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The Wrongologist

Geopolitics, Power and Political Economy

Saturday Soother – January 5, 2019

The Daily Escape:

Bryce Canyon NP, looking down at the Wall Street trail – this photo was taken on New Year’s Eve by natsmith69. The photographer says he didn’t hike down because of the government shutdown.

Two topics for today: First, the December jobs report, which was encouraging in the face of a roller-coaster stock market. Employment rose a very strong 312,000 jobs in December, bringing the full count of jobs added for 2018 up to 2.6 million, the strongest year for job gains since 2015.

Unemployment ticked up to 3.9%, largely because more people were drawn into the labor market as measured by the civilian labor force participation rate. It moved up two-tenths to 63.1%, its highest level since 2014. That’s a reminder that the job market still has capacity to expand.

Wage growth accelerated slightly, and tied cyclical highs. Weekly hours worked edged up, job gains for the prior two months were revised upwards, and a very high 70% of private industries added jobs.

It seems that low unemployment has finally started to lead to pressure to raise pay.

Despite all of this positive labor market news, there are economic headwinds in the volatile stock market, Trump’s trade war, and slower economic growth abroad.

Some economists are forecasting a grim outlook for near-term US economic growth. OTOH, low unemployment, job gains, and higher wages should boost consumer spending, which accounts for almost 70% of the US economy.

Try to keep calm about the stock market. There isn’t much definitive economic news that should make you decide to bail out of stocks just now.

Item two: The shut-down. On Friday, Sen. Charles Schumer (D-NY) after another meeting about the shut-down, said that Trump threatened to keep the government closed for “months or even years” until he gets his desired wall funding.

Speaker Pelosi (D-CA) described the meeting as a “lengthy and sometimes contentious conversation with the president.” She said both sides agreed to continue talks. She then said: (brackets by Wrongo)

 We cannot resolve this until we open up [the] government…

So far, most Republicans are keeping a stiff upper lip, saying just what Trump says. But there are a few cracks, notably Sen. Cory Gardner (R-CO) and possibly, Susan Collins (R-ME), who are asking to re-open the federal government without a deal on funding the border wall.

Clearly there is a deal to be had. It probably looks like funding Trump’s wall, which is a rounding error in the federal budget, in return for passing a Deferred Action for Childhood Arrivals (DACA) relief bill as part of immigration reform. Lawmakers in both parties are sympathetic to immigrants who entered the country illegally as children.

The Hill reports that Sen. Roy Blunt (R-MO), a member of GOP leadership, said that while he hasn’t been involved in overall immigration discussions, expanding the scope of negotiations could be one way to break the logjam:

You know, sometimes the best way to solve a problem is to make it bigger, and that’s always one of the options here…

Sen. Lamar Alexander (R-TN) is urging Trump to strike a deal on comprehensive immigration reform:

Why would he not agree to such a thing…We could go small, we could go a little bigger… but I’d like to see the president say, ‘OK, we’ve got a new Congress. We’ve got divided government. I’m the president who can actually make this happen.’

Sen. Rob Portman (R-OH) is pitching his proposal that would establish a $25 billion border trust fund and codify protections for DACA recipients. Remember that Trump rejected a similar offer from Senate Democrats last year, so it isn’t clear where the goalposts for such a deal are today. We’ll have to watch the drama unfold.

Time to let go of the news and settle into a Saturday soother, maybe while taking down ornaments. Start the process of soothing by brewing up a yuuge cup of Panama Ninety Plus Perci Lot 50 coffee ($60/8 oz.) from Birdrock Coffee of San Diego, CA. Coffee Review rates it at 97, with tastes of fruit while being giddily brandy-toned. Maybe that’s a rave.

Now settle back in a comfy chair and listen to the “Adagio for Oboe, Cello, Organ and Strings” by Domenico Zipoli. Zipoli was an Italian Jesuit priest who lived much of his life in what is now Argentina. He studied with Scarlatti, became a Jesuit, worked as a missionary and died in 1726 in Argentina at age 38:

If fate had granted Zipoli another 20 to 25 years, he would be regarded today as a major composer.

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