President Trump may have expected to be the star villain at the first Democratic presidential debate on Wednesday night.
Instead, he ran a distant second to American corporations and the wealthy, as most of the candidates competed to outflank each other to the left and capture the angry populist flag.
The development was a surprise in a field that has divided itself into those seeking to consolidate liberal support versus those chasing the moderate mantle — and it suggests corporate interests from Wall Street and beyond could be in for rougher ride than they expected from the Democrats' extended primary campaign.
Sen. Elizabeth Warren (D-Mass.), polling well ahead of her rivals on the stage, started the bidding by pushing back on a question about whether her economic plans are too bold “at a time when 71 percent of Americans say the economy is doing well.”
Warren said the economy is “doing great for a thinner and thinner slice at the top,” drug companies, private prison companies, and oil giants. “When you've got a government, when you've got an economy that does great for those with money and isn't doing great for everyone else, that is corruption, pure and simple,” she said. “We need to call it out. We need to attack it head on. And we need to make structural change in our government, in our economy, and in our country.”
The answer was squarely on brand for Warren. But then Sen. Amy Klobuchar (D-Minn.), who has staked out more moderate ground in her campaign, dodged an invitation to repeat criticisms she’s made previously of sweeping plans offered by Warren and other liberals (maybe, ahem, because she read Wednesday’s Ticker about the risks of attacking last night's frontrunner). “I do get concerned about paying for college for rich kids,” she said of a proposal to entirely eliminate student debt. And she summed up with another shot at the ultra-wealthy. “If billionaires can pay off their yachts, students should be able to pay off their student loans.”
Sen. Cory Booker (D-N.J.) similarly ducked an opportunity to draw a distinction with Warren. Asked why he disagrees with Warren’s call to break up big tech companies like Facebook, Amazon and Google — as he has said, policymakers shouldn’t “be running around pointing at companies and breaking them up without any kind of process” — Booker said he doesn’t in fact disagree with his colleague from Massachusetts.
“I think we have a serious problem in our country with corporate consolidation,” he said. “I see every single day that this economy is not working for average Americans. The indicators that are being used, from GDP to Wall Street’s rankings, is not helping people in my community.”
Booker name-checked Halliburton and Amazon as companies “that pay nothing in taxes” and said that needs to change. (Amazon CEO Jeff Bezos also owns The Post.) And he said he would beef up antitrust enforcement by appointing judges who would make it a priority and ensure his Justice Department and Federal Trade Commission focus on it, too.
On taxes, former Texas Rep. Beto O’Rourke declined to say whether he would support a top marginal rate of 70 percent for those making more than $10 million a year — a proposal championed by Rep. Alexandria Ocasio-Cortez (D-N.Y.). But he blasted “a system that favors those who can pay for access and outcomes. That's how you explain an economy that is rigged to corporations and to the very wealthiest.”
He said he favors taxing capital gains at the same rate as ordinary income and would raise the corporate tax rate to 28 percent. That would hike it from its current rate of 21 percent to the level President Obama proposed in 2012 when the rate was 35 percent.
Chiming in from the far left edge of the stage, and angling to claim the far left mantle in the debate, New York City Mayor Bill DeBlasio endorsed all of the most liberal policy prescriptions that had been invoked. “Yes, we're supposed to be for a 70 percent tax rate on the wealthy,” he said. “Yes, we're supposed to be for free college, free public college, for our young people. We are supposed to break up big corporations when they're not serving our democracy.” He called the questions central to a “battle for the heart and soul of our party.”
Later on, DeBlasio had a ready replacement for the immigrants that Trump won office in part by demonizing to economically dislocated voters. “For all the American citizens out there who fear you’re falling behind, the immigrants didn’t do that to you,” he said. “The corporations did that to you, the 1 percent did that to you.”
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— Xi to present terms for ending trade war. WSJ's Lingling Wei and Bob Davis: "Chinese President Xi Jinping plans to present [Trump] with a set of terms the U.S. should meet before Beijing is ready to settle a market-rattling trade confrontation, raising questions of whether the two leaders will agree to relaunch talks.
"Among the preconditions, said Chinese officials with knowledge of the plan, Beijing is insisting that the U.S. remove its ban on the sale of U.S. technology to Chinese telecommunications giant Huawei Technologies Co. Beijing also wants the U.S. to lift all punitive tariffs and drop efforts to get China to buy even more U.S. exports than Beijing said it would when the two leaders last met in December.
"The U.S. chief trade negotiator, Robert Lighthizer, and his Chinese counterpart, Liu He, talked by telephone this week on ways to get the talks back on track and expect to meet in person in advance of the presidents’ Saturday lunch meeting after a Group of 20 summit in Osaka, said people familiar with the discussions. It is far from clear what the two will manage—and whether their bosses will approve their work."
As Trump threatens China with new tariffs: “[Trump] on Wednesday played down the importance of securing a trade deal with China as he prepared to meet with [Xi] saying he was ready to proceed with additional tariffs if negotiations between the countries failed to get back on track,” the New York Times’ Ana Swanson and Adam Satariano report.
“Mr. Trump said it was 'possible' that a deal could ultimately be reached and that China was eager for an agreement. But he said he was prepared to impose tariffs on another $300 billion worth of Chinese products, on top of the 25 percent tax already in place on $250 billion of Chinese imports. Mr. Trump also indicated he might limit the next round of tariffs to just 10 percent.”
Another bearish sign for the summit: Peter Navarro is going. The Post's Damian Palletta writes his inclusion raises "the possibility that the White House doesn’t plan to cut a quick deal."
— How companies are dodging U.S. tariffs on China: “Billions of dollars worth of China-made goods subject to tariffs by the Trump administration in its trade fight with Beijing are dodging the China levies by entering the U.S. via other countries in Asia, especially Vietnam, according to trade data and overseas officials,” the WSJ’s Chuin-Wei Yap reports.
“The Trump administration has for more than a year sought to weed out the practice known as transshipment, in which Chinese exports typically are minimally processed or altered during a brief stop in a third port and then re-exported as a product originating from the third port. Such circumvention threatens to crimp U.S. plans as it prepares to add tariffs on to $300 billion of Chinese exports, from toys to electronics, essentially covering all its China trade."
New tariffs would damage ports: “Along with dealing a fresh blow to China’s economy, the tariffs would mean unexpected cost increases for vital port modernization projects around the United States, damaging local economies and imperiling U.S. hopes of keeping pace with foreign rivals,” my colleague David J. Lynch reports.
“At least one dozen ports in places such as Baltimore, New Orleans, Seattle and Fort Lauderdale, Fla., which together have ordered more than 20 of these cranes, also face multimillion-dollar tariff bills if the president proceeds. Officials from those ports testified before officials of the U.S. Trade Representative’s office (USTR) in hearings that ended Tuesday, in hopes of getting the cranes exempted.”
— Huawei employees worked on military projects. Bloomberg: "Several Huawei Technologies Co. employees have collaborated on research projects with Chinese armed forces personnel, indicating closer ties to the country’s military than previously acknowledged by the smartphone and networking powerhouse.
"Over the past decade, Huawei workers have teamed with members of various organs of the People’s Liberation Army on at least 10 research endeavors spanning artificial intelligence to radio communications. They include a joint effort with the investigative branch of the Central Military Commission -- the armed forces’ supreme body -- to extract and classify emotions in online video comments, and an initiative with the elite National University of Defense Technology to explore ways of collecting and analyzing satellite images and geographical coordinates."
— Dem lawmaker says Canada and Mexico might be open to tweaking USCMA: “Canada and Mexico may be open to a limited renegotiation of aspects of the United States-Mexico-Canada free trade agreement to satisfy U.S. lawmakers’ concerns, a top U.S. Democrat said on Wednesday, opening the door to its passage in the fall,’ Reuters’ Jonas Ekblom reports.
‘There are alternatives, including strategically opening [the agreement] on specific items,’ said Earl Blumenauer, the Oregon Democrat who chairs the trade subcommittee of the House of Representatives Ways & Means Committee. He said that the trade agreement could be modified to address specific concerns, but was skeptical about using so-called side agreements, which he said had proven problematic in the current trade agreement among the three nations.”
— Trump continues to attack Powell: “A day after the Federal Reserve chair, Jerome H. Powell, asserted his independence from the White House, [Trump] responded by suggesting that nobody had heard of Mr. Powell until Mr. Trump tapped him to run the Fed and implying that the head of Europe’s central bank was making better decisions,” the Times’ Jeanna Smialek reports.
“Mr. Trump also voiced jealousy over Europe’s monetary policy. Last week, he criticized Mario Draghi, the head of the European Central Bank, for saying the bank was prepared to prop up Europe’s economy unless it improves. Mr. Trump said Mr. Draghi was trying to push down the value of the euro to give Europe an unfair advantage.”
Trump's Wednesday assault on Powell: "Here’s a guy, nobody ever heard of him before, and now I made him and he wants to show how tough he is? O.K. Let him show how tough he is. He’s not doing a good job.”
— Bank of America to stop lending to private prisons: “Bank of America Corp., the second-biggest U.S. bank, will stop lending to companies that run private prisons and detention centers,” Bloomberg’s Lananh Nguyen reports.
“The move followed a review by the bank’s environmental, social and governance, or ESG, committee, which included site visits and consultation with clients, civil rights leaders, criminal justice experts and academics. The Charlotte, North Carolina-based lender also met with its internal Hispanic and black leaders. The company will stop its activities in the industry as soon as it can, while meeting contractual obligations, said Finucane, who leads Bank of America’s ESG efforts.”
-- Wayfair is supplying beds to Texas detention centers for children — and its employees are protesting: “Employees at online furniture giant Wayfair are organizing a walkout to protest the retailer’s sale of $200,000 worth of beds and other furniture to a Texas detention center for migrant children,” my colleague Abha Bhattarai reports.
“The walkout, planned for Wednesday at 1:30 p.m. near the company’s Boston headquarters, comes after Wayfair executives said they would fulfill an order for beds and other items for a detention center in Carrizo Springs, Tex., according to two Wayfair employees who spoke on the condition of anonymity. The order was placed by BCFS, a government contractor that manages the facility.”
— Boeing’s struggles loom large: “New orders for long-lasting U.S.-made goods fell for a second straight month in May as troubles at Boeing weighed on demand for aircraft, suggesting manufacturing could remain weak even as business spending on equipment appears to stabilize,” Reuters’ Lucia Mutikani reports.
“The report from the Commerce Department on Wednesday added to a raft of weak data on trade, consumer confidence, housing and employment growth that have indicated a sharp loss of momentum in economic activity in the second quarter. The economy, which will celebrate a record 10 years of expansion next month, is losing speed amid an ebb in both business and consumer confidence in the wake of an escalation in trade tensions between the United States and China.”
— Tesla has a secret lab to build its own battery cells: “Tesla is developing the means to manufacture its own battery cells, according to five current and recent employees, something that the electric vehicle maker has relied on Panasonic to do since the companies signed an extensive partnership deal in 2014,” CNBC’s Lora Kolodny reports.
The move could help Tesla offer cheaper, higher-performance electric vehicles than it does today, without having to pay or share data and resources with outside vendors or partners. The battery pack and battery cells are the main cost component in an electric vehicle, according to research by IHS Markit.
— Waters backs down after Ex-Im debate: “House Financial Services Chairwoman Maxine Waters on Wednesday shelved a bipartisan Export-Import Bank bill that sparked a fierce backlash from her own caucus, in the first big blow to her leadership of the powerful committee,” Politico’s Zachary Warmbrodt reports.
“Just before the panel was scheduled to take up the bill this afternoon, the California Democrat informed her members that she would not move ahead with a vote this week on the legislation she negotiated with Rep. Patrick McHenry (R-N.C.) to reauthorize and revamp the bank, which provides loan guarantees to foreign buyers of U.S. goods.”
— Harris, Porter bill would strengthen state oversight of banks. The Daily Beast's Gideon Resnick: "Sen. Kamala Harris (D-CA) and freshman Rep. Katie Porter (D-CA) are teaming up on legislation to hold banks and Wall Street executives accountable. The bill, the Accountability for Wall Street Executives Act, would allow for state attorneys general and state law enforcement to conduct oversight of national banks regarding compliance with state law, including giving them the ability to issue subpoenas to examine bank records and interview bank executives. The goal of the legislation is to deter the conditions that, experts say, led to the subprime mortgage crisis in the late aughts. And none of the major banks would seem to be immune."
— SCOTUS rules in favor of federal agencies expertise on ambiguous regulations: “The Supreme Court on Wednesday weakened but upheld a long-standing precedent that says judges should generally defer to a federal agency’s expertise when ambiguous regulations are challenged,’ my colleagues Robert Barnes and Ann E. Marimow report.
“The court’s most conservative members, who have said the deference gives too much power to unelected bureaucrats in the ‘administrative state,’’ were not satisfied. Chief Justice John G. Roberts Jr. joined the court’s liberals to preserve the precedent. But he, too, said the vote should not be seen as a signal that deference to agency expertise is settled.
Judging strictly by Google searches, Rep. Tulsi Gabbard (D-Hawaii) and Sen. Cory Booker (D-N.J.) had the best nights Wednesday at the first Democratic presidential debate. From Google Trends:
More from Google, via the NYT's Nick Corasaniti:
Tulsi Gabbard finished with the most Google searches, followed by Cory Booker and Elizabeth Warren: pic.twitter.com/nrnGKpjGpY— Nick Corasaniti (@NYTnickc) June 27, 2019
- The Banking Committee holds a hearing on the reauthorization of the Export-Import Bank on Thursday.
- Nike, Accenture, Conagra and McCormick are among the notable companies reporting their earnings on Thursday, per Kiplinger.
- Trump meets with Xi on the sidelines of the G-20 summit in Japan on Saturday.
The best one-liners from night one of the first Democratic debate: