The Morning Dispatch: Bad News for the Economy

Plus, a tweet from the president has Republicans scrambling to react.

Happy Friday! The next time we’ll be in your inbox, it’ll be August. Wild.

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Quick Hits: Today’s Top Stories

  • The United States confirmed 67,317 new cases of COVID-19 yesterday, with 8.2 percent of the 819,270 tests reported coming back positive. An additional 1,347 deaths were attributed to the virus on Thursday, bringing the pandemic’s American death toll to 152,055.

  • The U.S. economy shrunk a record amount—an annualized rate of 32.9 percent—in the second quarter, per data released by the Commerce Department on Thursday.
  • The CARES Act’s supplemental unemployment benefits of $600 per week will expire today for millions of Americans after the Senate adjourned for the week without reaching consensus on the next stimulus bill.
  • Michael Flynn’s criminal case will continue. The U.S. Court of Appeals for the D.C. Circuit announced that the case will now be heard by all of the judges on the court to determine whether to allow the Department of Justice to dismiss the prosecution without further review.
  • Herman Cain—business activist, Federal Reserve Bank of Kansas City Chairman, conservative activist, and 2012 Republican presidential candidate—died on Thursday at the age of 74, several weeks after he contracted COVID-19.
  • The NBA officially returned to action in its Orlando, Florida bubble last night, 141 days after the season was first suspended due to the coronavirus.

A Historic Contraction in GDP

The Commerce Department announced on Thursday that gross domestic product (GDP) fell 9.5 percent during the second quarter of 2020. That’s a 32.9 percent annual plunge, the biggest quarterly drop since at least 1947—by a lot.

This dramatic contraction in GDP—though historic—came as no surprise to most economists. “The Congressional Budget Office (CBO) had estimated a drop this size several months ago with the projection of a partial rebound in the third and fourth quarter,” said Brian Riedl, senior fellow at the Manhattan Institute. “I think what matters now is whether or not we get that rebound.”

Consumer spending makes up about 70 percent of the American economy, and it fell at an annualized rate of 35 percent in Q2. But thanks in large part to key CARES Act provisions, this decline was due more to Americans not having places to spend their money than not having money to spend. Disposable personal income increased nationwide in the second quarter by $1.53 trillion, or 42.1 percent. Those figures were $157.8 billion and 3.9 percent in Q1. Americans’ personal savings rate was 25.7 percent in Q2, compared to just 9.5 percent in Q1.

‘November 3 is Election Day’

The Commerce Department released its report at 8:30 a.m. ET. Sixteen minutes later, at 8:46 a.m., this president tweeted this:

Squirrel! (Readers who listened to yesterday’s Advisory Opinions will get this reference.)

As we’ve discussed in this newsletter before, the president and his surrogates’s claims that mail-in voting would be an unmitigated disaster are largely unsubstantiated, but there are documented cases of mail-in ballots being completed incorrectly or sent to the wrong address, and therefore not counted. It took New York more than a month to finish tallying votes in its June 23 primary, and thousands of ballots were invalidated. But the president’s call for delaying the November election is a new one, and it provoked an unusually swift denunciation from Republican leaders in both chambers of Congress.

“Never in the history of the country, through wars, depressions and the Civil War, have we ever not had a federally scheduled election on time,” said Senate Majority Leader Mitch McConnell in an interview with a Kentucky television station. “We’ll find a way to do that again this November 3.”

Worth Your Time

  • Washington Post columnist Henry Olsen—longtime Trump explainer, sometime Trump booster, and a consistent critic of Trump critics—is not happy with the president’s decision to float a change to the November election. In April, Olsen rebuked Joe Biden for even suggesting that Trump might want to delay the election. Now, with the president’s public confirmation of Biden’s concerns, Olsen offers a scathing denunciation of Trump. “President Trump’s tweet Thursday morning suggesting that the November election should be delayed is more than reckless and irresponsible. It is the single most anti-democratic statement any sitting president has ever made. It should be immediately, forcefully and vocally repudiated by every conservative and Republican.” It wasn’t, as noted above—with many congressional Republicans unwilling to offer anything more than “no comment.”
  • For Steven Calabresi—a longtime Republican voter and co-founder of the Federalist Society—Trump’s push to delay the 2020 election crossed an uncrossable line. Calabresi, who supported the president through the Mueller probe and the impeachment trial, took to the New York Times opinion page to argue that Trump’s tweet yesterday constituted an impeachable offense. “President Trump needs to be told by every Republican in Congress that he cannot postpone the federal election,” he writes. “Doing so would be illegal, unconstitutional and without precedent in American history. Anyone who says otherwise should never be elected to Congress again.”

Presented Without Comment

Steve Guest @SteveGuest

Joe Biden is off his rocker to make such an irresponsible allegation without any evidence. @realDonaldTrump has made it clear that the general election will happen on November 3rd.

Katie Glueck @katieglueck

NEW: Biden’s remark last night that Trump may attempt to “kick back the election” amounted to a warning shot – and an effort to frame what may be the ugliest election in recent American history. my memo: https://t.co/d2YGhOW7AI

Toeing the Company Line

  • The D.C. Circuit has decided to hear the Michael Flynn debacle en banc. As Sarah reminds us on today’s episode of the Advisory Opinions podcast, “Michael Flynn seems to be getting some extra justice that a lot of criminal defendants would be really happy to get.” Beyond some mail-in ballot election punditry, our podcast hosts also touch on the Supreme Court conference leaks to CNN legal analyst Joan Biskupic, the latest updates with DACA, and some discussion on the importance of the bar exam.
  • David’s latest French Press (🔒) explains forward deployments, and why the withdrawal of 12,000 American troops from Germany would be a grave mistake. Amid increasing military aggression from Xi Jinping and Vladimir Putin, maintaining a forceful American presence in Europe is more important than ever, he writes. “Renewed great power military conflict would represent a world-historic failure, and it’s worth spending money—and maintaining forward deployments—to continue the long peace.”
  • As we wait with bated breath for Joe Biden to announce his running mate, yesterday’s bonus edition of The Sweep (🔒) features a back-and-forth between Sarah and Steve about the selection of a vice presidential candidate, and how the press has historically tried to get the pre-announcement scoop. “So many of the things that one would have done as a reporter to try to ferret out who was going to be picked you can’t do anymore,” Steve says. “Because everyone’s sequestered or quarantined, there aren’t likely to be as many flights to track, there aren’t going to be the kind of staff-related tells that you might be able to get if you were reporting on this very closely as someone covering the campaigns.”
  • A.B. Stoddard joined Jonah on The Remnant once again for some of their customary rank punditry and a discussion of the Trump administration’s coronavirus response. Be sure to tune in here!

Reporting by Declan Garvey (@declanpgarvey), Andrew Egger (@EggerDC), Sarah Isgur (@whignewtons), Charlotte Lawson (@charlotteUVA), Audrey Fahlberg (@FahlOutBerg), Nate Hochman (@njhochman), and Steve Hayes (@stephenfhayes).

Photograph by Mario Tama/Getty Images.