Do or Die say Dems in Detroit

For those viewers that wanted to get a firmer grasp of what were the most salient issues for the 2020 presidential Democratic candidates, they were torn between what was on display, the differences between moderates and party progressives, or the issue of the legacy of President Barack Obama, and while some observers were baffled, or thought it “bizarre”, what was seen, and heard, showed the struggle for a platform, be it progressive, or moderate, or was it to be turned to the left, or to the center.

Personifying the center, or the old-guard, was on Wednesday night, its near personification, Vice-President Joe Biden, and the new face of Kamala Harris, who hammered away at Biden, in the previous debate, but it also showed that health care was not only a salient issue, but one that defined the two sides, and in some instances on Tuesday, showed a near willingness to see the reelection of Donald Trump by decriminalizing illegal immigration to the United States, and giving them health care.

“At the center of the back-and-forth was the question that has bedeviled the party since 2016: Will nominating a firebrand progressive from the far left energize enough voters to win back the White House? Or would doing so demolish Democratic hopes by alienating the centrist voters who cast ballots for Trump in 2016?,” wryly noted CNN.

Some observers have seen this as a race to the bottom, or a family squabble in a crowded field, with a cranky uncle, a nerdy nephew, a sassy aunt, and a jockey younger brother.

Separating the wheat from the chaff was Bernie Sanders and Elizabeth Warren, whose take-no-prisoners on a single-payer plan that costs $32 trillion dollars, and wipes out private insurance --- even while 60 percent of Americans, like what private plans they have.

As CNN reported: “Former Colorado Gov. John Hickenlooper warned that if Democrats want to "take private insurance away from 180 million Americans" -- a reference to the fact that Medicare for All would phase out private health insurance -- while guaranteeing that every American could get a government job through the Green New Deal, then "you might as well FedEx the election to Donald Trump."

Former Congressman John Delaney, much to the consternation of Warren pointed out the weakness of the plan, and one that threatens the question of choice for millions of Americans, despite the fiery support of Sanders and Warren.

The tart response, from Warren: "I don't understand why anybody goes to all the trouble of running to the President of the United States to talk about what we really can't do and shouldn't fight for. I don't get it.”

Viewers did see a stronger Cory Booker, who along with Harris, harassed and parried with front runner Biden who seemed anachronistic, and clinging to his resume as Vice-President to Obama, whose legacy some saw, like political adviser, Paul Begalia, as a betrayal.

“While Biden said he would not share details about his private conversations with Obama, Sen. Cory Booker (D-N.J.) interjected, saying he couldn't have it both ways.

“Mr. Vice President, you can’t have it both ways,” Booker said Wednesday. “You invoke President Obama more than anybody in this campaign. You can’t do it when it’s convenient and then dodge it when it’s not,” reported The Hill.

While the book on the 2016 election has not been written, it’s a safe bet that the centrist model promulgated by the defeated Hillary Clinton, and its resonance in the Obama years, won’t work for a complicated future, and especially one that has been compromised by Donald Trump.

“Since Clinton's loss to Trump in 2016, Democrats have struggled with this internal debate about whether they must do more in 2020 to attract the centrist, white working-class voters who voted for Trump or if they can win the White House by embracing a bold, progressive agenda that would dramatically restructure government.”

Moving beyond the Clinton-Obama years to a different venue might be a better bet, even with a waffling Harris, who just this week, moved away from being an acolyte to the Sanders plan, to one that has found some room for private insurance, albeit in abeyance.

“But, in a Democratic Party that has been energized and shifted to the left by social movements such as Black Lives Matter, #MeToo, and the resistance to Trump, many activists are eager to move beyond the policies of the Obama Administration. For all the former Vice-President’s recent efforts to fill out his policy platform with new proposals on health care, climate change, and criminal justice, he is effectively running to extend the Obama Administration to a third term,” noted John Cassidy, in The New Yorker.

In the fiercely industrial Midwestern city of Detroit, the question was this: "Can you guarantee those union members that the benefits under Medicare for All will be as good as the benefits that their union reps fought hard to negotiate?" moderator Jake Tapper asked.

"They will be better because Medicare for All is comprehensive and covers all health care needs for senior citizens, it will finally include dental care, hearing aids and eyeglasses --," Sanders said.

"You don't know that, Bernie," Congressman Tim Ryan interrupted. "You don't know that."

"I do know!" Sanders responded sharply. "I wrote the damn bill."

Ryan, undeterred, continued to make the point about union workers.

"Sen. Sanders does not know the union contracts in the United States," Ryan said. "I'm trying to explain that these union members are losing their jobs. Their wages have been stagnant. The world is crumbling around (them). The only thing they have is possibly really good health care, and the Democratic message is going to be -- we're going to go in, and the only thing you have left, we're going to take and do better. I do not think that's a recipe for success for us. It's bad policy and it's certainly bad politics."

Trump denies attacks on Elijah Cummings are racist

Rep. Cummings

It really should not come as much of a surprise that once again, Donald Trump is race baiting - since it worked for him so well in 2016, sending him to the Oval Office; yet it would not be inaccurate to say that this has not been a national momentum, for many white Americans who  resented the black civil rights movement of the 1960s, taking their grievances underground to send the racist cartoons, jokes, and using derogatory language of race.

Trump had a trial run with his “birther” attacks on President Obama, and demands for his birth certificate, to “show” he was not born in Kenya, but the U.S. and thus ineligible for the presidency.

While that seemed ludicrous to some, but yet the stage was set and the fast forward to Trump’s latest Twitter rage, attacking Rep. Elijah Cummings of Baltimore; but also reveals a defensive crouch because Cummings is about to subpoena cell phone records of his daughter Ivanka and son-in-law, Jared Kushner; so now the wrath of the mighty is combined with, what most people recognize as the key to winning those undecided independent voters, to give him an edge beyond the 44 percent support that has almost become standard polling when covering President Trump.

As CNN noted on Monday, “Pinching the racial nerve of US society is behind his attacks on Democratic Rep. Elijah Cummings of Maryland and the whole city of Baltimore as well as his efforts to vilify four progressive lawmakers -- all women and minorities.”

The rhetoric is getting nastier by the day, exceeding his previous attacks on the Squad -  the four liberal lawmakers, led by Alexandria Ocasio-Cortez in the House of Representatives.

To date: “This latest episode involves Cummings, chair of the House Oversight Committee, who is overseeing multiple investigations of Trump and top administration officials. Trump tweeted over the weekend that Cummings' district is a "disgusting, rat and rodent infested mess."

One thinks of the baby blimp balloons that Londoners saw, on the president's two visits to Queen Elizabeth, but while this is amusing to some, it goes even deeper as Trump revists, his old playbook, in effect extending his “shit hole” descriptions of some African communities; knowing that this target of urban blight, viewed by his base as the exclusive domain of black urban Americans, he brings it front and center, for his base.

While many New Yorkers previously thought of him as a con man, it’s necessary to see how clever he truly is, in battle, and that this is what the 2020 election is about for Trump: a fight to the finish to keep his self-proclaimed position.

In the absence of his father, Fred, to spend millions to keep him  afloat in university, and business,  the fight to keep the top job, is at the core of these crude remarks.

The question that roils across the wide-planked floors of liberal elites, and their supporters, is just who are the people this rhetoric is intended for?

“The audience for these attacks wasn't voters in Baltimore or anywhere near it, just as the audience for Trump's vicious attacks on immigrants isn't people who live in border areas or cities. It's the base of supporters in the South and in the Rust Belt who handed him electoral victory in 2016 and who he hopes will do so again.”

"He is exciting his base," said Andra Gillespie, a political scientist at Emory who is an expert on race and politics. "He's reminding folks based on their resentments, stoking their resentments, that there are all these testy people who are saying we should do this or we should do that and they shouldn't have this much power.”

We have a history here, of course, Nixon’s southern strategy, while not a bright line, has some resonance, but who can forget President Reagan’s description of the “welfare queen” in her Cadillac, as the television audience nudged each other and Mrs. Reagan, clapped in approval.

“But there is a direct line from Nixon's coded "law and order" campaign in 1968 to Ronald Reagan's warnings against "welfare queens" in 1980 and beyond, according to a recent piece by Angie Maxwell, a University of Arkansas political scientist.

"Trump, in many ways, is no anomaly. He is the very culmination of the GOP's long Southern strategy," she wrote.

Going even further we can now see that this is indeed the direction that the country has taken, and is going, and on a more direct path than some can acknowledge.

“There is evidence that his efforts to further divide the country are working. In a Pew study released in April, 58% of Americans said race relations in the US were bad, 56% said Trump has made them worse and nearly two-thirds said people are expressing racist views more with Trump as President.”

Even abroad in the horrific shootings in the mosque in New Zealand, the shooter, while dreading Trump’s politics, praised his xenophobic racism.

The support, near hero worshiping, that he has gained from white supremacists adds further to the racist label. Even more disturbing were the damaging pictures of the Charlottesville marchers wearing his trademark informal uniform of khaki pants, white golf shirts and red caps emblazoned with the tagline, of his own campaign, “Make America Great Again.”

In a previous column, last October, we wrote about Trump’s remarks about the Puerto Rican hurricanes. They bear worth repeating:

“The recent hurricanes and tornadoes in Texas, Florida and Puerto Rico have resulted in great personal and economic damage to the United States, but they have also added to the perception that President Donald Trump is a racist. While Texas and Florida faced equally damaging loss of life and property as did Puerto Rico, it was only Puerto Ricans that were told that they were expecting too much from the federal government and that they needed to do more on their own, an oft repeated phrase from whites towards blacks in their struggle for civil rights during the 1960s.”

The race optics became even worse with his condemnation of the NFL players protesting the ill-treatment of black men, by some of the nation’s police and by mostly black players, joined with his verbal recommendation to “get that son of a bitch off the field,” if he did not stand for the national anthem.

“Circling back to Charlottesville, we get the lion’s share of remarks when he said that there was blame on both sides, as hundreds of white supremacists marched towards a group or bedraggled, mostly University of Virginia undergraduates, protesters, angry about the invasion of their town to support an untenable position.”

Winning independent voters to his side, is the goal, and the remembrance that 54 percent of Americans did not vote for him, in 2016, must be a constant reminder as he sends out the attack tweets, and organizes his rallies, with the roar of the crowd, and chants of “Send them home!”

The Hill has reported that “President Trump on Tuesday said his ongoing barrage of attacks on Rep. Elijah Cummings (D-Md.) and the city of Baltimore are not part of a larger political strategy, telling reporters he's "pointing out facts" in repeatedly criticizing the city's conditions.

"There’s no strategy. I have no strategy. There’s zero strategy," Trump said upon returning to the White House from a trip to Jamestown, Va.

"All it is, I’m pointing out facts," he added. "The most unsafe city in our country is Baltimore."

Turning back to his prior attacks on some African countries, we read this: “The president has waged a days-long onslaught of criticism directed at Cummings and the city of Baltimore. He has denigrated the city as a "very dangerous & filthy place" where "no human being would want to live" and claimed Cummings is racist.”

And, almost unbelievably, we have this assertion, in true Trumpian style, "If the news reported it properly of all of the things I’ve done for African Americans ... I think I’d do very well with the African Americans," Trump said. "And I think I'm doing very well right now."

The president rejected “the findings of a new Quinnipiac University poll that found 80 percent of black voters believe Trump is racist.”

A recent poll also revealed that nearly one-third of independent voters would not vote for Trump, and as political observers have long acknowledged, for presidential races, it’s all about the numbers.

June Jobs Report: the good, the bad and the ugly

June is traditionally the season for brides in the U.S. -- who doesn’t want to be a June Bride, say many social arbiters, but while modern brides are marrying, when they choose to, almost any time and nearly anyplace, June was the month for a rebound in the American jobs market, and defying, cautious estimates from economists, and bankers, predicting between 165-170,000 jobs, rose to a whopping 224,000, giving the market, some economists, and of course, President Trump, a surge, and a big sigh of relief after a moribund May, that sent hopes reeling, and the Federal Reserve Board looking anxious.

What we didn’t see in Friday’s report, from the Labor Department,  and may not see, is substantial wage increase, where the now average hourly rate for employers is $27.90 an hour, showed a modest increase of 6 cents, but as many a Southern grandma, has said, “Ain’t no matter!”

That is what many of those whose business to watch the economy said. In fact, they said a lot, and some of it was optimistic, but some was tempered with caution.

The venerable New York Times said, “Friday’s figures were the latest evidence that the economy is gradually cooling, not headed for a deep freeze. Separate data from the Institute for Supply Management this week showed that both the manufacturing and services sectors grew in June by a variety of measures, though more slowly than in May. The housing market has shown signs of weakness, but that hasn’t yet discouraged consumers from spending money, perhaps because layoffs are near record lows.”

Let’s lead with this: “The rebound in construction and manufacturing has been particularly encouraging considering the hit that those industries have taken from the tariffs and trade war.” said Thomas Simons, Jefferies LLC.

Northern Trust’s Carl Tannenbaum said the jobs report would be “seen as a relief” — adding it’s “probably not enough to change the Fed’s tracking to a 25 [basis-point] cut” at its July 30-31 meeting, quoted MarketWatch.

“The strong June jobs numbers start the summer off on a strong footing for the American worker, and a big disappointment for the markets that are hoping for substantial interest rate cuts from the Fed. The 224,000 jobs added were broad based, with good gains in everything from manufacturing to construction to business services. The one weak category is retailing, as that industry moves from brick-and-mortar to online.” was the view of Robert Frick, Navy Federal Credit Union.

If there is a pattern to be seen, it is the role of the Federal Reserve, who said last month that it was going to hold off on any rate increases till the end of July, but now most have said that there would be only a modest change, and that might be true.

On the opposing side, is that “Despite the strong jobs data, some European investors still expect a series of rate cuts in the U.S., which could narrow the gap between the rates in the U.S. and Europe over the coming months.”

“Dickie Hodges, head of unconstrained fixed income at Nomura, has been buying up debt issued by governments in the periphery of the eurozone this year, expecting rates in the U.S. to drop as much as 100 basis points over the next 12 months, “ said the Wall Street Journal.

“The Federal Reserve will be readjusting and this, in my opinion, is regardless of any stability in U.S. economic growth and regardless of the fact that the unemployment numbers show the U.S. has added 224,000 new jobs in June, which is above people's expectations,” Hodges added.

Adding to the mix, is this opinion: "The data are unlikely to stop the Fed from easing at this month’s meeting; the well-signaled easing reflects officials’ worries about the potential drag on growth from trade-related 'uncertainties,' along with sub-2% inflation. However, the report adds to the likelihood that the easing will be of 25 rather than 50 basis points," Jim O’Sullivan, chief U.S. economist at economic and research consulting firm HFE says in a note, to the WSJ.

Also, of note, is that the report comes after the change of heart for Mexican tariffs to Mexico, but with the Chinese tariffs still in question, but with some signs of hope, with pending negotiations, some are feeling that this might indeed be a sign of confidence, not only in the market, but with the Feds.

Adding a bit of spice, or maybe even vinegar is this, “I am “less confident than before that a trade deal will be done since, unlike earlier this year, the interminable U.S. presidential election season has now begun,” wrote Christopher Wood, global head of equity strategy at Jeffries, in a Thursday note to clients, “ and quoted by MarketWatch.

“This means Trump will have to defend any deal with Beijing against [Democratic] criticism. It also remains the case that the Fed, via its dovish language of late, has enabled Trump’s hard-line on trade,” he added.

"This is really a mixed bag of news," said Mike Loewengart, vice president of investment strategy at E*Trade, in emailed comments [to MarketWatch]. The good: the strength of Friday's non-farm payrolls figure helped ease fears sparked by a soft ADP reading earlier in the week and a more lackluster report last month. But the unemployment rate ticked higher and wage growth has retreated from a recent peak hit in the spring.

"It's not the kind of clean read that will help bolster the Fed's position in either direction," Mr. Loewengart said to the Journal.

Taking a further step is this opines: “I don’t see the Fed changing what they’ll do based on one jobs report,” JJ Kinahan, chief market strategist at TD Ameritrade, told MarketWatch. “The market says the probabilities of a rate cut are 100%. The Fed has been backed into a corner because expectations are so high.”

Kinahan added, however, that the overall strength of the jobs market, as evidenced again by Friday’s report, could cause the Fed to just cut rates once, and then delay the timing of the next cut to get a better sense of the pace of the U.S. economic slowdown.”

“I don’t think it is large enough to steer them away from an interest-rate cut,” said  Tannenbaum.

“We’re on track for a quarter-point cut at the end of the month.”

Tannenbaum said the Fed can package a rate cut as “insurance” rather than necessity. It can then wait and see if more is needed. The strong data removes the sense that the Fed is behind the curve or in panic mode, he added,”: which seems to support Hodge’s belief.

Wages still concern us, and the paltry 6 cents rise should give any diehard macro economists concern for a true rebound, and retail continues to plunge, and “from January through mid-June, U.S. companies announced plans to close some 7,000 brick-and-mortar stores, more closures than in all of 2018,” and in an industry where half of all employees are women, this becomes a cloud on the sunny skies of this report, noted The Washington Post in June.

Just ahead of Friday’s report, there were “Expectations are for a deceleration in job growth. Job growth is decelerating quite sharply from 2018. The real issue for the Fed is what’s wage growth, and it’s not been promising of late,” said Diane Swonk, chief economist at Grant Thornton. “We’ve seen 3.1% after hitting a peak of 3.4%. If we stay in that 3% range, that’s enough for the doves at the Fed to go. The question is can they bring the hawks along with them. They’re really going to be looking at the wage number.”

An area not helped by the Trump Tariffs, is retail, that can “stress the already-thin profit margins” raising prices on everything from cell phones to toys and shoes, they said, along with one important facet: “They source much of their inventory from China and can't reroute their supply chains easily, cheaply, or quickly.”

Adding further concern, and giving a less optimistic opine than that of the Times, is Challenger, Gray & Christmas,Inc,” who in an earlier press release, said that “U.S.-based employers announced plans to cut 140,577 jobs from their payrolls in the second quarter of this year, down 26% from the 190,410 cuts announced in the first quarter. Despite the drop, Q2 cuts are 34% higher than the 104,800 cuts announced in the same quarter last year, according to the latest report on job cuts released Wednesday.”

Market reaction showed a downturn and “Stocks fell from all-time highs on Friday after the release of stronger jobs data dampened hope for easier Federal Reserve monetary policy.

The Dow Jones Industrial Average pulled back 43.88 points to 26,922.12, snapping a four-day winning streak. The S&P 500 slipped 0.2% to 2,990.41 and ended a five-day winning streak. The Nasdaq Composite fell for the first time in seven sessions, slipping 0.1% to 8,161.79. Earlier in the session, the Dow dropped as much as 232.67 points, while the S&P 500 and Nasdaq slid nearly 1% each.

Despite Friday’s losses, the major indexes posted solid weekly gains. The Dow and S&P 500 rose more than 1% each this week while the Nasdaq gained nearly 2%. Stocks also posted all-time highs on Wednesday.”

“The jobs number was solid,” said Gregory Faranello, head of U.S. rates at Amerivet Securities. “The real theme now will be shifting very quickly to what the number means in the context of what we’re pricing in for the Fed in July.”

While the banner rate grabs all of the heads over the cubes, and in the coffee shops, a better indicator of how the jobs market is trending is the U-6 rate which gives a more accurate picture and includes those that are either stuck in part-time jobs, or have been job searching for more than 20 weeks. And, that has improved.

“The number of persons working part time for economic reasons decreased in June to 4.347 million from 4.355 million in May. The number of persons working part time for economic reasons has been generally trending down. These workers are included in the alternate measure of labor underutilization (U-6) that increased to 7.2% in June,” noted Calculatedrisk.blog.

Some final good news: “The labor force participation rate increased one-tenth to 62.9%, its best since March, pushing up the headline and “real” unemployment rates. The total labor force increased by 335,000 to just under 163 million while those counted as not in the labor force fell by 158,000 to 96.1 million;” good but not great, but shows some promise.

All of this aside, It seems that all heads, cooler, or not, are pointing to Fed Chair Jerome Powell and his team, this July to see what will happen.

Biden and Buttigieg: clueless on racial issues in the US

The 2020 election began with the inauguration of Donald J. Trump who filed almost immediately for reelection, and the race has been on in what has become a very crowded field of contenders among the Democrats with former Vice President Joe Biden being dusted off as “electable” and quickly followed by a resurgent Bernie Sanders, a hopeful Elizabeth Warren and emerging in second place, California Sen. Kamala Harris who showed strong stuff in the debates.

Of the issues that has showed itself to be enduring is that of race, specifically, the role and issues facing the black community in America, who despite the passage of the Civil Rights and 50 years of progress still remain behind their white counterparts, especially financially, as The Economist has said, “Yet after decades of declining discrimination and the construction of a modern welfare state, that ratio remains the same. The mean of black household wealth is $138,200—for whites, that number is $933,700.”

They also reported that, “A recent study by Dionissi Aliprantis and Daniel Carroll, research economists at the Federal Reserve Bank of Cleveland, argues that the persistent racial gap in wealth can be almost entirely accounted for by the racial gap in income. According to the latest figures, from 2017, the median black household takes in $40,258 a year compared with $68,145 for the typical white one.”

A look back into the rear view mirror of history, has brought more than objects closer than they appear; with Biden’s awkward, and, ultimately, contentious comment of being able to work with segregationist lawmakers, and the resulting firestorm, setting the bar low, before a group of wealthy, and potential donors, according to Vox, “he brought up segregationist senators Eastland and Herman Talmadge (D-GA). Though he disagreed with them, he said, “we got things done.”

Then the bombshell: “. . .a guy like Herman Talmadge, one of the meanest guys I ever knew, you go down the list of all these guys. Well guess what? At least there was some civility. We got things done. We didn’t agree on much of anything. We got things done. We got it finished. But today, you look at the other side and you’re the enemy. Not the opposition, the enemy. We don’t talk to each other anymore.”

While some wags subsequently made reference to “Shoeless Joe”, others were less charitable, and began calling him “Clueless Joe”.

Then there were his defenders telling us what he meant to say, as if that particular road to hell was truly paved with good intentions.

Up next is the genial and boyish Mayor Pete Buttigieg of South Bend, Ind. facing a hostile “shout down” crowd of his angry black residents after a series of missteps that included his firing of a popular black police chief who was “under FBI investigation for wiretapping white officers who had been suspected of using racist language investigating racist remarks,” and showed a sense of incredulity when facing their anger, and who stumbled, when asked, point blank, if black lives matter,  and who repeated the question before answering in the affirmative.

What we have observed, along with others, is that it seems that Biden is stuck in a time warp, despite his seemingly avuncular geniality, and has not faced the changed Democratic party, that is more left leaning; and, a lesson he should have learned from Hillary Clinton, whose adherence to centrist position, was one, of many reasons, she lost the presidency in 2016.

The young man from Indiana seems clueless to a demographic that is necessary for any win of the nomination for the United States presidency.

Pew Research, that venerable institution, opined, “The black eligible voter population has grown about as fast as the electorate overall, meaning their share has held constant at about 12% since 2000,” a fact that Buttigieg seems to have not known.

When wedded to the record that despite having placing second, in number, to Hispanics, as the nation’s largest voting bloc, blacks have, in fact, voted in greater numbers than the former.

Going back to historical precedent, while many people point to the Civil Rights Legislation of 1964, when blacks started voting largely Democratic, “It's important to note, though, that African Americans were already voting more heavily for Democrats than Republicans. At no point from 1936 on, according to Joint Center data, has the Republican candidate for president gotten more than 40 percent of the black vote.”

White candidates, in particular, must gain a greater sensitivity to their issues such  as employment, housing, education, and most salient of all, how police misconduct can make or break a community, and the voting booth.

Race is not only America’s most intractable problem; it is going to be one of the most important factors in the 2020 presidential race.

Flexing some political muscle on the issue is Kamala Harris, (daughter of an Indian mother and a Jamaican father) who identifies as black, and a graduate of Howard University, excoriated Biden on his prior stance of opposition to bussing, and used her childhood self as an example, a brilliant tour de force that cameras showed a grimacing Biden.

Optics aside, how the Democratic candidates show their understanding of black America, is going to be especially potent, when they face off with President Trump who has shown a dismissive, if often benign, contempt for black Americans, be it for his assertion of the “good people” among white supremacists, or referring, disrespectfully, to a wounded black veteran, as “your man” to his widow, or Buttigieg,who has stumbled too often, and despite his cultivated air of thoughtfulness, seems to be running, (as he has done for too long), on a narrative, instead of substance as a recent Time Magazine interview revealed.

As The Nation noted, in their debate coverage, “a parallel drama occurred when moderator Rachel Maddow pressed South Bend Mayor Pete Buttigieg about a police shooting in his city. As Maddow accurately noted, civil rights groups are unhappy not just with Buttigieg handling of the shooting but also his inability to discipline the South Bend police force. Before the shooting, the officer had turned off his body camera, making the incident all the more suspicious.”

“The police force in South Bend is now 6 percent black in a city that is 26 percent black,” Maddow noted. “Why has that not improved over your two terms as mayor?”

Buttigieg responded with contrition. “Because I couldn’t get it done,” Buttigieg confessed. “And I could walk you through all of the things that we have done as a community, all of the steps that we took, from bias training to de-escalation, but it didn’t save the life of Eric Logan. And when I look into his mother’s eyes, I have to face the fact that nothing that I say will bring him back.”

“This acknowledgement of inadequacy was humanizing—but also unsatisfying. Not surprisingly, Buttigieg rivals grabbed the opportunity to undermine him further. Former Colorado governor John Hickenlooper wasn’t impressed by Buttigieg claims to be trying to solve the problem. Hickenlooper remarked that “the question they’re asking in South Bend and I think across the country is why has it taken so long?” After all, other jurisdictions have been moving forward with police accountability.”

They noted that, “Both Biden and Buttigieg discovered that their record on racism has seriously wounded their presidential bids. According to a poll conducted by Morning Consult for FiveThirtyEight, Biden lost nearly a quarter of his support after the debates, dropping from 41.5 percent to 31.5 percent. Buttigieg, starting from a lower floor, lost nearly a third of his support, going from 6.7 to 4.8 percent. (By comparison, Kamala Harris more than doubled her support, going from 7.9 to 16.6 percent; Vermont Senator Bernie Sanders and Massachusetts Senator Elizabeth Warren also experienced significant, if smaller, gains).”

Looking southward to South Bend, it is a microcosm on one of the key issues, in the US: overzealous cops shooting black kids, and avoiding best practices policing that have worked in other areas to reduce the “occupation mentality”; in fact, “South Bend has in fact been going backwards under Buttigieg watch. The number of black officers on the city’s force has dropped from 29 in 2012 to 15 in 2019. Interviewed by Huff Post, Oliver Davis, one of the longest-serving black politicians in South Bend, said, “These kind of issues have not been his priorities.” Davis added, “He responds when he has to, but you go back to April, and they were saying the whole makeup of his campaign staff lacked diversity, OK?”

Once again, the candidate relies on a narrative when he says, ““I’m not allowed to take sides until the investigation comes back,” Buttigieg said. “The officer said he was attacked with a knife but he didn’t have his body camera on. It’s a mess and we’re hurting. I could walk you through all the things we have done as a community, all the steps that we took, from bias training to de-escalation, but it didn’t save the life of Eric Logan.”

We reached out to the Buttigieg campaign, before the debate, with emailed suggestions in specific areas to help blacks, not only in South Bend, but also in the country, on education, healthcare and employment, and pointed out the inadequacy of his housing program, as reported in Time magazine, to either tear down, dilapidated homes, or “fix up 1,000 in 1,000 days,” in predominantly black areas, but with no financial assistance, and at publication date received no response.

As is becoming very clear with him, there seems to be a lack of interest, when confronted on race, and the mayor’s reply, which did not endear him the Fraternal Order of Police, in South Bend was this: ‘All police work and all of American life takes place in the shadow of racism’ is divisive.’”

All? Either he is not thinking, or has not done his homework on the issue.

The reaction to residents, according to The New York Times, was also weak, although Buttigieg does have some supporters in the black community of South Bend, albeit those who have a vested interest in working with him, such as the local leader of the NAACP.

Others seem to speak for many: ““It’s not in his best interest to go into all of it because he knows he didn’t do anything,” said Jordan Geiger, who works for a nonprofit group.

“But he needs to speak to those,” Ms. Batiste-Waddell said. “That’s how I believe our department got to the point of killing a black man. Because none of the other racial things that have happened have been addressed.”

Making things worse was the following exchange when he interrupted the campaign to come home to address a shooting, from the Daily Beast:

“The tension reached a flashpoint as Buttigieg arrived in South Bend, which has a significant African-American population, on Friday, when a woman confronted him about his desire to win over black voters in the city. “You’re running for president and you want black people to vote for you?” the woman said. “That’s not going to happen.”

“Ma’am, I’m not asking for your vote,” Buttigieg responded.

After meeting with members of The Congressional Black Caucus, in South Carolina, the mayor sidestepped interviewers’ questions about what he learned, by saying, ““Those meetings are extremely informative for understanding some of the issues that are at the top of their agenda,” Buttigieg said. “As long as black Americans are cut out of equal access to criminal justice, to homeownership, to education, to health outcomes that other Americans enjoy, we’ve got a problem.”

Huh?

Fed stays the course on interest rates

Mr. Powell

In a much anticipated meeting, and with a much anticipated move, the Federal Reserve Open Market concluded its meeting on Wednesday and decided to let rates remain the same between 2.25 and 2.5 percent range, currently holding at 2.5; historically low, but high in terms of the last decade.

For some this soothes the markets, but some others have opined that this does leave the door open for 2020 cuts. And, some see that there might even be a change in July, while still others say that Wednesday's announcement could keep options open

The 9-1 vote also signaled to many observers that this was a divided move and that there was some dissension among members as they hatched out the dot plots, the anonymous charting of rate moves, that the Fed has recently used.

“This was probably the compromise decision — it wasn’t shocking and should offer some reassurance,” Steve Rick, chief economist at CUNA Mutual Group, said in a note, quoted by CNBC,  “The FOMC will still want to closely monitor the stress fractures from the bond market, middling housing and auto sales numbers, and an increasingly uncertain global economic landscape in the coming months.”

Some have said, most notably, The New York Times, that “Though there are economic reasons for the Fed’s greater caution, it carries a political risk: The Fed might appear to be bending to the president’s will.”

In that vein, the news also seemed to soothe concerns, at least for now, on the part of the Administration, whether President Trump will sack Fed Chair Jerome “Jay” Powell whose dovish moves have led the president to blame Powell for not having a market rebound.

“If the Fed had done its job properly, which it has not, the Stock Market would have been up 5000 to 10,000 additional points, and GDP would have been well over 4% instead of 3% … with almost no inflation,” Trump tweeted on April 14.

For his part, the chair has said that the law is clear, and that he “fully intends to serve” his four year term.

Senior White House advisors have said, that only for the most egregious conduct, or to use the term “for cause”, could Powell be sacked; but, they have suggested that he could be demoted.

Powell for his part has powerful friends, including Sen. Richard Shelby (R-Alabama) who is a senior member of the banking committee, who said, “We should make sure that the independence of the Fed is above politics as much as you can and doesn’t accommodate one group or another, or one person or another, or one president or another, but does what’s best for the economy.”

“That would be an unprecedented step, and the White House probably lacks the legal authority to make such a move. The Fed chair is a Senate-confirmed position, and the Fed is an independent agency,” opined the Times.

Trump who launched his reelection bid, on Tuesday, faces polls that show him trailing  former Vice-President Joe Biden, and some say that he needs to ramp up his strong economy, his possessive, that it has never been better, as the gain to reelection, while others opine that the president needs to let the Fed maintain its historic independence from politics.

The FOMC has clearly evolved from prior moves and according to Yahoo Finance, “The new dot plots show Fed officials tilting closer toward a rate cut by the end of 2020. Nine members now see a case for up to two rate cuts in that same window of time. For comparison, the March dot plot reflected only seven members seeing a case for a rate cut by the end of 2020 — and none projected more than a single 25-basis point cut.”

Perhaps most revealing was that “The June update shows some members still taking a hawkish stance. Three Fed officials see a case for at least one rate hike by the end of 2020, with one of those three officials predicting three rate hikes.”

Supporting that view is Neil Birrell, chief investment officer at Premier Asset Management, who said, “The Fed didn’t surprise investors with the decision to maintain rates, but the split vote tells us that a cut is on the way and it’s increasingly likely that will be in July, as bond markets have been hoping.”

These projections also “saw a tick down in future expectations for inflation. In March, the median Fed official projected the economy touching 2% on core personal consumption expenditures (the central bank’s preferred measure of inflation) by the end of 2019 and hitting that target again in 2020 and 2021.”

The Fed’s historic mandate of keeping inflation at 2 percent, or lower, is one that faces a variance of opinion among economists, and even politicians who have described themselves as populists.

In a statement after the announcement, the Fed “also changed wording to concede that inflation is “running below” the Fed’s 2% objective. In their forecast for headline inflation this year, officials slashed the estimate to 1.5% from March’s 1.8%. Core inflation, which excludes volatile food and energy prices, is likely now to be 1.8% from March’s 2%, according to the quarterly summary of economic projections also released Wednesday.”

Bloomberg Businessweek, this past April, had a cover story on “Who Killed Inflation”, and asked “Was it killed by central banks, with high interest rates the murder weapon? Or is it not dead at all but just lurking, soon to return with a vengeance?”

Or, as Bernie Sanders and Alexandria Ocasio Cortez have suggested, is the culprit class struggle related to a neo-Marxian effort at wage suppression, which as we have seen in recent job reports, is down, and staying down?

“Richard Clarida, a Columbia University economist who began a four-year term as vice chair of the Fed in September, likes to point to the decline in labor’s share of national income, to 66.4 percent at the end of 2018, from a range of 68 percent to 71 percent from 1970 to 2010. His implicit argument is that business could give labor a solid raise without raising prices of goods and services, as long as it was willing to give back some of its increase in the share of national income,” noted Bloomberg..

The change in wording from the Fed might also help understand the problem of low inflation, because, as Bloomberg said, in an earlier and prescient mood, “Powell acknowledges, persistently low inflation is hard to explain using standard macroeconomic theory. Price pressures were weak in the aftermath of the global financial crisis because there was a lot of slack in the economy, including underutilized factories and workers. What’s surprising now is that even after one of the longest economic expansions in U.S. history, and with the unemployment rate hovering around half-century lows, inflation is still subdued.”

Going even further, “The Fed has repeatedly missed the target it set in January 2012 of 2 percent annual change in the price index for personal consumption expenditures. Once you strip out volatile food and energy prices, inflation by that measure has reached 2 percent just one month (July 2018) in the past seven years.”

That seems to have echoed what Powell said in January, where he “was declaring that the economy seemed strong enough to sustain two quarter-point interest-rate increases in 2019, on top of the four the Fed orchestrated last year. But inflation has again come in below the Fed’s expectations, and both 2019 rate hikes have been erased from the median forecast of the bank’s policymakers.”

The road ahead is more than traveled, and with the tariff war with China, and the president's willingness to slap a tariff on any country he picks a fight with, and a slowing of the economy, plus a May Jobs Report that showed less robust numbers, especially with revisions, most economists and observers are cautious, for just cause, with the outcome of the FOMC decision.

Lightfoot hits the ground running as new mayor of Chicago

In less than the three weeks that Lori Lightfoot was inaugurated as mayor of Chicago, she has shown a propensity for tackling the hard work ahead, and her unenviable task list, for taking America’s third largest city from a sea of financial red ink, and the burden of high crime, weakened schools, (with a wobbly reputation), and pension indebtedness, among others; and has made some fast enemies, yet seems to care less about them, and more about the future of the city.

To wit, she has called for the disgraced, and now indicted, longtime alderman Ed Burke to resign, after he was fried by the feds for trying to shake down a Burger King franchise in exchange for a bribe, targeted to defeated mayoral rival, Toni Preckwinkle.

Lightfoot’s swift actions have gained her some enmity from long-time Chicago “machine” fans; and, to wit, one 60ish, black woman, and self-styled politico, told me in an off-hand comment,“I can’t stand her,” and exclaimed, with outstretched hands,  ”Look at what she has done to Beale!”

What she did to earn that woman’s ire was to push aside a Burke crony, Ald. Anthony Beale, from a key position in favor of a younger and fresher, read, “non-machine” colleague, Scott Waguespack, and accepted the reality that she was not going to have control over a casino, (designed to help fill the city coffers), and prepared an interim school board, as the Chicago Teachers Union, wrung its collective hands at not having an immediate elected school board, and most significantly signed an executive order to not allow aldermanic privilege to go unfettered, in the shadow of Burke’s shenanigans.

For a woman that is shorter than most of her colleagues, and even her own wife, she seems to brook no nonsense as she tackles Chicago’s problems systematically and methodically, and in less time than many of her rivals, who might have wallowed in the perks of office.

As we noted previously the job of Chicago mayor is often death by a thousand blows, and those who want the job either have to be mad, or are a crusader, and Lightfoot seems to be the latter.

Ending aldermanic privilege

Facing down the alderman and their “life, or death, privileges”, and also their side hustles, may give her street cred among progressives, but also is likely to increase the challenges to that effort, but as The Economist noted earlier this year, after the raid on Burke’s office, these building permits, and development requests, are best handled by city departments rather than through their hands. And, their power often hinders the effort to gain affordable housing, and re-enforces Chicago’s long held racial segregation.

“Under Lightfoot’s plan, the old system would be replaced with one where departments underneath the mayor’s purview would establish uniform criteria to decide who gets permits, licenses and more,” according to local PBS affiliate, WTTW.

“It’s really a simple change,” said Ald.Carlos Ramirez-Rosa, 35th, who says he enthusiastically supports the measure. “Rather than an alderman just picking up the phone and saying, ‘Stop that permit,’ it means the aldermen has to answer to a commissioner.”

Then on the other hand, there is blowback, and,  “She might as well say she doesn’t need aldermen anymore,” said Ald. Ray Lopez, 15th. “There is no cookie cutter solution to answer the issues in every neighborhood, and to try to use this to force aldermen to give up their duty to be advocates for their community is not only distressing, it is wrong.”

Ald. Lopez

“Still, there are some incoming aldermen who like Lightfoot won in part by campaigning to take power away from individual Council members. Some of them say they’re not quite sure that what they heard today from Lightfoot’s staff goes far enough to change the system.”

“For example, they point out that the issue of zoning is not included in Lightfoot’s planned executive order, meaning that aldermen will still have final say about which parcel of land can be zoned for residential, commercial or other types of use.”

“These kinds of decisions have, in the past, facilitated a pipeline for campaign contributions and corruption. Therefore, some aldermen say that Lightfoot will eventually have to take bolder steps to change the system.”

As the Tribune Editorial board reminded readers, “Remember, this is a body that brazenly avoided filling the position of legislative inspector general, a post that was created to investigate complaints against City Council members. When aldermen finally settled on New York attorney Faisal Khan to fill the role, they swiftly discredited him, mocked him, refused his requests for paperwork and ignored his demands.”

“I believe that it was abuses of prerogative around zoning that brought us to this point, to this call of reform,” said Ald.-elect Daniel LaSpata, 1st.  “And I think that’s going to have to be an ongoing conversation.”

“When public officials cut shady backroom deals, they get rich and the rest of us get the bill,” Lightfoot said in her inaugural speech., adding that “It’s in the City Council’s own interest.”

Lightfoot  also has plans to replace longtime politico Carrie Austin, another African American alderman, “from her long-held perch as chairman of the Budget Committee, instead giving that high-power assignment to Ald. Pat Dowell, 3rd.”

“The mayor wants to create a new Committee on Contracting Oversight and Equity and let Austin chair that one instead, in a bid to temper Austin’s anger over losing the Budget post.”

“My decision is going to hinge upon Mayor Lightfoot,” Austin said [last] Thursday. “I will say this throughout my term with her: If it’s something you want me to support, you’ve got to ask me. You’ve got to ask me. That’s the one thing I can say about Mayor Emanuel. He asked me for my support.”

“Lightfoot said Friday that she had asked Austin for her support. Asked whether she expected to get it, Lightfoot replied “I do.”

On a purely operations level, the mayor won as she “managed to reshape the City Council in her reformer image — installing new chairmen and new operating rules to prevent aldermanic conflict of interest — by a voice vote,” reported the Sun-Times.

“Only three aldermen could be heard shouting “No”: Anthony Beale (9th), Edward Burke (14th) and Ray Lopez (15th).

“I think it went fine,” a self-satisfied Lightfoot said, in a dramatic understatement.

Here a TIF, there a TIF

Next up on the “must do” agenda that helped propel her to City Hall, and also the progressive agenda that she backed, is reforming the TIF program -- Tax Incremental Funding -- that was designed to benefit low income areas, and encourage economic development, but which became under Mayor Richard M. Daley, and Emanuel, a slush fund, of sorts, that helped open the French Market, and other posh establishments, in rapidly gentrifying areas of the Loop.

Using the backdrop of an internal investigation by Inspector General Joe Ferguson, the Chicago Tribune reported that it was established to see “how well the city had enacted the recommendations made in 2011 by former Mayor Rahm Emanuel’s Tax Increment Financing Reform Panel.

The inspector general found the city has only partially followed through on setting multiyear development plans and capital budgets for the money, which gets diverted into infrastructure spending accounts within TIF districts all over the city instead of going to traditional property taxing bodies such as Chicago Public Schools and the annual City Hall budget.”

“Inspector General Joe Ferguson’s report reveals what many of us have long suspected: Behind closed doors, City Hall has made decisions on how to spend TIF dollars without documented justifications or clearly articulated goals to guide the spending,” Lightfoot said in a statement.

Mr. Ferguson

“The report makes two things clear. First, the TIF system needs far more transparency in how it makes decisions and who receives money. Second, the City must commit to publicly-available, community-driven plans for which economic development and capital improvement projects should be approved.”

“Emanuel’s agreement to earmark up to $2.4 billion in tax increment financing money to support megadevelopments The 78 and Lincoln Yards just before he left office this year brought particular scrutiny to the city’s TIF process,” the Trib added.

Despite those assertions, Lightfoot was criticized by some of the more progressive groups and media for accepting the deal negotiated by the outgoing administration of former mayor, Rahm Emanuel; and, in another blow to reality, Lightfoot had to accept that she did not have the votes to forestall the project,and instead let it continue with the promise of increased contracts for minority and women owned projects.

“But progressives see it differently. Talk to them and they say that they took Lightfoot at her word when she frequently said during and since the campaign that the Lincoln Yards deal in particular needed lots of work and that a final decision should be left for a new mayor and City Council,” reported Crain’s Chicago Business, also noting that the Chicago Teachers Union criticism was misplaced.

"Her consent for these deals will cost our schools, our parks, and our public services literally billions of dollars in deflected funding," thundered the Chicago Teachers Union in a statement shortly after the City Council vote. "The City Council and the new mayor will have to answer to the people occupying a packed City Council chambers who are jeering their maneuvers."

Crain’s columnist Greg Hinz opined, with accuracy, “I think the progressives really are way, way off base in much of their opposition. The $2 billion-plus in subsidies mostly is for transportation infrastructure, the type of thing government generally pays for. And that money won't "come from" public schools, however much the CTU screams. It will come from property taxes paid by the developers. With few exceptions, the schools will get that money back by raising their property tax rate a little higher on landowners not located in the TIF districts.”

All of this before the inauguration, to boot, but it shows that the 56-year-old, and former corporate attorney, will have to maintain a tough stance, as she faces criticism from many sides, in her effort to reform Chicago; or to paraphrase Lincoln’s famous stance of not being able to please all of the people, all of the time.

On the heels of that action Hinz added: “But Lightfoot is the one who said she opposed action now. And she's the one who acted very much like the Emanuel she criticized in releasing terms of the deal under cover of night—in this case, a 10:45 p.m. email—too late for morning media coverage and too late to really have much impact before a 9 a.m. City Council meeting.”

There was good news in the shuffle: “The new Finance Committee also has been stripped of control over tax increment financing subsidies, like the record $1.6 billion package for Lincoln Yards and “the 78” Mayor Rahm Emanuel pushed through shortly before leaving office.

The power over TIF subsidies has gone to the Economic Development Committee, to be chaired by Ald. Gilbert Villegas (36th), Lightfoot’s floor leader.”

With her support for affordable housing, which is at a dearth in the city, and those calling for rent control, which the local realtor association definitely does not want, the balancing act between a progressive agenda, and not wanting to totally alienate the business community, will be a challenge.

Violence they say, stop, she says

Gun violence has been in the headlines for Chicago for months, even years and there seems to not be a day that there are not headlines proclaiming the latest murders and shootings.

“In an interview with CBS News national correspondent Jericka Duncan, Lightfoot said she plans a proactive approach to tackling gun violence as a public health crisis by better investing in neighborhoods to address the causes of violent crime,” reported CBS Chicago.

“It means we bring resources to the communities so that they can grow; that we bring economic development opportunities to neighborhoods; that we work on providing wraparound services and job training in the neighborhoods so that people in those neighborhoods who don’t have a history of work actually have a pipeline to good paying jobs,” she said, and noted that fighting violence was the biggest challenge of her new role.

“You have to bring people together. They have to get comfortable with each other, which is why we are encouraging our officers to get out of their cars, walk the beat, get to know the community that they’re in. We will be bringing some additional changes both in training our new recruits and our veteran officers,” she said, just ahead of the Memorial Day holiday, an annual launch to a new round of violence, and associated with warmer weather.

Her good intentions aside, “After “flooding the zone” over Memorial Day weekend with 1,200 more police officers and dozens of religious leaders — and touting more than 100 events and youth programs as alternative activities — Lightfoot came away with results tragically similar to previous years, according to the Sun-Times.

“Seven dead, same as last year. And 34 wounded, two more than last year.

That’s apparently why Lightfoot is now attempting to lower the bar that she herself raised by putting so much of her early political capital on the line over Memorial Day weekend.

“I didn’t come into this with any illusions that we were gonna be able to wave a magic wand and reverse trends that have been in the making for some time. We were down on homicides from a year ago. But, we were up on shootings—and that’s clearly unacceptable,” the new mayor said.

It's been widely acknowledged by academics, sociologists, and others who study America’s core cities, that violence is underscored by the lack of opportunity that Lightfoot has seen.

She has noted that “a lot of what we’re seeing out there are crimes of poverty.” That underscores the need to invest heavily in the South and West side neighborhoods suffering from “systemic disinvestment” that has dragged on for decades.”

“There’s young guys out there who get a small amount of money to essentially patrol their streets, but are telling me, ''We have nothing.’ It’s difficult to make a persuasive argument not to be involved in the illegal drug trade, for example, when there are no other economic activities and opportunities out there for young men and women to participate in,” she said.

Show me the money

Of course, as critics have pointed out, none of these changes are possible without money; and the debt, especially the pension debt the city has endured, plus the high interest loans the city took out, under Emanuel, have made things better and Lightfoots’ transition team demurred on the question of city finances, and what is known is a $700 million budget shortfall.

According to The Civic Federation, Lightfoot faces a $277 million increase in pension payments and “payments that will rise by $1 billion in 2023 — as a five-year ramp to actuarial funding ends and the road to 90% funding begins.”

“Whether it’s the structural deficit for next year, the pension obligations that we have to meet, the service on the debt, open police, fire and teachers contracts and a range of other issues, we have a significant challenge on our hands. Make no mistake about it,” Lightfoot said.

“We will talk about what that challenge is. But I also believe you have to talk to people about solutions. We’re not there yet. We’re looking at a range of different options. . . . But it’s important for us to actually get in and see the books for ourselves so we can understand what the magnitude of the challenge is.”

The dean of Chicago political reporters, Fran Spielman, of the Sun-Times, said, in her coverage that “Newly elected mayors routinely paint the worst possible picture of the budget shortfalls they inherit, then blame their predecessors for leaving behind a bigger mess. That frees them to make the painful choices on taxes and budget cuts early in a first term in hopes that Chicago voters forget about it before the next election.”