Mnuchin: Losing human jobs to AI "not even on our radar screen" - Axios
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Mnuchin: Losing human jobs to AI "not even on our radar screen"

Stef W. Kight / Axios

Treasury Secretary Steve Mnuchin joined Axios' Mike Allen this morning at the debut of his News Shapers event series to talk about his new role in the Trump Administration.

On AI supplanting human jobs: "it's not even on our radar screen.... 50-100 more years" away. "I'm not worried at all" about robots displacing humans in the near future, he said, adding: "In fact I'm optimistic."

Other big ticket items:

Trump:

  • Trump's stamina: "He's got perfect genes. He has incredible energy and he's unbelievably healthy."
  • Trump's diet: Mnuchin claimed Trump no longer eats KFC or McDonald's, as the White House food is "great."
  • The dollar bill: "I think we should look at putting President Trump on the thousand dollar bill."
  • Trump's views evolving: "He's the negotiator-in-chief... he wants big deals."
  • Trump's leadership style: "He has an open door. People are coming and going, and he thinks about something and calls somebody on the phone... this is not a formal, scheduled president."

Tax reform:

  • "Much simpler" than health care reform, saying the Trump administration will do it comprehensively. Not going to break it up into more passable pieces.
  • Corporate tax rate: Mnuchin declined to reiterate Trump's goal of a 15% corporate tax rate, vs. Ryan's 20% plan.
  • Carried interest loophole: Mnuchin said the loophole will be closed in our tax plan. But that's for hedge funds. No commitment on real estate, etc.
  • Border adjustment tax: It has certain aspects that are VAT-like, which much of the rest of the world uses.
  • The focus of tax cuts: Mnuchin said the Trump administration's focus is on tax cuts for the middle class, not upper.

The global economy:

  • Renegotiating trade deals: "So long as we can renegotiate [trade] deals that are good for us, we won't be protectionist. Otherwise we will."
  • The one bad thing: We don't know how to predict the next bad thing.
  • Trump's big objective: Keep people safe, per Mnuchin.
  • Does Mnuchin worry about who is calling Trump? "No. Do you?"

On Silicon Valley, tech and jobs:

  • Valuations: "I don't understand these valuations."

Infrastructure:

  • Infrastructure finance: "It's clear he wants to do something very significant," Mnuchin said, referenced Trump's wish list. He added it wouldn't be deficit-financed.
  • The big problem: Regulations, not the money.
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The Economist goes after India’s “nationalist firebrand” PM

AP

The Economist cover story about Narendra Modi, India's PM, argues he's "a nationalist firebrand."

Modi "is more energetic than his predecessor, the stately Manmohan Singh, launching glitzy initiatives on everything from manufacturing to toilet-construction. But he has not come up with many big new ideas of his own ...

"His reputation as a friend to business rests on his vigorous efforts to help firms out of fixes — finding land for a particular factory, say, or expediting the construction of a power station. But he is not so good at working systematically to sort out the underlying problems holding the economy back."

Why it matters: "Political conditions are about as propitious for reform as they are ever likely to be. ... Modi's admirers paint him as the man who at last unleashed India's potential. In fact, he may go down in history for fluffing India's best shot at rapid, sustained development."

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Trump "tapes" scapegoat: Obama administration

Alex Brandon / AP

President Trump told Fox & Friends' Ainsley Earhardt that his original tweet suggesting there could be tapes of his Oval Office conversations with ex-FBI Director James Comey came from concerns that the Obama administration may have been surveilling the White House:

The quote: "You never know what's happening when you see that the Obama administration, and perhaps longer than that, was doing all of unmasking and surveillance and you read all about it... the horrible situation with surveillance all over the place... But when [Comey] found out that I, you know, that there may be tapes out there, whether it's governmental tapes or anything else, and who knows, I think his story may have changed."

  • Should Mueller recuse himself from special counsel? "[H]e's very, very good friends with Comey, which is very bothersome... we'll have to see. I can say that the people that have been hired are all Hillary Clinton supporters... I mean the whole thing is ridiculous."
  • On health care: "I've done in five months what other people haven't done in years... It's a very complicated situation from the standpoint, you do something that's good for one group but bad for another."
  • On rumors Pelosi is being ousted: "I hope she doesn't step down. I think that it would be very, very sad for Republicans if she steps down. I'd be very, very disappointed if she did. I'd like to keep her right where she is, because our record is extraordinary against her."
  • Democrats being obstructionists: "I think they'd do much better, as a party, if they got along with us... I honestly think they'd do better at the polls... boy, would the people love to see two parties getting together and coming up with the perfect health care plan... I don't think that's going to happen, but that is what should happen."
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Study: $13 minimum wage didn't cause Seattle job losses

Elaine Thompson / AP

Seattle has been the vanguard of the newly energized minimum wage movement, hiking its pay floor from $8.55 in 2010 to between $11 and $15 in 2017. Other cities have followed suits — in all, nine big cities and eight states have passed minimum wages between $12 to $15, depending on the size of the employer and other factors.

Berkeley's Institute for Research on Labor and Employment is out with a new study on the effects of Seattle's wage policies, and found that there was no job loss as a result of the mandate.

How did they do it? They uses an algorithm that tests combinations of different counties across the U.S. to create a "synthetic" Seattle, mirroring its employment and wage characteristics for six years. The only difference is that these counties did not increase their minimum wage.

What they found: There was no negative effect on employment, even up to a wage floor of $13, a much higher level than previous research has studied.

Not so fast: The authors of the study admit that their synthetic Seattle may be failing to reflect important qualities about the real Seattle that could be preventing job loss. The IRLE plans to conduct similar studies in Chicago, Oakland, San Francisco, San Jose and New York City, and elsewhere, which will help respond to this critique.

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Venture capital investment in AI skyrockets

Venture capitalists are pushing a lot of cash into artificial intelligence and machine learning technologies, more than doubling the investment into virtual reality technologies in 2016, according to PitchBook data via the National Venture Capital Association.

Why it matters: U.S. investors want an edge on the development of next-generation technologies that center around AI, including self-driving cars. Other countries such as China are also charging ahead.

Data: PitchBook; Chart: Chris Canipe / Axios

President Trump yesterday told venture capitalists and emerging tech company execs that his administration wants to help "unleash the next generation of technological breakthroughs that will transform our lives and transform our country, and make us number one in this field." The White House gathering was largely focused on drones, 5G wireless technologies and connected devices.

Big bets: AI technologies have also captured the mindshare of the biggest tech companies such as Google, Facebook and Amazon who are investing a lot of research and development resources into machine learning, deep learning and neural networks. AI-related technologies are at the core of emerging systems like self-driving cars. In 2016, there were 322 deals worth a total of $3.6 billion in investment into AI and machine learning companies, compared with only 31 such deals in 2007.

Virtual reality and augmented reality are also attracting investments, but those applications are seen as more narrowly tailored for specific uses, as opposed to the mass adoption potential seen for AI. There were 99 deals worth a total of $1.485 billion in this area in 2016, up from 23 deals in 2007.

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The ACA is more popular than the GOP health care bill

We knew the Republican health care effort wasn't polling well, but a new Kaiser Family Foundation poll out this morning puts a finer point on it: It's way less popular than the Affordable Care Act that it's supposed to replace.

Data: Kaiser Family Foundation Health Tracking Poll; Chart: Lazaro Gamio / Axios

Just 30% of the public likes the American Health Care Act, the House health care bill. (The poll was done before the Senate bill came out.) Meanwhile, the ACA, which has never been loved, is slowly becoming more accepted. It's now favored by 51% of the public — the first time it's topped 51% since Kaiser started polling on it in 2010.

Other highlights:

  • Republicans still support the AHCA, but their support has gotten softer. It's down to 56% (was 67% last month).
  • Nearly three-fourths of the public have favorable views of Medicaid — but 70% say states should be able to impose work requirements for non-disabled adults, as Republicans want.
  • Good news for Republicans and Democrats: the public doesn't blame either of you for insurers pulling out of the ACA markets. It blames the insurance companies — four in 10 Americans say the insurers are withdrawing because of profit-driven decisions.
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The Senate health bill is out. Here's your speed read

J. Scott Applewhite / AP

You can read it here, and a summary here. The highlights:

  • Ends the Affordable Care Act's mandates and most of its taxes.
  • Phases out its Medicaid expansion over three years, ending in 2024.
  • Limits Medicaid spending with per capita caps, or block grants for states that choose them. The spending growth rate would become stricter in 2025.
  • States could apply for waivers from many of the insurance regulations — though not protections for people with pre-existing conditions and coverage for young adults.
  • The ACA's tax credits would be kept in place, unlike the House bill — but their value would be reduced.
  • Funds the ACA's cost-sharing subsidies through 2019, but then repeals them.

Want more? Keep reading.

  • There's a stabilization fund to help states strengthen their individual health insurance markets.
    • $15 billion a year in 2018 and 2019, $10 billion a year in 2020 and 2021.
    • There's also a long-term state innovation fund, $62 billion over eight years, to help high-cost and low-income people buy health insurance.
  • The ACA tax credits continue in 2018 and 2019.
  • After that, they'd only be available for people with incomes up to 350 percent of the poverty line.
  • The "actuarial value" — the amount of the medical costs that insurance would have to cover — would be lowered to 58 percent, down from 70 percent for the ACA's benchmark plans. That's likely to reduce the value of the tax credits.
  • All ACA taxes would be repealed except for the "Cadillac tax" for generous plans, which would be delayed.
  • Medicaid spending growth rate under per capita caps would be same as House bill until 2025. Then it switches to the general inflation rate, which is lower than House bill.
  • States would be able to impose work requirements for people on Medicaid, except for the elderly, pregnant women and people with disabilities.
  • Children with complex medical needs would be exempt from the per capita caps.
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Don't expect House to water down Russia sanctions

Pablo Martinez Monsivais / AP

The New York Times reported Wednesday that the White House has been "quietly lobbying House Republicans to weaken a bill overwhelmingly passed by the Senate last week that would slap tough new sanctions on Russia for its meddling in the 2016 election and allow Congress to block any future move by President Trump to lift any penalties against Moscow."

Meanwhile, Democrats and some sources in the corporate sector are speculating that a procedural delay is merely cover by House leaders to slow-walk and ultimately water down the bill.

Not so fast: three House Republican sources involved in the process tell me the House bill is shaping up to look very similar to the Iran-Russia sanctions bill that passed the Senate. And it's likely to move pretty fast. House Speaker Paul Ryan wants tough sanctions on Russia, as does Foreign Affairs Committee chairman Ed Royce, who is driving the process.

  • A GOP aide close to issue told me there could be minor technical fixes to the bill that even some Senate staffers who worked on the original privately acknowledge need to be made. The bill would then be sent back to the House and if Chairman Royce gets his way it will proceed quickly to the floor and to the President's desk.
The big question: will President Trump risk using his veto pen on this legislation if it passes as originally written? Most GOP sources I've spoken to doubt it. While Secretary of State Rex Tillerson has said the administration needs more flexibility to over the Russia-Ukraine conflict — and believes the new sanctions package is unhelpful to that end — Trump can't risk getting his veto overridden by Congress. It looks like there'd be more than enough votes to do so, given the Senate voted 98-2 in favor of the original sanctions package.
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Ex-CIA officer charged with selling top secrets to China

Vincent Yu / AP

Thomas Mallory, a former CIA officer, has been arrested and charged in federal court with selling top secret documents to Chinese intelligence officials, per The Washington Post.

What allegedly went down: Originally contacted by a supposed recruiter for a Chinese think tank, Mallory realized he was in contact with Chinese intelligence officials before traveling to Shanghai in March and April. He then provided a Chinese intelligence operative with three documents — one labeled top secret — in May. Around the same time, he wrote his Chinese contact: "Your object is to gain information, and my object is to be paid for it."

The potential consequences: Mallory will have a preliminary hearing this week, but he faces up to life in prison.

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Fed: U.S. banks could withstand global recession

Matt Rourke / AP

The Federal Reserve's stress test results are in and, according to their calculations, the 34 largest U.S. banks would be strong enough to withstand a global or U.S. recession if one were to hit right now.

Why we care: The banks weren't prepared for the 2008 financial crisis. Right now they are, according to the Fed. Plus, the stress test will reassure investors.

The test: To see if banks with more than $50 billion in assets have a large enough capital buffer to keep lending in the case of "severely adverse" scenarios resulting in billions of dollars in losses. The next part of the stress testing will be out June 28, and will reveal which banks have "passed" and "failed" their tests.

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Destroying Jon Ossoff: the adman's view

I've been speaking with Bob Honold, a Republican strategist hired by the NRCC to craft TV and digital ads for the Georgia House special election, in which the GOP's Karen Handel beat Democrat Jon Ossoff.

His key takeaways from the most expensive House race in American history:

  • "The energy on the left was considerable — and the $25 million sent to Ossoff was a product of that energy that posed a huge problem," he says. "That unprecedented amount of money put the race squarely in jeopardy."
  • "Many factors were necessary to win — including a great campaign by Karen Handel and her team...[but] without the enormous amount allotted by the NRCC [more than $7 million], and without the specific and methodical ways we spent it on TV and digital – we would not have won. The same can be said for the incredible work done by CLF (Congressional Leadership Fund)."

The ad-by-ad path to defeating Ossoff:

  1. During the jungle primary they identified him with unpopular party leader Nancy Pelosi, and portrayed him as just another liberal. (The Pelosi branding became a centerpiece of the GOP strategy throughout the race, and is part of the reason her leadership is under new jeopardy.) The Republicans also used Ossoff's own TV ad against him to highlight the fact that he did not support repealing Obamacare, and remind voters that Ossoff does not live in the district.
  2. Also during the jungle primary – Republicans used residents of the district to accuse Ossoff of lying about his credentials, and they again reinforced the branding of him as a Pelosi liberal who'd raise taxes and weaken the military.
  3. Straight after the primary, they ran a contrast ad — framing Ossoff as a carpetbagging Hollywood/Pelosi liberal and Handel as a "proven fighter for Georgia."
  4. National security played a surprisingly heavy role in the messaging given Ossoff had never taken a vote that could be used against him. Republicans used the fact that he'd supported Obama's Iran deal to brand him as "naive" and soft on terrorism.
  5. Doubling down on the "Ossoff is too risky" national security messaging because Republican internal polling showed it was damaging him. Honold believes the issue helped to disqualify Ossoff to many independents and motivated Republicans who were previously considering staying home.
  6. When early voting began, Republicans aired a get-out-the-vote ad on Fox News and History Channel and on targeted digital/mobile destinations. Republican internal polls showed some of the voters who didn't like Trump — and were considering either staying home or voting for Ossoff as a protest vote — also happened to be motivated by a disgust for what they viewed as extreme behavior by liberal protesters. Republicans ran an ad titled "Childish Radicals" that played to that disgust — and used the controversial image of Kathy Griffin holding up Trump's severed head.
  7. The closing argument: Republicans used a formula that had worked earlier in the campaign, filming voters from the district and repeating the key branding words for Ossoff — "childish," "naïve" and "inexperienced." And — of course — there was Nancy Pelosi.

Last word: "The massive investment made by the NRCC and the strategic message progression executed by Honold destroyed Ossoff," says Guy Harrison, another top Republican strategist and former NRCC executive director.