Jul 28, 2020

Axios AM

By Mike Allen
Mike Allen

Good Tuesday morning! Today's Smart Brevity™ count ... 1,165 words ... 4½ minutes.

1 big thing: Two recession realities

Illustration: Sarah Grillo/Axios

The coronavirus recession is creating two parallel economic realities, growing further apart by the day, Axios Markets editor Dion Rabouin reports.

  • Many people with financial assets and white-collar jobs have actually benefited from the downturn, while the rest of the country is doing its best to stay afloat.

Evidence of a "K-shaped recovery" — in which some Americans' fortunes rise while others' fall — is already visible, Peter Atwater, an adjunct lecturer at William & Mary, tells Axios.

  • Wealthy and middle-class asset holders have retained or resumed their jobs. And the value of their assets, like stock portfolios and homes, has risen to all-time highs.
  • Blue-collar workers and small business owners, and the half of the U.S. population not invested in the stock market, are enduring unprecedented job losses and business closures.
  • Starting Saturday, more than 20 million no longer will receive $600 a week in unemployment benefits.

How it happened: A massive $3 trillion bond buying spree by the Fed and more than $2 trillion in relief spending from Congress have underpinned asset prices.

2. Exclusive poll: Rise of virus bubbles
Data: Axios/Ipsos poll (1,076 U.S. adults; ±3.1% margin of error). Chart: Naema Ahmed/Axios

Nearly half of Americans say they've established social "bubbles" of people they can trust amid the virus, managing editor David Nather writes from the new Axios-Ipsos Coronavirus Index.

  • Between the lines: The trend isn't particularly partisan. It's most common in the suburbs and among women, older adults and people who went to college.

Why it matters: This week's poll findings suggest that Americans are grappling with the reality that the virus isn't going away anytime soon.

  • 46% of Americans say they know someone who has tested positive.
  • 18% say they know someone who has died.

47% of Americans said they've established social bubbles, including:

  • 51% of women.
  • 50% of suburban residents.
  • 54% aged 65 and older.
  • 51% with a bachelor's degree or higher.

Between the lines: This is one of the rare movements that isn't hopelessly split along party lines. 50% of Democrats and 49% of Republicans say they've established bubbles, as have 42% of independents.

  • 49% of Black Americans, 47% of white Americans, and 41% of Hispanics had established bubbles.

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3. Mayors try to block feds
A demonstrator is charged by federal officers during a Black Lives Matter protest at the federal courthouse in Portland yesterday. Photo: Marcio Jose Sanchez/AP

The mayors of Portland and five other major U.S. cities appealed to Congress to make it illegal for the federal government to deploy militarized agents to cities that don’t want them, AP reports.

  • The mayors of Portland, Seattle, Chicago, Kansas City, Albuquerque and D.C. wrote: "This administration’s egregious use of federal force on cities over the objections of local authorities should never happen."

📺 Protest violence is now a prime-time staple on Fox News.

  • Tucker Carlson's show, which can draw 4 million viewers, led last night with: "POLITICAL VIOLENCE IS AN ATTACK ON AMERICA ITSELF ... MORE CHAOS & VIOLENCE IN CITIES ACROSS AMERICA."

🗞️ Local coverage from The Oregonian ... People chanted: "Feds go home!"

4. Pics du jour: Conscience of the country
Photo: J. Scott Applewhite/AP

Members of the Congressional Black Caucus say farewell as the late Rep. John Lewis, a pioneer in the civil rights movement and a 17-term congressman from Georgia, lies in state in the Capitol Rotunda.

  • During the memorial service, Speaker Nancy Pelosi turned the microphone over to Lewis himself, playing audio from his address at Emory's 2014 commencement, the Atlanta Journal-Constitution writes.
  • "You must find a way to get in the way," Lewis' voice bellowed from loudspeakers. "You must find a way to get in trouble. Good trouble. Necessary trouble."
Photo: Jonathan Ernst/Reuters
Courtesy NBC News

All three broadcast networks broke in for hours of live coverage, including the hearse's journey through Black Lives Matter Plaza in D.C.

5. Inside Republicans' next stimulus

Reporters trail Treasury Secretary Steven Mnuchin after weekly policy luncheons on Capitol Hill yesterday. Photo: Tasos Katopodis/Getty Images

Senate Majority Leader Mitch McConnell and other Republican leaders rolled out a roughly $1 trillion proposal for the next round of coronavirus relief funding, which has the White House's seal of approval, Axios' Alayna Treene reports.

  • Leaders hope they can pass a final bill by mid-August.
  • That'll be extremely difficult, given stark party differences.

Some key provisions of the Republicans' HEALS Act:

  • Unemployment benefits will be extended, but at 70% of an individual's lost wages rather than the $600 weekly benefit Americans were receiving under the CARES Act. They will begin as a $200 weekly benefit until states, many of which have outdated systems, are able to calculate the new target.
  • The Paycheck Protection Program (PPP) will be extended. Small businesses with 300 or fewer employees that show a revenue loss of 50% will be able to apply for a second loan.
  • Stimulus checks will be doled out under the same guidelines as in the CARES Act. Direct payments of $1,200 will be available to individuals with a yearly income of up to $75,000.
  • Back-to-work child care grants are a key White House priority.
  • Schools will get $105 billion. Roughly $70 billion will go toward K-12; schools that reopen will get more immediate access to the money.
  • Liability protection, which covers claims against a defendant caused by "an actual, alleged, feared or potential exposure to coronavirus."
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New this morning ... House Judiciary Committee Democrats plan to press Attorney General Bill Barr at a hearing today on the politicization of the Justice Department. Keep reading.

6. Investors see cure riches
Data: Yahoo Finance. Chart: Axios Visuals

Moderna's stock soared 9% on Monday following a new federal grant and the official start of a late-stage trial for the company's coronavirus vaccine, Axios health care business reporter Bob Herman writes.

  • It now has received almost $1 billion in taxpayer funds to help develop a vaccine that is tied to the work of federal scientists.

The company, with no FDA-approved drug on the market, is valued at $31 billion.

7. Dan Senor's Rx for Trump
In North Carolina yesterday, President Trump tours a lab making components for a potential vaccine. Photo: Jim Watson/AFP via Getty Images

Dan Senor — who advised Mitt Romney's presidential campaign, served President George W. Bush and now works in finance — writes in the Financial Times (subscription), "It is too soon to write off Donald Trump’s election chances":

[Trump should] drop his offensive tributes to symbols and leaders of the Confederacy and instead focus attention on ... "cancel culture." This cause was launched by young progressives who call out or boycott public figures for objectionable behavior. But many other Americans worry that the movement is getting out of hand.

Why it matters: This is Senor's effort to calm the GOP donor world, which is currently in panic mode.

8. Virus collides with hurricane season

Illustration: Sarah Grillo/Axios

Virus cases are skyrocketing in states frequently slammed by hurricanes — Texas, Florida and Louisiana, Axios' Caitlin Owens writes.

  • Hurricane Hanna hit the Texas coast over the weekend, testing the response effort in a state that hasn't been able to get its outbreak under control.

Why it matters: Encouraging people to travel to other cities or states to stay with family, or housing them in crowded gymnasiums and convention centers, isn't exactly in line with pandemic mitigation practices.

9. China consulates do a lot more than spy

Illustration: Aïda Amer/Axios

China has long used its U.S. embassy and consulates to exert control over student groups and collect information on Uighurs and dissidents, reports Bethany Allen-Ebrahimian, author of the weekly Axios China.

The Houston consulate, which the U.S. ordered closed last week, wasn't even China's most important espionage hub.

  • "San Francisco is the real gem but the U.S. won't close it," a former U.S. intelligence official told Axios.

Keep reading.

10. End of the beginning of Mars exploration

Illustration: Annelise Capossela/Axios

NASA's Perseverance rover, heading to Mars on Thursday, aims to pave the way for humans, writes Miriam Kramer, author of the weekly Axios Space newsletter.

NASA has methodically "followed the water" on Mars for 20 years, and progressively found evidence that the planet was once habitable and pinpointed areas where life may have been preserved.

  • MOXIE, one of the experiments flying into space this week, is designed to figure out how to draw oxygen from the thin Martian atmosphere.

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Mike Allen

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