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CEO Daily: Thursday, 23rd February

Good morning.

Last night, the Arthur W. Page Center honored me with their inaugural Award for Integrity in Public Communication. In order to steal some extra sleep this morning, I’m passing on my brief comments, in lieu of the usual morning commentary.

Thank you for this magnificent award. It’s such an honor to receive it, and to receive it here among friends.

And I do consider you friends. Some of my journalist colleagues think those of you in public relations are the enemy. But I’ve always felt that you and we are trading in the same currency—facts. You may withhold a fact every now and then, or pile up the facts so they tilt toward the storyline you are paid to present. And I may assemble the facts in a way that suits my notion of the perfect narrative—which may be no closer to reality. But at the end of the day, we both deal in facts. And the facts are the facts.

Funny how a simple truism like that—the facts are the facts—sounds almost old fashioned these days, like “dialing a telephone,” or “checking the dictionary.” Some even contend we live in a “post-fact” society.

Clearly, changes in the press have something to do with that. I trained in an organization that had standards of verification, fact checking, and fairness. But in the Internet age, everyone is a journalist, and common standards of the profession have declined.

Speed also has something to do with it. Our readers want news the instant it happens, not 24 hours later, and certainly not five days later. That leaves less time for checking the facts, making sure you have the story right.

Bias is an issue, too. The people who go into journalism are, as a group, generally to the left of the people who go into banking. It’s hard to escape that reality.

Then there is the fact that we editors no longer control your front page—your social media contacts do that. And guess what? Your friends tend to pass along headlines that have edge and bite to them, and are more likely to ignore traditional, straight headlines and stories.

All that had happened before we entered the era of Trump. Now, we have a president who has an exceedingly loose relationship with facts—like whether President Obama was born in Kenya, or Muslims danced on the tops of buildings in New Jersey after 9-11, or he won more electoral votes than any president since Ronald Reagan.

Trump also has decided to make the press his enemy—“disgusting,” “corrupt,” “fake news,” he calls us. And he makes no distinction between those who have standards of verification and fairness, and those who don’t. He baits us by throwing out incorrect facts and misguided notions several times a day, knowing we will take the bait and thus prove his point, over and over, that we are against him.

The result is that the great divide between those in this country who voted for Donald Trump and cheer now that he is doing exactly what he said he would do, and those who didn’t, is getting wider and deeper. And there is no common currency of facts to form the basis for civil discourse, much less civil action, on any of the very real problems or issues that face our society.

Now, I’m not sure I know what to do about this. If I did, I suspect it would take more than the six minutes I’ve been allotted tonight to address it.

But I do know this: we need institutions like the Arthur Page Center, that are dedicated to the truth and to the currency of facts, more than ever before. So I thank you for this, and I encourage you to keep it up.


News below.

Alan Murray

Top News

The Fiscal-Monetary Policy Clash Approaches

Minutes from the Federal Reserve’s last policy meeting indicated that “many” officials had advocated another interest rate hike “fairly soon,” a phrase interpreted by most of the markets as meaning “March.” Fed officials have voiced skepticism about the new administration’s plans for a more expansive fiscal policy, but have adopted a ‘wait-and-see’ approach so far. Treasury Secretary Steven Mnuchin dropped another hint that they may not have to wait too long for it, telling The Wall Street Journal that the administration will target a growth rate of over 3%. That’s far above the 1.8% natural growth rate estimated by the Fed and the Congressional Budget Office. Higher interest rates (and an accordingly higher dollar) could frustrate the administration’s goals. Fortune

Well, That Didn’t Take Long

Unilever launched a strategic review of its businesses in an effort to convince shareholders that it can deliver the returns that Kraft Heinz had appeared to promise with its short-lived $143 billion bid. “The events of the last week have highlighted the need to capture more quickly the value we see in Unilever,” the company said. The news sent the shares up 5.7% in early London trading. Obvious issues for consideration will be a possible share buyback (something avoided by CEO Paul Polman since 2007) and the splitting of the food brands from the higher-margin personal care products. WSJ, subscription required

Going, Going, Ghosn…

Carlos Ghosn is stepping down as CEO of Nissan to concentrate more on matters relating to its alliance with Renault and (as of last year) Mitsubishi. Hiroto Saikawa, currently co-CEO of Nissan, will be sole CEO as of April 1. Ghosn had been criticized for taking on too much, especially after the alliance absorbed Mitsubishi in the wake of its fuel consumption scandal last year. The timing of the announcement comes only a week after Renault’s big French rival Peugeot stepped up the pace of consolidation in the sector by opening talks with GM over buying its European operations. Fortune

Elon Musk Eyes a Cash Call

Tesla owner Elon Musk dropped a big hint that the company will seize the opportunity created by Tesla’s 50% stock rally since December to raise more capital. He told an earnings call that the company’s need for cash to complete its massive battery factory and deliver its mass-market Model 3 meant that “it probably makes sense to raise capital to reduce risk.” It’s unclear whether that view played any role in Tesla’s other news yesterday—that chief financial officer Jason Wheeler will leave the company after less than two years for a job in public policy. He’ll be replaced by Deepak Ahuja, who had had the CFO job for the previous seven. Fortune

Around the Water Cooler

Will We Ever Kick Our Sugar Habit?

This month’s edition of our magazine has a profoundly thought-provoking feature by Beth Kowitt on the sugar problem: our unwillingness to kick it, despite a growing mountain of evidence about its negative impact on health; and the food and drink industry’s problem—an inability to develop a healthier substitute that doesn’t, as Beth memorably puts it, “taste like sucking on a penny.” Fortune


Exxon’s Vanishing Act

ExxonMobil wrote off a net 3.3 billion barrels of oil equivalent in reserves—over 10% of its total reserves—at the end of last year, as low prices made them uneconomic to develop. A company filing showed that it had de-booked the entire 3.5 billion barrels of its Kearl oil sands project in Alberta in another stark reflection of the changing economics of the upstream business. New discoveries in Papua New Guinea, the U.S. and Kazakhstan helped offset the decline. Its latest ventures into Texan shale may do more to restore the balance sheet this year. But the market has made Exxon pay a price for investing too much in high-cost oil: its shares are down 15% since July. Reuters


Google Tiptoes Onto Uber’s Turf

Google, one of Uber’s earliest backers, is edging towards competing with it directly. The company is expanding its Waze navigation app to several cities across the U.S. and Latin America after a successful trial run in Israel and San Francisco, Waze CEO Noah Bardim told The Wall Street Journal. The two services aren’t exactly the same: Waze is less of an on-demand taxi service than a way of persuading regular drivers to pick up people who are heading in the same direction. The financial incentive for drivers is also much lower at only 54c a mile, although Waze doesn’t take any of that—at least not yet. Fortune


Who’s Eating Macy’s Lunch

It isn’t just Amazon or the up-and-coming e-commerce fashion names. TJX, the company behind off-price stores T.J. Maxx and Marshalls, said fourth-quarter same-store sales rose 3% year-on-year. The performance is all the more remarkable since it only gets 1% of its sales online. CEO Ernie Herrmann repeated the company’s aim of opening another 700 physical stores in the long term, at a time when Macy’s and many others are shutting them.


Summaries by Geoffrey Smith;