Good morning.
Google was the big loser in yesterday’s hearing on the tech companies’ role in the last election. While Twitter CEO Jack Dorsey and Facebook COO Sheryl Sandberg both showed up to face the unpleasant congressional music, Google CEO Sundar Pichai declined—and earned bipartisan enmity as a result. Senators set up an empty seat with a Google name plate to highlight his absence. Richard Burr, the Republican committee chair, and Mark Warner, the lead Democrat, both expressed their extreme disappointment. And Sen. Marco Rubio said the company’s leaders must either be “arrogant,” or determined to avoid questions about an embarrassing Buzzfeed report that said researchers posing as Russian agents were able to buy political ads on the Google platform. Not a smart move.
Separately, S&P Global CEO Douglas Peterson stopped by the Fortune offices yesterday, and expressed his optimism about the U.S. economy. “We don’t see any major factor that leads to a recession” in the next couple of years, he said. And while overall debt levels are high, “the debt isn’t on the banks’ balance sheets this time,” as it was in 2007. Instead the debt is mostly corporate, it’s not highly rated, and it’s held by hedge funds and others who “should be sophisticated borrowers” who understand the risk.
The biggest problem Peterson sees on the horizon: “unwinding the Fed’s balance sheet,” which could eventually put upward pressure on interest rates and lead heavily leveraged companies to default. The sectors where S&P sees the biggest risk of problems: oil and gas, retail, and restaurants.
More news below.
| Alan Murray | |
| @alansmurray | |
| alan.murray@fortune.com |
Top News
Quiet Resistance
An anonymous senior official working in the White House wrote an op-ed for the New York Times in which he or she identified as part of a "quiet resistance" within President Trump's administration—not to undermine the government but to protect the country from the president's "more misguided" anti-trade, anti-democratic impulses. Trump, needless to say, is livid and has demanded the Times reveal the author's identity for "national security purposes." New York Times
Sessions v. Tech
Don't think the current government's antipathy toward big tech platforms exists only in the abstract. The Justice Department announced yesterday that Attorney General Jeff Sessions will meet with state attorneys general later this month to discuss the companies' anticompetitive nature and the idea that they intentionally stifle the free exchange of ideas. Apparently September 25 is the date to look out for there. CNBC
More Sanders v. Amazon
Sen. Bernie Sanders has unveiled a bill called the "Stop Bad Employers by Zeroing Out Subsidies Act," and in case you might be wondering who the primary target is there, the snappier version is the "Stop Bezos Act." Sanders says he's also gunning for McDonalds, Walmart and American Airlines, though. Here's the upshot: "The Stop Bezos Act gives large employers a choice: pay workers a living wage or pay for the public assistance programs low wage workers are forced to rely upon." Fox Business
CBS Struggle
CBS and its controlling shareholder, National Amusements, are trying to negotiate a settlement that would keep their war out of court—they're supposed to meet in a Delaware court next month, over CBS's bid to gain independence from National Amusements by diluting its ownership. The discussions reportedly "became more serious" over the Labor Day weekend, although there is still no guarantee they'll reach a resolution out of court. NBC
Around the Water Cooler
Kavanaugh Hearing
Brett Kavanaugh, President Trump's second nominee for the Supreme Court, would not say at his hearing yesterday whether he believes a president can pardon himself, or has to comply with subpoenas. Many suspect Trump picked Kavanaugh because he is a strong advocate for executive prerogative, although one frequently-laid charge—that he believes a sitting president cannot be indicted—may be overstated. Wall Street Journal
Cryptocurrency Tumble
Bitcoin is cratering again—it's lost as much as 12.5% over the past 24 hours. Rivals such as Ether, Litecoin and Ripple have also fallen. The widespread tumble may have something to do with news of Goldman Sachs deprioritizing its plans to set up a cryptocurrency trading desk. This would be the latest in a series of "crypto" project pullbacks within the traditional finance industry (many tech nerds, including this one, bitterly defend the fact that "crypto" actually means "cryptography.") Fortune
Burberry Burn
The fashion brand Burberry is to stop burning its unsold goods, following an environmentalist backlash to the news that it destroyed unsold clothes, accessories and perfume to the tune of $37 million last year. Rather than torching its unwanted wares, Burberry will step up efforts to reuse, repair and recycle the goods. It's also moving away from the use of real fur in its products. BBC
Making China Great Again
China has a reason to be grateful to President Trump: his administration's hostility to Chinese students and researchers is helping to reverse the country's brain drain. The other big factor there is pay: Chinese research institutes now offer significantly more than their American counterparts do, in many cases. South China Morning Post
This edition of CEO Daily was edited by David Meyer. Find previous editions here, and sign up for other Fortune newsletters here.
