view original post

Welcome to The Daily 202! Tell your friends to sign up here. In France today they’re celebrating Armistice Day — the end of World War I. On this day in 1918, after four years of trench warfare, my great-grandfather walked up the Champs Élysées with two of his daughters. Family lore has it that his job, as one of the rare recruits who could read, write, and decipher maps, was to observe the disposition of the French and German front lines at the end of a day of fighting, draw them on a map, and bring them to the higher ups … away from the front lines.

The big idea

The Biden economy is being defined by these two numbers

© Washington Post illustration; Oliver Contreras for The Washington Post; iStock (Washington Post illustration; Oliver Contreras for The Washington Post; iStock)

President Biden is overseeing a bumpy economic recovery that is sending a steady stream of seemingly contradictory signals. To get a sense of the good news, bad news dynamic as the country emerges fitfully from the pandemic, let’s look at two sets of data: monthly inflation and job-creation figures.

Load Error

No one who remembers Bill Clinton’s “It’s The Economy, Stupid” campaign slogan will miss the political importance of Americans’ perceptions of how they, and the country, are doing financially, particularly at the dawn of the 2022 midterm election cycle.

Many other indicators — like gross domestic product growth, for instance, or stocks — are perfectly valid ways to assess the Biden economy. But rising inflation and job growth arguably convey some of the complexities of the current circumstances more clearly.

Surging inflation — a general increase in prices that has the effect of reducing Americans’ purchasing power, making them worse off — has grabbed the headlines, enough that Biden himself felt the need Wednesday to express personal concerns.

Everything from a gallon of gas to a loaf of bread costs more. And it’s worrisome, even though wages are going up,” Biden said in a speech at the port of Baltimore that focused on his infrastructure package. 

“Many people remain unsettled about the economy, and we all know why. They see higher prices,” he added. Americans “go online and they can’t find what they always want and when they want it.”

Inflation on its own could be a potent political issue.

Americans see evidence of it first hand at the gas pump — AAA says the average price for a gallon is $3.417 against $2.117 one year ago, when the pandemic throttled travel — and at the supermarket. No one wants to pay more for a hamburger Tuesday than they did today. And it hits the poorest Americans hardest.

‘Inflation tax?’

Republicans blame Biden for what some observers call the “inflation tax” — suggesting it’s government policy rather than an economic phenomenon driven by soaring consumer demand, labor shortages, disrupted supply chains, and Americans generally having cash on hand (partly because of trillions of dollars in pandemic stimulus signed into law in 2020 and 2021).

In a bad sign for Biden’s domestic agenda, Sen. Joe Manchin III (D-W.Va.) used the same phrase Wednesday in urging Democrats to go more slowly in pushing the massive social spending bill of which he’s been skeptical.

“By all accounts, the threat posed by record inflation to the American people is not ‘transitory’ and is instead getting worse,” Manchin said in a statement Wednesday. “From the grocery store to the gas pump, Americans know the inflation tax is real and D.C. can no longer ignore the economic pain Americans feel every day.” 

The use of the phrase “inflation tax” also gives the impression the price increases are going into the government till.

But the real problem for Biden — errr, and for Americans — is how inflation dampens what has otherwise been robust wage growth, brought about in part by Americans quitting jobs en masse and holding out for better pay, benefits, and conditions.

As my colleague Eli Rosenberg reported Wednesday: “Stagnant wages haunted the country for years until the coronavirus pandemic blew the old economy away and ushered in an era of labor scarcity, giving workers more leverage. Since then, earnings for rank-and-file workers have grown at the fastest pace in four decades.”

“But new data released Wednesday shows how price inflation is eating into many of those higher wages. Prices rose 6.2 percent in the past year, threatening to completely negate gains.

Average hourly earnings are up 5.1 percent on the year, a significant increase after years of middling growth. But inflation is more than wiping out those gains; when adjusted for the costs of rising prices, earnings are down 1.1 percent on the year.

On the job growth front, the news is generally more positive for Biden. Gallup recently found 74 percent of Americans say now is a good time to find a quality job, the highest number since the polling outfit started asking the question in 2001.

Here’s Eli again, this time on the October jobs report: “The nation added 531,000 jobs in October, a strong month of growth that showed an economy gaining new momentum in the final months of the year after being slowed by the coronavirus’s surge in the late summer.”

“The unemployment rate dropped, too, to 4.6 percent from 4.8 percent. It is still up from its pre-pandemic low of 3.5 percent in February 2020 but down significantly from January of this year, when it was at 6.3 percent.”

Perhaps even more important, the prior two months’ job growth enjoyed significant revisions. The initial reports for August and September showed 235,000 and 194,000 jobs created, respectively. The new data showed job creation of 483,000 and 312,000.

That’s still well below forecasts of 720,000 and 500,000, but it’s clearly healthier, even if the country is still not back to pre-pandemic trends.

And ultimately, the coronavirus is the biggest economic “X” factor, especially as large swaths of the country head indoors as the leaves turn and the days grow colder.

What’s happening now

There’s a new candidate for D.C. attorney general

© Attorney Bruce V. Spiva has worked at the Perkins Coie law firm since 2015.

Bruce V. Spiva, longtime lawyer, will run for D.C. attorney general

“Spiva, who announced his decision to run in an interview with The Washington Post, said his broad experience litigating cases on voting rights, consumer protection and antitrust issues make him the ideal successor to incumbent Attorney General Karl A. Racine (D), who will not seek a third term,” Michael Brice-Saddler reports.

Border crossings by Haitian migrants plunged in October, CBP data show

“The number of Haitian migrants attempting to cross into the United States fell by more than 90 percent in October after the Biden administration aggressively ramped up its use of deportation flights, according to preliminary U.S. Customs and Border Protection data obtained by The Washington Post,” Nick Miroff reports in a fresh report.

  • “CBP figures show about 1,000 Haitians were taken into custody along the Mexico border last month, down from 17,638 in September, when huge crowds waded across the Rio Grande to a makeshift camp in Del Rio, Tex., creating a humanitarian and political crisis for the Biden administration.”

Pressure builds on Meadows to cooperate with Jan. 6 committee

Video: Biden: U.S. Economy Starting to Work for More Americans (Bloomberg)

Biden: U.S. Economy Starting to Work for More Americans
What to watch next

“White House Deputy Counsel Jonathan Su sent a letter to [former Trump White House Chief of Staff Mark] Meadows’s lawyer, George Terwilliger, Thursday morning notifying him that President Biden will not assert executive privilege or immunity over the documents and deposition requested by the House Select committee related to his client,” Jacqueline Alemany and Tom Hamburger report.

House Democrats introduce resolution to censure Rep. Gosar over animated video that depicted him killing AOC

“For a Member of Congress to post a manipulated video on his social media accounts depicting himself killing Representative Alexandria Ocasio-Cortez and attacking President Biden is a clear cut case for censure,” the Democrats said in a statement, Felicia Sonmez reports. “For that Member to post such a video on his official Instagram account and use his official congressional resources in the House of Representatives to further violence against elected officials goes beyond the pale.”

You sanction us again? We’ll freeze you, Lukashenko warns Europe, threatening to cut gas supply.

“Belarusian President Alexander Lukashenko threatened Thursday to cut gas supplies to Europe as the European Union weighs new sanctions on Belarusian officials and entities, in a sharp escalation of tensions over a migration crisis on the Belarusian-Polish border,” Robyn Dixon reports.

Lunchtime reads from The Post

To tax or not to tax the rich, Democrats ask themselves

© J. Scott Applewhite/AP Sen. Joe Manchin III (D-W.Va.), who has been a key holdout on President Biden’s ambitious domestic package, speaks with Sen. John Neely Kennedy (R-La.) right, as he leaves the chamber after a vote, at the Capitol in Washington. (J. Scott Applewhite/AP)

Democrats’ lofty tax agenda imperiled by resistance from within

  • Sinema’s demands: “To meet the demands of Sen. Kyrsten Sinema (D-Ariz.), the White House agreed to drop a proposed 3 percent tax on taxpayers earning over $5 million, instead agreeing to target the higher tax to those earning more than $10 million, two people familiar with the matter said on the condition of anonymity to discuss the internal negotiations. The move exempted roughly 35,000 of the wealthiest Americans, or approximately .02 percent of the richest 1 percent, from the new levy, according to the most recent Internal Revenue Service data,” Jeff Stein reports.
  • Pressure from Manchin: “The Biden administration also agreed to pull a proposed tax in late October targeting 700 billionaires after it faced criticism from a number of top Democrats, including House Speaker Nancy Pelosi (Calif.), who complained in one phone call with senior party officials on Oct. 26 that the plan amounted to a publicity stunt, two people familiar with the matter said. Sen. Joe Manchin (D-W.Va.) also raised substantive objections to the plan.”
  • New objectors: “And while the White House is pushing a new 15 percent minimum tax on corporations, the measure faces fresh objections this week from renewable-energy groups who are warning it could undermine the party’s climate goals. Rep. Earl Blumenauer (D-Ore.) said in a statement that he and several Senate Democrats are seeking changes to ensure the minimum tax does not dilute the potential impact of the legislation’s clean energy tax credits to spark new renewable capital projects.”

… and beyond

© Bonnie Jo Mount/The Washington Post Rep.-elect Nikema Williams (D-Ga.) laughs while sitting for a portrait on the steps of the U.S. Capitol in Washington, D.C.

More than a painful period: Endometriosis caucus relaunch aims to boost funding and education

“An estimated 7 million women in the United States, and 200 million worldwide, deal with endometriosis. It also affects transgender and gender-diverse people. People who deal with significant bouts of pain may be forced to miss out on work or school. This includes [Rep. Nikema] Williams as a sitting congress member; during the relaunch event she said she recently had to find another lawmaker to vote for her by proxy because endometriosis pain left her unable to attend proceedings in the House chamber,” the 19th‘s Candice Norwood reports.

The Biden agenda

© Drew Angerer/Getty Images President Biden waits to speak about the recently passed $1.2 trillion Infrastructure Investment and Jobs Act at the Port of Baltimore on Wednesday. (Drew Angerer/Getty Images)

Biden-Xi virtual summit tentatively set for Monday

“The confirmation of the summit’s date follows days of White House refusals to provide details on the agenda or its timing besides ‘before the end of the year.’ White House officials this week have sought to lower public expectations for the summit’s outcome,” Politico’s Phelim Kine and Nahal Toosi report.

Infrastructure bill will ease economy woes, just wait, Biden says

“President Joe Biden touted his $1 trillion infrastructure plan Wednesday as an eventual fix for the nation’s inflation and supply chain woes — if Americans just have the patience to wait for the construction to begin,” the AP’s Josh Both and Colleen Long report.

Biden announces effort to ID toxic air issues in veterans

The president is using his first Veterans Day in office to announce a new effort that “centers on lung problems suffered by troops who breathe in toxins and the potential connection between rare respiratory cancers and time spent overseas breathing poor air, according to senior White House officials. Federal officials plan to start by examining lung and breathing problems but said they will expand the effort as science identifies potential new connections,” the AP’s Colleen Long reports.

The ‘I feel your pain’ conundrum

“[Biden] is trying to convey that the economy is doing great, though its greatness still isn’t all that good; that his massive infrastructure bill is historic, but far more spending is needed and soon; and that even though America has bounced back from the pandemic better than other countries, its recovery is nowhere near complete,” Politico’s Christopher Cadelago and Eugene Daniels report.

“Presidents rarely find themselves trapped in such obvious and politically perilous limbo as Biden now finds himself.”

Biden’s next inflation threat: The rent

“Housing costs just posted one of their largest monthly gains in decades, and many economists expect them to loom large in inflation figures over the next year heading into the 2022 midterm elections. It’s not just economists — the Federal Reserve Bank of New York said in research released Monday that Americans on average expect rents to rise 10.1 percent over the next year, the highest reading in the survey’s history,” Politico’s Katy O’Donnell and Victoria Guida report.

How global climate targets are set and what they mean, visualized

“How much warming can the world bear?” Adam Taylor and Harry Stevens report what different levels of warming would look like, and how global temperature targets have been set.

© The Washington Post

Hot on the left

(Neil Jamieson for The Washington Post)

Opinion: Have Democrats reached the limits of White appeasement politics?

“Party leaders for decades have informally adopted a strategy of White appeasement — by which I mean they have frequently taken actions, often subtle, to demonstrate to White Americans that they aren’t too tied to civil rights causes and people of color. Sometimes this means Democrats taking a stance on a racial issue to align with views of moderate and conservative White people; other times it is Democrats avoiding a stance on a racial issue for the same reason. The Democrats’ White appeasement is their countermove to the Republicans’ White grievance,” columnist Perry Bacon Jr. writes.

“But the questions of if, when and how Democrats pursue White appeasement politics have always been contested within the party. And right now, that debate is perhaps more relevant than ever before.”

Hot on the right

© Pool/Reuters Rep. Adam Kinzinger (R-Ill.) gets emotional as he speaks during a hearing by the House Select Committee investigating the Jan. 6 attack on Capitol Hill. (Oliver Contreras/Pool via Reuters)

House Republicans who backed infrastructure bill face vicious backlash

“One caller instructed Representative Adam Kinzinger of Illinois to slit his wrists and ‘rot in hell.’ Another hoped Representative Don Bacon of Nebraska would slip and fall down a staircase. The office of Representative Nicole Malliotakis of New York has been inundated with angry messages tagging her as a ‘traitor,’” the New York Times‘s Catie Edmondson reports.

Today in Paris (all times Eastern)

Vice President Harris will speak at the Paris Peace Forum at 1:05 p.m.

Harris and Second Gentleman Doug Emhoff will eat dinner with French President Emmanuel Macron and first lady Brigitte Macron at 2:30 p.m. at the Élysée Palace.

In closing

A tuna sandwich from a Subway in San Anselmo, Calif. (Photo Illustration by Justin Sullivan/Getty Images)

The Subway tuna lawsuit has returned. And the allegations are … upsetting.

“The on-again, off-again Subway tuna lawsuit is on again, and this time the plaintiffs are revealing their test results. They claim that 19 of 20 tuna samples from Subway locations throughout Southern California had no detectable tuna DNA, and all of the samples contained at least one other animal protein, whether chicken, pork or cattle,” Tim Carman reports.

Thanks for reading. See you tomorrow.

Continue Reading