Feb 1, 2019

Axios AM

☕ Happy Friday, and welcome to February.

  • Stocks posted their best January since 1989 — 30 years. (WSJ)
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1 big thing: Trump's bills come due

Illustration: Lazaro Gamio/Axios

As Trump heads into Year 3, many of his bills are coming due, Jonathan Swan points out.

  • Over the first two years, he could get away with largely extending his campaign bluster: Build a "big, beautiful wall" and get Mexico to pay for it, withdraw from foreign entanglements, deliver "incredible" healthcare, slash drug prices and fundamentally change the U.S.-China relationship.

Trump’s dawning reality:

  • The only path to a wall is by taking executive action, probably by declaring a national emergency, and finding himself caught up in yet another court fight.
  • Nobody at a senior level in the White House thinks they’ll get any legislating done in a Congress now dominated by a newly-elected anti-Trump, and unapologetically progressive, House Democratic majority.
  • Trump has thrown China off balance with harsh tariffs and deserves credit for highlighting Beijing’s abuses more than any recent president. Congress and the business community are surprisingly receptive to Trump’s tough line on China.
    • But he now needs to deliver the structural changes he promised — fundamentally changing China’s behavior. If all this results in is a bribe — China goes on a short-term U.S. shopping spree in exchange for Trump leaving them alone — then all the bluster will be worthless.
  • The American healthcare system remains an unaffordable mess.
    • Trump is using executive powers to make some reforms to drug pricing, which have angered the pharmaceutical lobby. But the chances of Congress passing something substantial this year are minimal.
  • After declaring — unequivocally, as always — that he was getting U.S. troops out of Syria, Trump’s administration is now grinding through a complicated and unclear process.
    • Republicans are pushing back and many, including Sen. Lindsey Graham, are pushing Trump toward retaining a skeletal U.S. presence in Syria as part of a long-term "stabilization" mission.
    • The bottom line: It’s still unclear when or even if the U.S. military will fully withdraw from Syria. It's even more unclear in Afghanistan, though Trump says he’s optimistic about the ongoing talks with the Taliban.
2. What Trump is asking friends

Over the past week, President Trump has asked friends and advisers how they think the shutdown has affected him politically and what he should be doing to recover his standing in Pennsylvania, Wisconsin and Michigan, Swan reports.

  • Why it matters: Those three states delivered the presidency to Trump, but turned against him in the midterms.

Trump has also been polling these advisers on who they think will be the most formidable challenger to him in 2020.

  • Several have told him that his biggest risk is a candidate like Joe Biden who they believe could sweep Trump out of the Rust Belt.
3. Women will surround Trump at State of the Union
China's Vice Premier Liu He (left) and President Trump meet in the Oval Office yesterday. (Photo: Brendan Smialowski/AFP/Getty Images)

"Pelosi behind and above. Female immigrants, gazing down from the balcony. A black woman who ran a close race for governor of Georgia, rebutting."

  • "When President Trump delivers his first State of the Union address under divided government on Tuesday, he'll be surrounded by these and other living reminders of the 2018 elections that delivered Democrats the House majority and a record number of women to Congress, " AP Laurie Kellman writes.

"[T]he striking visual is shaping up to be the new lawmakers who will be arrayed around the president and elected in the wake of Trump's inflammatory statements about women, immigrants, Muslims and more."

  • In the gallery overhead will be two "former employees of Trump's New Jersey golf club, women and immigrants, who have spoken out about its hiring practices."
  • "Members of Congress are inviting federal workers who went without pay for 35 days and are worried about a repeat."

P.S. Trump said yesterday that the speech will "cover a lot of territory. But part of  it is going to be unity."

  • As for the tone, he said: "I think it’s unification.  I think it’s industry."
4. Pics du jour
Photo: Tara Walton/The Canadian Press via AP

Above: Ice and water flows over the brink of the Horseshoe Falls in Niagara Falls, Canada.

Below: Ice builds up along the shore of Lake Michigan in Chicago, where temperatures during the past two days have dipped to lows around -20.

Photo: Scott Olson/Getty Images
5. A new age: Tech giants as gatekeepers

Illustration: Aïda Amer/Axios

Apple's move this week to lock out Facebook and Google employees from internal versions of their own iPhone apps was a strong stand on behalf of user privacy.

  • At the same time, it was a stunning display of the absolute control Apple has over what runs on the phones it makes, Axios tech editor Scott Rosenberg writes.

Why it matters ... The squabble reminds us that all these companies have become gatekeepers with enormous power:

  • Apple controls our phones (if they're iPhones).
  • Facebook controls our access to people.
  • Google controls our access to information.
  • Amazon controls our access to goods and many software services.

The big picture: These powers to say "no" depend on market-dominant positions and near-monopolies.

  • The early, "permissionless" internet and web found a key to growth by connecting the world and bypassing gatekeepers.
  • We've come nearly full circle in two decades.

What's next: Many innovators working in the crypto/blockchain world hope to reverse that trip — but haven't yet built systems and products that the mass of users are willing to embrace.

  • By contrast, most of the work in machine-learning-based artificial intelligence that's already beginning to be widely adopted depends on proprietary dragon-hoards of data controlled by large companies.

Long view: Tech has seen dominant gatekeepers before, like IBM and Microsoft, lose their centrality and evolve into mature money-making machines with lower public profiles.

  • But the tenure of the current crop of tech giants shows few indications of approaching obsolescence.
6. Hate crimes highest in 10 years

Last year, Los Angeles, San Francisco, Chicago, Houston, Dallas and Seattle all recorded their highest number of hate crimes in a decade, the L.A. Times' Richard Winton reports:

  • "Members of the LGBTQ community, African Americans and those of Jewish faith were the most frequently targeted, according to the newly released report by the Center for the Study of Hate and Extremism."
  • “The day after the 2016 election was the worst day for hate crimes since 2003,” said Brian Levin, the center's executive director.

The context: "An FBI report released in November detailing hate crimes across more than 3,000 police agencies showed a more than 17% uptick in 2017, fueled by increases in attacks against religious and racial minorities."

  • "It was the biggest annual increase in reported hate crimes since 2001, when attacks on Muslims surged in response to the Sept. 11 attacks, and the third straight year that hate crimes have gone up."
7. Half of U.S. adults have heart or blood vessel disease

48.5% of U.S. adults (121 million) deal with some form of cardiovascular disease (heart or blood vessel), mostly because of high blood pressure, according to an American Heart Association study, as reported by USA Today.

  • 'When cases of high blood pressure are removed, the prevalence of cardiovascular disease among Americans is 9%, or 24.3 million Americans."
  • High blood pressure is "one of the most common and dangerous risk factors for heart disease and stroke."

"The study found significant declines in smoking."

  • "From 2015 to 2016, 79% of adults were nonsmokers, up from 73% in 1999-2000."
8. 🏈 Metric du jour

USA Today's table of Super Bowl predictions from its NFL experts includes how soon in the game CBS' Tony Romo will deploy his signature: "Here we go!"

  • A popular prop bet is how many times Romo says: "Here we go!"
9. The anointing of Juan Guaidó
Juan Guaidó (Courtesy The Economist)

"The world’s democracies are right to seek change in Latin America’s worst-governed country," The Economist writes in its lead editorial:

  • "The scale of the disaster [President Nicolás] Maduro has brought down upon Venezuela is hard to comprehend. In the past five years GDP has fallen by half."
  • "Juan Guaidó ... last week proclaimed himself the rightful head of state. Mr Guaidó has won the backing of most of Latin America, as well as the United States and Europe. ... But Mr Maduro is supported by the army as well as Russia, China and Turkey. "

"A generation ago, Venezuela was a functioning state. It can be again. It is blessed with oil and fertile land. It has an educated population at home."

  • "But first it must get rid of Mr Maduro."

What's next: Massive protests are planned tomorrow.

10. 1 phone thing
iPhone XS, XR and XS Max (Richard Drew/AP)

Apple plans to launch iPhones "with a more-powerful 3-D camera as soon as next year, stepping up the company’s push into augmented reality," Bloomberg's Mark Gurman and Debby Wu report:

  • "The rear-facing, longer-range 3-D camera is designed to scan the environment to create three-dimensional reconstructions of the real world [and] will work up to about 15 feet from the device."
  • "That’s in contrast with the current iPhone 3-D camera system, which points toward users and operates at distances of 25 to 50 centimeters to power Apple’s Face ID facial-recognition feature."