The politics of a bear market

Welcome to a bear market. Monday’s stock market sell-off means that the S&P 500 is down more than 20 percent from its record high in January. Plunging stock prices also mean that all the gains made since Joe Biden entered the White House have been wiped out.

Away from the equities hit, one can see fair-weather luxuries fall by the wayside. Cryptocurrencies continue to plummet in value while the vogue for ESG investing is losing its luster, with regulators paying closer attention and investors unhappy with performance. The road ahead looks really rather bumpy. Among economists the debate is over whether we are due for more inflation, a recession, or both. Cheery stuff! An FT-IGM survey of economists this week found that 70 percent of leading academic economists predict a recession in 2023. The Federal Reserve is poised to raise interest rates by three-quarters of a percentage point. In other words, things aren’t going so well.

Not that you’d know it listening to the White House. As the economic skies get gloomier, the administration remains comically chipper. One of the emerging ironies of the Biden era is that a politician puffed up as a uniquely empathetic “consoler-in-chief” on the campaign trail oversees an administration that seems insensitive to the point of callousness when it comes to the hardship that follows from rising prices, declining real wages and tumbling stock prices. Barely a day goes by without Biden’s unsteady new press secretary Karine Jean-Pierre heralding her boss’s achievements and the “historic” economy he has built. Such claims look more delusional by the day.

Faced with a tsunami of bad economic news, Biden addressed the AFL-CIO trade union convention in Philadelphia this morning. His speech contained nothing new for those looking for reassurance that the White House understands the gravity of the situation. While a mea culpa on last year’s inflationary big spending is probably too much to ask for, we await something from the president that shows he gets it. “Getting it” may not be enough to avert economic trouble for the country and political disaster for the president’s party. But it would be a start.

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Giuliani’s big boozy lie

The testimony from Trump administration officials during Monday’s House January 6 committee managed to be both humiliating and reassuring. Humiliating for Donald Trump, that is. And reassuring for the rest of us. The words of former Trump staffers, including Jason Miller and Bill Stepien, painted a vivid picture of election night in the White House.

We learned that Trump’s infamous late-night address, in which he told the country that the vote was a “a fraud on the American public” and that “frankly we did win this election” began as the ramblings of a tipsy Rudy Giuliani. Miller told the committee that a “definitely intoxicated” Giuliani was the source of the idea that Trump should claim the election was stolen. Miller and Stepien both said it was too soon to make that claim. According to Miller, Giuliani said to the president “They’re stealing it from us… where do all the votes come from? We need to go say that we won.” Which is what Trump did.

Former attorney general Bill Barr was, once again, characteristically blunt in his view of the president’s stolen election convictions. “There was never an indication of interest in what the actual facts were,” he said in recorded testimony. “I was somewhat demoralized because I thought, ‘Boy, if he really believes this stuff — he’s become detached from reality if he really believes this stuff.’”

The picture of the former president that emerges from the hearings is that of a delusional narcissist who could not face the fact that he lost. A damning, disqualifying fact about the former president, but also curiously at odds with the picture of a premeditated plot to subvert American democracy that the committee seems to want to present.

Primary watch, Palmetto edition

Four states hold their primaries today — and the most significant races are in South Carolina, where two Trump-backed challengers take on incumbent members of Congress. Neither Tom Rice nor Nancy Mace have gone along with the former president’s post-2020 narratives but have since then taken different paths in their re-election bids. Rice, a resolutely conservative lawmaker, voted to impeach Trump and has since stood by that decision. Mace, however, has softened her tone, sought to downplay differences between her and Trump and emphasized that she was one of his “earliest supporters.”

What you should be reading today

Gilbert T. Sewall: The unremarkable Meghan Markle
Teresa Mull: Puppy privilege
Cockburn: Among the green conservatives
Chris Stirewalt, the Dispatch: The January 6 Committee and me
Yaroslav Trofimov and Stephen Fidler, Wall Street Journal: Ukraine fears defeat without surge of military aid
Noah Rothman, Commentary: An act of evil in New York City

Poll watch

President Biden job approval
Approve: 38.9 percent
Disapprove: 54.6 percent
Net approval: -15.7 (RCP Average)

Should transgender women be allowed to compete in women’s college sports?
Yes: 28 percent
No: 58 percent (Washington Post/UMD)

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