Saturday Morning Post: The Weekly View from Washington
President Obama, in his final press conference of the year, offered a “nothing to fear but fear itself” reassurance to the American people on Friday afternoon. Reflecting on the danger Russia poses to the U.S. now that our intelligence agencies agree the hacking of Democratic emails was a state-sponsored attack, Obama sought to put the threat in perspective: “The Russians can’t change us or significantly weaken us,” he said. “They are a smaller country, they are a weaker country, their economy doesn’t produce anything that anybody wants to buy except oil and gas and arms. They don’t innovate. But they can impact us if we lose track of who we are. They can impact us if we abandon our values.”
By way of an amen, let’s apply some numbers to the comparison. The Russian economy in 2015 was less than a thirteenth the size of the U.S. economy. Put another way, if Russia was an American state, it’s economy would rank behind those of California, Texas, and New York. This year, Russia claimed only five of the companies on the Fortune Global 500 list, versus 134 that call the U.S. home (including eight of the top 20). True to the president’s characterization, the three biggest Russian companies — Gazprom, Lukoil, and Rosneft Oil — are all in the energy sector, and all have been slammed by falling oil prices and reverberations from the Russia-Ukraine conflict. The other two are state-owned banks.
It’s true that this century has already demonstrated the wages asymmetric threats can exact. Russia made its menace manifest by not only pulling off the hacking caper but surely succeeding beyond its own expectations. What’s more, the Obama administration so far has failed to muster a reprisal. And graver perils loom: Russia itself still presides over a sprawling nuclear arsenal, a stockpile that some of its recent military maneuvers appear designed to highlight; China, our nearest peer competitor, is growing bolder in the South China Sea, where on Thursday it seized a U.S. underwater naval drone it has so far refused to return. Evidently, absent armed conflict, our superiority only pays dividends proportional to its recognition by our rivals.
But after a presidential campaign in which the victor regularly ran down American prestige, it’s worth pausing to recognize what the facts continue to show. By any reasonable measure, the U.S. remains a singular global force, economically and militarily. For that reason, among others, we’re already great. And those seeking to displace the U.S. can only succeed with our unintentional consent.
| Tory Newmyer | |
| @torynewmyer | |
| tory_newmyer@fortune.com |
Top News
• Obama warns Russia: We’ll “do stuff” to you
President Obama issued a warning to Russia and other would-be cyber-attackers in his final press conference of 2016 on Friday: Don’t attack the U.S., “because we can do stuff to you.” And he defended his decision not to strike back at the Russians, noting that he wanted to hold off in the run up to the elections to avoid the risk of appearing to politicize their attack. The president said this week that he confronted Vladimir Putin directly about incidents of Russian hacking. His comments came as new reporting indicated that the U.S. intelligence community has achieved consensus that Russia was behind the attacks, launched them with the aim of interfering with the election and the hope of boosting Trump’s candidacy. Earlier, there had been suggestions that the FBI wasn’t entirely on board with that assessment. TIME
• Hillary Clinton blames Russia hack on Putin “beef”
Hillary Clinton on Thursday told a group of donors in Manhattan that Putin interfered with the U.S. presidential election to settle a years-old score with her. The Russian president, she said, has never forgiven her for a statement she made as Secretary of State, back in 2011, accusing him of rigging his country’s parliamentary elections that year. In her remarks, delivered to a group that collectively contributed about $1 billion to her campaign, she endorsed a bipartisan Congressional investigation to get to the bottom of the Russian attack. She also pointed to the impact on her campaign of a letter that FBI director James Comey sent late in the contest raising new questions about emails from her private server. The former Democratic nominee said the missive cost her several battleground states. New York Times
• Tech leaders and Trump step gingerly into substance after making nice for the cameras
After the happy talk on display for the cable news cameras, the tech titans that Donald Trump gathered for a summit at Trump Tower on Wednesday tackled some substance of major consequence to the industry. On one of the most glaring sources of dispute between the two camps — immigration reform, and specifically, the treatment of high-skilled workers critical to the industry’s engineering corps — Trump sounded surprisingly accommodating, without making any concrete promises. The session also touched on STEM education, cybersecurity, updating the electrical grid, the tax treatment of the companies’ foreign profits, and opening the Chinese market. The event appeared to amount to a truce ceremony after a campaign in which tech leaders lined up nearly uniformly against Trump’s candidacy. So it remains to be seen whether it will launch fruitful policy discussions on areas of common interest, or whether tech executives, by engaging, can convince Trump to soften up on some of his harder-line protectionist stands that grate against industry priorities. ReCode
Around the Water Cooler
• Trump, most likely, will keep on tweetin’
Even some of the people closest to Trump have been disappointed by the president-elect’s inability to demonstrate grace in victory. Instead, in the weeks since his election win, Trump has remained as combative as ever, regularly attacking critics, both prominent and unknown, much as he did over the course of the campaign. “Sometimes, you think, you’re the president now, why do you care about that person or insult?” one transition aide says. But those who’ve known and observed him for decades aren’t holding their breath for a temperamental transformation once he reaches the Oval Office. Politico
• Patent troll capital faces high court scrutiny
The East Texas district that’s become the patent troll capital of the U.S. may be about to see a new sheriff riding into town. The Supreme Court has agreed to take a case that could shake up the system that’s allowed the venue to become the most popular venue for such cases. Plaintiff-friendly laws and juries made the region home to 44% of all patent cases, but the high court appears poised to tighten the screws on a law that effectively allowed lawyers to go venue shopping. The Supreme Court is hearing the case, pitting food producer TC Heartland against Kraft, after Congress failed earlier this year to pass a law called the Venue Act that would have cracked down on the ability of patent trolls to take their cases on the road. Fortune
• Top CEOs stand to reap major retirement savings from Trump tax plan
Fortune 500 CEOs, who together had gathered nearly $3 billion in tax-deferred retirement accounts by the end of 2015, would save $180 million if Trump succeeds in cutting the tax rate of the highest earners. That's the conclusion drawn by a new analysis from the Institute for Policy Studies, a left-leaning think thank. While gaps in pay and overall wealth have received plenty of attention, less focus has centered on retirement savings, an area where the ultra-wealthy have also dramatically expanded their holdings compared to the rest of the population: According to the report, 100 CEOs have accumulated savings equal to 41% of U.S. families, or 16 million people. Trump has proposed cutting the top individual tax rate to 33% from 39.6%, which would yield a windfall for chief executives who've socked away salary money, bonuses and some stock awards in deferred compensation plans. Bloomberg
• Trump cabinet so far worth at least $9.5 billion
Speaking of incredible concentrations of wealth, the 17 people Trump has so far nominated to his cabinet together claim more wealth than over a third of the least well-off U.S. households. The magnitude of riches in the cabinet is already unprecedented, and Trump still has six slots to fill. It would take 120,000 households of median net worth to equal the affluence of the four richest figures in line for cabinet positios — Betsy DeVos, Wilbur Ross, Linda McMahon, and Rex Tillerson. Quartz
