GIULIETTA TALEVI: Can Trump spend his way back into the White House?
And if that doesn’t work, maybe he can spend his way into space
Don’t bet against the Fed. In fact, don’t bet against any stock market that has a central bank behind it, ready and willing to crank up the money printing presses. If you add fiscal stimulus – like tax relief or grants to the “real” economy – you probably have an unstoppable combination, and even if you, here on the southern tip of Africa, have lost your job, your pension is probably looking OK right now.
Take the EU, which is hoping to get consensus on a €750bn spending programme to resuscitate the eurozone economy after countries in the region unfurl themselves from a horror winter. Japan’s cabinet has also just approved a further $1.1-trillion stimulus programme, topping up efforts already in place.
It is the main reason that stock markets have found a level of support which frightful earnings reports and uncertain outlook statements can’t seem to assail. The New York Times covers that here.
Of course, how governments spend their citizens out of the corona catastrophe will have immense political ramifications too. And it could play into Donald Trump’s hands better than anyone might have anticipated.
The US president, no-one needs reminding, has had something of a shambolic Covid crisis. But throwing money at the problem tends to work, and this could be his way out, argues Janan Ganesh in this fantastic piece in the Financial Times.
“As his standing deteriorates, Mr Trump has one hope. He must ‘own’ the fiscal effort to save the economy. This means demanding another bill to that end — Congress passed the first in April — and skewing it to households over business. It means rivalling Joe Biden’s Democrats for federal largesse and not fretting about moral hazard. The president must spend his way to re-election,” he writes.
If it’s all too much for you here on earth, Elon Musk is here to remind you that you have other options.
On Wednesday, Musk’s SpaceX venture was due to make history, as the first private company to send humans into space. But, just 20 minutes before the rocket was due to launch from the Kennedy Space Center, bad weather saw the mission scotched.
The good news, however, is that it’s been rescheduled to this Saturday, May 30, so now you can plan to watch it.
Why does it matter, you ask. Is it not just the ultra-wealthy playing with ever-bigger toys?
Well, no — there’s far more to it. In this article the FT’s Richard Waters writes: ” As the first human test flight on a commercial rocket to reach the International Space Station, it will also signal a breakthrough for the private space industry as a whole, and an important moment in the opening up of low Earth orbit to the commercial sector.”
If you’re keen to find out exactly who those two astronauts making this historical voyage are, The New York Times has you covered.
It may be that, in the end, commercial space flight really does have a viable future. At the very least, we’d be willing to bet those prospects trump the odds of SAA piloting anything resembling a profitable operation in our lifetimes.
*Talevi is the FM's Money & Investing editor.
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