35.07 0.00 (0.00%)
After hours: 4:55PM EDT
|Bid||35.11 x 2200|
|Ask||35.12 x 1400|
|Day's Range||34.93 - 35.75|
|52 Week Range||21.34 - 36.00|
|Beta (3Y Monthly)||1.11|
|PE Ratio (TTM)||43.84|
|Earnings Date||Aug 6, 2019 - Aug 12, 2019|
|Forward Dividend & Yield||0.20 (0.57%)|
|1y Target Est||33.75|
(Bloomberg) -- A chunk of New York City plunged into darkness for hours as 72,000 customers on Manhattan’s West Side lost power on the anniversary of the historic 1977 blackout. Energy supply has since been fully restored, Governor Andrew Cuomo said.The outage on Saturday night affected an area stretching from Fifth Ave. to the Hudson River, and from West 42nd through 71st streets, an area that includes Times Square and Central Park. Subway services to as far away as Brooklyn, Queens and the Bronx were disrupted as the power failure took a toll on the “entire system.”“While this situation was luckily contained, the fact that it happened at all is unacceptable,” Cuomo said in a briefing before he headed to a substation that caused the outage. He’s directed “a full and thorough investigation into the cause of tonight’s blackout and we will hold all parties accountable in ensuring this does not happen again,” he added.A substation explosion and fire that created a surge was the cause of the outage, in turn affecting four other substations, Cuomo said earlier in the evening, citing an update he received from Consolidated Edison Inc. or ConEd, the city’s utility. He said no passengers were stranded on trains and there have been no reports of injuries so far.Singer Jennifer Lopez canceled her concert at Madison Square Garden and said people were evacuated from the venue. The outage also caused all but three Broadway theaters to close, the New York Police Department’s Times Square Command said.The power failure happened on the 42nd anniversary of the infamous blackout that left most of the city without power. The outage led to widespread looting and arson that cost an estimated $310 million in damages, the New York Times reported.(Updates with Governor Cuomo’s comments in third paragraph.)\--With assistance from Aibing Guo.To contact the reporters on this story: Shoko Oda in Tokyo at email@example.com;Will Wade in New York at firstname.lastname@example.orgTo contact the editors responsible for this story: Matthew G. Miller at email@example.com, Linus Chua, Shamim AdamFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
George Houraney, a Florida-based businessman, organized an exclusive “calendar girl” party at Mar-a-Lago. He was bringing 28 girls. He was surprised to find out that only Jeff Epstein and Trump would be there.
(Bloomberg Opinion) -- Call it progress: When President Donald Trump unveiled a plan in May to reform the U.S. immigration system, he said that the number of immigrants granted green cards each year would remain unchanged. That’s a U-turn from his 2017 endorsement of a bill that could’ve halved annual admissions, currently running at about 1.1 million. The new plan promotes a merit-based system that privileges skills and education over extended family ties. But it is short on detail, lacks political support even from Republicans, and is at odds with the administration’s record of imposing new restrictions on skilled immigrants.This ambivalence and disarray, although more pronounced in Trump’s administration, exemplifies the approach America has taken to the issue for decades. Even as the country grows more dependent on new arrivals, its policies toward immigrants — skilled and unskilled, legal and illegal, refugees and asylum seekers — remain confused and ill-considered. Change has rarely been so urgent.It’s true that the U.S. has undergone a significant demographic shift in recent decades. In 1970, only 4.7 % of its inhabitants were foreign-born. By 2017, the number had risen to 13.6%, close to its historical peak of 14.8% in 1890.But the fact is, the country needs more immigrants of every kind. It needs innovators, entrepreneurs, scientists, engineers and other skilled workers for its economy to thrive. It needs crop-pickers and health-care workers to do jobs native-born Americans generally don’t want. It also needs to resolve the status of more than 10 million undocumented residents. And as the world’s most powerful democracy, whose strength and legitimacy depend on living up to its values, it has compelling reasons to fix its broken systems for aiding asylum seekers and refugees.The starting point for thinking about these challenges is to recognize how important immigrants are to the U.S. economy. According to the New American Economy Research Fund, immigrants and their children established nearly half of today’s Fortune 500 companies. In 2017, they made up about 17% of high-skilled working males. In Silicon Valley, more than half the workers in STEM fields — and an even higher proportion of software engineers — were born overseas.In all likelihood, the importance of immigrants will grow in the digital age. There’s good evidence that high-skilled immigration promotes innovation. Immigrants are almost twice as likely as the native-born to start new businesses, and in 2014, they made up about 20% of all entrepreneurs. Figures compiled by Bloomberg show that “states with the greatest concentration of immigrants create the most jobs and biggest increase in personal income.”Demographics, meanwhile, are making America’s needs more acute. A country with fewer babies and more old people has greater need of immigrants. Last year, the U.S. population grew at its slowest pace since 1937. Nearly one-fifth of states have lost residents during the last two years. Alaska, Maine and Vermont — along with numerous cities and towns across the country — are even offering bounties to newcomers.Other things equal, this means slower economic growth, and an aging workforce pushes the same way. Fewer workers supporting more retirees will put Social Security and other public pension plans under further strain.In short, the U.S. can’t afford an immigration system that saw its last major overhaul half a century ago.Related: Hard Questions on Immigration Deserve Straight AnswersBy any measure, America’s formal immigration processes are confusing and often arbitrary. Every year, for instance, 50,000 visas are allotted by lottery (in 2018, nearly 15 million people applied). Currently, the U.S. allocates 140,000 visas each year to employment-based immigrants — only about 12% of the total admitted in 2017. Two-thirds were granted on family ties.On balance, it makes sense to prioritize an increase in skill-based immigration — as Trump proposes — where the economic benefits are greatest and most obvious to current citizens. But how might this be done?Consider the system as it stands. Like most U.S. immigration procedures, the road from bright student to happy permanent resident is tortuous. Let’s say you get a student visa. Upon graduation, you’re entitled to a period of paid practical training. If your goal is to stay in the U.S., you find a company to sponsor you for an H-1B visa as a specialized worker. But Uncle Sam allocates only 85,000 of these annually, so you have to pray that yours is picked in a lottery. This year, 201,011 petitions were submitted. If you’re one of the lucky ones, your petition and visa must then be approved. Retaining your visa depends on retaining your job. Hold onto both and you can apply for a green card. But guess what? There’s a per-country cap of 7% of allotted visas each year. If you’re from a high-demand country like China or India, you’re in for a long wait — as of April 2018, it amounted to 17 years for Indians with bachelor’s degrees and, perversely, 151 years for those with advanced degrees.No wonder Canada has made the U.S. process a selling point for its own visa program, or that Australia came out ahead of the U.S. in a recent survey of national attractiveness to talented migrants.The Trump administration seems determined to make things worse. Student visa issuances fell from about 678,000 in 2015 to 390,000 in 2018. Even though the law regarding H-1B visas hasn’t changed, the denial rate surged from 5% in 2012 to 32% in 2019, including for seasoned petitioners such as Amazon.com Inc. Proposed regulations will put new limits on the time students can stay in the U.S., strip work permits from spouses of H-1B holders, and narrow eligibility for work visas.In fairness, the still-undefined points system Trump has aired could be an improvement. Similar systems in Australia, Canada and New Zealand balance the need for high-skilled workers with longer-term objectives, and create a more transparent and objective process. A comparable approach could be applied to semi-skilled workers in agriculture, health care or other fields in demand. Among other benefits, such an arrangement could avoid the per-country caps that have kept the U.S. from turning China and India’s brain drain into America’s gain.But the transition will face a big obstacle: What to do about the nearly 4 million immigrant petitions, most of them family-based, already on file? To keep faith with those applicants, give them the option of staying in the existing lengthy queue or submitting an application under a new system that awards some points for family ties, with the prospect of a speedier entry. The U.S. could also afford to ease the overall backlog — so long that applicants are dying out of the system — by increasing the number of green cards per year, say to 1.4 million or so.******Unfortunately, Trump’s approaches to the other huge challenges facing the immigration system are less coherent — or even counterproductive.Start with the undocumented. Trump’s fixation on an expensive and ineffective border wall has diverted resources from other priorities. His slandering of undocumented immigrants has sown division and made it harder to resolve their fate politically. And his administration’s cruel and incompetent enforcement strategies have gravely harmed families and children while failing to deter newcomers and damaging America’s reputation and relations with its neighbors.If Trump wants to reduce illegal immigration, he should instead be pushing long-delayed initiatives such as an effective entry/exit system that can curb the visa over-stayers who have outnumbered illegal border crossers in recent years. He could encourage wider use of the E-Verify system to block illegal workers, and step up prosecutions of those companies that employ them; last year, only 11 employers faced charges. Instead of cutting aid to Central America, he should bolster it, while also using U.S. leverage to persuade its leaders to invest more in their people instead of exporting them to earn remittances.As for the millions of undocumented already living in America, Trump proposes mass deportations — an idea that would take years, cost several hundred billion dollars, and likely cause U.S. GDP to contract by more than $1 trillion. (The U.S. deported about 295,000 people in 2017, down from 435,000 in 2013 under Obama.) For all Trump’s hyperventilating about an “invasion” of the U.S., the undocumented population fell from 12.2 million in 2007 to 10.5 million in 2017.The quickest, smartest and most compassionate way to shrink the undocumented population further would be to legalize the million-plus people in the U.S. already under some form of temporary protection. More than 400,000 immigrants, for instance, have been given Temporary Protected Status from deportation back to countries suffering from natural disasters, war or civil unrest. Another 700,000 — the so-called Dreamers — have had temporary protection under the Deferred Action for Childhood Arrivals program.Both groups deserve compassion. Dreamers were brought to the U.S. by their parents, raised and educated there, and know no other home. Many under TPS have now been in the country for decades. In 2017, the two groups contributed more than $5.5 billion in taxes, and represented $25 billion in spending power. The lives they’ve built include businesses, jobs and homes, as well as nearly 300,000 children who are U.S. citizens by birth. Sending them back to their countries of origin, especially the Dreamers, would not only betray America’s values but squander taxpayers’ investments in their educations and upbringing. Far better to legislate a path to legal status and terminate or revamp TPS to avert the creation of similar limbos in the future.Asylum is another area where Trump’s approach is making a bad situation worse. Nothing illustrates the absurdity of his wall preoccupation more than the tens of thousands of Central American asylum-seekers wanting to turn themselves in to the Border Patrol rather than evade it. The system is undeniably broken: Families seeking to escape poverty, not persecution, exploit its inconsistencies and weaknesses with the help of criminal gangs that profit from their misery.But the answer to these problems isn’t more troops at the border or overblown states of emergency. It’s more judges and clerks for the immigration courts, more asylum officers who can process cases quickly, and more humane shelters that don’t prompt fervid comparisons with concentration camps. The best way to deter future unmerited claims is to resolve them quickly so the word gets out. And yes, there’s nothing wrong with deporting families whose asylum claims have been rejected: If you want the public to support asylum, it must believe that the system is credible as well as compassionate.A final concern is refugees. Trump has done his best to transform America’s policies from a beacon of global hope into a darkening blot on its reputation. One of his first acts in office was to suspend refugee admissions, citing dubious security threats. (Unlike asylum applicants who simply show up at U.S. borders, refugees must undergo extensive screening before they’re approved for resettlement.) Since then, he has repeatedly lowered the ceiling for refugees and slow-rolled even those reduced admissions: Last year, when the ceiling was set at 45,000, the U.S. admitted just 22,491 refugees — the lowest number since passage of the 1980 Refugee Act. This year, with the number of displaced people worldwide at a record high, the ceiling is even lower: 30,000. In 1980, the U.S. admitted 207,116.America’s moral standing aside, such stinginess does the country no favors. A 2017 government study, which the Trump administration tried to suppress, estimated that from 2005 to 2014, refugees actually generated $63 billion more in government revenue than they cost. They’ve revitalized ebbing communities in Maine, Missouri, New York and more. Their rate of entrepreneurship is higher even than ordinary immigrants. And they’re more likely to become U.S. citizens — a proven boost to everything from income to home ownership. Dollar for dollar, person for person, the 3 million refugees that the U.S. has resettled since 1980 have been an invaluable investment.******Fortunately, overall attitudes about immigration have undergone a positive sea change in the U.S. since the 1990s, the decade that saw the second-biggest jump in the proportion of the foreign-born population (after the 1850s). Polls show much greater recognition of the benefits that immigrants bring, and a diminished sense of the threats they pose.Yet underlying this shift is a polarizing trend that impedes serious reform: Even as Democrats and independents have become much more supportive of immigrants and tolerant of illegal immigration, Republican attitudes have slightly hardened. The partisan gap on immigration is by some measures at a historic high. At its crudest level, this dynamic has translated into a Republican Party that resists even modest fixes to immigration laws, and a Democratic Party that refuses to talk seriously about enforcing them.Republican intransigence, for instance, is largely to blame for the failure of the last big attempt at comprehensive immigration reform. In 2013, House Speaker John Boehner refused even to hold a vote on the Senate’s so-called Gang of Eight bill, a bipartisan and badly needed measure that included a more merit-based system and a path to citizenship.Today’s Democrats, meanwhile, don’t exactly talk the walk on enforcement. When the New York Times recently asked 21 of the 2020 Democratic candidates for president if they thought “illegal immigration is a major problem in the United States,” only four mustered a yes or no. The rest served up the kind of soggy waffles you’d expect at a campaign diner stop.The fact is, both parties are going to have to commit themselves to making significant changes in the American immigration system in the coming decades and reconciling their differences. Fat chance of that, you might think — especially given the polarized discord on the issue since the failure of the Gang of Eight bill and the coming of Trump. Yet the past offers a hopeful precedent. In 1977, Congress stiff-armed President Jimmy Carter’s proposals on immigration reform, which were sparked by rising illegal Mexican immigration. But that defeat helped birth initiatives and bills that led to the Immigration Reform and Control Act of 1986, the last big reform Congress passed.Resolving today’s even more complex challenges will require the kind of bipartisanship and pragmatism that have proved elusive in recent years. Let’s hope that the presence of more than 10 million undocumented residents, the crisis at the border, and the growing global competition for immigrant talent prove to be catalysts that recall Americans to their senses. The demographic and economic future of the United States depends on it.To contact the author of this story: James Gibney at firstname.lastname@example.orgTo contact the editor responsible for this story: Timothy Lavin at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.James Gibney writes editorials on international affairs for Bloomberg Opinion. Previously an editor at the Atlantic, the New York Times, Smithsonian, Foreign Policy and the New Republic, he was also in the U.S. Foreign Service from 1989 to 1997 in India, Japan and Washington.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
If you see advertisements for a mall that look like they came straight out ofthe '80s on today's print edition of The New York Times, fire up Google Lens
The counselor to the president, on her visit to the friendly confines of “Fox & Friends,” talks about the recent tussle between House Speaker Nancy Pelosi and four freshman Democrats.
Small and large cap stocks are widely popular for a variety of reasons, however, mid-cap companies such as The New...
(Bloomberg Opinion) -- Now that the Fourth of July has slipped past, let’s take a quick look at a trio of controversies over history and tradition that erupted just as the holiday was creeping up on us.The most prominent was the uproar over Nike’s decision to withdraw a version of its Air Max 1 Quick Strike honoring Betsy Ross, which was to go on sale around Independence Day. The shoe displayed on its heel the original U.S. flag with its 13 stars — which Ross either did or didn’t create — and was pulled after former NFL quarterback Colin Kaepernick pointed out to the company “that the Betsy Ross flag had been co-opted by groups espousing racist ideologies.”I have two observations.First: White supremacists shouldn’t get to decide for the rest of us the meaning of our historical symbols. I’m old enough to remember the Ku Klux Klan — not today’s pale shadow, but the Klan to which many Southern politicians of the 1960s still pledged open allegiance. The group’s rallies always featured American flags in abundance — you know, the 50-star kind — and nobody thought the rest of us had to give up on the symbol by letting the bad guys control its significance. In that sense, Nike’s action might be seen not as a strike against the white supremacists but as a surrender to them.True, it’s not just the supremacists. The New York Times notes that some find the 13-star flag an offensive reminder of our nation’s “painful history of oppression and racism.” Fair point. But I’m a great believer in confronting rather than avoiding the burdens of history. And besides, if the 13-star flag must be hidden away as a symbol of racism, what about the 13 stripes on the 50-star flag?Second observation: Furious about Nike’s decision, the governor of Arizona has canceled the $1 million in subsidies that the company was promised in return for opening a $184 million factory in the state. OK, this sort of political tit-for-tat happens all the time — but the Supreme Court has recently made things interesting. At the end of its most recent term, the justices ruled in Iancu v. Brunetti that the federal government cannot refuse to register a trademark for being “scandalous” — which the court defined as giving offense — because such a power would amount to viewpoint discrimination, which the First Amendment forbids.Hmm. You get the Arizona subsidy if you sell the shoe with the 13-star flag but not otherwise? Sure sounds like viewpoint discrimination to me. I don’t expect Nike to sue Arizona for violating the company’s First Amendment rights, but goodness that would be a fun case.*Now let’s travel to St. Louis Park, Minnesota, where the city council voted in June to end the practice of reciting the Pledge of Allegiance to open its meetings. At least part of the motivation seems to have been to emphasize that the town is “very welcoming and increasingly diverse.” This decision has led to predictable fury — and not just from the right. The editorial board of the Minneapolis Star-Tribune, no bastion of conservatism, weighed in against the city, which in turn has promised to revisit its position later this month.Although a government institution can certainly do the people’s business without regularly pledging allegiance, the U.S. Congress opens its sessions with the Pledge of Allegiance. So does the town council in the Connecticut hamlet where my wife and I live. Since St. Louis Park is in Minnesota, let’s add this: The Minnesota legislature begins its meetings with the pledge. Minnesota public school students are required by law to recite it at least once a week unless they opt out.Moreover, the claim that the pledge is anti-diversity seems rather obscure. Wherever people might have come from originally, whatever the state of their documentation, whatever their religion or creed, most of those who live in the U.S. are here because they want to be. In its aspirational language, the Pledge of Allegiance arguably promotes rather than hampers diversity.(1) Certainly there are threats to diversity; but the pledge isn’t high on the list.Besides, as the Star-Tribune editorial pointed out, people who object to the pledge needn’t recite it; and they can even register their protests. I’ve long argued that a respect for vigorous dissent is at the heart of the American idea. The recital of the pledge to open a meeting signals only that those in positions of authority believe in what the flag stands for. The rest of us are free to do as we like.*Finally, let’s move on to Charlottesville, Virginia, which has voted to scrap its traditional commemoration of Thomas Jefferson’s birthday. Henceforth the city will celebrate instead Liberation and Freedom Day, marking the entrance of Union troops into the city on March 3, 1865. Unsurprisingly, social media erupted. Some critics accuse the city of hypocrisy, given that Charlottesville itself has a long history of racism.Regular readers know I’m no fan of sweeping disagreeable history under the rug, but let’s not be too hasty. Here’s the Wall Street Journal on the city council’s motivation: “Charlottesville has been grappling for years with its history of discrimination. Those efforts intensified after white nationalists gathered in the city in 2017 for a rally that descended into violence.”Well, “descended into violence” is one way to put it. What actually happened was that a self-proclaimed white supremacist deliberately drove his car into a crowd of counter-demonstrators, killing one and injuring two dozen.Still, on the merits, let me note that I’m not as anti-Jefferson as a lot of my friends. He did terrible things, like owning human beings, and he also did good and important things, like drafting the Declaration of Independence. I have no problem with those who want to celebrate him, as long as they don’t hide how mixed his legacy is.But I’m entirely onboard with the city council’s decision to celebrate the end of enslavement. My great-great grandfather Stanton was enslaved in Fauquier County, a bit north of Charlottesville, and was thrice carried back to Virginia in chains after escaping. In the end, Stanton successfully liberated himself. Alas, most of the South’s captive labor force was not as fortunate. Commemorating the end of this great national evil seems to me ... the patriotic thing to do.(1) Whatever you think of the “Under God” part, added by Congress in the 1950s, the Baptist preacher who wrote the pledge didn’t include it.To contact the author of this story: Stephen L. Carter at firstname.lastname@example.orgTo contact the editor responsible for this story: Michael Newman at email@example.comThis 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.
Are the causes economic, with disappointing living standards triggering support for illiberal populist political parties? The question is fundamental: the answer to it determines what policies are required to restore support for liberal politics, or whether that is even possible. The toughest case for the economic explanation would seem to be the Nordic social democracies, which have long been known for high and egalitarian levels of prosperity yet have also seen a rise in rightwing illiberal populism.
(Bloomberg Opinion) -- When I heard on Tuesday night that Lee Iacocca had passed away, I was momentarily taken aback. Not so much because he had died — he was, after all, 94 — but because, for someone who had been such a larger-than-life figure for so much of his career, he had been out of the limelight for so long.Iacocca first burst into the public consciousness in 1963, when he made the covers of both Time and Newsweek(1) in the same week, standing in front of the brand new Ford Mustang, which he had (allegedly) masterminded as a top Ford executive. His last public act took place in 1995, when he and the financier Kirk Kerkorian made a foolhardy attempt to take over Chrysler. Although he later formed an investment company, and dabbled in this and that, this once unforgettable figure spent the last two decades of his life, well, forgotten.In the headline of its obituary, the New York Times described Iacocca as a “Visionary Automaker Who Led Both Ford and Chrysler.” And that’s true, so far as it goes. Having accrued most of the credit for the Mustang, he was promoted to Ford’s president by the time he was 46. But in 1978, even though Ford was going great guns, Henry Ford II fired him. Supposedly, Ford said he was canning Iacocca because he didn’t like him.Then came his tenure at Chrysler, which was on the brink of collapse when he took it over. He persuaded the federal government to give the company $1.5 billion in loan guarantees, and used that money to orchestrate a brilliant turnaround, spearheaded by the Chrysler minivan — a car that, in addition to making the company gobs of money, had a profound impact on American society. (Just ask any parent.)All well and good.But Iacocca influenced the culture in another way as well. The celebrification of chief executives can be traced directly to him. Yes, there had been other famous corporate chieftains before Iacocca — John D. Rockefeller and Walt Disney come to mind — but they were the exceptions to the rule that CEOs should be low-key, boring even. Iacocca(2) made it okay for a chief executive not just to gain fame, but to desire it.When had a chief executive made himself the centerpiece of his company’s ad campaign before Iacocca did it at Chrysler? When had one made himself a selling point in asking Congress for help? Or taken a public victory lap the way Iacocca did after the Chrysler turnaround, posing for magazine covers from Life to the Saturday Evening Post? Or publicly muse about running for president? Oh, and when had a chief executive written an autobiography that became one of the best-selling books of all time? Not business books, mind you. Books. Published in 1984, there were more than 7 million copies sold by the end of the following year.After Iacocca did it, other CEOs put themselves in their companies’ ad campaign: Dave Thomas, founder of the Wendy’s Co., and Victor Kiam, who owned Remington Products Co., maker of electric shavers. (His tag line: “I liked it so much, I bought the company.”) CEOs became less bashful about granting interviews and posing for magazine covers. (By 2002, Bill Gates had posed for Fortune’s cover 25 times.) Or bragging about their accomplishments to anyone who would listen. (I’m talking to you, Jack Welch.)And then there were the ghost-written CEO autobiographies, which poured forth into bookstores after the success of “Iacocca: An Autobiography.” “Pizza Tiger,” by Tom Monaghan, founder of Domino’s Pizza Inc. “Work in Progress,” by Michael Eisner, former chief executive of The Walt Disney Co. “Straight From the Gut,” by Welch, CEO of General Electric Co. “Sam Walton: Made in America,” by Walmart Inc. founder Sam Walton. “Father, Son & Co.: My Life at IBM,” by Thomas Watson Jr.(3) And lest we forget: “The Art of the Deal,” by Donald Trump. That came out three years after Iacocca’s book.I never covered Iacocca myself, but I’ve long realized that much of my career has been spent taking advantage of the trail he blazed. My very first business story, in 1982, was about T. Boone Pickens’s first hostile takeover attempt, which I wrote for Texas Monthly. When Pickens decided to write his autobiography a few years later, he hired me as his ghostwriter. (It ended badly for me, but that’s a story for another day.)During my decade at Fortune, getting to know CEOs, interviewing them, writing stories about them — and getting them to pose for the cover — was at the heart of the enterprise. I did a short documentary about Warren Buffett. At the New York Times, my readership always spiked when I wrote a column about Steve Jobs and Apple. Now at Bloomberg, I still find myself drawn to columns about CEOs. Readers care about the comings and goings of chief executives in a way they never did before Lee Iacocca.So I guess what I should say as I bid adieu to Iacocca is simply this: Thank you. Maybe that’s what we should all say.(1) And those were the days when making the cover of Time or Newsweek really meant something!(2) I should also note that Iacocca wasn’t just a business celebrity but an Italian-American celebrity. In 1963, when he first became famous, that was something Italian-Americans took pride in; by the time he left Chrysler in the 1990s, Italian-American celebrities had become no big deal. That’s progress.(3) For the record, the Watson book, written with Peter Petre, is in my view, the best CEO autobiography ever written. It is a deeply personal account of not just running a company but dealing with a larger-than-life father, who founded IBM.To contact the author of this story: Joe Nocera at firstname.lastname@example.orgTo contact the editor responsible for this story: Tobin Harshaw at email@example.comThis 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.
(Bloomberg Opinion) -- One hundred years ago this week, the U.S. was firmly in the grip of the Red Scare. “All Police Power Turned Upon Reds,” screamed the front-page headline of the New York Times on July 4, 1919. And, indeed, around Independence Day the police power was fully unleashed against the radicals, who had recently sent a series of bombs to public officials. But there was a lot more to the Red Scare than standing guard against bombings. It was the ideas themselves that the nation sought to restrict.How little things have changed. In the summer of 1919, public and private power were turned against ideas considered dangerous. The nation is now gripped by a similar fervor. True, the censored views are those hated by the left rather than those hated by the right. But today’s campaigns to ban and remove and deplatform target the same enemy as yesterday’s: the ability to communicate those dangerous ideas.In the summer of 1919, after first denying it, the New York Public Library admitted to possessing a copy of Mikhail Bakunin’s “God and the State.” Perhaps worse, as the New York Times reported, the city’s librarians, discovering that they were missing some issues of the radical newsletter “Bread and Freedom,” had actually tried to fill out their collection.During that same summer, Attorney General A. Mitchell Palmer proposed extending the notorious wartime sedition act to peacetime. The goal — as a young government lawyer named J. Edgar Hoover noted in a memorandum — was to prevent “the actual printing and sale” of radical literature.(1) Federal agents, unconcerned about legal authority, seized from the mails literature they deemed seditious, in order to prevent its delivery.Not just organizations but individuals were targets. A few years earlier, concerned about the “radical” views of the economist Scott Nearing, the University of Pennsylvania’s Wharton School of Business had dismissed him from its faculty. During that Red Summer of 1919, the state of New York raided Nearing’s new office at the Rand School, a socialist educational institution in Manhattan, searching for — no surprise — radical literature.Which brings us to the summer of 2019. We, too, live in an era when activists are determined to prevent the circulation of dangerous ideas. Today’s preferred method is the ban — from campus, from social media, from internet search results. But it’s the same mischief.One might argue that the goals pursued by today’s censors are more worthy than those of the Red hunters. Maybe so. But if history teaches us anything, it’s that sometimes the tool rather than the goal is the problem. Once you decide that speech is a privilege available only to those who don’t offend the values of the movement, it’s a short and easy step to cheering as a mob roughs up a journalist whose views the movement deems objectionable.The mobs were cheered on in 1919 too, as they broke up Socialist marches on May Day and beat up radical speakers and journalists. An editorial in the Austin (Texas) Statesman blamed the victims: “Everywhere the red flag appeared it stirred the people to anger against those bearing it.” The Washington Post, too, knew which side was at fault. The paper’s editors wrote that the “violence and bloodshed” of the riots were the predictable result of the effort to spread a radical message that “invited the indignant resistance” of “loyal citizens.”But the problem, argued the Post, went deeper: “A stop must be put to the lying propaganda preached by men of reputed intellect, which incites mental defectives to deeds of violence.” The time had come to prevent the radicals from spreading their “vicious and malicious lie.” It sounds an awful lot like arguments made today against the spread of fake news.It’s true, of course, that there’s a difference between the pursuit of censorship by government and the same behavior by private actors who happen to own the means of mass communication. Surely private actors have the right to promote what messages they like and deny forums to others.(2)Perhaps — but during the Red Scare era, too, private actors who owned the means of communication tried to prevent the dissemination of dangerous ideas. Mainstream publishers became loath to bring out radical volumes. Privately controlled print shops also got involved — such as the several white-owned presses that refused to print a special edition of the black-owned Chicago Defender during the city’s 1919 race riot (again, the basis was the prevention of what we now call fake news.)And the practice didn’t end when the era did. I’ve mentioned before in this space the travails of my great-uncle, hounded and imprisoned by the federal government during the 1940s and 1950s for his Communist views. Back then, as during the Red Scare, the great technology of communication was the printing press. Most were privately owned. And one by one, they refused to print books or pamphlets deemed radical. A private means of communication open to everyone else was denied to Communists or those thought to have Communist leanings.The publication of radical views was driven underground — in some cases literally underground, for the FBI investigated reports that my great-uncle was part of a cell using a clandestine mimeograph machine in a Washington basement.In short, the notion that we combat wrong ideas by restricting their spread isn’t an exciting new idea. It’s a vicious and oppressive old one. Between those who pursue it today and those who pursued it in the past there is little to choose.A final point about the Red Scare of 1919. Eventually the liberal establishment found its voice. A team of lawyers including future Supreme Court Justice Felix Frankfurter published a report critical of government efforts to target the so-called “radicals.” The House of Representatives offered Palmer the opportunity to testify in response. The attorney general was unrepentant: “I apologize for nothing that the Department of Justice has done in this matter. I glory in it. I point with pride and enthusiasm to the results of that work.”Which was then and is now the heart of the problem. Proud and enthusiastic certainty about the rightness of your cause does not absolve you of responsibility for the wrongness of your methods. I’m not saying that no speech is ever dangerous and hateful. I’m saying that, during this 100th anniversary of the Red Summer, we should remember that how we achieve our goals is as important as their achievement.Happy Independence Day. (1) For these and other examples, see chapter 3 of this book as well as pages 176 to 177 of this book. Another excellent source is this book.(2) If you doubt that corporations have First Amendment rights, you’re presumably appalled by censorship by tech companies.To contact the author of this story: Stephen L. Carter at firstname.lastname@example.orgTo contact the editor responsible for this story: Michael Newman at email@example.comThis 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.
(Bloomberg Opinion) -- “Insanity is relative. It depends on who has who locked in what cage.” ― Ray BradburyWe’ve now had several months of reports of inhumane and obscene conditions at the migrant detention camps managed by the Trump administration along the southern U.S. border with Mexico. The myriad, sordid details are already part of a larger stain on America’s collective ethos; they will disfigure the country’s reputation for generations to come.A report released on Tuesday by the Department of Homeland Security’s independent monitor found that overcrowding or prolonged detention at five centers in Texas’s Rio Grande Valley represented “an immediate risk to the health and safety” of detained migrants, and violated laws governing how detainees should be treated. DHS inspectors visited the facilities in June and found that adults were crammed into cells with only room to stand and that children weren’t given hot meals or showers.Migrants forced to clean themselves with wet wipes or subsist on bologna sandwiches had developed constipation and other medical problems. They were so desperate to leave the detention centers, the report said, that when they saw inspectors they “banged on the cell windows, shouted, pressed notes to the window with their time in custody.” Detention camps meant to keep migrants for days while they awaited deportation or a transfer to longer-term facilities are now housing people for weeks on end.The DHS report came on the heels of statements from several members of Congress (all Democrats), who toured facilities in Clint and El Paso, Texas on Monday and described equally squalid conditions. Two of the lawmakers said border patrol agents had told detained migrant women that running water wasn’t available and that they should drink from toilets.Last week, the Texas Tribune reported that while some migrants at a facility in Donna, Texas, described their treatment as humane others held in camps in McAllen and Del Rio, Texas, weren’t allowed to bathe or brush their teeth. “They don’t have the humanitarian conditions for people to be there,” one migrant told the newspaper. “There were more than 200 of us in a single cage — seated on the floor, standing, however we could fit.” The same person said that “the stench inside overflowing toilets was so bad it made him gag and caused children to vomit.”In late June the New York Times reported that the Clint facility wasn’t providing migrants with toothbrushes, toothpaste or soap. “Children as young as 7 and 8, many of them wearing clothes caked with snot and tears, are caring for infants they’ve just met,” the Times wrote of the Clint camp. “Toddlers without diapers are relieving themselves in their pants. Teenage mothers are wearing clothes stained with breast milk.”Last year, after the Trump administration launched its “zero tolerance” policy aimed at discouraging migrants from crossing the southern border by charging them with crimes and separating children from their families or caregivers, the DHS wasn’t prepared to deal with the humanitarian crisis that ensued. The department, according to another of its own reports, lied about maintaining a non-existent “central database” it claimed it was using to keep track of separated parents and children. U.S. Border Patrol agents didn’t tell migrant parents that they would be separated from their kids until after it happened, according to that DHS report.Some Border Patrol agents have seemed content to bring a cold-blooded, racist approach to their work for quite some time. On Monday, ProPublica, a non-profit investigative news organization, reported that a secret Facebook group for current and former agents with 9,500 members had circulated posts over the last three years that included agents joking about migrant deaths. One recent post shared by the group included speculation about a highly publicized photo, taken by the photojournalist Julia Le Duc, of a dead migrant father and his young daughter lying face down in the Rio Grande river. A member of the group wondered if the photo had been doctored because “I HAVE NEVER SEEN FLOATERS LIKE THIS.”The ProPublica account follows last year’s reporting about the prosecution of one Border Patrol agent, Matthew Bowen, for using his pickup truck to run down a migrant in southern Arizona. Investigators found text messages on Bowen’s phone shared among several agents in which they referred to migrants as “subhuman,” “wild ass shitbags,” “beaners” and “guats.” Bowen’s attorney said in a court filing that his client’s views were common among Border Patrol agents. Migrants are “disgusting subhuman shit unworthy of being kindling for a fire,” Bowen wrote in one text. “PLEASE let us take the gloves off trump!” he wrote in another.President Donald Trump, of course, has let everyone take the gloves off, including the young xenophobe who shapes his immigration policy, Stephen Miller. There’s ample White House spin meant to distract from the reality of what that policy means in the real world. The president’s wife Melania has made much of being a “BeBest Ambassador” committed to improving “the lives of children everywhere.” The president’s daughter Ivanka purports to be an advocate for empowering women globally. None of those fine sentiments extends to the migrant children and women caged along the southern border.It’s possible that the president and Miller are happy to let this humanitarian crisis fester because they see it as a useful tool for dissuading migrants from making the journey north to flee the drug wars and economic distress in Central America. There certainly wasn’t a border crisis until Trump and Miller began implementing their handiwork.Apprehensions of undocumented immigrants had been at a decades-long low prior to Trump’s inauguration. According to the DHS report released Tuesday, 99,835 migrants were apprehended in the Rio Grande Valley area between October 2017 and May 2018; the figure was 223,263 during the same period a year later. The Trump administration hasn’t been able to manage that massive jump and the detention facilities clearly can’t absorb such huge numbers of people.The nation’s conscience shouldn’t keep absorbing these obscenities and crimes either. On Tuesday a federal judge ordered lawyers for migrants and the federal government to resolve a dispute over allowing independent doctors and health experts to inspect detention facilities in Texas, including those in the Rio Grande Valley. It’s part of a court action that seeks to sanction the government for breaking the law at the camps. Like much in the Trump administration, it ultimately may be up to the law — rather than the president’s Republican Party or common decency — to rein in the White House’s war on migrants.To contact the author of this story: Timothy L. O'Brien at firstname.lastname@example.orgTo contact the editor responsible for this story: James Boxell at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Timothy L. O’Brien is the executive editor of Bloomberg Opinion. He has been an editor and writer for the New York Times, the Wall Street Journal, HuffPost and Talk magazine. His books include “TrumpNation: The Art of Being The Donald.”For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Could you spot fake news if it was presented in a video or a photo? It’s a question facing supporters of former US vice-president Joe Biden as he campaigns to become the Democratic nominee for the 2020 presidential race. A few months ago, the website joebiden.info popped up with the cheery tagline “Biden 2020”.
(Bloomberg Opinion) -- The calls to break up Facebook — or at least to consider it — are growing louder by the day. On the left, Elizabeth Warren got on the antitrust bandwagon early with a plan for dismantling the company and other tech giants, while on the right Republican Senator Josh Hawley has mused, “Maybe we’d be better off if Facebook disappeared.” They are just two of many.But what exactly is this growing chorus of critics trying to solve by threatening to dismember Facebook? The answers show why their solution would be both inappropriate and ineffective.Take the arguments of those who are concerned about privacy. Democratic Senator Ron Wyden, for example, went so far as to argue that federal regulators should hold Facebook CEO Mark Zuckerberg “individually liable for the company’s repeated violations of Americans’ privacy.” The company records how you are voluntarily using its platform, and sells that information to advertisers. Personal responsibility seems to get completely lost in this discussion. No one is being forced to use Facebook. If you don’t want your personal choices and parts of your life in the public domain, then keep them off social media. Regardless of your views on the importance of individual responsibility, breaking up Facebook would do nothing to protect privacy. Whether there are 10 Facebooks or one hardly matters if you are worried that information about your behavior is being sold to third parties. Another common worry is that foreign governments, especially Russia, are using Facebook to spread false information and interfere in U.S. elections. Chris Hughes, a co-founder of the company who now supports breaking it up, argued that in 2016 “Russian actors” manipulated “the American electorate.” This is a real concern, but as with privacy, it’s not clear why having 10 Facebooks rather than one would adequately address this threat. What Russia can do on one social media platform, it can presumably do on several.Another criticism of Facebook is that it is addictive, impairing cognitive function and the development of healthy interpersonal skills, especially among children. Hawley describes it as “a digital drug – and the addiction is the point.” Valid or not, these fears are linked to the way a social media platform is used and the amount of time spent on it. They wouldn’t be mollified if people had more platforms to choose from. The same is likely true when it comes to doubts about Facebook’s ability to filter out violent livestreams, stop the spread of racist and hate speech, and protect data. If anything, economies of scale might make it easier for one social media platform to solve these problems rather than 10.Then there is the complaint that Facebook has too much control over the public debate. But remember that in the decades before Facebook, Google and a few other companies came on the scene, most people consumed news from one of three nightly network television broadcasts and perhaps one or two local newspapers. Breaking up Facebook would make it harder, not easier, for me to access information I might have missed.A related accusation against the company is that it is suppressing viewpoints — content from conservatives, in particular. President Donald Trump and Senator Ted Cruz, among others, are up in arms about this. Consumer pressure seems like a good remedy here. Conservatives, who are enthusiastic about entrepreneurship, should consider starting rival companies if they don’t like the way Facebook moderates content. There have been some high-profile cases of right-wing figures being banned (correctly, in my view) from Facebook. But how serious of a problem is this overall? The complaints from Trump and some conservatives seem odd in light of his 2016 campaign’s effective use of Facebook. And as Vice News reported this spring, “In the Trump era, Fox News has cemented itself as the most dominant news publisher on Facebook as measured by engagement,” regularly beating out the New York Times and CNN, for example. What about traditional antitrust issues? Facebook’s critics charge that it has stifled innovation and competition, and decreased consumer welfare. There are reports that the government is ramping up an antitrust inquiry of its practices and those of other tech companies.As I have argued in this column before, this borders on the absurd. Monopolies charge consumers high prices, while Facebook is free to users. It is competing for consumers by being a top corporate spender on research and development, and plowing money into innovation. It is experimenting with ways to respond to its users’ concerns about privacy. Facebook’s acquisition of Instagram is cited as an example of how it suppresses innovation. But in reality, Facebook took a big bet on Instagram’s improbable success, and won. That was a good business decision, not a threat to consumer welfare. A study released this spring by Edison Research and Triton Digital finds that Facebook has lost 15 million users in the last two years, with declines heavily concentrated among younger people. (The Guardian summarizes the situation nicely: “Parents killed” Facebook for young people.) It hardly seems that Facebook is an entrenched, immovable monopoly. None of this is to say that the company shouldn’t make changes in the way it operates. Privacy questions could be addressed by requiring it to tell users what items of their data have been sold. This would allow users to make better informed decisions about whether, and how, to continue using Facebook. Criticism of Facebook’s role in the public square could be addressed by requiring that all of its accounts be held by actual human beings, rather than bots, and by requiring that political ads hosted on the platform be labeled. Indeed, in a conversation at the Aspen Ideas Festival with my Bloomberg Opinion colleague Cass R. Sunstein, Zuckerberg argued that current laws on political ads are “very out of date.” If Facebook were required to publish information on which content and users it kicked off its platform, conservatives might have a better yardstick for judging whether the company is biased. There is a lot of ground between breaking up a company and regulating it. Facebook’s users, and the company itself, might benefit from more regulation, done right. But breaking up one of the most innovative and successful American companies would be a gross abuse of government power. And for nothing. To contact the author of this story: Michael R. Strain at firstname.lastname@example.orgTo contact the editor responsible for this story: Katy Roberts at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Michael R. Strain is a Bloomberg Opinion columnist. He is director of economic policy studies and resident scholar at the American Enterprise Institute. He is the editor of “The U.S. Labor Market: Questions and Challenges for Public Policy.”For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
The New York Times Company (NYT) has been contemplating new avenues of revenue generation in a bid to counter dwindling print advertising revenues.
In fiscal 2019, John Wiley (JW.A) returns $76 million in cash to its shareholders through dividend payments and $60 million through buyback.
(Bloomberg Opinion) -- My morning train reads:• Buy Low-Tops, Sell High-Tops: StockX Sneaker Exchange Is Worth $1 Billion (New York Times)• Most of the 2020 Democratic candidates are already doomed (Politico) see also Winners and losers from the Democratic presidential debate’s first night (Washington Post)• Capitalism: A Rejoinder (Institutional Investor)• Media companies are hitting a ‘Trump slump’ with the president’s shock factor wearing off (Axios) see also Metrics show Trump’s tweets are losing their potency (Axios)• The surprisingly difficult art of doing less (Vox)• The Insulin Racket (Prospect)• Latest Suicide Data Show the Depth of U.S. Mental Health Crisis (Bloomberg Businessweek)• How to Spot (and Avoid) Fake Google Maps Listings (Wall Street Journal)• He Cyberstalked Teen Girls for Years—Then They Fought Back (Wired) see also TikTok Has A Predator Problem. A Network Of Young Women Is Fighting Back. (Buzzfeed)• Millennials Are Finally Getting The Giant Roll Of Toilet Paper They Deserve (Buzzfeed)What are you reading?The Young and the LiberalSource: Pew Research Want to receive our daily reads in your inbox? Sign up here!To contact the author of this story: Barry Ritholtz at firstname.lastname@example.orgTo contact the editor responsible for this story: James Greiff at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Barry Ritholtz is a Bloomberg Opinion columnist. He founded Ritholtz Wealth Management and was chief executive and director of equity research at FusionIQ, a quantitative research firm. He is the author of “Bailout Nation.”For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg Opinion) -- After several decades on the defensive, rent regulation has been on the comeback trail in the U.S. lately. In Oregon, the state Legislature and governor approved a new law early this year that limits rent increases to 7% a year plus inflation. In California, the state Assembly passed a similar cap in May that’s currently in committee in the state Senate, and local rent-control measures have been popping up on ballots for several years now and sometimes passing.(4) In New York, which has the country’s best-known and most extensive system of rent regulation (with allowed annual rent increases of much less than 7% plus inflation), the state Legislature and governor this month enacted a set of changes that will, among other things, put an end to thousands of New York City apartments leaving rent regulation every year when they become vacant.Proponents of rent regulation say it protects tenants in expensive markets, keeping families and senior citizens in their homes and preserving neighborhoods from rapid change. Opponents argue that such laws do nothing to increase the supply of affordable housing and sometimes decrease it, while leading to declines in housing quality. Interestingly, both sides appear to be right: Empirical studies examining a major expansion of rent control in San Francisco in 1994 and its abrupt removal a year later in Boston and Cambridge, Massachusetts, found that removing controls led to higher rents on previously controlled apartments but also increased investment in housing quality and supply, while adding new controls conferred benefits to the affected tenants and caused them to stay in their apartments longer but reduced the overall supply of rental housing, thus driving up rents on unregulated units.New York City has had no recent change in rent regulation quite sweeping enough for economists to build such a quasi-experimental study around. But the state Legislature did make a policy shift in 1993 to enable landlords to remove apartments above a certain monthly rent (originally $2,000, this year $2,774.76) from rent regulation when they became vacant or their tenants passed an income threshold (originally $250,000 a year, this year $200,000). The New York City Council made it easier for them to do so in 1994, and the Legislature loosened the rules even more in 1997. This month’s legislation repealed these high-rent-decontrol provisions. The New York City Housing and Vacancy Survey conducted every three years on the city’s behalf by the U.S. Census Bureau allows us to track what happened while they were in effect:The number of New York housing units that aren’t subject to rent regulation has grown 49% since 1991; the number of regulated and subsidized units is down 16%. In 1991, the city’s housing stock was split about 50/50 between regulated housing and not; now 64% of units are unregulated. High-rent decontrol wasn’t the only cause of this shift, but it was a big one.Rent regulation in New York consists of “rent control” and “rent stabilization” (though it exists in other parts of the state, I’m going to focus on New York City because that’s where the overwhelming majority of the regulated apartments are). Under both systems, rents can be increased within limits — which under rent control are determined by the largely incomprehensible Maximum Base Rent system and under rent stabilization are set annually by the New York City Rent Guidelines Board, which voted Tuesday night to allow increases of 1.5% for one-year leases and 2.5% for two-year leases in the 12 months starting in October. On average, rent-stabilized apartments cost about one-third more than rent-controlled ones. Rent control dates to the 1940s, applies only to buildings constructed before Feb. 1, 1947, and as of 2017 covered only about 22,000 units occupied either by people who’ve been in them since 1971 or by qualifying family members (kids, mainly) who succeeded them. Rent stabilization applies to buildings constructed before 1974, plus newer ones whose owners took advantage of tax breaks for new construction (the Section 421-a program) or extensive renovation (the J-51 program). Rent-controlled units also convert to rent-stabilized when they become vacant.Rent control is dwindling away, as it is meant to do. The number of subsidized units — public housing plus several other kinds of government-backed apartments — fell by 27%, or 94,632 units, from 1991 to 2017. The number of rent-stabilized units has been far more stable, declining just 4% since 1991, although that still amounts to 44,142 fewer units.The subtractions from the rent-stabilized housing stock in the above chart are partly offset by additions, most from the tax-credit programs. In 2017 and 2018, thanks to a permitting boomlet right before the expiration at the end of 2015 of the 421-a tax credit (a new version, called Affordable New York, was approved in 2017), there was actually a net gain in the number of stabilized apartments. But there was a net loss in every year before that, and high-rent decontrol has since 2000 been by far the biggest cause, although 2011 legislation that tightened the rules for landlords seems to have slowed things down a bit.(3)So what’s going to happen now? I would guess that the number of rent-stabilized apartments in New York will continue the upward trend of the past two years thanks to the end of high-rent decontrol and Mayor Bill de Blasio’s push for more affordable housing. But I’m skeptical that there will be all that noticeable an increase in the number of apartments that a household earning the city’s median income of $60,879 can reasonably afford: The number of government-subsidized units has been, as already noted, in steady decline, while the median monthly rent of apartments that joined the rent-stabilization rolls in 2018 (again, usually in exchange for a tax credit) was $3,000, or 59% of median household income.The removal of vacancy decontrol will presumably reduce incentives for owners to push rent-regulated tenants out: As the New York Times detailed in a two-part series last year, some large landlords had developed aggressive “eviction machines” of legal actions and other tenant harassment to free up apartments for deregulation. It will also, along with changes in the law that limit rent increases due to major capital improvements, presumably reduce incentives for landlords to maintain and improve apartments, possibly reversing the long upward trend in New York City apartment conditions that saw 52% of renter-occupied units have no maintenance deficiencies in 2017, up from 38% in 1991.Does this represent a reasonable trade-off for tenants? The consensus among economists, dating back at least to Milton Friedman and George Stigler’s famous 1946 pamphlet “Roofs or Ceilings? The Current Housing Problem,” has been that the overall economic costs of rent regulation outweigh the benefits to the tenants who are protected by it, and that affordable-housing policies focused on subsidizing tenants would be more effective. I’m sympathetic to this view, and was so even before I became (disclosure alert!) the indirect landlord of several rent-regulated New York tenants,(1) but I have also come to believe that it’s pretty naive. Current tenants understandably prefer status-quo guarantees to hypothetical future subsidies, especially since — as is apparent in the long decline of of subsidized housing in New York — such subsidies seem to be even harder to maintain politically than rent regulations are. Rent regulation survives in part because the more efficient remedies that economists propose just don’t have the votes.(1) A 1995 California state law sharply restricts what local governments can do about rents, though, and voters last fall turned down a statewide ballot measure that would have overturned it.(2) Vacancy decontrol has been far more common than high-income decontrol, with 160,292 units leaving rent stabilization since 1994 due to the former and 6,455 due to the latter.(3) That is, my wife and I have been shareholders since 2013 in the cooperative association that owns our apartment building and the one next door, and also owns the remaining rent-regulated apartments within (this is contrary to standard New York City practice, in which an outside "sponsor" owns the regulated apartments).To contact the author of this story: Justin Fox at firstname.lastname@example.orgTo contact the editor responsible for this story: Brooke Sample at email@example.comThis 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) -- Walk into this luxury boutique on Manhattan’s Upper East Side and you’ll find the kind of fashion that’s de rigueur for the 1%. There are $8,000 Oscar de la Renta jackets and Hermes alligator handbags priced to move at $30,000.To drop off your used clothing, though, you’ll have to go upstairs.Climb the curved staircase of The RealReal’s new outpost on Madison Avenue and you enter a different world—one that’s more neighborhood bank than plutocratic playpen. A clerk presides over a waiting room lined with cubicles, each with magnification equipment that allows for close inspection of the nicest secondhand goods you could imagine.Once an online-only vintage clothing retailer, RealReal has gone brick-and-mortar, opening three stores and 11 consignment locations across the country. At its full-service venues, including another shop in New York and one in Los Angeles, the company seeks to both buy and sell dresses, jackets and necklaces that have been sitting dormant in some very wealthy closets.Sound like a niche market? Don’t be so sure: The company raked in $207 million in total revenue last year and is preparing to go public this week. Though consignment and used clothing shops have occupied storefronts for decades, their role in society has changed over time. Once the haunts of only the working poor, they later attracted those sartorial obsessives who enjoy the thrill of a treasure hunt. More recently, young entrepreneurs looking to turn Salvation Army discards into Instagram-chic have stalked their aisles, capitalizing on the chance for a huge markup.Now, predictably, the well-funded startups have arrived. And Wall Street has followed with them. Used clothing, footwear and accessories represent a $10 billion market in the U.S., according to data from market research firm IBISWorld. Interest from young, sustainability conscious shoppers has been a boon for the industry, which the firm forecasts will grow around 1.6% a year through 2024. All this has made old clothing a magnet for investment. Venture capital has poured in, with more than $1.1 billion dropped into used-clothing operations over the past several years, according to data compiled by Bloomberg. This included more than $350 million in funding for RealReal and about $130 million for domestic competitor ThredUp. French startup Vestiaire Collective raised $45 million in June to fuel international growth, bringing its total funds to almost $200 million. RealReal, meanwhile, is looking to raise $270 million in its initial public offering.The physical locations opened by RealReal, ThredUp and Rebag are 21st century versions of the traditional vintage clothing shop. They’ve been integrated into a broader, preexisting e-commerce model—serving as a home base for companies to collect items people no longer want.“I think that we are seeing a shift to this, as compared to people maybe looking on EBay,” says Sucharita Kodali, an analyst at Forrester Research. “It’s a format that some people who like the treasure hunt will explore.”So why the tony location for this new RealReal outpost? When it comes to luxury resale, the bottleneck is usually on the supply side: It’s hard to get the well-heeled in the door, says Charles Gorra, chief executive officer of rival Rebag. New stores, he said, must be in places with “existing luxury ecosystems.” With this in mind, Gorra says his company is looking at Chicago and some cities in Texas as potential new locations. “We’ve had an easier time getting supply with brick-and-mortar—people have brought suitcases into the stores, full of multiple designer bags,” he explained. “Walk a block, and in just a matter of a few minutes you can get access to hundreds or even thousands of dollars,” he said. “Suddenly, the process is much more accessible for most luxury owners.”A spokesperson for RealReal declined to comment on the store’s strategy, citing a quiet period before its initial public offering, but the company’s executives revealed some of their game plan in a securities filing earlier this month—echoing Gorra’s plan to open stores where the rich live.ThredUp’s physical store strategy is a bit different, as it focuses on less pricey items. It currently has four locations in the San Francisco Bay Area and plans to cluster new stores in one metropolitan region at a time. Unlike other digital-native companies that seek high visibility in major cities, ThredUp is looking for easily reached venues where commuter and car access make them “part of consumers’ everyday routine,” says CEO James Reinhart.Read More: The Mad Dash to Buy Vintage Clothes on InstagramE-commerce has had a famously hard time cracking open the clothing industry. Some 85% of apparel is still bought in stores, so brands that sell only online miss a huge opportunity to engage with customers. Simultaneously, the cost of online advertising has grown every year, while brick-and-mortar rent has gone down. Store ownership has thus become more attractive, Reinhart says.Online resellers also have an advantage when opening physical locations—they have piles of data on shoppers, as well as their favorite brands—all easily sorted by zip code, which helps them choose what to display in each store.RealReal’s downtown New York store, where it shows off its largest collection of items, is two stories of upscale bags, watches, jewelry and garments for both men and women. It also happens to be down the block from What Goes Around Comes Around’s original store, which opened in 1993. The celebrity hotspot has an appointment-only archive with some of the highest-end vintage clothing items anywhere.Both hope to score the best rare finds in the neighborhood.To contact the authors of this story: Olivia Rockeman in New York at firstname.lastname@example.orgKim Bhasin in New York at email@example.comTo contact the editor responsible for this story: David Rovella at firstname.lastname@example.orgFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
A nationwide operation targeting thousands of undocumented migrant families will reportedly begin Sunday. The New York Times says raids are expected to take place in at least 10 major cities. They will be conducted by Immigration and Customs Enforcement. Omar Villafranca reports.