Biden's next fight on the left — Trouble in stimulus-land — Manufacturing EO coming today

From: POLITICO's Morning Money - Monday Jan 25,2021 01:13 pm

Jan 25, 2021

Presented by

Editor’s Note: Morning Money is a free version of POLITICO Pro Financial Services' morning newsletter, which is delivered to our subscribers each morning at 6 a.m. The POLITICO Pro platform combines the news you need with tools you can use to take action on the day’s biggest stories. Act on the news with POLITICO Pro.

Quick Fix

Biden’s next fight with the left — President Joe Biden’s new administration has won tons of points on the left for most of its financial services nominees, from Treasury to the CFPB. But the White House has a bit of a fight on its hands with University of Michigan’s Michael Barr, an Obama administration veteran, for head of the Office of the Comptroller of the Currency, a key overseer of national banks with a reputation for softness toward the industry. Many progressives prefer law professor Mehrsa Baradaran, who has a strong record writing about how banks treat people of color.

But Biden officials are not backing off Barr at all and believe much of the criticism — that he’s worked for fintech and crypto companies and pushed back on some of the more draconian versions of the Volcker Rule — is unfair. And they note that progressives in the past heaped praise on Barr, who, to be fair, is far from some kind of shill for big banks.

And they have some fairly powerful progressive names on their side. Former CFPB director Richard Cordray told MM of Barr: “He worked hard to get the CFPB put together and passed into law and I’ve read his scholarship on financial inclusion going back 30 years.” Cordray declined to comment on Baradaran, saying he was not familiar with her work or record. But his support for Barr is significant.

Per a person close to the Biden White House : “[It’s] absurd for a number of reasons, most especially his role in Dodd-Frank. But what seems especially out of whack is that some of the very same progressives who are hitting him now praised him strongly at the time … Elizabeth Warren… called him a ‘behind the scenes hero’ in the fight to create the CFPB.” MM wrote about this way back when Barr was, for a time, a candidate for a potential Fed seat.

And back during the Dodd-Frank drafting days, Bloomberg described Barr as Wall Street’s biggest nemesis. The left is just not going to get every single regulator they want.

Trouble on the stimulus — Via our Laura Barrón-López and Burgess Everett : “A bipartisan group of senators told White House officials on Sunday that the stimulus spending in … Biden’s coronavirus relief plan provides too much money to high-income Americans, an opening setback in the new administration's complex pandemic negotiations with Congress.

“The senators told the White House officials they support spending more on vaccine distribution but some balked at the stimulus payments, urging the White House to make them targeted, according to sources on the call. Maine GOP Sen. Susan Collins (R-Maine) pressed the Biden officials on why families making $300,000 would be eligible and urged a focus on lower-income workers.”

Reconciliation road? — Via our Kelly Hooper: “Sen. Bernie Sanders … said Senate Democrats would pass a Covid-19 relief bill as soon as possible through budget reconciliation, which would allow the package to pass with a simple majority vote rather than with the support of 60 senators.”

GOOD MONDAY MORNING — Well, thank God Tom Brady finally gets a shot at the Super Bowl! Seriously though, should be fun in two weeks when Tampa gets a home game against KC and the Sunshine Band. Email me on bwhite@politico.com and follow me on Twitter @morningmoneyben. Email Aubree Eliza Weaver on aweaver@politico.com and follow her on Twitter @AubreeEWeaver.

A message from Altria:

Moving beyond smoking. Altria’s companies are leading the way in moving adult smokers away from cigarettes – by taking action to transition millions toward less harmful choices. We are investing in a diverse mix of businesses to broaden options beyond traditional, combustible cigarettes. See how we’re moving.

Driving the Day

The House is expected to send an impeachment article against the former president to the Senate this evening. ... The Senate is expected to confirm Janet Yellen as Treasury secretary. … Biden at 3:45 p.m. will offer remarks and issue an executive order on manufacturing (more below).

Later this week — The Fed will issues its latest statement at 2:00 p.m. on Wednesday with no changes expected, and Chair Jay Powell is likely to say it’s still far too soon to take the foot off the gas even with some signs of potential inflation, especially if Covid-19 gets conquered later in the year.

MANUFACTURING EXEC ORDER — Via a fact sheet off embargo this morning: “Biden will sign an Executive Order to support manufacturers, businesses, and workers to ensure that our future is made in all of America by all of America’s workers.

“With this order, President Biden is ensuring that when the federal government spends taxpayer dollars they are spent on American made goods by American workers and with American-made component parts.”

LISTEN TO POLITICO’S ENERGY PODCAST, SPONSORED BY CHEVRON: Check out our daily five-minute brief for the latest energy and environmental politics and policy news. For must-know stories and candid insights to analysis from POLITICO’s 10-person energy team, don’t miss out. Subscribe for free and start listening today.

FED PREP — Mohamed A. El-Erian on Bloomberg Opinion: “While the Fed is likely to err again on the side of ultra-dovishness, economic and market issues are increasing the challenges of doing so.”

WHITE HOUSE WORRIED ABOUT VACCINE SHORTAGES — Our Jesse Naranjo: “Top Biden administration health officials … expressed concern about limited vaccine supplies but offered measured optimism that the worse-than-expected rollout would be improved, while warning that the current crunch for doses posed a pressing threat.

"‘I think that the supply is probably going to be the most limiting constraint early on, and we’re really hoping that after that first hundred days we will have much more production,’ CDC Director Rochelle Walensky said on ‘Fox News Sunday.’ State and local officials across the country have warned in recent weeks of dwindling vaccine supply, saying they are on the brink of running out of doses.”

Fly Around

BULLISH STOCK BETS EXPLODE — WSJ’s Gunjan Banerji: “Investors are piling into bets that will profit if stocks continue their record run. Options activity is continuing at a breakneck pace in January, building on 2020’s record volumes.

“It is the latest sign of optimism cresting through markets as individual and institutional investors pick up bullish options to profit from stock gains and abandon bearish wagers. More than half a trillion dollars’ worth of options on individual stocks traded on Jan. 8 alone, the highest single-day level on record, according to Goldman Sachs Group Inc. analysts in a Jan. 13 note.”

DAVOS SKI RESORT EERILY QUIET WITHOUT ANNUAL ECONOMIC TALKS — Reuters’ Arnd Wiegmann: “Student protesters who urged world leaders at the 2020 World Economic Forum in Davos to ‘Stop (f)lying to us’ must be pleased this year, at least as far as the flying is concerned.

“The streets of the little Alpine town that welcomed around 3,000 business chiefs, political thinkers and state leaders for last year’s annual meeting lie deserted. Discussions have moved online, starting Monday, and COVID-19 restrictions are also keeping regular tourists away.”

And Trump is unlikely to get another Davos invite anytime soon — Bloomberg’s Hugo Miller: “Already banned from Twitter, it looks like Donald Trump will be shut out of Davos too. The former U.S. president, the star attraction of last January’s gathering of power-brokers in the Swiss Alps, is unlikely to be invited back, according to the World Economic Forum’s founder and executive chairman, Klaus Schwab.

“Asked by newspaper NZZ am Sonntag if he’d extend another offer, Schwab said: ‘I’d have to go into a quiet room and think about it. If I came out, the answer would probably be ‘no.’”

HAPPENING TUESDAY - DRAWING THE ETHICAL LINE ON ARTIFICIAL INTELLIGENCE: As AI becomes increasingly ingrained in our everyday lives, there are concerns about biases in these systems and ethical standards to guide their fair use. Without an international framework or set of principles governing AI, the ethical guidelines for its use vary across countries and cities and sometimes even come down to individual policymakers, elected leaders, the private sector, and grassroots advocates' work. Join POLITICO for a conversation to explore the pace of global AI innovation and development and what it means for the future of ethical standards in this space. The virtual program features an executive conversation between POLITICO CEO Patrick Steel and Workday EVP of corporate affairs Jim Shaughnessy. REGISTER HERE.

WHEN SPACS ATTACK: A NEW FORCE INVADING WALL STREET — WSJ’s Amrith Ramkumar and Maureen Farrell: “The hottest thing in finance is four letters long. Former NBA star Shaquille O’Neal has one. So does former House Speaker Paul Ryan. Same goes for silver-haired hedge-fund billionaire William Ackman.

“It’s called a SPAC, and increasingly it is the favorite source of financing for private companies looking to go public. Richard Branson’s space-exploration firm Virgin Galactic Holdings Inc. went public through a SPAC in 2019, and sports-wagering firm DraftKings Inc. did so last year. Nearly 300 SPACs are now seeking deals, armed with about $90 billion in cash. And more are rolling out at a furious clip—so far this year, an average of five new SPACs launched each business day.”

PANDEMIC AFTERSHOCKS OVERWHELM GLOBAL SUPPLY LINES —The Washington Post’s David Lynch: “One year after the coronavirus pandemic first disrupted global supply chains by closing Chinese factories, fresh shipping headaches are delaying U.S. farm exports, crimping domestic manufacturing and threatening higher prices for American consumers.

“The cost of shipping a container of goods has risen by 80 percent since early November and has nearly tripled over the past year, according to the Freightos Baltic Index. The increase reflects dramatic shifts in consumption during the pandemic, as consumers redirect money they once spent at restaurants or movie theaters to the purchase of record amounts of imported clothing, computers, furniture and other goods.”

A message from Altria:

Moving beyond smoking. Altria’s companies are leading the way in moving adult smokers away from cigarettes. Today, we are taking action to transition millions toward less harmful choices.

From cigarettes to innovative alternatives. By investing in a diverse mix of businesses, Altria is working to further broaden options. Our companies are encouraging adult smokers to transition to a range of choices that go beyond traditional, combustible cigarettes.

From tobacco company to tobacco harm reduction company. And while Altria is moving forward to reduce harm, we are not moving alone. We are working closely with FDA and other regulatory bodies, and will work strictly under their framework.

See how we’re moving.