This morning’s final economic report is the ISM manufacturing index for September.
This is a short leading indicator, and the new orders subindex specifically is one of the 10 components of the Index of Leading Indicators.
A neutral reading is 50. The overall index came in at 55.4, and the new orders subindex came in at 60.2:
So while the Index pulled back a little bit from August’s levels, it was still a very strong positive.
Again, this is evidence that the economy “wants” very much to expand smartly in the near future, if only the pandemic can be brought under control.
For our own sake and the world’s, America must pull back
Boston Globe – Andrew Bacevitch – October 4
A nation running trillion-dollar deficits can repair itself at home
or it can embark upon crusades abroad. It cannot do both.
A remarkable reinvigoration of American politics is emerging as an ironic signature of the Trump era.
A new agenda of progressive reform is emerging. The abuses of the Trump presidency are creating a renewed appreciation for the Constitution and the rule of law. The devastation inflicted by the coronavirus is highlighting the need to improve government capacity to respond to unexpected and unforeseen threats. As wildfires and hurricanes increase in fury and frequency, the threat posed by climate change moves to the forefront of American politics. Societal qualities such as resiliency and self-sufficiency are now receiving greater attention. The economic crisis has made it impossible to ignore the defects of neoliberal policies that benefit the rich while condemning others to lives of insecurity and want. And, not least, the Black Lives Matter movement suggests that a collective reckoning with the legacy of American racism may at long last be at hand.
Yet thus far at least, this embryonic Great Awakening overlooks something critically important to the overall prospects for change. That something is America’s role in the world, which is also badly in need of reevaluation and refurbishment.
Since the end of the Cold War, the prevailing conception of American global leadership has emphasized the never-ending accumulation of armed might along with its promiscuous use. The distinguishing qualities of contemporary US national security policy are the size of the Pentagon budget, the sprawling network of US bases abroad, and Washington’s penchant for armed intervention. No nation on the planet comes anywhere close to the United States in any of these three categories.
The operative answer to the classic question “How much is enough?” is “Can’t say yet — gotta have more.”
The operative answer to the more fundamental question “When can we declare victory?” is “Can’t say yet — gotta keep trying.”
When you tally up the total costs, the current national security budget exceeds $1 trillion annually. None of the several wars and armed interventions undertaken in the past two decades, with Afghanistan and Iraq the most prominent, has produced a satisfactory outcome. Estimated total spending on those conflicts (so far) is north of $6 trillion. That’s not including thousands of US troops killed and tens of thousands wounded or otherwise bearing the physical, psychological, or emotional scars of combat. The United States has paid a staggering cost for our recent military misadventures.
I submit that there is something wrong with this picture. And yet, with a few honorable exceptions, Washington appears blind to the yawning gap between effort and outcomes.
Neither political party has shown any serious willingness to confront the consequences resulting from the wholesale militarization of US policy, most especially in the Middle East. …
Expand American influence around the world, or else China will fill our shoes
Boston Globe – Charles Dunst – October 4
It’s easy to point to the failings of the ‘liberal world order’
led by the United States. We can fix those flaws
instead of writing off the whole system.
The deleterious effects of China’s rise are kaleidoscopic in Sihanoukville, Cambodia. When I was last there, in April 2019, half-built buildings bearing Chinese-language characters and seedy new casinos dominated the city, having replaced most of the Cambodian-owned businesses.
Sihanoukville, a city of some 150,000 people at its peak, once catered to a steady trickle of Western backpackers. But as the home to Cambodia’s only deep-water port, the city is of great interest to the Chinese Communist Party, which has geopolitical ambitions to string a series of naval pearls along key shipping lanes and explore oil and gas deposits in waters like the Gulf of Thailand. Cambodian Prime Minister Hun Sen, meanwhile, has cozied up to China; in return, China helps keep him in power as long as he serves Beijing’s interests, regardless of whether ordinary Cambodians benefit from the arrangement.
By 2018, billions of dollars of Chinese investment had transformed Sihanoukville, and parts of the country at large, into a dangerous playground. In June 2019, an illegal Chinese-owned construction site in Sihanoukville collapsed, killing at least 28 Cambodian workers and setting off already simmering anti-Chinese sentiment. Murderous disputes among Chinese criminal syndicates festered, with perpetrators dumping victims’ bodies in the middle of town. The wave of Chinese investment in the country has stayed largely in the Chinese expatriate community, drowning many Cambodians struggling to stay afloat on roughly $3 a day. “The problem of Sihanoukville indicates that China is more concerned about its own benefits than the benefits of the local people,” says Sovinda Po, a senior fellow at the Cambodian Institute for Cooperation and Peace and PhD candidate at Australia’s Griffith University.
Indeed, despite promising mutually beneficial “win-win” relations with countries like Cambodia, China has explicitly illiberal and Sinocentric designs for global leadership, promoting its own interests to the detriment of others. Hun Sen keeps both Sihanoukville and Cambodia as a whole bound to China because Beijing bolsters his dictatorship economically, politically, and militarily. With China’s backing, he has tightened his grip on power by banning the opposition party, charging its leader with treason, muzzling what was left of the independent media, securing all 125 parliamentary seats in rigged elections, and even arresting social media critics.
Beijing’s ambitious dreams of global influence have crept into reality because of the decline of the liberal world order — the system of international political and economic cooperation that the United States built after World War II. President Trump has accelerated that decline; he considers the liberal order a naive dream that has failed Americans by globalizing the world economy, a view shared by more than a few mainstream and otherwise Trump-skeptical scholars. But one must also compare this system with the chaos that came before or the illiberalism that China hopes will come next. The liberal order may be imperfect, but for humanity’s benefit, the United States must nonetheless salvage it. …
Six Months In, the Shape(s) of the Economic Crisis
NY Times – October 5
Six months after the first coronavirus shutdowns went into effect across the United States, unemployment data is painting a picture of how quickly — or not — the economy is recovering from pandemic job losses.
Looking beyond the overall number can provide a view of the dynamics shifting beneath the surface. Comparing the number of workers who were temporarily laid off to the total who were permanently let go each month, for example, reveals the potentially lasting consequences of the crisis.
Early in the pandemic, employers thought the virus’s impact on business would be short-lived and that they would be able to bring back their workers within a few months. Now, despite consistent monthly gains in jobs, the number of job losses that are permanent is increasing as the virus shows few signs of going away soon. …
(Odd graphics, at the link.)