NYT - The New York Times Company

NYSE - NYSE Delayed Price. Currency in USD
32.35
+0.51 (+1.60%)
At close: 4:03PM EST
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Previous Close31.84
Open32.17
Bid32.31 x 1400
Ask32.35 x 800
Day's Range31.98 - 32.43
52 Week Range21.34 - 36.25
Volume1390162
Avg. Volume1,636,587
Market Cap5.5B
Beta (3Y Monthly)1.15
PE Ratio (TTM)42.62
EPS (TTM)0.76
Earnings DateFeb 4, 2020 - Feb 10, 2020
Forward Dividend & Yield0.20 (0.64%)
Ex-Dividend Date2019-10-01
1y Target Est32.75
  • At US$31.84, Is It Time To Put The New York Times Company (NYSE:NYT) On Your Watch List?
    Simply Wall St.

    At US$31.84, Is It Time To Put The New York Times Company (NYSE:NYT) On Your Watch List?

    The New York Times Company (NYSE:NYT), which is in the media business, and is based in United States, saw a...

  • New York Times (NYT) Up 5.4% Since Last Earnings Report: Can It Continue?
    Zacks

    New York Times (NYT) Up 5.4% Since Last Earnings Report: Can It Continue?

    New York Times (NYT) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.

  • Bloomberg

    Hollywood Shows How Antitrust Laws Can Flop

    (Bloomberg Opinion) -- In 1939, about 80 million Americans — more than 60 percent of the population — bought movie tickets every week. To meet the demand for fresh entertainment, Hollywood studios released new movies at the rate of one a day, 365 in all.The year’s motion pictures counted so many classics — including “The Wizard of Oz,” “Dark Victory,” “Goodbye, Mr. Chips,” “Stagecoach,” “Ninotchka,” “Mr. Smith Goes to Washington” and, of course, “Gone with the Wind” — that 1939 is often called Hollywood’s greatest year.A decade later the studio system that produced these touchstones and made movie-going an everyday pastime was largely gone — destroyed by a combination of antitrust action and marginal tax rates that reached 90 percent for the industry’s well-paid salaried employees.In its place, Hollywood adopted an early form of the gig economy, with project-based contracts and profit participation, taxed at lower capital gains rates, instead of steady employment.A winner-take-all system of star talent and blockbuster bets replaced the diverse ecology of working actors, staff writers, B-movies and cheap tickets at second- and third-run theaters. Film rental and ticket prices rose, the number of films produced fell, and, by 1950, the number of actors and directors under contract had plummeted to a third of what it was at its height. (Unions offered benefits and some protections, but in 2018, to take one example, only 6,057 of the 20,000 members of the Writers Guild of America West earned any income.)Today, as a resurgent left, sometimes joined by the populist right, demands a return to punitive taxes and blunderbuss enforcement of U.S. antitrust laws, the Hollywood experience offers a timely reminder of how economic crusaders can destroy what they don’t understand. By hampering creativity and increasing risk, ill-informed antitrust action can ultimately harm the consumers it is supposed to protect.Last month, the Justice Department filed a motion to drop the Paramount consent decrees that have governed most of the movie industry for more than 70 years. The rules have prevented studios from owning theater chains and imposing film rental terms that antitrust enforcers deemed anti-competitive. (Disney, which was not involved in the original case, is exempt.)Times have changed, Assistant Attorney General Makan Delrahim said in a speech to the American Bar Association. We no longer have to worry about practices such as “block booking,” in which a studio bundles its releases to a given theater.“Today, not only do our metropolitan areas have many multiplex cinemas showing films from different distributors, but much of our movie-watching is not in theaters at all,” said Delrahim, who oversees the Justice Department’s antitrust division. These days, the most prolific studio in Hollywood is Netflix.Delrahim only hinted that the antitrust cases might have been misguided even in their own day.“It is important,” he said, “for antitrust enforcers to recognize the risks of misapplying antitrust law in creative fields that experience significant change.” He was talking about today’s tech companies, but he could have been referring to movies on the cusp of the television era, when a landmark Supreme Court ruling forced movie studios to divest themselves of their theater chains.The vertical integration and licensing contracts that regulators interpreted as monopolistic actually dated back to the wildly competitive early days of feature films in the 1910s, when producers evolved effective ways to deal with risks and uncertainties specific to their business.Each movie is a unique product requiring a large upfront investment. Nobody knows whether it will succeed until people see it, and even popular films can take time to build an audience. All these factors led studios to emphasize long-term relationships and multiple-film licensing deals with “greater flexibility than the short-term, one-picture, one-theater contacts that the courts prescribed in the decrees,” write economists Arthur De Vany and Ross D. Eckert in a 1991 article in Research in Law and Economics.Take the studios’ use of block booking. Los Angeles Times reporters Ryan Faughnder and Anousha Sakoui recently described it as “essentially telling cinemas they had to take the studios’ likely flops if they wanted the hits.”This common characterization misses the point. Before movies hit the screen, no one knows which ones audiences will embrace. Producers surely had high hopes for “Charlie’s Angels” and “Terminator: Dark Fate,” to take a couple of recent disappointments, while “Joker” surpassed expectations.Rather than a nefarious plot to foist lousy flicks on unwilling exhibitors, block booking permitted cinemas to buy in bulk. The practice evolved in the 1910s as a way to keep theaters supplied with enough movies to change their offerings as often as twice a week. As more costly talkies emerged in the 1920s, contracts shifted from straight rentals to revenue-sharing deals.Regardless of the structure, “block booking was simply intended to cheaply provide in quantity a product needed in quantity,” writes economist F. Andrew Hanssen in a 2000 article in the Journal of Law and Economics. Cinema owners didn’t want to run around shopping for movies to show.They said as much at the time. ‘‘The exhibitor is in the position of buying a sufficient quantity of quality product for his theater to insure a continuous supply of merchantable pictures,” declared the exhibitors’ trade association in 1938. “To quit block booking would be to greatly increase the price of pictures.’’Besides, duds don’t seem to have posed a major problem. Examining contracts between Warner Bros. and independent cinemas in the Long Island area, Hanssen found that theater owners canceled fewer movies than their contracts allowed and ran them for longer than the minimums required — not the choices that dissatisfied customers would make.Block booking was also one of several ways studios avoided the biggest potential risk for a movie producer: having no place to show a film. Studio-owned theaters were another way to reduce this risk. Most were ordinary theaters that showed movies from a variety of studios.In a 2010 article in the Journal of Law and Economics, Hanssen analyzed booking sheets from Wisconsin cinemas owned by Warner Bros., a rare source of information on both how long a film was supposed to play and how long it actually did play. He compared these records with the film runs advertised for independent cinemas in the New York Times, using Sunday ads for the projected runs and tracking actual runs in the daily paper.He found that the studio-owned theaters were more likely than independent cinemas to drop films before their minimum runs were over, usually substituting a movie from a different vertically integrated studio for the original. The evidence suggests, he says, that the antitrust case’s Big Five studios were in fact colluding — but not in the way regulators feared.“The cooperation allowed film companies to better match films to audiences so that consumers could see more of the movies they valued most,” Hanssen writes.Antitrust enforcers hated the way studios rolled out their movies, with first runs reserved for the best theaters, followed by second-, third-, fourth- and even fifth-run venues, with rental prices getting cheaper as time went on. Nearly three-quarters of first-run theaters were owned by the studios — a statistic the Supreme Court cited as damning in its 1948 ruling in favor of the antitrust action.With the consent decrees in place, thousands of theaters upgraded to first-run showings, the number of discount cinemas fell, and simultaneous releases replaced gradual rollouts. The new pattern gave each new film less time to find an audience.“Earnings per screen in a first-run booking decline faster and generally are lower under a wide-release pattern, so more widely shown films have shorter runs,” observe De Vany and Eckert. One result was a decrease in the variety of films, with an increasing emphasis on big-budget pictures. Another was stricter enforcement of minimum run requirements, even for obvious flops.“It is argued that the steps we have proposed would involve an interference with commercial practices that are generally acceptable and a hazardous attempt on the part of judges unfamiliar with the details of business to remodel its delicate adjustments which have hitherto provided the public with what is a new and great art,” wrote the U.S. District Court in its Paramount decision, which was affirmed by the Supreme Court. “But we see nothing ruinous in the remedies proposed.”Hollywood did indeed survive. But neither theater owners nor studios nor the moviegoers were well served by the results. “Nothing ruinous” is an awfully low standard.To contact the author of this story: Virginia Postrel at vpostrel@bloomberg.netTo contact the editor responsible for this story: Katy Roberts at kroberts29@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Virginia Postrel is a Bloomberg Opinion columnist. She was the editor of Reason magazine and a columnist for the Wall Street Journal, the Atlantic, the New York Times and Forbes. Her next book, "The Fabric of Civilization: How Textiles Made the World," will be published in 2020.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • McClatchy Goes Digital to Ward Off ‘Ghost Papers’
    Bloomberg

    McClatchy Goes Digital to Ward Off ‘Ghost Papers’

    (Bloomberg Opinion) -- When I interviewed Craig Forman, the chief executive officer of McClatchy Co., last week, shares of the regional newspaper chain stood at 39 cents. Like its peers, it has struggled as print advertising has dwindled and subscribers have abandoned ship. Last month, the company said in a regulatory filing that it might not be able to continue “as a going concern” because of a pension overhang. That explains the depressed stock price.Coincidentally, last month was also when Alden Global Capital LLC bought a 25% stake in another struggling media company, Tribune Co. As I’ve noted before, the Alden Global business model is to treat newspapers as declining assets and bleed them for cash until there’s nothing left but a carcass. It will no doubt be imposing its draconian business model on the Chicago Tribune, the Baltimore Sun and the other Tribune papers.Meanwhile, in August, the New Media Investment Group announced that it was buying Gannett Co. and combining it with its GateHouse Media subsidiary, which instantly created the largest newspaper chain in the country. New Media is controlled by Fortress Investment Group, and its approach is not terribly different from Alden Global’s. People are starting to call papers owned by hedge funds “ghost papers” — defined by the New York Times as “thin versions of once robust publications put out by bare-bones staffs.”Although they’ve had their share of layoffs, McClatchy’s 30 media properties, which include the Miami Herald, the Kansas City Star and the Fort Worth Star-Telegram, are not ghost papers. A little more than a year ago, Julie K. Brown, a journalist at the Miami Herald, published an extraordinary expose of the convicted sex offender Jeffrey Epstein; that series sparked an outcry that led to Epstein’s arrest in July. In October, the well-regarded McClatchy Washington bureau documented a disturbing rise in the rate of cancer treatments at Veterans Affairs hospitals. And just a few weeks ago, the Kansas City Star published a powerful examination of Missouri’s public defender system.“We are still determined to do essential journalism of genuine impact in our communities,” Forman told me in an email a few days before we met.The “death of local news” has become a meme among journalists. According to a study by University of North Carolina researchers, 1 in 4 papers has shut down since 2004. Newspaper employment has been cut in half. Combined weekday circulation has shrunk from 122 million to 73 million. The New York Times ran a series of articles over the summer called “The Last Edition,” which examined “the collapse of local news in America.”But Forman believes that, notwithstanding that 39 cent stock price, McClatchy can beat the odds and craft a model that will allow it to avoid the clutches of a rapacious hedge fund. In fact, he says, that’s what McClatchy is doing. That’s what I wanted to talk to him about.To be clear-eyed about this, it will be not be easy. In 2006, with industry-wide circulation already in steep decline, McClatchy bought another regional chain, Knight Ridder, for $4.5 billion. When the deal was completed, McClatchy was saddled with $5 billion in debt. (The “ball and chain of debt,” Forman called it when we spoke.) The company has to pay $124 million into its pension in 2020 — cash it doesn’t have. In the first three quarters of 2019, its adjusted earnings were a slim $64.9 million. Its revenue has declined 27 consecutive quarters on a year-over-year basis.On the other hand, McClatchy has reduced its debt from $5 billion to $700 million and has pushed off further payments to 2026. McClatchy family members haven’t received a dividend in a decade. And it is negotiating with the Pension Benefit Guaranty Corp. to take over its pension, which holds $1.3 billion in assets. These three moves — assuming the latter happens — will free up the cash McClatchy needs.To do what, exactly? Forman’s goal is to complete a digital transformation that will allow McClatchy to thrive again by going from a business that relies primarily on advertising to one that relies mainly on digital subscribers, just as the New York Times and the Washington Post have done so successfully.That may sound obvious, but no other regional chain has been able to accomplish it. That is partly because most of them were too busy cutting costs as revenue fell to spend the millions it would take to create a winning digital platform. And it’s partly because most of them lacked the scale to take full advantage of the ways digitalization could help revive them.“It’s not just about putting your content on a website,” Forman told me. “Any digital effort has to be centralized.” A sophisticated digital platform is far too expensive for any one of McClatchy’s papers to do on its own — it has to be done companywide. If done right, it offers data analysis and analytics, targeting of potential customers, site personalization and so on.Because McClatchy lacked a robust digital infrastructure during the 2016 election, “we mostly missed the Trump bump,” Forman said. The New York Times and the Washington Post have signed up millions of digital subscribers since the election. McClatchy hasn’t.“We have newspapers in much of purple America,” Forman said, pointing to states such as Florida and Georgia where Democrats suddenly have at least a fighting chance. “That’s where the 2020 election is going to be decided.” This time, he wants McClatchy to be ready to offer digitized political news to a national audience hungry to consume it.That may help on the margins, but for a company like McClatchy, the core subscriber is still going to live in the 30 metropolitan areas its papers serve. Forman told me that the top five categories McClatchy’s readers want are local opinion, breaking local news, sports, news-you-can-use service articles and investigations. That’s what his papers are trying to deliver. “You have to be essential to your community,” he said. The papers run by hedge funds have largely lost that ability because they are too thinly staffed. McClatchy is betting that high-quality digital journalism will be a winning strategy.So far, McClatchy has 200,000 digital subscribers and nearly 500,000 “paid digital relationships,” which include print subscribers who have activated their digital accounts. This year, for the first time, its revenue is split 50-50 between subscriptions and advertising. But given that the chain’s total circulation is close to 1 million (1.3 million on Sundays), it has a long way to go.“We’re in a race,” Forman told me. A race against the debt that will come due in six years. A race against the 2020 election that could boost its digital fortunes. A race to replace advertising dollars with subscription dollars while there’s still time.Forman and McClatchy are running as fast as they can.To contact the author of this story: Joe Nocera at jnocera3@bloomberg.netTo contact the editor responsible for this story: Daniel Niemi at dniemi1@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Joe Nocera is a Bloomberg Opinion columnist covering business. He has written business columns for Esquire, GQ and the New York Times, and is the former editorial director of Fortune. His latest project is the Bloomberg-Wondery podcast "The Shrink Next Door."For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • Departure of Co-Founders Means Nothing for Alphabet Stock
    InvestorPlace

    Departure of Co-Founders Means Nothing for Alphabet Stock

    News that co-founders Larry Page and Sergey Brin are stepping down from active management at Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) will have muted impact on the company but could have a huge impact on Silicon Valley.Source: achinthamb / Shutterstock.com It's not big news because CFO Ruth Porat has been running Alphabet since she joined the team from Morgan Stanley (NYSE:MS) in 2015. Sunder Pichai has been running Google itself over the same tenure.The news should put Alphabet stock under the control of investors. This would give Porat the freedom to deliver the kinds of returns, in the form of stock splits and dividend payouts, Tim Cook has made Apple (NASDAQ:AAPL) policy since succeeding Steve Jobs in 2011.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut it won't do that. That's because Page and Brin still control Google's voting shares. Investors should ask why. The Curse of the FoundersFounder control has been quite the phenomenon in Silicon Valley since Jobs was cast out of Apple, which he had co-founded, in 1985. Apple's subsequent struggles, and its rise after he re-joined in 1997, seemed to justify founders maintaining control of their public companies through a dual-share structure.The structure has a long history. Arthur Ochs Sulzberger is the sixth in his line to run The New York Times (NYSE:NYT). Family control was made a condition of sale when the company went public in 1967. The same structure holds at News Corporation (NASDAQ:NWS), despite occasional revolts. * 9 Tech Stocks You Wish You'd Bought During 2019 But recently the dual-share structure has become a plague. Dropbox (NASDAQ:DBX), Eventbrite (NYSE:EB), Blue Apron (NYSE:APRN), Roku (NASDAQ:ROKU) and Twilio (NYSE:TWLO) all went public in recent years with dual-share structures. Voting shares in Snap (NYSE:SNAP) are privately held, mostly by the co-founders. China's Alibaba (NYSE:BABA) listed first in New York because it has a dual-share structure, and listed in Hong Kong only after such structures were allowed.Founder control, however, can cost money. It took $1.7 billion to get Adam Neumann out at WeWork because of its dual-share structure.The issue has long-term implications. Between them, Page and Brin have five minor children. Should they inherit voting control of Google stock? How would that serve the interests of shareholders? Google at WarPorat and Pichai need all the authority they can get because Google is under unprecedented government attack around the world. Alphabet spent $21.7 million lobbying Washington last year and about $1 million per year on political contributions, equally split between the parties.As a global company, Alphabet is under attack over its taxes, its search results and its advertising policies in nearly every world capital. A company that Page and Brin launched with the mantra "don't be evil" is now seen by many as the personification of evil.The rot has gotten inside the company, with Google accused of wrongdoing by MeToo organizers, union organizers and right-wing agitators. Pichai has already cut back on its vaunted "all-hands" meetings, fearful of leaks.How Pichai and Porat deal with this won't just impact shareholder value. It could determine whether the internet remains a global resource, or whether it will be Balkanized, as the old phone networks were, by governments who see communication as a threat.Heavy government regulation, and a natural corporate reaction, could also turn Google into a new AT&T (NYSE:T). The latter is a risk-averse company that misses new opportunities like the cloud itself. Google, founded in 1998, is now worth more than three times AT&T. The Bottom Line on Alphabet StockAs an investment, Alphabet stock looks like a star. But it has done no better than the Nasdaq Composite average over the last two years.Barring a dividend, don't expect anything better, until Page and Brin really are out of the way.Dana Blankenhorn is a financial and technology journalist. His latest book is Technology's Big Bang: Yesterday, Today and Tomorrow with Moore's Law, essays on technology available at the Amazon Kindle store. Write him at danablankenhorn@gmail.com or follow him on Twitter at @danablankenhorn. As of this writing he owned shares in AAPL and BABA. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 9 Tech Stocks You Wish You'd Bought During 2019 * 5 Under-the-Radar Marijuana Stocks With Over 100% Upside * Watch These 5 STARS Stocks as They Change the Future The post Departure of Co-Founders Means Nothing for Alphabet Stock appeared first on InvestorPlace.

  • The EPA’s Pernicious Attack on Science
    Bloomberg

    The EPA’s Pernicious Attack on Science

    (Bloomberg Opinion) -- William Ruckelshaus, the first administrator of the Environmental Protection Agency, died last week. Ruckelshaus laid the foundation for environmental rules that have improved the quality of our air and water, and made science the cornerstone of the EPA. Yet his legacy, and our environment, are now in grave peril.Andrew Wheeler, President Donald Trump’s EPA administrator, is working to demolish the edifice that Ruckelshaus built by destroying the scientific foundation on which it stands. In November, the New York Times revealed that Wheeler is seeking to undermine the role of science in the process by which environmental standards are established and safeguarded. A draft EPA proposal would require medical studies used by the EPA to include raw data, including confidential medical records of study subjects. Otherwise the EPA could not act on a study’s conclusions.Wheeler cannot actually make the knowledge contained in previous scientific studies disappear. But most studies have not been conducted under the curious standards he now supports. By demanding the disclosure of confidential patient data — something most scientists are unable to provide, due to the privacy rights of study subjects — he would render countless studies null and void. As a result, an enormous body of public health science would be disregarded by the EPA in setting environmental standards.Instead, the EPA would rely on the limited body of research that does not rest on confidential data, limiting the scope of science in policy making and forcing regulators to ignore risks revealed in the full scientific data base. Producing new research to replicate the old studies could easily require another 15 years, during which polluting industries would be newly empowered to subvert air, water and chemical standards.In an open letter, the editors of six leading scientific journals pointed out that “foundational science from years past — research on air quality and asthma, for example, or water quality and human health — could be deemed by the EPA to be insufficient for informing our most significant public health issues. That would be a catastrophe.”We don’t have to speculate about the scientific knowledge that Wheeler, a former coal lobbyist, and his patrons in the chemical and energy industries most wish to neuter with this proposal. Two key research studies, the “Six Cities” study published in 1993 by Harvard University researchers, and a 1995 follow-up conducted by the American Cancer Society, which confirmed the Six Cities results, are the twin pillars of air quality standards adopted by the EPA and international health agencies.The studies established that fine particles, the sort belched by coal plants and the like, are the most deadly form of air pollution. Pollution abatement efforts based on these studies are estimated to have added 2.7 years to the life of the average American, saving almost 200,000 lives last year alone.Yet these are not the only studies likely to be targeted. Science that documents the risks to children of lead exposure, or the links between the neurotoxin mercury, from coal power plants, to birth defects, or the risks of the pesticide chlorpyrifos to rural Americans, would also be vulnerable.Restricting the use of data in governance has not been a characteristic of democratic societies. Attacks on ideas are common. But the Trump administration’s attack on knowledge is especially pernicious.The World Health Organization has determined that air pollution is the world’s fourth-leading cause of death. Exposure to air pollution already kills 107,000 Americans annually — almost double the U.S. toll from the entire Vietnam War. If Wheeler succeeds in gutting scientific standards, millions of Americans, and billions around the globe, would become even more vulnerable to toxic pollutants.To contact the author of this story: Carl Pope at Carldpope@gmail.comTo contact the editor responsible for this story: Francis Wilkinson at fwilkinson1@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Carl Pope is a former chairman of the Sierra Club and an adviser to Michael R. Bloomberg.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • Financial Times

    US House passes bill seeking tougher action on Uighur detentions

    The US House of Representatives has passed a bill that would force the Trump administration to take a tougher stance on Beijing over the mass detention of Uighurs in the Chinese province of Xinjiang. It was the latest example in a number of overwhelmingly bipartisan congressional actions aimed at intensifying pressure on China over everything from its human rights abuses in Xinjiang to its stance on the pro-democracy protests in Hong Kong.

  • Why Verizon is partnering with Amazon on 5G Edge Cloud Computing
    Yahoo Finance

    Why Verizon is partnering with Amazon on 5G Edge Cloud Computing

    Amazon and Verizon are teaming up to deliver 5G Edge Cloud Computing, bringing the processing power and storage closer to 5G users and wireless devices at faster speeds and ultra-low latency.

  • Hedge Funds Still Love The New York Times Company (NYT)
    Insider Monkey

    Hedge Funds Still Love The New York Times Company (NYT)

    "Since 2006, value stocks (IVE vs IVW) have underperformed 11 of the 13 calendar years and when they beat growth, it wasn't by much. Cumulatively, through this week, it has been a 122% differential (up 52% for value vs up 174% for growth). This appears to be the longest and most severe drought for value […]

  • Business Wire

    The New York Times Company to Webcast Its Presentation at the UBS Global TMT Conference

    The New York Times Company announced today that it will participate in the UBS Global TMT Conference in New York City on Monday, December 9, 2019. The New York Times Company (NYT) is a global media organization dedicated to enhancing society by creating, collecting and distributing high-quality news and information. The company includes The New York Times, NYTimes.com and related properties.

  • Reuters

    PRESS DIGEST- New York Times business news - Dec 3

    The following are the top stories on the New York Times business pages. - The Trump administration said on Monday that a new French tax that hit American technology companies discriminated against the United States, a declaration that could lead to retaliatory tariffs as high as 100 percent on French wines. - U.S. President Donald said on Monday that he would impose tariffs on steel and aluminum from Brazil and Argentina, a move that would shatter previous agreements with these countries.

  • Financial Times

    A selection of the FT’s biggest stories and best reads every Friday

    Every December FT Magazine produces a special edition profiling women who have broken new ground, inspired others or brought attention to the most important issues of our time — and this year they want to hear from you. At the opening of a Louis Vuitton leather workshop in Texas last month, President Donald Trump was given a clue about an upcoming deal that would be the luxury sector’s biggest ever. In this sharp and entertaining piece, Harriet Agnew and Michael Pooler look at how the deal was done — and why.

  • Bloomberg

    Will the New EU Commission Be French or German?

    (Bloomberg Opinion) -- The new European Commission under President Ursula von der Leyen received overwhelming support from the European Parliament on Wednesday. Born of French President Emmanuel Macron’s improvisation and German Chancellor Angela Merkel’s acquiescence, the commission will have to navigate the inclement waters of the Franco-German relationship.In July, Macron boldly proposed von der Leyen for the commission presidency over the party candidates who had campaigned for the job. Merkel assented, though she’d backed the political process: None of the campaigning candidates appeared capable of commanding a majority in the parliament. That body took it as a slight, and von der Leyen was approved only by a thin margin. Legislators then took barely veiled revenge on Macron by rejecting his chosen candidate for France’s European commissioner, Sylvie Goulard. Macron was forced to name tech businessman and former minister Thierry Breton instead, who managed to squeak by. After the parliament spent weeks interviewing proposed commissioners and rejecting some — a demonstration to von der Leyen that she wasn’t getting a free pass — it was finally ready on Wednesday to let her and the commissioners take office, a month later than previously scheduled. This doesn’t mean it won’t be a hurdle for von der Leyen going forward. The Greens, who abstained during the confirmation vote, will always demand more from the commission, and keeping the other centrist factions satisfied won’t be a breeze given the growing rift between the center-left and the center-right even in Germany, where they govern together.But the von der Leyen commission will probably have a bigger problem with the European Council, comprised of national leaders, than with the parliament. There, France and Germany, the two countries meant to take the EU forward after Brexit, have been at loggerheads lately. Macron has blocked the opening of accession talks with potential new EU members, Albania and North Macedonia, and pushed a plan to make Europe militarily more independent from the U.S. Germany disagrees on both counts. On Wednesday, Merkel responded forcefully to Macron’s criticism of the North Atlantic Treaty Organization as undergoing “brain death.” She said to the German parliament: “Europe cannot currently defend itself alone, we are dependent on this transatlantic alliance and that’s why it’s right for us to work for this alliance and take on more responsibility.”Macron’s open bid for sole leadership in Europe is an irritant to Germans. According to a recent article in the New York Times, at a recent dinner to mark the 30th anniversary of the fall of the Berlin Wall, Merkel told Macron she was “tired of picking up the pieces” after his attempts at creative disruption. “I have to glue together the cups you have broken so that we can then sit down and have a cup of tea together,” Merkel reportedly said.This marks a low point in what generally has been a constructive relationship. In such a situation, von der Leyen’s commission faces the likelihood of deadlock in the European Council on its key proposals. France and Germany will each try to use the commission’s power to draft policies, and the large workforce that comes with that power, to back up their positions — that is, to satisfy Macron’s impatience and Merkel's compromise-seeking caution.Merkel, of course, has promised to retire from politics in 2021 — but a more assertive German leader probably would clash even more energetically with Macron.In such a situation, the sheer balance of nationalities in key staff positions can be important. On Wednesday, Politico’s Brussels Playbook, a well-informed newsletter about EU politics, reported that five commissioners’ heads of cabinet (or chiefs of staff) — including Breton's — will be German, and not one will be French. Breton hasn’t officially picked his head of cabinet yet, but even if the Politico report on him proves false, the balance would appear troubling for Macron. The senior staff positions are extremely powerful in EU decision-making, and if there's a strong German influence on the chief-of-staff level, it won’t be easy for Macron to push his proposals.On the other hand, as things stand today, France has a disproportionately large number of senior EU bureaucrats and Germany a disproportionately small one. Of the 30 officials holding the top administrative grade, AD 16, five are French and only two German. More generally, 12.8% of the 2,600 officials in the top four grades are French and 12.6% are German, even though, based on the countries’ populations, Germany’s quota should be higher and France’s lower. A balance of influence is difficult to achieve in the EU when there’s little agreement on key issues, such as the bloc’s future geopolitical role, its adherence to the transatlantic alliance, and key expansion and immigration policies. A lack of broad agreement and personal harmony among leaders turns the complex bureaucratic and inter-institutional processes into a series of mini-battles. Macron may have helped von der Leyen into the top EU job, but he appears intent on making it impossible for her to do anything meaningful as he keeps trying Merkel’s patience with his escapades.To contact the author of this story: Leonid Bershidsky at lbershidsky@bloomberg.netTo contact the editor responsible for this story: Tobin Harshaw at tharshaw@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Leonid Bershidsky is Bloomberg Opinion's Europe columnist. He was the founding editor of the Russian business daily Vedomosti and founded the opinion website Slon.ru.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • Media Megamergers Can Be Good for Local News
    Bloomberg

    Media Megamergers Can Be Good for Local News

    (Bloomberg Opinion) -- Local news is in steep decline. A recent report from Pen America finds that the U.S. has lost more than 1,800 newspapers since 2004. The consequences include a decline in civic engagement and an increase in corruption. The report mentions how government officials in Bell, California, a city without a newspaper, were able to get rid of caps on their salaries and loot the public treasury.The report offers recommendations for philanthropists, tech companies, news outlets, governments and consumers who want to reverse the trend. But it cautions that there is no panacea. One of its ideas, though, may inadvertently move in the wrong direction.Pen America’s first suggestion for the government is that the Federal Communications Commission “restore pre-2017 regulations governing the ownership of TV stations, radio stations, and newspapers to prevent further consolidation and homogenization in local news media.” This move could backfire – and in one recent case, it already has backfired.Under its deregulation-minded commissioner Ajit Pai, the FCC in 2017 ended its restrictions on cross-ownership of broadcast outlets and newspapers in the same locality. In September, two judges in the Third Circuit Court of Appeals struck down the FCC’s rules changes on the ground that the commission “did not adequately consider the effect its sweeping rule changes will have on ownership of broadcast media by women and racial minorities.”That decision put a pending media deal on hold. Apollo Global Management Inc., a private-equity firm, recently formed Terrier Media to purchase media properties from Cox Enterprises Inc. and Northwest Broadcasting Inc. The new company would own 25 full-power TV stations covering roughly 13% of households with televisions.The Justice Department gave a go-ahead to the deal this spring. Since the deal complied with the FCC’s new ownership rules, it seemed to be only a matter of time before it could be consummated. Then came the September court decision, which goes into effect today. The rationale of the decision did not apply to the deal: Even opponents of the deal, such as Common Cause, have not alleged that it would reduce media ownership by women or racial minorities.  Rather, the deal simply didn’t comply with the pre-2017 rules. In Ohio, for example, Cox owns three newspapers in places it also owns TV broadcasters. The FCC’s rules, both before and after 2017, allow this cross-ownership. But the old rules, coming back into effect, forbid the transfer of these properties to a new cross-owner.The FCC is appealing the court decision, but instead of waiting, Terrier decided to change the terms of the deal to fit the old rules. Among the changes: Terrier said it was willing to change the publication schedule for the three newspapers so that they would appear in print only three times a week.On Nov. 22, the FCC approved the deal on certain conditions - including that the publication frequency of those three newspapers be reduced. A spokesperson for Terrier Media says, “The new company does not want to scale back local daily news coverage but will do so if that’s what is required by the Third Circuit ruling.”It’s hard to see how this forced modification of the company’s plans serves the public interest.Jan Rybnicek, a senior fellow at George Mason University’s Global Antitrust Institute, told me, “The media ownership rules are fairly outdated.” They were established in 1975, he said, “when newspaper and television were the only outlets. Now there are more alternatives and many newspapers are struggling.”Pai, the FCC chairman, had this kind of scenario in mind when he pushed to relax the rules. Defending the action in the New York Times in 2017, he wrote, “There’s ample evidence that the cross-ownership rule has led to less local reporting … a company that owns both a newspaper and broadcast outlet is able to gather the news and distribute it more cost-effectively across its multiple platforms.”It may not be possible to bring local news back to its former health, and how to revive it is not clear. But government regulation doesn’t have to contribute to the problem.To contact the author of this story: Ramesh Ponnuru at rponnuru@bloomberg.netTo contact the editor responsible for this story: Tobin Harshaw at tharshaw@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Ramesh Ponnuru is a Bloomberg Opinion columnist. He is a senior editor at National Review, visiting fellow at the American Enterprise Institute and contributor to CBS News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • Bloomberg

    An American Thanksgiving Story Without Any Heroes

    (Bloomberg Opinion) -- American Thanksgiving is typically seen as a celebration of the cooperation between the English who settled the continent and the natives who helped them grow crops and saved them from starvation. It is a story about how multicultural cooperation and private-property incentives, both strong American principles, can boost a harvest.But as Thanksgiving 2019 approaches, I am struck by another lesson: America’s need to come to terms with a history that, as it relates to the treatment of Native Americans, has remarkably few heroes on the side of the white settlers.For contrast, consider the recent disputes over The New York Times 1619 project, which argues that anti-black racism has been in the DNA of the U.S. since the arrival of the first enslaved people in 1619. There has been a lot of pushback to this argument, most recently from the Civil War historian James McPherson. The U.S. also has a redemptive side, he says, as represented by the opponents of slavery. William Lloyd Garrison, Abraham Lincoln and the millions of whites who supported the civil rights movement in the 1960s may make you feel slightly better about the American experiment.But when it comes to Native American history, there is no American president who fills a role remotely comparable to that of Abraham Lincoln or even Lyndon Johnson for African-Americans. Nor, until the 1960s, is there much history of entertainers, athletes or academics speaking up effectively for Native American rights.Presidents Grover Cleveland and Franklin Delano Roosevelt did set up and then improve the reservation system. Even if you favor those decisions, the result nonetheless reeks of segregation, of parsimoniousness, of a continued history of poverty and deprivation. The system is at best an unsatisfactory compromise rather than a source of national pride.Who since then are the white heroes — those who later deregulated casino gambling and mining rights for many reservations? Again, even if those decisions were for the better, it is hard to find much to boast about.Nor is there any major American political ideology that can sit comfortably with the historical treatment of Native Americans, which has been multipartisan in its awfulness. Many libertarians fail to decry the government coercion involved, since they also wish to invoke the growth of the American republic as a major event in the history of freedom. Even if most libertarians are embarrassed by how much of America’s glory is rooted in land theft and massacres, they do not emphasize land reparations as a solution.Nor does classical Marxism or communism offer a convenient base for condemnation of this aspect of U.S. history, as those ideologies emphasize the necessity of uprooting earlier modes of production so that economies can progress to capitalism and then socialism.Even the most optimistic narrative — the convergence of multicultural cooperation and market incentives — is incomplete. Multicultural cooperation breaks down if one side becomes so powerful that it can later simply take from the other side, and that is indeed what happened. So one lesson is that political cooperation usually rests on a delicate balance, with no assurance it will continue over time. (If you would like a case study in how such an order can unravel, I recommend Pekka Hämäläinen’s “Lakota America,” which is my favorite non-fiction book of this year.)A related lesson of Thanksgiving is that good news can end in bad news, with no real reversal in sight. That, too, is an appropriate reminder for an America that, at least up through the 1990s, was all too willing to congratulate itself as a world historical force for good.One final Thanksgiving lesson for 2019: A place you love — for me, the United States — can also be a country that in some crucial ways has had very few good guys, at least once you take all of the issues into account. That counsels skepticism about today’s heroes, because it suggests that a near-universal moral failing just might be in our national DNA.This lack of heroes should also make Americans more reluctant to judge their political opponents so harshly. All of us are part of a system built on longstanding historical crimes, and thus we have more in common with those opponents than we might like to think.Thanksgiving always has universal lessons. This year they just feel more depressing — and more urgent — than usual.To contact the author of this story: Tyler Cowen at tcowen2@bloomberg.netTo contact the editor responsible for this story: Michael Newman at mnewman43@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tyler Cowen is a Bloomberg Opinion columnist. He is a professor of economics at George Mason University and writes for the blog Marginal Revolution. His books include "Big Business: A Love Letter to an American Anti-Hero."For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • Bloomberg

    Airbnb Queried by Congress Over Listings that Violate Local Laws

    (Bloomberg) -- U.S. lawmakers are asking Airbnb Inc. to provide information about hosts that list short-term rentals on the site who don’t comply with local laws and violate the company’s own policies.In a letter to Airbnb Chief Executive Officer Brian Chesky, six members of Congress said they are particularly interested in recent media reports that have highlighted the proliferation of limited liability corporations on the home-sharing platform. For example, the lawmakers cited an article in the New York Times that showed listings by one operation, out of compliance with company policy, were able to generate revenue of almost $21 million in three years.Deceptive and misleading listings have also led to customers being scammed by “hosts” who abuse Airbnb’s cancellation policies, according to the letter, which was signed by Representatives Bonnie Watson Coleman of New Jersey, Barbara Lee of California and Robin Kelly of Illinois, among others.“While we appreciate that you have frequently stated that Airbnb has a ‘zero tolerance’ policy with respect to these types of host behaviors, it also seems clear that you have failed to authenticate host identities in a way that would prevent bad actors from continuing to rent through your platform under false identities after being banned,” the letter stated.The lawmakers said they hoped Chesky would meet with them within the next two weeks to answer a list of questions, including how Airbnb vets hosts and how it will verify the veracity of photos on rental listings. Airbnb representatives didn’t immediately answer a request for comment.Airbnb announced significant safety measures earlier this month in the wake of a deadly shooting at a house in California. The changes include a 24/7 neighbor hotline, 100% verification of all the listings on the site and a full refund policy for guests. The San Francisco-based startup is preparing for a public stock market listing next year and is trying to resolve regulatory issues with various cities across the U.S.To contact the reporter on this story: Molly Schuetz in New York at mschuetz9@bloomberg.netTo contact the editors responsible for this story: Jillian Ward at jward56@bloomberg.net, Andrew PollackFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Uber’s Introduction of Dashboard Cameras Raises Privacy Worries
    Bloomberg

    Uber’s Introduction of Dashboard Cameras Raises Privacy Worries

    (Bloomberg) -- Uber Technologies Inc. is adding video and audio recording for more trips -- a move designed to make the service safer and help settle disputes, but which has triggered privacy concerns about the personal information the ride-hailing giant collects.Uber began offering some drivers the option to install dashboard cameras in their cars this summer, and next month will launch a pilot program in Brazil and Mexico to let riders and drivers opt to record audio in a car. Both early stage experiments are part of Uber’s push to better protect riders and drivers following reports of sexual assaults, physical assault and robbery.The increased surveillance of rides at Uber coincides with a spike in demand from U.S. and Canadian regulators and law enforcement officials for companies to share their customers’ information. The number of requests from U.S. state and federal law enforcement agencies increased to 3,825 in 2018, up 30% from the year before, according to Uber’s transparency report released Wednesday.“None of this is simple or easy, but we’ll continue to invest, test and learn to improve safety on our platform while respecting privacy,” Uber Chief Executive Officer Dara Khosrowshahi said on Twitter Thursday in response to a media report about the expansion of its videotape program. Descriptions of the recordings were previously reported by the New York Times and Reuters.An Uber spokesman said the company had not significantly expanded video recording beyond the pilot program started in July with camera and driver analytics company Nauto Inc. Nauto’s website lists seven cities where it’s working with Uber on dashcam recording: Dallas and Houston in Texas, Memphis and Nashville in Tennessee, plus Fort Myers, Naples and Tampa in Florida. The spokesman also said some drivers are engaged in the program in San Antonio, Miami, Orlando, Austin and Jacksonville, Florida.Riders in those cities can see which drivers have cameras when they schedule a ride in the app, and when the driver picks them up because the car has a sticker indicating a recording is underway.According to information on the website of dashcam provider Nauto, the audio and video footage is deleted on a regular basis. Drivers and riders can both request to view the footage -- with the faces blurred out and audio muted -- but they don’t own it. Uber only reviews the footage when a driver or rider requests a review. In those instances, Uber can access the audio and unblurred faces.An Uber spokesman said that both the video and audio recording programs are experiments, and the company is gathering feedback before deciding whether to expand them to additional markets.In Mexico and Brazil, where the company is planning to start its audio pilot, riders will have the option to record the audio of the trip on their phone during a ride. The file is then stored on the user’s phone, but won’t be accessible because it’s encrypted. If a rider or driver wants Uber to review the tape, they send the recording to Uber, which will be able to decrypt it with a key. Uber announced the program in Sao Paulo earlier his month.While Uber’s access to the recordings is limited, the possibility for abuse remains a concern for some privacy advocates and Uber users. George Arison, founder of startup Shift Technologies Inc., said he’s worried about the “scary” amount of data Uber could potentially collect. “It’s concerning especially since I take a lot of my work calls from my Uber,” he wrote in a message, adding that he still values the service and probably won’t stop using it given the limited scope of the experiment.Uber, for its part, recognizes the power it wields as it collects customer data, even without the audio and video recordings. In its last transparency report, the company expressed some concern that the information it’s amassed on trips, trip requests, pickup and drop-off areas, fares, vehicles and drivers could compromise privacy if disseminated.“There is a risk that information like pickup and dropoff locations may allow government agencies—or anyone else who obtains this information—to identify individual riders by associating it with publicly available records,” the report states.Of the requests from law enforcement officials, 2,106 were made via a subpoena, 972 were made because of an emergency, 629 were made because of a search warrant and 118 were made through a court order. In the case of search warrants, Uber produced some data for 84% of the requests.Arison said he was dismayed at the potential for problems with any recorded data. “Creating more opportunity for privacy violations feels very weird,” he said.To contact the reporter on this story: Lizette Chapman in San Francisco at lchapman19@bloomberg.netTo contact the editors responsible for this story: Mark Milian at mmilian@bloomberg.net, Anne VanderMey, Andrew PollackFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Google, Facebook at Center of Rising Political-Ad Tensions
    Bloomberg

    Google, Facebook at Center of Rising Political-Ad Tensions

    (Bloomberg) -- Facebook Inc. and Google were drawn into an escalating battle of wills Wednesday over the use of political advertising on social media.Trump campaign officials pressured Facebook to maintain its permissive political advertising rules, while Alphabet Inc.’s Google announced an overhaul of how campaigns may target their messages across the world’s largest search engine.The ability of candidates to show different messages to people based on their physical location, age, or other characteristic, referred to as micro-targeting, has become an increasing focus of the broader debate about political advertising online. Last month, Twitter Inc. said it will ban political ads on its platform altogether, and is restricting targeting for other ads related to some politically charged issues, like climate change.Google on Wednesday said it will ban candidates from targeting election ads based on people’s political affiliation, though the messages can be tailored based on gender, age and geography. The company also is eliminating a feature called Customer Match for political advertisers. The tool lets marketers upload their own lists of email addresses or phone numbers, and target ads specifically at those people.Facebook, the largest platform for online political advertising, has been under pressure to follow suit. Several prominent Democrats have attacked the company for refusing to fact-check political ads. Facebook has rebuffed those calls, saying it doesn’t want to police political speech. In October, hundreds of Facebook employees sent a letter to the company’s executives calling for new limits on ad targeting for political campaigns. The letter became public after it was obtained by the New York Times.Carolyn Everson, a Facebook vice president, said Monday at a Recode conference that the social-media company wasn’t considering changes to its targeted advertising options for political ads. Later that day, however, she told Axios, the news website, that Facebook hadn’t ruled out any specific changes, raising the prospect the company may change course and limit targeting in some way.The Trump campaign reacted directly to Everson’s comments. It sees Facebook as an essential tool for speaking directly to voters, instead of relying on critical media outlets that the president says treat him unfairly.Gary Coby, the Trump campaign’s digital director, argued on Twitter Wednesday that stopping campaigns from pairing in-house data with Facebook’s advertising tools would suppress voter engagement. “This would unevenly hurt the little guy, smaller voices, & issues the public is not aware of OR news is NOT covering,” Coby tweeted, saying it was very “dangerous” and a “huge blow to speech.”Tim Cameron, chief executive officer at FlexPoint Media, a Republican media strategy firm, said the Trump campaign is likely concerned that new restrictions could result in Facebook deciding to begin fact-checking political ads. “I think the Trump campaign is looking down the road beyond this decision and are actually more afraid of subsequent decisions that Facebook may make,” he said.Facebook hasn’t announced any changes to its policies. “For over a year, we’ve provided unprecedented transparency into all U.S. federal and state campaigns -- and we prohibit voter suppression in all ads,” a company spokesman said. “As we’ve said, we are looking at different ways we might refine our approach to political ads.”During the 2016 election, the Trump campaign ran 5.9 million different versions of ads, constantly testing them against different groups to increase engagement, according to internal Facebook documents reviewed by Bloomberg in 2018. It spent $44 million on Facebook in the six months before the 2016 election. So far in 2019, the Trump campaign has spent more than $15 million in ads, and is the largest political spender on the platform, according to Facebook’s political ad library.Before Google announced its changes, the company touted its ability to target voters based on political affiliations, like “right-leaning,” as a major selling point. “They were all heartily selling us this for years as the coolest thing since sliced bread,” said Will Ritter, the founder of Poolhouse, a political advertising firm.Google’s new restrictions mean campaigns may have to spend more after losing the ability to hit key voters, Ritter added. For instance, a candidate could identify frequent Republican voters in Democratic-heavy areas of the country, and reach them with ads on search and YouTube. Now they can’t.“It’s just going to increase costs because there’s going to be so much waste,” Ritter said.Irene Knapp, a former Google employee who now works for Tech Inquiry, a political advocacy group focused on ethical issues related to technology, said the ability to target makes online advertising particularly susceptible to abuse. Campaigns can test messages on certain audiences, find which ones resonate, then use tools provided by Facebook or Google to target those people with new ads while also reaching people with similar characteristics. Misleading messaging can be directed at specific audiences without drawing widespread attention.“You can be seeing one message that seems fine, and your next-door neighbor can be seeing some misinformation that is cleverly targeted to produce a very different response or action,” Knapp said.Knapp said Google’s Customer Match tool could be used to target racial groups, or engage in other behavior that violates the policies of the platforms. The equivalent tool on Facebook, “Custom Audiences,” still exists.(Updates with details on Google rules in the fourth paragraph.)\--With assistance from Alistair Barr.To contact the reporters on this story: Eric Newcomer in San Francisco at enewcomer@bloomberg.net;Kurt Wagner in San Francisco at kwagner71@bloomberg.net;Mark Bergen in San Francisco at mbergen10@bloomberg.netTo contact the editors responsible for this story: Jillian Ward at jward56@bloomberg.net, Andrew PollackFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Trump’s Tax Cuts Were Working Until He Started His Trade War
    Bloomberg

    Trump’s Tax Cuts Were Working Until He Started His Trade War

    (Bloomberg Opinion) -- Has corporate America failed to make good on its promise to increase investment after getting a huge tax cut in 2018? That’s the premise of an article that so outraged FedEx Corp. CEO Fred Smith that he has challenged the editor of the New York Times, where it was published, to a debate over it.The best way to judge the effect of 2017’s Tax Cut and Jobs Act is to compare what has happened since to what would have happened if it hadn’t been passed. This is by nature a speculative exercise, but several lines of evidence suggest that the cuts are working as intended, even as other factors are slowing investment growth.The case that the tax cuts are not having their intended effect comes in two parts. First, investment growth was higher before the tax cuts than afterward. Second, there is no correlation between the companies that received the largest tax cuts and those that have increased investment the most. Those assertions, while true, miss the point.The implicit model here is that the tax cuts would fund greater investment by leaving corporations with more cash on hand. But that isn’t the primary way that tax cuts are supposed to influence investment, and none of the models that predicted a larger economy as a result of the tax cuts were based on such effects.The idea, rather, is that the tax cuts stimulate investment through related channels — by making it easier for companies to recover costs associated with new investment, and by increasing the market value of business capital.Both effects raise Tobin’s Q, the economics of which are complex but can be summarized this way: As the market value of assets rises relative to the cost of replacing those assets, investment increases. So soaring tech stock prices in the 1990s led to an enormous investment in Silicon Valley startups, while a run-up in home prices in the early 2000s led to record construction of single-family homes.In both of these cases, the boom was based on bubble-driven price increases. The goal of tax reform was to create a more sustainable increase in asset prices by cutting business taxes. It did exactly that.But as business investment was climbing through 2018, there was something else happening: President Donald Trump was continuing to ramp up his trade war. By the end of the year the effect had begun to hit stock prices, which fell in the fourth quarter. Business investment likewise peaked in the first quarter of 2019 and has declined since. The evidence strongly suggests that both the tax cuts and the trade war have had their predicted effect on business investment — the first positive, the second negative.Comparisons with the Congressional Budget Office forecasts bear that out. In 2017, before the tax cuts passed, the office predicted that growth in business investment would accelerate to nearly 6% by the end of the year before slowly declining to 2% by the third quarter of 2019. Instead business investment has been more volatile, though it remains above what the original CBO projections.Economists, finance ministers and business leaders all blame the trade war for worsening investment conditions. And there is ample indication that an end to trade conflicts would allow business investment to return to the higher trajectory of 2017 and 2018.In his statement about the Times article, Smith called for a debate about “federal tax policy and the relative societal benefits of business investments.” He might want expand the discussion to include U.S. trade policy as well.To contact the author of this story: Karl W. Smith at ksmith602@bloomberg.netTo contact the editor responsible for this story: Michael Newman at mnewman43@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Karl W. Smith is a former assistant professor of economics at the University of North Carolina's school of government and founder of the blog Modeled Behavior.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • Benzinga

    California Won't Buy From Automakers Who Sided With Trump

    The California government will bar all state agencies from purchasing any further vehicles from these companies, the New York Times reported. “Carmakers that have chosen to be on the wrong side of history will be on the losing end of California’s buying power,” Gov. Newsom said in an official statement on Monday, according to the New York Times. The automakers that intervened on President Trump’s behalf in October against a lawsuit filed by environmentalists included General Motors Company (NYSE: GM), Toyota Motors Corporation (TYO: 7203), and Fiat Chrysler Automobiles NV (OTC: FCAU) among other major companies, Reuters reported at the time.

  • New Media (NEWM) is all Set to Bring Gannett Under its Wings
    Zacks

    New Media (NEWM) is all Set to Bring Gannett Under its Wings

    New Media's (NEWM) merger with Gannett is likely to create one of the strongest entities in the publishing industry.

  • Bloomberg

    Come On, EPA! Don’t Give Polluters a Scientific Smokescreen.

    (Bloomberg Opinion) -- The Trump administration has developed a way to make pollution sound appealing. President Donald Trump’s Environmental Protection Agency has a plan to relax regulations to allow Americans to be exposed to more dirty air. But the agency has dressed it up to look like it’s just advocating the use of stronger, more transparent science.The policy, sometimes called the “secret science” plan, was released in the spring of 2018, and after some criticism, went back to the drawing board for revision. The idea was to raise the scientific bar for studies that can be considered in making regulations — in particular, disallowing those in which data on human subjects was kept secret for privacy reasons. This week, the New York Times published a leaked version of the updated policy. Critics say the new plan’s scope is even worse than the original — better for industry, that is, worse for people who breathe air.How much scientific proof do you need to recognize that pollution is bad for you? There are already dozens of studies showing connections between particulate matter and cardiovascular disease, and if that isn’t enough, there’s growing evidence linking air pollution with Alzheimer’s Disease.One of the most prominent studies that might be disallowed is a 1993 Harvard project that tracked 22,000 people in six cities and led to the conclusion that air pollution caused some people to die. But the complete raw data aren’t available for others to recheck the results.Critics quoted in the journal Science and the New York Times said that the new policy would allow the EPA to throw out high quality studies where some personal data were kept secret to protect the privacy of human subjects — possibly disqualifying studies that conclude that typical environmental exposure to mercury and lead had damaged the brains of kids. (Thanks to resulting regulations, lead exposures are a fraction of what they were in the mid-20th century).There are reasonable arguments about how to balance scientific openness with personal privacy. But the problems of resolving that issue shouldn’t open the door to easing up on polluters.There’s a dishonesty at the core of the new EPA policy, which is revealed in former EPA Administrator Scott Pruitt’s reference to the replication crisis — a problem that has beset psychology and other areas of social science, where many researchers seemed to misunderstand the statistical tools they were using. Similar problems have plagued some areas of medical research, where a publish-or-perish culture encouraged bad practices.Several attempts to systematically replicate a sample of published experiments has shown that many were not as solid as claimed. That was all too common in the social sciences.In contrast, there are dozens of follow-up studies on air pollution concluding that it is killing people. Sometimes follow-ups show that a supposed threat isn’t real — as do the hundreds of studies on vaccines that have debunked an initial claim that they’re linked to autism. The important thing is that there’s a mountain of research.But historically, environmental studies have tended to underplay risk. Industry-funded studies on lead allowed millions of children to be exposed to brain-damaging levels. The dangers of climate change were underestimated. Some journalists, trying to hype the replication problem, wrongly insinuated that all of science was corrupt. The Trump people are using that popular misconception to make themselves look good while making the world a worse place to live.To contact the author of this story: Faye Flam at fflam1@bloomberg.netTo contact the editor responsible for this story: Jonathan Landman at jlandman4@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Faye Flam is a Bloomberg Opinion columnist. She has written for the Economist, the New York Times, the Washington Post, Psychology Today, Science and other publications. She has a degree in geophysics from the California Institute of Technology.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • FedEx CEO calls out NYT over tax bill report
    Yahoo Finance Video

    FedEx CEO calls out NYT over tax bill report

    FedEx CEO Fred Smith called out 'The New York Times' after the publication published a report detailing how FedEx slashed its tax bill from $1.5 billion to $0 in one year. Yahoo Finance’s Zack Guzman and Brian Cheung are joined by Retail Expert Erin Sykes on YFi PM.