In this week's newsletter: Corporate parochialism; art; philanthropy; and the outlook for the U.S. and the U.K. All in just 1,830 words, which will take you about 7 minutes to read.
Illustration: Sarah Grillo/Axios
There's a double standard in corporate America. CEOs-turned-activists are experimenting with taking bold stances on social and political issues at home, writes Axios' Erica Pandey — but that activity stops at the nation's borders. It certainly doesn't reach as far as China.
Why it matters: The same companies that extol high-minded principles on U.S. soil are perfectly content to abide by every censorship rule set by the Chinese Communist Party — and are even happy to travel to Riyadh to butter up the murderous Saudi royal family.
"China’s economic miracle hasn’t just failed to liberate Chinese people. It is also now routinely corrupting the rest of us outside of China."— Farhad Manjoo writes in NYT Opinion
The list is almost endless. All three big U.S. airlines — American, United and Delta — bent to the party’s will last summer and scrubbed references to Taiwan; Marriott did likewise. Gap apologized for selling T-shirts with a map of China that didn't include Taiwan, saying its map was "incorrect." Even news organizations are treading carefully, if they're owned by Disney. Hollywood has long accepted China's censorship rules to rake in its profits.
Driving the news: American firms’ instinctive deference to Chinese autocrats was thrust into the national spotlight this week.
One level deeper: Thermo Fisher Scientific, which is based in Massachusetts, boasts of its "strong global citizenship practices." But, it has also supplied the Chinese government with DNA sequencers that are being used to collect the DNA of Uighur ethnic minorities in Xinjiang.
The bottom line: For all that CEOs increasingly talk of their "moral duty to speak up," those moral duties seem to be left on the tarmac whenever they hop on their corporate jet.
We're in a Goldilocks economy, if you believe Fed chair Jay Powell. He gave a speech on Tuesday to the National Association for Business Economics in which he reminded the attendees just how special the current economic situation is.
"We don’t get to see the 11th year of an expansion a lot, and there’s a lot to like about it, particularly for people at the lower end of the wage scale who are getting now the highest raises. And it’d be great to continue."— Jay Powell
Powell was upbeat about his interest rate cuts, which he said were designed to give the economy room to "gather steam again." He was also optimistic on inflation, and said he was trying very hard to persuade the markets that he wants to see it higher.
Powell barely needed to mention unemployment, which is at a 50-year low. There are now just 1.04 Americans looking for work for every job vacancy in America, according to new data from the U.S. Chamber of Commerce. That's an all-time low and bespeaks a very healthy labor market.
Next week is the official start of earnings season. Major banks will report their 3rd quarter results, including JPMorgan, Wells Fargo and Goldman Sachs, writes Axios' Courtenay Brown. Look out for United Airlines and J&J too.
Why it matters: Expectations are low. Analysts expect S&P companies' third-quarter earnings to come in 4% lower than the same period last year. That would mark the biggest year-over-year drop since 2016, according to FactSet.
The Brexit omnishambles continues. The chance of Britain agreeing to any kind of a deal with the European Union seems to have fallen to zero, and no one has a clue what will happen after Oct. 17, the date of the last EU summit before the Oct. 31 deadline.
The will of the people is clear. Britons voted narrowly to leave the EU in 2016, but in the intervening 3 years, some of them have changed their minds. Plus, a large number of older "Leave" voters have died and a similar number of young "Remainers" have attained voting age.
The bottom line: Brexit remains more likely than not. But it's not what the people want.
One of the few winners from the Brexit mess was the anonymous consignor of “Devolved Parliament,” a Banksy painting that sold for £9.9 million, or $12.2 million, a few days ago at Sotheby’s in London.
The painting easily set a new auction record for Banksy, whose previous record was $1.9 million that was set at a charity auction for a Damien Hirst collaboration.
These might be highbrow prices, but they are not highbrow paintings. “The Kaws Album” and “Devolved Parliament” are not-very-funny one-note jokes, while “Knife Behind Back” is an oversized cartoon figure. Art gadfly Kenny Schachter has given this trend a name: "infantilism".
Why are these artworks so expensive? Part of the reason is relatively mundane: All 3 canvases are old-fashioned paintings, and all of them are unusually large.
Simplicity sells. In the modern era, each successive generation of artists has generally become easier to understand and appreciate.
The bottom line: As the world of art collectors has expanded and globalized, the minimum level of sophistication that an artwork needs in order to fetch 8 figures at auction has clearly been falling.
Illustration: Aïda Amer/Axios
You must read this ProPublica investigation into the philanthropic predilections of hedge fund billionaire David Shaw. Per the article...
By the numbers: The overall cost of raising a child in America was $233,610 in 2015, or just under $14,000 per year. Then again, as Yale law professor Daniel Markovits demonstrates in his new book, the average child in America has essentially zero chance of getting into Yale — or any of the other schools that Shaw attempted to buy entry to.
Elsewhere in academia, MIT has launched "a groundbreaking philanthropic venture fund" called Solve Innovation Future. It plans to take in some $30 million in tax-deductible philanthropic dollars, starting with a $3 million pledge from Noubar Afeyan, the CEO of Flagship Pioneering.
My thought bubble: The giant tax-exempt hedge funds known as Harvard and Yale lose about 5% of their assets every year, in the form of donations to their venerable educational subsidiaries. Solve Innovation Future makes you wonder why that's even necessary.
Photo: Bernd Wüstneck/picture alliance via Getty Images
When you think of the Renaissance you normally think of Italy — but Güstrow Castle, in northern Germany, is a masterpiece of 16th Century architecture by master builder Franz Parr.