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      in US Politics

      Markets plunge in uncertainty about a second term and a second wave

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      Stock market investors are braced for a bumpy ride this week as the likelihood of further dramatic increases in Covid-19 cases across the world collide with the final days of the US presidential election campaign.
      Last week, shares in the US and Europe slumped at their fastest rate since March and analysts said there would be worse to come, after France and Germany imposed strict lockdowns and US states came under pressure to tackle the rising number of deaths.
      “New lockdowns across Europe are being harshly repriced by markets,” said Barclays equity strategist Emmanuel Cau.
      “There is a huge nervousness about a second wave,” added Gabriel Sterne, head of global macro research at consultancy Oxford Economics. “With some government finances beginning to be stretched, the threat of further lockdowns is causing a large degree of anxiety.”
      Heightened levels of concern about the path of the virus began to affect markets three weeks ago. From New York to Paris, London and Tokyo, investors sold heavily from 13 October onwards as each day brought news of higher infection rates and growing numbers of deaths.
      Stricter measures to limit households mingling began to take effect and government ministers of all political stripes began to talk about broader lockdowns being the only answer to the spread of the virus.
      FTSE 100
      The Paris CAC index lost more than 400 points, or 8%, from 13 October to the end of last week while London’s top 100 listed companies slumped 7.5% over the same period. Last week, the Stoxx 600 index of European companies slumped to its lowest level in five months, falling 3.1% in a day.
      In the US, a downturn in stock values that began in September with a panic over the virus turned into a rout after it became clear Congress would not give Donald Trump the stimulus package he craved.
      Without a second trillion-dollar tranche of cash to support closed businesses and millions of unemployed workers, the president’s boast that the recovery was “looking fantastic” lacked substance. The S&P 500 lost more than 8% in the 16 days that followed 13 October.
      It wasn’t the first time this year that fears of a Covid-19 second wave had spooked markets, but the rallies that turned the previous panics into mere blips on a chart appear to be absent this time. Investors have stopped listening to hopeful stories about a vaccine and begun looking at the ripple effect that flows from the widespread adoption of masks and physical distancing.
      As Dhaval Joshi, chief European strategist at BCA Research, says, consumers who cannot use their nose or mouth in close proximity to others are hardly consumers at all.
      He estimates that while lockdowns put a temporary block on economic activity, the face mask and distancing rules will cut as much as 10% off GDP for as long as they are imposed.Stocks in the three hardest-hit sectors – hospitality, retail, and transport – have taken a beating since March.
      Stoxx 600
      However, investors who have switched to the tech industry have shrugged off concerns about the virus. The major tech companies – Apple, Amazon, Alphabet (the owner of Google), Microsoft and Facebook – were behind the 50% increase in the S&P 500 since Trump took the presidency and have generally benefited from the switch to a more digital economy since the lockdowns in March. If US stocks are to recover their momentum, tech will have to perform.
      In the UK, where the FTSE 100 is dominated by banking, insurance and oil and gas companies, share prices have barely recovered after dipping to 5,000 points in March. Across Europe, successful industrial giants such as Mercedes-Benz, Volkswagen and Siemens have been hit as a six-month recovery in their share prices took a negative turn.
      Donald Trump’s attack lines in the closing weeks of the US presidential campaign have also highlighted the potential downside for investors of a victory for Democratic candidate Joe Biden on 3 November. Desperate to land some punches on his rival, the president has tweeted more than once: “A vote for Joe Biden is a vote for the biggest TAX HIKE in history.”
      So far the claim, which even rightwing US thinktanks say overstates the magnitude of his tax proposals, has failed to shift the polls and they continue to suggest a Biden victory. But distrust of the polls and Trump’s veiled threats to challenge the validity of a narrow Biden victory have only added to stock-market jitters.
      S&P500
      One constant source of light for investors has been the actions of central banks. After a brief flirtation by the US Federal Reserve with increasing interest rates during the first years of the Trump administration, all central banks have cut borrowing costs to zero, and some, including the European Central Bank (ECB) and the Bank of Japan, to below zero.
      Central banks have also pumped trillions into the financial system to maintain the flow of easy credit to businesses large and small, adding to the sense that whatever Covid-19 may throw at them, companies’ borrowing costs will be negligible.
      This week the Bank of England’s monetary policy committee is expected to add another £100bn to the £745bn of “quantitative easing” – purchasing sovereign and corporate debt from financial institutions – it has already injected into the economy. The US Fed’s board will also meet this week and the signs are that the recent slump in stock values will persuade its policymakers to increase its current $7.2tn (£5.6tn) of QE.
      Last week the president of the ECB, Christine Lagarde, signalled a further stimulus for the eurozone in December, while the Bank of Japan has said that its determination to print as much money as it takes to keep interest rates below zero is “unlimited”.
      Such support from the central banks will be essential as the virus continues to ravage the populations of Europe and the US. Whether it will be enough to turn the stock market back on to a more positive path is another matter. More

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      in UK Politics

      What would be the economic impact of a new national lockdown?

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      If we are – as is being briefed by Downing Street – about to enter into another tough set of national restrictions to curb the spread of coronavirus ahead of Christmas what will the economic impact be?  What will be the cost of a second lockdown?
      Precise economic forecasts are always dubious, and especially so in these circumstances, when we don’t know what the restrictions would actually be or for how long they would last.
      If they involve closures of non-essential retail and hospitality the impact on those particular sectors would, of course, be devastating, as their lobby groups have been making clear. But what about the overall economic impact?The economy is estimated to have fallen by almost a quarter earlier this year during the first lockdown – easily the biggest slump in UK recorded history.There are some reasons to hope the impact of another lockdown would not be as severe as that.
      The signals from ministers are that schools and universities would not close this time. With education output accounting for around 5 per cent of GDP that should – purely on an arithmetic basis – mean a smaller loss.
      And last time the toughest restrictions were in place for two months. This time the talk is of one month of curbs.
      Some companies that have implemented new physical distancing protocols since March, such as construction firms, might be able to stay open too. But the economic impact would still undoubtedly be severe.Between April and August the economy is estimated to have recovered around two thirds of the lost activity, leaving GDP around 10 per cent below its level in February.Yet the signs are that momentum was already slowing over recent weeks.
      Some analysts were already projecting stagnation over the final quarter of 2020.  New restrictions on top must surely heighten the chances of a return to contraction – a double dip.Simon French of the stockbroker Panmure Gordon thinks there could be a hit of around 5 per cent in the final quarter.The blow to business investment from a second lockdown might be even greater than the first, threatening longer term damage to the UK’s growth potential. Furthermore, the Treasury’s support measures to prevent mass redundancies and big falls in livelihoods are starting to look increasingly inadequate. The furlough scheme ends today – and its replacement is less generous to workers, with only two thirds of wages covered rather than 80 per cent.The Treasury has still yet to increase the generosity and scope of Statutory Sick Pay, even though it’s a manifestly vital tool in fighting the disease.Business groups are, understandably, increasing pressure for enhanced support for affected firms and workers.If we are going into a second lockdown it’s not clear what justification there can be for not deploying the same levels of support as in the first one.As we know, the government’s scientific advisors on the Sage committee, were last month proposing a two week “circuit breaker” lockdown, perhaps coinciding with the October half term holiday that has just ended.Would that have been preferable for the economy? The answer is that it might well have been.Last month the Prime Minister was talking about how “a stitch in time saves nine”, meaning that restrictions now – such as the 10pm pub curfew –  would save the need for greater restrictions in future.But there’s an economic logic to this as well.Getting on top of the virus with severe measures early, the argument goes, might restrict economic activity in the short term, but would enable the economy to be opened up sooner. And a later lockdown will require a longer period of restrictions.
      This is the economic argument against delaying imposing a lockdown today – against waiting and see if the disease really is spreading as rapidly as Sage fears.In all of these calculations ministers would do well to bear in mind the growing evidence base that, when the virus is spreading rapidly, economic activity takes a hit regardless of the restrictions imposed by the government.The idea that it is solely the restrictions, rather than the virus itself, which harms the economy and livelihoods is a fallacy that really needs to be exorcised from Downing Street this Halloween. More

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      in UK Politics

      Don’t blame Chancellor’s Eat Out to Help Out for second Covid wave says epidemiologist Neil Ferguson

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      One of the Britain’s most well-known epidemiologists has said that he has not seen “convincing evidence” Rishi Sunak’s controversial meal subsidy scheme is responsible for the UK’s subsequent spike in Covid cases.The Chancellor’s Eat Out To Help Out (EOTHO) scheme offered subsidised meals in pubs and restaurants in the month of August and has been identified by some as a likely accelerant of the virus’s spread over the summer.
      But Professor Neil Ferguson of Imperial College London said it was “probably misleading” to identify individual government policies as responsible for the second wave of cases that has hit the UK.“I haven’t seen any convincing evidence that Eat Out to Help Out made any appreciable difference to risk,” Professor Ferguson told Econ Films’ CoronaNomics show.“Undoubtedly reopening the economy, allowing people to go to restaurants and bars has contributed, as well as more general and more frequent mixing of people in society, to the growth of the epidemic we see here.”  “[But] the UK is not in a unique position. The whole of Europe is experiencing the same challenges right now so I think it’s very hard to attribute and probably misleading to attribute those risks to particular policies.”
      The debate about the wisdom of the Chancellor’s policy – which subsidised 100 million meals over the summer – is heating up.  Some researchers initially found no clear association between cases and uptake of the scheme.But a new paper last week from Thiemo Fetzer of Warwick University’s Centre for Competitive Advantage in the Global Economy (CAGE) used an analysis of microdata on the number of restaurant visits and subsequent infections and also local rainfall patterns to suggest EOTHO had been responsible for up to 17 per cent of new infection clusters.Professor Tim Besley of the London School of Economics, who is leading a project, under the auspices of the Royal Society, to integrate epidemiological and economic modelling to give better policy advice to ministers, who was also speaking to CoronaNomics, said the jury was still out on the impact of the Chancellor’s policy.“Certainly some of my colleagues were sceptical right from the start about the policy given the economic benefit for the increase risk, but what I haven’t seen is any convincing analysis that it was a material factor in the pick of the disease in recent weeks,” he said.
      Professor Ferguson’s team at Imperial put together a model in March which suggested the unmitigated the spread of the virus could cause 500,000 deaths in the UK. The results are credited with prompting the Government to impose the full lock down within days.Professor Ferguson stepped down from Sage, the government’s main scientific advisory group in May, after it emerged he had broken the lockdown rules himself. But he told CoronaNomics that he is still “involved in advising the UK government”. More

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      in US Politics

      Unions discussing general strike if Trump refuses to accept Biden victory

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      US unions have begun discussing the idea of a general strike if Donald Trump refuses to accept an election results showing a Joe Biden victory.
      Such a move would be unprecedented in the modern era. There has not been a general strike in the United States since 1946 – and that was restricted to Oakland, California.
      The local labor federation in Rochester, New York, was the first union group to officially support the idea. Union federations in Seattle and in western Massachusetts have followed suit, approving resolutions saying a general strike should be considered if Trump seeks to subvert the election outcome.
      Dan Maloney, president of the Rochester-Genesee Valley Area Labor Federation, said his 100,000-member group adopted the resolution to get people discussing the idea – from local unions to the AFL-CIO, the nation’s main labor federation which represents more than 12.5 million people.
      On 8 October, the Rochester federation voted to support preparing for and holding “a general strike of all working people, if necessary, to ensure a constitutionally mandated peaceful transition of power as a result of the 2020 presidential elections.”. The union leaders voted to stand “firmly in opposition to any effort to subvert, distort, misrepresent or disregard the final outcome” of the election.
      The Rochester move spurred discussion and debate of a possible general strike in union after union, even though some labor leaders see it as a drastic, hard-to-pull-off action. “The idea has gotten a lot more legs than I ever thought it would,” Maloney told the Guardian. “Our democracy is in jeopardy of a wannabe dictator. It’s time to be counted and do whatever it takes to remove him from office if he attempts to retain power against the will of the American people.”
      Maloney acknowledged that a general strike would be an extraordinary measure. “In drastic times, you need drastic measures,” he said.
      The Rochester federation’s resolution states: “The extreme risk currently posed to the historic institutions of democracy in our nation may require more widespread and vigorous resistance than at any time in recent history.”
      Maloney said that in a 22 October call with labor leaders, Richard Trumka, the AFL-CIO’s president, stressed that until 3 November, unions should overwhelmingly focus on maximizing voter turnout for Biden. After that, Trumka said, unions can focus on what to do if Trump resists a peaceful transition.
      The AFL-CIO’s executive council, approved a resolution on October 19 saying: “Democracies are not, in the last analysis, protected by judges or lawyers, reporters or publishers. The survival of democracy depends on the determination of working people to defend it. And America’s labor movement is indeed determined to defend our democratic republic.”
      [embedded content]
      Michael Podhorzer, a senior Trumka adviser, said: “We believe democracy is stronger than Trump. We are not looking for a fight. We want the election results to be respected. We’re getting ready if they’re not respected because of what he said. We believe this is a country where what voters say matters.”
      Podhorzer, who used to be the AFL-CIO’s political director, said: “The thing that is really striking is that Joe Biden and the labor movement are doing everything they can to win the election, and Donald Trump is doing everything he can to defeat the election.”
      Podhorzer added that at the moment, “a general strike is a slogan, not a strategy”.
      But for many it is an inspiring slogan. Sara Nelson, president of the Association of Flight Attendants, helped put the idea of a general strike idea into the national conversation after the federal government shut down in December 2018 because of a standoff between Trump and Congress over funding for his border wall. In a speech on 20 January 2019, Nelson called for a general strike to end the shutdown, and many people credit her call for helping get Trump to end the 35-day shutdown and relent about wall funding.
      Nelson said a general strike could definitely be useful if Trump refuses to respect the election results. “What we’ve seen is people going about our business during the day and conducting mass protests at night, and that’s not going to be enough to make this president move,” Nelson said. “He will use those protests to further divide the country. We will have to do the one thing that takes all power and control from the government or anyone with corporate interests in keeping this person in office, and that is withholding our labor.”
      Nelson said a strike to make sure Trump honors the election results will “improve our jobs” including “our job security and safety at work”. “Donald Trump remaining in office puts all of us in jeopardy,” she said. “This directly relates to our basic safety and financial security.” Nelson has repeatedly criticized Trump for doing too little to help unemployed workers and the ailing airline industry. Such a general strike, she said, would be “firmly grounded” in what’s best for workers.
      Nicole Grant, who heads MLK Labor, the Seattle-area federation of 150 local unions with nearly 200,000 members, said her group approved its resolution to spur internal discussion and planning in response to the “chaos and anxiety” she said Trump has spurred. Her federation’s resolution said we “will take whatever nonviolent actions are necessary up to and including a general strike to protect our democracy, the constitution, the law and our nation’s democratic traditions.”
      “This is a break-in-case-of-emergency kind of demand,” Grand explained. She said labor leaders hope they do not have to reach such a point, “but at the same time, when we consider the potential of a coup, that’s not something we’re going to stand for”.
      Erik Loomis, a labor historian at the University of Rhode Island and author of A History of America in Ten Strikes, said: “So much of the conversation on the left about general strikes in this country is kind of a romanticized, people are going to rise up.” But Loomis added: “If there is ever any general strike in this country, it’s probably going to come out of the established labor movement. The only group capable of running the thing is the established labor movement.” If there is a general strike, union leaders say, they hope college students, Blacks Lives Matter activists, women’s and environmental groups and many others will join in.
      Nelson acknowledged that pulling off a successful general strike might not be easy. There needs to be “a spark that lights the fire”, she said, as well as “people to lead the fight”. “Do I think the labor movement is prepared to conduct a general strike? No,” Nelson said. “Can we do it, though? Can we organize quickly? Can we define the urgency of the moment? Absolutely.” More

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      in Elections

      US economy bounces back but deeper trends hint at enduring woe

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      [embedded content]
      The US economy bounced sharply back from the record-setting slump at the start of the coronavirus pandemic, according to government figures released on Thursday, handing Donald Trump a key talking point days before the election.
      According to the Bureau of Economic Analysis gross domestic product (GDP) rose at an annualized rate of 33.1% between July and September and was up 7.4% compared to the previous quarter. The previous record was a 3.9% quarterly increase in 1950.
      Trump was quick to claim credit, tweeting the figures were the “Biggest and Best in the History of our Country, and not even close.”

      Donald J. Trump
      (@realDonaldTrump)
      GDP number just announced. Biggest and Best in the History of our Country, and not even close. Next year will be FANTASTIC!!! However, Sleepy Joe Biden and his proposed record setting tax increase, would kill it all. So glad this great GDP number came out before November 3rd.

      October 29, 2020

      But the numbers show the US still has a long way to go to escape the devastation wrought by Covid-19 and were boosted by extra unemployment payments, business loans and direct payments, none of which have been replenished for the fourth quarter.
      The news comes just five days before the US election and is the last major economic release before polls close. Even before the figures were released the Trump campaign released ads boasting: “FASTEST GDP GROWTH IN HISTORY.”
      Big issues remain for the economy, however. The growth rate announcement came on the same day that the labor department announced that another 751,000 people filed for unemployment claims last week and the unemployment rate, at 7.9%, is twice as high as it was in February before the pandemic struck the US.
      A closer look at the numbers shows that the US’s economic woes are far from over. Thursday’s figures follow an equally historic slump in the second quarter. The US economy shrank by a revised annual rate of 31.4% between April and June, its sharpest contraction since the second world war, as much of the country went into lockdown to control the virus.
      The annual rate suggests the economy will continue on its current trend for the rest of the year. But such huge swings make the annualized figures misleading – no one expects such massive losses or gains to continue but most economists expect the US economy to be smaller at the end of the year than it was at the beginning.
      Gus Faucher, chief economist at PNC, said the figures represented “real growth” but added “there is still a long way to go before we get back to normal.”
      The decision to reopen much of the economy has provided a considerable boost, especially to consumer spending, which drove much of the recovery. But it comes as coronavirus infections are soaring in the US. Covid cases hit new highs over the weekend and the US now has the largest number of infections, more than 8.6m, and deaths, over 225,000, in the world.
      There are also signs that the recovery has slowed in recent months. Unemployment claims remain at historically high levels and the number of new jobs being created has dropped month on month. The economic situation for women, people of colour and teenagers remains difficult. The unemployment rate fell to 7.9% for the US population overall in September. For Black Americans it was 12.1% and for Black teens (16-19) it was over 20%.
      GDP is the broadest measure of the economy and includes personal consumption, business investment, government spending and net exports. The figure has often been criticized as a measure of economic health – GDP growth has, for example, done little to address growing income inequality.
      For some still feeling the impact of the pandemic and its attendant recession the latest GDP news was little comfort, especially as Congress remains deadlocked over further stimulus relief.
      Tim Swartz in Mesa, Arizona, stopped receiving unemployment benefits on 5 September after the unemployment office flagged an issue with his payments. When the pandemic hit he had to stop working as an Uber and delivery driver to care for his five children, including one with special needs. His wife works full-time as a medicine technician at a facility for Alzheimer’s patients.
      “I cannot get any answers from anyone on the phone or through emails. I’m behind on rent and utilities,” Swartz said. He has now received an eviction notice. “I’m not sure how we will pay the outstanding balances for rent and utilities,” he said.
      “Many of us are losing hope along with everything we have worked so hard for,” said Swartz. Three of his children had to recently return to online learning after exposure to classmates who tested positive for coronavirus, further delaying his return to work. “Without any relief package to help keep the economy going I don’t see much growth in the near future and unfortunately even darker times ahead for American families.” More

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      in US Politics

      Investors should prepare for worst over US presidential election

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      Opinion polls in the US have long pointed to the strong possibility of a Democratic party sweep in the election on 3 November, with Joe Biden winning the presidency and Democrats gaining control of the US Senate and holding on to the House of Representatives, putting an end to divided government.
      But if the election turns out to be mostly a referendum on Donald Trump, Democrats might win just the White House while failing to retake the Senate. And one cannot rule out the possibility of Donald Trump navigating a narrow path to an electoral college victory, and of Republicans holding on to the Senate, thus reproducing the status quo.
      More ominous is the prospect of a long-contested result, with both sides refusing to concede as they wage ugly legal and political battles in the courts, through the media, and on the streets. In the contested 2000 election, it took until 12 December for the matter to be decided: the supreme court ruled in favour of George W Bush, and his Democratic opponent, Al Gore, gracefully conceded. Rattled by the political uncertainty, the stock market during this period fell by more than 7%. This time, the uncertainty could last for much longer – perhaps even months – implying serious risks for the markets.
      This nightmare scenario must be taken seriously, even if it currently seems unlikely. While Biden has consistently led in the polls, so, too, had Hillary Clinton on the eve of the 2016 election. It remains to be seen if there will be a slight surge in “shy” swing-state Trump voters who are unwilling to reveal their true preferences to pollsters.
      Moreover, as in 2016, massive disinformation campaigns (foreign and domestic) are under way. US authorities have warned that Russia, China, Iran and other hostile foreign powers are actively trying to influence the election and cast doubt on the legitimacy of the balloting process. Trolls and bots are flooding social media with conspiracy theories, fake news, deep fakes and misinformation. Trump and some of his fellow Republicans have embraced lunatic conspiracy theories such as QAnon and signalled their tacit support of white supremacist groups. In many Republican-controlled states, governors and other public officials are openly deploying dirty tricks to suppress the votes of Democratic-leaning cohorts.
      On top of all this, Trump has repeatedly claimed – falsely – that mail-in ballots cannot be trusted, because he anticipates that Democrats will comprise a disproportionate share of those not voting in person (as a pandemic-era precaution). He also has refused to say that he will relinquish power if he loses and has instead given a wink and a nod to right-wing militias (“stand back and stand by”) that have already been sowing chaos in the streets and plotting acts of domestic terrorism. If Trump loses and resorts to claiming that the election was rigged, violence and civil strife could be highly likely.
      Indeed, if the initial reported results on election night do not immediately indicate a sweep for the Democrats, Trump would almost certainly declare victory in battleground states before all mail-in ballots have been counted. Republican operatives already have plans to suspend the counting in key states by challenging such ballots’ validity. They will be waging these legal battles in Republican-controlled state capitals, local and federal courts stacked with Trump-appointed judges, a supreme court with a 6-3 conservative majority and a House of Representatives where, in the event of an electoral college draw, Republicans hold the majority of state delegations.
      At the same time, all of the white armed militias currently “standing by” could take to the streets to foment violence and chaos. The goal would be to provoke leftist counterviolence, giving Trump a pretext to invoke the Insurrection Act and deploy federal law enforcement or the US military to restore “law and order” (as he has previously threatened to do). With this endgame apparently in mind, the Trump administration has already designated several major Democratic-led cities as “anarchist hubs” that may need to be put down. In other words, Trump and his cronies have made clear that they will use any means necessary to steal the election; and, given the wide range of tools at the executive branch’s disposal, they could succeed if early election results are close, rather than showing a clear Biden sweep.
      [embedded content]
      To be sure, if early results on election night show Biden with a strong lead even in traditionally Republican states such as North Carolina, Florida or Texas, Trump would find it much harder to contest the result for more than a few days, and he would concede sooner. The problem is that anything short of a clear Biden landslide will leave an opening for Trump (and the foreign governments supporting him) to muddy the waters with chaos and disinformation as they manoeuvre to shift the final decision to more sympathetic venues such as the courts.
      This degree of political instability could trigger a major risk-off episode in financial markets at a time when the economy is already slowing and the near-term prospects for additional policy stimulus remain grim. If an election dispute drags on – perhaps into early next year – stock prices could fall by as much as 10%, government bond yields would decline (though they are already quite low), and the global flight to safety would push gold prices higher. Usually in this type of scenario the US dollar would strengthen; but, because this particular episode would have been triggered by US-based political chaos, capital might actually flee from the dollar, leaving it weaker.
      One thing is certain: a highly contested election would cause further damage to the US’s global image as an exemplar of democracy and the rule of law, eroding its soft power. Particularly over the past four years, the country has increasingly come to be regarded as a political mess. While hoping that the chaotic outcomes outlined above do not come to pass – polls still show a strong lead for Biden – investors should be preparing for the worst, not only on election day but in the weeks and months thereafter.
      • Nouriel Roubini is professor of economics at New York University’s Stern School of Business. He has worked for the International Monetary Fund, the US Federal Reserve and the World Bank.
      © Project Syndicate More

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      in US Politics

      ‘I regret voting for him': Ohioans hit by GM plant closure reflect on Trump

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      Before Covid-19 hit, Trisha Amato spent her weekdays behind a modest, ebony-colored desk, running the “transition center” that helps laid-off General Motors workers pick up the shards of their lives. GM announced it was closing its mammoth plant in Lordstown, Ohio, in November 2018 and ever since Amato has been ladling out advice to the 1,700 laid-off workers on such matters as how to obtain jobless benefits and how to qualify for government assistance to pay for college courses.The GM plant, the size of more than 100 football fields, had long been the heart of Lordstown – as recently as 2016, it employed 4,500 workers, and in its 53-year history, it produced 16m vehicles. Built alongside I-80, the hulking plant has long been a monument to America’s industrial might, or perhaps one should say its fading industrial might.Deep-voiced, with long, auburn hair and broad shoulders – she, too, had worked at the plant – Amato has problems of her own, saying that she can no longer afford health insurance for herself and her two daughters on her transition center salary. Amato, who is divorced, felt betrayed when GM said it would shut the plant – the company had received $60m in state subsidies, and had promised in return to keep the plant open through 2027.Many of the GM workers were also angry at Donald Trump. During the 2016 campaign, he repeatedly proclaimed that he would make American manufacturing great again and would bring back jobs that had gone overseas. That message resonated in Lordstown and nearby Youngstown, part of the Mahoning Valley area that has been dragged down for decades by one factory and steel mill closing after another. Trump’s repeated promise to bring back factory jobs played well not only in Ohio, but also in Michigan, Pennsylvania and Wisconsin, helping win over many blue-collar voters, who were key to his narrow victories in those states. Blue-collar workers in those states could again play a decisive role in this year’s election, with many still supporting Trump, but some souring on him – perhaps enough to flip those states to Joe Biden.In July 2017, Trump spoke in Youngstown and told the crowd that on his way in from the airport, he had seen the carcasses of too many factories and mills. He bemoaned Ohio’s loss of manufacturing jobs, but then boldly assured the crowd: “They’re all coming back!” He next told his audience, many of them workers worried about plant closings: “Don’t move! Don’t sell your house!” More

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      in US Politics

      US blocking selection of Ngozi Okonjo-Iweala to be next head of WTO

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      The US is blocking the appointment of Ngozi Okonjo-Iweala as the next head of the World Trade Organization despite the former finance minister of Nigeria winning the overwhelming backing of the WTO’s 164 members, it has emerged.
      Dr Okonjo-Iweala had moved a step closer to becoming the first woman and the first African to be director of the global trade watchdog after securing the support of a key group of trade ambassadors in Geneva. Soundings taken by a selection panel of three WTO trade ministers found she had far more support than her South Korean rival, Yoo Myung-hee.
      Sources said Okonjo-Iweala was backed by countries in the Caribbean, Africa, the European Union, China, Japan and Australia.
      However, her candidacy failed to win the support of Washington, which raised last-minute objections to the process by which the new director general was being picked. An original list of eight candidates, which included the former Britishinternational trade secretary Liam Fox, has been whittled down to a final two since the summer.
      By tradition, the WTO chooses its director general by consensus, with all 164 members having to approve a candidate. The US has been unhappy with the way the WTO has operated for some time, objecting to China’s designation as a developing country and blocking the appointment of new judges to the organisation’s appeals body.
      Sources said it was unclear whether Washington’s opposition to Okonjo-Iweala was a deliberate attempt to sabotage an organisation much criticised by Donald Trump.
      A WTO spokesman said her candidacy would be put to a meeting of the body’s governing general council on 9 November, adding that there was likely to be “frenzied activity” in the meantime to secure consensus.
      In the event that Washington maintains it will not support Okonjo-Iweala, the WTO’s constitution does eventually provide for a vote, although every previous director general in the organisation’s 25-year history has been appointed by consensus, and trade experts said life would be difficult if an appointment was made against the wishes of the US.
      [embedded content]
      Sources in Geneva said it was possible the US position may be affected by the result of next week’s presidential election, which Joe Biden is currently expected to win.
      A spokesperson for Okonjo-Iweala said: “Dr Ngozi is immensely humbled to receive the backing of the WTO’s selection committee today.
      “Dr Ngozi looks forward to the general council on 9 November when the committee will recommend her appointment as director-general. A swift conclusion to the process will allow members to begin work together, on the urgent challenges and priorities.” More