Associated Press: “U.S. manufacturers expanded in March at the fastest pace in 37 years, a sign of strengthening demand as the pandemic wanes and government emergency aid flows through the economy.”
Wall Street Journal: “President Biden envisions long-term federal spending claiming its biggest share of the American economy in decades. He wants to pay for that program in part by charging the highest-earning Americans the biggest tax rates they’ve faced in years…”
“It all marks a major turning point for economic policy. The gamble underlying the agenda is a belief that government can be a primary driver for growth. It’s an attempt to recalibrate assumptions that have shaped economic policy of both parties since the 1980s: that the public sector is inherently less efficient than the private, and bureaucrats should generally defer to markets.”
Washington Post: “The issue has received an increasing amount of attention from some of the party’s most extreme members and conservative media figures, but it has also been seized on by Republican leaders like Florida Gov. Ron DeSantis, who is considered a potential 2024 presidential candidate.”
Said DeSantis: “We are not supporting doing any vaccine passports in the state of Florida. It’s completely unacceptable for either the government or the private sector to impose upon you the requirement that you show proof of vaccine to just simply be able to participate in normal society.”
“The hyper-charged rhetoric is directed at a nascent initiative between the Biden administration and private companies to develop a standard way for Americans to show they have received a coronavirus vaccination. The idea behind the passports or certificates is that they would be a way to ensure that people could return to normal activities without risking further spread of a virus that has killed more than 550,000 Americans.”
Washington Post: “Despite the headline numbers, the economy is still in bad shape for millions of Americans. And for many workers … jobs may not come back even if the economy booms again… The bleak picture shows the darker side of the Fed’s plan to keep interest rates near zero for quite awhile.”
“Historically, the Fed raised rates and slowed the economy to keep inflation from creeping too high, even at the cost of higher unemployment. Now the Fed goes by a new playbook, one that tolerates higher inflation if that means more people can get a job. But if all of that growth leaves behind people … the Fed’s path to getting as many people back to work as possible will be even harder to forge.”
Washington Post: “Summers who drafted economic blueprints for the past two Democratic presidents and was a top candidate to lead the Federal Reserve Board under President Barack Obama, has emerged in recent weeks as the loudest critic of President Biden’s approach to reviving the pandemic-era U.S. economy.”
“The Harvard University professor — who advised Biden for a time last summer — warns that the president’s stimulus plan may trigger the highest inflation in more than half a century and could cost Democrats the chance to make lasting investments in the economy.”
New Republic: “From President Biden’s first day in office, when he sent his American Rescue Plan Act to Congress, until March 11, when he signed the $1.9 trillion economic relief package into law, his top officials and allies on the Hill were laser-focused on keeping the Democrats’ slim majorities on board.”
“But they paid less attention to one potential source of danger: the need to screen out provisions which, after enactment, could give right-wing judges openings to shred Biden’s blockbuster reform—just as, a decade earlier, hostile judges nearly managed to shred his predecessor’s signature accomplishment, the Affordable Care Act.”
The CDC will announce on Monday an extension to its national ban on evictions through the end of June, CNBC reports.
“The protection was scheduled to expire in two days, and advocates warned of a spike of evictions if it was not kept in effect.”
“Around 20% of adult renters said they didn’t pay last month’s rent… Closer to 33% of Black renters reported the same.”
“Economists are becoming positively giddy about the potential for economic growth this year as President Biden and Congressional Democrats look set to push forward a $3 trillion infrastructure bill,” Axios reports.
“S&P predicts Biden’s infrastructure plan will create 2.3 million jobs by 2024, inject $5.7 trillion into the economy — which would be 10 times what was lost during the recession — and raise per-capita income by $2,400.”
U.S. Trade Representative Katherine Tai told the Wall Street Journal that the U.S. isn’t ready to lift tariffs on Chinese imports in the near future, but might be open to trade negotiations with Beijing.
Said Tai: “I have heard people say, ‘Please just take these tariffs off.’ But yanking off tariffs could harm the economy unless the change is communicated in a way so that the actors in the economy can make adjustments.”
New York Times: “Labor advocates confess to a gnawing anxiety: Despite Mr. Biden’s remarkable support for their movement, unions may not be much better off when he leaves office than when he entered it.”
“That’s because labor law gives employers considerable power to fend off union organizing, which is one reason that union membership has sunk to record lows in recent decades. And Senate Republicans will seek to thwart any legislative attempts — such as the PRO Act, which the House passed this month — to reverse the trend.”
“Jobless claims reached their lowest level of the pandemic, dropping to 684,000 last week,” the Wall Street Journal reports.
“The dip adds to evidence the economy is ramping up.”
Bloomberg: “The pandemic has created major headaches for the people whose job it is to determine the rate of inflation right now, and set the benchmarks that will be used to measure it in the future. They face two fundamental problems.”
“First, gauges like the Consumer Price Index are based on a ‘basket’ of stuff that Americans typically spent their money on in the past–which looks quite different from what people have been buying in the pandemic year.”
“Second, the standard way of compiling inflation numbers is to visit stores and check their asking prices. Researchers haven’t been able to do that during lockdown, leaving holes in the data.”
James Pethokoukis: “But just because it doesn’t automatically follow from our ballooning deficits that there’ll be a debt crisis — as happened in Greece with the global financial crisis of 2008 — that doesn’t mean big debt isn’t a big problem.”
“Higher debt levels can be like sand in the gears of the American economic machine, causing it to operate a bit less efficiently and less powerfully year after year. After a massive economic downturn thanks to Covid-19, we can afford that slowdown even less. Not only do we need economic growth to help pay down that debt, but some economists worry the post-pandemic world will be one of less risk-taking and less innovation.
“Moderate Senate Democrats are pushing their leaders for a more modest approach to the party’s signature minimum wage hike, arguing for a compromise that can attract broader support after the defeat of a $15 hourly wage proposal,” Politico reports.
“President Biden’s economic advisers are preparing to recommend spending as much as $3 trillion on a sweeping set of efforts aimed at boosting the economy, reducing carbon emissions and narrowing economic inequality, beginning with a giant infrastructure plan that may be financed in part through tax increases on corporations and the rich,” the New York Times reports.
“After months of internal debate, Mr. Biden’s advisers are expected to present a proposal to the president this week that recommends carving his economic agenda into separate legislative pieces, rather than trying to push a mammoth package through Congress.”
“The total new spending in the plans would likely be $3 trillion.”
“Republicans are looking for ways to attack President Biden’s COVID-19 stimulus despite its huge popularity. One idea they’re testing: target add-ons like an $86 billion pension plan bailout,” Axios reports.
“Republicans privately acknowledge they failed to successfully define the legislation before it passed. Now the American Rescue Plan is becoming a law Americans identify as giving them $1,400 checks and supercharging the economy.”
Former Treasury Secretary Lawrence Summers warned that the U.S. is suffering from the “least responsible” macroeconomic policy in four decades, Bloomberg reports.
Summers said that “what was kindling, is now igniting” given the recovery from Covid will stoke demand pressure at the same time as fiscal policy has been aggressively eased and the Federal Reserve has “stuck to its guns” in committing to loose monetary policy.
He added: “These are the least responsible fiscal macroeconomic policy we’ve have had for the last 40 years. It’s fundamentally driven by intransigence on the Democratic left and intransigence and the completely irresponsible behavior in the whole of the Republican Party.”
Wall Street Journal: “Restaurant and hotel bookings are up. Airplane tickets are selling fast. Consumers spent more on gyms, salons and spas in recent weeks than they have since the coronavirus pandemic began.”
“The U.S. economic recovery is picking up steam as Americans increase their spending, particularly on in-person services that were battered by the coronavirus pandemic.”
“The rising number of Covid-19 vaccinations, falling business restrictions, ample household savings and injections of federal stimulus funds into the economy are fueling the surge, economists say.”