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Takeaways from State of the Union: Economy not impeachment – Richmond News

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WASHINGTON — President Donald Trump leaned hard on the strong U.S. economy as he made the case for his reelection in the State of the Union address — and he threw in a few theatrical flourishes.

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Trump has often seemed to conduct his presidency as the ultimate reality TV show. He understands drama and suspense. He plays to emotions. He never seems to tire of the camera and attention.

But even for him, the production of this State of the Union speech, just as he begins to aggressively campaign for a second term, was taken to a level beyond any predecessor.

He told a young girl she would get a scholarship to attend a better school. He announced that a soldier had returned home to surprise his wife and children in the balcony reserved for the president’s special guests. And he dramatically asked his wife, Melania, to drape the Medal of Freedom around the neck of conservative radio stalwart Rush Limbaugh.

The speech was hardly memorable. The stagecraft won’t soon be forgotten.

IT’S STILL THE ECONOMY, STUPID

Trump delivered his speech of nearly 80 minutes without specifically mentioning the reality of one of the most consequential events of his presidency: his impeachment trial in the Senate, where he is expected to be acquitted Wednesday.

Trump made clear he is staking his re-election on the state of the economy. Deploying his penchant for superlatives, Trump said the American economy had never been stronger. The subtext was clear: He was asking voters who might not like him personally to judge him on whether they believed their own financial fortunes had improved with him as president.

His message drew from Ronald Reagan’s question to the country when he ran for re-election in 1984: Are you better off than you were four years ago?

A president who often talks about issues in terms of profit and loss also extolled the rise in the stock market and the increase in incomes of those in lower earning brackets.

“This is a blue-collar boom,” he said.

Yet Trump’s chest-thumping included some misleading stats, especially as he tried to paint the state of the U.S. economy before he took office in dismal terms. He failed to acknowledge that manufacturing has slumped in the past year, after having advanced in the prior two years. The president’s tariffs regime and slower growth worldwide hurt the sector in ways that suggest Trump’s policies robbed it of some of its previous strength.

NOT EVEN A CLAPBACK

There were no niceties. No efforts to hide the tension.

House Speaker Nancy Pelosi extended a handshake to the president.

He turned away.

She gave a look.

He started into his speech.

Pelosi, wearing the white suit of the suffragettes that has become a lasting fashion statement of the House Democratic women, who swept to power in the 2018 election, stopped there with the niceties.

She delivered just a curt introduction to the president of the United States and then busied herself with paperwork. He talked.

She raised an eyebrow here, smirked some there, as Trump told the chamber, and the American people, of his accomplishments.

The speaker, whose House impeached Trump on charges of abuse of power and obstruction of Congress, didn’t need to say much more.

The House has spoken. The Senate, though, is set to acquit Trump of the two charges Wednesday.

As she presided over the chamber, Pelosi wore a gold pin shaped as the speaker’s mace, which she often puts on for times like these.

When Trump finished, Pelosi dramatically ripped a copy of the speech in half.

LIONIZING RUSH LIMBAUGH, PLAYING TO BASE

It was the kind of high drama moment that animates Trump. In a gesture that left nearly everyone — including its recipient —- looking dumbfounded, Trump announced he was giving Limbaugh the nation’s highest civilian honour.

Limbaugh, who announced this week that he had advanced lung cancer, appeared stunned, his jaw visibly dropping as Trump made the announcement. Others sat in silence as first lady Melania Trump draped the medal around his neck on the spot.

“Thank you for your decades of tireless devotion to our country,” Trump told Limbaugh, commending “all that you have done for our Nation, the millions of people a day that you speak to and that you inspire.”

Honouring Limbaugh was one of the clearest examples of Trump making yet another play to his political base. But he reminded them of many others, including his appointment of conservative judges, fervent support for gun rights, opposition to abortion and what he called defence of “religious liberty.”

“In America, we do not punish prayer. We don’t tear down crosses. We don’t ban symbols of faith,” he said. “In America, we celebrate faith.”

COUNTERPROGRAMMING

The president always commands the stage at the State of the Union, but Democrats hit the president on the issue that most voters in their party say is their top priority: health care.

And with good reason. Trump tried to label Democrats’ health care plans as “socialism” that would deprive millions of Americans of their private health insurance, a reprise of his attack on the health care plan offered by Sen. Bernie Sanders.

Democrats were prepared. They pre-emptively decried the administration’s support for a federal lawsuit that would gut President Barack Obama’s health care law. “We all want to tell the president, ‘Drop the lawsuit, drop the lawsuit, drop the lawsuit,'” Pelosi, Senate Minority Leader Chuck Schumer and other Democratic lawmakers said in unison.

Trump also said he would always protect “pre-existing conditions” even though gutting Obamacare would do that.

A “PRESIDENT” IN WAITING

Foreign policy was a small portion of Trump’s speech. Among the surprise guests invited by the White House was Venezuelan opposition leader Juan Guaidó, who has been seeking international help in his bid to oust Venezuelan President Nicolas Maduro from office.

“Maduro is an illegitimate ruler, a tyrant who brutalizes his people. But Maduro’s grip of tyranny will be smashed and broken,” Trump said, praising Guaidó as the “true and legitimate President of Venezuela” and a “man who carries with him the hopes, dreams, and aspirations of all Venezuelans.”

In addition to offering a major public boost to Guaidó, the move also helped Trump bolster a message he has used to hit the Democratic candidates: that socialist policies are dangerous.

“Socialism destroys nations.” he said. “But always remember, freedom unifies the soul. “

The Trump administration was among the first governments to throw its weight behind Guaidó. Yet Maduro remains in power nonetheless.

OBAMA LIVES RENT-FREE IN TRUMP’S HEAD

Trump started with an upbeat address, but could not resist criticism of his predecessor, even when the context is unclear. “If we hadn’t reversed the failed economic policies of the previous administration,” Trump said, “the world would not now be witnessing this great economic success.”

The economic recovery from the Great Recession that started in 2008 began under President Barack Obama, whose own record for job creation matched Trump’s.

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How Saskatchewan's economy is being boosted by summer events – CTV News Regina

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As summer events draw crowds of people together again, Saskatchewan’s economy is feeling the benefit.

This year’s Queen City Exhibition (QCX) broke all previous attendance records with 278,306 people walking through the gates.

The Regina Exhibition Association Limited (REAL) said the fair carried a $12.8 million economic impact.

“Any time you bring new dollars to our community such as the ride operators, the food operators and folks from rural Saskatchewan or western Canada that come to join, that drives hotel nights, restaurant nights and bar nights which has a significant impact on our visitor economy,” Tim Reid, the CEO and president of REAL, said.

Reid said organizers focused on a few things to make this year’s fair a bigger success, including investing in higher quality entertainment. The Jason Derulo concert drew the largest crowd ever for a Queen City Ex show.

“We saw airport numbers go up because people were flying in to watch Jason Derulo. We saw travel numbers go up because people were coming here for the rodeo,” Reid said.

“When we do events that draw a market beyond Regina, that means that it helps our economy.”

During the same weekend as the Queen City Ex, the Regina Folk Festival was taking place in Victoria Park.

Final attendance numbers aren’t calculated yet but Amber Goodwyn, the festival’s artistic director, said the turn out was “amazing.”

“People came out. People really missed this festival for three years,” Goodwyn said. “The festival this year was on par with previous festivals.”

Goodwyn said the festival provides a boost to a number of sectors of the local economy.

“We’ve got hundreds of volunteers, stage technicians, crews, suppliers, restaurants, all the companies that build the infrastructure,” she explained.

“It’s really important, especially for the entertainment industry aspect who were on pause for essentially three years. People are just so happy to get back to work.”

PROVINCIAL TOURISM RAMPING UP

According to Tourism Saskatchewan, the province is rebounding from the COVID-19 pandemic.

“We’re continuing to come back from 2020 especially, but last year we saw a small recovery and this year we’re seeing even stronger growth,” Jonathan Potts, the CEO of Tourism Saskatchewan, said.

“Some parts of the industry are seeing really strong numbers, even stronger than pre-pandemic. Others are still trying to catch up to where they were before.”

Hotel occupancy is one area where things are climbing.

“In 2019, our hotel occupancy in the summer was in the 60-65 per cent range. We’re actually, in many parts of the province, doing better than that right now,” Potts said.

Camping numbers are down slightly from last year, but remain strong, according to Potts.

Meanwhile, summer events have been hit or miss for drawing people in.

“It’s been quite uneven,” Potts said. He added that while Queen City Ex saw a record breaking year, not all events have had the same turn out.

“Some other events, they’ve seen a little softer numbers than they would historically but it’s the first full year back for them so they’re rebuilding and it’s great to see them back and generating revenue again.”

Tourism Saskatchewan said American hunters and anglers are starting to return again, providing a boost in cash flow.

“It’s such an important part of the economy, particularly in places like northern Saskatchewan, so it’s just beneficial for a lot of people to see those American visitors come back because they do spend a lot of money,” Potts said.

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Taiwan's Economy Could Take Serious Damage if China Trade Hit Persists – Bloomberg

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Taiwan’s Economy Could Take Serious Damage if China Trade Hit Persists  Bloomberg



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In an Unequal Economy, the Poor Face Inflation Now and Job Loss Later – The New York Times

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For Theresa Clarke, a retiree in New Canaan, Conn., the rising cost of living means not buying Goldfish crackers for her disabled daughter because a carton costs $11.99 at her local Stop & Shop. It means showering at the YMCA to save on her hot water bill. And it means watching her bank account dwindle to $50 because, as someone on a fixed income who never made much money to start with, there aren’t many other places she can trim her spending as prices rise.

“There is nothing to cut back on,” she said.

Jordan Trevino, 28, who recently took a better paying job in advertising in Los Angeles with a $100,000 salary, is economizing in little ways — ordering a cheaper entree when out to dinner, for example. But he is still planning a wedding next year and a honeymoon in Italy.

And David Schoenfeld, who made about $250,000 in retirement income and consulting fees last year and has about $5 million in savings, hasn’t pared back his spending. He has just returned from a vacation in Greece, with his daughter and two of his grandchildren.

“People in our group are not seeing this as a period of sacrifice,” said Mr. Schoenfeld, who lives in Sharon, Mass., and is a member of a group called Responsible Wealth, a network of rich people focused on inequality that pushes for higher taxes, among other stances. “We notice it’s expensive, but it’s kind of like: I don’t really care.”

Higher-income households built up savings and wealth during the early stages of the pandemic as they stayed at home and their stocks, houses and other assets rose in value. Between those stockpiles and solid wage growth, many have been able to keep spending even as costs climb. But data and anecdotes suggest that lower-income households, despite the resilient job market, are struggling more profoundly with inflation.

That divergence poses a challenge for the Federal Reserve, which is hoping that higher interest rates will slow consumer spending and ease pressure on prices across the economy. Already, there are signs that poorer families are cutting back. If richer families don’t pull back as much — if they keep going on vacations, dining out and buying new cars and second homes — many prices could keep rising. The Fed might need to raise interest rates even more to bring inflation under control, and that could cause a sharper slowdown.

In that case, poorer families will almost certainly bear the brunt again, because low-wage workers are often the first to lose hours and jobs. The bifurcated economy, and the policy decisions that stem from it, could become a double whammy for them, inflicting higher costs today and unemployment tomorrow.

“That’s the perfect storm, if unemployment increases,” said Mark Brown, chief executive of West Houston Assistance Ministries, which provides food, rental assistance and other forms of aid to people in need. “So many folks are so very close to the edge.”

America’s poor have spent part of the savings they amassed during coronavirus lockdowns, and their wages are increasingly struggling to keep up with — or falling behind — price increases. Because such a big chunk of their budgets is devoted to food and housing, lower-income families have less room to cut back before they have to stop buying necessities. Some are taking on credit card debt, cutting back on shopping and restaurant meals, putting off replacing their cars or even buying fewer groceries.

But while lower-income families spend more of each dollar they earn, the rich and middle classes have so much more money that they account for a much bigger share of spending in the overall economy: The top two-fifths of the income distribution account for about 60 percent of spending in the economy, the bottom two-fifths about 22 percent. That means the rich can continue to fuel the economy even as the poor pull back, a potential difficulty for policymakers.

The Federal Reserve has been lifting interest rates rapidly since March to try to slow consumer spending and raise the cost of borrowing for companies, which will in turn lead to fewer business expansions, less hiring and slower wage growth. The goal is to slow the economy enough to lower inflation but not so much that it causes a painful recession.

Cinemagraph
Officials at West Houston Assistance Ministries said its food bank served 200 households on Friday.Meridith Kohut for The New York Times

But job growth accelerated unexpectedly in July, with wages climbing rapidly. Consumer spending, adjusted for inflation, has cooled, but Americans continue to open their wallets for vacations, restaurant meals and other services. If solid demand and tight labor market conditions continue, they could help to keep inflation rapid and make it more difficult for the Fed to cool the economy without continuing its string of quick rate increases. That could make widespread layoffs more likely.

“The one, singular worry is the jobs market — if demand is constrained to the point that companies have to start laying off workers, that’s what hits Main Street,” said Nela Richardson, chief economist at the job market data provider ADP. “That’s what hits low-income workers.”

Lower-income people are already hurting. Mr. Brown’s organization has seen more requests for help in recent months, he said, as local families fall behind on their bills. The size of the typical request has gone up, too, from a few hundred dollars to a few thousand. And he has noticed financial pain creeping up the income spectrum.

Mr. Brown’s observations are backed up by government data: About 12 percent of households reported they were struggling to get enough to eat in early July, up from about 10 percent at the beginning of the year, according to the Census Bureau.

Families can’t easily cut back what they spend on rent, gas or electricity as those prices climb, said Brian Greene, chief executive of the Houston Food Bank, which provides food to Mr. Brown’s organization and other charities across the region. So they cut back on food.

“Food insecurity isn’t about food,” Mr. Greene said. “Food insecurity is about income.”

Many poorer families’ incomes held up relatively well early in the pandemic because government aid — expanded unemployment benefits, stimulus checks and other programs — helped offset lost wages when businesses shut down. Then, as the economy reopened, pay soared for restaurant workers, delivery drivers and other low-wage workers.

But pandemic aid programs have ended and wage growth is slowing in many sectors — average hourly earnings in leisure and hospitality, which rose rapidly last year, actually fell in July from a month earlier for rank-and-file workers. Prices have risen so fast that even unusually quick wage growth has failed to keep up.

Travelers at Kennedy International Airport in New York. If richer people keep going on vacations, dining out and buying new cars, many prices could keep rising.
Gus Powell for The New York Times

The gaping divide between the rich and the poor in this inflationary moment is clear in corporate earnings calls. At Boot Barn, a Western wear retailer, sales of men’s Western boots were down in the first quarter, but sales of higher-priced exotic skin boots picked up. At LVMH, which owns luxury brands like Louis Vuitton and Tiffany, American revenues have been growing strongly, while at Walmart, customers are pulling back as they struggle to afford basic necessities, particularly food, which has run up sharply in price.

“This is affecting customers’ ability to spend on general merchandise categories and requiring more markdowns to move through the inventory, particularly apparel,” Walmart said in its July 25 guidance.

It’s not just apparel: Consumers across the economy are buying less milk and fewer eggs, as prices for those products rise significantly, according to an analysis of government figures by Michelle Meyer, chief U.S. economist for Mastercard. Yet they are also going out to eat at restaurants more often.

The fissures are clear in the car market. Demand for new cars, which generally sell to higher-income buyers, has remained strong and prices continue to soar amid supply shortages — putting upward pressure on inflation. But used-car demand is ebbing and prices have begun to depreciate again.

“We see bifurcation in many parts of the economy and the auto market,” Jonathan Smoke, chief economist at Cox Automotive, said in an interview. “The new vehicle buyer has shown much less price sensitivity.”

Housing is another realm where fates have diverged. Home costs have run up sharply since the pandemic and mortgages are now more expensive, making buying unaffordable for many families. Because would-be buyers can’t afford homes, they are renting, keeping apartments for lease in short supply and pushing rents ever higher. Those soaring rents hit lower-income households especially hard: Roughly six in 10 people in the bottom quarter of earners rent their homes.

By contrast, homeowners have both seen their houses rise in value and often enjoy a built-in inflation hedge, since many refinanced their mortgages and locked in low monthly payments when rates were low in 2020 and 2021.

“The haves are really comfortable right now,” said Nicole Bachaud, an economist from Zillow, also noting that “we’re going to see this gap getting wider between people who are homeowners and people who are probably never going to be homeowners.”

Jamie Kelter Davis for The New York Times

Ms. Clarke, the New Canaan retiree, recently got off the wait list for an affordable apartment for herself and her 24-year-old daughter, who has autism and cannot work. Their new unit has just one bedroom, but it is clean and has new appliances, and at about $1,350 a month, she can squeeze it into her budget.

The lease lasts only a year, however, and Ms. Clarke is worried about finding somewhere to live if it isn’t renewed. Even now, she is barely making ends meet: She lost her car keys recently and had to spend nearly $500 replacing them, wiping out nearly all her small rainy-day fund and leaving her one crisis away from financial disaster.

“When you don’t have money, you’re on a fixed income, you’re constantly thinking, ‘Well, maybe I shouldn’t have bought that,’” she said. “There’s no cushion. There really never was.”

More financially secure families also face headwinds, of course, which could eventually prompt them to slow down spending. The cash savings they built up during the pandemic won’t last forever, and rising prices could prompt many households to pull back their spending.

And swooning stock markets could prompt richer families, who tend to have more money invested, to spend less than they otherwise would. Some economists think that the people in this demographic have mostly kept spending recently — despite their falling economic confidence — because they are eager to take vacations that they had put off earlier in the pandemic.

“Where I’m budgeting, it’s to make room for travel,” said Mr. Trevino of Los Angeles. “I feel like I’ve missed out on that a little bit.”

Economists have speculated that richer consumers’ resilience could fade as autumn approaches and they take stock of their finances amid a slowing economy. But for now, the reality that America’s wealthier consumers have yet to sharply pull back in the face of rising prices may be setting up a tough road ahead for the nation’s poorer ones.

“We really, in a way, haven’t noticed the inflation very much,” Mr. Schoenfeld said. “This economy is very unfair.”

Jason Karaian contributed reporting.

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