Aug 2, 2019

Axios AM

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1 big thing: Juul's growing kids crisis

Illustration: Aïda Amer/Axios

Juul's campaign to convince America it does not target kids to vape is getting crushed by lawmakers, attorneys general and the media. The backlash is wicked — and widespread: 

  • The Connecticut attorney general this week announced an investigation into Juul's health claims and appeal to young people.
  • In May, the North Carolina attorney general sued Juul "for designing, marketing, and selling its e-cigarettes to attract young people."
  • A year ago, the Massachusetts attorney general launched a probe into accusations that Juul markets and sells to minors. [Corrects date]
  • The Trump administration has followed up tough talk with real action, Axios' Sam Baker tells me: The FDA is still moving forward with tight limits on e-cigarette sales, even over the objections of conservatives who say it's too much regulation from a Republican administration. 
  • In April, 11 Democratic senators (including Elizabeth Warren) sent Juul a letter demanding data and documents about "hooking an entire new generation" via its "highly addictive nicotine." Sen. Dick Durbin of Illinois, the lead senator on the letter, wasn't satisfied by Juul's 22-page response, and continues to blast Juul's "PR campaign."

Juul is asking policymakers to distinguish between its past and present.

  • Juul CEO Kevin Burns wrote in a Washington Post op-ed in March that after FDA objections, "we stopped the sale of flavored Juul pods to traditional retail stores, enhanced our online age-verification process, strengthened our retailer compliance, and exited our Facebook and Instagram accounts."

But I continue to hear horror stories from parents and teachers about the vaping "epidemic" in middle and high schools — and administrators' helplessness in curtailing e-cigarettes in their halls, bathrooms and classrooms.

  • Why it matters: No sooner had cigarettes become decisively uncool when a sleek new nicotine delivery device started captivating our kids.
  • Along with Fortnite and other screen issues, "Juuling" has become a leading topic for parent-teacher conversations.
  • Federal researchers said in December that in an annual survey of American teenagers, 21% of high-school seniors "said they had vaped within the past 30 days — about double the level from the year before," the N.Y. Times reported.
  • Juul has about 75% market share, based on Nielsen convenience store data.

A front-page article in Saturday's Washington Post reported that some teens refer to school bathrooms as "Juul rooms":

  • "As e-cigarettes have skyrocketed in popularity, ... pediatricians report seeing teens who behave less like tobacco users and more like patients with substance-abuse disorders."
  • Many e-cigarettes, "including Juul, allow users to ingest far more nicotine than they would with traditional cigarettes."

A devastating analogy in the Post story: "[E]ven though many teens assume e-cigarettes are safe, some turn up with signs of nicotine toxicity, a condition previously seen in young children who accidentally ingested nicotine gum."

  • "These kids have behaviors that we often see in patients who have opioid or marijuana addiction," Sharon Levy of Boston Children's Hospital told The Post.
  • Addiction treatment specialists told The Post that some kids resort "to stealing from their parents or selling e-cigarette paraphernalia to support their habits."

In a response, Juul's Ted Kwong told Axios: "JUUL Labs exists to help adult smokers switch from combustible cigarettes, which are still the leading cause of preventable death in the world and we do not want non-nicotine users to buy JUUL products. We share these serious concerns about youth vaping."

Go deeper.

2. The forever trade war

Illustration: Aïda Amer/Axios

Experts are beginning to worry that the trade war between the U.S. and China won't be over in weeks or even months, but has become a long-term conflict that could last for decades, Axios Markets editor Dion Rabouin writes.

  • President Trump tweeted yesterday that the U.S. would put an additional 10% tariff on $300 billion worth of Chinese goods on Sept. 1, again escalating the conflict that has already weakened U.S. growth and business investment.
  • Why it matters: Bullish investors have priced a near-term positive outcome into record-high stock prices. But a growing chorus of money managers and economists says the conflict's resolution could take a long time.

Even before Trump’s latest tweets, ratings firm S&P Global had revised down its outlook for U.S. GDP growth through 2022, because "the risk of trade protectionism between the U.S. and China will persist for some time."

  • Citing "an intensifying multi-front trade war," chief economist Beth Ann Bovino wrote: "A sharper-than-expected slowdown in China and Europe, and uncertainties stemming from Brexit, add to the downside risk."
  • Bovino tells Axios: "The fight over who’s in charge in the new technological world, that doesn’t seem to have any end in sight."

The bottom line: Tax cuts and increased government spending have given a major boost to stocks, but the trade war has already eaten away at U.S. and global manufacturing.

3. MIA from debates

Illustration: Sarah Grillo/Axios

Axios' subject-matter experts spotted two topics that got short shrift in this week's back-to-back Democratic debates in Detroit:

1) It's not the economy, stupid. Axios' Dan Primack wrote in his Pro Rata newsletter that economic policy was barely mentioned on Night 1, and rarely on Night 2.

  • Candidates and moderators on Tuesday said the word "economy" just 29 times out of more than 26,000 words spoken. "Jobs" was said just 31 times.
  • On Wednesday, Kamala Harris got econo-Twitter all excited by saying "Jerome Powell." But that was after the two-hour mark.
  • Many other debated issues have economic pertinence — health care, climate change, race relations — but the framing often left it as an afterthought.
  • Why it matters: President Trump will keep highlighting U.S. economic performance as his top achievement while in office, and it's a compelling re-election case. Democrats either can (quietly) hope that GDP growth continues to slow, as it did in the second quarter, or begin to seriously workshop their counter-punches. Ignoring the economy is just stupid.

2) Neither night included a real conversation about the underlying cost of health care, Axios' Sam Baker tells me.

  • There was plenty of back-and-forth about the role of insurance companies.
  • But insurance plans — whether that's Medicare or private insurance — exist to pay the bills for drugs, hospital stays and doctors' visits.
  • Those bills keep getting bigger.
  • Politically, it's a lot harder to beat up on hospitals than insurance companies.
  • But hospitals are a far bigger driver of our expensive health care system.

P.S. ... "Over the two nights, the debate moderators didn’t ask a single question about gerrymandering or voting rights." (HuffPost)

4. Trail pic du jour
Photo: Scott Olson/Getty Images

The day after the debate, Joe Biden shakes hands yesterday at Detroit One Coney Island Restaurant.

5. Hope for ending an 18-year war
At Dover Air Force Base on July 31, an Army team transfers the remains of Spec. Michael Nance, who was killed in Afghanistan. Photo: Al Drago/Getty Images

"The Trump administration is preparing to withdraw thousands of troops from Afghanistan in exchange for concessions from the Taliban, including a cease-fire and a renunciation of al-Qaeda, as part of an initial deal to end the nearly 18-year-old war," the WashPost reports.

  • "The agreement ... could cut the number of American troops in the country from roughly 14,000 to between 8,000 and 9,000."
  • "That number would be nearly the same as when President Trump took office."
6. Breaking: Another GOP House loss
Rep. Will Hurd on NBC's "Late Night with Seth Meyers" in May. Photo: Lloyd Bishop/NBC via Getty Images

Rep. Will Hurd of Texas, a former CIA undercover officer who is the House's only African American Republican, announced that he won't seek re-election.

  • Why it matters: Hurd's exit further hurts his party's efforts to appeal to minority voters, and wounds its already uphill chances of regaining House control. (AP)

The GOP is now ahead of its retirement pace last cycle, when 34 members stepped aside — the most for the party since at least 1930.

7. Why it's so hard to stay in the middle class

These three eye-opening stats from The Wall Street Journal explain why families have to go deep into debt to stay in the middle class:

  • "Median household income in the U.S. was $61,372 at the end of 2017, according to the Census Bureau. When inflation is taken into account, that is just above the 1999 level. Over a longer stretch — the three decades through 2017 — incomes are up 14% in inflation-adjusted terms."
  • "Average housing prices, however, swelled 290% over those three decades in inflation-adjusted terms, according to an analysis by Adam Levitin, a Georgetown Law professor."
  • "Average tuition at public four-year colleges went up 311%, adjusted for inflation, by his calculation. And average per capita personal health-care expenditures rose about 51% in real terms over a slightly shorter period, 1990 to 2017."

Keep reading (subscription).

8. Big Tech's smart-speaker war

Photo: John Brecher for The Washington Post via Getty Images

Eager for a place in the home, Big Tech giants are beefing up their smart speaker products, hoping to find just the right combination of screens, speakers and features that will stick with consumers, write Axios' Ina Fried and Sara Fischer.

  • Why it matters: There's a lot of potential in the smart speaker market, especially for the big companies like Google and Facebook whose traditional advertising streams face slowed growth projections — but balancing privacy concerns with enough functionality to attract users is proving to be tricky.
9. 🎮 Big switch by esports megastar
Photo: Jose Juarez/AP

Fortnite superstar Tyler "Ninja" Blevins is ending his hugely profitable partnership with Amazon-owned Twitch and is taking his video game live streams to Microsoft's Mixer platform, AP's Jake Seiner reports.

  • Within 40 minutes of the announcement, Mixer was the top trending topic on Twitter in the U.S.
10. 1 mysterious thing

Indiana Reformatory booking shots of John Dillinger show the notorious gangster as a 21-year-old. Photo: Charlie/Nye/Indianapolis Star via AP

Two relatives of notorious gangster John Dillinger, who plan to have him exhumed as part of a History Channel documentary, say they have "evidence" the body buried in an Indianapolis cemetery may not be him and that FBI agents possibly killed someone else in 1934, AP reports.

  • The FBI immediately disputed that idea, calling it a "myth" that its agents didn't fatally shoot Dillinger outside a Chicago theater more than 85 years ago. The agency said in a statement that "a wealth of information supports Dillinger's demise," including fingerprint matches.

Go deeper.

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