It’s Friday, so time for some feedback.
I tried to avoid the political meat grinder Wednesday by simply reporting what President Trump said in his State of the Union address about the economy and business, without (much) comment. But I failed. The meat grinder chewed me up anyway.
“Really, is re-stating Trump’s false quotes the best you can do? How about a fact check?” wrote D.S. “To present the excerpts…without any qualifying statements felt one sided” agreed D.A. I took particular flack for repeating the president’s promise to “renew our resolve that America will never be a socialist country.” T.C. dismissed the quote as “red meat to his base.”
But there is more going on here than “red meat to the base.” As Cass Sunstein, who served in the Obama administration, wrote for Bloomberg yesterday, “to many Americans, the idea of socialism seems to have growing appeal.” Rep. Alexandria Ocasio-Cortez—who is now routinely referred to by the acronym AOC—is a member of the Democratic Socialists of America. Senator Bernie Sanders has long described himself as a socialist. A recent survey shows some 57% of Democrats had a favorable attitude toward socialism, compared to only 47% who felt favorable toward capitalism.
Sunstein concludes that this new interest in socialism “is mostly expressive. It is a way of raising the volume, pounding a fist and offering a signal—of saying, in shorthand, that the U.S. has far too much economic insecurity; that the current system is not working nearly well enough for millions of people; that incremental change is not enough; that bold thinking is in order.”
The Wall Street Journal editorial board thinks it is more than that. Noting the dictionary definition of socialism—governmental ownership of the means of production—it cites a series of policies being pushed by Democrats, including “Medicare for All,” the “Green New Deal,” and a 70% top tax rate, that would represent a lurch in the direction of state control.
Hard to know where this ends. But it would be foolish to ignore it. American politics is at a turning point, and how it turns will have profound implications for business.
Jeff Bezos published emails that he says show the National Enquirer—whose boss, David Pecker, is a longstanding Trump ally—trying to blackmail him over salacious photos of the Amazon CEO and his girlfriend, Lauren Sanchez. He also published details of the embarrassing items. Fortune
President Trump is reportedly going to ban Chinese equipment from U.S. telecoms networks via an executive order that will appear next week. The U.S. has been pressuring allies to cut Huawei equipment (ZTE would also be affected here) from their 5G deployments, so it stands to reason that the U.S. should make such a move itself. Not good news for the U.S.-China trade talks, though. Politico
Google has reportedly started censoring its search results in Russia, in order to comply with the country’s laws. Russia’s media regulator, Roskomnadzor, publishes a blacklist of banned websites that cover illegal topics such as drugs and suicide, and that publicize corruption investigations conducted by the opposition. Google has apparently now deleted links to around 70% of the sites on that blacklist. Moscow Times
Sony is launching its first-ever major share buyback, to the tune of $910 million. Investors have been fretting about mediocre results, but they liked the buyback news, sending Sony’s stock up 7% not long after the aforementioned results brought the price down by 14% or so. Reuters
Around the Water Cooler
Economic signs have been pointing to a looming downturn in Germany, but finance minister Olaf Scholz isn’t convinced. “A lot of companies are very confident about their future prospects,” he enthused in a Financial Times interview. But he also warned that slowing growth could put Germany’s public finances under strain. FT
The results are out for the first half of Finland’s much-watched basic income experiment. It seems the unconditional cash (given to unemployed people in lieu of basic unemployment benefits) didn’t result in any meaningful rise in employment. It did, however, make the recipients feel healthier, less stressed, and more positive about their employment prospects. Fortune
Do you tip the contracted driver who delivers your Amazon Prime goodies? If so, chances are that the tip goes towards their base pay, the Los Angeles Times reports. Amazon emails say it adds “any supplemental earnings required to meet our commitment that delivery partners earn $18-$25 per hour.” L.A. Times
Cisco wants federal legislation in the U.S. to make privacy a fundamental human right, like it is in Europe. Why? It would make it easier for U.S. firms to operate globally as we move into the era of billions of internet-connected devices. Like Apple, Cisco is also concerned about fragmented rules at home. Ars Technica