Jul 15, 2020

Axios AM

By Mike Allen
Mike Allen

Good morning. It's Tax Day, extended.

Situational awareness: Justice Ruth Bader Ginsburg was admitted to Johns Hopkins Hospital yesterday to treat a possible infection, and is expected to remain there for a few days. Details.

  • To the delight of President Trump, former Attorney General Jeff Sessions lost the Republican nomination for his old Senate seat in Alabama to former Auburn college football coach Tommy Tuberville, 61% to 39%.
  • In Texas, Trump’s former White House physician, Ronny Jackson, won the GOP nomination for a rural congressional seat.

💻 Today at 12:30 p.m. ET., Sara Fischer and Kim Hart talk with Austin Mayor Steve Adler for "The Pandemic Pivot," an Axios virtual event on small business. Register here.

1 big thing: Existential threat to small business

Illustration: Eniola Odetunde/Axios

The pandemic has changed the game for U.S. businesses, pushing forward years-long shifts in workplaces, technology and buying habits and forcing small businesses to fight just to survive, Axios Markets editor Dion Rabouin writes.

  • Why it matters: These changes are providing an almost insurmountable advantage to big companies, which are positioned to come out of the recession stronger and with greater market share than ever.

What we're hearing: "There is no doubt that the longer this pandemic pulverizes this economy, the main victims will be small and mid-sized companies," Bernard Baumohl, chief economist at The Economic Outlook Group, tells Axios.

  • "We’re seeing the whole business landscape dramatically undergo massive changes, and one part is how large companies with resources will take advantage of the troubles, travails and financial problems small companies have."

What to watch: Big companies, which have benefited far more from congressional and Federal Reserve relief efforts, are expected to buy out or simply wait out smaller competitors.

The backstory: The Fed has provided nearly $3 trillion in liquidity since March to reopen credit and financial markets.

  • Corporate titans — Apple, ExxonMobil and United Airlines — have borrowed a record amount of money, at rock bottom rates.
  • The lone lifeline for small businesses has been the Payroll Protection Program, which economists have found to be inefficient and insufficient, largely excluding the businesses most in need of assistance.
  • In particular, businesses with Black, women, and immigrant owners have disproportionately been shuttered because of the virus.

A recent survey of U.S. chief financial officers found the difference in outlooks between small and large firms over the next 12 months "is extreme."

  • Expectations at small businesses "have essentially collapsed," says Keith Parker, global equity strategist at UBS Research.
  • Conversely, more than 60% of large firms with sales over $2 billion expect sales growth to accelerate — 49% expect a "significant pickup."

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2. Florida's outbreak is getting worse
Reproduced from The COVID Tracking Project. Chart: Axios Visuals

Florida is the new domestic epicenter of the coronavirus pandemic, and it's on track to keep getting worse, Axios' Caitlin Owens writes.

  • Of the 20 U.S. metro areas with the highest daily case growth, nine are in Florida, according to Nephron Research.

Zoom in: "Miami is now the epicenter of the pandemic. What we were seeing in Wuhan five or six months ago, now we are there," Lilian Abbo, an infectious disease specialist at the University of Miami, told NPR.

  • Orlando, Fort Lauderdale, Fort Myers-Cape Coral, Tampa-St. Petersburg-Clearwater, West Palm Beach-Boca Raton, Sarasota-Bradenton, Jacksonville and Pensacola are also in the top 20 metro areas, as of July 12.

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3. College students say they'll nix fun

Illustration: Aïda Amer/Axios

College students overwhelmingly plan to return to campus this fall if their schools are open — and they claim they'll sit out the fun even if it's available, Axios' Neal Rothschild writes from a new College Reaction/Axios poll.

  • 76% of the 800 college students polled (margin of error: +/- 3.5 percentage points) say they will return to campus if they have the option.
  • 66% say they would attend in-person classes.
  • A striking majority say they're planning to forgo the fun on campus: 79% say they wouldn't attend parties, and 71% say they wouldn't be sports spectators.

Between the lines: College students have few options and going to school may be the best choice available.

  • Traditional gap year options, including travel, are out of the picture.
  • Others who can't live with parents depend on student loans and work study.

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4. Pic du jour: Ole Miss
Photo: Bruce Newman/AP

In Oxford, Miss, a marble Confederate statue at Ole Miss is lowered en route to a Civil War cemetery in a secluded area on campus. Details.

5. Newsrooms vs. "the ultimate editor": Twitter
Courtesy N.Y. Post

The dramatic resignation of writer and editor Bari Weiss from the N.Y. Times Opinion department is the latest aftershock from an earthquake that has rocked U.S. newsrooms amid the rise of cancel culture, Axios' Sara Fischer reports.

  • In a 1,500-world letter to publisher A.G. Sulzberger, Weiss says she was the victim of persistent bullying within the organization and warns the Times that "Twitter has become its ultimate editor."

Weiss describes herself as a "centrist" who became a victim of "a 'new McCarthyism' that has taken root at the paper of record":

  • "A new consensus has emerged in the press, but perhaps especially at this paper: that truth isn’t a process of collective discovery, but an orthodoxy already known to an enlightened few whose job is to inform everyone else."

Catch up quick: Critics charged that Weiss' coverage of Israel, the intellectual right online and other issues contained factual errors and prized controversy.

  • The Times fired Weiss' former boss — Times Opinion editor James Bennett — last month in the wake of a controversy over publication of an op-ed by Sen. Tom Cotton (R-Ark.).

The big picture: The reckoning around systemic racism in America has forced the media to address decades of inequality within their own newsrooms.

  • But that industry-wide conversation has become more hostile against the backdrop of an increasingly hyper-partisan political environment.
  • News organizations that pride themselves on presenting "both sides" in their opinion columns face challenges from activist employees who argue that some perspectives promote hate or violence.

Between the lines: These conflicts are emerging as the media industry faces a massive business transformation, moving from a reliance on corporate advertising to support from consumer subscriptions.

🥊 Also yesterday, longtime columnist and blogger Andrew Sullivan, a maverick conservative who once edited The New Republic, said he's leaving New York magazine. In a series of tweets, Sullivan alluded to concerns similar to Weiss'.

6. Biden teases climate path

Photo illustration: Aïda Amer/Axios. Photo: Eric Baradat/AFP via Getty Images

Joe Biden is offering hints about how he’d try and thread the political needle to move big climate and energy plans through Congress, Ben Geman writes in our daily energy newsletter, Axios Generate.

Biden yesterday unveiled plans to spend $2 trillion over four years on clean energy and climate-friendly infrastructure projects like mass transit.

  • The plan also calls for policies including a requirement that power companies provide 100% zero-emissions electricity by 2035.

Biden is casting the plan as a pillar of economic recovery.

  • That means that if Biden wins, big clean energy investments will likely be part of a recovery package — which means political pressure to speed up the Senate's slow legislative gears.
7. "So are white people"
Catherine Herridge interviews President Trump. Photo: CBS News

In an interview with CBS News' Catherine Herridge, President Trump bristled when asked: "Why are African Americans still dying at the hands of law enforcement in this country?"

  • "And so are white people," Trump replied. "So are white people. What a terrible question to ask. So are white people. More white people, by the way. More white people." Video.
  • Reality check: Based on population, Black people are three times as likely as white people to be killed during a police encounter, according to a study by Harvard's T.H. Chan School of Public Health and a WashPost analysis.

🎓 Facing eight federal lawsuits and opposition from hundreds of universities, the Trump administration rescinded a rule requiring international students to transfer or leave the country if their schools held classes entirely online, per AP.

  • Why it matters: The announcement brings relief to thousands of foreign students who had been at risk of being deported.
8. Tech hits the brakes on office reopening

Illustration: Annelise Capossela/Axios

Many tech companies are realizing that their reopening plans from as recently as a few weeks ago are now too optimistic, Axios' Ina Fried writes from S.F.

  • Why it matters: Their decision to pause their return plans is the latest sign that normalcy is likely to remain elusive in the U.S.

Snapchat, which had said employees could work remotely through Sept. 1, said yesterday that period is being extended through at least Jan. 4.

9. Evening news tops prime time
Courtesy ABC News

ABC's "World News Tonight" with David Muir and NBC's "Nightly News" with Lester Holt both averaged more viewers than any single program in prime time last week, AP's David Bauder writes.

  • "World News Tonight" averaged 9 million viewers, according to Nielsen.
  • "Nightly News" had 7.6 million.

The week's top prime-time program was "60 Minutes" on CBS, with 7.05 million.

  • The "CBS Evening News" with Norah O'Donnell had 5.3 million.

See prime time's Top 20.

10. 🎂 1 smile to go: Arianna on turning 70
Arianna Huffington attends a gala honoring Justice Ruth Bader Ginsburg, in New York in December. Photo: Eugene Gologursky/Getty Images

Arianna Huffington ("Mother. Sister. @HuffPost Founder. Founder & CEO of @Thrive Global") turns 7-0 today, and tells readers:

[A]s I read back through half a century of notes, I’m struck by four things. First, by how early I knew what really mattered in life. Second, how bad I was at acting on that knowledge. Third, how draining and depleting all my worries and fears were. And fourth, how little those worries and fears turned out to matter. 
Now, with 70 almost here during lockdown, I see how much easier it is at 70 than it was at 30 to live the life I always wanted to live.

Keep reading.

Mike Allen

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