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I tend to concur with the Value Line economic assessment. It is going to require a modicum of luck.
Economic and Stock Market Commentary
The consumer sector remains the main cog in the continued economic expansion. Supported by a still tight labor market, which has seen a series of weekly initial unemployment claim declines since mid-June, the U.S. consumer continues to spend, particularly on services. It should be noted that the Conference Board’s Consumer Confidence Index, which measures and compares how consumers view the overall economy, business conditions, and the labor market presently and over the next six months, climbed in July, to a two-year high.
The resiliency of the U.S. consumer has raised hopes that the Federal Reserve can orchestrate a “soft landing” for the domestic economy. That said, we have seen some red flags recently, such as lackluster June retail sales data and moderating personal expenditures in May. Then, there are concerns that mounting credit card balances financed at higher rates and the resumption of student loan repayments in September will eventually force consumers to cut back on discretionary spending.
Earnings season is again proving better than feared. True, profits for the S&P 500 companies likely fell for the third-consecutive quarter, but comparisons have surprised to the upside. Most importantly, the results from the big money center banks did not show elevated signs of stress in the financial system. This assuaged worries about any near-term banking crisis, but with interest rates still on the rise, the resultant impact on the health of the overall financial system will be scrutinized.
A recession down the road is still plausible. The Conference Board’s Leading Economic Index, which provides an early indication of significant turning points in the business cycle and where the economy is heading in the near term, has fallen sharply over the last 12 months. Meanwhile, the Treasury market yield curve remains sharply inverted, another significant indicator of tougher economic conditions ahead.
Conclusion: The equity market rally, which has been fueled, in large part, by the strength of the mega-cap stocks, has valuations looking stretched. S&P 500 companies recently traded at nearly 20 times earnings, leaving many stocks susceptible to selling on negative news. Thus, a well-diversified portfolio of high-quality companies is recommended to reduce possible near-term downside risk associated with a market trading at a heightened multiple. Please refer to the inside back cover of Selection & Opinion for our statistically based Asset Allocation Model’s current reading.
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The interview of BIBI by Mark Levine is authentic but the liberal mass media, which in Israel is less reliable than even the lies emanating from the American mass media, is insightful and indicates BIBI is seeking a modest correction in Israel top Court's power.
What he and his rightist coalition are seeking has been blown out of the water by the liberals who seek to overturn his government.
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Will De Santis recover his campaign?
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Christian Whiton: Ron DeSantis Will Revive the Middle Class. Here's How
DeSantis outlines economic independence from China and stronger economic growth
By CHRISTIAN WHITON
Florida Governor Ron DeSantis again distinguished himself from Donald Trump and the rest of the Republican field on Monday, advocating not only traditional conservative, free-market economic ideas like limiting taxes and regulations but also a populist and much-need fundamental reordering of the over-financialized U.S. economy that is wrecking the middle class.
The speech was billed as an economic declaration of independence and that’s what it outlined—a future free from Chinese economic domination and preachy, woke Wall Street and corporate poohbahs who see themselves as “citizens of the world” instead of Americans. It will also free us from the Green New Deal.
The American people know exactly what is going on with their country. The White House is heralding “Bidenomimcs” but the chaos that government has inflicted using the pandemic as an excuse for the most radical central planning and spending spree since the New Deal has been devastating.
Alas, according the RealClearPolitics average, only 38 percent of Americans approve of President Joe Biden’s handling of the economy. So much for Bidenomics.
According to the Institute for Supply Management, the manufacturing sector has been contracting since last October and the rest of the economy (except government) is following. Americans intuitively know that in Biden’s term of office one-fifth of their savings and purchasing power will have been wiped away permanently by inflation. Real wages have fallen even as the rich have gotten richer.
The problem goes beyond just Biden: DeSantis observed that, “The bottom half of American households have less wealth today than in 1989 while the top ten percent have added $29 trillion in wealth over the same period.” These aren’t typical Republican talking points but they reflect a troubling reality.
The basics of the middle class American dream: owning a home and building a family with kids better off than their parents is evaporating amid inflation and a oligarchic economy run by globalists.
Biden and his predecessors in the White House and their amigos in Congress have left us dangerously dependent on China, not only for most manufactured goods, but also for critical items like pharmaceuticals and their ingredients and materials needed for high-tech hardware.
Enter Ron DeSantis with a different approach.
In addition to the traditional pillars of conservative economics like cutting taxes and regulations to stimulate economic freedom and the manufacturing side of the economy, DeSantis has a plan to end the rigging of the economy to the benefit of the elite—a lamentable situation in which, as he pointed out, “gains are privatized and losses are born by taxpayers.” Who can doubt this after the recent bailout of woke-run Silicon Valley Bank?
In calling for an end to “The asymmetric relationship between the U.S. and China … characterized by China’s theft of our intellectual property, trade dumping, currency manipulation, and espionage,” DeSantis has implied that he will expand tariffs on China and implement more export controls. While he did not explicitly call for strategic decoupling from China, his program would achieve that crucial goal. He will end China’s “preferential trade status,” which necessarily implies he will undertake a reevaluation of America’s role in the globalist World Trade Organization.
Vowing to eliminate our “fourth branch of government”—unelected regulators who have come to make up the administrative state—DeSantis will embark on the greatest program of deregulation of energy and other industries in history, unleashing the potential of American business and workers who actually build things. His goals: economic growth of three percent annually or better and “a country where a family can raise children on a single income.” That will also mean a country with more kids and thriving, healthy communities.
DeSantis will stop government from pushing young Americans to incur massive debt for degrees of limited or no value, instead creating a free market in student loans that incentivizes valuable education and ends the gravy train for woke universities that preach hatred of our great country.
These and other steps that DeSantis advocated today mark a fundamental change from what has been sought by either political party. Both progressives and the Chamber of Commerce crowd will gripe about his policies and departures from orthodoxy, but his solutions will appeal to voters. He deserves credit for going into far more policy detail than the other major candidates who stick mostly to talking points and bumper-sticker prescriptions.
One other factor: DeSantis can actually enact his plan. After all, he is the man who turned Florida from purple to red, won reelection after the Covid crisis by nineteen points, and stood firm against corporate bullies and a hostile progressive media.
It’s not just DeSantis’s ideas that appeal. Plain-spoken, honest, and direct—a voice of a new generation—he alone has the skill to put his plan to the American people and enter the White House with a mandate to succeed.
Sadly, no Republican has won a majority in the national popular vote since 2004. DeSantis has the best shot of anyone to break that ignominious record, attract new voters to arrive in Washington with a mandate, and serve eight years in a successful presidency in which the American people are set free to restore their country.
Christian Whiton was a senior advisor in the George W. Bush and Trump administrations. He is a surrogate for the DeSantis campaign.
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The Hoover Institution Monthly Briefing on Education
In the July 2023 briefing on education, we explore the Hoover fellowship’s latest research and analysis in education policy.
Eric Hanushek reveals that K‒12 student achievement has been on the decline long before COVID-19 shutdowns; Michael Hartney explains how Catholic schools suffered no discernible learning losses during the pandemic period; and Michael Petrilli describes the recent increase in charter school funding across America.
FEATURED ANALYSIS
School Test Scores Are Down. And It Isn’t Just Because of COVID-Era Shutdowns
In an essay for The Hill, Eric Hanushek and co-author David Armor assert that no attention has been paid to the fact that there were significantly poor National Assessment of Education Progress (NAEP) scores—skewed heavily against disadvantaged students—well before schools were shut down for a year and a half beginning in early 2020.
Hanushek and Armor write that NAEP data shows that between 2012 and 2020, Black students lost eight points in learning in math, Hispanics lost four points, and Whites lost two points.
Math scores among Black 13-year-olds have dropped to lows not seen since the 1980s, and the Black-White achievement gap has widened to 42 percent.
“The COVID-19 shutdown is certainly a major contributor, but it is not the whole story,” the authors maintain.
Hanushek and Armor argue that a significant factor was Congress’s decision to dismantle the No Child Left Behind Act (NCLB) of 2001,which imposed federal accountability measures on public schools nationwide.
Between 1999 and 2012, Black students gained 13 points nationally compared to 12 points among Hispanics and 10 points among Whites.
In 2015, Congress replaced NCLB with the Every Student Succeeds Act (ESSA), diffusing authority over school accountability to the states and removing various requirements for evaluation of teachers and schools. According to Hanushek and Armor, the decline in student achievement begins with the introduction of ESSA and accelerates with COVID-19.
Hanushek and Armor contend that it is still possible to remedy these learning losses. Many school districts have unspent funds from federal COVID-19 relief packages. The authors assert that these funds could be invested in providing incentives for the most effective teachers to take on more students while buying out the contracts of the least effective ones. Such policies, Hanushek and Armor argue, have proven to lead to significant achievement gains.
Click here to read the entire essay.
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Hunter’s Sweetheart Plea Deal
Justice Department officials didn’t count on IRS whistleblowers or a skeptical judge.
By Kimberley A. Strassel
U.S. Attorney David Weiss is now offering to testify publicly in front of the House, and Republicans may need to book him for a week. It could take that long for the Delaware prosecutor to unwind his office’s growing list of Hunter Biden special favors, not to mention its half-truths and outright dissembling.
The latest example came Wednesday in a Wilmington courtroom, as U.S. District Judge Maryellen Noreika exposed the gaping irregularities in what the press had insisted was a routine plea deal with Hunter Biden. The Justice Department had refused to release the agreement, so it was extraordinary when the judge explained that the provisions giving Hunter a wrist-slap for tax and gun charges were “not straightforward,” “atypical,” without legal precedent and potentially unconstitutional. Not only does the Justice Department stand accused of treating the young Mr. Biden with kid gloves; a federal judge now says the president’s son received a sweetheart plea deal like no other.
This included Hunter’s deal related to his gun offense, in which the charge would be dropped so long as Hunter didn’t use drugs or own a firearm for two years in a diversion program. In normal cases, Justice Department personnel would decide whether terms had been violated. But Hunter’s team, worried that a future Republican administration would get to make that call, netted a unique deal that put the judge in charge of the question. Defense lawyer Chris Clark acknowledged this was a special proviso for Hunter, given the controversy surrounding the case and the potential for a “politicized” decision down the road. Yet Judge Noreika said the perk was so unusual as to be potentially unconstitutional, as it essentially granted her prosecutorial powers that belong to the executive branch.
The judge was also taken aback by a deal that was structured to require her to “rubber stamp” pretty much all of it—stripping out a judge’s usual ability to modify or reject provisions. How many defendants cajole their prosecutors into attempting to insulate them from a judge’s oversight? Not many who aren’t named Biden.
But the big moment came when Judge Noreika asked about a curious immunity clause that would appear to shield Hunter from additional charges tied to the conduct described in the plea agreement. She asked if he might still face prosecution for, say, a violation of the Foreign Agents Registration Act. Mr. Weiss’s team—having publicly claimed that its investigation is “ongoing”—clearly felt it had no choice but to acknowledge he might. This shocked Hunter’s defense team, which objected. Things fell apart from there.
Blame this mess, yet again, on prosecutors. There’s good reason to believe the Team Hunter surprise about immunity was legit. What defense lawyer allows his client to sign a plea deal—to negotiate away any leverage—knowing that even tougher charges may still come? Whatever its public statements, Mr. Weiss’s office had clearly led Hunter’s team to believe the probe was wrapped up. Judge Noreika’s demand for legal clarity looks to have exposed a wink-nod deal.
The claim of an “ongoing investigation” has been highly convenient for the Delaware U.S. attorney. It allows the Justice Department to keep dodging congressional questions about the investigation of Hunter’s business activity—since officials claim they can’t talk about active probes. The need for such stonewalling has grown more acute now that two Internal Revenue Service whistleblowers have provided detailed testimony on the irregularities of the investigation. It’s so acute that the Weiss team decided that maintaining the claim of a continuing probe was worth the risk of jettisoning whatever handshake immunity agreement they had made with Hunter’s team.
Yet with the deal now in limbo, Mr. Weiss has an even bigger mess. Judge Noreika instructed the parties to return in several weeks with clarity on her role and details about Hunter’s risk of further prosecution. This gives Republicans more time to inform the judge about problems with the investigation. It’s also entirely possible that Hunter’s team won’t agree to any revised provisions that treat their client like other mere mortals.
The Justice Department on Monday offered to make Mr. Weiss available for public testimony in front of the House Judiciary Committee on specific dates in September and October. The letter was sent on the presumption that the Hunter plea deal would by then be done and dusted, which would have allowed Mr. Weiss to speak to this settled “justice” while artfully dodging questions about live issues. Now the Hunter deal remains open, its special perks in focus, and Mr. Weiss is under pressure to give the court even more ugly details.
In short, the Justice Department has been caught playing games—and has no good answers. That’s because it never expected to have to give any. The Hunter deal was always premised on the notion that nobody would see the sausage. The Justice Department would release the bare bones of an agreement, the press would infuse it with credibility, and the judge would sign off. It didn’t count on two whistleblowers providing evidence of political favoritism, or on a court that questions why prosecutors are acting as a Hunter favor factory.
All the more reason for House Republicans to double down on their own investigation. Lady Justice isn’t operating blind.
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