If you missed Sunday’s New York Times take out on President Obama as “regulator-in-chief,” I’d suggest you read it today. When even the Times recognizes the extraordinary burden of new regulation that’s been imposed in the last eight years, you know it’s a serious matter. The administration finalized 560 regulations classified by the Congressional Budget Office as “major” in its first seven years – a 50 percent increase from the Bush administration – adding billions of dollars in new costs to business and consumers. This may be Obama’s most lasting legacy.
Some of the increase flows directly from the two signature legislative accomplishments early in his presidency – the Affordable Care Act and the Dodd-Frank Act. But much of it is a legacy of the legislative stalemate that followed. Unable to work with Congress, President Obama increasingly relied on executive powers to implement his agenda.
Will the trend continue in a new presidency? With power divided in Congress and the parties at loggerheads, the temptation to rely on regulation rather than legislation will be hard to resist. At a panel on presidential transitions convened by the Miller Center during the Democratic Convention, Chris Lu, Obama’s deputy secretary of labor, advised the next president: “Have a long list of executive actions ready to go on day one.” I suspect that advice won’t be ignored.
More news below, including Tesla’s removal of the word “autopilot” from its Chinese web site.
• One Shot but Violence Abates in Milwaukee
Violence in Milwaukee abated somewhat after Wisconsin Governor Scott Walker declared a state of emergency and called out the National Guard in response to a night of rioting on Saturday. One person was shot, but there was no repeat of the widespread destruction of property that followed the police shooting of an African-American man. Authorities said the officer responsible was himself black, and said that the officer’s body camera footage (which hasn’t been released), showed he had acted “withing lawful bounds” after the suspect had turned on him with a gun. Fortune
• Stocks Push Higher on Chinese Rally
World stock markets are pushing higher again Monday after China, the one market that has missed out on the latest leg of the global rally, finally joined in, rising over 3% to a seven-month high. The trigger for that was a report in Hong Kong predicting that a new trading link with the Shenzhen market (home to the country’s biggest concentration of tech stocks) could be announced as early as this week. Stocks were also lifted by the hope for yet more Japanese stimulus after data showing that GDP was flat in the second quarter, while energy stocks were also lifted as crude oil prices continued to rise on hopes for output restraint from OPEC. Reuters, Fortune
• Tesla Dials Back its Advertizing in China
Tesla removed the word “autopilot” and a Chinese term for “self-driving” (“zidong jiashi”)from its China website after a driver in Beijing who crashed in “autopilot” mode complained that the car maker overplayed the function’s capability and misled buyers. The Tesla driver crashed earlier this month while on a Beijing commuter highway after the car failed to avoid a vehicle parked on the left side, partially in the roadway, damaging both cars but causing no injuries. It was the first known such crash in China, though it follows a fatal accident in Florida earlier this year that put pressure on the auto executives and regulators to tighten rules for automated driving. The company said it was “continuously making improvements, including to translations” and said the timing of its move “had nothing to do with current events or articles.” Fortune,
• Internet Giants Face Tighter Rgulation in Europe
The EU is preparing to level the regulatory playing field between traditional telecoms providers and new internet-based technologies. The Financial Times reported Monday that it will publish proposals for a new “ePrivacy” directive next month, which will subject services like Facebook’s WhatsApp and Microsoft’s Skype to the same requirements as traditional providers as regards how they comply with requests from security services and how they monetize consumer data. Big European telecoms companies have complained for years about the way their new generation of rivals have avoided such regulation. Fortune
Around the Water Cooler
• Brexit May Be Delayed (Unlike its Impact)
The U.K. may not get to leave the EU till 2019 at the earliest, according to weekend reports. The U.K.’s Sunday Times reported that turf wars were between the three various ministries most affected by the process were partly responsible, but also noted that Prime Minister Theresa May could wait until after Germany’s elections in September 2017 before activating Article 50 of the EU Treaty and thus starting the two-year period of divorce proceedings. This week will give markets the first clear evidence of how hard the Brexit referendum has actually hit the economy. Surveys released so far have shown a sharp drop in business and consumer sentiment, and online realtor Rightmove said Monday its closely-watched index of house prices fell for a second straight month in July. Rental prices in London also fell for the first time in six years. A loosening of the fiscal policy stance, the Bank of England’s biggest monetary stimulus in seven years and a stabilization of the exchange rate 10% below pre-referendum levels have absorbed some of the shock. FT, metered access, Fortune
• Google’s High-Speed Web Program Gets Stuck
Alphabet is rethinking the future of its high-speed internet business after big cost overruns and delays in the initial rollout of services from its provider business Google Fiber, according to The Wall Street Journal. The WSJ reported that the company is now looking at using wireless technology for ‘last-mile’ connections to homes, rather than fiber-optic cables. It’s eyeing a dozen new metropolitan areas, including Los Angeles, Chicago and Dallas. Google Fiber projects in San Jose, Ca. and Portland, Ore have already been suspended, it said. WSJ, subrcription required
• 2 REITs Don’t Make a Wrong in This Market
Two of the country’s biggest apartment owners may be merging in a deal creating a $12 billion company. The Wall Street Journal reported Sunday that MAA, worth some $8 billion, is in advanced talks to buy Atlanta-based Post Properties Inc. for around $4 billion in an all-stock deal. The rental business is booming as rising house prices and sluggish income growth turns would-be buyers into renters. That has fueled a big increase in M&A activity in the Real Estate Investment Trust industry this year. The deal will strengthen MAA’s position in the “Sunbelt” states, but the company will keep its headquarters in Memphis and will also keep MAA’s Eric Bolton Jr. as CEO, according to the Journal. WSJ, subscription required
• Bolt’s Glory Spares the IOC’s Blushes
Jamaica’s Usain Bolt became the first person in history to win the 100 meters title at three successive Olympic Games, coming from behind to beat the U.S.’s Justin Gatlin. Bolt’s victory spared the organizers the embarrassment of seeing the games’ single most high-profile event go to a twice-convicted doper, but the controversy refuses to go away: Gatlin was roundly booed by the crowd ahead of both the semi-final and final. Elseehwere, the only Russian athlete allowed to compete in the track and field events, Darya Klishina successfully appealed a last-minute suspension imposed on her after new, unspecified evidence emerged against her. Michael Phelps went out on a high, with a record 23rd gold medal in the men’s 4x100m medley relay. Fortune