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With Impeachment Unfolding Amid a Booming Economy, What Will Voters Prioritize?

With Impeachment Unfolding Amid a Booming Economy, What Will Voters Prioritize?WASHINGTON — President Donald Trump was greeted Friday morning with news of a blockbuster jobs report, showing that employers added 266,000 jobs in November and the unemployment rate fell to 3.5%, its lowest level since 1969.The country's economic condition, which has historically aligned with a president's reelection chances, should be helping Trump sail into a second term. But what should be a top indicator of Trump's performance as president came a day after Speaker Nancy Pelosi called on the House to begin drafting articles of impeachment against him.It didn't take long for Trump to tie the two together. "Without the horror show that is the Radical Left, Do Nothing Democrats, the Stock Markets and Economy would be even better, if that is possible," he wrote on Twitter. "And the Border would be closed to the evil of Drugs, Gangs and all other problems! 2020."Such is the Trump presidency: A leader who is presiding over a record-long economic expansion that has proved more durable than anyone predicted while defending his fitness to hold office.With 11 months to go before the 2020 election, a polarized electorate is dividing itself by which storyline it views as more pertinent — the president's potential abuse of power or the comfort of a steady paycheck credited to his leadership.The Trump campaign is betting that Trump's rote denials of pressuring the Ukrainian president to investigate his political foes will eventually sway enough voters to put the entire impeachment issue to the side."Trump having a perfectly acceptable phone call with the president of Ukraine doesn't affect anybody's daily life," said Brad Parscale, the president's campaign manager. "A good job with a bigger paycheck does."But Trump's presidency is also testing conventional wisdom that a good economy is all voters need to keep the status quo rather than seek out change."Were it not for the other factors of the Trump presidency, it should be by far the most popular presidency in history, based on the economics," said Tony Fratto, founder of Hamilton Place Strategies, a public affairs firm, and a former spokesman for the Treasury Department under President George W. Bush.Instead of enjoying anything close to overwhelming popularity because of the economy, Trump's national approval rating has remained low, dropping about 2 percentage points to 41% since the Ukraine story broke. One problem with Trump's campaign message is that the economic expansion started before the president assumed office, causing many voters to take it for granted."At this point, voters may think this is just the normal economy," Fratto said. "That gives them the luxury to focus on other things, like the behavior of the president."Another factor is also at play: While Trump routinely talks up the economy, he is far more passionate when lashing out at Democrats over the impeachment inquiry, or simply riffing about the news of the day, than when discussing the stock market and unemployment rate. His off-the-cuff comments often overshadow his dutiful recitations of gains.At the White House on Friday, Trump noted in a monotone voice that the unemployment rate was "at the lowest rate, as I told you, in many years and in many ways I think we probably very soon say historically."He only seemed to come alive when discussing rolling back energy standards on light bulbs. "The new bulb is many times more expensive, and I hate to say it, it doesn't make you look as good. Of course, because being a vain person that's very important to me," he said, noting that it "gives you an orange look."Trump's penchant for steering the conversation away from the economy is frustrating for many Republicans and business leaders, given America is powering through a record 11-year expansion. Employers have hired 2.2 million people over the past 12 months, a surprisingly robust performance at a time when unemployment is at its lowest in half a century.Those gains have often come despite Trump's policies, not because of them. And it remains an open question how long the pace of growth can continue.The president's globe-spanning trade war has put businesses on edge and slowed their investment. Manufacturing has dipped into outright contraction as weak global growth and geopolitical tensions weigh on exports.Trump's economic advisers have been keenly aware of the need to keep the economy humming as the president heads into a reelection year. "America is working, and not only is America working, America is getting paid after taxes," Larry Kudlow, a top economic adviser, said Friday. "I don't see any end to it right now. What I see is more strength."Administration officials have been exploring ways to ensure the expansion continues, including tax cuts aimed directly at the middle class. The White House has not indicated which income brackets would see a lower rate, but Trump is expected to back a plan that would make permanent the individual tax cuts included in the tax package he signed in 2017. Those cuts are now slated to expire in 2025.Trump has dangled the additional tax cuts as a reason voters should back him and Republican House candidates, warning that the economy — and retirement accounts — will tank if Democrats win the White House."If any of these people that I've been watching on this stage got elected, your 401(k)s would be down the tubes," Trump said in October. "You'd destroy the country."At rallies and speeches, he has told supporters, "you have no choice but to vote for me," citing dire economic consequences of electing any of the Democratic candidates, whom he has tried to broadly portray as a band of extreme socialists.So far, the economy is complying with Trump's reelection message.Average hourly earnings increased 3.1% in the year through November, a moderate but sustainable pace. Bigger paychecks have given consumers more cash to spend on everything from restaurant meals to holiday shopping, helping to power the economy.Such a strong economic track record should help insulate Trump from attacks by Democrats claiming that they can do a better job managing the economy. So far, his rivals have floated plans that they say would spread wealth more equitably by raising taxes on corporations and the rich to finance universal health care and free college tuition.But Democrats have found a ripe opening in impeachment to hone their attacks on Trump."The Constitution makes clear no one is above the law," Sen. Elizabeth Warren of Massachusetts said in a recent interview with MSNBC. "I hope we hold him accountable."Even without the impeachment drama, it's not clear that the economy will continue complying with Trump's campaign messaging.Trump said this week that trade talks with China may last past the 2020 election, rattling stock markets around the world. Additional tariffs on Chinese goods are slated to take hold Dec. 15, and it is unclear whether they will be delayed. Global growth remains fragile, and while many economists expect it to accelerate in 2020, that forecast could be upended by an escalation in the trade war."We're really in terra incognita here, I think, in terms of what's possible next year, just given all of the geopolitical factors at play," said Ernie Tedeschi, policy economist at Evercore ISI.Trump has jawboned the Federal Reserve to cut interest rates more aggressively, blaming the central bank for not doing enough to propel the economy. The Fed cut rates three times in 2019 as it tried to insulate the economy against trade tensions and slowing global growth, but it is unlikely that it will cut borrowing costs again without good reason.For now, Trump is hoping his economic message wins out over impeachment, an issue campaign advisers predicted would be firmly in the rearview mirror by November."Stock Markets Up Record Numbers," Trump tweeted Friday, adding: "It's the economy, stupid."This article originally appeared in The New York Times.(C) 2019 The New York Times Company



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Asia’s Big Trade Pact Will Hurt the Global Economy

Asia’s Big Trade Pact Will Hurt the Global Economy(Bloomberg Opinion) — From a political perspective, India’s decision overnight to walk away from immediate involvement in a trade zone encompassing half the world’s population and a third of its economy is good for almost everyone.The government of Prime Minister Narendra Modi no longer needs to make difficult concessions on agricultural trade. Other members of the Regional Comprehensive Economic Partnership group, or RCEP, won’t need to open their home markets to India’s thriving, and low-cost, services sector. China, the linchpin of a zone that also includes the Association of Southeast Asian Nations, Japan, South Korea, Australia and New Zealand, will be able to move forward faster with an agreement that was at risk of being jeopardized by India’s foot-dragging.The U.S., meanwhile, can take satisfaction from the fact that its key regional ally in New Delhi is remaining outside of Beijing’s orbit. A stronger RCEP that included India would almost certainly have revived politically fraught question of whether Washington should rejoin the rival Trans-Pacific Partnership agreement or TPP, which died in Congress under the Obama administration and was formally killed off by President Donald Trump. That’s precisely the problem, though. Trade agreements are hard precisely because deals that are worthwhile economically tend to be politically hazardous, and vice versa. India’s pause on the RCEP isn’t the cause of the parlous state of international commerce in 2019, but it’s another telling symptom of a global trading system where volumes are now falling at the fastest pace since the 2009 financial crisis.Both the RCEP and the pared-down, U.S.-free version of the TPP are better understood as attempts to harmonize trading standards than reduce tariff barriers.In part this is a result of the success of previous trade agreements, which have lowered border levies to the point where the more potent restraint on commerce is often non-tariff barriers, governing areas such as food safety, licensing, and rules of origin. Even within the more protectionist RCEP zone, the median trade-weighted tariff had fallen in 2017 to about 5.15%, a lower average rate than Australia or Canada imposed in the mid-1990s.Still, the effect of harmonizing standards at the regional-agreement rather than global level is the opposite of an opening of trade. The objection to the original TPP — that it resulted in the U.S. imposing its standards on other economies within the bloc — comes with the territory in such deals. The standards that are established across the zone inevitably resemble those of its largest member. That would be fine in a global agreement, but in a regional deal the effect is to raise barriers to nations outside the bloc with different rules.In the case of RCEP, that means smaller and lower-income countries in Southeast Asia are likely to become more closely entwined with China, while their links with potential partners outside the zone will fall behind. The reformed TPP, likewise, will bind those nations closer to each other than to the rest of the world. Only the handful of countries in both blocs — Japan, Australia, New Zealand and Singapore — stand a chance of benefiting as much as China.The result suggests that trade is moving in a similar direction to tech, with the world bifurcating into separate zones as tensions between China and the U.S. force nations to take sides. It’s a path that’s grimly reminiscent of the aftermath of World War II, when the U.S.-led Marshall Plan and Soviet-centered Comecon developed into rival trading blocs. That division split the global economy for the duration of the Cold War. We shouldn’t welcome its revival. To contact the author of this story: David Fickling at dfickling@bloomberg.netTo contact the editor responsible for this story: Matthew Brooker at mbrooker1@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.David Fickling is a Bloomberg Opinion columnist covering commodities, as well as industrial and consumer companies. He has been a reporter for Bloomberg News, Dow Jones, the Wall Street Journal, the Financial Times and the Guardian.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.



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Protests squeezing Hong Kong economy, tourism, leader says

Protests squeezing Hong Kong economy, tourism, leader saysHong Kong’s economy is languishing after months of increasingly violent protests, the city’s embattled leader Carrie Lam said Tuesday. Lam, addressing reporters after a long weekend of more turmoil, said tourism arrivals were down by half and that hotels and retailers were suffering. Hong Kong’s third quarter economic data will definitely be “very bad”, said Lam, the semi-autonomous territory’s Beijing-backed chief executive said.



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China Won’t Save the World Economy This Time

China Won’t Save the World Economy This Time(Bloomberg Opinion) — U.S. recession indicators are growing stronger and there's one bigger-than-usual reason why the world should be worried: China isn't coming to the rescue this time.In the past week alone, a gauge of U.S. manufacturing unexpectedly fell to its weakest reading in a decade and payrolls at private companies grew less than forecast. Economists are starting to wonder whether the U.S. has approached so-called stall speed, the slowest pace of growth without careening into a recession. The International Monetary Fund, meanwhile, will likely downgrade global growth estimates this month.One of the engines that drove a global economic recovery after the last two downdrafts in America – the relatively shallow one in 2001 and the catastrophe that began in 2007 – was China. As the financial crisis escalated, Beijing opened a floodgate of credit and cut interest rates, which stoked demand for everything from Australian coal to German cars.We’re unlikely to see anything like that this time. Beijing has shown little appetite for another round of massive fiscal stimulus as it atones for the profligacy of the last decade, which left a massive buildup of debt and fueled asset bubbles.While Chinese authorities have been juicing the economy the past year, they have been very careful about how they go about it. Economists keep predicting cuts in the benchmark interest rate; but those haven't been forthcoming, as my Bloomberg Opinion colleague Shuli Ren wrote recently. The People's Bank of China has preferred trims to lenders' reserve requirements, as officials focus on the best way to channel credit to certain sectors of the business world. Open-slather easing, it isn’t. That doesn't augur particularly well for the prospects of a global recovery. The financial crisis saw the world's most consequential central banks coordinate rate cuts, with China's participation. Beijing’s involvement made China a serious player in the global monetary order.How likely is it that the PBOC will happily sign off on something with the Fed once again? With President Donald Trump sitting in the White House, not very. Then again, Trump has already likened Federal Reserve Chairman Jerome Powell to Chinese President Xi Jinping. Desperation has been known to make odd bedfellows in pursuit of shared short-term goals. The good news is that any steps China does take will have ripple effects given its sheer size. Gross domestic product is now about $ 14 trillion, compared with barely more than $ 1 trillion in 2001 and about $ 4 trillion in 2007. Chinese firms continue to plow investment into neighboring countries and Beijing-funded lenders like the Asian Infrastructure Investment Bank may well step up to provide cash to struggling economies.Let's keep things in perspective, though. China is now recording quarterly economic growth of about 6%, not the 15% notched in 2007 or the roughly 10% in 2001. The executives and politicians who tripped over themselves to praise China’s model of development are noticeably quieter now.Not every recession is like 2007, nor are they always accompanied by a financial collapse. The next slump, whenever it comes, will still be painful, so the U.S. might want to start casting about for an enthusiastic partner. It’s probably a mistake to expect that’ll be China this time around – it’s not only less willing, but less able.To contact the author of this story: Daniel Moss at dmoss@bloomberg.netTo contact the editor responsible for this story: Rachel Rosenthal at rrosenthal21@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Daniel Moss is a Bloomberg Opinion columnist covering Asian economies. Previously he was executive editor of Bloomberg News for global economics, and has led teams in Asia, Europe and North America.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.



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Saudi prince says war with Iran would gut world economy

Saudi prince says war with Iran would gut world economySaudi Arabia’s crown prince said in an interview aired Sunday that war with Iran would devastate the global economy and he prefers a non-military solution to tensions with his regional rival. “Oil supplies will be disrupted and oil prices will jump to unimaginably high numbers that we haven’t seen in our lifetimes,” the prince said. The prince said a war between Saudi Arabia and Iran would be catastrophic for the world economy.



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We need Unions for All. It's a bold agenda for helping everyone get ahead in our economy.

We need Unions for All. It's a bold agenda for helping everyone get ahead in our economy.We need serious plans to empower all workers to form unions, no matter what job they do. 'Unions for All' is our litmus test for 2020 candidates.



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Trump dismisses worries of recession, says economy is strong

Trump dismisses worries of recession, says economy is strongPresident Donald Trump dismissed concerns of recession on Sunday and offered an optimistic outlook for the economy after last week’s steep drop in the financial markets. “I don’t think we’re having a recession,” Trump told reporters as he returned to Washington from his New Jersey golf club. A strong economy is key to Trump’s re-election prospects.



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North Korea's economy tanks as sanctions, drought bite: South Korea

North Korea's economy tanks as sanctions, drought bite: South KoreaNorth Korea’s economy shrank in 2018 for a second straight year, and by the most in 21 years, as it was battered by international sanctions aimed at stopping its nuclear programme and by drought, South Korea’s central bank said on Friday. North Korea’s gross domestic product (GDP) contracted by 4.1% last year in real terms, the worst since 1997 and the second consecutive year of decline after a 3.5% fall in 2017, the South’s Bank of Korea estimated. North Korea does not disclose any statistics on its economy.



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Donald Trump vowed to raise pressure on Iran and cripple its economy. Did it backfire?

Donald Trump vowed to raise pressure on Iran and cripple its economy. Did it backfire?Critics of Donald Trump’s Iran strategy say it has created the current crisis but the administration says Tehran will be forced to negotiate.



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Economy Grows 3.2 Percent During First Quarter, Outpacing Expectations

Economy Grows 3.2 Percent During First Quarter, Outpacing ExpectationsThe economy grew 3.2 percent during the first quarter of this year, beating analysts' and investors' expectations, according to data released Friday by the Bureau of Economic Analysis (BEA).Economists had expected a first-quarter showing of 2.5 percent GDP growth, only slightly higher than the 2.2 percent growth in the last quarter of 2018. Instead, GDP grew 3.2 percent, marking the economy's best first-quarter performance since 2015.The BEA attributed the favorable growth rate to exports as well as better state- and local-government spending. Disposable personal income increased by 3 percent in the first quarter, while prices rose 0.8 percent. Imports sank by 3.7 percent and exports increased by the same amount. At the same time, some potential warning signs also appeared in the report, including a 50 percent drop in the business-investment rate despite 2017's tax cuts.The growth rate also defied expectations that the economy would suffer more seriously from the record-breaking 35-day partial government shutdown earlier this year, as well as fears that global growth was sputtering. President Trump's tariffs on China had particularly worried investors, with even the White House saying that American companies may see their earnings projections take a hit because of them.“It’s not going to be just Apple,” top White House economist Kevin Hassett said in January. “I think that there are a heck of a lot of U.S. companies that have a lot of sales in China that are basically going to be watching their earnings be downgraded next year until we get a deal with China.”



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