You Can’t Make This Stuff Up — Republicans and Democrats are Fighting Among Themselves
Author: Greg Valliere
December 11, 2019
AS THE MEDIA HYPERVENTILATED over an impeachment that will fail, several fascinating stories unfolded yesterday — most defying credulity — as Republicans and Democrats openly battled among themselves. Some examples:
LOTS OF REPUBLICANS REALLY HATE THE USMCA TRADE DEAL: President Trump hailed it as a great victory, but GOP critics condemned it as a giveaway to labor and the Democrats. “We ate their lunch” in the negotiations, Nancy Pelosi proclaimed. The treaty so displeased Mitch McConnell that he will wait until after the impeachment trial to hold a Senate vote on USMCA. Once again — a trade deal has been proclaimed as done, except it really isn’t; between now and a final vote later this winter, Republican opposition could intensify.
EVEN MORE REPUBLICANS HATE PORTIONS OF THE DEFENSE BILL, which contained a huge expansion of federal worker benefits — paid family leave for 12 weeks, a provision that isn’t paid for, as we noted yesterday. One Republican we talked with bemoaned the surge of new spending; another called the family leave provision “a gift to Ivanka Trump.” In any event, the enormous explosion in the budget deficit — which will easily exceed $1 trillion this year — is beginning to anger House Republicans.
A CIRCUS OR DECORUM? There’s a rift among Republicans — and still another dispute between McConnell and Trump — over how to proceed with the impeachment trial. McConnell wants it done quickly; his main concern is maintaining Senate decorum. Trump apparently wants a circus — a noisy, nasty, disruptive trial that, the president believes, will so disgust the public that Trump’s re-election prospects will improve.
THE DEMOCRATS, MEANWHILE, ARE PUMMELING PETE BUTTIGIEG because — gasp !! — he once worked for a consulting firm. And Elizabeth Warren had corporate clients when she was a private attorney, how scandalous !! And who’s starting to make a move in Iowa? Bernie Sanders, who has won important endorsements from leftist activists, eclipsing Warren, whose campaign has stalled. And here comes Amy Klobuchar and Andrew Yang, still trailing badly but showing signs of life.
JUST BENEATH THE SURFACE, there’s real grumbling on the left aimed at Pelosi — she allowed only two impeachment charges, while progressives wanted more. And her decision to sign on to the USMCA has infuriated leftists who do not want to give Trump any victory that he could boast about (which he did in a campaign rally in Pennsylvania last night). Trump doesn’t care what’s in any of these year-end bills; he just wants victories, and Pelosi gave him one.
WHILE THERE’S MUCH THAT DEFIES BELIEF right now in Washington, the most comforting story for the financial markets is that the Federal Reserve — which terrorized Wall Street a year ago with threats of aggressive rate hikes — will make it clear today that monetary policy will be on hold for months and months to come (with the exception of huge liquidity infusions into the reeling repo market).
REPUBLICANS AND DEMOCRATS CAN’T AGREE AMONG THEMSELVES, but the accommodative Fed is on the same page — a major positive for investors from Washington, amid the dysfunction.
The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The forward looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward looking statements. The information contained in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to the circumstances of the individual.
AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), Highstreet Asset Management Inc. (Highstreet), AGF Investments America Inc. (AGFA), AGF Asset Management (Asia) Limited (AGF AM Asia) and AGF International Advisors Company Limited (AGFIA). AGFA is a registered advisor in the U.S. AGFI and Highstreet are registered as portfolio managers across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. AGF AM Asia is registered as a portfolio manager in Singapore. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.
About AGF Management Limited
Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.
For further information, please visit AGF.com.
© 2020 AGF Management Limited. All rights reserved.