October 21, 2020

How Failures of the Obama-Era Stimulus Could Guide a Biden Administration

“We have much better tools for tamping down growth that is too fast than we have the tools to boost an economy that’s too weak,” said Wendy Edelberg, director of the Hamilton Project at the Brookings Institution and a former chief economist at the Congressional Budget Office. “Once our economy gets into a slow-growth, grinding scenario, it is very difficult to change that course.”

At the same time, a sharp drop in interest rates even as budget deficits have risen has led many centrist and left-leaning economists to worry less about debt than they did in the Obama years. And Republican support for a $1.5 trillion tax cut in 2017 and a $2.2 trillion pandemic relief bill this past spring has helped reduce sticker shock over 13-figure cost estimates.

Ms. Edelberg published a paper with Louise Sheiner this month estimating that $2 trillion in fiscal stimulus would bring the economy back to its pre-pandemic growth path by the third quarter of 2021. In the absence of any action, they estimate, it could take as long as a decade.

Mr. Biden has cited his work on the 2009 stimulus bill, boasting of his work to prevent fraud and of the role the recovery act played in supporting state and local governments and clean energy. In discussing his 2021 agenda, he has promised “the kinds of investment that will stimulate the economy” and “to get back to full employment fast and help build back better than before.”

Those who advise him say he is aware of the historical echoes.

“Joe Biden doesn’t want to come into office and sit on a sloggy economy for four, six, eight quarters,” said Jared Bernstein, who advised Mr. Biden during his vice presidency and does so now. “If he gets the chance, I suspect there will be real motivation to do this deeply, effectively and quickly.”

In particular, Mr. Bernstein said, a Biden administration would seek “high-multiplier” policies that funnel money to people and businesses that need it and are likely to spend it, helping funds circulate through the economy quickly to fuel growth.

Article source: https://www.nytimes.com/2020/10/19/upshot/biden-stimulus.html

U.S. to Sign Limited Trade Deal With Brazil

The announcement follows a series of other small-scale trade deals announced by the Trump administration, including with Japan, China and the European Union. Unlike a comprehensive free trade deal, these smaller deals do not require the approval of Congress, which can stall an agreement for many months, or sink it entirely. The Trump administration has also sought a limited trade deal with India, but has so far failed to reach an agreement.

The deals have provided a series of quick wins for the Trump administration, and quick gains for American farmers, ranchers, lobstermen and other sectors Mr. Trump has sought to support. But they have also attracted criticism from the business community for leaving out many sectors of the economy, especially those where trade negotiations tend to be most difficult. Business leaders have urged the administration to continue to negotiate toward more comprehensive trade deals.

The administration has not yet released details on the Brazil deal, but it appears to be smaller still than agreements signed with China and Japan. It focuses on trade facilitation, or aligning the methods the two governments use to process goods passing over their borders, with the aim of making it easier for companies to trade between the countries. It will also reduce regulatory barriers to trade and strengthen rules to root out corruption.

Myron Brilliant, the executive vice president and head of international affairs at the U.S. Chamber of Commerce, said on Monday that the new deal with Brazil would “support commerce, growth, and job creation in both countries.” However, he added, the countries had much more to do on key priorities, including digital trade and express shipments.

“We ask both governments to return to the negotiating table as soon as possible to leverage the positive momentum of today’s announcement,” he said.

Article source: https://www.nytimes.com/2020/10/19/business/economy/us-brazil-limited-trade-deal.html

A Korean Store Owner. A Black Employee. A Tense Neighborhood.

But other forces are also at play. Ms. Na said her father had been shaped by his parents’ experience living through the Japanese occupation of Korea and then the Korean War. That left him with a shared feeling of grief and loss, which Ms. Na said is often referred to as Han.

It helps explain, she said, why her father typically hires Korean managers in stores where most of the employees are Black.

“Han creates a level of trust among Koreans,” Ms. Na said. “That trust goes back decades.”

Since the protests, many business leaders and public figures have sought to address racial disparities with more investment. Square, the payments company led by Jack Dorsey, the billionaire founder of Twitter, has pledged $100 million to financial firms supporting Black communities. Senator Elizabeth Warren, Democrat of Massachusetts, has proposed a $7 billion federal fund for Black entrepreneurs.

But the struggles of Black women in the beauty supply industry show that some barriers to success are more complicated.

In interviews this summer, Black women who own beauty shops in Dallas, Buffalo and Sacramento said they were consistently denied accounts with major Korean-owned suppliers. One of the women said that as soon as she had sent over a copy of her driver’s license, the supplier stopped returning her calls.

These rejections, the women said, prevent them from stocking the most popular hairpieces, forcing their customers to shop elsewhere.

While Mr. Na is a retailer, not a distributor, he said he was aware of some of the challenges Black female proprietors faced in obtaining products.

Article source: https://www.nytimes.com/2020/10/15/business/beauty-store-race-protests.html

Republicans Clash on Stimulus Package as Trump Says ‘Go Big’

In a nearly 90-minute phone conversation with Ms. Pelosi, Mr. Mnuchin reiterated his willingness to accept Democratic language with “minor” edits and said he would provide a proposal on Friday, Drew Hammill, a spokesman for Ms. Pelosi, said in a statement summarizing the conversation. “The speaker looks forward to reviewing.”

But a number of unresolved differences remain, such as how much money to provide to state and local governments and lapsed federal unemployment benefits.

Investors, who have been following the stimulus talks closely, seemed unmoved by statements from Mr. Trump and Mr. Mnuchin on Thursday, with stocks on Wall Street dropping for a third consecutive day. And Senate Republicans, who have grown increasingly frustrated with Mr. Mnuchin’s willingness to buck their narrow proposals and capitulate to Ms. Pelosi’s demands for a sweeping relief package, were equally reticent about the prospects of a deal before Nov. 3.

“I’m proposing what we think is appropriate,” Mr. McConnell said after voting in Louisville, Ky., when asked about the targeted bill he was preparing. At later events in the state, he noted that the administration had not yet successfully reached a deal and said he felt “it was important to indicate to the American people before the election — not after — that we were not in favor of a stalemate, that we were not in favor of doing nothing.”

Mr. McConnell, who has not formally unveiled legislation before an expected vote next week, said it would be similar to a scaled-down package that Senate Republicans proposed in September, which failed to meet the 60-vote threshold.

While some Democrats have pushed for Ms. Pelosi to accept a smaller relief package, she has insisted that the toll of the pandemic merits another broad package. With the original Democratic offer costing about $3.4 trillion, the speaker has repeatedly argued that she has been more than willing to compromise with her Republican counterparts, counseling Democrats in a private phone call on Tuesday that “I don’t think our leverage has ever been greater than it is now.”

“The disdain that they have for the state and local, the contempt that they have for science by not wanting to have a national strategic plan, and again, the unfairness when it comes to America’s workers, is a tough nut to crack.,” Ms. Pelosi said in an interview on MSNBC on Wednesday. “Still and all, we want to try and find our common ground.”

Article source: https://www.nytimes.com/2020/10/15/us/politics/stimulus-talks-republicans.html

Black Products. Black Shoppers. Black Workers. But Who Owns the Store?

But other forces are also at play. Ms. Na said her father had been shaped by his parents’ experience living through the Japanese occupation of Korea and then the Korean War. That left him with a shared feeling of grief and loss, which Ms. Na said is often referred to as Han.

It helps explain, she said, why her father typically hires Korean managers in stores where most of the employees are Black.

“Han creates a level of trust among Koreans,” Ms. Na said. “That trust goes back decades.”

Since the protests, many business leaders and public figures have sought to address racial disparities with more investment. Square, the payments company led by Jack Dorsey, the billionaire founder of Twitter, has pledged $100 million to financial firms supporting Black communities. Senator Elizabeth Warren, Democrat of Massachusetts, has proposed a $7 billion federal fund for Black entrepreneurs.

But the struggles of Black women in the beauty supply industry show that some barriers to success are more complicated.

In interviews this summer, Black women who own beauty shops in Dallas, Buffalo and Sacramento said they were consistently denied accounts with major Korean-owned suppliers. One of the women said that as soon as she had sent over a copy of her driver’s license, the supplier stopped returning her calls.

These rejections, the women said, prevent them from stocking the most popular hairpieces, forcing their customers to shop elsewhere.

While Mr. Na is a retailer, not a distributor, he said he was aware of some of the challenges Black women proprietors faced in obtaining products.

Article source: https://www.nytimes.com/2020/10/15/business/beauty-store-race-protests.html

As Coronavirus Spread, Reports of Trump Administration’s Private Briefings Fueled Stock Sell-Off

“Short everything,” was the reaction of the investor, using the Wall Street term for betting on the idea that the stock prices of companies would soon fall.

That investor, and a second who was briefed on the Hoover meetings, said that aspects of the readout from Washington informed their trading that week, in one case adding to existing short positions in a way that amplified his profits. Other investors, upon reading or hearing about the memo, stocked up on toilet paper and other household essentials.

The memo was written by William Callanan, a hedge fund veteran and member of the Hoover board. A research institution at Stanford University that studies the economy, national security and other issues, Hoover has been directed since September by Condoleezza Rice, the secretary of state under President George W. Bush. Its board includes the media mogul Rupert Murdoch and the venture capitalist Mary Meeker, neither of whom attended the meetings in February, which were a series of informal, off-the-record discussions with Trump administration officials and Republican lawmakers.

Mr. Callanan described the Hoover briefings in a lengthy email he wrote to David Tepper, the founder of the well-known hedge fund Appaloosa Management, and one of his senior lieutenants about the level of concern among American officials over the spread of the virus domestically. In the email, he also touched on how ill-prepared health agencies appeared to be to combat a pandemic.

Inside Appaloosa, the email circulated among employees, who in turn briefed at least two outside investors on the more worrisome parts of Mr. Callanan’s email, according to people who received those briefings.

Those investors in turn passed the information to their own contacts, ultimately delivering aspects of the readout to at least seven investors in at least four money-management firms around the country within 24 hours. By late afternoon on Feb. 26, the day the email bounced from Appaloosa to other trading firms, U.S. stock markets had fallen close to 300 points from their high the previous week.

Article source: https://www.nytimes.com/2020/10/14/us/politics/stock-market-coronavirus-trump.html

Manhattan Emptied Out During the Pandemic. But Big Tech Is Moving In.

The larger companies have established a tech corridor on Manhattan’s West Side, stretching from West 34th Street in Midtown south to the World Trade Center area in Lower Manhattan.

The focus of the tech companies in New York has shifted from marketing and sales departments to teams that mirror those in Silicon Valley. They have recruited engineers and developers from local and regional universities and filled some roles with West Coast employees who want to decamp to New York City.

For every Big Tech company in the city, there are numerous smaller but still sizable firms, including Salesforce, LinkedIn, Spotify and ZocDoc. Microsoft, another tech giant, has a modest presence in offices near Times Square.

Before the pandemic, the city’s tech sector employed 150,100 people, and had added a total of 15,700 jobs in 2018 and 2019, according to the New York State comptroller’s office. Most of the new jobs were in fields like software, data processing and internet publishing.

The pace of hiring is expected to keep climbing.

In August, when Facebook grabbed all the office space at the James A. Farley Building near Pennsylvania Station, it cemented Manhattan’s West Side as its East Coast campus.

The company said it leased 730,000 square feet at the old post office in part because of its cavernous layout — a rarity among New York City buildings — which mimics the large open areas at its headquarters in Menlo Park, Calif. When a renovation is completed next year, the building will be filled with engineers.

“The floor plan will allow for multiple teams to be housed on those floors,” said Jamila Reeves, a company spokeswoman, “and we don’t necessarily have to break folks up.”

Article source: https://www.nytimes.com/2020/10/13/nyregion/big-tech-nyc-office-space.html

Europe Can Impose Tariffs on U.S. in Long-Running Aircraft Battle

“Airbus did not start this W.T.O. dispute, and we do not wish to continue the harm to the customers and suppliers of the aviation industry and to all other sectors impacted,” Guillaume Faury, the company’s chief executive, said in a statement. “It is time to find a solution now so that tariffs can be removed on both sides of the Atlantic.”

Boeing said it was “disappointed” that Airbus and the European Union had pursued the tariffs even after the tax break’s repeal, but said the company hoped that both would focus “on good-faith efforts to resolve this long-running dispute.” The European Union had asked the W.T.O. to authorize more than $8.5 billion in annual tariffs, while the United States said they should not exceed $412 million.

In a statement, Robert E. Lighthizer, the U.S. trade representative, said that the European Union had no valid basis to impose tariffs since Washington had already repealed its tax break, and that the United States would seek more negotiations with Europe.

“Any imposition of tariffs based on a measure that has been eliminated is plainly contrary to W.T.O. principles and will force a U.S. response,” he said. “The United States is determined to find a resolution to this dispute that addresses the massive subsidies European governments have provided to Airbus and the harm to U.S. aerospace workers and businesses.”

Valdis Dombrovskis, the European Commissioner for Trade, said in a statement that while the decision allowed the European Union to impose tariffs on American products, it would do so “reluctantly.”

“I have been engaging with my American counterpart, Ambassador Lighthizer, and it is my hope that the U.S. will now drop the tariffs imposed on E.U. exports last year,” he said. “If it does not happen, we will be forced to exercise our rights and impose similar tariffs.”

Ole Moehr, an associate director at the Atlantic Council’s GeoEconomics Center, said that, in the short run, there were likely to be more barriers to trade than before, but that the ruling might ultimately “open the door for a trans-Atlantic trade détente.”

Article source: https://www.nytimes.com/2020/10/13/business/economy/boeing-europe-tariffs-trade.html

Customers Still Like to Shop in Person, Even if They Get Only to the Curb

“If you are having an increase in sales and in productivity, the workers should share in that benefit,” said Marc Perrone, president of the United Food and Commercial Workers union, representing tens of thousands of grocery store workers. “Right now, the owners of these companies are the only ones benefiting.”

Labor experts and Wall Street analysts also predict that the job of picking items off the shelf and taking them to a customers’ cars can easily be done by machines, which means that the boom in jobs may be fleeting.

Even now, that work is highly automated. Workers fulfilling curbside orders at Walmart use a hand-held device that indicates the order in which they should pick each item, for maximum efficiency.

“They can sometime feel like robots,” Mr. Perrone said.

A recent report by the Labor Center at the University of California, Berkeley, and the nonprofit Working Partnerships USA predicted that workers would come under new pressure as stores began to resemble Amazon warehouses, and noted that “stock clerks’ jobs seem destined for more radical change than any of the other major retail job categories.”

“On the store floor, they also will be more frequently prompted by ‘alerts’ to replenish stock,” the report said. “As with cashiers, this could make stocker jobs more varied and interesting, but in combination with new ways of tracking work, it also could result in jobs that are surveilled, closely watched, sped up and stressed.”

Jean-André Rougeot, chief executive of Sephora Americas, said that on a recent visit to Walmart, he saw more employees pushing carts for pickup orders than he did shoppers. He anticipates that people will return to Sephora’s stores to touch and try its beauty products, but acknowledged that the pandemic would transform how people shopped and received goods.

Article source: https://www.nytimes.com/2020/10/09/business/retailers-curbside-pickup.html

Broadway Will Remain Closed at Least Through May

Broadway is not only the pinnacle — and best-paying workplace — of the American theatrical landscape, but it is also big business, or at least it was. In 2019, the industry’s theaters drew 14.6 million theatergoers and sold $1.8 billion worth of tickets. This year, the grosses are likely to be a tiny fraction of that amount, since theaters were only open for 10 weeks at a time of year when attendance is usually soft.

Although television and film production are resuming, the performing arts remain almost completely shut down, at least at the professional level, in New York and throughout much of the nation.

The Metropolitan Opera announced last month that it would remain dark until next September. And even before that announcement, some theaters had already made the same decision: a few days before the Met announcement, Trinity Rep in Providence said it would delay in-person productions until next fall, while Hartford Stage, in Connecticut, had taken the same step in July.

Theaters have been reopening more rapidly in Europe, although with social distancing, which Broadway producers say is not economically feasible here. Broadway faces multiple challenges to reopening during the pandemic: its public and backstage spaces are cramped, its audience is heavily dependent on tourists, and producers need to sell a lot of tickets to recoup their costs, making reduced capacity an economic nonstarter.

St. Martin said it is not realistic to expect that Broadway will wait for everyone to be vaccinated before reopening, given public skepticism about vaccines.

Instead, she said, “there has to be a medical or scientific change. We’re hoping for complete reliability of rapid testing, combined with other medical or scientific enhancements for the audience and the cast and crew. Many products are being tested which are promising, and a combination of those would bring us back. And yes, we’d love a vaccine.”

Article source: https://www.nytimes.com/2020/10/09/theater/broadway-reopening.html