December 21, 2017
Good Thursday morning. If you're in D.C., please join me downtown at 8 a.m. for my double-header year-end event: back-to-back conversations with Senate Majority Leader Mitch McConnell, who'll take us behind the scenes of the tax wrangling, and Senate Intelligence Committee Vice Chair Mark Warner, who yesterday declared "red lines" on firing Mueller or pardoning witnesses.
RSVP, location here.
1 big thing: A synchronized surge
Two weeks of insight: Between now and New Year's Day, Axios CEO Jim VandeHei and I will bring AM readers our year-end thoughts on the topics that matter most ...
For all the worldwide worries, a fascinating and rare trend is unfolding around the globe: synchronized growth.
President Trump and many other global leaders are basically boosting each other with their expanding economies and increased spending at home. It's very unusual for the world's biggest economies to grow all at once — and this phenomenon has no doubt helped boost U.S. markets.
- CNN's Fareed Zakaria, in an interview with us about transcendent global forces, calls it the "extraordinary" trend of a "synchronized global recovery" that could well continue into 2018 and beyond.
Check out the Q3 growth rates of the world's 10 largest economies:
U.S.: 3.3% China: 6.9% Japan: 2.5% Germany: .8% U.K.: .4% India: 6.3% France: .5% Brazil: .1% Italy: .4% Canada: 1.7%
There are many reasons/theories for simultaneous growth:
- The United States, Europe and others spent heavily to pull out of the 2007 recession. Around the same time, Japan finally pulled out of its long funk. Turns out, goosing spending helps, at least in short-term.
- You wouldn't guess it from media coverage, but the world is more peaceful than usual. Even terrorist attacks are down — by double-digits.
- Many of the emerging growth markets, like Indonesia, are governed by market- and trade-friendly economic reformers, juicing spending.
- JPMorgan Chase CEO Jamie Dimon told us in Michigan last week that another reason has been the slow but sustained growth in the U.S., which has — little by little — helped lift other nations.
Bullish at the top: Dimon says we "could have years of more global growth." White House economic adviser Gary Cohn told us to expect a lot more growth at home next year, especially with the tax cuts in place. He sees a continued rally "based on real, underlying fundamentals of the economy — the U.S. economy as well as European economy and global economy," plus the new tax incentives. Be smart: Economics is like politics: Everyone has an opinion, but everyone is guessing. Be watchful: The same force that pulled the world out of an economic funk — sustained if anemic growth in the U.S., and robust growth in China — could turn and pull others down.
2. Trump's triple dip
New Year signing planned: President Trump plans to sign the tax bill Jan. 3 to ensure automatic spending cuts to Medicare and other programs don't take effect, a House Republican aide told Bloomberg:
- "The White House informed House GOP members of the timetable, following the likely decision by House Republicans to leave the so-called PAYGO provision out of a year-end spending deal to avoid a government shut down before Friday."
Trump's triple dip ... From his South Lawn remarks: "[W]e essentially repealed Obamacare because we got rid of the individual mandate ... So we have [drilling in] ANWR, we have mandate [repeal], and we have the tax cut."
Shot ... From the Wall Street Journal's tick-tock: "Early Wednesday, after [the] Senate vote, ... Republicans piled into a 1 a.m. press conference to congratulate themselves ... Ten senators spoke for a total of nine minutes. Two words that weren't used: 'President' and 'Trump.'"
- Chaser (and N.Y. Times Quote of the Day) ... Senate Majority Leader Mitch McConnell, on the South Lawn (where the Trumpulation sounded a bit like that famous Cabinet meeting): "This has been a year of extraordinary accomplishment for the Trump administration."
How it's playing ... NYT banner, "G.O.P. EXULTS AS CONGRESS DELIVERS TAX BILL" ... WP, "Sweeping tax overhaul clears Congress" ... WSJ, "Tax Vote Seals Victory for Trump" ... USA Today, "Government headed for $1 trillion deficit" in 2018 ... L.A. Times, "No deal for 'Dreamers' expected by year's end."
- Go deeper ... Intelligence from Axios subject-matter experts: What to expect under the new tax code, short- and long-term, for individuals, businesses, health care, tech and energy.
3. Companies share (a bit of) the wealth
Within minutes of the tax bill's final passage, companies began to roll out pre-staged plans to increase pay benefits and philanthropy, Axios' Khorri Atkinson reports.
- Why it matters: The moves will curry favor with Trump and his administration, and put a human face on the windfall that business will get with the cut in the corporate tax rate from 35% to 21%.
- AT&T said it will give $1,000 bonuses to more than 200,000 U.S. employees and fulfill a $1 billion capital investment pledge as soon as the bill becomes law.
- Wells Fargo will increase its minimum wage to $15 an hour. The San Francisco-based bank also plans to allocate $400 million in donations to community and nonprofit organizations in 2018.
- Boeing committed $300 million for charitable giving, employee development programs and "workplace of the future" facilities and infrastructure enhancement.
- Comcast CEO Brian Roberts said the company will award $1,000 in bonuses to more than 100,000 employees, and spend $50 billion over the next five years to improve broadband capacity, which he said will create "thousands of new direct and indirect jobs."
Go deeper: What you'll see under the new tax code.
Bonus: Pic du jour
Near Carpinteria, Calif., ashen hillsides burned in the Thomas Fire take on a nearly winter-like appearance.
- The Thomas Fire, at 272,000 acres, is now the second largest fire in modern California history (since records began in 1932), and has destroyed more than 1,000 structures since it began Dec. 4.
- L.A. Times: "[T]he Thomas fire surpassed the lightning-sparked Rush fire, which burned 271,911 acres in Lassen County in 2012."
- Last night, the fire (Ventura and Santa Barbara counties) was 60% contained.
4. The talk of tech
Microsoft CEO Satya Nadella — the heir to Gates and Ballmer — talks to Bloomberg Businessweek Editor Megan Murphy about dealing with populism and nativism:
- "The reality we all have to confront is that globalization, using that term very broadly, has yielded a lot of advantages to the world — except it's not been evenly spread."
- "Unless and until we can deal with the inequities in our societies — in every country — it's America First in the U.S. It's going to be Britain First in the United Kingdom. It's going to be China First in China."
- "That's what the world will expect. No one is going to get elected to any country's presidency or prime ministership by not talking about their country first."
- "Business leaders in particular have to deal with this challenge. We can't say, 'Well, this nationalist movement of populism is a passing phase.' We've got to deal with it as a phase that we've entered because the dividend of globalization hasn't yielded more equitable growth for the world."
Breaking ... "Tech giants ratify a key standard for 5G cellular technology." Axios' Ina Fried reports from S.F.
P.S. "Targeted Job Ads on Facebook Prompt Concerns About Age Bias," per N.Y. Times A1:
- "Verizon is among dozens of the nation's leading employers — including Amazon, Goldman Sachs, Target and Facebook itself — that placed recruitment ads [on Facebook] limited to particular age groups, an investigation by ProPublica and The New York Times has found."
- "Facebook defended the practice. 'Used responsibly, age-based targeting for employment purposes is an accepted industry practice and for good reason: it helps employers recruit and people of all ages find work,' said Rob Goldman, a Facebook vice president." See Facebook's full statement.
5. Data du jour
6. Jay Penske is the new Jann Wenner
Penske Media Corp., owner of Variety, buys a controlling interest in Wenner Media, parent of Rolling Stone, Variety reports:
- Wenner Media was valued at just over $100 million. "BandLab, a Singapore-based company that acquired a 49% share of the magazine, will retain its stake."
- "Jann Wenner, who co-founded Rolling Stone in 1967 as a countercultural voice that went on to transcend the world of rock 'n' roll, will remain with Rolling Stone as editorial director."
- "The transition to the Penske Media platform is expected to occur over the next six months."
- PMC founder and CEO Jay Penske "will look to revitalize everything from Rolling Stone's digital operations to its event business."
- The backdrop: "The deal comes as the music business where Rolling Stone made its name is undergoing a rejuvenation after years of struggles to adapt to the digital era. Record labels are recovering as streaming platforms like Spotify and Apple Music pave new paths to monetization."
- "The global recorded music industry is expected to grow to $41 billion by 2030, according to a Goldman Sachs analysis in September, $34 billion of which will come from streaming revenues."
7. Watch your cable bill
8. Two Americas: Districts of despair
Homicide data show that urban killings are rising in clusters, while other areas of the same city grow safer, AP's Sara Burnett and Larry Fenn report:
- "Slayings in Chicago, St. Louis and Indianapolis are becoming concentrated into small areas where people are dying at a pace not seen in years, if ever. Around them, much of the rest of the city is growing more peaceful."
- "The neighborhoods enduring the most violence were largely poor and African-American, as were the killers and the victims."
- "Researchers say the disparity may be linked to increased joblessness, segregation and the growth of the so-called wealth gap. Over the past three decades, the wealthiest Americans have grown markedly richer while low earners lost jobs and struggled and some turned to violence."
- Why it matters: "The inequality between the two realities deepened in recent years, allowing people in the same metropolis to live in one realm with little sense of the other and creating districts of despair where everyone has seen or had someone close to them shot or killed."
9. An epic year: 19 of 30
Reliving 2017 in 30 images ... ISIS loses its caliphate: A woman holds an injured girl as Iraqi forces advance against Islamic State group militants in the old city of Mosul, Iraq, on July 3.
- After lengthy assaults, an array of forces drove the Islamic State from its two main strongholds — the city of Mosul in Iraq, and its self-styled capital, Raqqa, in Syria.
- The defeats left the Islamic State without significant territory in either country, but affiliates elsewhere in the region, particularly in Egypt and Afghanistan, continued to operate.
10. One crazy thing: Break out the bowler
"Control of Virginia House comes down to a coin toss," per a WashPost front-pager:
- "Control of Virginia's legislature hung in limbo ... after a three-judge panel declined to certify the recount of a key House [of Delegates] race, saying that a questionable ballot should be counted in favor of the Republican and tying a race that Democrats thought they had won by a single vote."
- So the race is tied, 11,608 to 11,608.
- "The balance of power in the House stands at 50-49 in favor of Republicans until the Newport News race can be resolved."
- "State law says the winner of a tied House race will be determined by lot — leaving the fate of the chamber to what is essentially a coin toss."
- "James Alcorn, chairman of the State Board of Elections, said the winner will probably be chosen by placing names on slips of paper into two film canisters and then drawing the canisters from a glass bowl (or his bowler hat). He said he is conferring with staff to figure out the date and method."