Situational awareness: The price of a Forever Stamp — the standard postage rate in the United States — rose by an unprecedented 10% today to 55 cents.
Illustration: Sarah Grillo/Axios
The largest gathering of billionaires in the world took place last week in the not-particularly-luxurious Alpine resort of Davos, Switzerland.
Axios' Steve LeVine reports the plutocrats were told by their host, World Economic Forum chief Klaus Schwab, that they must make dramatic changes to the very system that made them dynastically wealthy.
Turkeys don't generally vote for Thanksgiving, and, in Davos, billionaires like Michael Dell laughed at the idea that they should pay significantly higher taxes.
The very existence of the World Economic Forum is predicated on the assumption that the people who have won the capitalism lottery are best positioned to improve the state of the planet.
That narrative, however, seems to be losing its allure.
Your plutocrat religion, win-win-ism, teaches that what’s best for the winners of our age is best for all. We don’t believe you anymore. You enabled the nationalism that threatens our societies. You stiffed so many of us. You fought for rules that let you steal the future from our children. The hunt for answers to the present mess is not yours to lead. Your task is simple: stay out of the way.— An edited-down version of Anand Giridharadas' letter to Davos delegates in Time. It's pretty short, so read the whole thing.
My thought bubble: Billionaires have historically been alluring, magical figures. The U.S. even elected one of them to the presidency. But he isn't doing so well. Increasingly, billionaires are seen as avatars of inequality and greed. When they gather in Davos, the world increasingly assumes that their prescriptions are entirely self-serving.
61% of Americans aged between 18 and 24 have a positive reaction to the word "socialism" — beating out "capitalism" on 58%.
Overall, 39% of Americans are well-disposed toward socialism.
Illustration: Sarah Grillo/Axios
The United States officially recognized Juan Guaidó as the rightful (if interim) president of Venezuela; it has also pledged a paltry $20 million of humanitarian assistance to the country. A top sovereign-debt lawyer has proposed one huge next step the White House (and only the White House) could take. It would be much more effective than $20 million in cash — and it would cost nothing at all.
If Guaidó does take power, he will immediately be faced with more than $90 billion in outstanding debt, the vast majority of which is in default.
If the fight over Venezuela's debts were to be halted for a few years, that would give the Guaidó regime, working with the IMF, time to get the domestic economy back on its feet. The debts racked up by the Hugo Chávez and Maduro administrations will have to be dealt with at some point, but given the scale of Venezuela's humanitarian disaster, court fights in New York should not dominate Guaidó's priorities.
The solution to the debt problem is presented in an important paper by Lee Buchheit and Mitu Gulati. Buchheit, the doyen of sovereign debt restructurings, explains that the U.S. government can unilaterally call an effective standstill to court proceedings by declaring Venezuelan assets temporarily immune from attachment by U.S. courts.
The bottom line: It is extremely rare for the U.S. government to prevent established legal mechanisms from running their natural course. But it can be done and has been done in the past. If Trump were to sign an executive order preventing creditors from attaching Venezuela's assets, that would be by far the greatest gift he could bequeath a fledgling Guaidó administration.
The official figures for Venezuelan oil production show it falling almost by half since 2013. Unofficially, Venezuela observers think even these numbers are exaggerated and that the country is producing barely more than 1 million barrels of oil per day.
Venezuela is shaping up to become a major geopolitical flashpoint, with both Russia and China opposing the U.S. stance in very strong terms. The U.K. stands with the U.S. and has reportedly refused a request from the Maduro government to liquidate $1.2 billion of gold reserves held at the Bank of England.
Illustration: Rebecca Zisser/Axios
In the wake of George Soros' broadside against China in Davos, expect to hear much more about China this week, writes Axios' Courtenay Brown.
The government is back open, but we may not get the final 2018 GDP report on Wednesday. The release may be postponed if there’s a big backlog of prep work for the Bureau of Economic Analysis employees who were furloughed.
Brexit is still an omnishambles. Reuters has an excellent guide to the various amendments you can expect this week, and which ones have a chance of passing.
The Intercontinental Hotel, designed by Oliver Hofmeister of Oikos, was built in 2013, largely to meet the needs of the World Economic Forum. Set well apart from the main town of Davos, it has much tighter security than most of the other hotels and features large suites for heads of state and other high-profile delegations.