Jan 14, 2019

Axios AM

By Mike Allen
Mike Allen

❄️ Good Monday morning. NFL's final four ... Super Bowl LIII race is down to L.A. Rams vs. New Orleans Saints for NFC crown, and Pats vs. Kansas City Chiefs for AFC.

1 big thing ... 2020 puzzle: Life brightens, sourness surges

Illustration: Lazaro Gamio/Axios

A huge challenge for 2020 candidates will be navigating these tandem trends:

  • Day-to-day life on the globe is better than at any time in history.
  • Yet the heartland worries that elected President Trump haven't been solved.

It's a fact that humans are living longer, healthier, safer, more comfortable lives.

Several journalists have recently made a similar case:

  • Wall Street Journal columnist Greg Ip started the year with the headline, "The World Is Getting Quietly, Relentlessly Better."
    • "If we can solve global poverty, we can solve other problems like climate change," Ip wrote. "If you spent 2018 mainlining misery about global warming, inequality, toxic politics or other anxieties, I'm here to break your addiction with some good news: The world got better last year."
  • N.Y. Times columnist Nick Kristof made a related point: "Why 2018 Was the Best Year in Human History!"
    • "Never before has such a large portion of humanity been literate, enjoyed a middle-class cushion, lived such long lives, had access to family planning or been confident that their children would survive," Kristof wrote. "Let’s hit pause on our fears and frustrations and share a nanosecond of celebration at this backdrop of progress."
  • And the cover of yesterday's Washington Post Business section headlined a story about coming space milestones, "2019 is shaping up to be a stellar year."
    • "More exploration, human spaceflight and tourism opportunities appear primed for takeoff."

All that euphoria is based on data and reality. But it sounds tone-deaf if you're part of the majority of America, which isn't enjoying the escalating affluence inside the bubbles along the coasts.

CFR President Richard Haass — whose most recent book title, "A World in Disarray," sends a very different message — tells me that the super-optimists are fooling themselves: "[T]he trends are bad ... And third, global security is eroding."

Haass said the many examples "where things are getting worse is much more extensive and significant." He rattled off quite a list:

  • "Intrastate conflict is worse than ever given Yemen, Syria, Libya, Venezuela."
  • "Democracy is in a global recession."
  • "We are highly vulnerable to new infectious diseases and bacteria ... that are resistant to antibiotics. Non-communicable diseases are way up."
  • "Climate change is already having serious effects and much more will come sooner than expected even if we get serious about combatting it, which we are not."
  • "Cyberspace is a new arena of conflict."
  • "North Korea is not denuclearizing."
  • "Great power rivalry is returning after a hiatus."
  • "U.S.-Russia arms control agreements are unraveling. "
  • "Aggression has returned to Europe, populism to Latin America, and the Middle East shows no signs of stabilizing."
  • "Nearly 1 out of every 100 people in the world (65 million) is either a refugee or internally displaced."
  • "U.S. and global debt is at an all-time high."
  • "New technologies are emerging that will displace millions of workers, and the jobs that will be created are either not as good or require skills the workers lack."
  • "And the principal architect and builder of post-WWII international order [the U.S.] has largely abdicated."

Here's how Axios future editor Steve LeVine put it when I asked him about this conundrum: "The trouble is that these very long arc analyses look mindless against the chaos and unhappiness in front of all our eyes."

  • "A better description of the trend would be, 'Long-term betterment, with ultra-wild swings into the abyss.'"
  • "We have many profoundly serious problems to solve before we can comfortably embrace Steven Pinker's thumbs-up to the human race's current condition."

Be smart: Howard Wolfson — who advised Hillary Clinton in her first presidential campaign, and has spent a lot of time thinking about the country as he revs up for a potential run by Mike Bloomberg — warns that the loss of opportunity in major swaths of the U.S. is "more relevant to Americans than the rise of living standards in the developing world or space exploration."

  • "People are angry and anxious," Wolfson said. "Good luck running on the notion that things are better than they think — that was, in part, Hillary’s message — and it fell flat in MI, PA and WI."
  • "The real question is whether or not someone can channel that anxiety in a productive and optimistic way, with a real plan to make things better."
2. Shutdown, Day 24: Dems smell blood on Russia
Screenshot via CNN

House Intelligence Chair Adam Schiff clearly will escalate "his effort to obtain notes or testimony from the interpreter" in a Trump-Putin meeting, per the N.Y. Times.

  • Damning paragraph: "Several administration officials asked the interpreter what had been discussed. But the interpreter told them that the president had taken the notes after the meeting, and had instructed the translator not to discuss the meeting."

Be smart ... Trump's presidency has been consumed with one simple question: Did he collude with Russia? So he not only only meets privately with Putin, he then goes and tells the interpreter to hand over the notes and stay silent.

  • Of all the You Cant Make It Ups in this saga, this one wins.

P.S. "White House aides expressed regret that the president did not more clearly and forcefully deny being a Russian agent when asked by the usually friendly Fox News host" Jeanine Pirro when he called into her show Saturday night. (AP)

  • Trump told her: "I think it’s the most insulting thing I’ve ever been asked."

📈 Datapoint: The N.Y. Times says that half of last week's 20 most-read stories online "concerned the government shutdown and/or what caused it."

3. How Democratic voters became more militaristic

Here's a fascinating example of how President Trump has not only transformed basic beliefs of Republicans, but has also moved opinion among Democrats:

Remarkable new polling data on Syria shows "that the vast bulk of support for keeping troops there comes from Democratic Party voters, while Republicans and independents overwhelming favor their removal," Glenn Greenwald writes on The Intercept.

  • "The numbers are stark: Of people who voted for Clinton in 2016, only 26 percent support withdrawing troops from Syria, while 59 percent oppose it. Trump voters overwhelmingly support withdraw by 76 percent to 14 percent."
  • "Throughout the Obama years, polling data consistently showed that huge majorities of Democrats favored a withdrawal of all troops from Afghanistan."

"With Trump rather than Obama now advocating troop withdrawal," that's changed:

  • "The new polling data shows far more support for troop withdrawal among Republicans and independents, while Democrats are now split or even opposed."
  • "Among 2016 Trump voters, there is massive support for withdrawal: 81 percent to 11 percent; Clinton voters, however, oppose the removal of troops from Afghanistan by a margin of 37 percent in favor and 47 percent opposed."

P.S. ... WashPost: "A multipronged effort by alarmed U.S. national security officials, foreign allies and Republican hawks in Congress to significantly alter or reverse Trump’s decision [to pull out of Syria] was effectively a bust."

4. Pics du jour
Brendan Smialowski/AFP/Getty Images

Above: A snow family greets D.C.'s first major snowfall since 2016.

Below: Morgan Miller carries her 1-year-old daughter, Mia Jennings, as she shovels the stairs to her home in Springfield, Ill.

Ted Schurter/The State Journal-Register via AP
Austen Leake/The Tribune-Star via AP

Above: Noah Shober makes a snow angel outside his home in Terre Haute, Ind.

Below: A man uses a kite to snowboard on the National Mall yesterday.

Brendan Smialowski/AFP/Getty Images
5. Smaller tax refunds could slash U.S. auto sales

Last year's tax reform spurred stronger-than-expected car sales by giving consumers more disposable income, but the payback will come this spring when many Americans could discover they're not getting the tax refund they had expected, Axios' Joann Muller reports.

  • Why it matters: Car sales are a key driver of the U.S. economy, and the industry sees a big uptick every spring as consumers turn their tax refund into a deposit on a new or used car. Without that seasonal bounce, 2019 auto sales may be lower, making a recession more likely.

The bottom line: The U.S. auto industry sold 17.2 million cars and light trucks in 2018 — the fourth-best year in history. Cox Automotive sees U.S. auto sales falling to 16.8 million units in 2019 — a drop of 400,000 vehicles, or about 2%.

6. Cost of climate change for PG&E is a warning to big business

Illustration: Rebecca Zisser/Axios

Breaking: PG&E CEO Geisha Williams, who led California’s largest investor-owned utility for less than two years, stepped down last evening. (S.F. Chronicle)

A battle between California politicians and PG&E, the state's largest utility, is being waged over who should have to pay the price of wildfire damage in recent years, Axios' Courtenay Brown and science editor Andrew Freedman write.

  • Why it matters: Companies are being forced to deal with the consequences of a changing climate, which is leading to more frequent and destructive wildfires and other types of disasters than ever before.
  • PG&E could be on the hook for billions of dollars in liability costs related to last year and the prior year's wildfires, far more than its insurance would cover.

Be smart: PG&E's predicament could be repeated elsewhere as the impacts of climate change hit increasingly hard.

7. One planet, divided under global warming

Illustration: Sarah Grillo/Axios

Sure, we all share this one planet. But the warming Earth is poised to divide — not unite — us, Amy Harder writes in her weekly energy column, "Harder Line":

  • Two reports out last week show the uneven effects of a warming world and a transition to cleaner energy sources. Certain regions, particularly those with economies based on fossil fuels, are set to lose under the Paris deal while others, particularly China, are poised to gain.
  • The reality of a warmer world and government policies aiming to slow that warming are no longer a matter for the future. They’re both happening now. And the convergence of those two turning points is exacerbating tensions that have been simmering for years.

What’s next: As the world warms more and the renewable-energy transition increases, other divisions could emerge:

  • Several colder-climate nations, including Russia, are set to benefit or already are benefiting from warmer temperatures, such as with better agricultural output, according to a 2018 U.N. report.
  • Nations with clean-tech manufacturing and patent dominance could have geopolitical leverage over those that don’t. That makes China, a leader in both, a clear winner.
8. Gloomy earnings forecasts fan market fears

"The U.S.’s biggest public companies are warning that their earnings may not be as strong as they hoped this year," the Wall Street Journal's Akane Otani reports (subscription):

  • "Firms in the S&P 500 were projected back in September to report fourth-quarter earnings growth of 17% from the year earlier."
  • "But dimmer expectations for global growth and disappointing holiday sales have forced many companies to slash their forecasts, pushing the estimated earnings-growth rate for the quarter closer to 11%, according to FactSet."

Why it matters: "The drop-off in estimates ... is the latest sign that U.S. corporations, from retailers and airlines to phone makers, are losing momentum after several quarters of standout growth."

9. Brexit: The movie
Courtesy HBO

HBO Films has a fast-turnaround Brexit movie, debuting Saturday at 9 p.m. (in partnership with BBC Studios, Channel 4 and House Productions):

  • "The film [portrays] the outsized characters of Nigel Farage, David Cameron, and Boris Johnson as they attempt to convince Britons to leave or remain in the EU in what resulted in one of the most consequential elections in modern history."
  • "Benedict Cumberbatch plays Dominic Cummings, the controversial architect of the Vote Leave campaign and a former advisor to David Cameron."

"The film is [an] insider’s look at the political disruptors and the war room antics behind the Leave campaign."

  • "It shows how they mined personal data with a technology operation funded by Robert Mercer."
  • See the trailer.

HBO announced that the eighth and final season of "Game of Thrones" will kick off on Sunday, April 14.

10. 1 fun thing

Photo: @world-record-egg/Instagram

A picture of an egg has become the most-liked picture in Instagram history, garnering more than 25 million likes in 10 days, Axios' Sara Fischer reports.

  • The egg officially surpassed the previously most-liked picture, posted by reality TV star and businesswoman Kylie Jenner in February 2018 after the birth of her daughter, which had 18 million likes.
  • The egg is captioned: "Let’s set a world record together and get the most liked post on Instagram. Beating the current world record held by Kylie Jenner (18 million)! We got this 🙌 #LikeTheEgg#EggSoldiers #EggGang."

As The Atlantic's Taylor Lorenz reports, these "world record" accounts aren't a new phenomenon on Instagram — this just happens to be the one that achieved massive, viral success.

  • Between the lines: Jenner got into the fun herself, posting a video of her cooking an egg on the ground. The caption? "Take that little egg."
Mike Allen