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Democrats want Americans to kick Trump out, but there's one problem: the thriving economy – National Post

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(Bloomberg Opinion) — Democrats are facing a challenge they haven’t confronted since the 1988 presidential election. They are trying to persuade enough Americans to kick a Republican out of the White House even though the economy is doing well. They failed that year – and as their latest presidential debate showed, so far they haven’t figured out how to meet the challenge this time either.

Early in that debate, moderator Judy Woodruff of PBS noted that “the overall U.S. economy right now looks strong” and asked the candidates what they would say to voters “who may not like everything President Trump does but they really like this economy.” Each of the candidates who responded denied her premise. They said it wasn’t really a strong economy after all.

One of their tacks was to bring up specific shortcomings of the economy. Senator Bernie Sanders of Vermont said we have the highest child-poverty rate “of almost any major country on earth” and that wage growth over the past year, at 1.1% after inflation, has been “not great.” Former Vice President Joe Biden said that “most Americans” would “have to sell something or borrow the money” to pay an unexpected $400 bill. Entrepreneur Andrew Yang said that depression, financial insecurity and student loan debt are at record highs.


Senator Elizabeth Warren speaks as South Bend Mayor Pete Buttigieg and former Vice President Joe Biden listen near the end of the sixth 2020 U.S. Democratic presidential candidates campaign debate at Loyola Marymount University in Los Angeles, California

REUTERS/Mike Blake

Many of these specific complaints are false or overstated. America’s child poverty rate looks bad in international comparisons only if you are looking at relative poverty: the fraction of children in households making less than half the median income. That’s actually a measure of inequality. Look instead at levels of material deprivation among children, and the U.S. is in line with other countries. Child poverty rates have also been declining.

Wage growth during the past year was better than it has been for most of the past two decades; and it is as good a conjunction of wage growth and high employment levels as we have seen in this period.

Biden’s statistic about a surprise $400 bill is wrong. He almost certainly misunderstood a Federal Reserve finding that 61 percent of Americans would pay a $400 bill out of cash. The other 39 percent, it is true, would sell something or borrow the money, for example by running a credit-card balance. That doesn’t mean a majority of the population would “have to” resort to such measures.

Americans’ self-reported financial security is also holding up well. The percentage of Americans who tell Gallup they are worried about maintaining their standard of living has generally been falling. For three years running, majorities have said that their financial situations are improving.

While Democrats are straining to find gloomy statistics, almost every economic indicator is moving in the right direction. Employment growth and wages are up. Poverty is down.

The other main tack the Democratic candidates took was to deny that Americans consider today’s economy good. Biden and Yang were joined by Massachusetts Senator Elizabeth Warren and South Bend, Indiana, Mayor Pete Buttigieg in claiming that although gross domestic product and the stock market have been rising, ordinary Americans aren’t feeling good economic times. “This economy is not working for most of us,” the mayor said.

Many of these specific complaints are false or overstated. America’s child poverty rate looks bad in international comparisons only if you are looking at relative poverty: the fraction of children in households making less than half the median income

But most Americans don’t feel the way these Democrats say they do. As noted already, most Americans say their financial situations are getting better. The percentage of Americans who say it’s “a good time to find a quality job,” as another Gallup question puts it, has been at or higher than 50% for all of Trump’s time in office. It was below 50% for almost all of the George W. Bush and Barack Obama years. During the past two years, a majority of Americans has also rated economic conditions as excellent or good. They didn’t do that during the past two presidencies.

It is certainly possible for Democrats to argue that we could be doing better, or to deny that Trump’s policies are responsible for the health of the economy. A lot of positive economic trends have continued, but not accelerated, during his time in office. But to say that “the middle class is getting killed,” as Biden did at the debate, is to fly in the face not just of the economic data but of what most Americans think about their own lives.

Perhaps the bottom will fall out of the economy before the election in a way that few people now anticipate. If it stays on the same path, though, President Trump will campaign next fall on a simple economic message: He has been good for the economy and the Democratic nominee would be bad. On current form, the Democratic candidate will counter him by trying to convince Americans that the economy isn’t as good as it looks and they’re not doing as well as they think they are. And then they’ll switch the subject to how Trump is dangerously disconnected from reality.

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Racism has cost US economy $16 trillion in 20 years: Citi report – Yahoo Canada Finance

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<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="According to a new report from Citi (C), systemic racism in the United States has had a huge cost to the economy: $16 trillion over the past two decades.&nbsp;” data-reactid=”16″>According to a new report from Citi (C), systemic racism in the United States has had a huge cost to the economy: $16 trillion over the past two decades. 

That’s the combined cost of disparities in wages, education, investment in black-owned businesses, and the housing market.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="“Racial inequality has always had an outsized cost, one that was thought to be paid only by underrepresented groups,” said Citigroup Vice Chairman Raymond J. McGuire. "What this report underscores is that this tariff is levied on us all, and particularly in the U.S., that cost has a real and tangible impact on our country’s economic output. Now, more than ever, we have a responsibility and an opportunity to confront this longstanding societal ill that has plagued Black and brown people in this country for centuries, tally up the economic loss and as a society, commit to bring greater equity and prosperity to all."” data-reactid=”18″>“Racial inequality has always had an outsized cost, one that was thought to be paid only by underrepresented groups,” said Citigroup Vice Chairman Raymond J. McGuire. “What this report underscores is that this tariff is levied on us all, and particularly in the U.S., that cost has a real and tangible impact on our country’s economic output. Now, more than ever, we have a responsibility and an opportunity to confront this longstanding societal ill that has plagued Black and brown people in this country for centuries, tally up the economic loss and as a society, commit to bring greater equity and prosperity to all.”

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="The $16 trillion drag on the U.S. economy since 2000 is particularly felt in the area of capital investment of black-owned businesses. A 2019 study from Illumen Capital found that $35 trillion of capital would be allocated differently, were it not for racial and gender bias.&nbsp;” data-reactid=”19″>The $16 trillion drag on the U.S. economy since 2000 is particularly felt in the area of capital investment of black-owned businesses. A 2019 study from Illumen Capital found that $35 trillion of capital would be allocated differently, were it not for racial and gender bias. 

According to the estimates from Citi’s research, racism impacting Black entrepreneurs has cost the United States $13 trillion of business revenue and potentially 6.1 million jobs that could have been created — each year. 

<h2 class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Closing the gap” data-reactid=”21″>Closing the gap

What’s more, closing the wage gap between Black and white employees could have added $2.7 trillion — or 0.2% of GDP each year to the American economy. 

“Improving access to housing credit might have added an additional 770,000 Black homeowners, adding $218 billion in sales and expenditures,” the study found, while improving access to college for Black students could increase the income of Black employees by up to $113 billion over their lifetimes.

“Present racial gaps in income, housing, education, business ownership and financing, and wealth are derived from centuries of bias and institutionalized segregation, producing not only societal, but also real economic losses,” the study noted. 

WASHINGTON, DC - JUNE 27: A Black Lives Matter ballon is seen at the Navy Memorial to support Black Lives Matter during the Black Mamas March a protest against police brutality and racial inequality in the aftermath of the death of George Floyd on June 27, 2020 in Washington, DC. Demonstrators took part to voice their support for racial equality and to honour the memory of George Floyd, whose death at the hands of police in Minneapolis sparked protests worldwide. (Photo by Michael A. McCoy/Getty Images)
A Black Lives Matter ballon is seen at the Navy Memorial to support Black Lives Matter during the Black Mamas March a protest against police brutality and racial inequality in the aftermath of the death of George Floyd on June 27, 2020 in Washington, DC. (Photo by Michael A. McCoy/Getty Images)

“However, future gains from eliminating these gaps are enormous: benefiting not only individuals, but also the broader U.S. economy with positive spillover effects into the global economy.”

If racial gaps were eliminated, Citi estimates that over the course of the next 5 years, roughly $5 trillion could be added to the country’s GDP. 

That’s an average of 0.35% of GDP growth each year.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Goldman Sachs in July published a report saying that reducing racial income inequality “could also deliver a boost to the level of US GDP of around 2%, which currently equates to just over $400 billion per year.”” data-reactid=”39″>Goldman Sachs in July published a report saying that reducing racial income inequality “could also deliver a boost to the level of US GDP of around 2%, which currently equates to just over $400 billion per year.”

The benefits wouldn’t just remain domestically: the study also notes that 0.09% growth would be added to global growth. 

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Citi on Wednesday announced it plans to spend over $1 billion to help address racial inequality over 3 years. The plan would include programs to help increase access to banking and credit to Black and brown communities, which are traditionally underbanked. The initiative would also aim to increase investment in Black-owned businesses and help more Black households purchase homes.&nbsp;” data-reactid=”41″>Citi on Wednesday announced it plans to spend over $1 billion to help address racial inequality over 3 years. The plan would include programs to help increase access to banking and credit to Black and brown communities, which are traditionally underbanked. The initiative would also aim to increase investment in Black-owned businesses and help more Black households purchase homes

In its report, Citi wrote: “The persistence of racially-biased attitudes, coupled with the implementation and maintenance of policies enshrining these attitudes, constitute what is often termed as systemic racism. Biases may be conscious or unconscious. Nonetheless, the result of policies creating and perpetuating bias produce inequality. Even when the biases fade, the policies may linger, rendering the inequality multi-generational as it becomes interwoven with the way things are done: in broader society, government, corporations, and/or institutions.”

“We are in the midst of a national reckoning on race and words are not enough,” said Chief Financial Officer Mark Mason. “We need awareness, education, and action that drive results.”

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Read more:” data-reactid=”44″>Read more:

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Read the latest financial and business news from Yahoo Finance” data-reactid=”52″>Read the latest financial and business news from Yahoo Finance

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Follow Yahoo Finance on&nbsp;Twitter,&nbsp;Facebook,&nbsp;Instagram,&nbsp;Flipboard,&nbsp;LinkedIn,&nbsp;YouTube, and&nbsp;reddit.” data-reactid=”53″>Follow Yahoo Finance on TwitterFacebookInstagramFlipboardLinkedIn, YouTube, and reddit.

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Tech lifts world stocks as economy back in focus – TheChronicleHerald.ca

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By Danilo Masoni

MILAN (Reuters) – World shares stabilised and the dollar rose on Wednesday with overnight gains of stay-at-home Wall Street tech champions helped balance concerns that new restrictions to counter resurging coronavirus infections will hurt economic recovery.

First indications from global surveys about economic activity in September gave a gloomy picture for Europe with rising COVID-19 infections leading to a downturn in services.

MSCI world equity index .MIWD00000PUS>, which tracks shares in 49 countries, was 0.2% higher by 0821 GMT, while the pan-European STOXX 600 .STOXX> benchmark rose 1.1%.

Tech shares were the strongest gainers in Europe following a rally overnight in big U.S. tech stocks Amazon , Microsoft , and Apple .

“This strong performance on the part of U.S. stocks is likely to translate into a similarly positive open for European stocks,” said Michael Hewson, analyst at CMC Markets in London.

“However there is rising concern that in light of surging infection rates across Europe, and the beginnings of a rise in hospitalisations, that the economic rebound from the lockdown lows is set to finish the year with a whimper,” he added.

The PMI survey showed euro zone business growth ground to a halt this month as the service industry shifted into reverse, knocked by a resurgence in coronavirus cases that pushed governments to reintroduce restrictions.

French business activity slowed to a four-month low in September, while Germany’s private sector continued to recover from the coronavirus shock.

Earlier, MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS> rose 0.2% for its first gain this week, but the mood was hardly bullish. Japan’s Nikkei .N225> returned from a two-day holiday to slip 0.1%.

Nasdaq futures remained near Tuesday’s highs, up 0.1%. S&P 500 futures were 0.3% higher.

In foreign exchange markets, the standout mover was the gaining dollar, which was up 0.10% against a basket of six major currencies .DXY> at its highest level since July 27.

“Risk aversion on the back of new COVID-19 infections affecting Europe more directly remains an important factor this week,” UniCredit strategists said in a note. “This means that the USD is likely to remain firm in its role as preferred safe-haven currency.”

Meantime the euro hit a seven-week low and was last down 0.12% at $1.1693, on concerns about coronavirus infections and after the tepid European surveys.

Commodities were also weighed down by the robust dollar and worries linked to economic impact of a second wave of COVID-19.

“A resurgence in cases could prove to be a stumbling block for the demand recovery, although any lockdowns moving forward are likely to be more targeted and localised,” said ING commodity strategists Warren Patterson.

Brent crude futures were last down 0.2% at $41.64 a barrel and U.S. crude futures slipped 0.3% to $39.69.

Gold prices touched a six-week low as the dollar strengthened. Spot gold fell 1.2% to $1,875.7 per ounce.

In bond markets, Italy’s 30-year bond yield fell to a record low as the country’s debt remained supported after local elections reduced the risk of a snap election.

U.S. bonds were steady, with the yield on benchmark 10-year U.S. debt US10YT=RR up less than one basis point at 0.6724%

(Additiona reporting by Tom Westbrook in SINGAPORE; Editing by Tomasz Janowski)

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Italy’s Chance of a Lifetime for Economy Could Yet Be Squandered – Yahoo Canada Finance

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Italy’s Chance of a Lifetime for Economy Could Yet Be Squandered

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(Bloomberg) — No Italian government has ever had so much cash at its disposal as Prime Minister Giuseppe Conte — enough possibly to transform the region’s laggard economy.

But if that fiscal hoard swelled by European Union rescue funds and central bank-backed cheap borrowing is spent unwisely, it could become the biggest missed opportunity of a generation.

Avoiding that outcome is the test confronting Conte and his finance minister, Roberto Gualtieri. While targeting a revamp of the economy, they face pressure to throw funds at protecting existing jobs rather than investing in new ones, expanding the role of the state despite a troubled history of such policies in the country.

“In Italy, too many people think that any kind of public expenditure can boost output,” said Riccardo Puglisi, economics professor at the University of Pavia. “This increases the risk that recovery-fund money is not used properly and efficiently.”

The fiscal windfall that Italy’s governing class is about to sink its teeth into is staggering. Gone are the days of haggling over 0.1% budget deviations with Brussels officials concerned about burgeoning borrowings that are now well on the way to exceed 150% of gross domestic product.

The country stands ready to receive as much as 209 billion euros ($248 billion) in EU aid funded by jointly issued debt to help its post-coronavirus reconstruction.

Further bolstering its public finances are European Central Bank efforts to keep borrowing costs low. That help allowed Conte to spend 100 billion euros in stimulus on a battered economy that analysts anticipate may contract as much as a 10th this year. The yield on Italian 10-year bonds has more than halved since the peak of the pandemic in mid-March.

Deep Pockets

“Italy will have billions in its pockets,” said Paolo Pizzoli, a senior economist at ING Bank. The government “needs to show it is not only able to access European Union funds, but also to focus spending effectively to ultimately boost growth.”

With strict strings attached to EU money, officials intend to use it to boost growth to at least 1.6% a year and increase employment by 10 percentage points from the 2019 tally of 63.5% to bridge the gap with regional peers, according to draft guidelines seen by Bloomberg.

The plan is to invest in digitalization, a unified ultra-broadband network, innovation, education, more efficient infrastructure, a green economy, and also reforms of the judicial system and state bureaucracy.

“It’s a once-in-a-lifetime opportunity to exit a long period of stagnation,” Gualtieri told lawmakers last week.

That ambitious growth agenda is pulling in one direction, while the government’s own spending plans for the rest of its budget are pulling in another. Conte’s coalition of the left-wing Democratic Party and the populist Five Star Movement — newly emboldened after holding its ground in local elections this week — is increasingly tending toward state aid and government intervention.

The premier has pushed for the creation of a single broadband network company, halting the sale by Telecom Italia SpA of a minority stake in its network. He has also pressured the Benetton family’s Atlantia holding company to sell its 88% stake in toll road operator Autostrade per l’Italia. Meanwhile Gualtieri has publicly favored a sale of the Italian Stock Exchange and its MTS bond market to a European company.

The government wants the state-backed lender, Cassa Depositi e Prestiti, to take stakes in all three enterprises, and it has also set up a new publicly controlled company to run failed airline Alitalia SpA. Italy has seen such measures before, but not for a while.

Not the Solution

“The successful Italian economy of the 1950s, which was a mixed system — with strong government involvement in companies through a vehicle called IRI — worked for a time but degenerated quickly into cronyism and wasting public funds,” said Giovanni Orsina head of LUISS University’s School of Government in Rome. “Regenerating that system for all the wrong reasons is not the solution.”

The Institute for Industrial Reconstruction — known as IRI — was a state company established by the fascists in 1933. It helped rebuilding after the war, constructing roads and the phone network, and was once Italy’s biggest employer.

If Cassa Depositi becomes a revamped version of that, it would ultimately turn back the clock, reversing decades of economic policy since IRI was dissolved during a sell-off of assets in the 1990s.

“We hope the government will use the funds to boost competitiveness with a market approach rather than acting as a nanny state,” said Paolo Magni, parter at Alpha Group, a private equity fund with 2 billion euros of assets under management in Italy.

For Orsina, such an outcome would prolong Italy’s history of failing to deliver on economic reforms, hampered by special interests and a political cycle with frequent elections.

“Politicians gain very little from long-term planning and very much from spending on solutions that increase their power and popularity,” he said. “The country is condemned to short-termism.”

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