Trump’s Shadow Looms Large on Capitol Hill

With the impeachment inquiry and trial of President Trump in the rear view mirror, it’s back to business as usual on Capitol Hill. That means the House passing Democratic-crafted bills that will go nowhere in the Republican-controlled Senate while the upper chamber continues to approve Trump-nominated judges but steering clear of much else.

But congressional lawmakers just can’t escape the Trump Show, no matter how much they want to (and they desperately do, both Democrats and Republicans).

Two controversial post-impeachment moves by President Trump rattled Capitol Hill this week: His dismissal of two top government officials who testified in the House’s impeachment inquiry, and the Justice Department’s abrupt reversal of a sentencing recommendation for long-time Trump ally Roger Stone after the president publicly complained it was too harsh. The moves forced Republicans to awkwardly respond to press questions while handing Democrats ammunition to accuse Trump of going rogue.

Critics say Trump’s decision to oust Lt. Col. Alexander Vindman, a decorated soldier and national security aide, and Gordon Sondland, Trump’s ambassador to the European Union, was nothing more than payback for two officials who played a central role in the Democrats’ impeachment case.

It was “a clear and obvious act of retaliation… against witnesses who told the truth under oath,” said Senate Minority Leader Chuck Schumer (D-NY). “How vindictive, how petty, how nasty.”

But some staunch Trump supporters on Capitol Hill said the president was well within his right to oust officials he deems disloyal.

“It amazes me the lack of empathy, at least on one side of the (partisan) aisle, for a president who doesn’t know who to trust,” said Sen. Ron Johnson (R-WI.) “And from my standpoint, you sure can’t trust Vindman inside the administration. I’m actually surprised the president took that long” to dismiss him.

Not all Republicans shared Johnson’s view.

“While I certainly recognize that the president has the right to choose his own staff and his own ambassadors, I’m concerned about what appears to be retaliation against the individuals who’ve been removed,” said Sen. Susan Collins (R-ME), who voted last week to acquit the president in the Senate’s impeachment trial.

Collins said that when she learned the president was going to remove Vindman and Sondland from their posts, she called the White House “to try to prevent the action.”

Trump’s handling of the Stone case presented Republicans with an equally tricky messaging challenge, though most tried to avoid directly confronting the president on the issue. Some shrugged it off. Others, like Senate Majority Leader Mitch McConnell (R-KY), simply refused to answer questions about the Stone situation.

Even Sen. Mitt Romney (R-UT), who has been hammered by Trump and the conservative media for his vote to convict the president, was wary about weighing in.

“I’m not going to comment on the president’s tweets,” Romney said. “If I commented on all the tweets that I disagreed with, it would be a full-time job.”

The Utah senator did add, however, that while he hopes the president didn’t try to influence the Justice Department’s decision regarding Stone, “the appearance (of influence) is unfortunate.”

As if things couldn’t get any tenser at the Capitol, a pair of Senate Republican chairmen are steaming ahead with investigations related to the Bidens and Ukraine. 

Johnson, who heads the Homeland Security Committee, and Finance Committee Chairman Chuck Grassley of Iowa, have ramped up their requests for documents and interviews related to work done by former Vice President Joe Biden’s son Hunter for Burisma, a Ukrainian energy company.

Johnson told reporters that he’s not launching a politically driven witch hunt against the Bidens.

“What I’ve seen in the press is like, ‘Oh, now all of a sudden we’re targeting the Bidens,’” the Wisconsinite said. “From my standpoint, I’m not. This is just part and parcel of all this oversight that I want to conclude so the American people understand what happened.”

“I have so many unanswered questions… From my standpoint this is a very even-handed approach.”

All in all, another typical week on Capitol Hill.

Heard on the Hill

Senate Majority Leader Mitch McConnell (R-KY) on post-impeachment reflections:

“The Senate did its job. We protected the long-term future of our Republic. We kept the temporary fires of factionalism from burning through to the bedrock of our institutions.”

Rep. Alexandria Ocasio-Cortez (D-NY) on the current field of Democratic presidential candidates:

“I think that no matter what, we’re going to have to unify under the nominee. There will always be concerns about party unity, no matter who it is…  There is no one candidate that is going to defeat Donald Trump. It needs to be a movement of Americans and everyone coming together.”

What To Make of Tesla’s Rise and Big Oil’s Woes

Tesla’s stock price has been soaring. Its market capitalization now exceeds that of Ford and GM combined. Meanwhile, the shares of virtually every oil and gas producer are down sharply to start the year. Shares of ExxonMobil, once the world’s biggest publicly traded company, hover near a 10-year low. What’s going on? Are electric cars about to take over the auto industry and banish the need for oil?

The short answer: No. The slightly longer answer: It’s complicated, but still no.

The reason for Tesla’s meteoric share price increase this year is hotly debated among financial analysts. Some attribute it to Tesla’s production ramp-up that points to a profitable future for a company that, to date, has never turned an annual profit. Others point to short covering, in which investors who had bet that Tesla’s stock would fall are now scrambling to close out those bets by buying shares. I don’t claim to know more than the folks on Wall Street do. I’m more interested in the larger market forces that will rule the fate of Tesla and its rivals.

There’s no question that the market for electric vehicles is growing, as I wrote last fall. And Tesla specifically is growing its sales. In 2019, it delivered 367,000 cars worldwide, a 50% jump from the year before. It opened a plant in China in record time, and aims to build another in Germany to serve the European market.

That’s all well and good, but does it justify the stock price rising from less than $200 last summer to nearly $800 today? Remember, this is a company that lost $862 million last year.

To believe that Tesla’s share price is justified and destined to keep rising, as many Tesla bulls do, you need to believe that electric vehicles are going to rapidly gain market share, and that Tesla is going to dominate that market. There are reasons to question both of those assumptions.

First, EVs aren’t exactly threatening to displace the internal combustion engine just yet. Website InsideEVs reports that in 2019, U.S. sales of all plug-in vehicles (not just Teslas, and including plug-in hybrids that still use gas) came in a bit under 330,000, versus total U.S. auto sales of about 17 million. That was actually down from 2018’s sales figure for plug-ins. It appears that EVs are still a tough sell for the typical American car buyer, especially when gas is relatively cheap.

Second, it’s not like Tesla’s competitors are standing still. Both legacy automakers such as Ford and GM, and startups such as Rivian, are readying new EVs of their own. Notably, all of those companies are planning electric SUVs or pickup trucks, the most popular – and lucrative – segments of the U.S. market. Meanwhile, Porsche has unveiled an electric sedan that has drawn rave reviews for its sporty performance. It’s pricier than the comparable Model S from Tesla, but in a recent comparison, the editors of Car and Driver magazine found the Porsche more entertaining to drive.

My take: Tesla’s recent successes are real, but it’s premature to declare it the unquestioned king of the EV market, or even to assume that EVs are destined to displace conventional gas-powered vehicles anytime soon.

Oil: The New Tobacco?

What about the companies that depend heavily on the continued success of the internal combustion engine? The stocks of oil companies are off to a miserable start this year, and have lagged behind the broader market for roughly a decade. CNBC commentator Jim Cramer last week declared that oil stocks are in the “death knell phase” and compared them with tobacco companies. He said that money managers are getting out of the sector in response to pressure from environmental activists, which makes the stocks too dangerous to recommend.

He’s certainly right about the pressure on money managers to divest from fossil fuel investments. But is the comparison of smoking to burning fossil fuels apt?

The number of smokers in the U.S. has plunged over the past half century or so. Cigarettes are highly addictive, but they’re not strictly speaking necessary, as proven by the number of people who have quit. Meanwhile, it’s pretty tough to “quit” fossil fuels such as oil and natural gas. For most people, that would mean giving up heating their home in the winter; traveling beyond the range of a bicycle trip; or buying anything made or shipped with petroleum (which is pretty much everything). The vast majority of cars on the road, and pretty much every truck, train, plane or ship, runs on some form of petroleum (with some corn-based ethanol mixed in to the gasoline). Tesla could sell 10 times as many electric cars this year as it did last year, and oil demand wouldn’t fall much. (In the U.S., natural gas demand would actually rise to generate the additional electricity needed to charge them.)

There’s something to Cramer’s thesis, but again, I think the point is a bit overblown. Electric cars aren’t ready to displace the hundreds of millions of gas-powered cars on the road globally, and batteries are nowhere near ready to power planes or freight trains or other heavy-duty vehicles. In the long term, renewable energy and EVs are certain to proliferate, but the world’s also going to consume huge quantities of oil and gas for a long time to come.

I’m certainly not saying to sell Tesla or buy oil stocks. Just keep in mind that the narrative the stock market is telling about these companies may have gotten a little bit ahead of the reality.

Facial Recognition Technology Is Set to Take Off

Facial recognition technology will see a surge of new interest in 2020. The tech has made huge strides in the past few years, becoming faster, more accurate and cheaper, sparking new attention from retailers, hospitals, schools, manufacturers and more.

New uses range from spotting school threats to identifying VIP customers. Continue reading “Facial Recognition Technology Is Set to Take Off”

Post-Impeachment Hangover to Linger Over Capitol Hill

While the impeachment trial of President Trump is over, its shadow will linger over Capitol Hill indefinitely. Among its legacies will be a further erosion of across-the-aisle cooperation, comity and trust. If you’re hoping for a kumbaya moment between the parties, don’t hold your breath.

Congress already was bedeviled by toxic partisanship long before impeachment or Trump’s presidency. In 21st Century Washington, lawmakers view members of the other party as rivals, not coworkers elected by the American people to work together to make the country a better place. Bipartisanship is often considered a dirty word on Capitol Hill. Continue reading “Post-Impeachment Hangover to Linger Over Capitol Hill”