Silicon Valley could be next target for Trump-style nationalism - Axios
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Silicon Valley could be next target for Trump-style nationalism

Manuel Balce Ceneta / AP

As tech royalty converges on the White House today for an American Technology Council meeting, the darlings of Silicon Valley are in danger of becoming the devils of Trumpism's nationalist wing.

This won't happen overnight, but danger signs are everywhere.

Axios Tech Editor Kim Hart wrote last week that the giants, with their "enormous concentrations of wealth and data," are "drawing the attention of economists and academics who warn they're growing too powerful."

Turns out it's government, too. The Bannon wing of the White House would like to take on the lords of the Valley now over outsourcing, the concentration of wealth and their control over our data and lives. But this fight is on hold for a later date, officials tell us.


The bigger problem for tech is that many Americans are rethinking their romantic views of the hottest and biggest companies of the new economy. As people look for villains to blame, tech might get its turn:

  • Some shine has come off Facebook (though not in user data, Dan Primack points out: People still love the service), as executives fend off grievances about fake news, live violence and the filter bubble.
  • Silicon Valley makes itself a juicy target with its male dominance, concentration of wealth (in both people and places), and reliance on foreign workers.
  • Robots will soon be eating lots of jobs, with working-class, blue collar workers — an engine of the Trump coalition — at the most immediate risk. Many think this will be the story of the next 10 years.
  • Anyone familiar with military intelligence will tell you cyber-risk is much greater than most people realize. Russians used cyber tools to try to throw the 2016, and electronic attack is perhaps the greatest U.S vulnerability to an international power.

People increasingly distrust technology, and the companies will increasingly be in the crosshairs. Richard Edelman — president and CEO of the global communications firm — wrote in introducing Edelman's 2017 Trust Barometer: "[O]ngoing globalization and technological change are now further weakening people's trust in global institutions, which they believe have failed to protect them from the negative effects of these forces.

Be smart: Tech executives are very aware of the public's unsettled mood and fearful that if they completely disengage with Trump the White House will turn on their companies. That's why many are here today!

Dive deeper: "What Apple's Tim Cook will tell Trump" (CEOs come with their own agendas: He'll raise topics the White House hadn't planned)

Off embargo at 6 a.m.: "Silicon Valley's elite comes to Trump's Washington."

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Uber has met with SEC about giving drivers equity

Jeff Chiu / AP

Uber has held multiple meetings with the SEC about how it can provide equity to its drivers, who are contractors rather than employees, Axios has learned from a source familiar with the situation.

  • Why it matters: If Uber and the SEC come to an agreement, it could provide a legal template for other gig economy companies. It also could help Uber better recruit and retain drivers.
  • Book excerpt: "Kalanick lights up. He says he wants to give equity to drivers... but Uber has found the securities-law implications to be complicated." – from Wild Ride by Adam Lashinsky, in reference to former Uber CEO Travis Kalanick.
  • Context: New York-based ride-hail company Juno had promised drivers restricted stock units (so long as they met certain requirements), but the SEC objected to the structure. So much so, in fact, that Juno told drivers via email that it was "considering, among other things, whether the RSUs previously granted were void under the terms of the RSU program." That same email also announced that Juno was being acquired by Israel-based Gett, which effectively voided the RSUs anyway (with Juno drivers basically getting bupkus).
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The rising opposition to Mylan's leaders

Mylan CEO Heather Bresch (Alex Brandon / AP)

An investor uprising is starting to bubble over at Mylan, which has been under fire for hiking the prices of EpiPens and other drugs. Mylan released the vote tallies from its June 22 shareholder meeting, and the picture wasn't pretty.

Why it matters: It's a prime example of the megaphone that activist investors have today, and of the tone deafness that some in the pharmaceutical industry have toward their business operations.

The most notable votes:

  • 83% of shareholder votes opposed Mylan's executive compensation, but the vote is nonbinding, so Mylan is free to ignore that.
  • 56% of the votes were against board member Wendy Cameron, chair of Mylan's compensation committee, but she will stay on the board. Mylan trumpeted in a press release last week that all of its board directors were "duly and validly elected." That's because Mylan, now headquartered in the Netherlands, follows a Dutch rule where a supermajority is needed to remove a board member.
  • One-third of votes were cast against re-electing board chair Robert Coury, who is getting a nine-figure payout for last year. CEO Heather Bresch had more than a quarter of votes opposing her.
Three investors — New York City Pension Funds, New York State Comptroller and California State Teachers' Retirement System — sent a letter to independent directors demanding a slew of changes, including the immediate resignation of Cameron.

The killer quote: "From the EpiPen price-hiking debacle, to allegedly overcharging the government for life-saving drugs, to paying chairman Coury nearly $100 million, this board's oversight failures have hurt investors, consumers and American taxpayers. We need to see change." — New York City Comptroller Scott Stringer

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Doing away with CVs and those horrendous on-line applications

Creative Commons

Interminably long on-line job applications are a horror for job-seekers. But it's not much better for hiring managers, who can only guess they are culling out the best job candidates.

Hirevue, Utah-based firm, has developed a machine-learning algorithm to appraise applications done by video. The system grades the applicants according to their suitability for the job, as set out by the hiring company. Human hiring managers can do the rest. "It allows hiring managers to not just randomly throw people out. You can spend time in ways uniquely human, rather than looking at resumes all day," said Lindsay Zuluaga, a data scientist with Hirevue.

As such systems improve, AI can take over more of the hiring process. "It would be very cool if algorithm could get better and better at assessing people, and could hire someone," Zuluaga tells Axios."[A]n algorithm could say, 'This person is your best bet. They're going to stick around awhile,'" she said.

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Even Nike can't resist the Amazon revolution

Michael Noble Jr / AP

Sportswear giant Nike announced an agreement earlier this month to sell its products directly through Amazon.com, despite resisting the online retailer's entreaties for more than a decade.

The Wall Street Journal reports the decision was made after third-party sellers offering Nike products began to proliferate on the site, loosening the firm's control over pricing and distribution. Nike can't stop third-party sellers from reselling lawfully-purchased product, and following the liquidation of bankrupt Sports Authority's inventory last year, the market was flooded with Nike product that could be resold at deep discounts. Nike therefore decided to strike a deal to sell its products on Amazon in exchange for its help in stopping unauthorized third-party sales.

Why it matters: When consumers want to buy any type of product, be it electronics or apparel, an increasing share think of Amazon first.

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Ex-Binary Capital employee sues for alleged harassment

Binary Capital website

A female former employee at Binary Capital alleges that the VC firm tried to silence her after she quit, including alleged threats to withhold her share of the profits from successful investments (i.e., carried interest), according to a lawsuit filed in San Mateo Superior Court on Thursday.

The details: The former employee, Ann Lai, says that Binary Capital's culture was sexist, including commentary about sexual encounters, women's bodies, and inappropriate behavior toward female staff. After she resigned in May 2016, Binary Capital partner Justin Caldbeck allegedly threatened her ability to find work if she disclosed anything about her time at the firm. She quickly lost out on multiple jobs because of the firm's statements about her and her performance.

Piling on: Lai's complaint comes a week after a report from The Information revealed that Caldbeck had been sexually harassing some female startup founders. Since then, it's also been revealed that apparel startup Stitch Fix requested in 2013 that Calbeck, at the time working for Lightspeed Venture Partners, be removed from its board after he harassed the startup's founder, though she was forced to signed a non-disparagement agreement about the situation. Over the last few days, both Caldbeck and his partner, Jonathan Teo have effectively resigned, and Binary is expected to be wound down.

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Trumpworld's push to get a Senate health deal

Evan Vucci / AP

Everyone is making calls — based on calculations of who's got the most leverage with certain senators down to personal relationships. President Trump, Vice President Pence, Senate Majority Leader McConnell, and officials including White House Legislative Affairs director Mark Short and Chief of Staff Reince Priebus are working the phones.

On Tuesday night the Vice President hosted a small group of very conservative senators for dinner at his residence. Mike Lee, Pat Toomey, Tom Cotton, and Ben Sasse were there. I asked a source familiar with the dinner why Toomey was there given he supported the bill, and the source told me it was wise to bring together colleagues of a similar ideological persuasion who'd come to different conclusions about the health bill.

At the Capitol, Axios' David Nather and Caitlin Owens hear only pessimism. At the White House, we hear a more optimistic read.

Nobody I've spoken to is confident about getting anything sorted by Friday. They view the real deadline as the next recess.

  • Mitch McConnell is in the offer-making phase. In crude terms: he's got a couple hundred billion dollars to play with and he's trying to buy off moderate Republican senators with money to fight Opioid addiction and to help out vulnerable constituents affected by the new health care plan.
  • The way the White House is thinking about the path to success remains the same: short-term money for moderates and long-term reforms for conservatives.
  • There are plenty of doomsayers, but on the inside — both inside the administration and in senior Senate offices — I'm finding a number of officials who've been skeptical all along are now quietly predicting it's going to happen.
  • Best encapsulation of the White Hat (optimist) thinking, from an administration source: "I think we're going to pass this. I really think they'll bribe off the moderates with opioid money and then actually move policy to shore up Mike Lee and Ted Cruz. ... If it was going to fail, McConnell would've put it on the floor. He wants people on the record — put up or shut up. He would've said: 'F--- it, let's fail now and move onto tax reform.' ... Now he's going to eat up another two weeks of floor time. He's not going to waste those weeks unless he thinks he can do this."
  • Best encapsulation of the Black Hat (pessimist) thinking, from a Republican close to Senate leadership: "I think the gap is too wide and they are getting zero help from POTUS."

Bottom line, from same source: "Unpopular presidents pushing unpopular proposals usually fail."

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Mining by machine: Automation hits coal industry

Anupam Nath / AP

If you want to work in coal, forget using a shovel. As Bloomberg's Tim Loh writes: "Coal…executives are starting to search for workers who can crunch gigabytes of data or use a joystick to maneuver mining vehicles hundreds of miles away."

The coal industry's workforce composition is increasingly going to be skilled workers, and overall hiring is likely to dip. As Heath Lovell, a spokesman for coal producer Alliance Resource Partners LP, puts it: "Whether coal comes back or not is not necessarily directly related to jobs," since as tech makes the industry more efficient it will be able to produce the same amount with fewer employees.

  • To get a sense of how successful the coal industry is going forward, look to production levels, not hiring. Remaining competitive, particularly with natural gas, likely means cutting labor.
  • The tech now: The machines that are likely to displace workers in the next 10 to 15 years include the longwall machine (which cuts coal in mile-long strips without many employees), joysticks to mine by remote control (with the help of videos, sensors, and positioning software), autonomous haul loaders, autonomous trucks, autonomous long-haul trains, semi-autonomous crushers and more. Read more, via the International Institute for Sustainable Development.
  • Likely Impacts: Accenture predicted in 2010 that employing autonomous tech in open pit mines would reduce employment by 75%. Miners, drivers, and maintainers will see more layoffs, per ComputerWorld. It is also likely that the introduction of automation will reduce fuel consumption and spending but also lost tax revenue, IISD claims.
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The iPhone went on sale 10 years ago today

Sergey Ponomarev / AP

The Economist: "No product in recent history has changed people's lives more. Without the iPhone, ride-hailing, photo-sharing, instant messaging and other essentials of modern life would be less widespread. Shorn of cumulative sales of 1.2bn devices and revenues of $1trn, Apple would not hold the crown of the world's largest listed company. Thousands of software developers would be poorer, too: the apps they have written for the smartphone make them more than $20bn annually."

  • The next decade: "[T]he era of stand-alone electronic devices, however slick, is coming to an end. They will increasingly become a vehicle for — and be subsidized by — services based on machine learning and other artificial-intelligence techniques. The quality of these offerings will in turn largely depend on how much data developers have access to... Although Apple's Siri was one of the first digital assistants, Google's and Amazon's offerings are now much smarter."
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The story behind Trump's Medicaid tweet

On Wednesday afternoon, President Trump tweeted a graph from his personal account showing Medicaid spending under the Republican Senate health bill.

There's a story behind that tweet: In the Oval Office on Wednesday, Marc Short, the White House Legislative Affairs director, showed Trump a piece of paper with the graph of Medicaid spending pointing up. Trump wanted to tweet it, according to a source told about the meeting.

Why it matters: The graph doesn't show the other side of the Medicaid changes: the fact that spending would go down compared to current law, which is how Senate Republicans get $772 billion in savings. That's the whole point of the new spending limits.

This is all part of a broader White House strategy: They want to change the way it's presented in the media to help sway some of the Senate Republican holdouts.

  • For the longest time, Republicans in all branches of government failed to frame the argument over Medicaid in terms of the Medicaid dollars going up. Some in the administration had concluded it was an argument they couldn't win. But a number of officials saw they were getting killed every day in the press, with reports of the billions being cut out of Medicaid. Some officials wanted to aggressively reframe the argument as a growth in spending — and a slowing of the growth rate under Obamacare rather than a raw "cut."
  • Even at this late stage, the White House believes it's crucial to change the media narrative. A number of officials believe that some crucial senators are more heavily swayed by media coverage than they are by the substance of the cuts to the Medicaid spending under the Affordable Care Act.

HHS Secretary Tom Price has been making this argument, and tweeted a similar graph of Medicaid spending on Tuesday:

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Stop going to the White House press briefings

With all the legitimate gripes reporters have with this White House, perhaps the least worthy of your (or their) time and attention is the WWE-style smackdown over briefings. Every day, the White House hides or dodges. Every day, reporters protest and whine.

Here's an idea: Quit going.

  • Even if the spokespeople were fully looped in, appeared on camera, and shot straight, what would you miss by blowing it off? There are transcripts and this thing called Twitter, where the rare newsy nugget will quickly appear.
  • Truth is, with cable and the internet, the briefings were pretty useless, even pre-Trump. Government officials are paid to make little news, and spin the best take they can. It's low-grade propaganda at best, and full-blown B.S. at worst.
  • You're wasting time in your day you'll never get back. For a White House reporter who doesn't work in the building, it can take a good chunk of the workday to get to the briefing, sit through it, then complain about it afterward.
  • Work plugged-in sources instead. It's not as if this White House is a watertight ship: Aides are remarkably candid about the hour-by-hour intrigue, infighting and strategizing.