aacj

September 19 2024

Israel-Lebanon ground war? / GOP funding plan rejected / Teamsters withhold 2024 endorsement / U.S. debt crisis looms / China steel glut

Greg Loving

19 Sep 2024 • 5 min read

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FLASH Fed cuts interest rates by 0.5%, markets shrug

Ed note: the Fed’s ability to control the economy is overhyped in my opinion

A wave of deadly explosions of pagers and other electronic devices carried by militants in Lebanon has sharply heightened Pentagon concern about a potential ground war erupting in southern Lebanon between Israel and Hezbollah. Even before the hundreds of widely dispersed detonations Tuesday and Wednesday, U.S. Defense Secretary Lloyd Austin told other senior Pentagon officials in a Monday meeting that he feared Israel could soon launch an offensive, after months of back-and-forth rocket and air attacks with Hezbollah, an Iranian-backed militia group that controls much of southern Lebanon. U.S. alarm about a possible invasion has intensified since the brazen attacks in Lebanon. “I am very concerned about this spiraling out of control,” a senior defense official said, echoing comments since Tuesday by other Pentagon aides. Israel’s military moved a division of commando and paratrooper soldiers to the north in recent days from the southern part of the country, after it had operated for months in Gaza, according to a person familiar with the matter. The division consists of thousands of soldiers.

Article Source: WSJ

2 House GOP’s Government Funding Plan Rejected as Shutdown Looms

The House on Wednesday rejected Speaker Mike Johnson’s plan to fund the government for six months, cranking up tensions around a fast-approaching government shutdown deadline not only throughout Congress but also within Republicans’ brittle House majority. Fourteen Republicans joined with Democrats to block Johnson’s bill, which combined a six-month extension of federal funds at current spending levels with a measure the House already passed requiring proof of citizenship to register to vote in national elections. The Democratic-controlled Senate and the White House oppose the House bill, because of the length of the extension and because of the registration provisions. Funding for the federal government expires Sept. 30, and without an extension, most federal government operations would shut down Oct. 1 as millions of Americans begin early voting in November’s election.

With the House GOP’s initial effort defeated, Johnson now must quickly decide his path forward. Some GOP figures, including Republican presidential nominee Donald Trump, are demanding that Republicans leverage the specter of a shutdown to strike a hard bargain with Democrats to tighten voter-ID rules, while others say such an effort would be futile and wrongheaded just ahead of the November elections.

Article Source: WaPo, WSJ

3 Teamsters Break Tradition, Withhold Presidential Endorsement for 2024

For the first time in nearly three decades, the International Brotherhood of Teamsters won’t endorse a candidate in the presidential race — a blow to the Democratic Party, which has reliably received the union’s approval for years. The non-endorsement comes two days after union leaders and members met privately with Vice President Kamala Harris as she laid out her case for an endorsement, underscoring the current administration’s many achievements for unions. Trump has called himself “pro-worker.” And his selection of Sen. JD Vance as running mate reflects mounting pressure within the Republican Party to embrace populist right-wing politics intended to capture working-class votes. Still, as president, Trump supported a labor agenda that severely restricted union power, including installing NLRB appointees whose policies and rulings made it harder for workers to join unions. The Teamsters released the results of an electronic poll of its members Wednesday, which showed 59.6 percent supporting a Trump endorsement compared with 34 percent supporting a Harris endorsement.

Article Source: WaPo

4 OPINION A U.S. National Debt Crisis Is Coming

Despite intensifying polarization, the Republican and Democratic parties are alike in one important respect: Both now behave as though budget deficits don’t matter. Red and blue politicians alike seem to think we can increase spending, cut taxes indefinitely, and borrow whatever we need to close the gap while running up the national debt—all without paying a price. Why not make everyone happy by eliminating taxes altogether and borrowing everything? The answer is obvious: No prospective lenders would believe that they’d be repaid in full. They would thus demand ever-higher rates of interest on debt. Eventually, the merry-go-round would grind to a halt, triggering a crisis the likes of which the U.S. has never faced. Let’s recall recent history. The last time the U.S. federal government had a budget surplus was in 2001. Federal debt held by the public stood at $3.3 trillion, about 33% of gross domestic product, and the government was on track to pay it off completely by the end of the decade. Over the next two decades, the combination of tax cuts, spending increases, costly wars and the fiscal pressure of an aging population reversed this trend. The national debt held by the public is now above $28 trillion and is 99% of GDP. The 2024 budget deficit alone will be nearly $2 trillion, which is 7% of GDP. The Congressional Budget Office projects that by 2035 debt held by the public will top $50 trillion and total debt will equal 122% of GDP.

Article Source: WSJ

5 Chinese overcapacity is crushing the global steel industry

Each year China makes as much steel as the rest of the world combined. The vast scale of its output—around 1bn tonnes a year—is obscured by the fact that most of it stays in the country. Lately, however, China’s exports of the metal have surged, reaching 90m tonnes in 2023, up by 35% on the previous year (see chart 1). That may be a fraction of China’s total production, but it is more than what America or Japan make in a year. And it is enough to build a thousand Golden Gate bridges. With China’s economy struggling, its steelmakers are selling abroad at bargain prices, to the distress of foreign competitors and politicians alike. Last month Nippon Steel, Japan’s biggest steelmaker, called on the government to impose anti-dumping duties on Chinese imports. In the quarter to June its net profit shrank by 11% year on year. ArcelorMittal, Europe’s steelmaking champion, has been hit even harder: its net profit for the same period was down by 73%. “We want fair competition, and we know that the competition against China is not fair,” says Genuino Christino, the company’s chief financial officer. Such complaints tend to carry weight with politicians. Steelmaking is often seen as a symbol of a country’s industrial heft. And although a glut means lower prices for a diffuse group of consumers, politicians worry about the concentrated pain it inflicts on manufacturing workers and regions.

Ed note: the same dynamic is playing out in other industries too

Article Source: Economist

9/19/1982 The first documented emoticons, :-) and :-(, posted on Carnegie Mellon University Bulletin Board System by Scott Fahlman.

Sources

2. https://www.wsj.com/world/middle-east/pentagon-worries-israel-is-close-to-launching-ground-war-in-lebanon-33683bf4?st=wB8bda&reflink=article_copyURL_share

3. https://www.washingtonpost.com/business/2024/09/18/house-bill-government-shutdown-funding/; https://www.wsj.com/politics/policy/republican-divisions-sink-house-bill-as-government-shutdown-nears-dfc8454e?st=ArNHV4&reflink=article_copyURL_share

4. https://www.washingtonpost.com/business/2024/09/18/teamsters-endorsement-election/

5. https://www.wsj.com/opinion/a-u-s-national-debt-crisis-is-coming-policy-politics-6e189256?st=W3TcDL&reflink=article_copyURL_share

6. https://www.economist.com/business/2024/09/17/chinese-overcapacity-is-crushing-the-global-steel-industry