Ransomware hack targeting 2 million an hour - Axios
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Ransomware hack targeting 2 million an hour

This photo shows fingers on a laptop keyboard in North Andover, Mass. Elise Amendola / AP

A ransomware attack sweeping the globe right now is launching about 8,000 different versions of the virus script at Barracuda's customers, Eugene Weiss, lead platform architect at Barracuda, told Axios, and it's hitting at a steady rate of about 2 million attacks per hour.

Weiss' gut reaction on this hack: "What's remarkable about this one is just the sheer volume of it."

Here's what you need to know on the latest:

  • Automated hacking: "Nobody actually sat there and made 8,000 digital modifications," Weiss said. The way they do it is by using a kit that essentially automates code variations.
  • What to watch out for: An incoming email spoofing the destination host, with a subject about "Herbalife" or a "copier" file delivery. Two of the latest variants Barracuda has detected include a paragraph about legalese to make it seem official, or a line about how a "payment is attached," which tricks you to click since, as Weiss puts it, "everyone wants a payment."
  • The hackers are using social engineering to get people to click. That's increasingly becoming a trend, per Weiss. It's "less pure technical hacks" and instead using psychological tactics "get someone to click on something they shouldn't be."
  • If you remember one thing: "Don't click the link that is absolutely the most essential thing."
  • The targets: Email addresses at businesses or institutional groups in the U.S. or Canada.
  • It's likely not a nation-state perpetrating the hack, since the hackers' motives are financial. Instead it's a small, sophisticated group of criminals. The attacks are originating in Vietnam for the most part, as well as India, Colombia, Turkey, Greece, and a few other countries.
  • The future of global hacks: "At some point in the future you may see multilingual internationalized" hacks, Weiss said. In other words, they could be language-targeted. While the messages from these particular hackers are all in English so far, the virus programs are assessing the target computers' language settings.
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In a bet against college, WeWork acquires a coding bootcamp

WeWork will open coding academies within all its office spaces. (Photo: Flatiron School)

WeWork, the office leasing giant, has acquired the New York-based Flatiron School, a private coding academy, in a gamble on 15-week, $15,000 vocational education as opposed to far more expensive four-year college degrees. The companies did not disclose the precise value of the cash-and-stock deal. It was the first acquisition by WeWork, which at $20 billion is tied for the sixth most-valuable startup in the world.

Why it matters: At a time many experts and politicians are questioning the assumption that college is for everyone, the deal bets on a fashionable form of vocational education — coding — as a route to well-paying software jobs. The plans are to expand Flatiron from its single location in New York's financial district into all approximately 237 WeWork offices, which would further test the growing idea of bypassing college, at least in the U.S. tech world.

The deal fits WeWork's cultural play: WeWork rents out exquisitely designed and operated office spaces with the feel of boutique hotels. Adam Enbar, co-founder of Flatiron, said the deal, which was signed Oct. 11 but announced only today, aligns with a cultural shift to which WeWork is marketing. "More than prior generations, people want community at work," Enbar told Axios. "When you imagine education in a space, it starts to make sense. One of the most powerful forms of community is learning."

Six days after the agreement, Flatiron signed a settlement with the New York Attorney General in which it agreed to more clearly disclose its hiring and salary rates. Almost all graduates find jobs within six months, but they range from full-time positions to internships. The settlement included a $375,000 payment. The school appears now to be in full compliance.

Artie Minson, WeWork's CFO, said the deal was in the works for nine months. Enbar said that many on-line schools were failing to teach effectively because most students need to be with other students while they learn, and not just learning content at home alone. That is why the physical school is important. "We forget about that," he said. "Something is lost when you remove a physical community."

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The ethanol empire strikes back

Illustration: Rebecca Zisser / Axios

Ethanol is hot like it's the Iowa caucuses. It may be October in an off-cycle year, but President Trump is suddenly facing unusually intense pressure from Midwestern politicians and ethanol companies to keep his campaign promises on this issue.

Driving the news: Environmental Protection Agency administrator Scott Pruitt assured a group of corn-state lawmakers in an unusually detailed letter last week that he won't alter a federal mandate that requires refineries to blend biofuels — mostly corn ethanol — into the nation's gasoline supply. The EPA was considering changing certain parts of the mandate at the behest of oil-industry lobbying — but backed off under pressure from seven Midwestern Republican senators and ethanol companies.

Why it matters: Most casual observers know about corn ethanol in the context of politics: it's produced in Iowa, whose caucus kicks off America's presidential races. Trump vowed over and over to support the ethanol industry and its 12-year-old federal mandate.

The big picture: Trump has bigger problems on his plate with Congress, namely passing bills on higher priority issues like tax reform and health care. He needs GOP support everywhere he can get it. Ethanol battles flare up, but can be resolved comparatively easy given their parochial nature.

Midwestern GOP senators, led by Iowa's two Republican senators Joni Ernst and Chuck Grassley, threatened to hold up Trump's nominees unless they got Pruitt to back down on changes oil refineries were asking for. Committee votes on several top EPA nominees were delayed until this week because of the kerfuffle. Trump told Pruitt in a phone call late last week he needs to keep Grassley happy, according to multiple people familiar with the call.

"If he satisfies the refineries, then he's going to go back on the president's promise and hurt rural America," Grassley said in an interview last week. "Even though he's acting in good faith to thread the needle and go down the middle, it's pretty impossible to make that miracle come out."

What's next: The EPA faces a Nov. 30 deadline to issue quotas for how much biofuels refineries must blend into the gasoline supply. Iowa Gov. Kim Reynolds, a Republican, visits Washington this week and has meetings planned with Vice President Mike Pence and Pruitt. The oil refining industry will also be scrambling to respond to last week's machinations.

"In a moment of weakness I'll tell you what I'm really thinking," Chet Thompson, president and CEO of the American Fuel and Petrochemical Manufacturers, which represents oil refineries, said on Friday. "It's frankly been very embarrassing to watch the administration bend its knee to its will to king corn and these handful of senators."

Thompson said he anticipates allies of his industry aren't going to stay quiet for long. "This all happened quickly and I do think it took people a bit by surprise," Thompson said.

Fights du jour

Grassley and other Midwestern politicians have been worried over the last several months about three related but distinct possible changes to the mandate. Each of the revisions would benefit some refineries struggling to comply with the mandate. Ethanol backers say the changes are unnecessary and worry they would open the floodgates to broader rewrites, and possibly a wholesale repeal.

  1. The agency in late September said it was considering cutting the levels of biodiesel and other advanced biofuels the mandate requires.
  2. The EPA was also considering a request by refineries, including Valero Energy Corporation and Monroe Energy (owned by Delta Airlines), to allow exported biofuels to count toward domestic quotas.
  3. The agency has been considering a request by some refineries to broaden the category of companies that must show compliance with the law.

Pruitt assured the group of Midwestern senators in his letter late Thursday that he won't follow through on any of these, with final regulatory announcements expected by Nov. 30.

"This really represents the first major pushback by ethanol — it was well coordinated, strong and effective," said Bob McNally, president of the Rapidan Energy Group and former adviser to then-President George W. Bush. "The ethanol empire strikes back."

Why this all matters less to most drivers: The oil boom of the last decade, which has made complying with the law more difficult, has also lowered gasoline prices. This has made any ethanol impact on gas prices — up or down — almost unnoticeable, McNally said.

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Keeping the Alexander-Murray health care bill in context

As the debate unfolds about the bipartisan bill by Senators Lamar Alexander and Patty Murray to repair the Affordable Care Act marketplaces, the public could be just as confused as they have been about the ACA's marketplaces. That's why it's important to debate it in the right context: It's aimed at an urgent problem affecting a relatively small sliver of the health insurance system, not all of the ACA and not the entire health system.

The bottom line: It's up to experts and the media to explain Alexander-Murray for what it is — a limited measure that will never give conservatives or liberals everything they want.

Data: Kaiser Family Foundation Health Tracking Poll conducted Oct. 5-10, 2017; Chart: Chris Canipe / Axios

Reality check: Many people will think it affects their insurance when, in actuality, it will have no impact on the vast majority of Americans who get their coverage outside of the relatively small ACA marketplaces.

The chart based on our new Kaiser Tracking Poll shows the confusion. Just 23% of the American people know that rising premiums in the ACA marketplaces affect only people who buy their own insurance. More than seven out of 10 wrongly believe rising premiums in the marketplaces affect everyone or people who get coverage through their employer.

The public will be susceptible to spin and misrepresentation and may only dimly understand the limited goals of Alexander-Murray: a bipartisan effort to stabilize the marketplaces by funding the cost-sharing reduction subsidies, providing more resources for open enrollment outreach, and expediting state waivers.

Why it's happening: Some of this is the result of political rhetoric aimed at scaring people. Some of it is the result of sloppy punditry and headline writing. I am sure you have seen headlines like "Premiums Soar," implying to the casual reader that everyone's premiums are soaring when they are not. Or you have heard a pundit say "this affects one sixth of our economy," referring to the ACA marketplaces which affect only a tiny sliver of our economy.

President Trump has added to the confusion. He recently pronounced the ACA "dead", adding, "there is no such thing as Obamacare anymore." Possibly that's because he wishes it was dead. More likely, he was referring to the problems in the ACA marketplaces, which he has exaggerated.

Like thinking your whole house is falling down when just a part of the foundation needs shoring up, both he and the American people have an inaccurate picture of where the marketplaces fit in the ACA and where the ACA fits in the health system.

A few facts:

  • There are just 10 million people enrolled in the ACA marketplaces.
  • The law's larger Medicaid expansion and consumer protections are popular and working well.
  • The far larger Medicare and Medicaid programs and employer based health system combined cover more than 250 million people, and are largely unaffected by developments in the ACA marketplaces.
  • Premiums for the 155 million people who get coverage through their employers rose a very modest 3% in 2017.

Some conservatives in Congress will hold out for repeal, and they'll resist any legislation that they view as propping up Obamacare. But for everyone else, it's important to understand the problem and get the facts. Alexander-Murray is a proportionate response to an urgent but very specific problem: the need to stabilize the ACA marketplaces. It will not affect most Americans, satisfy conservatives who want the ACA gone and buried, or satisfy the left which is anxious for Medicare for All.

The news media, and experts and pundits who appears in print or on broadcast news, can do a lot more to provide a sense of proportionality, context, and the facts so that the public is not so easily misled and ill informed.

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McCain blasts "bone spur" excuses for dodging Vietnam

"[W]e drafted the lowest income level of America and the highest income level found a doctor that would say that they had a bone spur. That is wrong. That is wrong." — McCain, in an interview segment that aired on CSPAN

Background: President Trump, while not named in McCain's quote, received five draft deferments for a bone spur. Trump famously criticized McCain on the campaign trail, saying he likes people "who weren't captured."

Video from the interview:

Go deeper: McCain relishes his role as chief Trump critic

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Trump’s electricity shakeup

Today marks the starting gun in a battle for market share over America's stagnant electricity mix. Seeking to follow through on President Trump's campaign promises to revive coal and nuclear power, the Energy Department is asking an independent federal agency to issue a rule that would help those two fuel types. The stated aim is to ensure the electric grid is resilient to power outages and other vulnerabilities.

We've created a card deck to get you up to speed fast on how each fuel type is poised to gain — or lose — under the proposed changes.

Gritty details: The Energy Department's proposed rule would allow power plants operating in competitive markets, which make up more than half of the United States, to recover costs if they have 90 days worth of fuel on site.

The Federal Energy Regulatory Agency is requesting comments to that proposed rule be submitted by today. Groups representing most energy types other than coal and nuclear power are worried, because it could erode their otherwise growing market shares and upend the power market as it's known today. FERC makes the final decision, and its commissioners have expressed caution about following through with the rule.

Read more: Check out this Axios slide deck breaking down the market share for each electricity source.

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Ivanka hits the road to sell tax reform, child tax credit

Photo: Jose Luis Magana / AP

Ivanka Trump heads to Bucks County, Pennsylvania, on Monday to talk tax reform, according to a senior administration official. She'll appear at a White House tax reform town hall, alongside U.S. Treasurer Jovita Carranza, and former New York Rep. Nan Hayworth will moderate the event.

Pressure's on: Since the campaign, Ivanka has openly pushed for expanding the child tax credit. The Big Six tax reform plan would do that. But some fiscal conservatives worry it will only make the deficit worse. It remains to be seen whether House Republicans' final tax plan will keep the child tax credit expansion that Ivanka and the administration are lobbying for as part of their plan for "middle class relief." So that will be a big part of her focus in Pennsylvania.

  • Ivanka been working towards that end with the National Economic Council, the Office of Legislative Affairs and Treasury; and, as we first reported a couple weeks ago, Jared and Ivanka have been having members of Congress over for dinner at their Washington D.C. residence. A senior admin official said the child tax credit is "part of her overall commitment to work on policies that help working families."

Despite concerns from fiscal conservatives, officials working on tax reform say support is building for the child tax proposal.

Momentum play: The administration's effort to sell tax reform has kicked into overdrive. The president sat down with Fox News' Maria Bartiromo on Friday for an interview aired today, his team placed a Trump Op-Ed that ran this morning in USA Today, OMB Director Mick Mulvaney hit the Sunday shows, and the president phoned into a conference call for House Republicans this afternoon, urging members to adopt the Senate budget this week and follow through to tax reform, saying, "We are on the verge of doing something very, very historic."

What's next: House Republicans are set to pass the Senate budget this week — even though it doesn't include top conservative priorities, like addressing the debt crisis through entitlement reform. They're putting those goals on the back burner in hopes of expediting tax reform.

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Inside the Fed chair decision

President Donald Trump during a news conference with Greek Prime Minister Alexis Tsipras. Photo: Pablo Martinez Monsivais / AP

Like every major Trump decision, the president is leaving even his closest advisers in suspense over his plans for the next Federal Reserve Chairman. Most aides I've spoken to think Trump will appoint Fed Board member Jerome Powell. But nobody who's spoken to Trump feels overly confident.

"It's never a done deal with this guy," said one official.

Rupert Murdoch, who speaks regularly to Trump by telephone and is one of his most influential informal advisers, has urged the president to appoint either of the two free market conservative finalists, Stanford economist John Taylor or former Fed Governor Kevin Warsh, according to two sources familiar with his outreach.

A spokesman for Murdoch declined to comment.

Trump didn't have amazing chemistry with Taylor, according to two sources familiar with their interactions. But he's still in the mix, possibly for vice chair. Top officials who Trump respects, including Vice President Pence, have been vouching for Taylor's credentials and intellect. Trump has also spoken favorably of current Fed Chair Janet Yellen, further muddling the picture.

What else we're hearing:

  • A source who spoke to Trump late last week said they left the conversation believing the president had not made up his mind.
  • Another source close to the process told me the smart money is still on Powell. Powell's most aggressive advocate has been Treasury Secretary Steven Mnuchin. But Trump should be taken at his word when he tells Fox Business' Maria Bartiromo that he's considering Taylor and Yellen, or a combination of Powell and Taylor for chair and vice-chair.
  • Some White House officials have vented about the constant stream of news stories promoting Powell's candidacy. They say they suspect the leaks have come from Treasury, since Powell is Mnuchin's preferred candidate.
  • One senior official said Powell is far from a home run for Republicans. When Obama nominated Powell to the Fed Board, in 2012, 21 Republican senators voted against his confirmation.

What the West Wing is reading: Senior administration officials told me that Friday's Wall Street Journal editorial headlined "A Fed for a Growth Economy" was read attentively in the West Wing. The editorial argues it's a bad idea to give another term to the Obama appointee Janet Yellen or replace her with Jerome Powell, whom the Journal portrays as a Yellen clone. The newspaper lobbies for Trump to appoint either Taylor or Warsh. "Both would be change agents at the Fed," the editorial declares.

Bottom line: If you're handicapping the Fed Chair race, you're still probably safest with Powell. But this is far from a done deal. Trump still plans to announce his pick for the Fed Chair before he leaves for Asia on Nov. 3.

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Million dollar bracket in the works for GOP tax plan

From left, Rep. Carlos Curbelo, R-Fla., Rep. Vern Buchanan, R-Fla., and House Ways and Means Committee Chairman Kevin Brady, R-Texas, confer before a news conference on the tax plan. Photo: J. Scott Applewhite / AP

The Republicans on the House Ways and Means Committee — engaged in a high-pressure, high-stakes tax policy rewrite — are currently exploring not cutting the income tax rate for people who earn $1 million or more per year.

  • Right now, the marginal tax rate for anyone who makes $418,000 or more per year is 39.6 percent. The Republicans' opening gambit — secretly negotiated for months, and endorsed by Trump — would have cut the highest tax rate to 35 percent.
  • But now, House Republicans' thinking has changed. Under their current thinking, people who earn between $418,000 and $999,999 will be in a lower tax bracket. But those earning $1 million or more will not.

Opting to keep taxing million-dollar-earners at the current 39.6 percent-rate will help stem the deficit increase from tax cuts for corporations and the middle class.

Caveat: The million dollar bracket plans haven't been finalized and could change this week, as committee Republicans finalize their tax bill during meetings on Tuesday and Wednesday.

Potential blowback: If the Committee Republicans ultimately decide not to cut the income tax rate for million-dollar-earners, much of the Republican donor class and Reaganomics community (including anti-tax activist Grover Norquist) will feel betrayed.

"I understand compromise, but why compromise with the sin of envy?" Norquist told us. "This isn't the dumbest idea I have ever heard of. But it is in the top 20."

Norquist argues this won't placate Democrats — who inevitably will charge that Trump's tax overhaul is just designed to help the rich — but will alienate conservatives.

Meanwhile, one administration official told me Trump doesn't really care about this issue.

"He basically thinks they [rich people] are fine and he believes they don't care that much about the individual rate so long as they get all the other goodies, like the corporate rate and expensing," the official said.

What's next: The House expects to pass the Senate budget this week. Shortly after, we're likely to have a timeline of when House Republicans will release their tax cut bill.

A dynamic we're watching: House Republicans make no secret of their disdain for Treasury Secretary Steven Mnuchin. They call him and Gary Cohn "the Democrats." Don't expect either one of them to have much lobbying power with conservatives on the Hill over these next crucial weeks.

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What's next for the caliphate?

Illustration: Lazaro Gamio / Axios

ISIS lost its Syrian capital, Raqqa, last week. Trump issued a congratulatory statement; but we've not seen any George W. Bush-style "Mission Accomplished" speeches.

I spoke to Dana White, the top spokeswoman for Defense Secretary James Mattis, about where the U.S. military is at in its fight against ISIS and what challenges lie ahead.

Shrinking caliphate: In Iraq and Syria the Syrian Democratic Forces and the Iraqi Special Forces — with the help of the U.S. military — have retaken an area the size of California. White says that what ISIS still controls "is a territory slightly smaller than New York State."

Most importantly: White points out that "ISIS has not regained an inch of the territory it has lost."

Bottom line: The power of intimidation, to use Mattis' phrase, is working great. But now comes the hard part.

  • What White calls "the stabilization piece" — working with Syrians and Iraqis on the ground to ensure ISIS doesn't make a comeback — is going to be incredibly tough and time-consuming work.
  • Brett McGurk, the Special Presidential Envoy for the Global Coalition to Defeat ISIS, "is responsible for ensuring the hard fought military gains are maintained — ensuring the 73 coalition members (NATO, Arab League, Interpol and EU) continue to support these communities after the fighting stops."
  • "It's why Secretary Mattis and Tillerson work so closely together," White says, "and why [Mattis] insists on having a State Department rep with him when he meets any of his counterparts."
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A Trump priority: Keep Grassley happy

Senate Judiciary Committee Chairman Sen. Charles Grassley, R-Iowa, listens to an aide. Photo: J. Scott Applewhite / AP

A senior administration official joked to me last week that the real EPA Administrator comes from Iowa, and his name is Chuck Grassley. The source made that wisecrack after Trump called EPA Administrator Scott Pruitt last week and told him to keep Grassley happy on the Renewable Fuel Standard.

After that call, Pruitt backed away from a plan to reduce how much biofuel — mostly corn ethanol — is required in gasoline. Pruitt's concession to Grassley and co. surprised approximately nobody.

The reality: Pruitt is one of Trump's favorite cabinet secretaries, has aggressively deregulated his agency, and was a key voice behind the president's decision to withdraw from the Paris climate deal.

  • But, but, but... Don't mess with Grassley. Perhaps no senator wields more power over Trump than the Judiciary Committee chairman. When Grassley wants one of his people appointed at an agency, it happens. Trump views him as a loyal supporter who helped him in Iowa. (Grassley even stuck by Trump after the Access Hollywood tape leaked!) The fact that Grassley chairs the Judiciary Committee, which confirms federal judges, is just one more source of leverage.

Go deeper on the policy and politics of ethanol with my colleague Amy Harder. In her column tomorrow morning she'll dive into this hot issue, with an interview with Grassley. To read Harder's column, sign up for our energy newsletter Generate.