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  • 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’

    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.

  • The EPA’s Pernicious Attack on Science

    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.

  • 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

    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

    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.

  • Financial Times

    Big Tech abroad

    Having done two weeks of promotion in the US before landing in the UK for more, I can say that the debate about digital rights, privacy and monopoly power is much more advanced in Britain than America. There have been two interesting Big Tech news angles here in just the past few days. The shift towards private sector power since the 1980s has gone too far, and that’s one reason that broadband penetration lags behind in the UK — this is exactly the sort of area of infrastructure spending where you need some public investment support, because private companies don’t see enough profit here to go full steam ahead.

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

    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

    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

    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.

  • Too Many Young Men Still Aren’t Working

    Too Many Young Men Still Aren’t Working

    (Bloomberg Opinion) -- In January 2010, with the Great Recession technically over but employers not yet adding jobs, a breakthrough in American labor markets and gender relations transpired. That month, a higher percentage of women aged 20 through 24 were employed than men in that age range. This was, as best I can tell, the first time women in any of the age brackets tracked by the Bureau of Labor Statistics had ever outdone their male peers in employment-population ratio, or Epop.It was also the last. As soon as hiring started again, young men returned to the workforce more rapidly than young women, and young men’s Epop went back to being several percentage points higher than young women’s.Lately, though, the lines tracking this labor market statistic have been converging again.It’s not as if young women are breaking new employment records: their Epop is still one-and-a-half percentage points below its 2001 peak. Young men’s Epop, meanwhile, is more than nine percentage points below its 2000 peak, and five percentage points below the high it reached during the last expansion, in 2006. This is happening even as prime-age (25-54) men have been returning to the workforce after some tough times, as I wrote last week. And while a large share of people in their early 20s are still in school, young women are more likely to be enrolled in college than young men are, so that can’t be what’s causing the convergence.(3) Something strange is going on with young men and the labor market.Last year Jeanna Smialek (then at Bloomberg, now at the New York Times) made a similar observation based on employment data for men and women in the 25-34 age range. There the Epop lines are nowhere near converging — mainly because the women are much more likely to be at home taking care of kids, with a Pew Research Center analysis of Census data finding that in 2016 about 30% of mothers aged 20 to 35 were stay-at-home parents, compared with 6% of fathers — but women similarly gained a lot of ground during the recession and, after losing some of it through about mid-2015, have been gaining again since. This chart that I’ve updated from Smialek’s article also shows that while 25-to-34-year-old women are now just as likely to be employed as those in the 35-44 age cohort, 25-to-34-year-old men are now markedly less likely to be employed than those slightly older.Finally, here’s an international comparison. The Organization for Economic Cooperation and Development, the club of the world’s affluent democracies, publishes annual estimates of the share of young people who are not in employment, education or training, or Neet. The 14% U.S. Neet share for men aged 20-24 was just slightly higher than the OECD average of 13.4% in 2018, but that average was driven up by a few large economies with major Neet problems, namely France (21%), Spain (23.3%), Italy (27.5%). Here are four countries that had higher young men’s Neet shares than the U.S. in the late 1990s and are all lower or about even with it now.What’s keeping young American men out of the workforce? Well, that’s the big question. In a 2016 commencement speech at the Booth School of Business at the University of Chicago that has since become the target of some mockery in online economics circles, economics professor Erik Hurst proposed that improvements in video games and other electronic amusements might be luring young men to stay home and play rather than look for work. Young men without jobs are certainly spending a lot of time amusing themselves with video game consoles and computers: an average of 12 hours a week among those ages 21 through 30, up from 5.4 hours in the mid-2000s, Hurst and three other economists reported in a subsequent working paper based on data from the American Time Use Survey.But Gray Kimbrough, a government economist and American University adjunct professor, has found in his own analyses of ATUS data that the rise in time that non-working young men devote to video games has been accompanied by a similar decline in time spent watching television, which suggests that video games are displacing other amusements rather than work. And even Hurst and his co-authors conclude that declining labor demand has played a bigger role than video games in reducing young men’s employment.Still, there does seem to be a mix of economic and social factors at work here. There are recent economics papers, for example, arguing that less-educated young men’s chances of getting married have declined because it’s harder for them to get good jobs and, conversely, that less-educated young men have become less interested in getting jobs because their chances of marriage have declined. The growing number of young men who live with mom and dad is surely the result of forces beyond just a tough labor market. High real estate prices in some parts of the country and big student debt burdens for some young people have made it harder to strike out on one’s own, while larger houses, smaller families and (perhaps) more indulgent parents have made it easier to stay home. Immigrant families have also brought a taste for multigenerational living that had died out among native-born Americans in the 1950s and 1960s. About 37% of 25-year-old men in the U.S. lived with their parents in 2017, according to Kimbrough’s analysis of Census Bureau data, compared with 31% of 25-year-old women — and just 16% of 25-year-old men in 1970.This living-with-the-parents phenomenon may in turn be partly responsible for what one regular survey indicates is a sharp rise since 2008 in the percentage of men ages 18 to 29 who have never had sex, although evidence on that from other data sources is mixed. It may also ease the pressure on young men to find work. Whatever the reasons, there is now a small but larger-than-it-used-to-be minority of American men in their 20s who seem to be making no progress in achieving the markers of adulthood: get a job, move out of the house, get married, have kids. My Bloomberg Opinion colleague Noah Smith this week offered a compelling set of reasons for why it takes longer to get established in careers than it used to, which is delaying things like marriage and homeownership. But what I’m describing seems like a distinct and gender-specific phenomenon, if not a totally unrelated one.Meanwhile, young women’s labor market gains relative to young men haven’t exactly translated into labor market equality. Women aged 20 through 24 may now be as likely to have jobs as men their age, but they’re less likely to have full-time jobs — partly because more of them are in college, admittedly — and even those who do work full-time are paid less than men. The gender pay gap is smaller for the 20-24 age group than for any other, with full-time female workers earning 90.3% as much per week as their male peers in the third quarter of this year, but it hasn’t narrowed over the past couple of decades.(2)Young men with jobs are doing OK. It’s the ones who’ve never had one who might be a problem.(1) College enrollment rates have also fallen recently, and have fallen more among men than among women.(2) This percentage can jump around a lot from quarter to quarter, and has gone as high as 99% (in the fourth quarter of 2002), but the average since 2000 is 92.4%, and the average for the past five years is 91.7%. Female part-time workers, for whatever it's worth, made slightly more than male part-timers in the third quarter.To contact the author of this story: Justin Fox at justinfox@bloomberg.netTo contact the editor responsible for this story: Sarah Green Carmichael at sgreencarmic@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Justin Fox is a Bloomberg Opinion columnist covering business. He was the editorial director of Harvard Business Review and wrote for Time, Fortune and American Banker. He is the author of “The Myth of the Rational Market.”For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • Bloomberg

    Go Ahead, Call It a Quid Pro Quo

    (Bloomberg Opinion) -- What did the president quid and when did he quo it? That’s the question being earnestly debated at the impeachment hearings centering on Donald Trump’s July 25 telephone call with Ukrainian President Volodymyr Zelenskiy. Congressional Democrats insist that Trump made military aid contingent on an investigation of a political rival. One news story after another has referred to the alleged arrangement as a quid pro quo.But is quid pro quo the right term? Some experts think not. The other day, the New York Times published a letter from 33 writers asking journalists to stop using the phrase in accounts of the Ukraine controversy because “most people don’t understand what it means, and in any case it doesn’t refer only to a crime.” In referring to the question of whether Trump pressured Zelenskiy, they write, it’s more accurate to say “extortion” or “bribery” — because “words make a difference.” The letter concludes: “Please use precise and forceful language that reveals the struggle in which we now find ourselves. It’s a matter of survival.”Although the card-carrying Grammar Curmudgeon in me suspects that the late William Safire would have a word or two to say about this use of the verb “reveal,” I agree on the importance of “precise and forceful language.” And in describing what Trump is alleged to have demanded from Zelenskiy, no form of words is more precise and forceful than “quid pro quo.”The phrase has been adopted into English unchanged from its Latin roots. It means, literally, “something for something.” (Quo is simply the ablative singular form of quid.) According to the Oxford English Dictionary, when quid pro quo is used nowadays as a noun, its meaning is exactly what we tend to think: “The action or principle of giving one thing in return or exchange for another” especially “as part of a bargain.”In 1871, a Chicago magazine published a nonsense verse, playing on the words: “If Quid is Quo And Quo is Quid,/ You nothing owe Old Quo, old Quid!” Except the verse isn’t really nonsense. In contract law, the phrase has long carried this meaning of mutual exchange, the giving of something in order to receive something. So studiously have judges tried to ensure that both parties benefit from a contract that a Kentucky court two centuries ago proclaimed that “The ‘quid pro quo’ is the delight of the law.”  Certainly the phrase constitutes a delight of the language, a simple yet mellifluous way to describe the exchange relationship, and equally suited to bargains formal or informal, fair of unfair, legal or illegal.Most people instinctively understand quid pro quo in this sense, as a deal, an exchange of this-for-that. Just last month, ESPN described the implicit deal between the notoriously cheap Tampa Bay Rays baseball team and their players as “the quid pro quo of being a Ray: We’ll help you get better, we’ll support you for you, but trust us when we ask you to do something, because we’re good at this.” In the fall of 2018, Senator Susan Collins of Maine used the term “classic quid pro quo” to refer to threats by activists to give money to her opponent unless she voted against the confirmation of Brett Kavanaugh to the Supreme Court.The phrase is commonly used by journalists even when questions of criminal behavior arise. The FBI, reported the Wall Street Journal earlier this year, “is investigating how Puerto Rico awarded some public contracts and whether various companies engaged in quid pro quo arrangements to win government business.” I don’t imagine that readers mistook this language to refer to legitimate deals.Perhaps the best-known example from popular culture occurs in the 1991 film “The Silence of the Lambs,” when the imprisoned Hannibal Lecter promises to help FBI trainee Clarice Starling catch the serial killer known as Buffalo Bill. In return for his help, however, she must answer Lecter’s questions about her own life. “Quid pro quo,” he explains. “I tell you things, you tell me things.” A moment later, when it is Lecter’s turn to provide information, Clarice says “Quid pro quo, doctor.” No one misses the point:  She is reminding him of — what else? — their bargain.(1)Contrary to the implication in the letter to the Times, few people are confused by the phrase. The meaning of the July 25 conversation between Trump and Zelenskiy may be contested, but the charge is essentially that Trump was proposing an exchange. It’s hard to imagine anything quid-pro-quoier.That’s why, as Steven Pinker nicely puts it, “The lack of a quo for the quid has become a talking point among his defenders.” Pinker is skeptical that this claim passes the giggle test — but it’s important to note what the claim is. A quid pro quo, Trump’s defenders say, requires an explicit offer of a deal. They deny that any deal was on the table. Those who are calling for impeachment are with Pinker.Whichever side you find yourself on, this is the right debate to have.  To dispense with “quid pro quo” and substitute “bribery” or “extortion” would only sow confusion. Bribery and extortion are crimes, but they have precise and subtle definitions that may not be well understood by non-lawyers. So let’s keep things simple. Let’s first determine whether the president really proposed a bargain. Only if the answer is yes do we have to decide whether the quid he demanded for his quo broke the law.(1) If you happen to like your incidences a bit co-, you might want to follow me down one last rabbit hole.I mentioned above that the serial killer chased by Clarice Starling in “The Silence of the Lambs” is called Buffalo Bill.The Oxford English Dictionary, as one of its examples of traditional usage of “quid pro quo,” provides a play on words from “Sunny South,” an 1860 pro-Southern tract by one J. H. Ingraham:“All things being equal—that is, the quid being equal to the quo as my brother used to say.”J. H. Ingraham was the father of Prentiss Ingraham, the Confederate officer who after the Civil War garnered fame as the author of a series of still-popular books about ... Buffalo Bill.To contact the author of this story: Stephen L. Carter at scarter01@bloomberg.netTo contact the editor responsible for this story: Sarah Green Carmichael at sgreencarmic@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Stephen L. Carter is a Bloomberg Opinion columnist. He is a professor of law at Yale University and was a clerk to U.S. Supreme Court Justice Thurgood Marshall. His novels include “The Emperor of Ocean Park,” and his latest nonfiction book is “Invisible: The Forgotten Story of the Black Woman Lawyer Who Took Down America's Most Powerful Mobster.” For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • Apple Plans Mega Bundle of Music, News, TV as Early as 2020

    Apple Plans Mega Bundle of Music, News, TV as Early as 2020

    (Bloomberg) -- Apple Inc. is considering bundling its paid internet services, including News+, Apple TV+ and Apple Music, as soon as 2020, in a bid to gain more subscribers, according to people familiar with the matter.The latest sign of this strategy is a provision that Apple included in deals with publishers that lets the iPhone maker bundle the News+ subscription service with other paid digital offerings, the people said. They asked not to be identified discussing private deals.Apple News+, which debuted in March, sells access to dozens of publications for $10 a month. It’s often called the “Netflix of News.” Apple keeps about half of the monthly subscription price, while magazines and newspapers pocket the other half.If Apple sold Apple News+ as part of a bundle with Apple TV+ and Apple Music, publishers would get less money because the cost of the news service would likely be reduced, the people said.As the smartphone market stagnates, Apple is seeking growth by selling online subscriptions to news, music, video and other content. This month, it launched Apple TV+ for $4.99 a month with shows from stars including Jennifer Aniston and Jason Momoa.Bundling these offerings could attract more subscribers, as Amazon.com Inc.’s Prime service has done. Apple is already experimenting with this kind of approach. It recently began offering a free Apple TV+ subscription to students who are Apple Music subscribers. Still, the company’s plans may change, given how complex deals like these can be.Some media executives say the amount they’ve received from Apple News+ so far has been less than expected. One publisher typically gets under $20,000 a month, less revenue than it saw from Texture, a previous iteration of the service that Apple acquired last year, one person said.Apple News+ offers dozens of magazines, like the New Yorker, GQ and People, as well as major newspapers such as The Wall Street Journal and the Los Angeles Times. Bloomberg Businessweek, owned by Bloomberg LP, also participates.It remains unclear whether publishers are seeing less revenue than they expected because Apple News+ has few subscribers, or because their content isn’t being widely read. Publishers share the remaining 50% of the revenue based on how much time Apple News+ subscribers spend reading their articles. Apple has not revealed subscriber numbers for Apple News+. The company recently expanded the service to Australia and the U.K.Advertisers have been less interested in Apple News+ because Apple’s restrictive data policy makes it difficult for marketers to target specific readers, one of the people said. Some publishers also would like Apple to share data about subscribers, like email addresses, which they could use to sell other offerings.As part of the contracts, media companies have the right to pull their magazines or newspapers from Apple News+ after a year if they’re unhappy with the service, one person said.The media industry was initially wary of Apple News+ before it launched, fearing their readers might cancel existing subscriptions and get their articles at a cheaper price from Apple. For that reason, some did not make all their articles or magazines available. Others, including the New York Times and the Washington Post, didn’t sign up.Still, some news executives are pleased with how Apple News+ has gone so far.“The financial results to date are consistent with our expectations,” Norm Pearlstine, the executive editor of the Los Angeles Times, said in a statement. “We are optimistic that they will continue to grow in the months and years ahead.”To contact the reporters on this story: Gerry Smith in New York at gsmith233@bloomberg.net;Mark Gurman in San Francisco at mgurman1@bloomberg.netTo contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, Alistair Barr, Andrew PollackFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Bloomberg

    Will Ukraine Turn Back to Russia? This Billionaire Thinks So

    (Bloomberg Opinion) -- When Igor Kolomoisky says Ukraine should turn away from the West and back toward Russia, the world should listen, even if the Ukrainian billionaire doesn’t call the shots in Kyiv to the extent that many believe he does. Despite the seemingly irreparable damage Russia caused to its relationship with Ukraine by annexing its territory and sustaining a separatist war in its eastern regions, it’s conceivable that Ukraine eventually could return to its old strategy of having Russia and the West compete for its affections.Kolomoisky, whose TV channel ran Volodymyr Zelenskiy’s comedy shows before the actor and producer became Ukraine’s president this year, gave a scandalous interview to the New York Times. He said that since the West is in no hurry to accept Ukraine as a member of the European Union and the North Atlantic Treaty Organization, Ukraine should make peace with Russia and take Russian money instead of International Monetary Fund loans. As things stand, he said, the U.S. is just using Ukraine to wage “war against Russia to the last Ukrainian.” But Russia is “stronger anyway” and it’s time to mend fences.Kolomoisky was one of the engineers of Ukraine’s decisive break with Russia in 2014. He funded the volunteer battalions that fought off the early onslaught of Russian-backed separatists in eastern Ukraine, helping to contain the spread of secession before the long-underfunded regular army was strong enough to be of any use. In the process, he lost his financial business in Russia and gained the Dnipropetrovsk regional governorship in Ukraine, which former President Petro Poroshenko soon took away, seeking to dismantle what he saw as Kolomoisky’s personal army. So what the oligarch is saying now could be seen as a turnabout, except Kolomoisky doesn’t think in such terms: Whatever he says or does, he’s looking out for his business interests first.Today, these interests consist in getting compensation for the 2016 nationalization of Privatbank, Ukraine’s biggest lender, which he co-owned and which the Poroshenko government accused him of plundering. Kolomoisky is tied up in complex litigation with now-state-owned Privatbank. He and his partner have just been forced to pay 10 million pounds ($12.8 million) to cover Ukraine’s legal expenses in a London court. The billionaire is widely suspected of trying to exploit his longstanding relationship with Zelenskiy to end the conflict in his favor. The president so far has managed to remain above the fray, but he hasn’t heeded calls from U.S., European and International Monetary Fund officials to distance himself clearly from Kolomoisky. The oligarch has few friends in Washington or the European capitals, and he used the interview to make an implicit threat: If Western officials continue fighting him and supporting the Privatbank nationalization, he’ll turn Zelenskiy sharply toward Russia. Whether he can do that is a different matter.Zelenskiy was elected on the promise of restoring peace to eastern Ukraine, and he’s taken some steps toward that goal by exchanging prisoners with Russia and accepting a key Russian demand concerning the sequence of events that should lead to the return of separatist territories to Ukrainian control. But even that progress ran into the resistance of Ukrainian intellectuals who see it as capitulation — and of the very volunteers Kolomoisky once funded. These combat veterans, armed with weapons they’d brought back from the war, inserted themselves in areas where Ukraine and the separatists had agreed to pull back their troops as a prelude to “Normandy format” peace talks mediated by France and Germany. Zelenskiy was forced to travel to the area and attempt to persuade them to leave.Now, the pullback appears to be complete, the area is being cleared of mines and there are no obstacles to the talks. But Zelenskiy is aware by now that compromises with Russia are fraught with the danger of a revolt at home, possibly even an armed one. If he did what Kolomoisky says, Kyiv and much of central and western Ukraine almost certainly would rise against him. That’s not a reasonable price to pay for Kolomoisky’s early support, and today, the billionaire has no obvious leverage on the president.Voice, a liberal opposition party, recently proposed that Ukraine exit the 2015 Minsk agreements, which serve as the framework for the current peace process, and put off ending the conflict in the east and concentrate on domestic issues until better times. Zelenskiy is probably tempted to try a version of this plan, only without formally exiting the Minsk agreements, which likely would anger Ukraine’s European allies. Zelenskiy has his hands full with an ambitious reform agenda. On Wednesday, the Ukrainian parliament, in which his party has a majority, took the first step toward allowing a market in land, something all of Ukraine’s previous governments failed to do.Yet Kolomoisky's provocative statements shouldn’t be dismissed out of hand.Zelenskiy, indeed, isn’t getting much Western support today, apart from technical and military assistance programs that are, let’s face it, useful but not vitally important. The IMF is withholding its more significant support, in part because it fears Zelenskiy might not try hard enough to recoup Privatbank losses from Kolomoisky. French President Emmanuel Macron lately has been talking about a rapprochement with Russian leader Vladimir Putin, and neither France nor Germany can be expected actively to side with Ukraine in the peace talks because both are eager to be rid of the problem. In the U.S., ongoing Ukrainegate and impeachment proceedings have, in effect, made Ukraine the actual country both toxic and irrelevant.Kolomoisky’s point is that, five years after breaking with Russia, Ukraine isn’t a priority project for the West — but it’s still a priority for Putin. Zelenskiy can’t afford, and doesn’t want, to hand his country to the Russian president. But he can quietly open it to more Russian trade and investment, and he can gradually return to the both-sides-against-the-middle policy all Ukrainians leaders except Poroshenko tried to pursue after Ukraine became independent. In a way, that’s also the game Alexander Lukashenko, the president of neighboring Belarus, tries to play, turning to the West every time he has a disagreement with Putin and to Putin when he senses he can get something out of him.This cynical policy is a long way from the “civilizational choice” Ukrainian politicians claimed to have made under Poroshenko. But Western politicians must realize it’s a natural fall back for Ukrainians when they feel spurned. If Zelenskiy does start flirting with Putin, it won’t necessarily be because of Kolomoisky’s evil influence. A Western failure to embrace his reformist zeal and support his attempts to get more favorable peace terms with Russia could be the real reason.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.

  • 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.