Axios AM

January 07, 2023
Happy Saturday! Smart Brevityโข count: 1,483 words ... 5ยฝ minutes. Edited by TuAnh Dam.
โก Breaking: Federal prosecutors in Seattle are probing hedge funds' dealings with Binance โ the world's largest crypto exchange โ as part of a long-running money-launder investigation, The Washington Post reports.
1 big thing: The shrunken gavel

House Speaker Kevin McCarthy โ after eking out an agonizing, five-day 15-ballot victory โ savored the gavel for the first time at 1:13 a.m. ET, and declared in his opening remarks:
- "My father always told me: It's not how you start โ it's how you finish."
- But it's how McCarthy got there that signals a new depth of dysfunction for the American government.
Why it matters: McCarthy's desperate fight for speaker provides a preview not just of a new era of divided government โ but a new reality where even basic governance will require repeated brinkmanship.
- McCarthy, 57 โ the son of a firefighter from Bakersfield, Calif. โ presides over a GOP that's plain ungovernable, and a House that's so narrowly split that little productive work looks possible.
- As we warned you earlier this week, this is institutionalized anarchy.
๐ฅ McCarthy's predecessor โ former Speaker Nancy Pelosi, who remains in the House as a representative from San Francisco โ told the N.Y. Times as she entered the chamber yesterday afternoon:
- "What we're seeing is the incredibly shrinking speakership."
What happened: McCarthy was tortured by his hardliners all the way to the finish line, with a final indignity on his night (actually morning) of triumph.
- McCarthy's team 100% believed that victory was locked when the House returned for a 14th ballot at 10 p.m. The House reconvened that late to give two members time to travel back.
- That was already the first time since 1923 that a speaker election had gone past the first ballot.
But after McCarthy had made concessions after concession to his right wingers โ including the ability for just one Republican to call a vote to boot him at any time โ he still got stiffed at the last hour.

When McCarthy fell one vote short on the 14th ballot, he furiously confronted a ringleader of the rebels, Rep. Matt Gaetz (R-Fla.), on the House floor, live on global TV (above).
- Former President Trump gave McCarthy a last-minute boost by calling Gaetz and another holdout, Rep. Andy Biggs (R-Ariz.), and telling them the speakership needed to be resolved.
"One more time!" Republicans chanted ahead of the 15th ballot.
- Gaetz, Biggs and four co-conspirators changed their votes to "present," allowing McCarthy to win with 216 votes, at 12:37 a.m.
McCarthy then returned to his usual happy-warrior mien for his victory speech:
- "I hope one thing is clear after this week: I never give up," he said, thumping the podium with his new gavel, and prompting sustained applause.
"I make this promise: I'll never give up for you, the American people."

At 1:41 a.m. ET, a worker screwed in this sign over the speaker's suite โ live on CNN, in a split screen with the House floor.

Speaker McCarthy celebrated after the House adjourned at 1:52 a.m. ET โ until Monday at 5 p.m.
2. ๐ท 3 stunning moments

Rep. Richard Hudson (R-N.C.), at left, restrains Rep. Mike Rogers (R-Ala.), as they pressure Rep. Matt Gaetz (R-Fla.) and other holdouts last night.
- Members gasped when Rogers had to be physically pulled back, Axios' Stef Kight reports from the House chamber.

Al Drago, who made this picture for Bloomberg, tweeted his narration:
- "Rep. Marjorie Taylor Greene, a Republican from Georgia, holds her smart phone with former US President Donald Trump on the line, as Rep. Matt Rosendale, a Republican from Montana, waves it off."
Note that Trump is in her phone as "DT."

Gaetz and McCarthy looked like they could come to blows.
3. Facial recognition's alarming pitfalls
Illustration: Maura Losch/Axios
The breakneck development and deployment of facial recognition technology are outstripping efforts to corral alarming pitfalls, writes Alex Fitzpatrick, editor of Axios What's Next.
- Why it matters: Police, retail stores, airports and sports arenas are rapidly increasing biometric surveillance. But critics say the results are too often blindly trusted, without enough double-checking of matches.
Catch up quick: The latest face-recognition surveillance technology is designed to identify people seen on security cameras in real-time, or close to it.
- It aims to match security camera footage of someone with images tied to that person's identity and kept in various databases or publicly available online, such as police mugshots or social media profiles.
- Facial recognition also lets you unlock smartphones and tablets without a password.
What's happening: A Black man was recently jailed for almost a week in Georgia after a facial recognition system incorrectly matched his face with a suspect in a New Orleans robbery, his lawyer told The New Orleans Advocate.
- The man โ who said he has never been to Louisiana โ was released after detectives realized their mistake, The Advocate reports.
- Facial recognition technology has led to at least three prior false arrestsโ all involving Black men, Wired reports. The technology has long been faulted for failures to accurately identify Black faces.
In Manhattan last month, a personal injury lawyer said she was kicked out of Radio City Music Hall, which is owned by Madison Square Garden Entertainment, after being identified by facial recognition tech.
- The lawyer, Kelly Conlon โ who was chaperoning a Girl Scout field trip to the Rockettes โ works for a firm involved in a personal injury suit against an MSG-operated restaurant.
๐ What's next: Facial-recognition tech will only keep improving โ University of Georgia researchers are working on a system that works based solely on the shape of people's ears.
4. ๐ถ๏ธ New signs of soft landing

Yesterday's jobs report was really terrific in lots of subtle ways, Axios' Neil Irwin reports:
- Job growth is soft-landingish.
- Labor supply looks to be rising.
- Wage growth remains solid โ but not wage-price-spiral alarming.
Go deeper ... Get midday Axios Macro by Neil Irwin and Courtenay Brown.
5. First-grader shoots teacher

A 6-year-old student shot and wounded a teacher in Newport News, Va., during an altercation inside a first-grade classroom.
- The teacher โ a woman in her 30s โ suffered life-threatening injuries; her condition improved later in the day, AP reports.
No students were injured. Investigators in the Tidewater-area city were trying to figure out where the 6-year-old obtained the handgun.
6. ๐ฎ In-car gaming

In-car gaming is a sexy twist on connected cars โ a top attraction at the Consumer Electronics Show in Vegas, where I just spent two days.
- Why it matters: Automakers are positioning themselves to take advantage of the time people spend in their cars as a source of lucrative, recurring revenue, Reuters reports.
What started out as a novelty for Tesla owners has turned into table stakes in the next generation of electric vehicles.

Sony, maker of the market-leading PlayStation video game console, said at CES that its newly christened electric vehicle, Afeela (above), would be powered by the same Unreal Engine 3D technology used in video games.
๐ฎ What's next: Volkswagen is developing vehicles that can drive themselves on the highway or in traffic jams, which could give drivers and passengers more time to view videos or play games.
7.๐น Axios Local: New twists on dry January
Illustration: Brendan Lynch/Axios
If you're giving Dry January a shot in 2023, there's still a watering hole for you, Axios Local reporters found across the country.
- Why it matters: Many spaces traditionally focused on alcohol โ bars and bottle shops โ are giving up booze and offering high-quality non-alcoholic alternatives to help with New Year's resolutions.
A few sober-curious destinations:
- Salt Lake City's Curiosity is a zero-proof bar where a mixed drink will run you about $11. It features a huge selection of non-alcoholic wines and beers.
- Charlotte's Counterculture Club is holding an alcohol-free festival later this month with drinks, live music, panels and yoga to celebrate a healthier lifestyle. "Our mission is really to just challenge that mainstream idea that alcohol is necessary for a fun full life," club founder Molly Ruggere tells Axios.
- In Minneapolis, Marigold is a comfortable, boutique-like space with no alcohol involved. It sells a non-alcoholic version of just about every liquor store staple โ tequila, wine, cocktails, beer.
- Also in Minneapolis, Trail Magic Taproom is Minnesota's first THC taproom, catering to those who want to skip the alcohol but still desire a buzz as more and more states move to legalize marijuana. It comes after the state green-lit edibles last year and offers seltzers, kombuchas and Arnold Palmers that each clock in at under 5mg of THC.
- Axios' Erin Alberty, Laura Barrero, Audrey Kennedy and Ned Oliver contributed.
Share this story ... Sign up for Axios Local, now publishing daily newsletters in 24 cities โย with Cleveland and San Antonio launching next week.
8. ๐ผ๏ธ Framer

Rep.-elect Katie Porter โ a Democrat from Orange County, Calif. โ reads in the House chamber last night.
- Later she tweeted: "The 15th time's the charm, apparently."
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