Trump Rolls Back Obama Regulation, Harvey Wreaks Havoc on Energy
August 28, 2017
President Trump rolls back an Obama era regulation, allowing the Department of Defense to once again transfer excess military equipment to local police. Texas is hit with a Category 4 hurricane, Harvey, causing widespread flooding and damage to a key energy sector of the Unites States.
- Trump to roll back Obama regulation on police receiving military equipment. The president will sign an executive order today rolling back an Obama era regulation on the transfer of excess military equipment from the Department of Defense to local police. After the riots in Ferguson, when police were criticized for using tank-like armored vehicles and similar equipment, President Obama placed restrictions on the transfer of such gear from the Pentagon, out of concern that an overly militarized police force could further inflame already fraught tensions. After the President rescinds the order, the Pentagon will now be able to legally transfer surplus body armor, riot shields, firearms, ammunition, and computers. The Justice Department argues this policy change will better equip police to effectively do their jobs. [Politico]
- Federal travel ban from majority Muslim countries in court Monday. Judges from the 9th Circuit Court of Appeals will hear arguments from the administration and challengers as to how broadly the travel ban can be implemented until the Supreme Court issues a decision in the fall. The decision of this court will be built on the Supreme Court’s June 26th order, which declared the White House directive could not be enforced against those with a “bona fide relationship” with a US person or entity, such as businesses, family members or resettlement agencies. Who and what that is describing is up to a panel of judges in Seattle, who will start hearing arguments Monday, most of which will focus on which refugees are exempt from the ban. [Politico]
Economic Indicators & News
- Trade deficit increases as retail inventories drop. Economists remain optimistic despite modest inventory data and a widening trade deficit, a result of declining US exports. Imports fell .3%, but exports declined 1.3%, and the trade gap increased to $65.1 billion. Trade added .2 percentage points to economic growth this past quarter. [Reuters]
- Harvey pummels energy sector, homeowners. Category 4 Hurricane Harvey hit southern Texas this past weekend, resulting in widespread flooding and destruction in a key energy sector of the US. While this past year has seen record US energy production, the storm will likely disrupt that pattern. Gasoline futures jumped to their highest level in 2 years as investors anticipated the loss of production and scarcity of gasoline resulting from the storm. This news about potential loss of production comes on the heels of the US rig count falling for a second week in a row. There has been no announcement from the government as to the possible release of strategic petroleum reserves due to loss of production. Meanwhile, the economic impact of Harvey will be far reaching, with initial estimates coming in from $30 billion to up to $100 billion in damages, with many people uninsured for disaster. Insurers stocks fell Friday in anticipation of the claims from Harvey and the worsening of the flooding over Texas. Many homeowners will be left behind, however; while 47% of losses during Hurricane Katrina were insured, only 27% are expected to be insured for Hurricane Harvey. [Reuters, WSJ, Bloomberg]