The Morning Jolt


Off the Wall

Construction workers place a section of new bollard wall on the U.S.-Mexico border in Santa Teresa, N.M., April 23, 2018. (Jose Luis Gonzalez/Reuters)

Making the click-through worthwhile: An update on the scramble to avoid a government shutdown; a look at yesterday’s market action; and an attempt, via analysis of the widths of individual glyphs in Times New Roman, to figure out exactly what the special counsel wrote behind those black-redaction bars.

The Wall Show

Will Chuck and Nancy Pay For The Wall? Donald Trump says he won’t sign any spending bill that doesn’t contain at least $5 billion in border-wall funding, while Democratic leadership says the maximum they would allow is $1.6 billion. The government will shut down Friday night if no agreement is reached. On Monday, however, the two sides signaled their willingness to kick the can down the road and pass a two-week continuing resolution. So the fight now looms over Christmas Week.

It’s shaping up to be another relatively pointless installment in the government-shutdown annals, but Schumer’s and Pelosi’s willingness to negotiate a dollar amount for the border wall has prompted loud criticism from the activist branch of the party. To fund Trump’s signature campaign promise, they argue, is to abet his and his supporters’ nativism and to legitimate an unacceptable, bigoted approach to the immigration issue. Instead, they should play hardball, as The New Yorker writer Osita Nwanevu recently put it in a Twitter thread:

It’s natural that progressives would be upset at Democratic leadership for entertaining the idea of funding the wall, but there’s something interesting about the logic here. The wall has always been a meaningful symbol — but it’s always been a symbol. Several policy-minded restrictionists have argued that it is far from the most effective way to substantially change the U.S. immigration system. In 2017, visa overstays outnumbered illegal border crossings, leading many restrictionists to prioritize policies such as E-Verify that would discourage overstayers from remaining in the country. The current flashpoint on immigration is the growing number of asylum seekers from Central America, leading the Trump administration to push for changes to the asylum system. Here’s what National Review’s editorial board wrote in April 2017: “The wall Trump often describes may be big and beautiful, but it is also fanciful, and, when it comes to the things we need to do to establish a durable enforcement regime, largely beside the point.”

Robert Moses’s highways and bridges had an enduring effect on the flow of people in New York State. Wantagh Parkway, wrote Langdon Winner, was designed to discourage buses from reaching Long Island’s beaches. The physical structure of a border wall would obviously have enduring political and social consequences, but people have other ways to get to Jones Beach. Trump would surely claim a symbolic victory if Schumer and Pelosi agreed to partially fund the wall — which might be a shrewd way for them to defuse his demands on the immigration issue while not actually making a difference.

No, I Don’t Have Any Investment Tips

If I knew with some level of certainty what was happening in the equity and bond markets, I’d trade on that information, not broadcast it to the public. Very few people know why, exactly, the markets are moving. Even people whose job description is to answer that question often don’t know. But investors are moving in on the risk curve, and markets fell yesterday across the board: Treasury yields tumbled; the S&P 500 fell by 3.2 percent; Eurostoxx fell by 1 percent; the two — ten yield curve — which I wrote about in a Jolt months ago — reached its flattest slope since 2007.

There’s general agreement that the supposed U.S.– China trade deal Trump announced over the weekend is a phantasm. Brexit negotiations also hit a snag yesterday. But Bloomberg has a list of seven other factors that might have precipitated the selloff, including a decline in momentum stocks and softening housing-market fundamentals. It’s worth reading, if only because it carries a reminder for political junkies that markets are not always driven by the day’s big news.

But markets are more jittery than they were in 2017, and there are some warning signs in the real economy, including problems in certain emerging markets and said softening in the domestic-housing market. Trump has been pushing Federal Reserve chairman Jay Powell to stop raising interest rates, but if the markets remain volatile, Powell may stop on his own accord.

What Did Mueller Mean By This?

The special counsel’s office released its sentencing memo for former national-security adviser Michael Flynn last night. Flynn, who pleaded guilty to lying to federal investigators one year ago, has been cooperating with Robert Mueller’s office for months. How much has he been cooperating? From the memo: “Given the defendant’s substantial assistance and other considerations set forth below, a sentence at the low end of the guideline range—including a sentence that does not impose a term of incarceration—is appropriate and warranted.”

People have read quite a bit into that recommendation, but there’s much information to justify some of the sweeping conclusions pinballing around cable news and social media. How commentators can conclude anything from passages like this is beyond me:

Having said that: The supplement to the sentencing memo refers to an ongoing criminal investigation apparently separate from the special counsel’s Russia probe. It also redacts several lines pertaining to Flynn’s cooperation in the Russia probe. In due course, we’ll find out what he means — right?


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