by Greg Valliere, AGF Management Ltd.
STUNNED TO SEE THE ECONOMY DECELERATING, and facing a major haircut on new social spending, the Biden Administration took off the gloves yesterday. Joe Biden’s sweeping Covid proposals will encounter push-back from conservatives — and, perhaps, from the courts — but at least Biden understands that he has to boost public confidence.
BLASTING THE 80 MILLION American adults who have not gotten vaccinated, Biden sent a sharp message: “We’ve been patient with those who refuse to be vaccinated. But our patience is wearing thin. And your refusal has cost all of us.”
BIDEN’S PROPOSALS WERE SURPRISINGLY TOUGH: He wants mandatory vaccinations for federal workers and contractors, new Labor Department vaccination rules at companies with more than 100 employees, and he called on schools to adopt new vaccine, mask and testing requirements.
THERE WILL BE PUSH-BACK, but polls show overwhelming public support for tough measures. Several conservative governors blasted the proposals; South Dakota Gov. Kristi Noem, undoubtedly eyeing higher office, said her advisers are weighing a lawsuit against the Biden proposals.
BIDEN’S RESPONSE WAS WASN’T SUBTLE: “If those governors won’t help us beat the pandemic, I will use my power as president to get them out of the way.” So the gloves are off, with Biden betting that his proposals will bring signs of improvement later this fall. He now owns this issue, and bipartisanship is over.
BOTTOM LINE: New cases of the Delta variant may be leveling off, but many Americans are reluctant to return to work or send their kids back to school. If Biden’s strong-arm tactics lead to a sharp rise in vaccinations, public confidence could rebound later this year — that’s the key for an economy that suddenly looks shaky.
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DONALD TRUMP, THE SHADOW PRESIDENT: The Washington Post reported yesterday that Donald Trump is meeting with parents of soldiers who died in Afghanistan last month. Trump is increasingly visible, anointing GOP challengers in next year’s election and granting interviews with the right-wing media.
TRUMP HAS COMMITTED to appearing at an Oct. 9 rally in Iowa, home of the first presidential primary. Some of his supporters think he soon may announce that he’s running in 2024, but we think he may wait — to ratchet up the suspense and keep the limelight focused on him. In any event, he will continue calling the shots in the party.
WE’RE NOT CERTAIN THAT TRUMP WILL RUN, because he faces an avalanche of tell-all books and likely indictments, starting soon. Of course, he will dismiss this as “fake news,” and his supporters will agree.
IF TRUMP RUNS, he almost certainly would win the GOP nomination; the party’s base still loves him. He undoubtedly would face an opponent or two; Nebraska firebrand Ben Sasse will be an irritant. Bottom line: Winning the nomination is one thing; reclaiming the presidency is another. Trump lost in a near-landslide last November, after all.
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REDUCING TENSIONS WITH CHINA: After a 90-minute phone conversation, Presidents Biden and Xi instructed their aides to say all the right things, pledging to work on trade disputes, climate change, and regional issues. It was their first conversation since February.
TALK IS CHEAP, but it strikes us that an improvement in the tone between Washington and Beijing is a positive development. “The two countries have no reason to fall into conflict as a result of competition,” a Chinese official said yesterday. We think the next step will be a visit by Treasury Secretary Janet Yellen to China this winter.
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This post was first published at the AGF Perspectives Blog.
