 50% of its normal schedule in the fourth quarter, with international flying reduced to only a quarter of 2019 levels.

Among other large U.S. carriers, United Airlines has sent notices of potential furloughs to 36,000 employees, while Southwest has said it hopes to avoid involuntary cuts this year.  Delta announced on Monday it would furlough nearly 2,000 pilots but has said the numbers could be reduced if they agree to a cut in minimum pay.

Thursday, United specified it will be cutting 2,850 pilots if the government doesn’t extend the aid package covering employee payrolls for another six months.

Airlines have argued that the industry is essential to a quick economic recovery.

*For the past 30 days, TSA checkpoint figures are still just 25%-32% of 2019’s levels on average.

--Qantas Airways Ltd. announced plans to cut up to 2,500 more jobs by outsourcing its Australian ground handling operations to lower costs as it braces for a $7.17 billion revenue hit due to the pandemic this financial year.

The job cuts flagged on Tuesday are on top of 6,000 across its workforce announced in June, which would take the total job losses to nearly 30% of its pre-pandemic staffing.

A Qantas executive said that outsourcing ground handling services “can turn our aircraft at 40% lower cost than we can using our resources.”

This is a worrisome announcement for the entire industry.  It represents the loss of lifetime employment, in many cases.

--The White House Chief of Staff Mark Meadows said that President Trump could take executive action to avoid massive layoffs at U.S. airlines.  “We’re looking at other executive actions.  If Congress is not going to work, this president is going to get to work and solve some problems.  So hopefully, we can help out the airlines and keep some of those employees from being furloughed.”

--Boeing Co. found two “distinct manufacturing issues” in the fuselage of 787 Dreamliner jets and has told airlines operating eight affected planes to remove them from service so they can be repaired.

The issues were found in the join of fuselage sections toward the rear of the aircraft, and as a result, the jets don’t meet Boeing’s design standards, the company said in a statement Friday.  Boeing said it has notified the Federal Aviation Administration and is conducting a review into the cause of the problem.

“We determined that eight airplanes in the delivered fleet are affected by both issues and therefore must be inspected and repaired prior to continued operation,” Boeing said.  “We immediately contacted the airlines that operate the eight affected airplanes to notify them of the situation, and the airplanes have been temporarily removed from service until they can be repaired.’

--Dell Technologies Inc. said consumer revenue jumped 18% for the business that includes computer sales in the July quarter, while commercial-client sales slumped 11%.  Overall revenue fell 3% to $22.7 billion.

“We saw strength in the government sector and in education, with orders up 16% and 24%, respectively, as parents, teachers and school districts prepare for a new frontier in virtual learning,” Dell COO Jeff Clarke said in a statement.

Online sales rose 79%, while revenue at Dell-controlled VMware was $2.9 billion, up 10%.

--HP Inc. said laptop sales surged 30% in the quarter from a year ago, helping the company limit its revenue drop to 2%, as it reported $14.29 billion in sales.

HP said its printing business saw sales fall to $3.93 billion, driven by lower sales of commercial printers and supplies.  But with people stuck at home, the consumer printing market was a bright spot.

--Best Buy on Tuesday said the sales gains it has seen in the first weeks of its current third quarter are not likely to continue as the consumer-electronics retailer reported higher fiscal second-quarter results that were driven by better-than-expected comparable-store sales growth.

“Trends across most categories and services improved materially throughout Q2 as we opened our stores more broadly for shopping, especially categories like large appliances and home theater that benefit from more experiential shopping,” said CEO Corie Barry. 

“The stimulus provided confidence and a backdrop against which customers felt like they had purchasing and spending power,” she added.  “Going forward a lack of that stimulus may only underscore the heightened levels of unemployment.”

Revenue rose to $9.91 billion from $9.54 billion, with comp-store sales rising 5.8%, let by higher sales growth in computing, appliances and tablets, which were partly offset by declines in mobile phones, digital imaging, and services.

Online revenue skyrocketed 242% to $4.85 billion.

--Dick’s Sporting Goods reported second-quarter results easily beat Wall Street’s expectations as consumers continue to focus on health and wellness while stuck at home amid the outbreak.

Chairman and CEO Edward Stack said in a statement Wednesday: “During this pandemic, the importance of health and fitness has accelerated and participation in socially distant, outdoor activities has increased. There has also been a greater shift toward athletic and active lifestyle product with people spending more time working and exercising at home.  The majority of our assortment sits squarely at the center of these trends, and while mindful of the uncertainty in the current environment, we are in a great lane right now.”

For the quarter, Dick’s earned $276.8 million, on revenue of $2.71 billion, both exceeding forecasts.

Sales at stores open at least a year increased 20.7 percent, while online sales nearly tripled.

For the first three weeks of its latest quarter the momentum continued, with same-store sales up 11 percent, the company said.

--Nordstrom said it lost $1.62 a share as revenue fell 54.1% year over year to $1.8 billion in the second quarter.

Stores were closed for about half of the quarter due to Covid-19.  But e-commerce sales were disappointing, up 20%, less than expected by analysts. 

--Bed Bath & Beyond said Tuesday that it’s cutting 2,800 jobs at its corporate headquarters and stores – about 5% of its overall workforce – as the troubled home good retailer looks to pivot more of its business online.

I went into my local outlet for the first time since shoppers were allowed back in, and I was one of only about five customers, when normally there would be 50+ given the time of day.

Actually, I went for an advertised special, a Black and Decker Lithium dustbuster, they were out of them and none were available online, so I bought it online from Kohl’s.  And, boy, this is the best dustbuster I’ve ever had!

--Lord & Taylor announced Thursday that all of its 38 stores will permanently close after it originally planned to shutter only two dozen.

The company was founded in 1826, but filed for Chapter 11 bankruptcy earlier this month after citing $137.9 million in debt obligations.  Hudson’s Bay Company sold the department store for $75 million in 2019 to Le Tote, which also has since filed for bankruptcy.

So Lord & Taylor joins JCPenney, Neiman Marcus and Sears, other department stores that have filed for bankruptcy during the pandemic, along with chains Brooks Brothers, Pier 1 Imports and Lucky Brand.

--Dollar Tree, which operates Dollar Tree and Family Dollar stores, said same-store sales rose 7%, while rival Dollar General saw comp sales increase about 19% in their latest quarterly reports.

The expiration of the higher federal benefit last month and delays tied to its replacement pose a challenge for the companies, but both said they are preparing to serve shoppers who are looking for deals and lower-priced merchandise during this period of economic weakness.

Dollar General said sales for its quarter ended July 31 jumped to $8.68 billion from $6.98 billion a year earlier, with profit of $787.6 million, up from $426.6 million.

Dollar Tree had sales of $6.28 billion, up from $5.74 billion.  You can find me at my local DLTR store every Monday, chatting up Evelyn, the cashier.

--Coca-Cola Co. said today it would nearly halve its operating units and offer voluntary separation to 4,000 workers including in the U.S., as the world’s largest beverage maker battles a hit to sales from the pandemic.

The company said it would reduce its current model that includes 17 business units to nine units under four geographical segments.

Coke had earlier reported a 28% slump in sales in its last quarter due to mandated closures of restaurants, theaters and sports venues.

--Vanguard Group said it will close its Hong Kong and Japan operations and cut jobs across both cities as it shifts its Asian headquarters to Shanghai.  The global fund giant, with more than $5 trillion in assets under management, said in a statement its Hong Kong business mostly served institutional clients and not retail investors, which are its primary focus.

--Mexico’s economy could contract by almost 13% this year, the central bank warned on Wednesday, with the pandemic throwing the country into its deepest slump since the Great Depression.

But the Banco de Mexico suggested in its quarterly report that a recovery could happen more quickly next year than previously thought.

In its best-case scenario, the economy would shrink by 8.8% this year and grow by 5.6% next year, the central bank said.

--Chile’s unemployment rate jumped to 13.1% between May and July, 5.6 percentage points higher than the same period a year ago and a new record the past decade as the country continued to maintain strict lockdowns in an effort to suppress the coronavirus.

--The net worth of Amazon.com Inc. founder Jeff Bezos eclipsed $200 billion on Wednesday as shares of the e-commerce giant climbed to a record.  The move simultaneously pushed his ex-wife MacKenzie Scott, 50, to the brink of becoming the world’s richest woman, just behind L’Oreal SA heiress Francoise Bettencourt Meyers.

Efforts by my people to reach her people have been unsuccessful.

Meanwhile, Elon Musk saw his net worth eclipse $100 billion, according to the Bloomberg Billionaires Index.  Bloomberg says the world’s 500 richest people have gained $809 billion so far this year (thru Wednesday), a 14% increase since January, even as the global pandemic caused a record drop in GDP and millions of lost jobs.

Regarding the rising income inequality, Senator Bernie Sanders earlier this month introduced legislation to tax ‘extreme’ wealth gains during the coronavirus crisis.

“We cannot continue to allow billionaires like Jeff Bezos and Elon Musk to become obscenely rich while millions of Americans face eviction, hunger and economic desperation,” Sanders said Wednesday in a statement.  “It’s time to fundamentally change our national priorities.”

Others view their massive wealth as justified, saying they’ve earned it through the creation of singular businesses.

Earlier this month, Facebook’s Mark Zuckerberg saw his net worth top $100 billion.

--Speaking of Musk and Tesla, he tweeted that the electric vehicle maker will be building batteries that could deliver a major jump in mileage within “probably 3 to 4 years.”

Tesla is holding its Battery Day presentation on Sept. 22, where the automaker is expected to walk fans and investors through the progress it has made in battery development for its EVs.

Thursday, Tesla shares hit $2,295 before selling off a little.  The company went public at $17 a share in 2010, and the stock has risen more than 400% since the beginning of the year.

Tesla’s market cap is now far in excess of Toyota’s and Volkswagen’s, combined, despite the fact Toyota sold 10.46 million vehicles in 2019, VW some 11 million, while Tesla delivered 367,200.  Tesla said it would deliver at least half a million vehicles by the end of 2020, which is still less than 5% of Toyota’s and Volkswagen’s annual sales.

--New York’s MTA Chairman Pat Foye is warning state lawmakers that the cash-strapped transit agency may have to take “draconian actions” if it doesn’t get a $12 billion federal bailout to make it through next year.

“We have never, New York has never – even during the Great Depression of the 1930s – seen ridership declines as severe and as sustained as those we are experiencing right now,” Foye warned at a hearing by the state Legislature on Tuesday, adding that “our sole focus now is on survival.”

Ridership is still down 75% on the subway and 80% on commuter rails because of the pandemic.

Foye said at the current ridership levels, the MTA is losing $200 million a week and needs $12 billion in federal aid, with its deficit projected to reach $10 billion by next year.  Without the money, riders could face fare hikes and service cuts.

The thing is, it’s the essential workers who most rely on mass transit.

Here in New Jersey, over the course of my day I pass two commuter rail parking lots for the line that goes into New York and here we are in late August, six months into the crisis, and I still see no more than two cars occupying both lots, each accommodating at least 150 vehicles, and pre-Covid, each one jammed.  That speaks volumes about the changes in the workforce…and work places. 

And you know it’s the same situation all over the country, which is a real crisis for mass transit systems everywhere.

For starters, you’re talking a lot of jobs. The MTA, for example, is looking to cut over 7,000 if they do not receive federal help.

Foreign Affairs

China: The United States and China traded jibes as military tensions grow between the two, China launching four medium-range ballistic missiles that hit the South China Sea between Hainan Island and the Paracel Islands.  U.S. Defense Secretary Mark Esper vowed not to “cede an inch” in the Pacific, while China said Washington was risking soldiers’ lives.  Both are at loggerheads over issues from technology and human rights to Chinese military activities in the disputed South China Sea, with each accusing the other of deliberately provocative behavior.

In the latest U.S. move against China ahead of November’s election, Washington blacklisted 24 Chinese companies and targeted individuals over construction and military actions in the critical South China Sea waterway.

Speaking from Hawaii, Sec. Esper said Beijing is using an aggressive military modernization program in a bid to project power globally.

“To advance the CCP’s agenda, the People’s Liberation Army continues to pursue an aggressive modernization plan to achieve a world class military by the middle of the century,” Esper said, referring to the ruling Chinese Communist Party.  “This will undoubtedly involve the PLA’s provocative behavior in the South and East China Seas, and anywhere else the Chinese government has deemed critical to its interests.”

Esper, on a regional tour, described the Indo-Pacific as the epicenter of a “great power competition with China.”  He added, “We’re not going to cede this region, an inch of ground if you will, to another country, any other country that thinks their form of government, their views on human rights, their views on sovereignty, their views on freedom of the press, freedom of religion, freedom of assembly, all those things, that somehow that’s better than what many of us share.”

In Beijing, China’s Defense Ministry shot back at “certain U.S. politicians” it said were damaging Sino-U.S. military ties in the run-up to the election for their own selfish gain, even seeking to create military clashes.  “This kind of behavior puts the lives of frontline officers and soldiers on both sides at risk,” spokesman Wu Qian told reporters at a monthly briefing on Thursday. 

China is not scared of “provocation and pressure” from the United States and will resolutely defend itself and not allow the United States to cause trouble, he added. “We hope the U.S. side will truly adopt a strategic vision, view China’s development with an open and rational attitude, and leave behind the quagmire of anxiety and entanglement.”

The tension, including China’s drills this week along its coast, have sparked fears of accidental conflict, which Taiwan President Tsai Ing-wen is warning of, such as Wednesday’s launching of the ballistic missiles into the South China Sea.

China claims virtually all of the potentially energy-rich South China Sea, but Brunei, Malaysia, the Philippines, Taiwan and Vietnam also lay claim to parts of an area through which about $3 trillion of trade passes each year.

Defense Secretary Mark Esper / Wall Street Journal

“(China’s People’s Liberation Army) is not a military that serves the nation, let alone a constitution, as the U.S. armed forces do.  The PLA belongs to – and serves – a political entity, the Chinese Communist Party.  A more capable PLA is a military more able to advance the party’s domestic vision, the one-sided international system Beijing desires, and an economic and foreign-policy agenda that is often inimical to the interests of the U.S. and our allies.  As a consequence, all nations that seek the prosperity and security of a free and open order must carefully consider the implications of PLA requests for access, training and technology.

“PLA modernization is a trend the world must study and prepare for – much like the U.S. and the West studied and addressed the Soviet armed forces in the 20th century.  The PLA openly declared its intentions to complete military modernization by 2035 and become a world-class force by 2049.  Its comprehensive modernization plan includes a powerful arsenal of conventional missiles alongside a suite of advanced cyber, space and electronic warfare capabilities.  It also includes the deployment of artificial intelligence to strengthen its authoritarian grip and continue its systematic repression of its own people, especially its Uighur population.

“The Communist Party’s emphasis on indoctrinating, modernizing and tightening control over the PLA shows how China’s leaders view the military as central to achieving their objectives.  Prominent among these is to reshape the international order in ways that undermine globally accepted rules while normalizing authoritarianism, creating conditions to allow the Chinese Communist Party to coerce other countries and impede their sovereignty….

“Unlike Communist China, the U.S. stands for a free and open global system, where all nations can prosper in accordance with shared values and longstanding rules and norms.  And unlike the armed forces of the U.S. and our allies, the PLA is a loyal tool of the Communist Party. As such, I urge all countries to examine – and consider curtailing – their relationship with the PLA to make sure they are not helping advance the Communist Party’s malign agenda toward our collective detriment.”

Meanwhile, in Hong Kong, two pro-democracy lawmakers were among more than a dozen people arrested on Wednesday, in what appeared to be part of a growing crackdown by the police on the city’s political opposition.

The lawmakers, Lam Cheuk-ting and Ted Hui, who are members of the city’s Legislative Council, were arrested because of their presence at an antigovernment protest on July 6, 2019.

The two were accused of rioting, when their representatives said they served as mediators when the Tuen Mun protests, which began peacefully, took a violent turn.

And regarding Taiwan, the government there is paving the way for an eventual free trade deal with the United States by announcing today that it was easing restrictions on the import of U.S. beef and pork.

Taiwan has long sought a free trade agreement with the United States, its most important supporter, but Washington has complained about barriers to access for the two products.  Taiwan has said that was for health grounds, going back to concerns over mad cow disease and additives.

North Korea: Amid more rumors that Kim Jong Un was incapacitated and that his sister, Kim Yo Jong, was effectively in control, Kim Jong Un appeared at a meeting of the politburo on Tuesday, warning North Koreans about the dangers posed to the country by the coronavirus and a looming typhoon (the latter proving not to be as bad as first forecast).

Kim was smoking a cigarette as he said there were “some shortcomings” in the state’s efforts to keep out the “malignant virus,” state media reported him as saying, without providing details.  North Korea has yet to admit whether it has had a single case of Covid.

Russia/Belarus: Belarusian leader Alexander Lukashenko said on Friday he had agreed with Russian President Vladimir Putin that their countries could unite their troops in the event of a threat from the West.  Lukashenko, who is facing the biggest challenge in his 26 years in power after protests and strikes erupted following a contested Aug. 9 election, added that not a single Russian soldier has yet crossed into Belarus.

Earlier on Friday, Lukashenko ordered half of the country’s army to enter combat preparedness in response to what he said were threats from the West.

Putin said Russia is ready to send police into Belarus to help it quash opposition protests if they turn violent.  Vlad the Impaler also praised the “restraint” of Belarusian riot police whose brutality towards peaceful demonstrators has compounded widespread anger over Lukashenko’s rule.

Putin told Russian television on Thursday that a “union state” agreement and security pact between his country and Belarus obliged them to “help each other in defense of sovereignty, external borders and in defending stability.”

Putin also echoed Lukashenko’s unsubstantiated claims that other foreign powers were “meddling” in Belarus, by alleging that 33 Russian mercenaries who were arrested near Minsk shortly before the election were lured into the country as part of a trap laid by the “Ukrainian and U.S. special services.”

It should be no surprise that President Trump has not uttered a word about Belarus.

Then there is the issue of Russian opposition leader Alexei Navalny, who is now in a coma in a Berlin hospital after being transported from Siberia following a suspected attempt to poison him.  German doctors say they have found evidence of poisoning, a possible nerve agent.  Russia denies this was the case.

Editorial / Washington Post

“The events surrounding Mr. Navalny’s poisoning give rise to deep suspicion.  For years, Mr. Navalny has been exposing corruption and greed among the top officials of Russia, posting videos to YouTube seen by millions of people. He has championed a method of local election organizing that eroded support for Mr. Putin’s allies.  He was under near-constant surveillance by the Russian security services.  On his most recent trip, the daily Moskovsky Komsomolets reported, the surveillance included ‘where he stayed, what he and his associate ate, whom he met, his credit card records, shopping receipts and the vehicles in which he traveled, down to a sushi order and a nighttime swim in a river.’  Were they also watching when Mr. Navalny ordered tea at the Tomsk airport before a flight to Moscow?....

“The Kremlin response has been chillingly indifferent.  Mr. Putin’s spokesman, Dmitry Peskov, insultingly refused to say Mr. Navalny’s last name, referring to him as ‘the patient’ and insisting any conclusion of poisoning was ‘hasty.’

“Secretary of State Mike Pompeo reacted with utter timidity.  ‘If the reports prove accurate’ of a poisoning, he said, the United States would support the European Union’s call for an investigation.  Mr. Pompeo said a probe should be transparent and hold those responsible to account.  So it goes with the Trump administration, always treating Mr. Putin with kid gloves, always looking for the ‘if.’

“The poisoning of Mr. Navalny must be thoroughly investigated, no matter where the truth leads.  Since Russia is unlikely to do it honestly, an international probe is warranted.  Mr. Navalny, who doctors say is not now in danger of dying, cannot become just another name on the roll call of Mr. Putin’s victims.

“Who put poison in his tea – and who ordered it put there – must be found and exposed.”

Separately, Reuters reported that Navalny has been telling supporters recently that he believes his death would not help Putin, and that he would be turned “into a hero.”

Iran: The UN’s International Atomic Energy Agency and Iran said on Wednesday they have reached an agreement on granting the IAEA access to two suspected former secret nuclear sites after a months-long standoff.  “Iran is voluntarily providing the IAEA with access to the two locations specified by the IAEA,” IAEA chief Rafael Grossi and Iran’s nuclear chief Ali Akbar Salehi said in a joint statement.  “Dates for the IAEA access and the verification of activities have been agreed upon.”

Iraq: U.S.-led international coalition troops withdrew from Iraq’s Taji military base on Sunday and handed it over to Iraqi security forces.  The base, 12 miles north of Baghdad, had been the site of frequent rocket attacks by Iran-backed militias targeting U.S.-led troops in recent months.

“The movement of coalition military personnel is part of a long-range plan coordinated with the government of Iraq,” the coalition said in a statement, adding that Camp Taji has historically held up to 2,000 coalition members, most of whom have departed this summer.

The withdrawal came days after President Trump redoubled his promise to withdraw the few U.S. troops still in the country.  The United States has had about 5,000 troops stationed in the country and coalition allies a further 2,500.

Lebanon: French President Emmanuel Macron has created a roadmap for Lebanese politicians outlining political and financial reforms needed to unlock foreign aid and rescue the country from multiple crises including an economic meltdown.

The two-page “concept paper” outlined necessary measures such an audit of the central bank, appointment of an interim government capable of enacting urgent reforms, and early legislative elections within a year.

Lebanon’s now-caretaker government, which took office in January with the support of Iran-backed Hezbollah and its allies, failed to make progress in talks with the International Monetary Fund for a bailout due to inaction on reforms and a dispute over the size of financial losses. The government resigned over this month’s huge Beirut port explosion and renewed protests against a political elite over endemic corruption and mismanagement that has led to a deep financial crisis.

Macron visited Beirut shortly after the blast and made it clear that no blank checks would be given to the Lebanese state if it did not enact reforms against waste, graft and negligence.

The roadmap could deepen France’s role in Lebanon, a former French colony.  The paper states that Paris will play a major role in rebuilding Beirut’s port, bolster healthcare, send teams from its treasury and central bank to support the financial audit, and help organize early parliamentary voting, along with the European Union.

Afghanistan: Peace talks between warring Afghan sides will begin in early September, said the country’s top peace negotiator on Thursday.  Abdullah Abdullah, a prominent politician and the chairman of the High Council for National Reconciliation, said Afghan officials were ready to hold talks with the Taliban.  His comments come at a time when prospects of peace talks were looking bleak over the issue of releasing a last batch of Taliban prisoners.

But then hours after Abdullah’s declaration, the Taliban’s lead negotiator told Reuters that no peace talks were planned with Afghan officials for early September.

Israel: In a case that shocked the nation, police claim to have “solved” the gang rape of a 16-year-old in Eilat’s Red Sea Hotel, investigators tracking down a total of 17 suspects related to the violent assault.  Ten of the suspects are minors.  Some of them filmed the act.

The victim, who officials said was severely mentally harmed by the incident, is under protection from security.  She also faced a vicious assault online, law enforcement officials said.

Random Musings

--Presidential tracking polls….

Gallup: 42% approve of President Trump’s job performance, 55% disapprove; 90% of Republicans approve, 39% of independents (Jul. 30-Aug. 12).
Rasmussen: 46% approve, 52% disapprove (Aug. 28…interesting, down from 51/47 a week ago).

--A CBS News/YouGov poll released last Sunday found that 57% of registered Republican voters consider the number of deaths from Covid-19 in America to be “acceptable” when “evaluating the U.S. efforts against the coronavirus pandemic,” compared with 31% of voters overall.  Ninety percent of Democrats and 67% of independents said the death toll was “unacceptable.”

When asked their opinion of how President Trump has managed the response to the pandemic, 42% of overall voters said Trump has done a good job.  Among Republicans, that number jumps to 86%, while 92% of Democrats say he has performed badly.  44% of independents said the president has done a good job with the outbreak and 56% said he hasn’t.

In the presidential race, 52% of likely voters said they would vote for Joe Biden and 42% said the go for Trump.

98% said their support for their respective candidate was either “very strong,” indicating their mind was made up, or “strong,” meaning they “probably won’t  change” their mind.  That’s rather telling.

--A Knight Foundation’s nationwide survey of 4,000 full-time undergraduates found that 70% of them plan to vote for Joe Biden, and 18% for Trump.  More than four out of five had an unfavorable impression of the Republican president.

But the students were almost evenly split on Trump’s Democratic challenger, with 49% reporting a favorable impression of Biden and 51% unfavorable.

The poll was consistent with many other surveys finding that much of Biden’s support comes from voters more motivated by their disapproval of Trump than by their enthusiasm for Biden.

The top concern of the students surveyed was, by far, Covid-19, followed by race relations and climate change. The poll came as colleges and universities are struggling to reopen safely, with epidemiologists warning that students on campuses that have reopened are spreading the coronavirus at parties where many do not social distance or wear masks.

More than two-thirds of the students said they would like the Constitution to be amended to abolish the electoral college and elect the president by popular vote.

--Racism, Part II…Los Angeles Lakers star LeBron James used his postgame news conference Monday to speak at length about the shooting of Jacob Blake in Kenosha, Wis., and the role of firearms in American society.

“Quite frankly, it’s just f---ed up in our community.  We are scared as Black people in America.  Black men, Black women, Black kids, we are terrified.  You have no idea how that cop left the house.  You don’t know if he woke up on the good side of the bed or the wrong side of the bed.  You don’t know if he had an argument at home with his significant other or one of his kids said something crazy and he left the house steaming. Maybe he just left the house saying, ‘Today is going to be the end for one of these Black people.’  That’s what it feels like.  It just hurts.”

“If you’re sitting here telling me that there was no way to subdue that gentleman or detain him before the firing of guns, then you’re sitting here lying not only to me, but you’re lying to every Black person in the community,” James said.  “We see it over and over and over.  If you watch the video, there was multiple moments where they could have tackled him or grabbed him. They could have done that.  Why does it always have to get to a point where we see the guns firing?

“His family is there, his kids are there, it’s broad daylight. Seven shots at close range, and he’s still alive. That’s through the grace of God right there.  My prayers go out to that family and that community, but I’ve got nothing nice to say about those cops at all.”

“I think firearms are a huge issue in America,” James continued.  “I don’t know how you clean that up.   I’m not saying I’ve got all the answers. Guns are a huge issue in America.  They’re not just used for hunting, like a lot of people do for sport.  For Black people right now, when you’re hunting, we think you’re hunting us.”

“We want change,” James said.  “It doesn’t end in November, but it starts there.  We have to keep our foot on the pedal then even if we get what we want.”

--Editorial / Washington Post

“It has been three months since George Floyd died gasping for breath under the knee of a Minneapolis police officer. The video of his horrible last moments spotlighted issues of police brutality and excessive use of force against Black people and served as a wake-up call for action.  But it seems not everyone has gotten the message, judging by the latest horrifying video of a Black man being shot as his three small children watched.  Shouldn’t police officers by now be on notice to stop using unwarranted – and too often deadly – force against Black men and women?....

“Why did officers draw their guns on an apparently unarmed man walking away from them? What threat did he present that justified use of lethal force?  Shouldn’t the presence of three small children in the car underscore the need for caution?  Some have argued on social media in the police’s defense that Mr. Blake may not have been complying with orders, and a tweet by a right-wing commentator that was shared by Donald Trump Jr. alleged Mr. Blake had a criminal record.  Neither noncompliance with a police order nor unconnected past crimes justifies a death sentence, and it is inexcusable to try to use those excuses.  Enough is enough.”

--New Jersey Gov. Phil Murphy called for borrowing $4 billion and raising taxes on the state’s wealthiest residents to fill a $5.7 billion budget shortfall fueled by the coronavirus shutdown.

Murphy’s budget proposal includes $1.25 billion in budget cuts that stretch across all state departments and makes a record high pension payment of $4.9 billion.  It also spares public education funding from reductions and raises taxes on cigarettes and guns and ammunition.

Murphy renewed his call for increasing taxes on millionaires, and proposed raising the rate of the top income-tax bracket to 10.75% from 8.97%.

Republicans are furious Murphy proposes to make the $4.9 billion pension payment without asking public-sector unions to make sacrifices related to their state-funded retirement plans.

Many will continue to flee my state because of such issues.

But at the same time, thousands are fleeing New York City for the suburbs of New Jersey and Connecticut.  The real estate market here is on fire.

Meanwhile, all the schools in my town of Summit have signs out front begging for substitute schoolteachers, given the large numbers of teachers refusing to teach classes indoors and/or opting for retirement in many cases instead (exacerbating the pension fund situation).

--Jerry Falwell Jr. confirmed on Tuesday he had resigned as president from Liberty University, following reports on the evangelical leader’s sexual relationship between him, his wife and a former ‘business associate/pool boy’.

Falwell has been a major supporter of President Trump.

--Boy, the family of Kellyanne and George Conway is a little dysfunctional these days; top Trump adviser Kellyanne suddenly announcing she was stepping away end of the month to focus on the family, while George was doing the same with his Lincoln Project.

15-year-old daughter Claudia Conway, who looks like she’s 22, has 600,000 TikTok followers and the little leftist, who wrote Saturday that she was “officially pushing for emancipation,” later reacted to her parents’ withdrawal from politics, expressing dismay that they “didn’t even talk about it with any of us.”

--As a Catholic, I don’t need a lesson from Lou Holtz on what it is to be a good one.

--Jerry Seinfeld / op-ed New York Times

[Seinfeld responding to those saying New York is ‘Dead.’]

“When I got my first apartment in Manhattan in the hot summer of 1976, there was no pooper-scooper law, and the streets were covered in dog crap.  [Ed. so true.]

“I signed the rental agreement, walked outside, and my car had been towed.  I still thought, ‘This is the greatest place I’ve ever been in my life.’

“Manhattan is an island off the coast of America. Are we part of the United States?  Kind of.  And this is one of the toughest times we’ve had in quite a while.

“But one thing I know for sure: The last thing we need in the thick of so many challenges is some putz on LinkedIn wailing and whimpering, ‘Everyone’s gone! I want 2019 back!’

“Oh, shut up.  Imagine being in a real war with this guy by your side….

“Energy, attitude and personality cannot be ‘remoted’ through even the best fiber optic lines. That’s the whole reason many of us moved to New York in the first place….

“Real, live, inspiring human energy exists when we coagulate together in crazy places like New York City. Feeling sorry for yourself because you can’t go to the theater for a while is not the essential element of character that made New York the brilliant diamond of activity it will one day be again.

“You found a place in Florida?  Fine. We know the sharp focus and restless, resilient creative spirit that Florida is all about.  You think Rome is going away too?  London?  Tokyo? The East Village?

“They’re not.  They change. They mutate.  They re-form.  Because greatness is rare.  And the true greatness that is New York City is beyond rare….

“This stupid virus will give up eventually. The same way you have.

“We’re going to keep going with New York City if that’s all right with you.  And it will sure as hell be back.

“Because of all the real, tough New Yorkers who, unlike you, loved it and understood it, stayed and rebuilt it.

“See you at the club.”

---

Pray for the men and women of our armed forces…and all the fallen.

God bless America.

---

Gold $1972
Oil $42.96

Returns for the week 8/24-8/28

Dow Jones  +2.6%  [28653]
S&P 500  +3.3%  [3508]
S&P MidCap  +1.9%
Russell 2000  +1.7%
Nasdaq  +3.4%  [11695]

Returns for the period 1/1/20-8/28/20

Dow Jones  +0.4%
S&P 500  +8.6%
S&P MidCap  -5.7%
Russell 2000  -5.4%
Nasdaq  +30.4%

Bulls N/A…59.2 / 16.5 a week ago
Bears

Hang in there.  Mask up…wash your hands.

Brian Trumbore

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