Daily Briefing – 387

Post: Oct. 6, 2021

Debt Ceiling – McConnell Makes Offer, Dems Accept

The Senate appeared poised to stave off a debt ceiling crisis of its own making on Wednesday after Democrats said they could accept a surprise offer from Senate Minority Leader Mitch McConnell (R-Ky.) to raise the debt limit for two months.

The deal McConnell offered is unlikely to lead to any GOP votes for raising the debt ceiling, but it will also stop Republicans from blocking a suspension. It would allow Democrats “to use normal procedures to pass an emergency debt limit extension at a fixed dollar amount to cover current spending levels to December,” per a statement from the Senate GOP leader.

Dudley: Fed is Fighting the Wrong Inflation War

SFormer NY Fed President William Dudley said on During the recovery from the recession of 2007 to 2009, the problem was not enough inflation. The Fed struggled to achieve its 2% target. As inflation readings persistently fell short, people’s expectations of future inflation also declined. To that end, it has committed to hold short-term interest rates at zero until three goals are reached: employment has reached the maximum level consistent with the inflation objective, inflation has reached 2%, and Fed officials expect inflation to exceed 2% for some time.

This strategy is not necessarily well suited for today’s circumstances. Inflation is already well above the 2% target, and the Fed’s index of common inflation expectations indicates that inflation expectations are very close to the Fed’s 2% inflation objective. This in turn raises important questions. How long will these inflationary pressures last? How far is employment from its maximum level, and what will happen with inflation when it gets there?

Cereal Workers Go On Strike

On Tuesday 1,400 U.S. Kellogg employees went on strike. Member employees of the Bakery, Confectionary, Tobacco Workers and Grain Millers International Union walked out of plants September 5 at the company’s cereal factories in Nebraska, Michigan, Pennsylvania and Tennessee.

According to BCTGM President, Anthony Shelton, Kellogg workers were asked to make concessions on health care, retirement benefits, and holiday and vacation pay after bargaining for more than a year. Shelton also claimed Kellogg’s has threatened to send cereal jobs to Mexico if workers declined. In a statement, Kellogg spokesperson Kris Bahner said his company was “disappointed” in the strike, noting that its employees made an average salary of $120,000 in 2020.

Builders Hunt for Alternatives to Materials in Short Supply

Shortages of key construction materials are forcing some builders and contractors to turn to substitutes and hunt for alternative suppliers as they rush to meet high demand for new housing.

Construction companies are looking for replacements and new sources for everything from wood paneling to ceiling joists to pipes, saying that potentially higher costs and added complications to design and construction can be preferable to putting a project on hold for months while waiting for planned supplies.

US COVID-19 Update – Kids Account for 27% of US Cases

Children make up only 22% of the U.S. population but account for 27% of coronavirus cases nationwide, the American Academy of Pediatrics reported Monday. Kids make up less than 1% of COVID-19 deaths, the Academy said. Since the beginning of the pandemic, 5.9 million children have tested positive for COVID-19, and less than half of eligible children have been fully inoculated.

Children ages 5 to 11 – making up 14.5% of the U.S. population – are not yet approved to receive the COVID-19 vaccine, but recent action by the Food and Drug Administration suggests that may change soon. The FDA scheduled a meeting of the independent committee, which advises the administration on vaccine and drug approvals, for the end of October.

NYS Vaccine and COVID Update

Vaccine Stats as of Wednesday October 5th:

One Vaccine Dose

71.9 of all New Yorkers – 13,935,676 (plus 13,800 from a day earlier)
In the Hudson Valley 1,461,906 (plus 1,448)

Fully Vaccinated

64.2% of all New Yorkers – 12,494,553 are fully vaccinated (Plus 15,336)
In the Hudson Valley – 1,297,460 (plus 1,421) are fully vaccinated.

The Governor updated COVID data through Tuesday October 5th. There were 38 COVID related deaths for a total of 56,978.

Hospitalizations:

Patients Currently in Hospital statewide: 2,231.

Seven Day Average Positivity Rate:

Statewide 2.34%
Mid-Hudson: 2.20%

Useful Websites:

Top COVID Experts Privately Urge Biden Admin to Scale Back Booster Campaign

A vocal contingent of prominent doctors and scientists is pressing the Biden administration to scrap its plans to provide booster shots to all previously vaccinated adults, according to five people familiar with the matter. Current U.S. data on vaccine performance does not justify using boosters widely to reduce the risk of breakthrough infections and slow the virus’ spread, the experts said.

Several of these outside experts, including some who advised President Joe Biden’s transition team, objected to the administration’s approach during a private, off-the-record call last week with federal health officials. Biden, who took office pledging to “follow the science,” until recently enjoyed the enthusiastic backing of eminent physicians and researchers as he attempted to crush Covid-19 and revive the U.S. economy. But the White House’s sweeping vision for boosters has weakened those ties.

COVID Toe Condition – Study Reveals Why Some People Get

A new study published in the British Journal of Dermatology found that “COVID toe”, a rash that appears on the digits and primarily affects young people, may be caused by the body’s immune system fighting the virus. It can happen at any age, but affects children and teenagers more commonly.
For some it is painless, but the rash can be extremely sore and itchy, with tender blisters and swelling.

Researchers conducted skin and blood tests on 50 people suspected of having the condition and 13 with similar symptoms unrelated to COVID-19.

Anti-Counterfeiting Bill Drops in Congress

A bipartisan piece of anti-counterfeiting legislation—formally called the Integrity, Notification and Fairness in Online Retail Marketplaces for Consumers (INFORM Consumers) Act—was introduced in the House of Representatives. The legislation instructs online platforms to verify the identity of high-volume third-party sellers of consumer products to help prevent the sale of counterfeits and stolen goods. It would also help consumers verify these sellers’ identification and contact information so that they can avoid purchasing counterfeit products.

Third-party sellers are able to push massive amounts of stolen, counterfeit and unsafe products through online marketplaces with relative impunity. According to the Office of the U.S. Trade Representative, the fast growth of these e-commerce platforms has turned counterfeiting into a half trillion-dollar industry, fueling the sale of goods that threaten public health and safety while also impacting legitimate manufacturers that sell safe and original products.

U.S. Trade Deficit Widens to Record on Consumer-Goods Imports

The gap in trade of goods and services increased 4.2% to $73.3 billion, from a revised $70.3 billion in July, according to Commerce Department data released Tuesday. While a surge in household demand for merchandise earlier this year and steady business demand for equipment have left inventories extremely lean, the reopening of the economy is gradually boosting demand for services.

The value of goods and services imports rose 1.4% to a record $287 billion in August. The U.S. imported $3 billion more consumer goods during the month, mostly due to pharmaceuticals and toys, games and sporting goods. Exports climbed 0.5% to $213.7 billion. At the same time, domestic producers have struggled to ramp up output because logistics bottlenecks have knocked global supply chains out of sync, resulting in backups at ports, a wide range of materials shortages, and soaring shipping rates.

Is China Meeting Its Phase One Trade Commitments?

The Phase One trade agreement that was signed in January 2020 included specific targets for Chinese purchases of agriculture, manufactured goods, energy, and service exports from the United States. These commitments were extremely ambitious: The agreement specified numerical targets for increases in U.S. goods and services exports to China, relative to a 2017 baseline, of $77 billion in 2020 and $123 billion in 2021. The 2021 target was 82 percent greater than the baseline level in 2017, and about double the level of 2019, just prior to the signing of the agreement.

The U.S.’s exports of goods to China fell precipitously over the course of the trade conflict, ultimately contracting by 35 percent as of February of last year, but since then have shown a strong recovery. From that low point, exports to China had grown by nearly 70 percent as of June. So, is China meeting its purchase targets? The short answer is “no.”

A Deal on Global Tax is Near, But it is Just the Start of the Fight

Negotiators from more than 130 countries will meet Friday to hammer out the final details of a years-long push to force the world’s largest companies to pay more into national coffers. Ireland — one of the last holdouts on securing an agreement — is on the brink of backing proposals that would fundamentally alter how companies like Apple and Johnson & Johnson pay tax worldwide.

Several political hurdles, though, stand between now and that deadline. Ongoing divisions within Washington over domestic corporate tax overhauls that are central to the global deal could still scupper American involvement. European countries like Italy and the United Kingdom have to roll back their own domestic digital taxes, which have primarily targeted Silicon Valley companies. And policymakers must still draft complicated international agreements to override countries’ existing tax law.

This Global Energy Crunch Won’t Be the Last

The world is living through the first major energy crisis of the clean-power transition. It won’t be the last. The shortages jolting natural gas and electricity markets from the U.K. to China are unfolding just as demand roars back from the pandemic. But the planet has faced volatile energy markets and supply squeezes for decades. What’s different now is that the richest economies are also undergoing one of the most ambitious overhauls of their power systems since the dawn of the electric age — with no easy way to store the energy generated from renewable sources.

The transition to cleaner energy is designed to make those systems more resilient, not less. But the actual switch will take decades, during which the world will still rely on fossil fuels even as major producers are now drastically shifting their output strategies.

GM, GE Partnering on Rare Earth Materials Vital to EVs

GM signed a nonbinding memorandum of understanding with GE Renewable Energy to “evaluate opportunities to improve supplies of heavy and light rare earth materials and magnets, copper and electrical steel,” the companies said in a joint statement.

GM and GE Renewable Energy said they would initially focus on creating a North America- and Europe-based supply chain of magnet manufacturing, like metal alloys and finished moments produced from rare earth materials. These are important for manufacturing electric motors for automotive and renewable power generation.

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