Bloomberg: “Today, nearly three months after the storm, more than one-third of the island is still without power, and in the areas where it has been restored the service is often unstable, with occasional outages. Thousands of businesses remain closed. Normality sporadically peeks out from it all—on a street with a string of working stoplights, in an air-conditioned hotel lobby—then quickly retreats, as if ungraspable.”
Stan Collender: “If it’s enacted, the GOP tax cut now working its way through Congress will be the start of a decades-long economic policy disaster unlike any other that has occurred in American history.”
“There’s no economic justification whatsoever for a tax cut at this time. U.S. GDP is growing, unemployment is close to 4 percent (below what is commonly considered ‘full employment’), corporate profits are at record levels and stock markets are soaring. It makes no sense to add any federal government-induced stimulus to all this private sector-caused economic activity, let alone a tax cut as big as this one.”
“This is actually the ideal time for Washington to be doing the opposite.”
President Trump said he’ll make a “major” announcement on trade next week at the White House upon returning from his Asia trip, Politico reports.
Said Trump: “We’ve made some very big steps with respect to trade, far bigger than anything you know.”
“We will have more trade than anybody ever thought under TPP. That I can tell you. Probably some of you in this room disagree… ultimately I’ll be proven to be right.”
— President Trump, quoted by the Washington Post, speaking in Japan.
Edward Luce: “How many poison pills does it take to kill a trade deal? Three, according to Donald Trump. Mexico and Canada are bending over backwards to preserve the North American Free Trade Agreement. But their tolerance for Mr Trump’s demands is wearing thin. It seems a matter of time before he declares America’s exit from ‘the worst trade deal ever.’ The temptation to withdraw from the World Trade Organization will grow as Mr Trump’s term wears on. Anyone who thinks he has dropped his vow to rip up the global trading system has not been paying attention.”
“Such tactics are the opposite of the art-of-the-deal image Mr Trump has spun. According to that playbook, Mr Trump opens with extravagant demands that force his counterparties to improve their offers. The final deal is far better than had he begun with a realistic gambit. Yet when Mr Trump refuses to dilute his outrageous opening offer, the suspicion arises that he never wanted a deal. That, indeed, has been his approach to almost every negotiation.”
Axios: The industries at risk if Trump quits NAFTA
FiveThirtyEight: “As you can see in the chart below, Trump’s overall net approval rating is far below where we would expect it to be if the usual relationship between economic and overall approval ratings held for him. Instead of a net job approval rating of -18 percentage points, Trump’s would be projected to be about +12 percentage points.”
“It’s the Congress. That’s where the flaw comes. You can do whatever you want in the administration. Congress is much more about process than about results. That will be tragic for the American economy.”
— Commerce Secretary Wilbur Ross, interviewed by Newsmax.
“The North American Free Trade Agreement, long disparaged by President Trump as bad for the United States, was edging closer toward collapse as negotiators gathered for a fourth round of contentious talks here this week,” the New York Times reports.
“In recent weeks, the Trump administration has sparred with American businesses that support Nafta and has pushed for significant changes that negotiators from Mexico and Canada say are nonstarters. All the while, the president has continued threatening to withdraw the United States from the trade agreement, which he has maligned as the worst in history.”
Bruce Bartlett: “Four decades ago, while working for Rep. Jack Kemp (R-NY), I had a hand in creating the Republican tax myth. Of course, it didn’t seem like a myth at that time — taxes were rising rapidly because of inflation and bracket creep, the top tax rate was 70 percent and the economy seemed trapped in stagflation with no way out. Tax cuts, at that time, were an appropriate remedy for the economy’s ills.”
“Tax cuts became the GOP’s go-to solution for nearly every economic problem. Extravagant claims are made for any proposed tax cut…”
“That’s wishful thinking. So is most Republican rhetoric around tax cutting. In reality, there’s no evidence that a tax cut now would spur growth.
“The incomes of middle-class Americans rose last year to the highest level ever recorded by the Census Bureau, as poverty declined and the scars of the past decade’s Great Recession seemed to finally fade,” the Washington Post reports.
“Median household income rose to $59,039 in 2016, a 3.2 percent increase from the previous year and the second consecutive year of healthy gains, the Census Bureau reported Tuesday. The nation’s poverty rate fell to 12.7 percent, returning nearly to what it was in 2007 before a financial crisis and deep recession walloped workers in ways that were still felt years later.”
President Trump is considering withdrawing from the U.S.-Korea Free Trade Agreement, sources tell Axios.
“Administration sources have cautioned that no decision has been made, but the leaking of these deliberations has startled many in the U.S. business and pro-trade communities, who were under the impression that KORUS withdrawal was not in the cards for 2017.”
“More than $100 billion of annual trade between U.S. and Korea in goods — and billions more in services — hangs in the balance as Trump weighs this decision. Withdrawing from the trade deal would also damage relations between the U.S. and a key ally in Asia at the same moment the North Korean threat is escalating to historic proportions.”
A new Fox News poll finds just 36% of voters are happy with how things are going in the country — down 10 points since April — while 64% are dissatisfied.
Most interesting is that the shift “is not, as is often the case, tied to the economy. Positive views on the economy are higher than in more than a decade: 36% say it is in either “excellent” (6%) or “good” (30%) shape. The last time conditions were rated this positively was August 2004.”
Financial Times: “Donald Trump last month rejected a Chinese proposal to cut steel overcapacity despite it being endorsed by some of his top advisers, as he urged them instead to find ways to impose tariffs on imports from China. One week after the July G20 summit in Hamburg — where Mr. Trump criticised China for flooding the world market with cheap steel — Beijing proposed cutting steel overcapacity by 150m tonnes by 2022. But Mr. Trump twice rejected the deal, according to several people familiar with the internal debate.”
“Wilbur Ross, U.S. commerce secretary, endorsed the deal and brought it to Mr. Trump, but the president rejected the proposal. Mr. Ross, a long-time friend of the president, floated the deal again the following week during the two-day meetings with Chinese vice-premier Wang Yang, but Mr. Trump once again refused to accept it.”
“I know there are some people in the room right now that are upset. I know there are some globalists in the room right now. And they don’t want them, John, they don’t want the tariffs. But I’m telling you, I want tariffs.”
— President Trump, quoted by Axios, in an Oval Office discussion with chief of staff John Kelly and others.