Inflation will make or destroy the next spending bill


Later today, President Biden is expected to sign the law the $ 1 trillion infrastructure spending bill to upgrade roads, bridges, high-speed Internet and more in the United States. But the fate of the White House’s other economic priority – its $ 1.8 trillion social spending plan – remains murky amid growing concerns about inflation.

Biden claimed the bipartisan bill will help heal the U.S. economy, create unionized jobs, improve the resilience of the US supply chain and reduce inflation. Last night he appointed Mitch Landrieu, the former mayor of New Orleans, to oversee “the largest and most comprehensive investments in American infrastructure in generations” and clamp down on unnecessary spending.

But inflation continues to haunt negotiations on the social spending bill. Biden’s approval ratings have dropped amid economic dissatisfaction with rising prices. Democrats are still arguing over its causes and effects:

  • Paul krugman blamed supply shortages and tight labor markets, while advising patience. Corn Larry summers, who has long warned of the dangers of inflation, accused Krugman of downplaying his threat.

  • Biden himself conceded last week that past stimulus spending contributed to inflation – although he also argued that supply chain disruptions were a factor as well.

  • Treasury Secretary Janet Yellen asserted that end the pandemic would help moderate inflation.

The fate of the spending bill may depend on what only two lawmakers think about inflation. Senator Joe Manchin of West Virginia and Kyrsten Sinema of Arizona have expressed concerns about the effect of the bill on rising prices. Thus, once the House has sent its version of the bill to the Senate, from this week, the two centrists will have an inordinate influence on its final form. Minority Leader Senator Mitch McConnell joked last week that the bill will be “written by Joe Manchin and Kyrsten Sinema”, and he may not be entirely wrong.

More reading: Neil Irwin of The Upshot writes that the Biden administration’s economic response to the pandemic has been fight the last war. And here’s how some big American companies have profited from inflation.

Shell will no longer become Dutch. The historically Anglo-Dutch oil giant said today it will move its tax residence to Britain, abandon its two-share structure and remove “Royal Dutch” from its name. The moves come under pressure from activist hedge fund Third Point, but have sparked an uproar in the Netherlands.

President Biden and President Xi Jinping will meet. At a virtual meeting of U.S. and Chinese leaders, the two will seek to ease growing tensions over a host of economic and military issues, including trade, Taiwan and cybersecurity. But the Biden administration fears the chances of keeping conflicts at bay are diminishing.

The Japanese economy is contracting. The country’s GDP contracted in the third quarter by an annualized rate of 3%, after increasing slightly in the spring. It is the latest economic setback linked to the pandemic this fall, but there are some promising signs for the Japanese economy, including a high vaccination rate and further stimulus measures.

Regrets persist over the great climate deal. The nearly 200 countries that participated in COP26 have agreed to work on reducing carbon emissions and come back next year with more ambitious targets. But the pact has failed to call on countries to phase out the use of coal and will fail to meet the summit’s goal of preventing the Earth from heating above 1.5 degrees Celsius above pre-industrial levels.

SEC rejects ETF directly linked to the price of Bitcoin. In reject exchange traded fund de VanEck, the agency cited the potential for fraud and investor manipulation. This is the latest case where the SEC rejects ETFs linked directly to Bitcoin, although the regulator has approved other index funds linked to cryptocurrency futures.

The United States Court of Appeals for the Fifth Circuit upheld the suspension of the Biden vaccine mandate on Friday, ruling that the requirement “greatly exceeded” the authority of OSHA. The decision shed light on the legal and political issues surrounding the mandate debate.

The political question: Critics of the decision said it was prompted by the court’s very conservative leanings. Part of this is because the court issued an opinion despite being told by the Justice Department to wait for a lottery to pick a venue for the consolidated case of the pending warrant prosecution. Rick Hasen, a lawyer at the University of California, Irvine, called the Fifth Circuit decision “quite radical and anti-science.”

The legal question: Has OSHA proven the existence of a serious danger, which is necessary to enact the rule?

  • The Fifth Circuit says no, arguing that the mandate was based on “a so-called ’emergency’ that the whole world has suffered for almost two years and to which OSHA itself has spent nearly two months responding.” He distinguished between Covid and other workplace threats, such as toxic materials in a building, saying the coronavirus was “both widely present in society (and therefore not specific to a workplace ) and does not endanger the life of the vast majority of employees. “

  • The Biden administration says yes. He highlighted the “significant exposure and transmission” of Covid that occurs in the workplace, including “many“ clusters ”and“ epidemics ”in the workplace. Delaying the mandate, he argued, “would likely cost dozens if not hundreds of lives a day.” The American Medical Association, which represents physicians nationwide, has filed a court friend memory support the government.

Next steps: The lottery to choose the court overseeing the consolidated dispute against the warrant will take place on Wednesday. Both sides played their chances: lawsuits have been filed in at least 11 circuits. Still, the case is likely to make it all the way to the Supreme Court, which Carl Tobias of the University of Richmond Law School said could be the target audience for the Fifth Circuit ruling.


Elon musk on Twitter, fighting with Sen. Bernie Sanders over how to tax the rich. Musk revealed in regulatory documents that he sold $ 1.2 billion of Tesla shares on Friday, as he raised money to pay a tax bill.


Retail Sales: Tomorrow, the Commerce Department will report on October retail sales. Consumer spending rose in August and September, thanks to economic reopenings and inflation, but retailers faced labor shortages and supply chain disruptions. Nonetheless, the National Retail Federation expects record sales growth this holiday season.

Labor disputes: Hollywood workers’ union IATSE set to release the results of a vote on a new labor agreement today; some members argued that it does not provide enough protections for working conditions. Meanwhile, it’s unclear whether unionized Deere workers will agree to a new revised labor agreement reached on Friday, after rejecting previous offers.


When MacKenzie Scott wanted to start spending her billions on philanthropy – $ 8 billion plus – she turned to Bridgespan, a little-known nonprofit that has become one of the most influential advisers in the world. charitable donations, reports Nick Kulish of The Times.

Bridgespan was founded on a big bet: that a non-profit organization would do better than traditional consultants providing pro bono services to non-profit organizations. The organization has since grown into a major force in the field – its clients include the Gates, Ford and Rockefeller foundations – and made more than $ 70 million in contributions last year, more than five times more than in 2019. .

How it works: Bridgespan advises not only donors, but also fundraising groups – the list includes the YMCA of the United States, Harlem Children’s Zone, and even the Sesame Workshop – providing the latter with strategic advice and even staff.

But critics say Bridgespan’s affairs are fraught with conflict. “Consultants at places like Bridgespan are setting the menu for what philanthropists can and should do,” Megan Tompkins-Stange of the University of Michigan told The Times. (The company claims that only 5% of customer donations go to nonprofits that are also customers.)

Offers

  • Who were the biggest winners in the conglomerate break-up frenzy? MY. bankers, of course. (Bloomberg)

  • The Trump Organization has agreed to sell its Washington hotel for at least $ 375 million. (NYT)

  • Carl Icahn reportedly intends to seek to overthrow the 10 members of the Southwest Gas board of directors. (Bloomberg)

  • Wall Street sees a new opportunity in New York taxi driver loans. (FT)

  • Duke Energy has settled a challenge launched by activist hedge fund Elliott Management by adding two new independent directors. (Duke Energy)

Politics

  • The Biden administration has reportedly discouraged Intel from building a new factory in China to address the global semiconductor shortage. (Bloomberg)

  • Disputes between the FAA and AT&T and Verizon could threaten the rollout of more 5G wireless services. (WSJ)

The best of the rest

  • Former Barclays CEO Jes Staley is said to have exchanged more than 1,200 messages with Jeffrey Epstein between 2008 and 2012, some containing unexplained terms like “snow white.” (FT)

  • A court case in Florida could reveal the identity of Satoshi Nakamoto, the pseudonym of the alleged creator of Bitcoin. (WSJ)

  • “Will real estate be normal again? (New York Times Magazine)

  • The Scottish distillery industry admits that it is increasingly unlikely to meet its carbon emissions target. (FT)

  • How “succession” makes wealth miserable. (The ring)

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