Mar 2, 2020

Axios AM

By Mike Allen
Mike Allen

🇮🇱 Good Monday morning. The polls are open in Israel, where Prime Minister Benjamin Netanyahu enters his third election in 10 months with momentum — and with his corruption trial looming just two weeks after the vote. Go deeper.

  • Today's Smart Brevity™ count: 1,289 words ... 5 minutes.
1 big thing: Inside the Bernie economy

Illustration: Sarah Grillo/Axios

The economy according to Bernie Sanders looks unlike anything any politician this close to the presidency has ever put forth before, Axios Markets editor Dion Rabouin writes.

  • It's a rethinking of the entire American economic model.

What it means: To understand the Bernie economy — his plans for free health care, college tuition and a government-guaranteed job for every Americanit helps to view it through the lens of modern monetary theory, or MMT.

  • While Sanders has not labeled himself an acolyte of MMT, the theory helps explain the unorthodox framework of his economic policy.

MMT argues that the way we have viewed government policy — that it's like a household with a fixed capacity for earning and spending — is wrong.

  • The question is not, "How much will a new program or policy add to the deficit?" but "Can a policy be implemented without significantly raising inflation?"
  • If the answer is yes, then whether it adds $50 billion or $50 trillion to the deficit is largely irrelevant because the U.S. government can pay off its debt at any time by printing more dollars and handing those out to its creditors.

A Sanders adviser is Stephanie Kelton, an economics professor at Stony Brook University and MMT's best-known advocate. She told Axios:

  • "We need to make budgets centered around our real resource capacity and not some arbitrary, imaginary revenue constraint."

The intrigue: Critics point out that Sanders' ideas for increasing government revenue — including heavy taxes on the wealthy, raising the corporate tax rate to 35%, and eliminating most corporate tax breaks and loopholes — will fall well short of paying for the new programs he proposes.

  • But the tax changes are not intended to offset the spending so much as they are designed to rewire the economy and "spread the wealth," a central tenet of Sanders' democratic socialist philosophy.

The bottom line: Bernie Sanders' economic agenda is not merely to "give people free stuff."

  • Backed by the fundamentals of an untested economic model (MMT) and socialist redistribution, a Sanders presidency would question and seek to overhaul much of what has underpinned U.S. government policy for generations.

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2. Bill Gates sets grim tone on virus
White House coronavirus task force meets Saturday in the Situation Room. Photo: White House via @Mike_Pence

Bill Gates, who has devoted much of his life and fortune to global health, warns in The New England Journal of Medicine that the coronavirus "has started behaving a lot like the once-in-a-century pathogen we’ve been worried about":

I hope it’s not that bad, but we should assume it will be until we know otherwise.
There are two reasons that Covid-19 is such a threat. First, it can kill healthy adults in addition to elderly people with existing health problems. ...
Second, Covid-19 is transmitted quite efficiently. The average infected person spreads the disease to two or three others — an exponential rate of increase. There is also strong evidence that it can be transmitted by people who are just mildly ill ... Covid-19 has already caused 10 times as many cases as SARS in a quarter of the time.

The big picture: Gates, always an optimist, writes that in addition to responding to this crisis, "we also need to make larger systemic changes so we can respond more efficiently and effectively when the next epidemic arrives."

⚡ The latest: In Paris, the Louvre is closed for a second day.

  • Workers worried about their own safety blocked the museum from opening yesterday, leaving confused tourists standing for hours in hopes of getting in. (AP)
3. Big climate changes unlikely, no matter who wins 2020

Illustration: Aïda Amer/Axios

Don’t hold your breath for big climate policy changes — even if a Democrat wins the White House, Axios' Amy Harder writes in her weekly "Harder Line" energy column.

  • Why it matters: Congress is likely to remain gridlocked, leading to either more of the same with President Trump’s re-election, or a regulatory swing back to the left no matter which Democrat wins — but far short of a legislative overhaul.

Between the lines: This pendulum dynamic is classic Washington. It’s inefficient and ingrains uncertainty for everyone involved, including corporate executives (who hate uncertainty), the environment itself and all of us affected by that environment

4. Why Pete matters
Pete and Chasten Buttigieg ate breakfast yesterday in Plains, Ga., with former President Jimmy Carter, 95, and Rosalynn Carter, 92. Photo: Matt Rourke/AP

After Pete Buttigieg ended his campaign in South Bend, N.Y. Times columnist Frank Bruni — who put the mayor on the national map in 2016 ("The First Gay President?") — writes that "this young gay pioneer ... did the grown-up thing":

  • "He’s not delusional, and he can see beyond himself."
  • "He looked at what happened in South Carolina on Saturday. He looked at what was likely to happen in the many states that will vote on Tuesday. And Buttigieg recognized that he had no path to the Democratic presidential nomination and that staying in the race would probably help Bernie Sanders."
  • "So on Sunday he got out. Just like that. No praying for a miracle. No waiting too long. No protracted melodrama or slow-building drum roll of hints."

Keep reading.

🔮 What's next: Buttigieg and Joe Biden have exchanged voicemails, amid speculation about a possible endorsement, Alexi McCammond reports.

5. How tech's bigness could protect it

Illustration: Sarah Grillo/Axios

As regulators review a decade of tech industry acquisitions for signs of monopolistic behavior, the very size of the platforms could actually protect them, Axios tech editor Kyle Daly writes.

  • Tech companies, including Google and Facebook, grew giant in part by rolling up startups that are now fully integrated into their businesses.
  • "It's very hard to unscramble the eggs," Bill Baer, DOJ antitrust chief under the Obama administration, told Axios.

But regulators could use the courts or a settlement to get companies to put up assets or money to seed a new competitor.

6. "Trump's Facebook Juggernaut"
Illustration by Kristian Hammerstad for The New Yorker

With the headline "#WINNING," The New Yorker's Andrew Marantz writes in a deeply reported piece that Trump campaign manager Brad Parscale is poised to beat Democrats at the online game for the second presidential election in a row:

  • "Even if Trump were banned from every social network, his campaign would be able to reach supporters by text. According to Parscale, the campaign is on track to send 'almost a billion texts, the most in history' — and texts are far more likely to be opened than e-mails, social-media posts, or news articles."

"We've been working on this around the clock for three years," a senior official who works on the 2020 digital campaign told Marantz.

  • "It's hard to feel like a total underdog when you have the White House ... [But] we're not slowing down. We're ramping up."

Keep reading.

7. George Packer: The "adults" missed Trump's superpowers
Courtesy The Atlantic

"The president is winning his war on American institutions," George Packer writes in the 21-page April cover story of The Atlantic:

When Donald Trump came into office, there was a sense that he would be outmatched by the vast government he had just inherited. ...
James Baker, the former general counsel of the FBI, and a target of Trump’s rage against the state, acknowledges that many government officials, not excluding himself, went into the administration convinced "that they are either smarter than the president, or that they can hold their own against the president, or that they can protect the institution against the president because they understand the rules and regulations and how it’s supposed to work, and that they will be able to defend the institution that they love or served in ... They’re fooling themselves. He’s light-years ahead of them."
The adults were too sophisticated to see Trump’s special political talents — his instinct for every adversary’s weakness, his fanatical devotion to himself, his knack for imposing his will, his sheer staying power.

Keep reading.

8. 📺 1 tube thing

Photo: Sonja Flemming/CBS via Getty Images

"Judge Judy," one of television's top-rated syndicated shows, will end after its 25th season next year, per The Hollywood Reporter.

  • Host Judy Sheindlin, earning $47 million per year, is currently the highest-paid personality on TV.

It's not the end of Sheindlin's media empire, as she plans to launch "Judy Justice" — its format and home are still unclear — after her current show takes its bow.

Mike Allen

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