To raise, or not to raise rates? Critics assail Fed Chair

Mr. Powell

In what seems to be pressure from the White House the FOMC of the Federal Reserve on Wednesday announced that the last rate hike would be a quarter of a point, and then announced, based in part, from other members that the Feds would look at a neutral rate, causing many observers to wonder what that meant, and why, now.

For some that pressure, in the form of either public shaming by the president, or private meetings with administration officials, makes some economists nervous that the Federal Reserve in its mission to keep inflation at 2 percent, and the nation at full employment, a basic in every undergraduate macroeconomics course, and some high school curricula, might be at risk.

President Trump seems not to have absorbed this, at best, and his remarks about the Fed and its chair, Jerome Powell not only break precedent, but also good manners.

To wit: “Mr. Trump's main beef with the central bank is that its ongoing policy of hiking interest rates is curbing growth just as Americans are reaping the benefits a buoyant economy. The job market is humming, with unemployment at its lowest rate in nearly half a century. Wages, which barely rose during the post-recession "recovery," are finally giving workers a meaningful pay bump. Inflation remains tame. So why mess with success?”, reported cbsnews.com.

"Inflation has continued to surprise to the downside, not by a lot, though, claimed  Powell.

When a central bank succumbs to political pressure, the journey ahead is fraught with pitfalls, and maybe even some pratfalls.

Then there are others that are saying that they would not because of market volatility - the specter of the Dow Jones plummeting, and that higher rates are crimping growth, for example in the housing market, and that the nation is climbing out of the Great Recession.

So for good measure, let’s hear from CNBC’s resident economic curmudgeon, Jim Cramer who said without a hint of regret:  "If I were running Trump's re-election campaign, Jay Powell would be my worst nightmare," said Cramer, who, like the president, has been calling on Powell to stop. Powell apologists, "they must have no sense or empathy for what's about to happen to the working person in this country."

“But the messaging in the Fed’s dot plot of interest-rate projections, policy statement and Fed Chairman Jerome Powell’s press conference are all more important than the move, and most economists think they will uniformly lean dovish, analysts said. At some point, perhaps as soon as March, the Fed will skip a quarterly rate hike. At the moment, most economists think that will be a pause and not the end of the tightening cycle,” reported Market Watch in a predictive spirit the day before the expected increase.

Dovish, if we remember, was the byword of Powell's predecessor, Janet Yellen, and she, too, was assaulted for that position, yet it also seems that the martyr’s crown is not for him, as he struggled for a self-described pause.

Ms. Yellen

Some have said that 2019 is the year for cutting, but let’s hold that thought for a moment.

Continuing in that vein, we see, “Michelle Meyer, head of U.S. economics at Bank of America Merrill Lynch, [who] said Powell must sound reassuring without sounding hawkish.

“The key words will be caution, patience, risks and data dependence,” Meyer said.

The reduction in the dots will be seen as a “market-friendly capitulation” and the market is already anticipating the move with current market pricing suggesting less than one hike in 2019, Meyer said.

“Powell blinked,” said Steven Ricchiuto, chief economist at Mizuho Securities USA.

Are we to assume that this is truly the position of the market?

At the risk of sounding “wonky”, a positive in my book, at least, “It is positive because it sends a tone that they are not overtightening and the yield curve is not going to invert,” Ricchiuto added.

A brief refresh for those that avoided macroeconomics like the plague, in favor or a beer at the campus pub: “When short-term yields on government debt pop above their longer-dated peers, it is often a prelude to a recession. The flattening yield curve is a key market concern,” he explained.

Yet, the market did erupt preceding the announcement of another rate hike, and “Erasing a 380-point gain prior to the Fed decision, the Dow Jones Industrial Average sank 351 points, closing at a 13-month low. The S&P 500 finished at a 15-month low, with 60 percent of the index now in a bear market, marked by declines of 20 percent or more from recent highs. The Dow opened nearly 100 points lower on Thursday.”

These could have been that unseen hand that we all learned about, decades ago, guiding the economy, but humor aside, selling is always an option for the market.

As promised earlier, another route, hovering in the background is the opposite -- the R word writ large - recession, and that some are saying is close on our heels, even with a rise in employment, and a strong dollar --- and that in 2020 we will see rates cut. So, take that!

Hold on say others, Powell "is raising the possibility of moving the landing zone by saying that we're not too far from the neutral rate and don't need to raise rates as much as previously thought," said Gregory Daco of Oxford Economics,” and also added, in his interview with CBS, that “he thinks Mr. Trump's claims that the Fed is denting the economy don't hold up to scrutiny, noting the strong pace of growth in recent months even as policymakers were in hiking mode. The far bigger impediment to growth next year will be the fading of any stimulus from the massive tax cuts Mr. Trump enacted in late 2017, he predicted.”

Ouch!

"Fed tightening won't be the main source of the slowdown in 2019," said Daco, "it'll be coming from Trump's policies."

Please, sir, may I have another?

Circling back we can also see a myriad of statements that makes many nervous that Powell is trying to serve two masters.

"Where we are right now is the lower end of neutral," he said during a news conference at the conclusion of the two-day Federal Open Market Committee meeting. "There are implications for that."

Thanks to the good office of CNBC we also see that “Statements Powell made over the past several months about the neutral rate have caused sharp market fluctuations.

In early October, the chairman said the Fed was "a long way" from neutral. The statement coincided with the beginning of a rough wave of volatility that has sent major stock market averages into correction territory.

Then in November, he addressed the issue again, saying the current funds rate was "just below" the range of projections that individual FOMC members had for the neutral level.”

Whose world is this anyway, asked pundits, with only the slightest tongue in cheek; we also heard the chairman say this, in reaction to reporter’s questions on what he was really trying to say:  "Monetary policymaking is a forward-looking exercise, and I'm just going to stick with that," he said.

"There's real uncertainty about the pace and the destination of further rate increases, and we're going to be letting incoming data inform our thinking about the appropriate path," Powell later added.

With the hike, announced Wednesday, the funds rate is now targeted between 2.25 percent and 2.5 percent. The range of neutral estimates from committee members is around 2.5 percent and 3.5 percent.

“The Federal Reserve is "listening" to a plunging stock market but still views the economy as strong enough to stick to an increasingly data-dependent, yet higher, course for interest rates, New York Fed President John Williams said on CNBC Friday. The Fed raised rates by a quarter point this week, the fourth hike of the year, sending stocks SPX, -2.06% sharply lower,” reported MarketWatch.

Then again, all things considered, Powell might be in self-protective mode, knowing that if the economy does run off the rails, next year, he will be Trump’s scapegoat.

Texas Judge on ACA creates a hornet's nest

Judge O'Connor

It could have been called a stealth attack: a Texas judge ruling that the Affordable Care Act, colloquially  known as “Obamacare”, was unconstitutional, just as the deadline approached for the 2019 sign up, or renewal; the move prompted a hue and cry, not only from Democrats, but also from Republican lawmakers, fearing another huge effort, on their part, to replace it, and an even larger blow back from their constituents.

In a move that was obviously deliberate --- a psychological weapon against the much maligned, and much misunderstood 2013 law, the legacy of America’s first black president, Barack Obama, and the fear is that the United States health market will be thrown into chaos, should it be supported.

Former U.S. House majority leader, and currently minority House leader, Nancy Pelosi, who was a pivotal figure in the ACA’s passage, said, in part, from a statement, released by her office:

  

“Tonight’s district court ruling exposes the monstrous endgame of Republicans’ all-out assault on people with pre-existing conditions and Americans’ access to affordable health care. The GOP Congress tried and failed to destroy the Affordable Care Act and protections for pre-existing conditions. Then, in the midterm election, the American people delivered a record-breaking margin of almost 10 million votes against House Republicans’ vile assault on health care.  Now, the district court ruling in Republicans’ lawsuit seeks to subvert the will of the American people and sow chaos in the final day of HealthCare.gov open enrollment.”

  

Many have questioned the reasoning of U.S. District Judge Reed O'Connor’s which is based on the removal of the individual mandate, which he sees as a total invalidation of the law, and its constitutionality, and one that many believe he is in serious judicial error.

Alison Kodjak of NPR reported that "The lawsuit had to do with whether when Congress last year repealed or eliminated the penalty for not having insurance — it was a tax penalty for people who didn't have insurance — whether that meant the rest of the law didn't apply anymore. The court case argued that all of the pieces of the law were dependent upon each other, so by eliminating the penalty the rest of the law fell apart. The judge agreed with that opinion."

The New York Times commented, in their coverage, that, “The Justice Department’s response to the case was highly unusual: though it disagreed with the plaintiffs that the entire law should be struck down, it declined this year to defend not just the individual mandate, but the law’s provisions that protect people with pre-existing conditions. That prompted a coalition of 16 states and the District of Columbia, led by California, to intervene and defend the law.”

Speaking for the Trump Administration, White House spokesperson, Sarah Sanders, was exultant in her praise, noting that "Obamacare has been struck down by a highly respected judge. The judge's decision vindicates President Trump's position that Obamacare is unconstitutional. Once again, the President calls on Congress to replace Obamacare and act to protect people with preexisting conditions and provide Americans with quality affordable healthcare. We expect this ruling will be appealed to the Supreme Court. Pending the appeal process, the law remains in place.”

Not to be outdone, President Donald Trump tweeted, in an almost alleluia-like manner: "As I predicted all along, Obamacare has been struck down as an UNCONSTITUTIONAL disaster! Now Congress must pass a STRONG law that provides GREAT healthcare and protects pre-existing conditions."

"Congress amended one provision of a 2,000 page law and did not touch the rest of the law so it is implausible to believe that Congress intended the rest of the law not to exist," Abbe Gluck, a health-law expert at Yale Law School, said following the ruling.

Going even further, “In a Washington Post op-ed, Nicholas Bagley, a law professor with a focus on health policy at the University of Michigan, failed to make sense of O'Connor's legal case. He determined that the "logic of the ruling is as difficult to follow as it is to defend."

"This case is different; it's an exercise of raw judicial activism," Bagley said. "Don't for a moment mistake it for the rule of law."

Observers have noted that the tables have turned now that the GOP is in power, even now with only the Senate, and the White House; and that decades of accusations of “liberal activist judges”, and “ruling from the bench, and not the law” are okay, as long as they do it.

Lest anyone think that the endgame belongs only to Democratic defenders, even those that on the opposite side of the aisle are calling, it, pun intended, a misjudgment.

“And even many Obamacare critics have spoken out against the ruling. Conservative lawyers that previously criticized the law took issue with the breadth of the ruling. Philip Klein, the executive editor of the conservative-leaning Washington Examiner and author of a book on "overcoming" Obamacare, called it an "assault on the rule of law” in an interview with Business Insider.

Based on a model from Mitt Romney as governor of Massachusetts, Obama, in a neat legislative trick of using a conservative hero to craft national law, the legacy piece faced several challenges in its crafting, but received no help from the Republicans who, in the words of Mitch McConnell, wanted him to be a one-term president.

Several attempts were made to replace the ACA and all failed; and, now O’Connor’s ruling is the latest effort to chip away at a law that helped over 12 million Americans get health care, and especially preventive care from the hills of West Virginia, to America’s urban core cities.

This happened despite talks of death councils, imprisonment and other ill-informed rumors, but it also “expanded Medicaid, which has allowed more than 10 million people to get coverage in states that chose to expand the program. The law also protects people with pre-existing conditions and allows people up to age 26 to be covered under their parents' insurance . . . The ACA also secured more money for Native American health care and made significant changes to allow for generic drugs and to provide funding for Medicare.”

In 2017 Consumer Reports also said that, “As legislators and the executive branch renew their efforts to repeal and replace the Affordable Care Act this week, they might want to keep in mind a little-known financial consequence of the ACA: Since its adoption, far fewer Americans have taken the extreme step of filing for personal bankruptcy.

Filings have dropped about 50 percent, from 1,536,799 in 2010 to 770,846 in 2016 (see chart, below). Those years also represent the time frame when the ACA took effect. Although courts never ask people to declare why they’re filing, many bankruptcy and legal experts agree that medical bills had been a leading cause of personal bankruptcy before public healthcare coverage expanded under the ACA. Unlike other causes of debt, medical bills are often unexpected, involuntary, and large.”

“It’s absolutely remarkable,” says Jim Molleur, a Maine-based bankruptcy attorney with 20 years of experience. “We’re not getting people with big medical bills, chronically sick people who would hit those lifetime caps or be denied because of pre-existing conditions. They seemed to disappear almost overnight once ACA kicked in.”

For those that are worried, take note: “The judge issued what is known as a declaratory judgment — which, unlike an injunction, allows the law to continue unabated until the case is taken up by another court. Democratic states have pledged to appeal the ruling, so O'Connor's decision will likely not be the last word. Meanwhile, people who get access to healthcare through Obamacare's marketplaces or Medicaid expansion will continue to have coverage.”

There is always the law of unintended consequences, and the old adage to be careful of what you wish for still holds, and for those, in the GOP, ready to pop the champagne corks as they damn Obama, that celebration might be only possible if they “think that plenty of unnecessary deaths, suffering, and financial ruin are OK. And Republicans, who suffered huge losses in the 2018 midterms in part because of their extremely unpopular attempts to repeal the ACA, would own this outcome. Plus, it’s essentially impossible to imagine a significant fix that would be acceptable to both a Republican-controlled Senate and a Democratic-controlled House.”

Many legal experts expect that the law will be preserved by the Supreme Court, certain that that is the eventual path, but also note that many of those supportive justices present in 2013, are still on the bench, but stress that “if Judge O’Connor’s decision ultimately stands, about 17 million Americans will lose their health insurance, according to the Urban Institute, a left-leaning think tank, but also the millions more who gained subsidized private insurance through the law’s online marketplaces, and no cap on out-of-pocket costs.”

November Jobs report disappointing, but optimism reigns

Despite optimism on the part of many economists, bankers and media, the U.S. economy was below expectations in the November Job Report, released by the Labor Department on Friday, when it showed that non-farm payrolls were down by 155,000, rather than the expected 198,000.

Many are seeing this as a paradigm, if not a disaster, and most are optimistic, and cite the banner headline of unemployment of 3.79 to cover any perceived cracks in the paint of a report that was hoped to be joyful.

“Adding 155,000 jobs this month is not a disappointment,” said Martha Gimbel, director of economic research at Indeed Hiring Lab. She said the U.S. is still adding “twice the jobs that the economy needs to add each month to keep the unemployment rate steady,” in her remarks to Marketwatch.

Taking the opposite tack from our early assessment, is this: “None of the information released today represents a paradigm change for the economy—the labor market is strong and continues to get stronger,” said “senior U.S. economist Eric Winograd of AllianceBernstein, and he stressed: “This, more than anything else, is the reason that the [Fed] remains likely to raise rates over the course of the next year.”

Wages, still are low, at a gain of only 0.2 for the average, and not the 0.3 that was hoped for; consumer confidence has waned, despite some expenditures that seem to reflect more need, than desire.

In previous months we have examined the myriad of reasons why wages will only increase, including those employers who will only reward those who are accepting new jobs, or those who bring much needed skills to a job; and, many employers are still finding it difficult to attract those jobseekers with the skill that they need.

“Employees who say they are willing to go above and beyond at work has declined,” said Brian Kropp, vice president for human resources at Gartner. One out of four employees used to say they were giving their work an extra oomph — something Gartner calls “discretionary effort.” Now, it’s closer to one in six.

The reason, Mr. Kropp said, is simple: Workers are not being rewarded for their efforts. “One of the things we’ve seen is that it’s harder for employees to get promoted nowadays,” he said. In 2006, for example, it took an average of about two and a half years to get a promotion, compared with four and a half years today,” reported The New York Times.

Labor Force Participation remains the same as in prior months at 62.9 percent, or 133,000, reflecting in part, the growing rise of baby boomers that are retiring; but, as we have cited there are those that do not have a specific reason, yet to most observers, the lack of real wages is a significant factor.

Last month we showed that gender played a role and that more women were entering the workforce at record rates, and that many men are still staying on the sidelines. And, some have said that men want the higher pay, while women,even with the gender gap in pay; and, many are entering, even if only to support the men, who are holding out, but that is more conjecture than fact.

The market has shown strength, as previously reported for low wage earners and those with less education, and has expanded opportunities for African Americans, Latinx, and those with lesser skills.

There are winners in the report, despite the need, or more accurately, the seasonal holiday help, retail jobs increased to over 18,000; manufacturing rose by 27,000; and transportation and warehousing rose to 25,000 jobs, in no small part to the rise of online retail and the need for big box warehouses, plus workers needed to pick and pack the merchandise, as much as haul it long distance.

Bad news is still the case for those marooned in part-time jobs that would like full-time’ indeed full time jobs are still the ones most sought, especially in nursing and retail, and in fact, that rate rose in November from 7.6 percent, from a previous 7.4 in what economists call the real unemployment rate.

For most, the attention is now on the Federal Reserve and whether they will continue to raise interest rates, to prevent the economy from overheating, which is part of their mandate.

“Meanwhile, the recent drop in oil prices has made any near-term acceleration in inflation less likely. A measure of core inflation that excludes food and energy prices, at 1.8% in October, was below where the Fed projects it will be on average in the fourth quarter,” noted National Public Radio.

An added factor, they noted is that “Fiscal policy is another uncertainty. A key source of growth in the near-term, it is set to lose some impetus when a two-year package of federal spending increases expires next September. It is unclear whether lawmakers and the White House will come up with a new agreement for additional spending going into an election year or allow fiscal restraint to take hold.”

With the public drumming that President Trump has given Chair Jerome Powell, many are wondering if he will stay the course, or succumb to pressure, with the by-now standard belittling of administration officials, from the president.

He has said that a “pause “might be needed in the planned progress of rate hikes, but overall, the Fed has said that that there has been no broad shift in interest polcv, ”even if incoming data prompts them to drag out the pace of increases in the months ahead.”

"That's not a lottery jackpot, but it also doesn't set off inflation alarm bells for financial markets or central bankers," Mark Hamrick, Bankrate.com senior economic analyst, said of the wage growth number”, in his cautious remarks with NPR.

Powell has replied that he will not act in accordance with public shaming, but will instead continue the data driven path of his predecessor, Janet Yellen.

What has come out is a push for a neutral rate in 2019, after the mid-December rate increase; a move that has been promoted by Randy Quales, the Reserve’s vice president for bank supervision, between, 2.5 percent and 3.5 percent.

Taking a  look back under the leadership of Alan Greenspan, as chair, the Wall Street Journal cited, “Mr. Greenspan experimented with interest-rate guidance in 2003, when inflation was low and the job market soft. The Fed offered an assurance to investors that short-term rates—then 1%—would remain low for a “considerable period.

The Fed raised rates in quarter percentage point increments at 17 straight meetings between June 2004 and June 2006, and along the way assured investors it would proceed at a “measured” pace. In December 2005, as officials started considering stopping the rate increases, they modified their statement to say “some further measured policy firming” could be needed.”

But there was, later on, a widely held belief that the Fed’s “measured pace” guidance was a mistake because it locked them in to predictable rate changes and betrayed their own uncertainty about the outlook,” the Journal noted.

Taking an honest, and cautious, path was Federal Reserve Bank of New York President John Williams,” who spoke later on Thursday, after Powell expressed confidence in the economy, saying “the biggest challenge facing policy makers is achieving a soft economic landing.

“We have a pretty strong economy -- unemployment pretty low, inflation near our goal -- it’s just managing a soft landing, keeping this expansion going for the next few years,” he said in remarks with former Bank of England Governor Mervyn King at the LSE Foundation in New York.

“In practice we know things happen, unforeseen events can occur. We just need to be really prepared and be nimble about how we respond to changing circumstances,” he said to Bloomberg.com.

While not quite a major issue, yet, tariffs, and the ongoing tension with China, are giving some concerns, at least to the market and investors; yet despite that, and with a moderate global economy, at least pending the U.K.’s Brexit from the European Union, but with the good news from Spain, and their economic recovery, plus a strong U.S. dollar, restraint my indeed rule the day.

Nancy Pelosi 2.0?

In September we covered some of the controversies about the re-election of Nancy Pelosi, as Speaker of the House, should the Democrats take the House, which they have now done. And, the furor over whether Pelosi is too old, at 78 years-old to lead, in this fractious effort has made tongues wag all over the country: Is she progressive enough? Can she impeach President Trump? Is she too much of a centrist?

As previously noted, the GOP stalwart, Newt Gingrich, who was a formidable Speaker of the House, in his time, told an interviewer that she had been in “this business forever” and that she would win, and that her contacts, and toughness were a real factor in the role. In other words, a worthy foe.

Some Dems say that she might not be the person to break the gridlock in Congress, a monumental effort for anyone, but others are pointing out that she is not the new Moses, ready to lead the Dems into the Promised Land.

“Pelosi met with Problem Solvers Democrats last week after they sent her a letter “strongly” encouraging her to embrace their proposals to “Break the Gridlock.” Pelosi described the meeting as “positive and constructive” and credited members for coming forward “with valuable solutions” to restore the House “as the great marketplace of ideas our founders intended, “said Politico.com

Pelosi did score some major reversals, notably the young Alexandria Ocasio-Cortez, who said in a tweet, "All the challenges to Leader Pelosi are coming from her right, in an apparent effort to make the party even more conservative and bent toward corporate interests. Hard pass," the New York Democrat said. "So long as Leader Pelosi remains the most progressive candidate for Speaker, she can count on my support."

Perhaps, the young lawmaker was realizing that support from an established leader, and one who supports female lawmakers was worth the risk. Learning the ropes, and who can support you, is the first rule on Capitol Hill, and it looks like she is learning fast.

Ocasio-Cortez also took a strong stand on the issues, knowing that she is going to have to face them, and she said: “I hope that we can move swiftly to conclude this discussion about party positions, so that we can spend more time discussing party priorities: voting rights, healthcare, wages, climate change, housing, cannabis legalization, good jobs, etc."

As Gingrich exclaimed, “I would say, first of all, Nancy Pelosi is a very smart, very tough person who has earned her position by just brute hard work, by applying her intelligence and by applying a network that has sustained her for a long time,” and he also added, that “Anybody who thinks they’re going to outmanoeuvre her is up against somebody who has literally spent her lifetime — she’s been in this business forever.”

Moving in concert is a 9-member group of Democrats who Politico.com reported on Friday that, “Democratic members of the bipartisan Problem Solvers Caucus are warning House Minority Leader Nancy Pelosi (D-Calif.) she won't win their votes for speaker if she doesn’t back their proposed rules changes.”

“We will only vote for a speaker candidate who supports ‘Break the Gridlock’ rules changes.”

Facing another front Pelosi also is “working to counter opposition from another group of Democrats who gathered 16 signatures from members and members-elect pledging to oppose her for speaker in a Jan. 3 floor vote.”

Using those skills that Gingrich identified she is managing to take free reign to wrangle, deal and even wheel --- case in point: “Her most prominent possible challenger -- Rep. Marcia Fudge of Ohio -- decided against running and instead endorsed Pelosi. The California Democrat also secured the backing of at least one other Democrat who had previously said he'd support new leadership.”

Pelosi offered to make her chairwoman of the House Administration Subcommittee on Elections previously a defunct position. Checkmate.

Continuing the dance, she had some good news: Rep. Brian Higgins (D-N.Y.), endorsed her on Wednesday after Pelosi “pledged to prioritize an infrastructure bill and legislation to open Medicare to people over the age of 50. Higgins had criticized the Democratic leader for months, vowing repeatedly to vote against her in the new Congress.

“Some will ask why I have changed my position. The answer is simple: I took a principled stand on issues of vital importance not only to my constituents in western New York but also to more than 300 million Americans whose lives can be improved by progress in these areas,” Higgins said in a statement.

Money might not bring you love, but it can help in a hotly contested election and the midterms showed that it can help your team win.

“Pelosi was also far-and-away the most prolific fundraiser for the Democrats this cycle, bringing in more than $137 million for the party’s campaign arm, vulnerable incumbents and first-time candidates hoping to flip GOP seats in the most hotly contested races,” said the Hill in its coverage.

Notably, those that she helped did not sign the insurgent letter, showing that they know who helped butter their bread to victory.

Going back to the Gingrich statement, “The slow erosion of opposition has highlighted the sheer power — and many tentacles — of the Pelosi machine, which is churning at full throttle heading into the closed-door Democratic leadership elections, scheduled for Nov. 28.”

Chipping away at the opposition, like Dominoes, seems to be the hallmark of Pelosi and as the Hill noted: “Higgins, for instance, wanted Rep. Karen Bass (D-Calif.), a senior CBC member, to launch a leadership bid. Yet Bass announced her support for Pelosi late last week — a move that influenced Higgins’s decision to back Pelosi.”

What do voters think” “A new poll, conducted after the midterm elections by Politico and Morning Consult, found that 48 percent of Democratic voters back Pelosi’s Speakership ambitions, versus 22 percent who oppose her ascension.”

One area of concern for many that oppose her is to impeach the president, yet Pelosi knows that it would require at least 20 votes from GOP members of the House, an unlikely event with party solidarity, but also that holding Trump to the checks and balances, outlined in the Constitution, is a better prospect, than trying to win over Republican lawmakers, who often hold their nose, and give at least outward support for the embattled Trump.

Taking to task the moderate Republicans can help achieve a neutralizing effect that a political veteran, like Pelosi than a neophyte, no matter how earnest, or a benchwarmer, who hasn’t been in the game.

With the rebuke of Chief Justice Roberts to the president over his criticism of an “Obama” judge, this is an opening to garner support among those same moderates.

In January, the results will be seen, and most observers, especially those inside the Beltway, are betting on Nancy.

Update: The Hill reported that "House Democrats voted overwhelmingly Wednesday to nominate Rep. Nancy Pelosi (D-Calif.) to the Speakership in a 203-32 vote.

The outcome was no surprise despite an entrenched rebellion from insurgent lawmakers who want changes to Democratic leadership. Pelosi was running uncontested and enjoys widespread support within the liberal-heavy caucus she’s led since 2003.

The 32 votes against her were fewer than the 63 votes won in a 2016 contest for minority leader by Rep. Tim Ryan (D-Ohio), who ran against Pelosi at the time.

Still, Pelosi faces a tougher test the first week of January, when the full House meets to choose the Speaker in a public vote requiring a majority of the entire voting chamber.

Pelosi can not afford 32 Democratic votes against her in that contest, though she has weeks to convince some of her opponents to either vote for her on the floor or vote present — reducing the total number of votes needed for victory."

Fending off opposition created an environment where she not only gained the nomination, but also, perhaps due to advancing age, and a lifetime of achievement, Pelosi agreed to pretty much a four-year term, when she reaches her early 80's, gaining more support. But, also in a display of strength in an Oval office meeting with Trump, she showed her mettle by challenging him on the facts of immigration, and told him point blank that getting $5 million dollars to build his, by now, infamous wall, would never happen.  Checkmate.

Updated 15 December 2018 - 2:56 CT

New lawmakers show diversity and fresh faces

Tuesday’s midterm election proved the pollsters correct, for once, said many, and gave the House to the Democrats, but it also gave a number of firsts, one being a huge voter turnout among the young, and secondly a handful of women that were minority women, of color, and of religion. And, one outlier in the form of the unresolved gubernatorial election in Georgia, where Stacy Abrams, is less than a sliver away from a recount, and in a state where voter suppression ruled, and where her opponent, as secretary, of state that there were 25,000 ballots that had not been counted.

One big surprise was the defeat of Joe Donnelly, in Indiana to Mike Braun, 43.4 to 52.6, for the Senate, considering that he was one of the most conservative Democrats on the HIll; and Ted Cruz fending off a very strong lead from Beto O’Rourke  and the recount in the Florida Senate, where Tallahassee Mayor Andrew Gillum was defeated by DeSantis in an election that was marred by racial animus, with a razor thin victory for Desantis with 49.6 versus, 49.2 for Gillum.

Adding to the mix was the victory on the Cook County Board of Commissioners for an openly gay man, Kevin Morrison, formerly a full-time field organizer for Hillary Clinton, and who seemed to have learned from that experience by knocking on doors, and emphasizing “bread and butter” issues such as health care, and property taxes strategically reached out to working class people.

Kevin Morrison

Welcome news for many was the defeat of Wisconsin Gov. Scott Walker, the union busting arch conservative who lost to Tony Evers, by 31,000 votes, and who scaled back Obama era environmental protections.

While veteran lawmaker Nancy Pelosi is poised to resume her role as Speaker of the House, there is also the calls for impeachment by the party’s radical left, and those on the right that want to see democratic governance, and that now faces the absence of Jeff Sessions as attorney general, and an acting AG that says he will not recuse himself from the Mueller investigation, and which is going to give a real push to any moderate efforts that Pelosi may want and to maneuver with a president that does not want to play fair, at all.

While the appearance of malfeasance on the part of Trump can be debated, its apparent that, as with former FBI director, James Comey, that Trump is afraid of the findings of the Russian collusion with he and his family. But, the road to perdition may not happen, with many of his supporters backing him, to the point of insulation, despite the findings of the special investigation.

The turnout by youth also will galvanize the need for gun control, always a hot button issue, with seemingly monthly mass shootings, and the need for health care that most exit polls showed to be of great concern, and that was promulgated by the Democrats.

Women seem to have been galvanized by the Women's March and the #MeToo movement have surged ahead, and in unexpected places such as Illinois, where in the 14th Congressional District, a largely white suburban area, with DeKalb, Du Page, and Lake County, as part elected a 32-year-old black woman Lauren Underwood, who defeated a four-term Republican incumbent, Randy Hultgren, showing not only a step toward racial inclusiveness, but that the profile of women elected officials is younger, browner, and blacker than previously thought possible.

Alexandria Ocasio-Cortez sailed in New York, after her supreme primary victory, as the youngest woman ever elected to Congress. And, in another victory for women of color, Jahana Hayes was elected as the first black women representing Connecticut in the House.

Alexandria Ocasio-Cortez

Close behind were Veronica Escobar and Sylvia Garcia as the first Latina women to represent Texas in Congress.

Making another historic inroad were Palestinian-American Rashida Tlaib, and Ilhan Omar, a Somali-American as the first Muslim woman elected to Congress, representing Michigan and Minnesota respectively.

While some observers and voters are wary of a divided Congress, this is not an expression of defeat, but more of a battle, say some, and a return to those lessons taught in civics classes across America.  And, Pelosi put it well, when she said, “Today is more than about Democrats and Republicans. It is about restoring the Constitution’s checks and balances to the Trump administration.”

There will be cries for impeachment of Trump, and incoming House Judiciary chairman, Jerry Nadler, said last year: “If you are actually going to remove a president from office, you are in effect nullifying the last election. Certainly the people who voted for him will think you’re nullifying the election. It’s OK to do that. It may be necessary to do that—as long as you have persuaded a sufficient fraction of the president’s former supporters, the people who voted for him, that you have to, that it’s necessary.”

For those that expected the millennials to stay at home, there was a big surprise: In Chicago alone, for those aged 25 to 34, there were 162,000 voters from their ranks, just behind those from 55 to 64, with 142,000 votes reported the Chicago Board of Election Commissioners.

The real clincher was the 18 to 29 year-olds whose votes exceeded 31 percent, the highest in the 25 years of midterm history.

“According to TargetSmart, a political data analysis firm, early voting among 18- to 29-year-olds escalated with a 188 percent increase from 2014. States with particularly close races had an even more intense increase in youth voters in comparison to the 2014 election, with a fivefold increase in states like Texas and Nevada,” reported The Daily Northwestern, the student newspaper at Northwestern University.

Co-president of Northwestern College Democrats Claire Bugos, noted that, “The Marjory Stoneman Douglas students led a revolt against the gun laws we have in this country,” and, “I think that we’ve seen those pockets of youth discontent throughout the presidency. Young people see the midterms as a way to easily have a say in their government, and they’re taking advantage of that.”

In the days, and weeks, ahead, final vote tallies will be had, and then the real work of legislating will begin anew with new faces, as they tackle the challenges of a divided country.

Midterm home stretch: the GOP, voters, and key races

The last of a two-part series that look at NAFTA, tariffs, voters, and the latest polls, and other issues ahead of tomorrow's election day.

Tomorrow, Tuesday, is election day where no matter if you are red, or blue, it’s the time where the rubber meets the road, and where the GOP is pinning its hopes on winning to keep both houses firmly under control - yet, some are saying, even President Trump, has all but conceded the House to the Democrats. But, not resting easy, the Dems are rallying the vote and former President Obama, had gone hoarse last night, stirring the faithful to the polls tomorrow.

As we have seen, the Republicans are saying that America has truly become the better place, restored to glory after the defeat of Hillary, the baseness of Barack and the perils of Pelosi ---- and this is base politics at supreme.

The president, perhaps in a hope to keep his campaign promise tried, like heck to renegotiate NAFTA to protect the American working class, or so he said, but a closer look revealed more of a rebranding than a negotiation.

As usual, he touted it as the BIGGEST, the BEST and much like a carnival barker of old, one had the sense that he was selling snake oil, say some.

“The president touted the new pact — the "U.S., Mexico, Canada agreement, called USMCA" — as keeping a campaign promise to renegotiate the North American Free Trade Agreement, which he had long described as perhaps the worst deal ever made,” reported CBS News in their coverage, and included some of the following fact checks:

“TRUMP: "This deal will also impose new standards requiring at least 75 percent of every automobile to be made in North America in order to qualify for the privilege of free access to our markets."

THE FACTS: That's true. But as with any such requirement, it could make autos more expensive by discouraging the use of cheaper components from overseas. The same could be true of another provision, requiring at least 40 percent of a car's content to be built where workers earn $16 an hour. The new United States-Mexico-Canada Agreement indeed contains greater worker protections, a tradeoff that could mean higher costs.

The pact, if approved by Congress, will raise the percentage of a car's content that must be built within the trade bloc to 75 percent from 62.5 percent if it is to qualify for duty-free status.”

And, not to be outdone:

“TRUMP, on overcoming the major hitch with Canada: "Dairy was a deal-breaker. And now for our farmers it's, as you know, substantially opened up much more. And I know they can't open it completely. They have farmers also. You know, they can't be overrun. And I fully — and I tell them that. I say, 'Look, I understand you have limits.' But they could do much better."

THE FACTS: That's a fair reading of one of the agreement's most significant changes — though dairy only accounts for about 0.1 percent of U.S.-Canada trade. Canada's tariffs on dairy imports can approach 300 percent. U.S. dairy farmers have also complained about Canadian policies that priced the U.S. out of the market for some dairy powders and allowed Canada to flood world markets with its own versions.

The new agreement would end the discriminatory pricing and restrict Canadian exports of dairy powders. Still, it's in some respects an incremental advance from the Pacific deal that Trump walked away from. It would expand U.S. access to up to 3.75 percent of the Canadian dairy market, versus 3.25 percent in the Trans-Pacific Partnership. Above that level, U.S. dairy farmers will still face Canada's punishing tariffs.”

In the exchange of words, we almost lost the respect of an old and valued ally, Canada, and the president said that the Canadian finance minister “hates America,” all of which chips away at the alliance for a name change and as one wag put it, “a few gallons of milk.”

The biggest issue for the GOP and the president is immigration, both legal and illegal as he began in 2015, accusing Mexico of sending rapists and murderers to the U.S. and now this has been extended to Central Americans fleeing poverty and violence, but both the optics and the rhetoric fit the bill, right down to his remark, that if the crowd threw rocks at Mexican border guards, then that “might as well be a gun” and that Americans would return in kind.

Coming on the heels of the separation of children from parents, regrettable but not avoidable, say some, that level of condemnation has died down, and Trump discusses putting some of them in tents, as he has done with the children.

Last week’s announcement to repeal, by executive order, (doubtful say most constitutional experts) to repeal birthright citizenship is to stem the tide of what immigration opponents deem a scam. In true fashion, the president said that the US was the only country to do so, but, in fact, there are 30 countries that do so.

In a rally in South Central Illinois, this past week, the crowds roared at these words.

Economics at play

The White House has touted economic gain, as a result of their economic policies, yet the Tariffs on Chinese steel and aluminum - ironic since as Clinton noted during the debates that much of his hotels and resorts were built with Chinese steel.

“The only countries which remain exempted from the steel and aluminum tariffs are Australia and Argentina. Separately, on July 6, the Trump administration set a tariff of 25% on 800 categories of goods imported from China worth $50 billion,” noted the popular online source, Wikipedia

The result announced on Monday was that “China’s retaliatory tariffs on U.S. exports are starting to be felt in hundreds of cities with more than 8,000 requests across the country for tariff exemptions. That’s causing some toss-up state Democrats to appeal to those businesses hardest hit by the trade war. The notion is they will somehow fight harder for exemptions,” noted Forbes, and who also said that while not high on voters minds, those Dems in swing states such as Indiana, it might be a dark horse issue to gain even more votes for the Democrats.

Gender and LGBT rights

For the LGBT community Trump’s desire to define gender by the gender at birth, seems, at first blush directed only at transgender people, but is really a trial balloon, to see how far he can go with earmarking other laws, such as the legalization of same-sex marriage.

Young voters

One group galvanized by the Parkland School shootings are young people, those defined as between 18 and 24, and they are, while traditionally less enthused by non-presidential voting are gearing up for an increase.

According to a recent poll by the Harvard Institute of Politics, “Americans under age 30 are 54 percent more likely to vote than they were in our 2014 midterm polling. Forty percent tell us they will vote in the midterms next week. While young voters generally overestimate their actual rate of participation by 7.5 points on average, by almost every measure, we are likely to witness an election for the ages. Compared with 2014, engagement from young Democrats is 24 percentage points higher (30 percent likely to vote in 2014 compared to 54 percent today), and Republicans are quickly closing the gap as they try to match that intensity. Six months ago, 36 percent of Republicans expected to vote, and in the weeks after the hearings to confirm Brett M. Kavanaugh to the Supreme Court, that percentage increased to 43 percent.”

White college educated women, on the left, are predicted to vote 25 percent more than they have in the past, adding even further excitement to this election.

Voting rights and voter suppression

Of deep concern are voting rights, and especially, in Georgia, where in a key race between Stacey Abrams and Brian Kemp who also happens to be the Secretary of State, that author Ari Berman called the epicenter of voter suppression, where 1.50 million voters have been purged their roles based on lack of a matched signature -- to other state databases, often as much by a hyphen, or Harry versus Henry, or Al versus Alexander, cutbacks on early voting; often affecting 70 percent of racial minorities, and ethnic minorities, that are often people of color and poll workers who do not understand some surnames.

Confusion reigned where there was a letter sent saying that there was a pending application, but confused those who received it thinking that they could not vote, but they could, at the polling station with proper identification.

We reported earlier about voting rights for those convicted of felonies, here is a recap:

Allowing those that have been previously incarcerated is another sea change affecting the midterms, and this time from those who normally would be denied the right to vote, or would they?

The New York Times recently examined this area of opportunity for the Democrats, which few have thought, about and looked at this scenario: ”If a person is convicted of first-degree murder in the state of Vermont, he or she will retain the right to vote — even while incarcerated. But a person who commits perjury in Mississippi could be permanently barred from casting a ballot there.”

“It is up to states — not the federal government — to say whether convicted felons can vote, and which ones, and when. So the rules for convicted criminals can change, sometimes drastically, from one state to the next.

In the end, elections are about numbers, and numbers of voters, which the Dems need, and which black candidates need, such as Abrams, need, and the chipping of these rights make tomorrow even more of a nail baiter.

Here is a sampling of just a few Key races to watch, for their numbers, among others, are Arizona, a Senate seat held by conservatives by Barry Goldwater and John McCain, is now between “Republican Martha McSally has been pushed to the right and faces a tough race against Democrat Kyrsten Sinema in a state with a growing Latino population,” noted the Guardian.

The 14th House district in Illinois is between Republican Randy Hultgren that holds “Chicago’s sprawling outer suburbs. His challenger Lauren Underwood is a much-touted Democratic recruit who is hoping to pull off an upset against the incumbent in a Republican leaning district that Trump won by 4,” they reported.

Getting a lot of ink is Texas where “Three-term congressman Beto O’Rourke has captured national attention with his challenge to incumbent Ted Cruz. The Texas Democrat still faces an uphill battle in a Republican state where incumbent governor Greg Abbott has an overflowing warchest and no real competition. However, even a close loss would mark O’Rourke as a national figure”, noted the Guardian.

Finally, and most importantly, remember to VOTE, if you have not done so by early voting.