Senator Joe Manchin III of West Virginia led his party and his president through months of tortured talks, with nothing to show for it as the planet dangerously heats up.
First, he killed a plan that would have forced power plants to clean up their climate-warming pollution. Then, he shattered an effort to help consumers pay for electric vehicles. And, finally, he said he could not support government incentives for solar and wind companies or any of the other provisions that the rest of his party and his president say are vital to ensure a livable planet.
Senator Joe Manchin III of West Virginia, who took more campaign cash from the oil and gas industry than any other senator, and who became a millionaire from his family coal business, independently blew up the Democratic Party’s legislative plans to fight climate change. The swing Democratic vote in an evenly divided Senate, Mr. Manchin led his party through months of tortured negotiations that collapsed on Thursday night, a yearlong wild goose chase that produced nothing as the Earth warms to dangerous levels.
“It seems odd that Manchin would choose as his legacy to be the one man who single-handedly doomed humanity,” said John Podesta, a former senior counselor to President Barack Obama and founder of the Center for American Progress, a left-leaning think tank. …
The West Virginia Democrat’s decision dealt a crushing blow to President Biden’s domestic agenda, effectively ruling out action on anything beyond prescription drug pricing and health care subsidies.
Senator Joe Manchin III, Democrat of West Virginia, pulled the plug on Thursday on negotiations to salvage key pieces of President Biden’s agenda, informing his party’s leaders that he would not support funding for climate or energy programs or raising taxes on wealthy Americans and corporations.
The decision by Mr. Manchin, a conservative-leaning Democrat whose opposition has effectively stalled Mr. Biden’s economic package in the evenly divided Senate, dealt a devastating blow to his party’s efforts to enact a broad social safety net, climate and tax package.
In recent months, Democrats had slashed their ambitions for such a plan to win over Mr. Manchin, hoping that he would agree to support even a fraction of the sweeping initiative they once envisioned. His abrupt shift appeared to dash those aspirations.
In a meeting on Thursday with Senator Chuck Schumer of New York, the majority leader, Mr. Manchin said he would support a package that would include a negotiated plan aimed at lowering the cost of prescription drugs and an extension of expanded Affordable Care Act subsidies set to lapse at the end of the year.
The shift capped off weeks of painstaking negotiations to cobble together a package that could win Mr. Manchin’s support. It came seven months after the West Virginian abruptly walked away from talks and rejected a far larger plan. …
As of Thursday morning, Democrats had remained cautiously optimistic that a deal could be reached, provided that they followed Mr. Manchin’s repeated calls to address the national debt, tax reform and drug prices.
Because Democrats hold the Senate by a bare 50-50 majority, Mr. Manchin has been able to effectively exercise veto power over the domestic policy package, which the party had planned to move under a special fast-track budget process that would allow it to bypass a filibuster and pass with a simple majority. With Democrats bracing for losses in midterm elections this fall, the package could be the party’s last chance to enact substantial spending and tax legislation while it still holds the White House and both houses of Congress.
In rejecting any climate and energy provisions, Mr. Manchin appeared to have single-handedly shattered Mr. Biden’s ambitious climate agenda and what would have been the largest single federal investment in American history toward addressing the toll of climate change.
His decision came just days after a report showed that prices surged to 9.1 percent in June, exacerbating existing fears about inflation and rising costs for every day Americans. But while Mr. Manchin has long sounded alarms about inflation and the national debt, he had also maintained openness to overhauling the tax code, a position he appeared to have reversed. …
High unemployment, a housing market in crisis and sluggish consumer spending during lockdowns are putting pressure on Beijing in a year when officials are focused on projecting stability.
When countries around the world have stumbled in the face of pandemic headwinds, China has often stood apart, seemingly impervious to financial pressures that undermined growth.
But now, dragged down by its commitment to curbing the spread of Covid-19 with widespread lockdowns and mass quarantines, China has suffered one of its worst quarters in years, threatening a global economy heavily dependent on Chinese factories and consumers.
For the country’s ruling Communist Party, the downturn could put added pressure on Beijing at a sensitive moment. China is scheduled to hold its party congress later this year. A thriving economy and growing wealth was part of the bargain that Chinese citizens accepted in exchange for living under authoritarian rule.
But the lockdowns, a staple of Beijing’s zero-Covid policy, have heightened the risk of instability — both socially and economically.
The National Bureau of Statistics in China said on Friday that the economy expanded 0.4 percent from a year earlier in the second quarter, worse than some economists’ expectations. It was the lowest growth rate since the first three months of 2020, when the country effectively shut down to fight the early stages of the pandemic, and its economy shrank for the first time in 28 years.
The 2020 downturn was short-lived, with the Chinese economy recovering almost immediately. But the current outlook is not so promising. Unemployment is close to the highest levels on record. The housing market is still a mess, and small businesses are bearing the brunt of weakness in consumer spending.
“China is the shoe that has never dropped in the global economy,” said Kenneth Rogoff, a professor of economics at Harvard University and a former chief economist for the International Monetary Fund. “China is no position to be the global engine of growth right now, and the long-term fundamentals point to much slower growth in the next decade.” …
The value of the U.S. dollar is the strongest it has been in a generation, devaluing currencies around the world and unsettling the outlook for the global economy as it upends everything from the cost of a vacation abroad to the profitability of multinational companies.
(graphs at the link)
The dollar lubricates the global economy. It is one side of about 90 percent of all foreign exchange transactions, accounting for $6 trillion in activity every day before the pandemic, from tourists using their credit cards to companies making major international investments.
As the world’s most important currency, the dollar often rises in times of turmoil, in part because investors consider it to be relatively safe and stable. Its performance is often seen as a marker of global economic health: The dollar has gained in recent months as inflation has soared, interest rates have increased and the outlook for growth has worsened. “That’s a pretty tough mix,” said Kamakshya Trivedi, co-head of a market research group at Goldman Sachs.
The main way to gauge the dollar’s strength is by indexing it against a basket of currencies of major trading partners like Japan and the eurozone. By that measure, the dollar is at a 20-year high, after gaining more than 10 percent this year, a huge move for an index that typically shifts by tiny fractions each day. …
Global Economy Is Imperiled by a Force Hiding in Plain Sight
The pandemic has set off an economic shock, causing job losses, hunger, plunging stock markets and intensified fears of recession.
Policymakers are confronting a rare combination of diminishing economic growth and soaring prices, with tools that are unsuited to such an atypical downturn.
Well more than two years into the worst pandemic in a century, the accompanying economic shock continues to assault global fortunes.
This past week brought home the magnitude of the overlapping crises assailing the global economy, intensifying fears of recession, job losses, hunger and a plunge on stock markets.
At the root of this torment is a force so elemental that it has almost ceased to warrant mention — the pandemic. That force is far from spent, confronting policymakers with grave uncertainty. Their policy tools are better suited for more typical downturns, not a rare combination of diminishing economic growth and soaring prices.
Major economies including the United States and France reported their latest data on inflation, revealing that prices on a vast range of goods rose faster in June than anytime in four decades.
Those grim numbers increased the likelihood that central banks would move even more aggressively to raise interest rates as a means of slowing price increases — a course expected to cost jobs, batter financial markets and threaten poor countries with debt crises.
On Friday, China reported that its economy, the world’s second-largest, expanded by a mere 0.4 percent from April through June compared with the same period last year. That performance — astonishingly anemic by the standards of recent decades — endangered prospects for scores of countries that trade heavily with China, including the United States. It reinforced the realization that the global economy has lost a vital engine.
The specter of slowing economic growth combined with rising prices has even revived a dreaded word that was a regular part of the vernacular in the 1970s, the last time the world suffered similar problems: stagflation.
Most of the challenges tearing at the global economy were set in motion by the world’s reaction to the spread of Covid-19 and its attendant economic shock, even as they have been worsened by the latest upheaval — Russia’s disastrous attack on Ukraine, which has diminished the supply of food, fertilizer and energy.
“The pandemic itself disrupted not only the production and transportation of goods, which was the original front of inflation, but also how and where we work, how and where we educate our children, global migration patterns,” said Julia Coronado, an economist at the University of Texas at Austin, speaking this past week during a discussion convened by the Brookings Institution in Washington. “Pretty much everything in our lives has been disrupted by the pandemic, and then we layer on to that a war in Ukraine.” …
How Senator Joe Manchin Doomed the Democrats’ Climate Plan
NY Times – July 15
Senator Joe Manchin III of West Virginia led his party and his president through months of tortured talks, with nothing to show for it as the planet dangerously heats up.
First, he killed a plan that would have forced power plants to clean up their climate-warming pollution. Then, he shattered an effort to help consumers pay for electric vehicles. And, finally, he said he could not support government incentives for solar and wind companies or any of the other provisions that the rest of his party and his president say are vital to ensure a livable planet.
Senator Joe Manchin III of West Virginia, who took more campaign cash from the oil and gas industry than any other senator, and who became a millionaire from his family coal business, independently blew up the Democratic Party’s legislative plans to fight climate change. The swing Democratic vote in an evenly divided Senate, Mr. Manchin led his party through months of tortured negotiations that collapsed on Thursday night, a yearlong wild goose chase that produced nothing as the Earth warms to dangerous levels.
“It seems odd that Manchin would choose as his legacy to be the one man who single-handedly doomed humanity,” said John Podesta, a former senior counselor to President Barack Obama and founder of the Center for American Progress, a left-leaning think tank. …
Manchin Pulls Plug on Climate and Tax Talks, Shrinking Domestic Plan
NY Times – July 14
China’s Economy Hits a Slump
NY Times – July 15
The Dollar Is Extremely Strong, Pushing Down the World
NY Times – July 16
Global Economy Is Imperiled by a Force Hiding in Plain Sight
The pandemic has set off an economic shock, causing job losses, hunger, plunging stock markets and intensified fears of recession.
Policymakers are confronting a rare combination of diminishing economic growth and soaring prices, with tools that are unsuited to such an atypical downturn.
The World Economy Is Imperiled by a Force Hiding in Plain Sight
NY Times – July 16
Well more than two years into the worst pandemic in a century, the accompanying economic shock continues to assault global fortunes.
This past week brought home the magnitude of the overlapping crises assailing the global economy, intensifying fears of recession, job losses, hunger and a plunge on stock markets.
At the root of this torment is a force so elemental that it has almost ceased to warrant mention — the pandemic. That force is far from spent, confronting policymakers with grave uncertainty. Their policy tools are better suited for more typical downturns, not a rare combination of diminishing economic growth and soaring prices.
Major economies including the United States and France reported their latest data on inflation, revealing that prices on a vast range of goods rose faster in June than anytime in four decades.
Those grim numbers increased the likelihood that central banks would move even more aggressively to raise interest rates as a means of slowing price increases — a course expected to cost jobs, batter financial markets and threaten poor countries with debt crises.
On Friday, China reported that its economy, the world’s second-largest, expanded by a mere 0.4 percent from April through June compared with the same period last year. That performance — astonishingly anemic by the standards of recent decades — endangered prospects for scores of countries that trade heavily with China, including the United States. It reinforced the realization that the global economy has lost a vital engine.
The specter of slowing economic growth combined with rising prices has even revived a dreaded word that was a regular part of the vernacular in the 1970s, the last time the world suffered similar problems: stagflation.
Most of the challenges tearing at the global economy were set in motion by the world’s reaction to the spread of Covid-19 and its attendant economic shock, even as they have been worsened by the latest upheaval — Russia’s disastrous attack on Ukraine, which has diminished the supply of food, fertilizer and energy.
“The pandemic itself disrupted not only the production and transportation of goods, which was the original front of inflation, but also how and where we work, how and where we educate our children, global migration patterns,” said Julia Coronado, an economist at the University of Texas at Austin, speaking this past week during a discussion convened by the Brookings Institution in Washington. “Pretty much everything in our lives has been disrupted by the pandemic, and then we layer on to that a war in Ukraine.” …