Most people don't think too hard about what happens to their soda bottles and milk jugs after the recycling trucks haul them away every week, but if they did, they wouldn't be surprised to learn that the fall in oil prices is potentially disastrous for recycling companies. Georgi Kantchev and Serena Ng report in The Wall Street Journal that these firms are having trouble selling scrap plastic:
Plastic is often derived from oil, and there used to be money in recycled scrap. Not anymore. The fall in oil prices has dragged down the price of virgin plastic, erasing the recyclers’ advantage. ...The cost of producing new plastic closely tracks the ups and downs of global oil prices. Since June, the price of a barrel of oil has fallen more than 50%.Many manufacturers prefer virgin plastic because its chemical composition can be precisely specified. That kind of plastic usually is more expensive than recycled plastic.
It's another example of how cheap oil is hurting environmentally friendly industries.
What's in Wonkbook: 1) Jobs report 2) Opinions, including Cowen on inequality 3) Paul will declare his presidential run, and more
1. Top story: Jobs report disappoints
Number of the day: 126,000. That's the paltry number of jobs the economy added in March, according to Friday's monthly report from the Bureau of Labor Statistics. Chico Harlan in The Washington Post.
Stockholders are worried. "U.S. stock-index futures retreated after data Friday that showed the weakest American hiring in more than a year. ... Concern is building that economic weakness will worsen the outlook for corporate profits. ... U.S. exchanges reopen at 9:30 a.m. on Monday in New York after being closed for the Good Friday holiday." Nick Gentle and Stephen Kirkland for Bloomberg.
How will the Federal Reserve respond? "Federal Reserve policy makers have another reason to delay an interest-rate increase after a weak March payrolls report corroborated a first-quarter slowdown in the U.S. economy. The question is whether that’s reason enough. ... The Fed is watching for the economy to reach or approach full employment and generate higher inflation before raising interest rates from near zero. Fed Chair Janet Yellen and her colleagues last month opened the door to an increase as soon as June, while also suggesting in forecasts that September may be a more likely time to begin tightening." Jeanna Smialek and Jeff Kearns for Bloomberg.
WOLFERS: The report is yet more evidence that the recovery has slowed down. "Over the past few months, consumption spending has been flat. Industrial production has fallen slightly. Real retail sales are down. And durable goods orders have fallen sharply. The latest readings of gross domestic product suggest a tepid rate of growth at the end of 2014, and tracking estimates point to continuing weakness at the start of 2015. Likewise, measures of sentiment among both consumers and businesses point to some degree of dissipating optimism." The New York Times.
O'BRIEN: All told, the data are discouraging. "You should never worry too much about a single bad jobs report. The numbers are just too noisy for you to extrapolate much from any one. But it's harder to dismiss when all the other data has been disappointing too. It's pretty clear that the recovery has down-shifted at the start of the year, but it's a lot harder to tell how long this will last. As in, impossible. Maybe the economy will bounce back once temperatures do. And maybe the Fed will put off raising rates. Or maybe not." The Washington Post.
2. Top opinions
LUCE: Will the 2016 election be a game of thrones? "There is something profoundly disturbing about the prospect of another Clinton or Bush presidency. Should either win in 2016, then by the time he or she completed their second term, the US would have had a Bush or a Clinton in the White House for 36 of the previous 44 years. There are inbred autocracies with richer blood circulation than this. ... At a time of rising inequality — and in an era where the rich tend to be hard working — those who do well in today’s US tend to be the offspring of those who do well on merit. They are given every educational advantage. ... Those who believe they have succeeded on merit alone are often free of self-doubt. This can blind them to the perceptions of others." The Financial Times.
COWEN: It's economic immobility, not inequality, that's concerning. "Income equality is about bridging the gap between the rich and the poor, while economic mobility is about elevating the poor as rapidly as possible. Finding ways to increase economic mobility should be our greater concern. ... The concept of mobility helps us distinguish between 'good inequality' and 'bad inequality.' Reductions in inequality can follow from a leveling in either direction — by elevating the poor or pushing down the wealthy. It is the plight of the poor that we most need to improve." The New York Times.
AVENT: The Federal Reserve needs to address a global imbalance between savings and investment. "Rich-world central banks with interest rates close to zero can only do so much to create their own demand. They will attempt to recover by siphoning off spending from the relative well-positioned American and British economies. ... The world as a whole is not spending enough money. Large parts of the world economy are short-run incapable of spending more for political and economic reasons. Unless other parts take up the slack, then the too-little-spending problem will grow more serious and ever more of the world will slip into this monetary trap." The Economist.
Restrictive environmental regulations have left California unprepared for drought. "Increased surface storage would give regulators more latitude to conserve water during heavy storm-flows and would have allowed the state to stockpile larger reserves during the 15 years that preceded the last drought. Yet no major water infrastructure project has been completed in California since the 1960s. ... Once beloved by greens, desalination has likewise become unfashionable. ... One problem is that California electricity rates are among the highest nationwide due to its renewable-energy mandate, and desalination consumes amp-loads of energy. Local and state regulators also impose expensive environmental requirements." The editorial board of The Wall Street Journal.
The Menendez case reveals the flaws in the Supreme Court's thinking in Citizens United. "The court wrestled with the possibility that unlimited spending might have a corrupting influence on politics, but in the end it decided that free speech was the overriding goal... According to the indictment, a wealthy Florida ophthalmologist, Salomon Melgen, who was seeking Mr. Menendez’s support on matters before the U.S. government, wrote two checks for $300,000 each in 2012 to the Senate Majority PAC... The court declared that independent expenditures, including those made by corporations, 'do not give rise to corruption or the appearance of corruption.' ... The money may have earned the doctor more than just gratitude. The indictment describes a flurry of e-mails, calls and requests for meetings by the senator on behalf of the Florida doctor. ... The Supreme Court has created an environment pregnant with possibility for corruption." The editorial board of The Washington Post.
2. In case you missed it
Sen. Rand Paul (R-Ky.) to announce his presidential campaign Tuesday. How much of a libertarian is he? "Paul is a candidate who has turned fuzzy, having trimmed his positions and rhetoric so much that it’s unclear what kind of Republican he will present himself as when he takes the stage. ... There are at least two areas where Paul has moved more in line with the conservative Republican base, somewhat to the consternation of the purists in the libertarian movement: adopting a more muscular posture on defense and foreign policy, and courting the religious right." Karen Tumulty and Robert Costa in The Washington Post.
Also Tuesday, Chicago voters decide whether to reelect Mayor Rahm Emanuel in a run-off. "Mayor Rahm Emanuel and challenger Jesus 'Chuy' Garcia marked a frenetic final weekend of campaigning by making their cases to voters everywhere from Sunday church services and Easter egg hunts to street demonstrations and Wrigley Field. ... Emanuel's get-out-the-vote push is aided largely by ward organizations of supportive aldermen and several unions, including operating engineers, plumbers, pipefitters, service workers and firefighters. Garcia is leaning heavily on the Chicago Teachers Union and the Service Employees International Union." Bill Ruthhart, Cynthia Dizikes and Juan Perez Jr. in the Chicago Tribune.
Loretta Lynch's confirmation as attorney general will be a close vote. "With the universal support of Senate Democrats, Lynch would need the backing of four Republicans to hit 50, with Vice President Biden able to cast the tie-breaking 51st vote. Currently, she appears to have the needed votes, with five Republicans — Sens. Orrin Hatch (Utah), Lindsey Graham (S.C.), Jeff Flake (Ariz.), Susan Collins (Maine), and most recently Mark Kirk (Ill.) — saying they will vote for President Obama's pick." Tim Devaney in The Hill.
A motivated majority of voters want action on global warming. "When it comes to 2016, a full 58 percent of registered voters say that they favor a candidate who will take action to fight climate change -- and 38 of all voters think that position is very or extremely important. ... Almost three times as many people enthusiastically support a 2016 candidate who will back government action on climate change than adamantly oppose that idea." Philip Bump in The Washington Post.