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US ECONOMY
US CULTURE WAR The big event in the U.S. economy this week was the Federal Reserve’s most aggressive increase of its policy rate this century. Or was it the Economic Culture War 
Original article: https://www.bloomberg.com/news/newsletters/2022-05-07/culture-wars-are-coming-for-the-u-s-economy-bloomberg-new-economy Burgess COMMENTARY Peter Burgess | ||
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The big event in the U.S. economy this week was the Federal Reserve’s most aggressive increase of its policy rate this century. Or was it the Economic Culture War
Bloomberg New Economy May 7th, 2022 7:05 AM Bloomberg There’s a strong case to be made that the most important development this week for those pondering the long-term future and shape of the U.S. economy was the leak of a draft Supreme Court decision foretelling the possible end of constitutionally-protected reproductive rights. The evidence is powerful that overturning Roe v. Wade would likely reverse decades of economic gains for women and to increase inequality. What it may also trigger is a geographic reordering of labor and talent that ends up being more significant than a half-point tweak to the Fed’s target rate. 
Samuel Alito Jr., appointed to the U.S. Supreme Court by Republican President George W. Bush, authored a draft opinion that would strike down the federal right to abortion. Photographer: Erin Schaff/The New York Times There’s a broader context to all of this, too. Americans have been fighting one version or another of culture wars for centuries. They are America’s real forever wars. Tensions over the pace of (and need for) social change to address everything from slavery to suffrage and whether religion or science deserves primacy have been at the heart of U.S. politics since the nation’s birth. But the current crescendo of the culture wars is encroaching on the economy in a new way. It used to be that economic costs were collateral damage in the culture wars. It took the form of things like boycotts over state policies, or the way people live their lives. An urban progressive might avoid North Carolina over a transgender bathroom ban. An evangelist from North Carolina might likewise boycott a Robert Mapplethorpe exhibit in New York City. Both sides of the wars had strongly-held beliefs. There were legal fights and costs, but there wasn’t a lot of economic harm. Increasingly, though, it feels like the cultural warriors are taking direct aim at the economy’s long-term shape. If the Supreme Court overturns Roe, abortion will be up to the states. As legislatures controlled by Republicans seek to limit reproductive rights, such restrictions are likely to influence decisions by companies ranging from benefits offered to investments and employment. Those laws will affect where women choose to study and work. They will also limit the opportunities that lower income women have in those states. Immigration and the politics surrounding it are already a drag on demographics in a country where—thanks in part to the pandemic—the population last year grew at its slowest rate since the nation’s founding. For a taste of what else lies ahead, look to states like Texas and Florida where issues ranging from race to the treatment of transgender children to gay rights and education are already leading to clashes between governors and corporations in what are self-described pro-business states. In Florida, the Republican governor has even taken on Walt Disney—a giant central to that state’s leisure economy—over LGBT rights. 
Florida Governor Ron DeSantis has been trying to punish Disney for opposing new laws restricting classroom instruction on sexual orientation or gender identity. Photographer: Tristan Wheelock/Bloomberg These economic culture wars aren’t stopping with the traditional flash-points. They’re also extending to climate change and energy policy. A vivid example of the widening battlefield is in Georgia, where David Perdue is Donald Trump’s pick to unseat Republican Governor Brian Kemp in a May 24 primary. Kemp rejected pressure by Trump to alter the state’s 2020 vote in favor of Joe Biden (Trump is the focus of a criminal investigation of the matter). Perdue, who is trailing Kemp in polls, has aimed his cultural fire at Kemp’s successful effort to have electric truck maker Rivian build a $5 billion plant in Georgia slated to employ some 7,500 people. What’s interesting isn’t Perdue’s criticism of a $1.5 billion tax concession package. It’s that Perdue, a former globetrotting Reebok executive who spent time as CEO of Dollar General, is arguing that neither Kemp nor Georgians should want a “woke” company from California in which billionaire George Soros is a minority investor—even if it’s creating jobs. Put another way, Perdue is arguing that ideology takes precedence over economic development. That would once have been anathema in Republican politics. But not anymore. Which is one reason why something bigger than the Fed’s move may have happened in the U.S. economy this week. —Shawn Donnan Bloomberg New Economy Gateway Latin America: The region is fast embracing tech-based innovation. Will the emerging digital economy widen inequality or create more opportunity? Government and business leaders will gather May 18-19 in Panama to address Latin America's prospects for inclusive growth in education, jobs, transportation infrastructure, fintech, clean energy and healthcare. L This week in the New Economy
| The text being discussed is available at | https://www.bloomberg.com/news/newsletters/2022-05-07/culture-wars-are-coming-for-the-u-s-economy-bloomberg-new-economy and |