Mar 3, 2019

Where capitalism gets its green light

Illustration: Aïda Amer/Axios

The U.S. government sued to prevent AT&T from acquiring Time Warner, lost, appealed the case, and, this week, lost again. There will be no more appeals.

The big picture: When corporations and financiers want to do something, they just go ahead and do it. The government can't stop them — it can only sue to stop them, in a court of law. And what the government wants, it doesn't always get.

Puerto Rico provides the most striking example of a situation where the interest of the people is regularly being overruled by a court thousands of miles away.

  • When Puerto Rico defaulted on substantially all of its debt in 2016, the government tried to cobble together a solution that would respect the interests of the bondholders while ensuring the best outcome for the island as a whole. The result was that it gave control of the island to an unelected oversight board, the majority of which was appointed by House Republicans. Puerto Ricans were (and are) understandably unhappy about this, but there was nothing they could do.
  • The oversight board has made a series of decisions that most Puerto Ricans consider far too creditor-friendly. Those decisions were then approved by the island's bankruptcy judge, Laura Taylor Swain. But still the creditors weren't happy, and they have repeatedly appealed Swain's decisions to the First Circuit Court of Appeals in Boston. Every time, the creditors have won, and Swain has been overruled.
  • In the most recent case, the oversight board itself has been ruled illegal, in a case where, once again, the First Circuit overruled Judge Swain.

The bottom line: Capital is insatiable, and it generally has the law on its side. In Puerto Rico, the equities of the case would be far less generous to creditors than even the oversight board and Judge Swain have been. But bonds come with contractual rights that even a government-appointed oversight board can't circumvent.

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Data: The Center for Systems Science and Engineering at Johns Hopkins, the CDC and China's Health Ministry. Note: China numbers are for the mainland only and U.S. numbers include repatriated citizens and confirmed plus presumptive cases from the CDC

Japan's Prime Minister Shinzo Abe announced plans to declare a state of emergency and a 108 trillion yen ($990 billion) stimulus package Tuesday, as several governments announced new restrictions amid a jump in cases.

The big picture: The virus is confirmed to have killed almost 75,000 people and infected 1.3 million globally as of early Tuesday, per Johns Hopkins data. Spain has reported the most cases outside the U.S. (more than 136,000) and Italy the most deaths (over 16,000) as half the planet's population is now on lockdown.

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U.K. Prime Minister Boris Johnson is being treated in the intensive care unit of St. Thomas' Hospital in London due to increasingly severe coronavirus symptoms.

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Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 3 a.m. ET: 1,348,184— Total deaths: 74,834 — Total recoveries: 284,802Map.
  2. U.S.: Total confirmed cases as of 3 a.m. ET: 368,376 — Total deaths: 10,989 — Total recoveries: 19,828Map.
  3. Trump administration latest: President Trump's economic adviser Peter Navarro warned White House colleagues in late January the coronavirus could take over half a million American lives and cost close to $6 trillion, memos obtained by Axios show.
  4. 2020 update: Wisconsin Supreme Court blocks governor's attempt to delay in-person primary voting delayed until June.
  5. States latest: West Coast states send ventilators to New York and other states with more immediate need — Data suggest coronavirus curve may be flattening in New York, Gov. Andrew Cuomo said.
  6. World update: U.K. Prime Minister Boris Johnson moved to intensive care as coronavirus symptoms worsen.
  7. Stocks latest: The S&P 500 closed up 7% on Monday, while the Dow rose more than 1,500 points.
  8. What should I do? Pets, moving and personal health. Answers about the virus from Axios expertsWhat to know about social distancingQ&A: Minimizing your coronavirus risk.
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