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‘Reality’ Is Knocking

Steve Mnuchin did something exceedingly rare for a top Trump administration official on Wednesday -- he acknowledged reality. In this case, that's not a good thing. Because when it comes to fiscal stimulus, the reality is that the chances of a comprehensive package making it through the legislative process prior to the election are not good. Nancy Pelosi has extracted concessions from The White House, but at this juncture, the only thing she'd likely accept would be total surrender -- or something close to it. She knows Trump wants to send out stimulus checks and she also knows he'd enjoy any bump in equities from the announcement of a deal. Thanks to last week's about-face, she also knows how desperate the president is, something he inadvertently underscored Tuesday with his exhortation for lawmakers to "go big," a thinly-veiled rebuke of Mitch McConnell, who said he's prepared to hold another vote on a narrow bill addressing only small businesses. Read more: Go Big Or I’ll Tweet! For his part, McConnell just doesn't care. The White House is a coin toss, and so is the Senate. No stimulus bill is going to materially alter the course of the election. The number of undecided vo
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15 comments on “‘Reality’ Is Knocking

  1. Alex says:

    IF the GOP retains the Senate then Pelosi will never see 2.2T or 1.8T. Mitch McConnell and his partners in crime will dig in their heels and nothing will get done, the country be damned

    • runamok says:

      Yeah, I don’t think the market is pricing in a Biden White House and a Republican Senate. Such a scenario is a bad environment for gold, BTC, maybe stocks, bad for oil, interest rates probably go down (will probably do so whoever wins what). It’d be stagflation.

      Two years later is the next election.

      • dayjob says:

        Yep, the odds of a Republican Senate and Biden White House are reasonably high and I think that’d be worst case scenario for the economy and markets. McConnell will pull out the Republican greatest obstruction hits from 2010 and kneecap the economy in the process. I suppose there could be Republican crossovers, but unless those same Republican Senators are willing to nuke the filibuster, it’s a moot point. No way in hell you get enough Republican Senators to cross the aisle and agree to any meaningful stimulus. To me, that’s a much bigger risk when the likelihood of it happening is considered than a contested election at this point. The lasting damage of at least two more years of inaction will just lead to the Fed doing everything it possibly can to stave off a depression, but that’ll be small solace to the people that are barely hanging on.

        • joesailboat says:

          May be why Republicans are mum on election shenanigans… Trump still loses but steal a few seats in the process.

        • I cannot see the rich and powerful benefiting from continued bickering during a crisis when the economic needs are so perfectly clear. But then the mood of the time seems firmly entrenched in screwing thy neighbor regardless if it screws themselves or not.

      • calh0025 says:

        Unfortunately I suspect that is entirely likely, Biden WH, GOP Senate and DNC House. Two years of exactly nothing happening, at that point I suspect the budget even dies. McConnell would probably let the whole thing crater if it meant he could throw it in the DNC’s face in 2022. Two years of state economies collapsing in the face of Covid which lets face it without extensive measures is going to continue to ripple through the country in waves. Followed of course by 2 more years of the same until Biden is voted out.

        Alternately we could see a Trump WH, GOP Senate and DNC house. I’m not sure honestly what of the above changes… McConnell won then without having to do anything and so will have no incentive to do anything.

        The only situations which fundamentally address anything would be at least a DNC house and senate majority. The presidency would be good but the senate is the key to it all and the deck is stacked heavily there.

      • Ria says:

        RIght now there are 3 Republican Senators on the ropes and plenty more hanging by a thread. The Democrats have Alabama in play. Odds are pretty good of a Democratic sweep….

  2. runamok says:

    Time for the SP to start testing some moving averages, I say. Unless, of course, uncertainty and chaos is the new narrative for why the SP so rides above the MAs. Talking head on some business channel: “Oh, it’s different this time. It USED to be that investors wanted stability and predicability. Now investors want chaos and uncertainty.”

  3. DoubleB says:

    I don’t get Pelosi’s strategy here. Align with the President on this one thing . . . “the White House and our caucus are close, but the President can’t get the Senate to make a deal . . . the issue is Mitch McConnell and the Senate.” I’m not a political strategist, but I do believe this could be an enormous wedge issue between Trump and McConnell.

    • joesailboat says:

      When Trump realizes McConnell has already moved on without him it could get weird in the Grand Old Party. This should happen right after court confirmation.

      • joesailboat says:

        Maybe Mnuchin will grow a pair and tell him.

      • dayjob says:

        Yep, the best outcome is a split in the Republican party where Trump takes his ball (i.e. his rabid supporters) and goes home. McConnell can point out that Trump lost in a landslide, but the diehards will eat up whatever narrative Trump spins about the big loss (it was rigged, RINOs sabotaged me, deep state, blah blah blah). If Trump loses big and Dems make it a sweep, it’ll be very interesting to see what happens with the Republican party. No way Trump goes quietly into that goodnight.

    • jyl says:

      I think her assessment may be that aligning with Trump still won’t get a meaningful stimulus bill through the Senate, and there are not enough days between now and the election for a wedge to do anything.

      A long shot might be for Pelosi to tell Trump that McConnell is selling him down the river by putting the Barrett nomination ahead of the stimulus that the President wants for his re-election, so he should pull the nomination, force the Senate to give him a YUGE stimulus bill, then re-nominate Barrett after the election. Its not clear if she and he communicate well enough to do that.

  4. mfn says:

    Trump punting on TikTok “until after the election” is the second least surprising news of the year, after news that Trump and half his WH staff were infected by the virus.

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