Tim Talks Politics - The Weekly Brief, August 16, 2019
The Weekly Brief - August 16, 2019
The return of recession?
The stock market had its worst day of 2019 this last week amid fears of a coming recession due to falling bond yields. “What’s that?” you say? Bottom line, something called an “inverted yield curve” in bond markets tends to be strongly correlated to recessions and that’s what happened this last week. So does that mean we’re header for a recession?
Well, correlation doesn’t equal causation, and American consumers sure weren’t acting like a recession was around the corner, and China has agreed to restart trade talks after Trump pulled back on tariffs.
However, the ongoing trade war with China is only one of several areas of global concern for economists, and US economic growth has slowed. Additionally, there has been a global slow down on several fronts, but Italian debt (in addition to Brexit) continues to be a worrisome prospect for the Eurozone and, by extension, the global economy. Still, some would argue that worries and concerns do not a recession make.
Hong Kong
China agreeing to restart trade talks maybe just one sign of its weakening hand as protests continue unabated in Hong Kong. If anything, the protests have grown. In addition to street protests, Hong Kong’s airport was shut down for several days this week.
China has massed troops at the Honk Kong border leading many to both speculate and fear a crackdown like the one that occurred at Tiananmen Square in 1989. Whether that happens or not, violence on the streets of Hong Kong seems to be increasing and Hong Kong’s government seems unable or unwilling to contain police and protester violence.
With other human rights flashpoints in Tibet and among the Uighur population, China can ill afford another human rights catastrophe, which leads some to conclude that Beijing will go easier on Hong Kong, but the situation is still pretty fluid.
Brexit is back...ish
Having been elevated to 10 Downing Street, British Prime Minister Boris Johnson has vowed to deliver Brexit by the October 31 deadline (all other previous deadlines proving as porous as Eurozone borders). Tough talk, but is Johnson willing to back that up? He seems to be, even going so far as to threaten closing down Parliament, which the Speaker of the House of Commons, John Bercow has promised to prevent.
If closing down Parliament isn’t enough, Johnson has already moved to to take the “Irish backstop” option off the table with Brussels, which Brookings believes ensures a “no-deal” hard Brexit in October. In short, it’s going to be a dicey Autumn in the British Isles.
India and Kashmir
The simmering conflict over Kashmir that I reported on last week is just one of several international spats between US partners and allies. However, this one spat has the greatest potential for developing into a highly significant conflict as Pakistan has responded to India’s move towards annexing Kashmir by cutting off economic ties and downgrading diplomatic relations. However, even as Pakistan prepares countermeasures, it’s Foreign Minister has cautioned Islamabad that Pakistan is playing with a weak hand.
Labor and immigration
In a controversial move, the Trump administration moved to amend rules governing the granting of green cards to immigrants, raising the possibility of denying admission to the US if the applicant has been a public charge.
This is an interesting move as it could disproportionately harm low skill, low income workers, which are currently in fairly high demand right now according to Vox. So why threaten economic growth by potentially curbing a labor source? Perhaps that’s exactly why the Department of Homeland Security is amending the rule - reasoning that it’s less likely that a low skilled/low income immigrant would have difficulty finding a job. But the problem is that such a job may still not pay enough to avoid needing public assistance.
Good news
Surveying global events can frequently feel like an ongoing study in human misery, but the last couple of weeks have also yielded some good stories. One of those stories comes from one of the world’s most troubled countries: Iraq.
Al-Monitor reports that Iraq is achieving self-sufficiency in strategic crops, which is a critical sign of economic stabilization.
Lawfare notes that the US is starting to use the provisions of the 2012 Magnitsky Act to gain leverage on actors within in Iraq charged with corruption and human rights abuses. This is particularly a good sign given the ongoing tragedy of enforced disappearances.
Closer to home, the drive to eliminate the Electoral College as a factor in American presidential elections seems to be running into headwinds as Colorado voters are mobilizing to remove the Centennial State from the National Popular Vote pact.
NOTE: I strive to maintain an even tone in the Weekly Brief and recognize that keeping the Electoral College in its current form may not be “good news” to some. This is one of those rare instances where I will let my policy preferences show and declare that I consider such a development good news indeed. Perhaps the continuing viability of the Electoral College would be a good subject for a future podcast?
Epstein
Jeffrey Epstein, friend of the powerful and influential, was found dead in his New York prison cell last weekend where he was awaiting trial on sex trafficking charges. The man’s appalling character and abuse of power, coupled with his closeness to the Clinton AND Trump families made him one of the most well known and hated people in America.
Given his high profile and his ties to equally maligned political actors, his death, initially ruled a suicide, immediately drew attention and the Internet conspiracy mills went into full production. Some of the more thoughtful commentary on the conspiracy theories came from individuals who have some understanding of how the particular prison system works, or prisons generally.
However, conspiracy or no, Attorney General Barr’s DOJ and the House Judiciary Committee have both launched investigations, with the DOJ already acknowledging that there were irregularities in how Epstein’s imprisonment was being handled.
Whither the gun control debate?
Even though shootings in El Paso and Dayton happened just a couple of weeks ago, talk about guns and gun control have dropped off significantly, which is very surprising to me given that this last week saw an alleged shooting at an ICE facility and the shooting of six Philadelphia police officers.
Politico notes that the drop off in coverage on the El Paso shooting is particularly harmful to the Latino community as it drastically under covers their lived experience in the US as the media and politicians opt to trot out their preferred talking points and policy options.
The National Review is one of the few publications I saw actually engaging in a solid gun control debate this week (which is why NR predominates in this section). Writers for that publication proposed argument both for and against a universal background check law.