News: ‘Tis the season to strike

Monday, September 16, 2024

‘Tis the season to strike

Sep 16, 2024

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QUICK FIX

In 2023, it was the “summer of strikes.” This year, call it a work stoppage equinox.

Some 33,000 workers at Boeing officially went on strike late last week after members of the company’s machinist unions voted down the company’s contract proposal.

It’s one of the largest work stoppages this year and it could cost Boeing billions of dollars in production losses if new CEO Kelly Ortberg doesn’t quickly reach a resolution with the International Association of Machinists and Aerospace Workers.

It could also be the harbinger of a very active autumn for organized labor. A 30-day strike of AT&T workers represented by Communications Workers of America concluded on Sunday after the union warned that it could expand to involve thousands of members in California and Nevada. Members of the International Longshoremen’s Association voiced unanimous support for a strike if they don’t ratify a new labor agreement by Oct. 1 — potentially disrupting activity at ports along the East and Gulf Coasts.

Those disputes, along with the machinist strike at Boeing, are recentering organized labor and workplace issues during the final weeks of the 2024 presidential campaign. They also underscore how workers are continuing to push for more favorable wages and benefits even as the labor market begins to soften.

“It is only now that we’re seeing the kind of serial, large unit strike possibilities in the same quarter of the year,” Seth Harris, the former deputy director of President Joe Biden’s National Economic Council, told MM. “If you have national level strikes, or national level high-stakes conflicts that will be forced onto the American consciousness, the public’s consciousness, it will absolutely become part of the political debate.”

Kamala Harris and Donald Trump have both been courting the support of organized labor. Harris has racked up the support of top unions like the International Association of Machinists and Aerospace Workers, which represents the Boeing employees. IAM endorsed the vice president earlier this month — only a week before the strike — citing how the next president’s Supreme Court appointments could shape collective bargaining rights, and how four dozen facilities with IAM representation closed during Trump’s administration.

But Trump’s protectionist economic policies have helped him chip away at Democratic Party support among rank-and-file union members. While the former president has a history of enraging union leaders — including after he mused about firing striking workers during an interview with Elon Musk — voters hold favorable views of his plan to impose punishing tariffs on imports to stimulate U.S. manufacturing. A majority of registered voters polled by Reuters/Ipsos said they were more likely to support a candidate who backed a 10 percent tariff on all imports and a 60 percent tariff on Chinese goods.

The Boeing strike, along with the growing likelihood of additional stoppages, “will force Trump and [JD] Vance, as well as Harris and [Tim] Walz, to talk about these issues on the stump, in interviews on social media,” said Seth Harris.

In the meantime, the economic impact of the Boeing strike could be substantial.

The ratings agency Moody’s has placed Boeing’s corporate debt on review for a downgrade — a 57-day machinist strike in 2008 cost the company roughly $50 million per day. The aerospace giant is still sorting through the aftermath of a door plug blowout on a MAX 737 jet earlier this year that led to federal probes, Senate hearings, and a Federal Aviation Administration cap on its production.

A prolonged strike “would fracture the recovery of the Commercial Airplanes business, which remains in its early stages,” Moody’s said. Former George W. Bush administration economist Douglas Holtz-Eakin warned in a recent note that a lengthy work stoppage at the company — which is headquartered in Arlington, Va., but has a massive presence in Seattle — “would have ripple effects on Washington and the rest of the country.”

In a statement, Boeing said it remains “committed to resetting our relationship with our employees and the union, and we are ready to get back to the table to reach a new agreement.”

IT’S MONDAY — “Work stoppage equinox” certainly doesn’t have the same ring as “summer of strikes.” I promise to do better. But if you have a better take – or better yet, some tips on how the campaigns or the White House are thinking about these labor disputes — email me at ssutton@politico.com.

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Driving the Week

Monday … White House National Economic Adviser Lael Brainard will speak at a Council on Foreign Relations event in New York City at 12:30 p.m. … The Securities Industry and Financial Markets Association’s Operations and Technology conference kicks off in San Diego with keynotes from CFTC Commissioner Caroline Pham and KPMG’s Diane Swonk …

Tuesday … U.S. retail sales data for August will be out at 8:30 a.m. … Georgetown University’s Psaros Center for Financial Markets and Policy Financial Markets Quality Conference kicks off at 9 a.m. Featured speakers include CFTC Chair Rostin Behnam, House Financial Services Chair Patrick McHenry (R-N.C.), Sen. Cynthia Lummis (R-Wyo.) and JPMorgan Chase CEO Jamie Dimon … The FDIC will meet at 10 a.m. to consider a proposed rulemaking on custodial deposit accounts and guidance on bank merger policy … Senate Banking has a hearing at 10 a.m. on the student loan servicing market at 2:30 p.m. …

Wednesday … Housing starts and building permits data for August will be out at 8:30 a.m. … House Financial Services holds a hearing on the SEC’s approach to digital assets at 10 a.m. … HUD Inspector General Rae Oliver Davis, Transportation Inspector General Eric Soskin and National Railroad Passenger Corp. Inspector General Kevin Winters will testify at a House Appropriations subcommittee meeting at 10 a.m. … The SEC will vote on whether to finalize market structure reforms at 2 p.m. … Senate Banking will hold a hearing at 2 p.m. on the macroeconomic impact of tax reforms in 2025 … House Financial Services National Security, Illicit Finance, and International Financial Institutions Subcommittee will hold a hearing on romance scams at 2 p.m. … The Federal Open Market Committee will announce its interest rate decision at 2 p.m. … Fed Chair Jerome Powell will hold a press conference at 2:30 p.m. …

Thursday … The Center for American Progress will hold a conference on the state of U.S. housing, starting at 9 a.m. Sen. Tina Smith, (D-Minn.), Rep. Alexandria Ocasio-Cortez (D-N.Y.) and CFPB Director Rohit Chopra are among the speakers … The Atlantic Festival begins at 9 a.m. House Minority Leader Hakeem Jeffries (D-N.Y.), Treasury Secretary Janet Yellen, Small Business Administration Administrator Isabel Guzman and Rep. Nancy Pelosi (D-Calif.) are scheduled speakers … Existing home sales data for August will be out at 10 a.m. …

Friday … Philadelphia Fed President Patrick Harker will speak at Tulane University event at noon.

Crisis averted — From Meridith McGraw and Natalie Allison: “Federal authorities are investigating an incident at Donald Trump’s Florida golf club on Sunday that “appears to be an attempted assassination,” a potential second attempt on the former president’s life in roughly two months.”

“Secret Service agents ‘opened fire on a gunman located near the property line’ of Trump International Golf Club in West Palm Beach, a spokesperson for the agency said during a news conference, adding that they were ‘unsure whether the individual,’ who is in custody, ‘was able to take a shot at our agents.’”

Trump’s $2B decision — On Friday, Trump eased at least some shareholder anxiety about what the GOP nominee will do with his nearly 115 million shares in Trump Media & Technology Group later this week. The former president's shares have been tied up in under a lock-up agreement that is set to expire Thursday. But Trump claims to have "absolutely no intention of selling," Declan Harty reports.

Shares in $DJT, as the stock is best known online, quickly jumped on the news — even triggering two brief volatility halts that Trump later criticized. In a Truth Social post after the market closed, Trump, who is not a director or executive at Trump Media, mused about moving the company's Nasdaq-listed stock to the New York Stock Exchange because of the stoppages. However, such halts are a regular occurrence and happen across the U.S. stock market.

Harris’s post-debate momentum — While the Reuters/Ipsos poll reflected a strong level of support for Trump’s tariff plans, the overall survey reflected a post-debate bounce for the vice president. The post-debate survey gave her a five percentage point advantage over the former president.

— Harris also extended her narrow edge over Trump when it comes to economic matters, according to post-debate polling from FT-Michigan Ross. She now leads 44 percent to 42 percent. Voters think Harris “represents ‘people just like them’ better, and that is important given the tendency of people to vote for the candidate they think will do the most for them,” Erik Gordon, a professor at the University of Michigan’s Ross School of Business, told The FT’s Lauren Feder and Eva Xiao.

— But, but, but: Harris has fared better in the FT-Michigan Ross poll than she has in other surveys. And some Democratic strategists believe she didn’t go far enough to clarify her economic policies during last week’s debate. “That is where Harris still has some work to do, which is to drive home the economic message, because she’s part of this administration that has lost credibility on economic issues,” Evan Roth Smith, the lead pollster at the Democratic polling initiative Blueprint, told The WSJ’s Aaron Zitner.

— The White House knows the economy is still a liability. Adam Cancryn has more on how Biden plans to use the final weeks of the campaign to persuade voters that his administration achieved major economic progress in the face of high inflation and rocketing interest rates.

At the regulators

More time on the clock — The Federal Reserve, and Office of the Comptroller of the Currency said Friday that they would push back the timeline for comments on bank partnerships with financial technology companies, Michael Stratford reports. Regulators have been keen to take a closer look at these partnerships since the fintech startup Synapse collapsed earlier this year — leaving thousands of customers without access to their deposits.

Bets busted (for now) — An appellate court granted a CFTC motion to halt trading on Kalshi, the political betting marketplace, only a few hours after the company began taking bets, Declan reports. The CFTC is asking the court to put a longer stop on Kalshi's markets while the agency appeals the ruling that allowed Kalshi to debut them.

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The Economy

Must read — Harris and Trump have both pledged to enact policies that would bring down grocery prices once they take office. Don’t expect any of them to succeed, Marcia Brown and Paula Friedrich report. Policies like price gouging bans, stronger antitrust enforcement or an expansion of the domestic energy supply may prove unworkable, or face impossibly difficult political obstacles.

YIMBYs — The Harris campaign has tapped into pro-development housing policies that are popular with YIMBY (Yes-in-my-back-yard) activists. As The WSJ’s Molly Ball reports: “Their cause, long the boutique obsession of a scattering of wonky bloggers and local activists, has suddenly moved to the political mainstream this election season.”

Wall Street

Banks at odds over rate cuts — Most Wall Street banks believe the Fed should lower interest rates by a quarter of a percentage point on Wednesday. Not JPMorgan Chase. “While others have settled back on 25-basis-point calls, chief US economist, Michael Feroli, on Friday reiterated in a note to clients that a half-point move was the ‘right thing’ to do,” per Bloomberg’s Liz Capo McCormick and Jonnelle Marte.

Here it comes — With the election approaching, wealthy Americans are calling their financial advisers and accountants to prepare for whatever changes occur when Congress debates whether to extend the 2017 tax cuts, The WSJ’s Ashlea Ebeling reports.

Odds and Ends

Own a piece of history — A tipster sent in this selection from a Bonham’s auction of items belonging to the late Sen. Dianne Feinstein (D-Calif.). For an estimated bid of $100 to $200, you could own the California Democrat’s copy of The Financial Crisis Inquiry Report. It’s signed with a personal message to Feinstein from the inquiry commission’s chair and former California Treasurer Phil Angelides. Bid at your own risk, I’m seriously considering placing one of my own. (Alas, this beautiful Georges Braque lithograph is a little out of my price range).

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