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Recession fears are on the rise; Italy’s prime minister resigns, deepening the country’s political crisis.
Signs of a global slowdown
- There are signs that the economy may be weakening, both in the US and globally — here’s what you need to know. [Vox / Alex Ward]
- First and foremost, don’t panic (yet). A recession — which means that the economy is getting smaller, rather than growing — may not come in the near future, and they’re rarely as bad as the Great Recession of 2007-’09. [Vox / Emily Stewart]
- Chatter of a recession intensified when the yield curve inverted, meaning when short-term rates get higher than long-term rates. Every modern recession has been preceded by an inverted yield curve. [Vox / Matthew Yglesias]
- Mounting debt also indicates a possible recession, according to Sen. Elizabeth Warren, who warned of a financial crisis before the Great Recession based on debt trends. Because the US economy is built on debt, it is vulnerable to shocks and lacks stability, she said. [Vox / Emily Stewart]
- One of the biggest reasons behind a possible recession: President Trump’s trade war with China. It seems unlikely that the two countries will reach a deal anytime soon, and tariffs on both sides have been slowing down a global economy that has already been cooling. [NYT / Jim Tankersley]
- The White House is trying to shut down any concern of an upcoming recession. Larry Kudlow, Trump’s top economic adviser, gave multiple interviews over the weekend boasting of low unemployment rates, growing wages, and consumer confidence. [Vox / Zeeshan Aleem]
- The Trump administration, however, does seem concerned about a slowing economy. Trump confirmed that he’s thinking of pushing for a payroll tax to stimulate the economy, contradicting statements from his staff (although it likely wouldn’t happen anytime in the near future). [CBS News / Kathryn Watson]
- The signs aren’t great for the future economy, and we might not be able to expect the same good news from the economy as we did last year. But, again, there’s no need to panic just yet. [Vox / Matthew Yglesias]
Italy’s prime minister resigns
- Italy’s political crisis has deepened as Prime Minister Giuseppe Conte resigned while the far-right Interior Minister Matteo Salvini seeks to gain more power. [Reuters / Crispian Balmer, Angelo Amante]
- Salvini called for a no-confidence vote against Conte and snap elections earlier this month, saying he could no longer work with the country’s coalition government — only 14 months since its establishment. Salvini is confident that new elections would solidify his power, as his far-right populist group has grown incredibly popular. [CNBC / Matt Clinch and Silvia Amaro]
- Conte’s scorching resignation speech to the Italian Senate on Tuesday directly criticized Salvini, who sat next to him, saying he was putting the country into turmoil to serve his own interests. [CNN / Livia Borghese and Ivana Kottasová]
- Italy’s coalition government was an unlikely one: The nationalist League party and anti-establishment Five Star Movement joined forces, but they’ve never agreed on much. Together, they isolated Italy from the rest of the European establishment — denouncing the European Union, demonizing migrants, and embracing Russian influence. [NYT / Jason Horowitz]
- The future of Italy now lies in President Sergio Mattarella’s hands. He can either call early elections or work with party leaders to form a new coalition government. [BBC]
- The two possible scenarios: The Five Star Movement could form a new coalition government with its rival, the center-left Democratic Party, or Salvini’s party could win the election with a few small right-wing allies. [WSJ / Marcus Walker]
- All this political turmoil comes as Italy is trying to find its way out of high debt. The president has to act fast: If the country doesn’t approve budget cuts by December 31, it will have to put a value-added tax on all purchases in order to balance out the financial instability, likely hitting Italians’ wallets. [NYT / Jason Horowitz]
- Study: Having children will make you happier — after they have grown up and moved out. [CNN / Jack Guy]
- California’s new police use-of-force law now has one of the toughest standards in the nation. The law is in response to the death of Stephon Clark, an unarmed black man who was fatally shot by police in his grandmother’s backyard in 2018. [NYT / Jill Cowan]
- President Trump has long been a supporter of establishing a “Space Force.” He’s now one step closer to getting what he wants: The US Space Command will launch August 29. [USA Today / Nicholas Wu and Ledyard King]
- A French couple who allegedly stole about 90 pounds of sand on an Italian beach as a “souvenir” could now face up to six years of jail time. The Italian take their sand seriously: Trading sand, pebbles, and shells is punishable with fines of up to $3,300, according to a 2017 law. [CBS News / Christopher Brito]
- How warm do you keep your house? Experts say around 78 degrees is best for energy efficiency — though that may be a little warm for some people’s tastes. [ABC News / Ella Torres]
“We don’t need people with full powers, but people with a culture of (respect for) institutions and a sense of responsibility.” [Italian Prime Minister Giuseppe Conte’s resignation speech]
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