Republicans looking for the alternative to Donald Trump found it over the weekend, as Ted Cruz won caucuses in Kansas and Maine, while the Rubio and Kasich campaigns continued to wilt. Cruz is the one candidate that business representatives in Washington say would be worse for business than Trump. His obstructionist tactics have helped keep the Capitol at a standstill in recent years, and earned him the enmity of virtually all his colleagues. At Saturday’s Gridiron Dinner, Vice President Biden joked that if President Obama really wanted to remake the Supreme Court, he should name Cruz. “Before you know it you’ll have eight vacancies.”
The lively Democratic contest continues to drive Hillary Clinton deeper into populist territory. Her fiery anti-business rhetoric was on full display in last night’s debate, as she promised to “claw back tax benefits” from companies that move jobs overseas, like Nabisco and Johnson Controls. Clinton’s TV ads are also becoming increasingly strident.
A number of readers wrote last week in response to Jeff Garten’s piece calling for a business “grand strategy” to rebuild public support. “We are going through an existential crisis whipped up by the political classes,” said Martin Whittaker, CEO of Just Capital. “The truth is that the story of the American people is the story of American business, and we have to connect them together more effectively.”
Meantime, central banking is going through its own existential crisis, as the “Phillips curve” relationship between unemployment and inflation that underlies much of modern monetary policy has broken down. Read Larry Summers’ latest on the problem here.
More news below
• BASF weighs counterbid for Dupont
Germany’s BASF is planning to crash the merger plans of Dupont and Dow Chemical, Bloomberg reports, a move that if confirmed would give investors a radical alternative to the strategy thrashed out by the two U.S. companies under pressure from activist investors Nelson Peltz and Dan Loeb. The Dow-Dupont deal, unveiled in December, would merge before breaking up into three companies focused respectively on agriculture, materials and ‘specialty’ areas like nutrition and health. By contrast, BASF is a company that believes very much in the old-fashioned conglomerate model, where advances in one division are used to cross-fertilize research in others.
• United Continental CEO to return
United Continental’s president and chief executive, Oscar Munoz, will return to the airline full-time as of March 14. Munoz had suffered a heart attack last October and had been on medical leave since then. United said Munoz has been taking active part in major decisions across the company and meeting with employees and shareholders during his recovery. Munoz hadn’t been in the CEO role for long before his health problems. He took over as chief executive in September, replacing Jeff Smisek, who resigned because of probes into United’s relationship with the Port Authority of New York.
• Founder of email has died
Ray Tomlinson, the man credited with founding email, has passed away at the age of 74, dying of a heart attack according to local media reports in Sydney. Tomlinson was a part of a team of computer programmers at research and design company Bolt Beranek and Newman (now BBN Technologies) in Cambridge, Mass., and had begun experimenting with internal messaging in 1971. He recalled the first email he sent involved keyboards that were about 10 feet apart. Tomlinson was subsequently inducted into the Internet Hall of Fame in 2012.
• Drug makers scrabble to solve Zika
About 15 companies are working on Zika vaccines, most in the initial stages, according to the World Health Organization, which also predicted it would take at least 18 months for large-scale trials to get under way. Drugmakers Sanofi, Inovio Pharmaceuticals and NewLink Genetics are all among those developing Zika vaccines. The Wall Street Journal reports that the efforts are even further behind than they were with Ebola, for which there is still no licensed drug or vaccine. At least a dozen Ebola vaccines were already in development when the virus spread in West Africa in 2014. For Zika, which was seen as a low-level threat before serious complications emerged last year in Brazil, there were no products in advanced development.
The Wall Street Journal (subscription required)
• China’s one-track mind goes for growth
China’s annual spectacle of government meetings this weekend produced a promise for the next year that was remarkably similar to what China has said for much of the past half decade: economic growth is what’s important. The nation announced an annual GDP growth target range for the next five years of 6.5% to 7%. It’s the first time the Communist Party has set a growth range since 1995, when China’s economy was half the size of France’s. The target means plenty of loose fiscal and monetary spending over at least the next year. The budget deficit, meanwhile, will increase as more funds are funneled into infrastructure-based capital spending.
Around the Water Cooler
• Why J.C. Penney isn’t closing more stores
Many of J.C. Penney’s stores are in struggling malls and sales per square foot are about one-third below levels of five years ago. But the department store’s new CEO, Marvin Ellison, is adamant the company won’t be closing stores in its 1,020-location fleet. Penney had already shuttered 83 stores over the last three years but the number of closures this year is far fewer than what rivals Macy’s, Sears and Kohl’s have announced. Why? Sales are rebounding, albeit slowly. And Ellison argues that Penney needs the locations more than ever as e-commerce and stores feed off of each other.
• ‘Zootopia’ sets record for Disney
Zootopia’s domestic opening pulled in an estimated $73.7 million over the weekend, setting a new record for the biggest Walt Disney Animation Studios opening of all time. The film surpassed Frozen’s prior record or $67.4 million to earn the biggest debut ever for a non-Pixar Disney animated film. Zootopia also scored the fourth-highest March opening weekend in box office history. Zootopia, which is now in its fourth weekend of international release, has brought in $158.8 million already globally. Ginnifer Goodwin and Jason Bateman lent their voices to the animated adventure, which was a universally praised by critics for its messages about prejudice and tolerance.