The U.S. Economy Is in Free Fall as Unemployment Benefits End
Millions of unemployed people are expected to be without benefits, setting the stage for another economic downturn later this year.
Here is today’s Foreign Policy brief: Pandemic unemployment benefits come to an end in the United States, Hong Kong bars opposition leaders from elections, and Russian-linked mercenaries are arrested in Belarus.
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Trump Tweets as the Economy Tanks
The U.S. Federal Pandemic Unemployment Compensation program, which provided financial relief to Americans hit hardest by the pandemic-induced recession, expires today as the country hurtles toward another economic downturn. Under the program, claimants received an additional $600 per week in unemployment benefits to offset widespread business closures resulting from lockdowns.
Senate Republicans have proposed a new stimulus package which would cut weekly payments down to $200 until states can implement a new plan, but Democrats are pushing back on the cuts. In the meantime, millions of unemployed people will be left without any relief, as FP’s Audrey Wilson reports.
When, not if. The expiration of additional unemployment benefits is happening just as the United States appears to be on the verge of another recession. The Bureau of Economic Analysis reported on Thursday that the U.S. economy contracted by 32.9 percent between April and June, its worst drop on record. The economy looks like it’s in free fall, and economists predict that a surge of coronavirus cases in the south and west of the country could lead to another economic downturn later this year.
Running out of options. The state of the economy puts President Donald Trump’s re-election hopes in serious danger, and the latest Gallup poll places his approval rating at just 41 percent. His behavior has grown increasingly erratic in response, and he caused a social media storm yesterday when he questioned the validity of mail-in voting and floated the possibility of delaying the November election.
What We’re Following Today
China tightens its grip on Hong Kong. The crackdown on dissent in Hong Kong continues as the local government announced on Thursday that it was barring 12 pro-democracy activists from running in the upcoming legislative elections scheduled for September.
The move follows Beijing’s passage of a draconian national security law earlier this month that severely limits the civil liberties of Hong Kongers, aiming to curtail opposition to the ruling pro-Beijing administration. Pro-democracy candidates rode a wave of public discontent in the recent local elections in November, notching major victories across the territory that shocked observers in mainland China.
Hanging by a thread in Tunisia. Rachid Ghannouchi, Tunisia’s parliamentary speaker, barely survived a confidence vote on Thursday after 97 members of parliament voted to remove him from office. According to Tunisian law, a vote of no confidence requires at least 109 votes in favor to pass, but the degree of dissatisfaction suggests that the Ennahda party, the largest political grouping in parliament, will face a more determined opposition moving forward. The vote follows the collapse of Tunisia’s short-lived government earlier this month, and adds to the growing instability of a country hit hard by the coronavirus pandemic.
Just a stop in Belarus. On Wednesday, Belarusian authorities said they arrested 33 operatives from the Wagner Group, the private security firm linked to the Kremlin which has supported Russian interventions in Syria, Libya, and Ukraine. Belarus’s state-run media agency claimed that Moscow had dispatched several hundred fighters in an effort to shape next weekend’s presidential elections, further raising concerns over Moscow’s relations with its neighbors.
Incumbent Aleksandr Lukashenko, who has served as Belarusian president for the entire post-Cold War history of the state, is considered pro-Russian but is facing one of his biggest challenges since first taking office in 1994. On Thursday, tens of thousands of demonstrators defied pandemic restrictions and attended an opposition rally in Minsk.
But FP’s Amy Mackinnon reported that it is more likely the Wagner operatives were using Belarus as a transit post on their way to hotspots in the Middle East or North Africa.
Keep an Eye On
Ouattara pushes the envelope. The Ivory Coast’s ruling RHDP alliance has formally nominated two-term incumbent Alassane Ouattara to stand as its candidate in presidential elections in October, edging the country closer to a constitutional crisis.
The constitution is ambiguous over whether an individual can serve as president for more than two terms, and Ouattara previously floated the possibility of pushing the constitutional bounds by seeking a third term as president. He ultimately opted to stand down and then nominated Prime Minister Amadou Gon Coulibaly as his chosen successor. But the country was thrown into political turmoil earlier this month after Coulibaly’s sudden death, after which members of Ouattara’s party urged him to reconsider his decision not to run. Despite the nomination, Ouattara has not yet confirmed whether he will stand.
Americans agree with Trump on China. Pew Research Center released a new poll yesterday showing that a large majority of the U.S. public holds unfavorable views on China, a trend that has increased considerably in recent years and puts it broadly in line with the Trump administration’s own hostility toward Beijing. According to the data, 73 percent of respondents view China unfavorably, while only 22 percent expressed a favorable opinion. Much of this was rooted in negative attitudes toward China’s handling of the coronavirus pandemic, as well as the strained economic ties between the two countries.
As Foreign Policy has reported, this could give Trump a lifeline in his battle for reelection as his poll numbers continue to sag.
Salvini cast adrift. The Italian Senate voted by a slim majority on Thursday to strip former Deputy Prime Minister Matteo Salvini of parliamentary immunity as prosecutors pursue a case of illegal detention against him. While serving as interior minister last August, Salvini blocked a Spanish rescue ship carrying more than 100 migrants from entering Italian ports before a prosecutor ordered the seizure and evacuation of the ship. Salvini rose to prominence in 2018 as the head of Italy’s League party which espouses strong anti-immigration, right-wing populist views.
After a protracted political impasse following the 2018 federal elections, Salvini served as the country’s deputy prime minister before a major split in the governing coalition tied to his stance on refugee ships brought him down in September.
Odds and Ends
Beach ban. As temperatures rise above 90 degrees Fahrenheit (32°C) in England and local lockdowns are imposed to prevent further coronavirus outbreaks, British police are preparing to keep crowds away from the sea after approximately 500,000 people flocked to beaches in Bournemouth and Poole during an earlier heatwave in June.
According to the Guardian, “Police are ready to set up roadblocks, create diversions and close off sections of Bournemouth beach to prevent a repeat of last month’s chaotic scenes.” Prime Minister Boris Johnson urged Britons not to risk spreading COVID-19. “What I’m saying to people is: don’t lose focus, don’t lose discipline, continue to observe those guidelines, and if you have symptoms, get a test.”
That’s it for today.