Abuse of Haitian asylum seekers shocks world

 In a dramatic reversal of campaign promises towards asylum seekers, the Biden administration has faced another political bungle, just after alienating France, with harrowing images of Haitian immigrants being beaten back by members of the Border Patrol at the Texas and Mexican international bridge.

These events stand in stark contrast to the president’s stated objectives when it came to asylum seekers and immigrants on the campaign trail, and now in office, the tactics and rulings toward expulsions to Haiti seem more draconian than his predecessor, Donald Trump.

Comparisons to American slavery abound as members of the patrol on horseback used their reigns to ensnare the Haitians, and often using foul curses while doing so.

The consequences of sending  plane loads of them back to Haiti, a country that many had not known, or escaped from, after the 2010 hurricane, seeking employment in South America, (some working at the Summer Olympics in Rio De Janeiro) only to have Covid destroy their livelihoods is even more baffling, since Haiti lost its president in a recent assassination, the economy is in shambles, and many with nothing but the clothes on their backs, are now living on the streets of Port Au Prince.

Further damming the country, Haiti has suffered the aftermath of a recent 7.2 magnitude earthquake, leaving desperation and financial ruin all around.

For Black Americans the images are especially disturbing, and the outrage towards Biden has been relentless, with the NAACP issuing a statement to the White House saying, in part, “White (and white-presenting) men on horseback with lariats are seen chasing, yelling and cursing at vulnerable Black asylum seekers who have for weeks and months been fleeing toward what they thought was safety,”

Adding to the events was Chief Raul Ortiz of the Border Patrol claiming that “the mounted unit was deployed to assist with security and see if any migrants were in distress . . .” reported The New York Times.

Disingenuous to the side, others claimed that the use of horses in an open are not the best choice, “especially with a lot of people, is probably not the best place to be,” said Gil Kerlikowske, a former commissioner with Customs and Border Protection.

As he told the Times, “I think they’re really trying to send a strong deterrence message.”

That open area was also filled with women and children, some who were crossing back and forth, between the two countries, for food, and supplies; knee deep in murky water.

Skirting the issue was Alejandro Mayorkas, secretary for the Homeland Security Department, who defended deterrence matters, while saying on Wednesday that he would look into the matter.

While there is some sympathy for a vexing problem that has plagued many an American presidents these optics, say some, point to a crisis in the West Wing, on how to tackle the issue, with one side saying, accurately, that they were left a mess by the previous administration, and were not prepared to allow any asylum seekers in, and while others, Susan Rice, chiefly, saying deter.

Whoever is responsible for the directions, the subsequent humanitarian crisis is one that has many people recoiling, while the Republicans gleefully point fingers, and decry a “policy” that has caused the events, such as Sen. Josh Hawley of Missouri.

In a continuance of Trump’s policy Biden has continued the use of Title 42 to stem the tide of immigration, but now it seeks to staunch the blood from a political fight that can loom large in the upcoming midterm elections.

Reaction from key lawmakers has been swift, with Vice President Kamala Harris calling the treatment “horrible” and that “human beings should never be treated that way.”

On the Hill, Speaker of the House Nancy Pelosi called the scenes “heartbreaking,” and that she was following the events with a close eye.

On Thursday, the senior American envoy for Haiti policy, Daniel Foote quit in disgust, and in a sharp letter to Secretary of State Anthony Blinken said, “"not be associated with the United States inhumane, counterproductive decision to deport thousands of Haitian refugees".

CNN reported that, “State Department spokesperson Ned Price said Wednesday that Foote "has both resigned and mischaracterized the circumstances of his resignation."

"He failed to take advantage of ample opportunity to raise concerns about migration during his tenure and chose to resign instead," Price said in a statement. He also said he was "not going to parse the contents of his resignation letter," but disputed a number of the points in that letter.”

White House spokesperson Jen Psaki said that Foote never raised any objections and that all opinions were valued, and "I would note that Special Envoy Foote had ample opportunity to raise concerns about migration during his tenure. He never once did so. Now, that wasn't his purview," Psaki said during a White House briefing. "His purview was, of course, being the special envoy on the ground. His positions were and his views were put forward. They were valued. They were heard. Different policy decisions were made in some circumstances."

It’s easy to see that Foote has been left twisting in the wind, but his resignation added fuel to a fire that does not seem to be easily extinguished.

To stem the tide of the double debacle, the United States has allowed some of the asylum seekers to remain in the country, mostly women, and men, with children, and families. Processing has been done in Houston by a faith based group, with many joining family members already there.

Locations include New York, Boston and Miami; meanwhile the horse patrol has been suspended, but 4,000 asylum seekers still remain in Texas, with rough estimates that 2,000 were repatriated to Haiti and another 2,000 to stay in the US to await adjudication with the immigration courts, which could take years.

Mayorkas has now said that the area in Del Rio has been cleared by “heroic” efforts, and promised an investigation that will not be predetermined. He also gave some numbers that were at variance with earlier media reports.

According to The Washington Post, “Mayorkas said about 2,000 migrants have been expelled to Haiti on a total of 17 flights organized by DHS. Six more flights were scheduled Friday. About 8,000 migrants “decided to return to Mexico voluntarily,” he said.

The Post also gave some statements, on deep background, and that person said “Most of the 8,000 were part of those who arrived to the Del Rio camp, indicating more than half of the migrants who arrived there have returned to Mexico, according to a DHS official who was not authorized to speak to reporters.”

Meanwhile Biden said, “It was horrible,” and, “To see people treated like they did? Horses running them over and people being strapped? It's outrageous and I promise you, those people will pay.”

“There will be consequences,” he said. “It’s simply not who we are.”

This  incident has revealed some deep fissures in a White House that most felt was diligent and competent, veterans of previous administrations, who were compelled by nature to refute much of what the last four years had borne.

To many the thought process of some in the Biden White House is confusing, and, as an example, there is this: “Mayorkas said the administration had determined Haiti to be capable of taking back the returnees, just weeks after finding the country too unsafe as DHS extended protected status to eligible Haitians present in the United States before July 29, shielding them from deportation.”

This is a developing story with updates to be provided.

Angering France threatens to upend Biden foreign policy

 

One of the United States oldest allies, and an early supporter of independence from England was France, who feted Benjamin Franklin and Thomas Jefferson alike, and whose military alignment with the war was the Marquis De Lafayette, who as a military strategist was instrumental to the American colonies becoming the United States of America.

Adding to the help that the US has given them in two World Wars and supporting the French Resistance movement, to the fall of the Vichy government, to the victory of Charles De Gaulle, and there is the perfect mix for a strong alliance.

In a move that has baffled internationalists, and France itself, the Biden administration began a series of long range talks with both Britain and Australia to sideline an agreement of $70  billion dollars for the latter to buy French submarines, in the ongoing desire to protect sovereignty in the Indo China seas. Was agreed upon in 2016.

The timing could not have been more precipitous as President Emmanuel Macron had just “announced that French special forces had killed a leading ISIS figure who was behind the 2017 killing of four Americans in West Africa,” according to the Wall Street Journal.

France is angry, rightfully so, and has recalled its ambassadors from Washington and Canberra\, an unusual move and one that has sent President Biden a strong and clear message that the agreement, named AUKUS, was a done deal.

They say that it was not told, or even consulted, suggesting a unilateral move that Biden not only campaigned against, in his run for the presidency, but also has some sources, stating, in effect,  “we knew they would be angry if we told them.”

National Security Council spokesperson, Emily Horne, in a statement said, “We understand their position and will continue to be engaged in the coming days to resolve our differences, as we have done at other points over the course of our long alliance. France is our oldest ally and one of our strongest partners, and we share a long history of shared democratic values and a commitment to working together to address global challenges.”

In an earlier report, Pentagon spokesman John Kirby said that “senior administration officials had been in touch with their French counterparts,” reported The Hill, but the term, in and of itself, is open to interpretation.

Also of note was the general absence in the plans was Secretary of State, Tony Blinken who lived in France as a student and who subsequently became a notable Francophone.

Coming on the heel of the “messy” Afghanistan withdrawal, and the lack of consultation to Europe, many in the European Union are seeing them dismissed from yet another American administration, still cringing after Donald Rumsfeld's dismissal of them: “Oh, that’s old Europe,” during the Iraq War.

For France, and many European leaders, the change represents betrayal at the highest levels and is indeed a “stab in the back” says French Foreign Minister Jean Yves Le Drian, and others to say that Biden’s move was redolent of the Trump era; and, while that may be unfair, or even hyperbolic, the move is a strategically wrong.

The reason given for the change was the better American nuclear powered submarines that could stay in the water longer, and without detection, amid other technical concerns; yet, many have wondered why these were not addressed with the French rather than this secretive change.

Some have said, such as former Australian ambassador, Kevin Rudd, in an interview with National Public Radio, this was calculated to boost the current Prime Minister in the polls, in an upcoming election; a move, perhaps unwise, as it is top heavy for Scott Morrison, if true.

For Britain, who has always prided itself on having “a special relationship” with America, (but one that is almost never spoken of in Washington, according to political author Anne Applebaum) the stakes are raised even higher, as they seek a much higher profile than they were given by Trump.

That further infuriates France who think of British Prime Minister Boris Johnson, as a clown, much in the mold of Trump, making some wonder if this is a position being used by them.

Certainly it’s a recognition that China does represent a threat to America and Europe, but France has 2 million citizens in the area, and 70,000 troops, a not insignificant presence that warrants consultation.

President Obama has noted previously, and accurately, that the US has to pivot towards China, but does that exclude old allies, like France, say many diplomats.

In August Rudd commented, and almost presaged the Biden foreign policy moves, when he noted in an interview for an Australian publication, that “The Australian public and body politic needs to understand we are in the midst of a profound paradigm shift in global and regional geopolitics. It’s about the rise and rise of China and an America that continues to question itself about its future strategic role in the region and the world.”

Biden addressed the United Nations General assembly on Tuesday, and the speech according to White House officials, said, “The speech will center on the proposition that we are closing the chapter on 20 years of war and opening a chapter of intensive diplomacy by rallying allies and partners and institutions to deal with the major challenges of our time,” the official told reporters Monday on a call previewing the speech, The Hill also noted.

While supporters and critics alike have commended him on the call for coming together on climate change, others are questioning the French incident as belying the statements on maintaining  and harnessing relationships with allies.

The incident has also challenged the generally unflappable Jen Psaki, White House press secretary to finesse the situation, and on Monday, she remarked, “You always have to work on your relationships and that includes with global leaders, but [Biden] believes that our relationships are sustaining over the course of many decades, that every step he’s taken from the moment he took office was with intention of rebuilding alliances and rebuilding those partnerships that were frayed over the last four years,” 

US Jobs in August take a nosedive

 

After a huge surge in nonfarm jobs for July economists, lawmakers and government officials were looking forward to even higher numbers for August, yet on Friday the US Labor Dept. released news that dashed all hopes with the dismal figure of 235,000 jobs, that most have attributed to the Delta Variant and its huge push into the economic behavior of Americans, just as they were going back to a relative version of normal, and especially going to restaurants, bars and other entertainment venues.

Leading the pack was Diane Swonk, chief economist at Grant Thornton who told The New York Times, “Delta is a game changer, '' and “it’s not that people are laying off workers in reaction to Delta but people are pulling back on travel and tourism and going out to eat and that has consequences.”

While there is still some activity in these areas, many people are reconsidering plans, and especially those that have children under 12 in their homes, for fear of exposure; and, with the last blush of summer fading, and a return to in person learning, pulling back, as Swonk says, is a sea change in consumer behavior, the driver of the US economy.

While most acknowledge that there is still some resilience in the American economy, no one is taking the future for granted, especially with large parts of the country unvaccinated.

“Still, this marked an eighth consecutive month of net job growth, and brought total employment closer to pre-pandemic levels,” reported Yahoo Finance, and as President Biden later noted.

Reflected in the numbers are high contact employees, especially in low wage industries that require face to face interactions, such as restaurants and bars. This creates a chilling effect on these businesses, as many have attempted to climb from the hole that the Alpha variant created. And, the Times reported that the reservation system Open Table, after a resurgence in the summer, “are now 10 percent below where they were before the pandemic.”

Shopping, a sport for many, took a decline with retail by 29,000, and the number of people working at home also took an increase, but with the report being created in mid month, online shopping figures are not available.

Hits taken by Hurricanes Henri and Ida, are also not reflected.

The good news is that most economists believe that despite all, “in the current quarter from the annualized rate of 6.5 percent in the spring, the economy is expected to remain in expansion mode for the rest of the year.”

The Delta variant is the sword of Damocles hovering over US economics and with the dearth of vaccinations, especially in the South, fragility is the watchword as Carl Tannenbaum, chief economist at Northern Trust, said in his interview, “We get another reminder of how significant the pandemic is in determining progress in our economy.”

Predictably, the Biden administration already burdened by the pullout from Afghanistan and the hurricanes, also took a punch in the gut over the news, as they try to pass legislation to increase jobs and expand infrastructure to include social capital, both in abeyance with this report.

The White House released a transcript of the president’s reaction to the news and it was clear that he was trying to put the best face on it, when he noted, “But despite the impact of the Delta variant — and I’ll talk a little more about that in a minute — what we’re seeing is an economic recovery that is durable and strong.”

 

Taking a long view, he noted, “The Biden plan is working.  We’re getting results.  America is on the move again.  And today’s revision of previous month job gains, with the revision of the July numbers — this report means that we have been adding an average of 750,000 jobs per month, on average, during the past three months.

  

While I know some wanted to see a larger number today, and so did I, what we’ve seen this year is a continued growth, month after month, in job creation.  It’s not just that I’ve added more jobs than any first-year President — in the first year of any President — it’s that we’ve added jobs in every single one of my first seven job reports.  And wages are going up.”

In a year over year analysis, wages did increase to 4.3 percent. 

Labor also gives a dual note when they say:

 “Average hourly earnings for all employees on private nonfarm payrolls rose by 17 cents to $30.73 in August, . . . and “average hourly earnings of private-sector production and nonsupervisory employees rose by 14 cents to $25.99.”

Taking wages on the whole proves problematic, since ”The data for recent months suggest that the rising demand for labor associated with the recovery from the pandemic may have put upward pressure on wages. However, because average hourly earnings vary widely across industries, the large employment fluctuations since February 2020 complicate the analysis of recent trends in average hourly earnings.”

One significance of the report is that Labor Force Participation stayed the same at 61.7 percent in August, a bellwether, say some of next month when schools across the country will be in person, and parents and caregivers are expected to return to offices, if not the service industry.

Another boon is that the long term unemployment population, those that have been jobless for 27 weeks or longer dropped from 3.4 million to about 3.2 million, noted The Hill.

While unemployment for whites fell from 4.8 percent to 4.5 percent, even while LFP stayed the same, Black workers faced an increase in unemployment from 8.2 percent to 8.8, with 0.8 in their participation, which some attribute to an earlier bump in service jobs, but might drop in the September report.

Hispanics faced a drop from 6.6 to 6.4, but Asians dropped from 5.3 percent to 4.6 percent, which reports say might be attributable to a decline in LFP, by 0.4 points.

Gains were seen in professional and business services at 74,000, but this is a catchall category that can mean anything from office temps to copier services, and everything in between.

Transportation and warehousing also made gains, thanks to all of that online ordering at 53,000, manufacturing, despite supply chain bottlenecks, came in at 73,000, and those attendant couriers, messengers and warehouse personnel came in at a strong 20,000.

Finally,  it should be noted that while 5.3 million jobs were recovered since the onset of the pandemic, and using February 2020, as a baseline; but, in contrast there were 5.3 million fewer jobs in August, than in February of 2020.

It was over when it was over: Afghanistan and the U.S.

There was a time in the not too distant past when two United States presidents faced the threat of communism from Southeast Asia: one young, and charismatic, had initially heeded the advice of his elder predecessor, who warned him not to get involved in Vietnam. He was followed by a veteran senator, who transitioned to the presidency upon the death of the younger, and eager to be seen as brave.

The two presidents, of course, are John F. Kennedy and Lyndon B. Johnson; the former reluctant to get involved, on the advice of his predecessor, Dwight Eisenhower, but later prodded by military chieftains to at least provide advisors, until he was forced to answer later, by an anxious media, as to why a US military helicopter was shot down.

What type of “advising” was that, they asked.

Later, in November of 1963, when more “advisors” were sent to Vietnam, Kennedy asked his top aide, on the way to that fateful trip to Dallas, “find a way to get us out of Vietnam.”

Johnson conscious of his legacy, as well as history, was reluctant to pull troops out, inc case he was second guessed by that same history, and communism roiled across the ocean, but agonized, all the while, kept them in; and, ultimately in the face of demonstrations and chants of “Hey, hey LBJ, how many boys did you kill today?” outside the White House gates, influenced his decision not to run for a second term, ending what historians would have recognized as a brilliant presidency.

The recent exodus from Afghanistan by President Biden came to mind, as we surveyed the damage from the planned pullout, and as America and its leader, has been jeered at and poked, what also comes to mind is the age old discussion of what role the US should play on the world's stage; an idea shaped by its dominance in two World Wars.

When President George Bush brought US  troops to Afghanistan it was in response to Al Qaeda’s direct attack on the World Trade Center in New York City, that unforgettable day as dust and debris covered people and streets became Ground Zero, an attack that brought global sympathy. 

It also brought a 20 year old commitment to a land and culture that few understood, and most countries had abandoned, at any level of partnership, or colonialism, Russia as one example, and took the world’s superpower to a place far beyond its initial goals to one of nation building.

With billions of dollars, and thousands of troops, and tragic deaths on both sides the US soldiered on enduring some victories, and many losses, that gave more hope than actions, and the military reports often hid the central question of what was happening and for how long would we be there.

Biden, taking following the exit plan of former President Trump, became enveloped amidst a plethora of advice, some pessimistic, some optimistic, about the Afghan’s ability to defend itself.

It also became curiously aligned with the timeline of Vietnam, and reluctant to admit a sad reality of inability, the military, according to The New York Times, “believed they would continue to fight for a time after the Americans left.”

Based on that assumption, it “took two years for a collapse after the withdrawal of troops and financial support. Optimists believed the Afghan military, with American funding, could last nearly as long. Pessimists thought it would be shorter,” they added.

The former view became the dominant one, and the resulting chaos to try and get allies and embassy personnel out of the country was the end result, while the scene echoed those from Saigon where people held dangling leads to helicopters.

Optics in this case ruled the day, with images of hundreds of Afghans fleeing, on foot and by auto, hand luggage dangling from their arms, fearful that their lives would change for the worse under the Taliban, based on its previous record of intolerance, abuse, and violence, especially towards women and girls. 

Adding to the desperate images of Afghans clinging to the fuselage, and even on the wings,and in the wheels of American cargo transporters, the images are heartbreaking, but don’t tell the whole story.

Fear and fact are often opposite ends, and as many have noted the Taliban waged a well calculated takeover learning both from the lessons of the West and their own knowledge of the country and its culture, steadily taking small provincial capitals, “they simply melted into the population to begin planning what would be a 20 year insurgency,” in an earlier report from The New York Times.”

They also gave money to the underpaid, or not paid Afghans, “secured border crossings, and assuaged with cultural knowledge a “population that is so tired, and weary of conflict they agreed to flip and support the winning side so they could survive.”

While these optics have been devastating to America’s image and Biden, the fallout from American allies, including our oldest, and who claim a special relationship with us, was exemplified by former British Prime Minister Theresa May who labelled the actions of the United States, as “incomprehensible,” while also railing about her successor, Boris Johnson, at the absence of the British as a backup, but the latter seemed dubious at best, especially with the absence of NATO.

Michael McCaul, Republican congressman from Texas has said that Biden has “blood on his hands.” And, both the House and Senate have called for congressional investigations.

While the ratings for Biden who had hovered near 50 percent, will slip, and whose criticism will be relentless, especially from hardcore militarists from the GOP, is a given, no one who occupies the Oval Office runs for the presidency, for their health, but the 78 year old chief executive seems prepared to take it on the chin, and said on Friday according to The New York Times that he “promised to bring home any American still trapped in Afghanistan, calling the evacuation effort for Americans and vulnerable Afghans “one of the largest, most difficult airlifts in history.”

But he acknowledged that he did not know how many Americans were still in the country, or if they could ultimately be brought out safely.

“Let me be clear: Any American who wants to come home, we will get you home,” Mr. Biden said, before adding, “I cannot promise what the final outcome will be, or that it will be without the risk of loss.”

He also added, said the Times, and sought “to give a sense of how many people had been flown out of the country in the days since Afghanistan’s collapse, Mr. Biden said that some 18,000 people had been airlifted from the country since July. This week, he said, Afghans — including women leaders — and American journalists — including staff members of The Times, The Washington Post, and The Wall Street Journal — had been safely removed from the country.

Mr. Biden said that he would commit to airlifting Afghans who had been helpful to the 20-year war effort, but said Americans were his first priority.”

July Jobs report is a blockbuster for US economy

 

In what has been termed a blockbuster, the US Department of Labor released its monthly jobs report for July and revealed that American employers had added 943,000 nonfarm payroll jobs, far exceeding the earlier ADP report of 330,00 from private employers, and while Labor and ADP use a different methodology, most observers, economists, and, of course, the White House, were ecstatic.

Many are saying that this is the post pandemic swing that they were waiting for,and it also serves to silence, in part, Biden Administration critics who have openly carped that the rising inflation was attributable to increased spending, and of course, those stimulus checks. 

Conversely while the report shows that the Biden policies are working, a little GOP carping goes a long way, for its base.

It also takes the heat off Federal Reserve chair, Jerome Powell, to diminish stockpiling bonds and securities in its reserves, as the increased job activity creates less of a vacuum.

It should be noted that while the goods news was welcome, it was gathered as is standard, from data collected in the first two weeks of June, and does not show the effects of the Delta Variant, that has coursed through some parts of the country, creating havoc on local economies, as they grapple with prevention strategies.

Acknowledging this, President Biden said, “we will doubtless have ups and downs along the way as we continue to battle the Delta surge of Covid,”but added,  “What is indisputable now is the Biden plan is working, the Biden plan produces and results ,and the Biden plan is moving the country forward.”

Gus Faucher, chief economist at PNC Financial Services in Pittsburgh, told The New York Times, “This is a great report, very solid in terms of job growth and the decline in the unemployment rate.”

Showing the way forward was the continued growth in leisure and hospitality, where one third of the gains were, (due to  increased vaccinations), as public consumption transferred from goods to be enjoyed at home, to services and activities outside the home; and, to prove the point restaurants and bars last month added 253,000 jobs, and as airline travel increased, hotels and resorts added 74,000, while entertainment and recreation added 53,000 jobs.

Coming as a surprise to some was the increase of 221,000 public school jobs that some see as a harbinger of the much hoped for September increase of office workers returning from remote work, at home, to school children doing the same.

The figures, “could be inflated by seasonal adjustments and the way COVID 19 upends hiring cycles,” reported The Hill, and school openings in the Fall could be affected by a number of issues, such as the presence, or absence, of mask mandates, as local leaders grapple whether to have staff and faculty fully vaccinated.

Heralding the good news also included the increase of employment of racial minorities, with Blacks seeing an increase to 9.2 percent from 8.2 in June.

Black workers, reported CNBC, “represent about 13% of the US labor force, but 21% of all workers in transportation and warehousing,[while] Hispanic workers are 17% of the labor force, but comprise 24% in the leisure and hospitality industry.”

It’s not hard to see how this translates to wages, and they increased “with average hourly earnings increased by 11 cents in July and 4 percent year over year,” added The Hill.

A closer look at wages shows a gross disparity,”when comparing the wages of white men to women across demographic categories. White women make 19% less, Black women nearly 40% less, Hispanic women 43% less, and Asian women make 7% less,” CNBC concluded from their research.

Economists have stressed that since people of color were overly affected by the economic disaster, brought by the pandmeic, any subsequent gains are proportional

Overall, the labor force participation rate was nearly the same at 0.8%, but there were some surprises, with manufacturing and construction showing modest increases, and still bearing the brunt of,”hidden goods process and a shortage of components like semiconductors,” surmised the Times.

In contrast the Institute for Supply Management showed accelerated growth both for June and July, 60.1 in June and 64.1 in July; and, which had shown some alleviation in earlier months and the growth supports Powell’s assertion that the bottlenecks in supply and demand would ease.

Just before Labor released its report, “Timothy Fiore, chair of ISM's manufacturing business survey committee, noted that "supply and demand dynamics appear to be moving closer to equilibrium for the first time in many months." Part of that could be because spending is rotating back to services from goods, added Reuters.

Manufacturing accounts for 11.9% of the US economy.

Overall the US has 9.2 new job openings with 9.5 million people still unemployed. And, in that vein there are still many employers desperate for employees, and even professional slots are still open, baffling the former.

Some, mainly GOP leaders, have stated that extended unemployment benefits are the fault, yet, as we have seen, in many areas, while not all service people are looking for a change; for some, those benefits provided  a  cushion for those looking for better wages, working conditions, or location.

Statistics are near nil for benefits as the culprit, for as Barrons recently noted, “70% of  people with benefits live in states that haven’t yet cut the additional payments.”

While July provided blockbuster numbers, all eyes seem to be on September for a real change in jobs and consumer behavior, but that remains an open question.

Feds keep rate, but creates a "new normal" for mandate

 

With the conclusion of the Federal Open Markets Committee on Wednesday, the resulting virtual press conference focused on answering questions on tapering the trunk fulls of asset purchases designed to keep money in the US pipeline.

All eyes had been centered on this question, for days, preceding the announcements and the $120 billion in government backed bonds, and $40 billion in mortgage backed securities gave economic pundits and economists a run to press on Thursday.

Set against the background of inflation which had hit record highs of 5.4 percent in a year over year comparison; it was the highest figure since 2008, and created a sense of urgency among the FOMC and increased pressure on Chair Jerome Powell, whose sense of caution gave alarm amongst those whose confidence in him was weakening.

With consumer spending driving the economy as usual, there was a heightened sense that there might be an overheating, with people sitting on piles of unspent cash during the nationwide lockdowns, and federal stimulus checks fattening those reserves.

Sandwiched between the inflationary worries, and the actions of the FOMC, observers were also concerned as consumers switched from spending on goods to services, and with the increase of vaccinations for Covid, travel and leisure, further increased inflationary fears.

Powell had the unenviable task of going in one direction, tapering the pile, or defining a new direction. With the latter he defined a new normal of accepting higher inflation, to make up for the periods when it was less, and the decision to stall tapering towards the Fall, or even later.

This gave him, and other members, who might have been uneasy about the timeline, a softer cushion to land on; and, one that allowed the Fed to be consistent with its twin mandate: keeping inflation, at or near 2.0 percent, and focusing on full employment.

Taking the virtual bull by the horns, at the press conference, Powell added that “the economy has made progress to all two goals.”

As predicted there were some fears that the past might be prologue with the memory of the 2013 model of tapering “in modest, equal amounts over the course of 10 months,” according to the Wall Street Journal, but noted the subsequent reaction: a spasmodic market..

No one really expected the Feds to raise its key interest rate, from its current 00.25 %, and Powell declared, “it's’ not something that is on our radar screen right now.”

Much like a Greek Chorus, there were the cries by some to do an equal reduction of both Treasuries and mortgage backed securities, to stem the tide of high home costs homes.

That appeal was nixed when Powell said buying long for these assets was the key. And, if that was disappointing to some, then his reaction to the increasing bottle neck of the supply chain and its attendant problems; (for example, the dearth of semiconductors), had him stating that in time, these problems would resolve themselves, proved to be equally dispiriting to many economists.

Hovering in the background was King Covid, but now its cousin The Delta Variant became an increasing concern for many, especially as the Fall was expected to bring workers back to the office and their children back to in person learning.

His reaction? “We’ve kind of learned to live with [it].” 

In a veiled remark Diane Swonk, chief economist of Grant Thornton said to the Journal if that was the case then his leadership should compel him to consider “tapering by year’s end.”

Consistent with his prior remarks, but further urging caution, Powell said, “there’s absolutely no sense of panic.”

Asking all to accept this, including the new normal of higher inflation, he said, simply, that it, “will be more persistent.”

Was this enough to stem the fears of the American public who in a recent poll said that 54 percent of Americans felt the economy was tanking? That said, only time will tell.

"I" is for inflation and that causes concern for US

 By now, many of you have noticed higher prices, be it the humble hamburger at McDonald's, gas at the pump, to even mid level restaurant menus, as they steadily erode our budgets, And, on the larger scale those tasked with keeping inflation at bay are finding a barrage of suggestions, criticisms, observations and even sly commentary.

Reaching consensus, or even understanding what the future might bring to both the US economy, as well as consumers. And, for those that are depression era survivors, a shrinking population, the days ahead may seem less daunting as memories of high prices and hoarding come to mind, but for Generation Xers, those skills and methods are unknown.

Some have opined, such as Chicago Booth School of Business, Michael Weber that "Central banks and shoppers are living, to some extent, in different worlds," and their focus is different and are "forming expectations on the basis of those."

With uncertainties about returning to the offices of pre pandemic America, this is another worry for those burdened with school debt and mortgage payments, especially those living in large urban areas, dealing with survival in a changed America where 7 million jobs were lost due to Covid. 

Recent reports have showed, however, that some consumers, after months of lockdowns, are not complaining of higher restaurant costs, so overjoyed they are at being able to gout and dine, and socialize with others.

On Wall Street as well as Main Street the key word is "transitory, but The New York Times noted recently that the "word is losing traction." But, it also stated that "inflation is running at a 13 year high" and while the White House claims that the rise in inflation is temporary, others are not so sure.

Jamie Dimon of JP Morgan Chase said recently, to the Times, that it's " a little worse than the Fed thinks"; still others say that the time has come to accept a higher level of inflation, beyond the targeted and mandated 2 percent that the Federal Reserve has, and in that respect a 2014 survey did cite that income inequality, the new normal has forced economists to take a long range view.

Consumer spending, the driver of the American economy hit the headlines with an increase of 5.4 percent, according to the Consumer Price Index, a feat in and of itself.

Weber notes, while seeing higher prices, and with some complaining, many in America aren't watching the inflation ball; and in fact, he and others "surveyed more than 20,000 Americans in 2018 and asked what they expected the Fed's inflation goal to be.Fewer than 20 percent answerd correctly, while a whopping 40 percent thought that the Fed was targeting 10 percent inflation."

The correct answer is 2 percent, a standard in an undergraduate macroeconomics course, as part of the twinned mandate of the Federal Reserve, the other being full employment.

Spreading out a bit, is Avraham Shama writing in an opinion piece for The Hill said that setting a “monetary or fiscal policy based on it could hurt the economy” and as a contributing factor to understanding the dilemma points to the pandemic both pre and post as the tipping point for understanding both the process, and his warning.

If the temptation is there, then changes in consumer behavior from dining out, plane travel and moving to the burbs are in order, then taking a look at Federal Reserve policy points and reliance on judgement, and an ability to change course might be the better course.

Tacking somewhat to the right is Axios who gives some sly digs to the Biden Administration and also Fed Chair Jerome Powell, and sees him as both indecisive and naïve in his handling of inflation, and hints at other matters, in its short estimation, and characteristic bullet points, seeing him as not knowing where to look next for the future, which it labels as “evolving.”

From the corporate side there is Conagra Brands and Pepsico, says Bloomberg who have “signaled that higher costs will be more than a blip,” and that costs “from raw ingredients to labor to remain substantially more expensive in coming months.”

Just behind these words consumers can expect the higher costs to be passed onto them. The bottom line as it were.

While there has been some relief in the used car market, it’s not hard to reckon that higher prices, or shrinking packages, and deceptive packaging to be the norm, so that the consumer may think that they are getting more than they get..

In their Dealbook analysis the Times offered some opinions that give some weight to the future, with most saying we have to deal with it, to others saying that accepting a higher level of inflation may be the course, with others using a historical trajectory to give some sense of direction towards policy action.

Austan Goolsbee, professor of economics also of the Booth School of Business favors temporary, and is a believer in the “potential” of the economy, or in other words what it sustains at full employment, citing the 1960s as the fulcrum for overheating.

He also sees the US as closer to the 1990s through the mid 2000s and “?none of which ignited sustained inflation despite unemployment rates well below today’s.

Add to his optimism a gain in jobs, then his opine takes the fright out of some observers.

Going in an opposite direction was Jason Furman, a professor of economic policy at Harvard University who questions the long term who sees inflation longer term than others, but sees a it settling “down at something more like 2.5 to 3 percent, but cautions against Fed overreaction, causing a recession, and subsequent market adjustment to right the ship, but notes that economic hurts could occur.

If this all seems too wonky for you, then consider that an increase in job and wage gains is a good event, and indexing can help for those on the lower wage scale;  some economists and academics see signs of 7 percent for the 3rd quarter, and as demands shift, a downward wave of 3.3 percent in the second quarter of 2022, reported the Wall Street Journal, with Treasuries yielding downward, trends could be far worse, with caution being our watchword.

Updated 13 August at 4:15 p.m. CDT