New Tariffs Kicked in Yesterday

The trade war has moved up another notch. As of yesterday, a 15% tariff on $110 billion worth of Chinese exports to the U.S. took effect along with retaliatory tariffs on $75 billion worth of U.S. exports to China, including wheat, sorghum, cotton, and petroleum products. This is the third round in the tariff battle, but this one is different from the first two. It hits consumer goods, which the first two didn't. Notebook computers, footwear, diapers, toys, and electronics are now being taxed. But that is hardly the full list of tariffed products. Also included:

• Bovine carcasses
• Live mules and hinnies (but only if the plan is to slaughter them)
• Bees
• Sour cream
• Kumquats
• Electric blankets
• Bedspreads
• Girdles and corsets
• Tarpaulins
• National flags
• Forks valued at 25 cents or more
• Parts for trash compactors
• Upright pianos
• Fish hooks, snelled or not snelled
• Feather dusters
• Cyanide
• Enriched uranium
• Clinical waste
• Sewage sludge

In short, unhappy news for those of you who thought you were going to put one over on the government by switching to a corset and to non-snelled fish hooks. The full list runs for 122 pages. On the other hand, the tariff on Bibles has been rescinded, as some of Trump's supporters were enraged by it.

JPMorgan Chase has predicted that these tariffs and other ones scheduled for December will cost the average household over $1,000 per year. People might notice that kind of money. But then again, they might not. If a toy someone has never bought before used to cost $19.95 and now costs $22.95, is the buyer going to notice the effect of the tariff? Studies have shown that most people were not aware of how much money they got in the 2017 tax cut, so they might be equally blissfully unaware of what the tariff is costing them.

Currently, the two sides are not talking, although talks could be scheduled later on. The problem is that China can easily wait another 18 months to see if Trump is reelected. Chinese President Xi Jinping believes that the Democrats will be easier to deal with. Furthermore, if they make a deal, they will stick to it. With Trump, Xi knows that Trump might well renege on any deal he signs.

Donald Trump famously said that trade wars are easy to win. He may soon find out if he is right. One possible winner, however, is Amazon.com. Many of its products will go up in price, but so will prices in stores. If people notice higher prices in stores (or even read about them), they may decide to shop online, which is usually cheaper than buying in stores. So the ultimate loser may be retail stores in general, with all the implications that has for employment and unemployment. (V)

Trump Backs Off Background Checks

There was, as you may have heard, yet another mass shooting this weekend. This one was in Texas (again), and resulted in 7 deaths so far. On the other hand, maybe you didn't hear about it, since it's just one of the 297 mass shootings that have already happened in the U.S. this year. And just one of the six that happened this weekend.

Anyhow, after the last highly publicized mass shootings, which took place just less than four weeks ago, Donald Trump expressed strong support for universal background checks for gun buyers:

We cannot let those killed in El Paso, Texas, and Dayton, Ohio, die in vain. Likewise for those so seriously wounded. We can never forget them, and those many who came before them. Republicans and Democrats must come together and get strong background checks, perhaps marrying....

— Donald J. Trump (@realDonaldTrump) August 5, 2019

He also told reporters that he was confident that he would be able to get the NRA on board. Then, the NRA got him on the phone, and reminded him in no uncertain terms that background checks were not what they paid over $30 million for. So, Trump backed down.

This time around, Trump is not going to make the same mistake. Instead, he completely avoided any talk of background checks during his (brief) press availability on Sunday, insisting instead that this is a mental health issue, and that he and Congress are "working on it." Presumably, they squeeze those discussions into the spare time they have when they are not working on the "terrific" Obamacare replacement, the infrastructure bill, and a better deal with Iran.

In short, it may be that the power of the NRA will one day be broken, and it will be possible for Congress to, at very least, adopt gun-related measures that have overwhelming support from Americans across the political spectrum. For now, however, the gun lobby still has enough sway to keep a Republican president safely in its pocket. (Z)

Independents Think Trump Has a Better Economic Plan Than the Democrats

A New Hill-HarrisX poll shows that 53% of independent voters favor Donald Trump's economic plan and 47% think the Democrats can do better to grow the economy. The margin of error in this poll was 5.8%, so it is essentially a statistical tie. Trade policy and how to handle China are certainly part of the economic equation, and quite a few voters want to stand up to it, something Trump is clearly doing with his tariffs. Of course, if the economy tanks on account of a trade war, independents could change their minds fairly quickly. (V)

DNC Opposes the Iowa and Nevada Virtual Caucuses

Ann Selzer just got some manna from heaven. Polling the Iowa caucuses has never been easy, because everything depends on hard-to-predict turnout. This year it looked like life was going to be even more difficult for the Des Moines Register's pollster, Selzer, because the Democrats were planning to have virtual caucuses to allow people who couldn't come to a physical caucus to call in and participate. Now the Democratic National Committee has rejected Iowa's plans (and also those of Nevada). The DNC chairman, Tom Perez, explained that he was worried that the virtual caucuses could be hacked, allowing Russians and people other than Iowa Democrats to take part.

Groups representing the elderly and the disabled have long fought for a way for people who are unable to travel to a caucus site to participate nevertheless. They are up in arms about the decision. Some of the candidates are also less than thrilled about the rejection. Julián Castro said: "The DNC needs to get its act together so that it doesn't disenfranchise tens of thousands of Iowans." On the other hand, the chairman of the Iowa Democratic Party, Troy Price, said: "We are obviously disappointed by this outcome, but if the DNC does not believe the virtual caucus can be secure, then we cannot go forward."

Iowa could yet change the rules to allow absentee participation. One way would be for people who chose to do so to mail an ordered list of their preferred candidates to the local caucus chair. The lists could then be handled at the caucus just like in-person votes. An ordered list is needed, because any candidate failing to get 15% is disqualified. Live supporters have to then pick a second choice, and possibly even more later in the process. An ordered list would serve the same function.

Iowa could also switch to a primary, which allows absentee ballots, but that would endanger Iowa's first-in-the-nation status because New Hampshire has a state law requiring its secretary of state to schedule its primary to be the first primary in the nation. So whatever date Iowa picked, New Hampshire would move its primary to a week before it. If Iowa were to pass a law saying its primary has to be first, we'd have a bit of a problem, so Iowa is unlikely to try to go down that road. (V)

Other Democrats Are Beginning to Go After Warren

Sen. Elizabeth Warren (D-MA) has had it easy up until now. The other Democrats running for president figured that between her missteps handling her Native American heritage, her poor initial fundraising, and her low polling, she was roadkill who could safely be ignored. Not so much anymore. Her DNA test is long forgotten, her fundraising is among the best, in all national polls she is second or third, and she is drawing massive crowds everywhere she goes. Suddenly, the other Democrats are beginning to realize that if Joe Biden stumbles, many of the progressive Democrats might decide that she is a fresher face and a better bet than Sen. Bernie Sanders (I-VT). If they aren't careful, she could become unstoppable.

Consequently, some Democratic movers and shakers are starting to go after her. Some of them are attacking her (many) policy proposals. Others are saying the proposals might be all right, but there is no way to pay for them. Still others are citing the lack of diversity among her supporters. Susan Sarandon, a Sanders supporter, keeps pointing out that Warren used to be a Republican. Dick Harpootlian, former chairman of the South Carolina Democratic party and a Biden organizer, said: "It's the law of political physics. What goes up must come down." Her supporters say this is all sour grapes.

None of the attacks are likely to work. Warren's core supporters are college-educated suburban women, a group that used to be Republican but is rapidly becoming Democratic, and certainly isn't going to be put off by Sarandon saying Warren used to be a Republican, since that applies to them, too. Sanders has decided that, for the moment at least, having the two progressive candidates try to muddy each other would be bad for their movement. There is enough time for that should it ultimately become a three-way race.

Warren is no dummy. She knows that this is her moment and that a lot of women would love to vote for a woman president, just not Hillary Clinton. She is extremely careful about what she says, attacks no one, and just keeps talking about her policy proposals, most of which (except maybe Medicare for All) are very popular. She will be on stage with Sanders and eight others in the third debate and many of the others may be gunning for her. They are going to say her policy proposals are just pie in the sky, but she is going to reply by saying they can be paid for by taxing the rich. Her proposal to have a European-style tax on the net assets of people worth $50 million is certain to face a constitutional challenge, but there are other ways to raise a lot of money as a fallback. For example, an Eisenhower-level marginal income tax rate (91%), a huge increase in the estate tax, elimination of special treatment for capital gains, and a 1% tax on all stock transactions. All of these would raise boatloads of money and put the tax burden mostly on the wealthy. (V)

Dates of Fourth Debate Have Been Announced

The third Democratic debate will be Sept. 12 in Houston, but the DNC is already working on the fourth one. It will be on Oct. 15 (and if need be, Oct 16), somewhere in Ohio. To qualify for #4, a candidate must reach 2% in four approved polls and have 130,000 donors, the same as for the third one. Billionaire Tom Steyer, who didn't make the third debate, still has time to buy his way onto the stage for the fourth one. If he makes the cut, the debates will take place on two nights, with six candidates one night and five the other. All the candidates who qualified for the third debate automatically qualify for the fourth one.

That said, the third one is next. Politico has put together a composite photo showing how the candidates will appear on the stage for the third debate:

So, frontrunner Joe Biden will be hit by progressives on his left flank and his right flank (geographically speaking) during the debate. (V)

McCready Leads in NC-09 Special Election

The 2018 congressional election in NC-09 was thrown out because a Republican operative cheated. On Sept. 10, a special election will be held to fill the still-vacant House seat. A new poll has Democrat Dan McCready, who lost last November by under 1,000 votes, leading Republican Dan Bishop 46% to 42%. The margin of error in the poll was 4.2%, so technically it is a statistical tie. However, if leaners are included, McCready is ahead 49% to 44%. Special elections have a notoriously low turnout, so any poll of a special election should be taken with a barrel of salt. Still, being +5 is better than being -5.

Republicans are in full-blown panic mode over this. If an R+8 district that Donald Trump won by 12 points in 2016 is even in play, what else could happen next year? It's ominous, and the optics of the wrong Dan winning will be horrendous, sending Republicans in marginal districts running for the hills. Consequently, the GOP is rolling out all the big guns in a desperate attempt to save Bishop's neck. They are trying to make the voters think that the Democrat in the race is Rep. Alexandria Ocasio-Cortez (D-NY), rather than McCready. Vice President Mike Pence and House Minority Leader Kevin McCarthy (R-CA) are going to campaign for Bishop. And the day before the election, the big dog himself will show up and hold a rally for Bishop. It remains to be seen if any of that works, though. To continue with Harpootlian physics, every political action produces an equal and opposite reaction. Trump's appearance at a rally the day before the voting happens will surely gin up Republicans to go vote. But it will also gin up Democrats, as well. If McCready pulls this off, there is going to be a lot of blood on the floor the day after and the prospects of the Republicans taking back the House will drop to near zero. (V)

Shimkus Won't Run in 2020

Some Republicans aren't even waiting for the results of NC-09 to come in. They are already calling it quits. Rep. John Shimkus (R-IL) has announced that he will not run for reelection in 2020. That makes him the 13th Republican to say he has had enough (plus one who is actually resigning this year, which will trigger a special election). Only three Democrats have announced their retirements. Open seats are much harder to defend than seats with incumbents sitting in them, so if this imbalance continues, the chances of the GOP picking up the House in 2020 are growing dimmer by the day.

Shimkus' district, IL-15, is R+21. Normally, 12-term Republican congressmen in R+21 districts who are only 61 and who are the ranking member of a major subcommittee, don't decide to call it quits. Shimkus didn't give a plausible reason for his decision, but since he could be reelected fairly easily, our best guess is that he is convinced the GOP will remain in the minority in 2021 and probably beyond, and being in the House minority is no fun at all. If McCready wins in NC-09 next week, quite a few other Republicans may come to the same conclusion and call it a day as well. (V)

Republicans Line up to Primary Chris Collins

Rep. Chris Collins (R-NY) was indicted for insider trading just before Election Day in 2018 and nevertheless ran for reelection. His district, NY-27 in Western New York, is R+11, yet he won by barely 1,000 votes against an unknown Democrat. New York Republicans are worried silly about what will happen if Collins is on the ballot in 2020. A number of them aren't taking any chances and have signed up to primary him. Their hope is that any Trump-loving Republican not named Chris Collins can hold the district, but any Trump-loving Republican named Chris Collins is toast since the Democrats will have a better-known candidate this time. Collins is raising money and planning to run for reelection.

One of the candidates is Chris Jacobs, a Trump-loving former New York Secretary of State and a member of the wealthiest family in Western New York. Another is attorney and former judge Beth Parlato, a Fox News contributor. A third one is state senator Rob Ortt. Democrat Nate McMurray, who ran in 2018, is running again, but might well have competition even though he is better known this time.

The NRCC claims not to be worried about a district that Trump won by 24 points. In reality, everyone knows that if Collins gets the nomination, McMurray or some other Democrat will pick up the seat. But the NRCC is in a bind. It hates to make choices among three otherwise decent Republican primary candidates lest it antagonize the other candidates' supporters. So it is not going to help any of them, at least not yet. (V)

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