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National

Media Trends

Axios Media Trends

Adapted from the 2019 Edelman Trust Barometer; Chart: Axios Visuals

Around the world, trust in societal institutions among those with higher household incomes and levels of educations reached a record high in 2018, while trust in those same institutions among the mass population remained stagnant, according to Edelman's 2019 Global Trust Barometer Study. 

Why it matters: This growing divide in societal trust between the "informed public," as Edelman calls it, and the rest of society is giving rise to the grassroots populist and protectionist movements that we're seeing in political elections. 

By the numbers: While trust is increasing among the informed public, it remains stagnant among the mass population, leading to a 16 percentage point difference in trust between the two groups. 

65% of the informed public say they have trust in nongovernmental organizations, business, government and media, while only 49% of the mass population feels the same. 

The phenomenon is global. Among 28 nations surveyed around the world, 18 markets have double-digit trust gaps between the informed pubic and the mass population, including Australia, China, the UAE, India and Canada. 

The nations with particularly large trust gaps are often those that are experiencing populist movements or elections that are underscored by extreme political polarization over the past two years, like U.S., the U.K., Mexico, Germany and France.

Between the lines: The study shows that mass populations often feel more pessimistic about their futures, and less served by traditional institutions. 

In nearly half of the markets surveyed around the world, majorities of the mass populations do not believe they will be better off in five years. 

In nearly every nation surveyed, the informed public is more optimistic about its future. 

The bottom line: Trust in institutions is rising among the wealthier and better educated classes around the world, but is not growing among everyone else. 

The rise of a global class-driven trust divide

A new survey highlights the growing divide in societal trust that has led to the rise of populism.

Politics

Populism

Capital

Axios Capital

Data: BLS; Chart: Andrew Witherspoon/Axios

New data from the BLS show that unionized workers still make substantially more money than their non-unionized counterparts.

Why it matters: The teachers strike in Los Angeles has cost $125 million so far, and all indications are that it's not going to end soon.

Unionized workers still make substantially more money

LA teachers are on strike that has cost city $125 million

Business

Labor strikes

Data: United Nations Inter-agency Group for Child Mortality Estimation; Chart: Lazaro Gamio/Axios

A child born today is half as likely to die before the age of 5, compared to if she was born in 2000, Axios' Eileen Drage O'Reilly reported. 

The big picture: This isn't general global good fortune; rather, it's the result of targeted interventions, costing hundreds of billions of dollars, from GAVI, the Global Fund, the Global Polio Eradication Initiative and the Global Financing Facility.

Every year, more than 6 million children under the age of 5 survive who would have died had they been born in the 1990s. Those kids — especially the girls — are also being educated better than ever before.

Saving children's lives is the lowest-hanging fruit in the development world, and we're surprisingly good at it. That's not only fantastic for the children themselves and for their parents, it's also fantastic for their countries' economies.

Why it matters: These figures are worth remembering next time someone tells you that aid doesn't work and that we should all be investing in disruptive innovation and electric cars instead.

Targeted humanitarian aid has radically cut the child mortality rate

A child born today is half as likely to die before the age of 5

Mortality rate

Health Care

The best speech ever given to an audience of bankers was delivered by Paul Volcker in December 2009: "The most important financial innovation that I have seen in the past 20 years is the automatic teller machine."

The big picture: Volker was right in substance, but he did miss one financial innovation that has been unambiguously positive for the world. The low-cost index fund, as popularized by Jack Bogle (1929–2019), has given millions of investors billions of dollars in extra retirement income.

Bogle created a fund-management giant in Vanguard, which is owned by the investors in its funds and therefore has no need to maximize the profits it makes.

For anybody trying to work out where to invest their retirement savings, it's hard to do better — and very easy to do a lot worse — than just putting the whole amount into a Vanguard index fund.

Bogle's insight was that an individual investor will find it statistically impossible to beat the market over the long term, either by picking stocks or by picking fund managers. Index funds provide market returns at minimal cost, by excising stock-pickers entirely.

Millions of Americans have got the message and have moved their investments to index funds and other passive strategies. The biggest fund managers, including Vanguard and BlackRock (which owns iShares), are built on not picking stocks.

Vanguard and BlackRock are two of the largest shareholders in just about any big company you care to mention; they have no choice in the matter. Yet as large shareholders, they are constantly subject to campaigns urging them to divest from certain companies.

BlackRock, in contrast to Vanguard, is reluctant to admit that it has very little control over much of its asset base. BlackRock CEO Larry Fink enjoys the bully pulpit that comes with controlling trillions of dollars. (Bogle, by contrast, never tried to tell public-company CEOs how to run their companies.)

This week, BlackRock was embarrassed by a fake letter from Fink, designed to make him look like an ineffective blowhard. The point of the letter was to show what Fink could achieve if he really wanted to, including divesting from carbon-investing companies even in his "broad indexed funds."

There's a case for divestment, but a fund manager doing any such thing is by definition an activist.

The bottom line: Passive investment is good for millions, but active investment is still necessary. It holds managers accountable for their actions and provides crucial price discovery. Bogle was proud to be a passive investor. Fink, by contrast, seems to want to have it both ways.

Jack Bogle's misunderstood legacy

The legacy of passive investment has been misconstrued

Funding

Analysts were convinced that the last quarter of 2018 was going to be great for earnings — until, suddenly, at the end of the year, they weren't.

The bottom line: The stock market's volatility at the end of 2018 was to a certain degree based in genuinely unexpected fourth-quarter weakness. And 2019 is getting off to a very rocky start. With expected earnings still at or near all-time highs, there's definitely a lot of room for them to be re-rated downwards.

JPMorgan is a good example. It had a record year in 2018, earning $32.5 billion in total. That shattered the previous record by some $8 billion. And yet its quarterly fixed-income trading revenue was its worst since the financial crisis.

Apple's earnings warning at the beginning of January was particularly noteworthy, and wiped some $2.5 billion off expectations for its quarterly earnings.

2019 earnings are off to a rocky start

Companies may downgrade earning projections

Earnings

From the Valley to D.C., Big Tech players like Facebook, Google and Amazon are under more scrutiny than ever as new technology develops and privacy and antitrust concerns grow in lockstep with companies’ ambitions.

Technology

BuzzFeed News reporter Anthony Cormier and editor-in-chief Ben Smith said several times on CNN Brian Stelter's "Reliable Sources" that they are confident in their reporting despite the challenge from special counsel Robert Mueller's office that claimed the story was inaccurate.

Reliable Sources With Brian Stelter-11 18 28 Am - 11 19 04 Am-2019-01-20-0

Why it matters: Because of the rare comments from special counsel spokesperson Peter Carr, lawmakers and reporters both scaled down the hype of whether BuzzFeed's story is a smoking gun. 

Stelter: "What if the sources are just wrong?

Stelter: "Not intentionally. Not trying to hurt you, but what if they're wrong?"

Cormier: "They're not. They're not. I'm confident."

Stelter also asked if BuzzFeed is concerned about its credibility and their jobs if the story is wrong:

Smith: "You know, we're confident in the story and we are — and I think he we also do think while there is right now and understandably a focus on the media story, the important story is about the relationship between the Trump administration and Russia."

Go deeper: Trump and Cohen discussed Trump Tower Moscow right up until 2016 election

BuzzFeed reporter: "I'm confident" our sources are correct on Trump-Cohen

The reporter and BuzzFeed's top editor repeatedly said the story is accurate

Mueller investigation

Top stories & latest news on the Federal Reserve, real-time data, plus the biggest shifts happening in the U.S. and global economy.

Economy

After a record economic expansion, the coronavirus pandemic sent the U.S. economy into a recession as unemployment soared to staggering heights. The country now faces urgent questions about how much stimulus is needed for reeling consumers and businesses, and what a recovery might look like.

Economy & Business

Facebook COO Sheryl Sandberg acknowledged at a conference in Germany on Sunday that the social network had a rough 2018 and that "we need to do better to protect people's data," CNBC reports. 

Why it matters: 2019 will be the year Facebook continues to apologize. As Axios' Scott Rosenberg previously reported, 2018 was going to be the year CEO Mark Zuckerberg finally fixed Facebook, but it became Zuckerberg's apology tour. 

"Protecting against election interference"

"Cracking down on fake accounts and fake information"

"Making sure people feel like they control their own information"

Go deeper: Sheryl Sandberg: Facebook must do better on civil rights

Sheryl Sandberg says Facebook needs "to do better"

"We have acknowledged our mistakes," Sandberg said.

Sheryl Sandberg on stage at DID conference

Facebook COO Sheryl Sandberg. Photo: Lino Mirgeler/AFP/Getty Images

Facebook

Big Tech

Social Media

Axios AM

For all his media bashing, President Trump sees the White House as the greatest show on Earth and obsesses over the staging — micromanaging his own lighting and constantly consuming the coverage of himself as if it were sports highlights. 

Why it matters: We learn in a forthcoming book by campaign confidant Cliff Sims ("Team of Vipers," out Jan. 29) that this fixation extends to the chyrons — the all-caps text at the bottom of the screen. 

Sims describes Trump as he watches TV in his private dining room off the Oval:

"He consumed TV like the late Roger Ebert must have watched movies. ... He commented on the sets, the graphics, the wardrobe choices, the lighting, and just about every other visual component of a broadcast. Sure, he liked to hear pundits saying nice things about him or White House officials defending him from attacks, but everything came back to how does it look?

With that in mind, the most Trumpian tactic the comms team employed was arguing with TV networks about the 'chyrons,' the words displayed at the bottom of the screen that act as headlines for whatever the commentators are discussing.

'People watch TV on mute,' the President told me, 'so it’s those words, those sometimes beautiful, sometimes nasty little words that matter.' ...  

When the President would deliver a speech somewhere outside of D.C., the research team would take screenshots of all the chyrons that aired while he was speaking. Then, adding those images to headlines and tweets from influential reporters and pundits, they would race to print out a packet before Trump made it back to the White House. 

The goal was for Sarah or Hope or me — or whoever hadn’t traveled with him — to meet him on the ground floor of the residence and hand him the packet to review mere moments after Marine One landed on the South Lawn."

Since Axios revealed the first excerpt from Sims' book, there has been rising curiosity and anxiety inside the White House.

"Team of Vipers" includes behind-the-scenes revelations — some comical, some troubling — about a range of Trump insiders, including some still in the West Wing.

A publishing source said Sims and others involved in the book have been peppered with incoming queries from aides who want to know how they’re portrayed. “They know he has the goods,” the source said.

The book is chockablock with glimpses of a world where Trump sees himself as star, writer, producer, director, audience and critic — all at once:

"'The graphics on Fox are the absolute worst — are you looking at this?' he said at one point. 'CNN and MSNBC are both so much better. I hate to say it — honestly, I really hate to say it — but MSNBC has the best graphics. Fox is the best — they have the best talent. I mean, look at the rest of these people. They can’t believe what’s happening right now. But Fox’s graphics are terrible. They’ve got to do something about it.'"

Another media scene is from Election night at Trump Tower, when Sims was by Trump's side: 

"CNN’s John King was working the interactive map — or 'Magic Wall' — ... turning states red and blue as results came in and playing out different electoral scenarios. 'They’ve got John King on the maps again,' Trump quipped. 'I used to hate him on the maps, then the maps started turning red and I started liking him. But he wants the map to be blue. And everyone knows he should be an anchor by now. But [CNN president Jeff] Zucker has him on the maps, and we all know what that means.' I actually wasn’t entirely sure what that meant, but no matter. I nodded knowingly just the same.

At one point, with Fox News back on the main screen, frequent Trump critic Karl Rove came on to lambaste both Clinton and Trump. 'Rove is a dope,' Trump said, turning away from the screens for the first time. 'How many times has he been wrong about everything but they still put him out there? This guy spent a half-billion dollars and didn’t win a single race [except the presidency — twice]. But they don’t say anything about that. He wants people to forget. I don’t forget, that I can tell you.'

When Fox News commentator Tucker Carlson complimented Trump’s ability to articulate an antiwar vision to Republican voters, Trump said, admiringly, 'He totally gets it.'"

Trump's chyron obsession: "Rove is a dope"

"The graphics on Fox are the absolute worst."

Trump's favorite TV graphics, at Hillary Clinton's Election Night HQ. Photo: Getty Images

Axios

Sunday's top stories

The rise of a global class-driven trust divide

Unionized workers still make substantially more money

Targeted humanitarian aid has radically cut the child mortality rate

Jack Bogle's misunderstood legacy

2019 earnings are off to a rocky start

BuzzFeed reporter: "I'm confident" our sources are correct on Trump-Cohen

Sheryl Sandberg says Facebook needs "to do better"

Trump's chyron obsession: "Rove is a dope"

Trump allies push border road show

Trump and Cohen discussed Trump Tower Moscow right up until 2016 election

Trump issues veiled deportation threat over shutdown negotiations

Democrats savor Trump as 2020 target