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After a record economic expansion, the coronavirus pandemic sent the U.S. economy into a recession as unemployment soared to staggering heights. The country now faces urgent questions about how much stimulus is needed for reeling consumers and businesses, and what a recovery might look like.

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Be on high alert for April Fools’ Day jokes and pranks today, including fake product announcements.

The big picture: April 1 is a good day to have some trust issues.

In 2021, Volkswagen announced a few days before April Fools' that it was changing its name to Voltswagen, only to admit that it was a prank.

Yes, but: Some products that sound like pranks turn out to be real.

When we heard Nissin Foods launched "Cup Noodles Breakfast" at Walmart this week, we immediately were suspicious of the limited-edition product that “blends ramen with your favorite breakfast flavors, including pancakes, maple syrup, sausage and eggs.”

But Nissin Foods confirmed to Axios that the product is indeed for sale at 3,000 select Walmart stores and online.

Also not a joke: The Van Leeuwen limited-run Hidden Valley Ranch ice cream, which Axios NW Arkansas co-author Worth Sparkman recently taste-tested.

Be smart: Trust nobody Saturday, especially not the pranksters in your family or sneaky coworkers.

Is it an April Fools' prank, or just a weird product?

Photo illustration: Courtesy of Nissin Foods

April Fools Day

Media Trends

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Social media is getting pricier for users who want to unlock special features and privileges.

Why it matters: Users who once believed they were contributing their time and creativity are now being asked to pay up by cash-hungry platforms.

Driving the news: Elon Musk on Monday tweeted that beginning April 15, only tweets by verified users will show up in Twitter's default main feed of "For You" recommendations. Verification, formerly a service Twitter offered public figures, is now available only to $8-a-month subscribers.

The new strategy "is the only realistic way to address advanced AI bot swarms taking over. It is otherwise a hopeless losing battle," Musk argued. "Voting in polls will require verification for same reason."

Between the lines: Musk has tried to shift more of Twitter's business towards charging for subscriptions amid advertising pullback. 

In addition to charging users to be verified, he also began charging companies for access to Twitter's API, or backend interface, something many used to be able to access for free.

Be smart: Other social networks have made changes to their feeds to prioritize paid traffic over organic posts, but Musk's moves are more drastic.

As The New York Times' Mike Isaac notes, when Facebook transitioned its algorithm to prioritize posts from friends over Pages, brands and news companies were forced to buy ads if they wanted to be seen. 

The big picture: Twitter isn't alone in its push for more stable, recurring revenues. Other social networks, having reached a point of maturity and a slowdown in the ad market, are also looking to make more money from subscriptions and licensing. 

Meta launched its version of a paid verification subscription service in the U.S. last week. Snapchat introduced a new consumer subscription last year. 

Snapchat also last week launched its first enterprise software business, licensing its augmented reality software and tools to enterprise companies. 

"[T]his opportunity is major, not just for Snap, but for businesses of all sizes," said Jill Popelka, head of AR enterprise services for Snap Inc. Snap will first focus on licensing out its tech and services to the retail industry before testing other markets. 

Yes, but: Musk has announced many new policies and promises from his Twitter account that have fallen by the wayside or remain unfulfilled.

The bottom line: Users may not need all of the new paid perks they're being offered, but tech firms are desperate to sell them.  

Musk admitted to employees this week that Twitter is worth less than half of what it was when he bought it. 

Stocks for Meta and Snap have both lost all of of their pandemic momentum since the ad market began to crater in 2022.

Editor's note: This story originally published on March 28.

Social media's new pay-for-play rules

Twitter's Elon Musk says only paying subscribers' messages will be featured in the service's main feed.

Illustration of a phone with a mobile payment icon on the screen, unzipping to show cards and money inside.

Social media

Technology

As travelers take to the skies this spring and summer, many are in for a delightful surprise: Several of the country's airports have made big improvements in recent months, including some whose very names had long been met with something between weariness and outright dread.

Why it matters: Airports are gateways to their city, where travelers make their first impression upon arrival.

More importantly, the latest improvements aren't just about aesthetics — they're also about accessibility and accommodations for travelers with different needs.

Driving the news: The most notable recent airport glow-up? New York's LaGuardia, of course.

LaGuardia's renovated Terminals B and C are now home to faster baggage screening machines, a massive and bright Delta Sky Club, and an eye-catching new water feature, among other upgrades that have taken the airport from worst to first. (In fact, Terminal B was just named the world's best new airport terminal in closely watched industry awards.)

Orlando International Airport's new Terminal C is replete with a robotic bag storage system, biometric boarding tech and USB ports at every seat.

Kansas City International Airport, meanwhile, just opened an airy new terminal with art installations by various artists including Nick Cave and George Rodriguez, an outdoor fountain space and blazing fast Wi-Fi.

And Detroit Metropolitan Airport has added a massive futuristic departure board that uses facial recognition tech to show travelers customized info about their flight.

Between the lines: These and other airports have also been busy installing modern amenities that, while less flashy, will no doubt be appreciated by those who find themselves in need.

Lactation rooms and pods are now almost as common an airport feature as Hudson News and Starbucks — many made by a startup called Mamava. All-gender bathrooms are starting to pop up too.

Newark Liberty International Airport, also newly upgraded, now boasts a sizable kids' play area where little ones can stretch their legs and burn off some energy before a long flight.

Kansas City's new "Air Travel Experience Simulation" is particularly impressive — it's a cross-section of a real airliner where first-time, nervous or neurodivergent passengers can get a sense of what'll happen on their real flight before they board.

Yes, but: Many of the country's other airports remain long overdue for  sweeping renovations and upgrades of their own.

Plus, all the USB ports in the world won't make much difference if you're stuck at the airport for hours amid the next systemwide meltdown, or if there's significant overcrowding.

Reality check: While some airports are getting big, expensive improvements, many small regional airfields are losing service, cutting off their surrounding communities from the air travel network.

Plus, U.S. airports overall leave a lot to be desired compared to their global peers — not a single American airfield cracked Skytrax's 2023 ranking of the world's top 10 airports overall. (LaGuardia got the nod specifically for "best new terminal.")

What's next: The Biden administration is funneling billions into further airport upgrades nationwide, with projects ranging from new terminals and security areas to baggage system overhauls and greener heating systems.

Part of that money is going to behind-the-scenes upgrades — some airports are getting control tower upgrades, for instance.

The bottom line: Even people who usually hate the airport might find something to like the next time they fly.

Editor's note: This story has been corrected to reflect that LaGuardia’s new Delta Sky Club is in Terminal C, not B. It was originally published on March 27.

America's airports are suddenly pretty good now

Several of the country's airports have made big improvements over the past few months.

Illustration of an airplane staircase with a red carpet.

Airports

Last year wasn't a great year for money flowing into China-based venture capital, or for Chinese startup exits. 

Why it matters: Distributions are important to keep limited partners backing Chinese funds, and thus, backing startups.

By the numbers: While the second half of the year was much stronger, 2022's total exit value was $157.7 billion — less than half of 2021's record $289.2 billion, per PitchBook. 

2022 only had $22 billion in venture-backed exits with participation from foreign investors, a huge dip from 2021's 164.7 billion, and the lowest amount since 2016. This translated to only 17 exits, down from 56 in 2021. 

Yes, but: China's IPO market has remained stronger than the rest of the world, with 201 public listings in 2022 (131 taking place in the second half). 

This is also important because almost all exit value since 2019 has come from public listings. 

Chinese startup exit slowdown

Last year's total exit value was $157.7 billion — less than half of 2021's record.

Illustration of the country of China surrounded by red bars and money. 

China

China’s venture activity in 2022 had a noticeable decline, during a year when geopolitical tensions with the world's second-largest economy hit a crescendo.

Why it matters: Over the last decade, China’s startup boom stoked concerns that it was surpassing American-style capitalism. But ongoing pandemic restrictions and macro trends put a damper on the last year, which also coincided with growing worries about Chinese tech companies like Bytedance's TikTok, which could be banned in the U.S.

In fact, next week Rep. Mike Gallagher (R-Wis.), chair of the new House China select committee, will travel to California to meet with venture capitalists Marc Andreessen and Vinod Khosla (along with other business leaders), a source close to the committee tells Axios' Sophia Cai. 

By the numbers: Total venture dollars invested in China in 2022 were $69.5 billion, across 6.186 deals, per PitchBook data.

That’s down from $136.2 billion across 7,486 deals in 2021.

Last year saw the lowest annual deal value since 2017.

Between the lines: One big reason for the drop is the decrease in mega-rounds ($100 million and over), which also saw their lowest dollar value and deal count since 2017.

Zoom in: Venture rounds with participation from investors outside of China declined as a portion of total rounds, underscoring investors’ recent concerns and pullback in dollars.

Last year, only 15.1% of all China VC deals included investors from abroad — the lowest level since 2017.

Deals denominated in Chinese yuan (RMB) and in U.S. dollars both decreased last year, though the latter shrunk significantly more. Deals in dollars plunged by 67.6% to $18 billion, while deals in RMB fell by 36.3% to $51.3 billion.

Meanwhile: Venture fundraising also sharply dropped last year, with Chinese VCs raising $44.5 billion, just under half of 2021's fundraising. 

And of that total, $11.8 billion went to a single fund, the Shanghai Zhangkeherun Biomedical RMB Fund. 

Capital commitments were concentrated, with 54.1% going into 13 funds that are $500 million or larger (down from 35 such funds being raised in 2021). Eight of those were denominated in yuan, further underscoring the pullback from foreign investment. 

Funds of $100 million or less raised $6.7 billion across 189 funds last year, a drop of 66.6% and 65.5% in value and fund count, respectively. 

Yes, but: China's relaxing of pandemic restrictions at the beginning of this year could mean a pickup in venture deal activity for 2023. 

The bottom line: Even China hasn't been immune to the weirdness of the market in the past year.  

China's venture investing had a rough 2022

Total venture dollars invested in China in 2022 were $69.5 billion.

Illustration of money in the shape of downward pointing arrows.

Markets

Axios Markets

Thousands of employees of Silicon Valley Bank, Signature Bank, and Credit Suisse have discovered the hard way that the stock they receive from their employer can become worthless overnight — just as Enron employees did in 2001.

Why it matters: Rank-and-file employees are being subtly encouraged to borrow money against their vested stock, instead of selling it — a move that in general should be taken only by the extremely rich, operating on very bespoke financial advice.

Driving the news: Better.com is offering an "equity unlocker" mortgage for Amazon employees whereby they can borrow against their Amazon stock rather than selling it at its current depressed level.

There's a conventional Better.com mortgage, secured against the property, for 80% of the value of the home. The other 20% comes by borrowing against the shareholding, at a higher interest rate.

The down payment loan is overcollateralized: The employee needs stock worth twice as much as the down payment.

Between the lines: The main reason not to sell stock is to avoid capital gains taxes on doing so. 

That's mostly attractive for people who literally plan to hold the stock until they die, in the hope that their heirs can then take advantage of the step-up in basis provision. 

The big picture: Broadly speaking, it's a good idea for employees to sell vested stock in their employer, since they're already massively exposed to the risk of that company doing badly just by dint of working for them.

It's also a bad idea to have a large shareholding in a single stock, since most stocks fail to outperform Treasury bills. 

It's an even worse idea to borrow against a large shareholding in a single stock, since in that case you only come out ahead if the stock outperforms the interest rate on the loan. Which will be substantially higher than the interest rate on Treasury bills. 

How it works: At Amazon, however, the entire corporate compensation structure is built on an outperforming share price. "Compensation was predicated on the assumption that Amazon’s stock would rise at least 15% each year," reports the WSJ.

By partnering with Better to allow employees to hold on to their stock and get onto the housing ladder, Amazon is implicitly encouraging them to do just that.

An Amazon spokesman told Axios that the product was part of an attempt to provide "benefits that aid with both short- and long-term financial success."

What they're saying: The announcement gave Better's CEO the opportunity to paint himself as a "creative" financier; the press release casts his product as a solution for Millennials who "cannot afford to purchase a home."

By definition, however, anybody using this product can afford to purchase a home, just by liquidating half of their Amazon stock.

The bottom line: If you can use your savings to make a down payment, that generally makes more financial sense than any clever alternative.

The danger of getting creative with housing down payments

Illustration of a hundred dollar bill with the fearful/scary emoji over Benjamin Franklin's face. 

Finance

Neoliberalism is dead; globalization is in retreat; we've now entered a new world where deep geopolitical tensions get surfaced in protectionist trade policies, no matter who sits in the Oval Office.  

The big picture: Economists and globalists are, predictably enough, convinced this is very bad news.

Why it matters: Despite the fact that politicians and the public at large have put neoliberalism decisively behind them, technocrats still use the old regime's measuring sticks to gauge the results — creating a tension that will inevitably result in a lot of failure and recrimination.

Driving the news: As Axios' Neil Irwin reports, economist Adam Posen — a truly global grandee, having worked variously for the U.S., U.K., German, and Japanese governments over the years, as well as the IMF — has written an unflinching and much-read takedown in Foreign Policy of post-neoliberal U.S. economic policy. 

Posen cites "more than two centuries of well-researched history of foreign economic policies" in defense of his claim that decoupling the U.S. from China is deeply misguided and counterproductive. 

Context: Posen's essay arrives in the wake of the publication of a 564-page book published by the World Bank bemoaning the sorry state of economic growth in emerging-market and developing economies.

Axios' Courtenay Brown reports that the Bank diagnoses "a lost decade in the making" — unless globalization is re-embraced and an indicator called "the growth rate of potential GDP" manages to come up from its current depressed levels.

Between the lines: The Bank is effectively doubling down on the neoliberal view that economic growth is the most effective way to achieve its goals, which include "eliminating extreme poverty, reducing inequality, achieving higher growth, [and] combating climate change," per the introduction.

"Addressing these priorities requires the same recipe: sustained and robust investment and productivity growth," the authors write.

What they're saying: In his introduction to the book, outgoing World Bank president David Malpass breaks out the old hits from the 1990s. "Monetary and fiscal frameworks should prioritize inflation, debt, fiscal prudence, and financial-sector stability," he writes. 

His unopposed successor, globe-trotting former Mastercard CEO Ajay Banga, tells Axios' Hans Nichols that his goal is to mobilize "trillions of dollars a year" in private-sector investment in the developing world. 

There's a word for that kind of profit-seeking capital flow from rich countries to poorer ones: Globalization. 

The other side: Biden administration officials show every sign of having moved on from such thinking. National security adviser Jake Sullivan said at a Hewlett Foundation event last weekend that he was focused on the American middle class, as "the foundation of our capacity to project strength in the world, just as it is fundamental to the sustainment of our economy."

"We can't just look at aggregate economic numbers," added Heather Boushey, a member of the Council of Economic Advisers.

The bottom line: As of yet, there aren't any agreed-upon post-neoliberal yardsticks that can be used to judge whether the new policies are proving more effective than the old ones. 

In theory, global wins can come even without large gains in aggregate GDP or total factor productivity. But economists naturally focus on such indicators, in the absence of alternatives, and are therefore going to have a very hard time seeing any such wins.

Why neoliberal measuring sticks don't work anymore

You can't judge a new world by the old yardstick

Illustrated collage of measurement lines and a hand holding a list with abstract circles.

Economic growth

Former Treasury secretary Steven Mnuchin said this week that the FDIC insurance cap should be raised "to either $10 million or $25 million" in order to prevent regional banks from being at a disadvantage to the big money-center banks. 

Why it matters: Businesses often need to keep a lot more than $250,000 on deposit in order to comfortably fund their day-to-day operations, including making payroll. Such businesses are in no position to be able to gauge the creditworthiness of banks. 

Flashback: Former FDIC chair Sheila Bair took control of Wachovia, the fourth-largest bank in the U.S., in September 2008. Ultimately it was sold to Wells Fargo, who outbid Citigroup for the bank.

The problem at Wachovia was a $5 billion bank run, led by large uninsured depositors. If those deposits had been insured, said Bair the following month, that “definitely would have made a difference.”

To address that problem, Bair introduced the Transaction Account Guarantee Program in October 2008. The plan, which didn't require Congressional legislation, effectively insured all deposits in corporate transaction accounts; it expired at the end of 2012.

The big picture: The fast rise in long-term interest rates has made corporate depositors worried about all but the very largest banks — the ones officially deemed too big to fail.  

Per Bloomberg, Y Combinator president Garry Tan wrote in a message to peers: “Anytime you hear problems of solvency in any bank, and it can be deemed credible, you should take it seriously.”

The catch: Just about any bank, even JPMorgan, can be the subject of solvency rumors in today's interest-rate environment. 

What they're saying: "We’ve got a huge systemic crisis," former comptroller of the currency Gene Ludwig tells Axios. 

"If you’re a business bank, almost by definition you’re going to have a lot of uninsured deposits."  

"We have to do something about deposit insurance. The notion that deposit insurance creates moral hazard is one of the biggest canards in the world."

"Some mid-size banks are in very tenuous situations," adds Klaros co-founder Michele Alt. "In recent weeks, depositors have moved an estimated $550 billion out of small banks and into big institutions and money market funds."

Between the lines: The Dodd-Frank banking reforms of 2010 made it more difficult for regulators like the FDIC to unilaterally guarantee deposits in the way they did in 2008. 

At the time, no one had ever seen a bank run nearly as fast or as dangerous as the one that hit Silicon Valley Bank. 

The bottom line: Government guarantees are effective at preventing deposit runs. But in order for the existing $250,000 limit to be raised, Congress would have to pass new legislation. 

The case for $25 million of FDIC deposit insurance

Illustration of a hundred dollar bill with Benjamin Franklin holding an umbrella. 

Federal Deposit Insurance Corporation (FDIC)

A growing number of TikTok users are touting a decades-old labor law that they say could give workers a heads-up about impending layoffs, but experts say the videos are breeding misconceptions.

Why it matters: The social media trend follows warnings from the Federal Reserve that economic pain and job losses are likely this year as the U.S. central bank fights inflation — and the tech sector has already been hit hard by layoffs.

The Worker Adjustment and Retraining Notification Act was designed to help workers find new jobs before losing their current positions, legal experts told Axios.

Yes, but: Social media chatter around the WARN Act is creating some misunderstandings, says Sara Moore, a partner at the Gordon and Rees law office in San Francisco.

The idea that "any layoff would necessarily trigger the WARN Act protections is not the case," said Moore, who deals with cases related to the law.

She said it is "better" to be educated about WARN Act requirements than trying to get ahead of your company's plans.

Background: Passed by Congress in 1988, the WARN Act requires most companies with 100 or more employees to officially disclose certain layoffs 60 days in advance.

The law surfaced during the Twitter and Elon Musk saga, as the tech company issued WARN notices about layoffs in November. Some employees sued, saying they were not given enough notice.

More recently, some TikTokers have been promoting the WARN Act as a way to see layoffs before they happen.

In one of the most viral videos, with more than 2.2 million views, a TikToker has a fictional layoff conversation with her manager. Thanks to the WARN Act, she says, she already knows about the layoffs.

Though many companies' layoffs qualify for an official WARN Act notice, the criteria are “complex,” the Department of Labor notes. Some of them include:

Layoffs of 50 or more workers at a single location, where 50 is at least one-third of all the full-time employees at that site.

Any layoffs of 500 or more workers at a single site.

Zoom in: Several states have their own WARN notice websites, where people can read which companies are announcing layoffs.

Each company provides details on how many people are affected, when the layoffs start, and sometimes, the reasons behind them.

Moore, the San Francisco attorney, said it’s true that certain companies are required to report their forthcoming layoffs in situations where there is a closure at a specific location or if a certain number of people are being let go.

But "the likelihood that an employer is going to file without notifying their employees is very low," Moore said.

"If you were to monitor that portal, it's not as if there's going to be secret information that is being held there and withheld from employees," she said.

Meanwhile, if your company is big enough to qualify for an official notice, you would most likely hear about the layoffs in the news, says Jon Klinghoffer, a lawyer at Goldberg Kohn who defends employers in WARN Act cases.

If you're at a small company, then the act wouldn't apply and you'd learn about layoffs internally anyway, he said.

“If it's big enough, you're already likely to hear about it,” he said.

Some TikTokers have also tried to dispel myths about the law, pointing out misleading information about how it works.

Layoffs are commonplace now in the tech sector. More than 500 tech companies have announced layoffs since June of last year, including Amazon, Google, Meta, and Microsoft.

The tech layoffs have raised questions about how the WARN Act applies to employees who work remotely, Klinghoffer told Axios.

He said every remote employee has a “WARN home” — which is based on where they report into, where their boss works, or other factors.

“You could have a bunch of remote employees who don't work in the same location, get laid off, and it may be a WARN event,” he said.

The bottom line: The WARN Act promotes corporate transparency and provides key information to workers about potentially life-changing job events — but it’s often not the secret weapon some on social media are making it out to be.

Why the tech layoffs are happening and what's next

What to expect when your tech firm is downsizing

Experts debunk viral TikTok videos about how companies reveal layoffs

The decades-old WARN Act has gained attention as tech companies announce cuts.

Photo: Andrew Harrer/Bloomberg via Getty Images