OAN Asks the Hard Questions...Really?

One America News (OAN) is a family-owned, far-right, pro-Trump news channel popular with many in the MAGA base. President Trump also loves the network; so much so, that his administration plans to publish news from OAN on the Voice of America and other U.S.-run media. So, it is salient what plays on OAN.

On foreign policy, MAGA's views on Israel appear to be shifting after Netanyahu's pre-emptive attack on Iran that threatened to embroil the U.S. in another Mideast war. In a further sign of unease with Israeli policies that are at odds with MAGA's "America's First" tenant, OAN host Matt Gaetz (the controversial ex-Congressman and Trump acolyte) ran a segment titled: How Many Americans Do Israeli Settlers Have to Kill Before We Care? The report covered the killing of 20-year old Palestinian-American Saif Musallet in the West Bank that Gaetz called an act of terrorism. Gaetz also talks about broader attacks on Palestinians by Israel with U.S. tax dollars...so, OAN doing hard-hitting news now?

Ilhan Omar: Lost in Translation

Ilhan Abdullahi Omar made history in 2019 when she became the first Somali American in the U.S. Congress and the first woman of color to represent Minnesota. She was also one of the first Muslim women in Congress along with Michigan's Rashida Tlaib. Both are core members of the "Squad", an informal group of progressive Democrats, who are a favorite target of many Republicans. The latest brouhaha flared up earlier this after a clip of Omar making a speech in Somali went viral on X. In it she was purportedly bragging about advancing a Somalia First agenda in Congress. As context, Omar was expressing support for the Somali government in its dispute with a breakaway republic within Somalia, called Somaliland, that is not recognized by the U.S. 

The meltdown from the right was swift and predictable. Fellow Minnesotan and GOP Majority Whip, Tom Emmers, demanded Omar resign in disgrace. Florida Gov. Ron DeSantis said that she should be expelled from Congress, stripped of her citizenship and deported. Naturally, Majorie Talyor Greene called her words treasonous and sought to censure her. Except...that Omar never said any such thing. The video of Omar’s speech was circulated on social media with distorted English captions. 

As per the Intelligencer, the "captions made it appear that Omar had said that she and her audience were “Somalians first, Muslims second,” and that “The U.S. government will only do what Somalians in the U.S. tell them to do. They will do what we want and nothing else. They must follow our orders.” 

However independent reviews by the Minnesota Reformer and the Minneapolis Star Tribune found significant differences between the videos’ claims and what Omar actually said. 

Per the Star Tribune, that part of Omar’s speech actually went as follows: “My answer was the U.S. government will do what we tell the U.S. government to do. We as Somalis should have that confidence in ourselves. We live in this country. We pay taxes in this country. It’s a country where one of your own sits in Congress. As long as I’m in Congress, no one will take Somalia’s sea. And the United States will not support other people to rob us. Rest assured, Minnesotans. The woman you sent to Congress is aware of you and has the same interest as you.”

In fact, Omar's position on the issue of Somaliland is in line with U.S. policy. So, there shouldn't have been any controversy. But if you're Somali, Muslim, and/or both, things are always a little more complicated. Best for Omar keep her speeches in English at all times...so nothing gets lost in translation.

Trump Acquitted (Again)...Will Be President in 2024?

Two impeachments, two acquitals. Yesterday, the Senate voted 57-43 to convict Trump, but fell short of the 67 votes necessary to bar Trump from ever holding public office again. An embolden, albeit Twitter-less, Trump declared he'll be back and that this is just the beginning...

Yup, even though Trump was on TV inciting a mob to attack the Capitol. And said mob rampaged Congress seeking to capture Senators, Representatives and even his own Vice President. And 5 people died. Still, it was not enough for most Republicans to convict Trump in the very place the attack took place.

That is fear...fear of getting primaried and/ or losing the MAGA support when hopeful Republicans run for the Presidency in 2024. Fear so bad, that they would overlook an actual insurrection...Sure, some Republicans and Trump's lawyers tried to provide cover and make the claim that Trump was really horrified by what happended. Except that when a desperate Kevin McCarthy pleaded with Trump on Jan 6th to call off the mob, he was reportedly told..."Well, Kevin, I guess these people are more upset about the election than you are." McCarthy, in shock and in mortal danger, managed to (allegedly) blurt out "Who the f**k do you think you're talking to?" Of course, a few weeks later a physically safer and chastened McCarthy went to Mar-a-Lago to pledge fealty once more to the (future?) President.

So the joke's on Cruz, Hawley and others who had sights on 2024 against Kamala Harris. Trump's gonna be back and in a Tump vs Harris match-up, Trump probably wins. No wonder, Mitch McConnnell was pleading to the states to bail out the Republican party.

Goldman Sachs Planned to 'Storm the Hill' First!

Not literally, of course. (After all, Government Goldman Sachs  is always doing 'God's work' and loves government.) 

The WSJ reports that the venerable bank was sponsoring an event next week for small business owners to meet with lawmakers. As part of the program they had come up with an enthusiastic and unfortunately timed "Storm the Hill" slogan that was prominently displaced on T-shirts and other parenphelia given to partcipants. But after last Wednesday's actual storming of the Hill, GS quickly rebranded the Jan 13 event, now called The Virtual Capitol Hill Day. It also asked participants to hide their swag...and presumably to never speak of its contents again. 

Scary Poll: Insurrection or Liberation?

Unfortunately, it depends... 

YouGov Direct conducted a poll of 1,397 registered voters Wednesday night about the mayhem in the US Capitol. A majority (62%) of those asked considered the pro-Trump supporters who attacked the Congress a threat to democracy (good!). However, while 93% of Democracts and 55% Independents (only?) saw it that way, only 28% (!!) of Republicans felt the same. In fact, a greater percentage of Republicans (45%) supported the storming of the Capitol than opposed it (43%). Scary stuff. (Click to enlarge).

Understanding Our Strange Economy

The NYT has an insightful article that helps explain Why Markets Boomed in a Year of Human Misery. Based on national accounting data, it reveals a complicated economic picture where policy, markets and consumer behavior intersected in unexpected ways. 

It begins with an analysis of the National Income and Product Accounts, which captures how Americans are earning and spending. What it shows is that, relative to the same period in 2019, personal income of Americans (in aggregate) actually increased during this historical pandemic by $1 trillion!

And that was due mainly to Congress and the Trump Administration's surprisingly swift and effective response to the Covid-induced national lockdowns. 

The CARES Act and stimulus checks contributed to $775 billions of additional income. And because of the Paycheck Protection Program (PPP), businesses saw a $29 billion relative gain in income rather than an estimated $143 billion loss in its absence. (Government works! Yay!)

But what about the economic fallout from the historic rise in unemployment in March and April? The cruel reality of income inequality comes into play here. Most of the unemployment was concentrated in lower paying jobs that couldn't be moved online. As the article notes: "the arithmetic is as simple as it is disorienting. If a corporate executive gets a $100,000 bonus for steering a company through a difficult year, while four $25,000-per-year restaurant workers lose their jobs entirely, the net effect on total compensation is zero." So, in aggregate, worker's compensation dropped just $43 billion over the Mar-Nov period, despite mass unemployment.

But this is just half the story. There were big changes in the spending side of ledger this year relative to 2019 as well.

Due to Covid, Americans spent $575 billion or 8% less this year on vacations and services like restaurants, movies, concerts and sporting events. This was modestly offset by increased spending on durable goods (like home office and gym equipment) and non-durable goods (like mineral water, stationery and clothes to look good on Zoom) by about $100 billion. And due to the Fed's interest rate cuts, households saved an additional $59 billion in interest payments.

So, in total American households spent $535 billion less in the Mar-Nov period in 2020 than in 2019.

This bears out Larry Summers' point that for many Americans the pandemic "reduced the ability to spend more than the ability to earn." That brings us to the third important component of the economy: Savings. Collectively, Americans earned more and spent less in 2020.

                                                        Savings = Disposable Income - Spending

or,                                                    Savings = +$1,030 billion - (- $535 billion) 

or,                                                    Savings = +$1,565 billion

So, what did Americans do with $1.56 trillion of additional savings? For one thing, they held on to more cash. Deposits at commercial banks are up ~20% since March. Others bought houses, causing housing prices to rise 8% nationally. Many others put money in the stock market, helping the S&P 500 rise 70% from the February lows to end the year up 16%. For the most daring (like the Robinhood day-traders) the stock market became a fun casino and stocks like Tesla its biggest slot machines.

To be sure the Fed played a key role in helping cut short a nasty bear market. Powell & Co. were instrumental in stabilizing financial markets in March when credit markets briefly froze and threatened the sustainability of the economic system. Yet, the dynamics around savings described above may have played a more sustained role in this wild stock market rally that left many puzzled and angry at perceived moral hazard...But who knows? And who knows how stocks will react once everyone gets vaccinated and returns to normal(ish) life. Does the savings trend reverse and money flow out of the stock market? Or are peoples' views of consumption and savings durably modified? 

And it's worth remembering the benefits of aggressive fiscal and monetary policies were not experienced equally across economic strata. Those who avoided major economic damage during the pandemic were largely the same people who were also doing better before it.