The Morning Dispatch: BBBack From the Dead
Plus: Fighting over the definition of "recession."
Happy Friday! Republican lawmakers beat their Democratic counterparts 10-0 in last night’s Congressional Baseball Game, ensuring the GOP presidential nominee will have home-field advantage in the 2024 debates.
Quick Hits: Today’s Top Stories
President Joe Biden and Chinese President Xi Jinping spoke on the phone for more than two hours on Thursday, warning each other not to disrupt the status quo over Taiwan. Xi reportedly warned that “those who play with fire will perish by it,” while Biden reiterated the United States’ longstanding policy with respect to the island remains unchanged. The leaders also discussed climate change and health security, according to a White House readout.
The House voted 243-187 on Thursday to advance a $280 billion package intended to jumpstart domestic computer chip manufacturing and boost the United States’ competitiveness with China. The legislation will now head to President Joe Biden’s desk, and he is expected to sign it into law.
The average number of daily confirmed COVID-19 cases in the United States has increased about 1 percent over the past two weeks as the Omicron BA.5 wave continued to spread, while the average number of daily deaths attributed to the virus—a lagging indicator—decreased approximately 5 percent. About 37,100 people are currently hospitalized with COVID-19 in the U.S., up from approximately 34,700 two weeks ago.
The New York Times reported Thursday the Biden administration is planning to roll out a COVID-19 vaccine booster campaign in mid-September, as Pfizer and Moderna have promised to have millions of doses of an updated, Omicron-specific vaccine ready for shipment by then.
The Labor Department reported Thursday that initial jobless claims—a proxy for layoffs—fell by 5,000 week-over-week to a seasonally adjusted 256,000 last week, remaining close to the highest level this year as the tight labor market continues to slacken.
BBBack From the Dead
Sen. Joe Manchin shocked the political world on Wednesday evening by announcing he had reached a deal with Senate Majority Leader Chuck Schumer on a pared down version of the Build Back Better Act he essentially killed in late December, rebranding the legislation for the times as the Inflation Reduction Act of 2022.
“Build Back Better is dead,” Manchin said in a lengthy statement explaining his decision. “Rather than risking more inflation with trillions in new spending, this bill will cut the inflation taxes Americans are paying, lower the cost of health insurance and prescription drugs, and ensure our country invests in the energy security and climate change solutions we need to remain a global superpower through innovation rather than elimination.”
After months of toying with supporting Democrats’ massive, $3.5 trillion reconciliation package last fall, Manchin ultimately pulled the plug days before Christmas, citing his concerns about inflation (then a measly 6.8 percent!) and the national debt. Democratic leaders had been working behind the scenes with the West Virginian ever since to bring some version of the climate and social spending legislation back to life, to no avail. Talks appeared at a standstill as recently as two weeks ago.
Recession Storm Clouds Gather
The second quarter’s gross domestic product (GDP) numbers arrived Thursday, and one thing’s clear: The American economy is definitely in a recession, unless maybe it isn’t.
We’ll back up.
The Bureau of Economic Analysis reported Thursday that seasonal and inflation-adjusted GDP fell at an annual rate of 0.9 percent in the second quarter, marking a second consecutive quarter of contraction, since real GDP fell at a 1.6 percent annual rate in the first three months of 2022. And while seasonal inventory swings and sagging external demand dragged down Q1’s GDP number, the second quarter showed a broader weakening of domestic demand thanks to inflation, rising interest rates, and high energy prices.
Two back-to-back quarters of economic contraction is a common shorthand for declaring a recession, which is why plenty of Republicans are happily using the R-word to hammer the Biden administration on its economic policies. “Democrats inherited an economy that was primed for an historic comeback and promptly ran it straight into the ground,” Senate Minority Leader Mitch McConnell alleged yesterday.
Biden administration officials have referenced that two-quarter rule in the past. National Economic Council Director Brian Deese did so in 2008 as the economic policy director on Hillary Clinton’s presidential campaign; Council of Economic Advisers member Jared Bernstein did so in a 2019 op-ed. This week, however, they’ve been opting for a more official classification.
A Quick Clarification on Monkeypox
In yesterday’s TMD, we wrote that monkeypox is “primarily, though not solely, sexually transmitted,” noting that, although monkeypox “can spread through non-sexual contact—holding a child, for instance, or touching dirty linens—98 percent of global cases discovered thus far have been among” men who have sex with men.
Most of that remains true, but there’s a debate within the medical community that we did not acknowledge over whether to actually label monkeypox as “sexually transmitted.” The disease spreads through close contact—and in practice, that close contact is often sexual in nature—but it isn’t necessarily an STD in the ordinary sense. According to the CDC, it’s currently unknown if monkeypox can spread through semen or vaginal fluids.
“It’s the close contact that matters, not the sexual activity itself,” University of Edinburgh epidemiologist Dr. Rowland Kao said.
Why is this distinction important? First, people should not assume contraception can prevent transmission of monkeypox like it can with other STDs—any sort of skin-to-skin contact could lead to an infection. And second, just because the current outbreak is concentrated among gay men, that does not mean all outbreaks of the illness will be.
Worth Your Time
Did a 37-year-old neuroscientist at Vanderbilt University just upend everything we thought we knew about Alzheimer’s? In an exposé for Science Magazine, Charles Piller tells the story of Matthew Schrag, the man who discovered that a landmark 2006 study of the cognitive disease may have been an elaborate mirage. “Schrag’s work, done independently of Vanderbilt and its medical center, implies millions of federal dollars may have been misspent on the research—and much more on related efforts. Some Alzheimer’s experts now suspect [University of Minnesota neuroscientist Sylvain] Lesné’s studies have misdirected Alzheimer’s research for 16 years,” Piller writes. Several top Alzheimer’s researchers “concurred with [Schrag’s] overall conclusions, which cast doubt on hundreds of images, including more than 70 in Lesné’s papers. Some look like ‘shockingly blatant’ examples of image tampering, says Donna Wilcock, an Alzheimer’s expert at the University of Kentucky.
New York’s state legislature passed bail reform in 2019, and crime began rising in New York City shortly thereafter. A Manhattan Institute report published yesterday finds that was no coincidence. “After decades of constant, methodical decline in almost every crime category, crime in all the categories for which inmates had been released due to the new bail laws went up,” Jim Quinn, a former assistant district attorney for Queens County, writes. “In just the first two and a half months of 2020, according to NYPD CompStat reports, more than 3,000 more crimes had been committed, compared with the same period just a year earlier. That included 755 more robberies, 351 more felony assaults, 536 more burglaries, 1,221 more grand larcenies, and 532 more car thefts. The only thing that temporarily stopped the rise was the Covid pandemic—and, even then, victimization continued to increase when adjusted for the amount of time people spent, for example, in public or on the subways.”
As we noted earlier this week, studies have found that employees generally prefer to work from home—and providing them the option tends to boost productivity. That doesn’t mean companies should do it, Peggy Noonan argues in the Wall Street Journal. “The primary location of daily integration in America—the coming together of all ages, religions, ethnicities and political tendencies, all colors, classes and conditions—has been, during the past century, the office,” she writes. “It is where you learn to negotiate relationships with people very different from you, where you discover what people with different experiences of life really think. You discern all this in the joke, the aside, the shared confidence, the rolled eyes. And with all this variety you manage to come together in a shared, formal mission: Get that account, sell that property, get the story, process those claims. Daily life in America happened in the office. If it doesn’t, where will America happen?”
Presented Without Comment
Also Presented Without Comment
Toeing the Company Line
The CHIPS Act is far from perfect, Klon argues in this week’s edition of The Current, but it’s still worth passing. “The bill ignores broader semiconductor supply chain security,” he writes, acknowledging concerns about Chinese intellectual property theft. “But CHIPS also helps the United States go on offense, incrementally improving our ability to shape the industry as a whole and to constrain semiconductor manufacturing in China.”
On Thursday’s episode of The Dispatch Podcast, Sarah was joined by Mo Elleithee—executive director of Georgetown’s Institute of Politics—for a conversation about the IOP’s new Battleground Poll. Most Americans believe the state of our politics is “really bad,” but do they agree on why? Plus: Alaska’s unique primary system, and will Iowa still go first in 2024?
And on today’s episode of The Dispatch Podcast, Sarah, Steve, Jonah, and David are back to discuss big pieces of legislation coming down the pipeline. Will the Inflation Reduction Act find footing in the House? Is the United States in a recession? And is President Biden going to run for reelection?
The next episode of The Dispatch Book Club (🔒) is out! Today, Sarah is joined by Annie Murphy Paul, author of The Extended Mind: The Power of Thinking Outside the Brain, to discuss what it means to live in a brainbound society. Contrary to popular belief, our brains are not actually computers—but how can we make them rise to meet the moment in this technological age?
On the site today, our intern Mary Trimble is double-dipping with one piece looking at the effect of Dobbs v. Jackson Women’s Health on rural Democrats and another—co-written with fellow intern Augustus Bayard—on whether the price of copper actually serves as an economic bellwether. And Samuel J. Abrams writes about the issue of antisemitism in higher ed.
Correction: The bill intended to boost domestic computer chip production includes about $280 billion in spending and tax incentives.