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+0.23 (+0.74%)
At close: 4:01PM EST
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Previous close30.93
Bid30.66 x 1100
Ask33.52 x 1400
Day's range30.63 - 31.17
52-week range21.34 - 36.25
Avg. volume1,609,498
Market cap5.169B
Beta (3Y monthly)1.15
PE ratio (TTM)41.05
EPS (TTM)0.76
Earnings date4 Feb 2020 - 10 Feb 2020
Forward dividend & yield0.20 (0.65%)
Ex-dividend date2019-10-01
1y target est32.75
  • Bloomberg

    Bloomberg Plans $100M in Anti-Trump Online Ads: Campaign Update

    (Bloomberg) -- Former New York City Mayor Michael R. Bloomberg will spend $100 million from his personal fortune for a digital advertising campaign against President Donald Trump ahead of the 2020 election, according to the New York Times.The ads will seek to attack and define Trump in battleground states likely to decide the presidential contest, beginning Friday in Arizona, Michigan, Pennsylvania and Wisconsin, the newspaper reported.Bloomberg has not yet announced whether he will run for president but has taken steps to appear on the Democratic primary ballots in states with early filing deadlines, including Alabama and Arkansas.Bloomberg is the founder and majority owner of Bloomberg LP, the parent company of Bloomberg News.COMING UPThe major Democratic candidates -- including Biden, Warren, Sanders and Buttigieg -- are scheduled to appear Sunday at the Nevada Democratic Party’s First in the West dinner, a major event that previously has drawn thousands to hear from presidential hopefuls.Ten candidates have qualified for the fifth Democratic debate, on Nov. 20 in Atlanta: Biden, Warren, Sanders, Buttigieg, Kamala Harris, Amy Klobuchar, Andrew Yang, Tulsi Gabbard, Cory Booker and Tom Steyer.To contact the reporter on this story: Elizabeth Wasserman in Washington at ewasserman2@bloomberg.netTo contact the editors responsible for this story: Wendy Benjaminson at wbenjaminson@bloomberg.net, Elizabeth WassermanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Jared Kushner Helped Put Cadre on the Map, Then Held It Back

    Jared Kushner Helped Put Cadre on the Map, Then Held It Back

    (Bloomberg) -- Executives at Cadre eagerly watched SoftBank’s Vision Fund dole out billions of dollars to companies like Uber, WeWork and Slack Technologies. Then they got their chance.After presenting Cadre’s real estate platform and its budding technology to the fund’s representatives in New York, CEO Ryan Williams flew to Tokyo in early 2018 at the invitation of Masayoshi Son, who oversees the $100 billion fund. The talks were promising.But there was a hitch: Cadre co-founder Jared Kushner.SoftBank wanted him to divest his ownership stake in the company, according to two people familiar with the matter. The request, not previously reported, was meant to head off any possible conflicts of interest or any suggestions that people doing business with Cadre were trying to curry political favor. That’s because Kushner has become a top adviser to his father in law, President Donald Trump, overseeing a broad foreign policy portfolio.The SoftBank talks fizzled. Like Trump, Kushner declined to shed all of his business interests upon joining the White House. Asked about his Cadre holdings and possible conflicts, a spokesman for Kushner said he “took himself out of all decisions and operations and became only a passive shareholder in Cadre” when he moved to Washington.Cadre and SoftBank declined to comment about the matter or whether Kushner ever entertained selling his stake.SoftBank’s decision to take a pass was a missed opportunity for Cadre that frustrated some top executives. Founded five years ago by Williams with a Harvard classmate, Josh Kushner, and his brother Jared, the company has grown into a midsize real estate manager with more than $800 million invested through its web marketplace.Despite that growth, its biggest ambition hasn’t been realized. Williams’ vision was to make real estate investments easy for the masses, sort of an Amazon for the real-estate obsessed who want to buy and sell shares of commercial properties. Only accredited, high net worth individuals can participate under current regulations, however. Similarly, Cadre’s plans to use artificial intelligence to uncover hidden investment opportunities have run up against the limits of property data, which is scattered and disorganized.Along with those obstacles, Cadre has had to weave a path around the Kushners' rising political profile, executive departures and some inflated business claims, according to company documents reviewed by Bloomberg News and interviews with more than a dozen investors, current and former employees, and others with knowledge of its inner workings. Forceful PitchCadre's engagement with SoftBank exemplified those problems. When Vision Fund representatives traveled to Cadre’s offices in the Kushners’ historic Puck Building in downtown New York early last year, Williams’ executives made a forceful pitch.The Cadre executives said they were already making “data-enhanced” decisions. In a demo, executives typed in a street address to get all sorts of data that might interest an investor: net operating income, occupancy rate, lease terms. But Cadre hadn’t been using the tool; instead, Cadre had built it in the weeks ahead of the presentation, expressly to impress SoftBank, two people familiar with the matter said.After this article was published, a person close to Cadre disputed that account. “The only software Cadre showed during the SoftBank meeting was the standard platform demo that includes Cadre's primary marketplace and investing experience that thousands of customers have used. Anyone who suggests otherwise is completely misinformed or not telling the truth," the person said.There’s no indication that SoftBank questioned the viability of the software. Start-up companies seeking financing often present an aspirational version of their product, even if it’s not yet ready for commercial use. Vision Fund executives were impressed enough by the meeting to push Cadre up the chain to SoftBank’s Son, several people familiar with the matter said.Tech ProgressCadre declined to comment on the contents of its SoftBank pitch. The company has made progress with its technology, Williams told Bloomberg News in a September interview at the company’s offices. For example, he said, Cadre has enhanced its marketplace to allow investors to trade property stakes. In theory, if that secondary sales platform grew large enough to meet regulatory requirements for a liquid market, ordinary investors might be allowed to trade on the Cadre platform.The company has also started a project called Keystone to organize data in the way the company pitched to SoftBank. Williams said he believes Cadre will eventually be able to expand into other alternative asset classes, including infrastructure and energy.“You learn, you pivot, you make quick decisions about what’s working and what’s not working,” Williams said. “We’re not here promising we’re building crazy machine-learning models or predictive analytics that are going to replace the need for humans.”Cadre has good reason to position itself as a cutting-edge technology provider rather than a more pedestrian buyer of real estate. Investors eager to bet on a disruptive force have valued property technology firms like Cadre and the brokerage Compass at multiples of their revenue. Cadre’s last funding round, in 2017, valued it at $800 million, even though it had bought stakes in only a handful of properties worth far less. Traditional real estate firms are generally valued at a small fraction of the assets they oversee. Newfangled real estate firms have lost some of their shine lately. WeWork’s valuation has collapsed to about $8 billion, down from $47 billion just months ago, after a canceled initial public offering and a $9.5 billion rescue package from SoftBank. Compass, another firm backed by SoftBank that promises to pair technology with residential real estate brokers, has faced questions about whether its technology is game-changing.From Cadre, SoftBank wanted a significant stake that would have doubled the company’s valuation to $2 billion or more, according to people familiar with the matter.Small InvestorsWilliams says the idea for Cadre came after he realized that small investors had limited options for buying real estate: They could either plow money into their own residence or buy shares in broad-based real estate investment trusts. Why couldn’t investors instead buy slivers of several properties the way they could buy shares in companies? He wanted to “democratize” access to the asset class.Since then, Cadre has teamed up with developers and landlords to buy stakes in properties across the U.S. — more than two dozen multifamily, hotel and office properties from Maryland to Texas to California. The aim is to be highly selective about deals, using metrics including rent growth and rent affordability, to generate outsize returns for clients.In September, Cadre said it sold stakes in suburban apartment complexes outside Chicago and Atlanta for an internalized rate of return exceeding 20 percent. “It has been exciting to see the concept we envisioned proved out,” Williams said, “and to show our investors that we honor the trust they are placing in us.'”Cadre’s aspiration to offer sophisticated real estate investments to the masses is limited, for now, by regulations concerning investments sold privately. As a result, Cadre’s customer base is made up of institutions and high-net-worth individuals. Many of those wealthy clients are overseas.About 20 percent of Cadre’s funds come from outside the U.S., the company says. The company’s international clientele is mostly wealthy individuals and family offices, as opposed to institutions, according to Williams.“We haven’t done a ton of international marketing,” he said. “It’s a testament to the brand awareness.”Foreign-Policy RoleAs the SoftBank courtship made clear, Cadre’s interactions with foreign investors could make for particularly messy optics because of Jared Kushner’s hefty foreign-policy portfolio in the White House.Almost half of the Vision Fund’s money comes from the government of Saudi Arabia, where Kushner has developed deep diplomatic ties. Kushner’s Saudi forays included an all-night desert meeting in October 2017 with the crown prince, Mohammed bin Salman, about a year before the journalist Jamal Khashoggi was murdered at a Saudi consulate in Istanbul.Critics saw any SoftBank infusion in Cadre as a possible way for Saudi Arabia to curry favor with the Trump administration by enriching Kushner.Kushner’s lawyers have long said he follows all ethics rules.As he joined the White House, Kushner transferred stakes in dozens of other assets to close family. Cadre was an exception, two friends explained, because Kushner sees it as a once-in-a-lifetime opportunity, with great potential for gains. Kushner’s stake was recently valued at as much as $50 million, according to a federal financial disclosure.Cadre executives including Mike Fascitelli, the former CEO of Vornado Real Estate who oversees Cadre’s investment committee, were disappointed that Kushner’s involvement in the company had caused the missed opportunity, according to a person familiar with the deal talks.Williams’ exasperation over the Kushner scrutiny bubbled over in a February cover story in Forbes magazine. “Jared is a passive investor who has no operational control,” he told the magazine, adding that “I can’t force anybody, really, to sell their equity.”Kushner Cos.Without the Kushners, there would be no Cadre. The young firm tapped capital from the Kushner family and executives of Kushner Cos. (The overall size of those investments hasn’t been disclosed.)Cadre is housed in the 19th-century Puck Building, among the Kushners’ prized assets. Two floors up are the offices of Thrive Capital, the venture capital firm of Josh Kushner, who continues to advise Cadre. Cadre’s first two investments came as part of Kushner Cos. deals for apartments in Queens and suburban New Jersey, giving the start-up early viability.Now, Williams is trying to create distance between Cadre and Kushner Cos., people familiar with the matter say. Earlier this year, the Kushners bought a $1 billion portfolio of apartments in Maryland and Virginia, their biggest purchase in a decade. As with most of their acquisitions, they needed outside investors to complete the deal.Executives from Kushner Cos. approached Cadre about the prospect, putting Williams and other executives in the awkward position of having to decline, according to a person familiar with the talks. The size of the deal and the Kushner connection were both factors, the person said.The person close to Cadre said it was never approached with those investments.Kushner Cos. didn’t respond to a request for comment. A spokesman for Williams declined to comment on the Kushner Cos. decision.Although SoftBank took a pass, several name-brand investors have shown confidence in Cadre. George Soros and Andrew Farkas have backed the firm, along with major Silicon Valley firms including Khosla Ventures and Andreessen Horowitz. Goldman Sachs Group Inc. has invested its clients' money using the Cadre platform.Blackstone HistoryWilliams, a 31-year-old fitness devotee, had a short resume with similar blue-chip names when he began the company. After a stint at Goldman Sachs, he moved to the Blackstone Group as an analyst in its real estate division.There’s been some friction between Williams and Blackstone since his departure in 2014. Several of his former colleagues say he has at times overstated his role and accomplishments at the firm.Williams has said, for example, that he played a central role in the launch of a single-family home-rental business at Blackstone. A Cadre press statement also credited him with acquiring a $550 million hotel while at Blackstone, despite his relatively junior role.After he poached about a half dozen Blackstone employees to join him at Cadre, Williams was summoned to a meeting at Blackstone’s Park Avenue offices with Jon Gray, the billionaire heir apparent to the Blackstone CEO job who was then leading its real estate arm.When asked about the April 2016 meeting, a Blackstone spokesman, Matthew Anderson, said that the firm wouldn’t discuss private talks but that it “was an entirely cordial and pleasant conversation.”A video from a Google conference last year in which Williams talked about his decision to start Cadre caught the attention of a Blackstone-aligned person.“When I told Blackstone what I was doing,” Williams says in the video, “I’d just been promoted, they gave me this quick, accelerated path to partner and told me they’d let me go to Europe and help with the debt business out there.”Two people familiar with his role said Williams hadn’t been told he'd be promoted to partner. Through a spokesman, Williams declined to comment on those assertions.More: Kushners’ Blackstone Connection Put on Display in Saudi Arabia Team ‘Tagma’Cadre has also been hobbled by departures from its senior executive ranks. The team, known internally as “Tagma,” a Greek term used to describe an infantry battalion, recently lost several top staff including investment leaders and the head of human resources. The company has been searching for a chief investment officer for over a year.Just before the Tagma team pitched the Vision Fund, its chief technology officer, Jean Sini, left the company. Several people said Cadre’s lack of technology progress frustrated Sini, an alumnus of Intuit Inc. and Oracle Corp. Sini declined to comment.Got a tip?Click for a secure and anonymous link to Bloomberg reporters.The company’s technology efforts are now focused on automation and analysis of data about its own properties, with the hope that this could yield investing insights in the future.The big question for investors and potential partners is whether Cadre is merely a tech-enabled real estate company or a game-changer.“You can hire as many developers as you want,” said David Friedman, CEO of a property tech start-up known as Knox Financial that doesn’t compete directly with Cadre. He declined to speak specifically about Cadre. “But if your tech doesn’t deliver a new way of doing business that’s measurably more profitable, then you’re not a tech company.”Cadre's website alternates between describing what it can do now and where it hopes to go. “We acquire and aggregate data, create algorithms that use machine learning and statistics to derive insights, and visualize findings,” one page reads.It has also posted jobs for engineers who can help the company crunch data the way it wants. The ideal candidate? Someone who’s “driven to solve hard problems in novel, elegant ways.”  (Updates to reflect post-publication comments from a person close to Cadre.)\--With assistance from Stephanie Baker and David Ingold.To contact the authors of this story: Caleb Melby in New York at cmelby@bloomberg.netGillian Tan in New York at gtan129@bloomberg.netDavid Kocieniewski in New York at dkocieniewsk@bloomberg.netTo contact the editor responsible for this story: Winnie O'Kelley at wokelley@bloomberg.net, David S JoachimFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Bloomberg

    Impeachment Hearing Draws About 13 Million TV Viewers, 33% Fewer than James Comey

    (Bloomberg) -- Almost 13.8 million TV viewers watched the first day of public testimony in the House impeachment investigation of President Donald Trump, falling short of the mammoth audience that tuned in to see James Comey’s congressional testimony in 2017.Fox Corp.’s Fox News, whose prime-time shows often champion the president, drew the biggest audience, with 2.9 million viewers. It was followed closely by Comcast Corp.’s MSNBC, with 2.7 million, based on Nielsen ratings.The total viewership figure roughly compares with the 19.5 million viewers who watched Comey, the former Federal Bureau of Investigation director, more than two years ago.It’s harder to say how the audiences compare with earlier high-profile hearings, since the TV landscape has changed so much over the years. Today, many people watch clips of events on social media or they stream them online. In contrast, 71% of Americans said they saw the Watergate hearings live on TV, according to Gallup.On a Saturday in 1998, CNN’s audience for a House of Representatives vote on the Clinton impeachment averaged 1.8 million homes, according to the New York Times. When CBS switched from the impeachment hearing that year to an NFL game, its viewership quadrupled.Wednesday’s hearing featured two experienced diplomats detailing their concerns that the president tried to leverage his office for personal political gain, including a new account of Trump stressing his desire for Ukraine to investigate a rival.While Democrats had released transcripts of their previous testimony as part of their impeachment inquiry, the lawmakers had hoped that having the witnesses speak in front of a large televised audience would help build more public support for their case.(Updates with final Nielsen numbers starting in first paragraph)To contact the reporter on this story: Gerry Smith in New York at gsmith233@bloomberg.netTo contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, Kara WetzelFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Too Many Young Men Still Aren’t Working

    Too Many Young Men Still Aren’t Working

    (Bloomberg Opinion) -- In January 2010, with the Great Recession technically over but employers not yet adding jobs, a breakthrough in American labor markets and gender relations transpired. That month, a higher percentage of women aged 20 through 24 were employed than men in that age range. This was, as best I can tell, the first time women in any of the age brackets tracked by the Bureau of Labor Statistics had ever outdone their male peers in employment-population ratio, or Epop.It was also the last. As soon as hiring started again, young men returned to the workforce more rapidly than young women, and young men’s Epop went back to being several percentage points higher than young women’s.Lately, though, the lines tracking this labor market statistic have been converging again.It’s not as if young women are breaking new employment records: their Epop is still one-and-a-half percentage points below its 2001 peak. Young men’s Epop, meanwhile, is more than nine percentage points below its 2000 peak, and five percentage points below the high it reached during the last expansion, in 2006. This is happening even as prime-age (25-54) men have been returning to the workforce after some tough times, as I wrote last week. And while a large share of people in their early 20s are still in school, young women are more likely to be enrolled in college than young men are, so that can’t be what’s causing the convergence.(3) Something strange is going on with young men and the labor market.Last year Jeanna Smialek (then at Bloomberg, now at the New York Times) made a similar observation based on employment data for men and women in the 25-34 age range. There the Epop lines are nowhere near converging — mainly because the women are much more likely to be at home taking care of kids, with a Pew Research Center analysis of Census data finding that in 2016 about 30% of mothers aged 20 to 35 were stay-at-home parents, compared with 6% of fathers — but women similarly gained a lot of ground during the recession and, after losing some of it through about mid-2015, have been gaining again since. This chart that I’ve updated from Smialek’s article also shows that while 25-to-34-year-old women are now just as likely to be employed as those in the 35-44 age cohort, 25-to-34-year-old men are now markedly less likely to be employed than those slightly older.Finally, here’s an international comparison. The Organization for Economic Cooperation and Development, the club of the world’s affluent democracies, publishes annual estimates of the share of young people who are not in employment, education or training, or Neet. The 14% U.S. Neet share for men aged 20-24 was just slightly higher than the OECD average of 13.4% in 2018, but that average was driven up by a few large economies with major Neet problems, namely France (21%), Spain (23.3%), Italy (27.5%). Here are four countries that had higher young men’s Neet shares than the U.S. in the late 1990s and are all lower or about even with it now.What’s keeping young American men out of the workforce? Well, that’s the big question. In a 2016 commencement speech at the Booth School of Business at the University of Chicago that has since become the target of some mockery in online economics circles, economics professor Erik Hurst proposed that improvements in video games and other electronic amusements might be luring young men to stay home and play rather than look for work. Young men without jobs are certainly spending a lot of time amusing themselves with video game consoles and computers: an average of 12 hours a week among those ages 21 through 30, up from 5.4 hours in the mid-2000s, Hurst and three other economists reported in a subsequent working paper based on data from the American Time Use Survey.But Gray Kimbrough, a government economist and American University adjunct professor, has found in his own analyses of ATUS data that the rise in time that non-working young men devote to video games has been accompanied by a similar decline in time spent watching television, which suggests that video games are displacing other amusements rather than work. And even Hurst and his co-authors conclude that declining labor demand has played a bigger role than video games in reducing young men’s employment.Still, there does seem to be a mix of economic and social factors at work here. There are recent economics papers, for example, arguing that less-educated young men’s chances of getting married have declined because it’s harder for them to get good jobs and, conversely, that less-educated young men have become less interested in getting jobs because their chances of marriage have declined. The growing number of young men who live with mom and dad is surely the result of forces beyond just a tough labor market. High real estate prices in some parts of the country and big student debt burdens for some young people have made it harder to strike out on one’s own, while larger houses, smaller families and (perhaps) more indulgent parents have made it easier to stay home. Immigrant families have also brought a taste for multigenerational living that had died out among native-born Americans in the 1950s and 1960s. About 37% of 25-year-old men in the U.S. lived with their parents in 2017, according to Kimbrough’s analysis of Census Bureau data, compared with 31% of 25-year-old women — and just 16% of 25-year-old men in 1970.This living-with-the-parents phenomenon may in turn be partly responsible for what one regular survey indicates is a sharp rise since 2008 in the percentage of men ages 18 to 29 who have never had sex, although evidence on that from other data sources is mixed. It may also ease the pressure on young men to find work. Whatever the reasons, there is now a small but larger-than-it-used-to-be minority of American men in their 20s who seem to be making no progress in achieving the markers of adulthood: get a job, move out of the house, get married, have kids. My Bloomberg Opinion colleague Noah Smith this week offered a compelling set of reasons for why it takes longer to get established in careers than it used to, which is delaying things like marriage and homeownership. But what I’m describing seems like a distinct and gender-specific phenomenon, if not a totally unrelated one.Meanwhile, young women’s labor market gains relative to young men haven’t exactly translated into labor market equality. Women aged 20 through 24 may now be as likely to have jobs as men their age, but they’re less likely to have full-time jobs — partly because more of them are in college, admittedly — and even those who do work full-time are paid less than men. The gender pay gap is smaller for the 20-24 age group than for any other, with full-time female workers earning 90.3% as much per week as their male peers in the third quarter of this year, but it hasn’t narrowed over the past couple of decades.(2)Young men with jobs are doing OK. It’s the ones who’ve never had one who might be a problem.(1) College enrollment rates have also fallen recently, and have fallen more among men than among women.(2) This percentage can jump around a lot from quarter to quarter, and has gone as high as 99% (in the fourth quarter of 2002), but the average since 2000 is 92.4%, and the average for the past five years is 91.7%. Female part-time workers, for whatever it's worth, made slightly more than male part-timers in the third quarter.To contact the author of this story: Justin Fox at justinfox@bloomberg.netTo contact the editor responsible for this story: Sarah Green Carmichael at sgreencarmic@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Justin Fox is a Bloomberg Opinion columnist covering business. He was the editorial director of Harvard Business Review and wrote for Time, Fortune and American Banker. He is the author of “The Myth of the Rational Market.”For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • Bloomberg

    Go Ahead, Call It a Quid Pro Quo

    (Bloomberg Opinion) -- What did the president quid and when did he quo it? That’s the question being earnestly debated at the impeachment hearings centering on Donald Trump’s July 25 telephone call with Ukrainian President Volodymyr Zelenskiy. Congressional Democrats insist that Trump made military aid contingent on an investigation of a political rival. One news story after another has referred to the alleged arrangement as a quid pro quo.But is quid pro quo the right term? Some experts think not. The other day, the New York Times published a letter from 33 writers asking journalists to stop using the phrase in accounts of the Ukraine controversy because “most people don’t understand what it means, and in any case it doesn’t refer only to a crime.” In referring to the question of whether Trump pressured Zelenskiy, they write, it’s more accurate to say “extortion” or “bribery” — because “words make a difference.” The letter concludes: “Please use precise and forceful language that reveals the struggle in which we now find ourselves. It’s a matter of survival.”Although the card-carrying Grammar Curmudgeon in me suspects that the late William Safire would have a word or two to say about this use of the verb “reveal,” I agree on the importance of “precise and forceful language.” And in describing what Trump is alleged to have demanded from Zelenskiy, no form of words is more precise and forceful than “quid pro quo.”The phrase has been adopted into English unchanged from its Latin roots. It means, literally, “something for something.” (Quo is simply the ablative singular form of quid.) According to the Oxford English Dictionary, when quid pro quo is used nowadays as a noun, its meaning is exactly what we tend to think: “The action or principle of giving one thing in return or exchange for another” especially “as part of a bargain.”In 1871, a Chicago magazine published a nonsense verse, playing on the words: “If Quid is Quo And Quo is Quid,/ You nothing owe Old Quo, old Quid!” Except the verse isn’t really nonsense. In contract law, the phrase has long carried this meaning of mutual exchange, the giving of something in order to receive something. So studiously have judges tried to ensure that both parties benefit from a contract that a Kentucky court two centuries ago proclaimed that “The ‘quid pro quo’ is the delight of the law.”  Certainly the phrase constitutes a delight of the language, a simple yet mellifluous way to describe the exchange relationship, and equally suited to bargains formal or informal, fair of unfair, legal or illegal.Most people instinctively understand quid pro quo in this sense, as a deal, an exchange of this-for-that. Just last month, ESPN described the implicit deal between the notoriously cheap Tampa Bay Rays baseball team and their players as “the quid pro quo of being a Ray: We’ll help you get better, we’ll support you for you, but trust us when we ask you to do something, because we’re good at this.” In the fall of 2018, Senator Susan Collins of Maine used the term “classic quid pro quo” to refer to threats by activists to give money to her opponent unless she voted against the confirmation of Brett Kavanaugh to the Supreme Court.The phrase is commonly used by journalists even when questions of criminal behavior arise. The FBI, reported the Wall Street Journal earlier this year, “is investigating how Puerto Rico awarded some public contracts and whether various companies engaged in quid pro quo arrangements to win government business.” I don’t imagine that readers mistook this language to refer to legitimate deals.Perhaps the best-known example from popular culture occurs in the 1991 film “The Silence of the Lambs,” when the imprisoned Hannibal Lecter promises to help FBI trainee Clarice Starling catch the serial killer known as Buffalo Bill. In return for his help, however, she must answer Lecter’s questions about her own life. “Quid pro quo,” he explains. “I tell you things, you tell me things.” A moment later, when it is Lecter’s turn to provide information, Clarice says “Quid pro quo, doctor.” No one misses the point:  She is reminding him of — what else? — their bargain.(1)Contrary to the implication in the letter to the Times, few people are confused by the phrase. The meaning of the July 25 conversation between Trump and Zelenskiy may be contested, but the charge is essentially that Trump was proposing an exchange. It’s hard to imagine anything quid-pro-quoier.That’s why, as Steven Pinker nicely puts it, “The lack of a quo for the quid has become a talking point among his defenders.” Pinker is skeptical that this claim passes the giggle test — but it’s important to note what the claim is. A quid pro quo, Trump’s defenders say, requires an explicit offer of a deal. They deny that any deal was on the table. Those who are calling for impeachment are with Pinker.Whichever side you find yourself on, this is the right debate to have.  To dispense with “quid pro quo” and substitute “bribery” or “extortion” would only sow confusion. Bribery and extortion are crimes, but they have precise and subtle definitions that may not be well understood by non-lawyers. So let’s keep things simple. Let’s first determine whether the president really proposed a bargain. Only if the answer is yes do we have to decide whether the quid he demanded for his quo broke the law.(1) If you happen to like your incidences a bit co-, you might want to follow me down one last rabbit hole.I mentioned above that the serial killer chased by Clarice Starling in “The Silence of the Lambs” is called Buffalo Bill.The Oxford English Dictionary, as one of its examples of traditional usage of “quid pro quo,” provides a play on words from “Sunny South,” an 1860 pro-Southern tract by one J. H. Ingraham:“All things being equal—that is, the quid being equal to the quo as my brother used to say.”J. H. Ingraham was the father of Prentiss Ingraham, the Confederate officer who after the Civil War garnered fame as the author of a series of still-popular books about ... Buffalo Bill.To contact the author of this story: Stephen L. Carter at scarter01@bloomberg.netTo contact the editor responsible for this story: Sarah Green Carmichael at sgreencarmic@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Stephen L. Carter is a Bloomberg Opinion columnist. He is a professor of law at Yale University and was a clerk to U.S. Supreme Court Justice Thurgood Marshall. His novels include “The Emperor of Ocean Park,” and his latest nonfiction book is “Invisible: The Forgotten Story of the Black Woman Lawyer Who Took Down America's Most Powerful Mobster.” For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • Apple Plans Mega Bundle of Music, News, TV as Early as 2020

    Apple Plans Mega Bundle of Music, News, TV as Early as 2020

    (Bloomberg) -- Apple Inc. is considering bundling its paid internet services, including News+, Apple TV+ and Apple Music, as soon as 2020, in a bid to gain more subscribers, according to people familiar with the matter.The latest sign of this strategy is a provision that Apple included in deals with publishers that lets the iPhone maker bundle the News+ subscription service with other paid digital offerings, the people said. They asked not to be identified discussing private deals.Apple News+, which debuted in March, sells access to dozens of publications for $10 a month. It’s often called the “Netflix of News.” Apple keeps about half of the monthly subscription price, while magazines and newspapers pocket the other half.If Apple sold Apple News+ as part of a bundle with Apple TV+ and Apple Music, publishers would get less money because the cost of the news service would likely be reduced, the people said.As the smartphone market stagnates, Apple is seeking growth by selling online subscriptions to news, music, video and other content. This month, it launched Apple TV+ for $4.99 a month with shows from stars including Jennifer Aniston and Jason Momoa.Bundling these offerings could attract more subscribers, as Amazon.com Inc.’s Prime service has done. Apple is already experimenting with this kind of approach. It recently began offering a free Apple TV+ subscription to students who are Apple Music subscribers. Still, the company’s plans may change, given how complex deals like these can be.Some media executives say the amount they’ve received from Apple News+ so far has been less than expected. One publisher typically gets under $20,000 a month, less revenue than it saw from Texture, a previous iteration of the service that Apple acquired last year, one person said.Apple News+ offers dozens of magazines, like the New Yorker, GQ and People, as well as major newspapers such as The Wall Street Journal and the Los Angeles Times. Bloomberg Businessweek, owned by Bloomberg LP, also participates.It remains unclear whether publishers are seeing less revenue than they expected because Apple News+ has few subscribers, or because their content isn’t being widely read. Publishers share the remaining 50% of the revenue based on how much time Apple News+ subscribers spend reading their articles. Apple has not revealed subscriber numbers for Apple News+. The company recently expanded the service to Australia and the U.K.Advertisers have been less interested in Apple News+ because Apple’s restrictive data policy makes it difficult for marketers to target specific readers, one of the people said. Some publishers also would like Apple to share data about subscribers, like email addresses, which they could use to sell other offerings.As part of the contracts, media companies have the right to pull their magazines or newspapers from Apple News+ after a year if they’re unhappy with the service, one person said.The media industry was initially wary of Apple News+ before it launched, fearing their readers might cancel existing subscriptions and get their articles at a cheaper price from Apple. For that reason, some did not make all their articles or magazines available. Others, including the New York Times and the Washington Post, didn’t sign up.Still, some news executives are pleased with how Apple News+ has gone so far.“The financial results to date are consistent with our expectations,” Norm Pearlstine, the executive editor of the Los Angeles Times, said in a statement. “We are optimistic that they will continue to grow in the months and years ahead.”To contact the reporters on this story: Gerry Smith in New York at gsmith233@bloomberg.net;Mark Gurman in San Francisco at mgurman1@bloomberg.netTo contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, Alistair Barr, Andrew PollackFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Bloomberg

    Will Ukraine Turn Back to Russia? This Billionaire Thinks So

    (Bloomberg Opinion) -- When Igor Kolomoisky says Ukraine should turn away from the West and back toward Russia, the world should listen, even if the Ukrainian billionaire doesn’t call the shots in Kyiv to the extent that many believe he does. Despite the seemingly irreparable damage Russia caused to its relationship with Ukraine by annexing its territory and sustaining a separatist war in its eastern regions, it’s conceivable that Ukraine eventually could return to its old strategy of having Russia and the West compete for its affections.Kolomoisky, whose TV channel ran Volodymyr Zelenskiy’s comedy shows before the actor and producer became Ukraine’s president this year, gave a scandalous interview to the New York Times. He said that since the West is in no hurry to accept Ukraine as a member of the European Union and the North Atlantic Treaty Organization, Ukraine should make peace with Russia and take Russian money instead of International Monetary Fund loans. As things stand, he said, the U.S. is just using Ukraine to wage “war against Russia to the last Ukrainian.” But Russia is “stronger anyway” and it’s time to mend fences.Kolomoisky was one of the engineers of Ukraine’s decisive break with Russia in 2014. He funded the volunteer battalions that fought off the early onslaught of Russian-backed separatists in eastern Ukraine, helping to contain the spread of secession before the long-underfunded regular army was strong enough to be of any use. In the process, he lost his financial business in Russia and gained the Dnipropetrovsk regional governorship in Ukraine, which former President Petro Poroshenko soon took away, seeking to dismantle what he saw as Kolomoisky’s personal army. So what the oligarch is saying now could be seen as a turnabout, except Kolomoisky doesn’t think in such terms: Whatever he says or does, he’s looking out for his business interests first.Today, these interests consist in getting compensation for the 2016 nationalization of Privatbank, Ukraine’s biggest lender, which he co-owned and which the Poroshenko government accused him of plundering. Kolomoisky is tied up in complex litigation with now-state-owned Privatbank. He and his partner have just been forced to pay 10 million pounds ($12.8 million) to cover Ukraine’s legal expenses in a London court. The billionaire is widely suspected of trying to exploit his longstanding relationship with Zelenskiy to end the conflict in his favor. The president so far has managed to remain above the fray, but he hasn’t heeded calls from U.S., European and International Monetary Fund officials to distance himself clearly from Kolomoisky. The oligarch has few friends in Washington or the European capitals, and he used the interview to make an implicit threat: If Western officials continue fighting him and supporting the Privatbank nationalization, he’ll turn Zelenskiy sharply toward Russia. Whether he can do that is a different matter.Zelenskiy was elected on the promise of restoring peace to eastern Ukraine, and he’s taken some steps toward that goal by exchanging prisoners with Russia and accepting a key Russian demand concerning the sequence of events that should lead to the return of separatist territories to Ukrainian control. But even that progress ran into the resistance of Ukrainian intellectuals who see it as capitulation — and of the very volunteers Kolomoisky once funded. These combat veterans, armed with weapons they’d brought back from the war, inserted themselves in areas where Ukraine and the separatists had agreed to pull back their troops as a prelude to “Normandy format” peace talks mediated by France and Germany. Zelenskiy was forced to travel to the area and attempt to persuade them to leave.Now, the pullback appears to be complete, the area is being cleared of mines and there are no obstacles to the talks. But Zelenskiy is aware by now that compromises with Russia are fraught with the danger of a revolt at home, possibly even an armed one. If he did what Kolomoisky says, Kyiv and much of central and western Ukraine almost certainly would rise against him. That’s not a reasonable price to pay for Kolomoisky’s early support, and today, the billionaire has no obvious leverage on the president.Voice, a liberal opposition party, recently proposed that Ukraine exit the 2015 Minsk agreements, which serve as the framework for the current peace process, and put off ending the conflict in the east and concentrate on domestic issues until better times. Zelenskiy is probably tempted to try a version of this plan, only without formally exiting the Minsk agreements, which likely would anger Ukraine’s European allies. Zelenskiy has his hands full with an ambitious reform agenda. On Wednesday, the Ukrainian parliament, in which his party has a majority, took the first step toward allowing a market in land, something all of Ukraine’s previous governments failed to do.Yet Kolomoisky's provocative statements shouldn’t be dismissed out of hand.Zelenskiy, indeed, isn’t getting much Western support today, apart from technical and military assistance programs that are, let’s face it, useful but not vitally important. The IMF is withholding its more significant support, in part because it fears Zelenskiy might not try hard enough to recoup Privatbank losses from Kolomoisky. French President Emmanuel Macron lately has been talking about a rapprochement with Russian leader Vladimir Putin, and neither France nor Germany can be expected actively to side with Ukraine in the peace talks because both are eager to be rid of the problem. In the U.S., ongoing Ukrainegate and impeachment proceedings have, in effect, made Ukraine the actual country both toxic and irrelevant.Kolomoisky’s point is that, five years after breaking with Russia, Ukraine isn’t a priority project for the West — but it’s still a priority for Putin. Zelenskiy can’t afford, and doesn’t want, to hand his country to the Russian president. But he can quietly open it to more Russian trade and investment, and he can gradually return to the both-sides-against-the-middle policy all Ukrainians leaders except Poroshenko tried to pursue after Ukraine became independent. In a way, that’s also the game Alexander Lukashenko, the president of neighboring Belarus, tries to play, turning to the West every time he has a disagreement with Putin and to Putin when he senses he can get something out of him.This cynical policy is a long way from the “civilizational choice” Ukrainian politicians claimed to have made under Poroshenko. But Western politicians must realize it’s a natural fall back for Ukrainians when they feel spurned. If Zelenskiy does start flirting with Putin, it won’t necessarily be because of Kolomoisky’s evil influence. A Western failure to embrace his reformist zeal and support his attempts to get more favorable peace terms with Russia could be the real reason.To contact the author of this story: Leonid Bershidsky at lbershidsky@bloomberg.netTo contact the editor responsible for this story: Tobin Harshaw at tharshaw@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Leonid Bershidsky is Bloomberg Opinion's Europe columnist. He was the founding editor of the Russian business daily Vedomosti and founded the opinion website Slon.ru.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • Financial Times

    Roula Khalaf to succeed Lionel Barber as Financial Times editor

    Roula Khalaf has been appointed the next editor of the Financial Times, succeeding Lionel Barber, who is stepping down after a 14-year tenure that put the news organisation on a profitable footing even as its traditional print business was upended. In an email to staff on Tuesday, Mr Barber announced his 34-year career at the paper would end in January when he leaves “the best job in journalism” and is replaced by his deputy, Ms Khalaf. Speaking to a packed newsroom, Mr Barber said he was proud of “restoring the gold standard in FT journalism” and building a sustainable business during “tumultuous times”.

  • The Other Quid Pro Quo Scandal in Ukraine

    The Other Quid Pro Quo Scandal in Ukraine

    (Bloomberg Opinion) -- Since the Ukraine scandal broke open in September, a narrative has set in: President Donald Trump was using Ukraine’s president to influence American politics. Last week, a new narrative came into focus: A Ukrainian prosecutor was trying to use Trump to influence Ukrainian politics.In the first story, Trump is the instigator of a corrupt bargain, attempting to enlist Ukraine’s new president in a plot to influence the 2020 election. A cascade of witnesses from Trump’s own government has supported this version of events, saying Trump wanted to withhold military aid to Ukraine until it agreed to investigate former Vice President Joe Biden and his son.The other story has received less attention but is just as scandalous. A corrupt Ukrainian prosecutor was trying to enlist a close adviser to Trump to fire an ambassador who threatened his position and standing. This story revolves around Trump’s decision to prematurely end the term of U.S. Ambassador Marie Yovanovitch, who was sent to Kiev in 2016 and left her post in May. Testimony released last week suggests that Yovanovitch was smeared and fired because Ukrainian general prosecutor Yuriy Lutsenko, who left his own post in August, had a vendetta against her.In his testimony before the House Intelligence Committee, George Kent, the State Department’s Ukraine expert, said Lutsenko enlisted former New York Mayor Rudy Giuliani in his campaign against Yovanovitch. According to Kent, Lutsenko provided Giuliani with information on Yovanovitch “in hopes that he would spread it and lead to her removal.”Giuliani told the New York Times that when he met with Lutsenko last spring in New York, “He didn’t say to me, ‘I came here to get Yovanovitch fired.’” But he nevertheless surmised that’s what Lutsenko wanted.The question is why. According to Giuliani, Lutsenko had been blocked from getting his information — such as his claim that Yovanovitch had given him a “do not prosecute” list of individuals — to proper U.S. officials. Yovanovitch and other witnesses have denied this claim, and she has also said she encouraged Lutsenko to seek meetings with the FBI and Justice Department through the bureau’s legal attaché in Kiev.The ambassador has an alternative theory for why Lutsenko wanted her fired. “I think that he felt that I and the embassy were effective at helping Ukrainians who wanted to reform,” she testified. Yovanovitch said Lutsenko initially promised to clean up the powerful office of the general prosecutor, saying he would prosecute the people who fired on protesters who forced former Ukrainian President Viktor Yanukovych out of office in 2014. Lutsenko also promised to try and recover more than $40 billion stolen by Yanukovych and his cronies.Yet over time, Yovanovitch said, Lutsenko proved unwilling or unable to pursue those goals even as she pressed him to do so. “We continued to encourage him,” she said. “And I don’t think he really appreciated it.”All of this gets more intriguing in light of last month’s indictment of Lev Parnas and Igor Fruman, two Ukrainian Americans, for illegal campaign contributions to Republican candidates through front companies. Parnas enlisted Giuliani in a consulting firm with the unfortunate name of “Fraud Guarantee.” This week it was reported that Giuliani was paid $500,000 for his role in the venture by a Republican donor based in Long Island.The indictment of Parnas and Fruman says they sought to use their political influence to further the interests of a foreign official, reported to be Lutsenko. One of the beneficiaries of their political donations, former Representative Pete Sessions of Texas, was an early advocate for firing Yovanovitch.So there appear to be at least two quid pro quos in the Ukraine scandal. The first is Trump’s effort to get Ukraine to investigate the Bidens. The second is Lutsenko’s effort to get Trump to fire Yovanovitch. Giuliani is in the middle of both. Says Alina Polyakova, a Ukraine expert at the Brookings Institution: “He was using his influence with the president to try to get his clients what they wanted, while at the same time getting the president what he wanted.”Some of this is attributable to weaknesses in American law and politics. The law Congress created to force Americans to register as foreign agents when they represent a foreign country or business went largely unenforced for 50 years before Special Counsel Robert Mueller’s investigation. And Trump distrusts the experts in his own government, instead relying on the counsel of foreign policy amateurs like Giuliani.Whatever the outcome of the Ukraine scandal, it has already laid bare a bitter irony: Official U.S. efforts to make Ukrainian politics less corrupt were stymied by a campaign to make American politics more like Ukraine’s.To contact the author of this story: Eli Lake at elake1@bloomberg.netTo contact the editor responsible for this story: Michael Newman at mnewman43@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Eli Lake is a Bloomberg Opinion columnist covering national security and foreign policy. He was the senior national security correspondent for the Daily Beast and covered national security and intelligence for the Washington Times, the New York Sun and UPI.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • Brexit Bulletin: Farage Under Pressure

    Brexit Bulletin: Farage Under Pressure

    Days to Brexit deadline: 81(Bloomberg) -- Sign up here to get the Brexit Bulletin in your inbox every weekday.Today in Brexit: No one is backing down in the tussle over whether to create a pre-election Leave alliance.Nigel Farage is coming under pressure to stand aside and let U.K. Prime Minister Boris Johnson deliver Brexit after the general election on Dec. 12.Arron Banks, one of Farage's key backers in the 2016 referendum, used a column in the Mail on Sunday to urge his former ally to step aside. Business Minister Kwasi Kwarteng echoed that call in an interview with Sky News’s Sophy Ridge. Former Theresa May aide Nick Timothy describes Farage today as a tragic figure, “the Frodo Baggins of Brexit.” But Farage, the original poster boy for Brexit, looks unlikely to give way gracefully. Leavers fear Farage could now split the pro-Brexit vote, help Jeremy Corbyn into Downing Street, and scupper Britain’s departure from the European Union. As Banks put it: If Farage “insists on pursuing his impossible dream of a perfect Brexit, he will not get it.” Weekend polling put Farage’s Brexit Party on 6%-10%, in fourth place. Farage launches his Brexit Party’s election campaign today in Hartlepool, in the north of England. Follow our rolling election coverage for all the latest.For all the pressure, Farage shows little inclination to bow out. On Sunday, he gave Johnson another four days to reach a deal or face Brexit Party candidates running against Conservatives across the whole U.K. His demand: Johnson should abandon his deal and pursue what Farage calls a “clean Brexit.”Why would the prime minister agree? The Tories are certainly nervous about the Brexit Party. Johnson may be enjoying a double digit lead in the polls — but it could evaporate quickly. The Conservatives are also at greater risk of losing supporters to the Brexit party than Labour, polling guru John Curtice pointed out in the Sunday Telegraph. On Sunday, Johnson ruled out extending the transition period beyond 2020, something many have taken as an olive branch to Farage and his supporters.But it would be an almost unthinkable step for Johnson to abandon outright the compromise he spent months hammering out — and even more of one for Farage to walk away. Single-issue campaigners like him need a cause if they are to remain relevant: If Brexit is delivered, and the public moves on, how does he go on being just that?Today’s Must-ReadsBrexit is even hurting Tinder, according to Bloomberg’s Joe Easton and Ivan Edwards. Here’s what companies have been saying about Brexit.  Johnson’s Tories hit out at Labour, saying opposition spending plans would cost £1.2 trillion ($1.5 trillion) over five years. Labour’s finance spokesman, John McDonnell, branded the claim a “ludicrous piece of Tory fake news.” Does Boris Johnson understand his own deal? Recent comments by the prime minister have only sown confusion, according to Bloomberg’s Rob Hutton.Brexit in BriefNo Contraction | The U.K. almost certainly avoided a recession ahead of the now-postponed Oct. 31 deadline to leave the European Union, according to a Bloomberg survey of economists. Official figures are due at 9:30 a.m. in London.More Chaos | The bid for a new Brexit referendum has been thrown into (even more) disarray, with the acting chief of the People’s Vote campaign stepping down amid allegations of harassment, according to the Guardian.Bercow’s Back | The former speaker of the House of Commons tells the Guardian he may be pompous, but says Brexiters and Theresa May are to blame for Britain’s delayed departure from the EU.Outlook Cut | The U.K.’s sovereign credit rating was put on negative outlook by Moody’s Investors Service, which said the country’s ability to set policy has weakened in the Brexit era along with its commitment to fiscal discipline.Time, Please | J D Wetherspoon Plc founder Tim Martin is coming under pressure to keep his pro-Brexit views to himself, according to the Guardian. Shareholder groups are increasingly unhappy with the publican’s habit of including his opinions on the controversial subject in his firm’s trading updates. The next is due on Wednesday.Nationalist Project | “Brexit seems to have knocked the British off their trolleys, depriving at least half of them any sense of proportion. How did they get to be like this?” Ferdinand Mount reviews Fintan O’Toole’s Postwar England and the Rise of Nationalism in the New York Times.Want to keep up with Brexit?You can follow us @Brexit on Twitter, and listen to Bloomberg Westminster every weekday. It’s live at midday on Bloomberg Radio and is available as a podcast too. Share the Brexit Bulletin: Colleagues, friends and family can sign up here. For full EU coverage, try the Brussels Edition.For even more: Subscribe to Bloomberg All Access for our unmatched global news coverage and two in-depth daily newsletters, The Bloomberg Open and The Bloomberg Close.To contact the author of this story: Edward Evans in London at eevans3@bloomberg.netTo contact the editor responsible for this story: Adam Blenford at ablenford@bloomberg.net, Timothy Coulter "Tim"For more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Bloomberg

    Do 125,000 Farmers Deserve $14.3 Billion?

    (Bloomberg Opinion) -- The European Union’s Common Agricultural Policy — also known as CAP — is a 58-billion-euro ($64 billion) system of farm aid that accounts for the bloc’s biggest single budget expense. And it has long been a punching bag for euroskeptics.The U.K. press for years excoriated the “wine lakes” and “butter mountains” supported by EU money. Even after the production quotas went away, critics accused the EU of trade protectionism meant to squeeze rivals. The EU’s defense is that the system is more market-oriented and eco-friendly than it used to be.Today it’s no longer just the Brits grumbling. In fact, the U.K.’s looming departure from the EU may leave a 98 billion-euro hole in the next EU budget and that shortfall has exposed deep discontent on the continent. Germany is loath to fill the gap and wants individual member states to contribute more for farm subsidies, something France —  still the biggest overall recipient of CAP funds —  is resisting. Unlike some of its thrifty neighbors who want to keep a lid on costs, France wants a more ambitious system. French President Emmanuel Macron is fighting the view popularized by author Michel Houellebecq and others that Brussels is too weak and beholden to free trade to defend France’s local terroirs from competition.It would be easier to build popular support for a bold new CAP if its hypocrisies weren’t so apparent to voters. The system only costs around 0.4% of the EU’s gross domestic product, but it's distributed in wildly unequal ways. Europe’s capitals are frequently awash in tales of well-heeled landowners receiving millions in EU aid — including the wealthy, Brexit-loving entrepreneur James Dyson — which should ideally go to those who actually need a financial boost.  One well-known statistic is that about 80% of EU agricultural aid goes to the top 20% of farmers; in absolute terms, according to 2017 data, some 125,000 beneficiaries get around 12.9 billion euros ($14.3 billion) in aid. That’s about 103,000 euros ($113,500) per farmer.Given the EU is advertising itself as a “geopolitical” defender of the Western liberal order and protector of citizens’ way of life, another awkward problem with the CAP is the corruption and cronyism it fosters within. A New York Times investigation this week revealed how the CAP has propped up the likes of Hungary’s Viktor Orban via farmland sold to his allies, and sent tens of millions of dollars to Czech Prime Minister Andrej Babis’s company Agrofert. With EU aid now doled out directly by the hectare, the wine lake and the butter mountain have been replaced by land-grabs based on patronage and directed at insiders , according to one 2015 study.More accountability and transparency would help, as would the centralized ability to link EU aid to recipients who have a healthy respect for the rule of law and democracy. But member states would have to agree to give up the power they enjoy when it comes to allocating aid. They have a bothersome habit of watering down sensible proposals such as putting a cap on the size of farm handouts or conditioning them on certain goals. Brussels does audit the money trail to fight fraud and error, which it estimates represents about 2.4% of farm aid, but its resources aren’t limitless.One idea raised by Alan Matthews, professor emeritus of European agricultural policy at Trinity College, is to tie aid to something that’s popular and a top priority for the new European Commission — the environment. Rather than just call for a hard cap of, say, 50,000 euros per beneficiary (which countries would fight), he suggests a soft cap above which aid would be tied to climate-friendly, sustainable farming initiatives. Big farms, however politically-connected, would have to show they can offer a public good in exchange for public funds.This is superficially the same message being sent by the U.K. government to its own farmers as a way to replace EU subsidies after Brexit: Aid should be earned by eco-friendly initiatives, not paid by the hectare. It’s easier said than done, and the state of U.K. agriculture without membership in the EU’s single market is hard to predict. But considering it will take time, money and political trade-offs to improve the EU’s flawed system, a small step like this — particularly if it proves to the naysayers that Europe can be reformed — is surely worth it.To contact the author of this story: Lionel Laurent at llaurent2@bloomberg.netTo contact the editor responsible for this story: Timothy L. O'Brien at tobrien46@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Lionel Laurent is a Bloomberg Opinion columnist covering Brussels. He previously worked at Reuters and Forbes.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • Bloomberg

    Warren Ignores Biden on Road, Implies Sexism In Fundraising Note

    (Bloomberg) -- At campaign events this week in the Carolinas, Elizabeth Warren refused to engage rivals Joe Biden and Pete Buttigieg as they depict her as a divisive and condescending elitist. But she and her supporters see a dollop of sexism in the criticism.After Biden, the former vice president, accused Warren of pushing an “angry unyielding viewpoint,” Warren sent a fundraising email to supporters Friday with the subject line: “I am angry and I own it.”“Over and over, we are told that women are not allowed to be angry. It makes us unattractive to powerful men who want us to be quiet,” Warren wrote, without mentioning Biden by name.The accusation reflects how some Warren supporters feel amid a onslaught from Biden and Buttigieg — sparked by a debate over her Medicare for All financing plan — that appears to have blunted her rise in the polls. The attacks come at a moment when many voters are making up their minds ahead of the first contest in Iowa, and are a test of Warren’s resilience after she avoided combat with Democratic rivals for most of the year.“I think that’s just very sexist,” Peggy Mormann, who’s based in Raleigh, said of the critique of Warren as angry and condescending. “They realize she’s a huge threat to them.”Maytee Sanz, a construction worker in Charlotte, said: “That happens when women lead. Men are afraid of strong women.”The criticisms may be working. A study by FiveThirtyEight found Warren has dipped in the polls by an average of 1.7 percentage points since the Oct. 15 debate, while Biden and Buttigieg have risen slightly. Iowa polls show her hanging on to a slim lead, with Buttigieg close behind.Biden said his issue with Warren is simply about the cost of her Medicare for All plan. “The strong women in my life are angry -- they get angry about things,” he told CNN’s Dana Bash when asked about Warren’s charge. He said criticizing her in sexist terms was “not anything I did or was intending to do.”The jabs present a difficult choice for Warren’s campaign: Let the claims go unanswered and suffer political damage, or wade into an extended back-and-forth that advisers worry will drown out her message and drive up her negative ratings.Deadlocked PollsThe dilemma comes as a Siena College/New York Times poll raises fresh questions about her ability to win a general election, showing her deadlocked or trailing President Donald Trump in key states like Florida and Pennsylvania, where Biden narrowly leads the president.Asked in Raleigh on Thursday about Biden’s attacks, Warren brushed it off. “I am here to talk about why I’m in this race,” she said, adding that she has campaigned in 28 states, held hundreds of town halls and taken over 75,000 selfies or photos with supporters.To some strategists, the attacks are just part of the campaign.“Biden wants to remain the front-runner and Buttigieg admitted he wants this to be a two-person race,” said Mary Anne Marsh, a Democratic strategist who is unaffiliated with a 2020 candidate. “She’s being very selective in the way she engages. But in the debate on Nov. 20, I expect her to respond in some way.”The clash grew heated after Biden accused Warren of fabricating the math behind her health care plan. Warren escalated the conflict by suggesting Biden was “running in the wrong presidential primary.” The remark struck a nerve with the former vice president, who has brought it up at fundraising events.From Biden, new arrows are launched almost daily — by the candidate himself, by surrogates on TV, and by staff via social media and campaign statements. The Warren campaign has refrained from sniping on Twitter or sending allies to go after Biden on TV.Buttigieg, who laced into Warren at the last debate, said recently that she would further polarize the country. In a appearance on ABC’s “This Week,” he accused her of adopting a “my way or the highway” attitude on health care and lacking “humility” with her calls for putting all Americans into Medicare, whether or not they like their private plan.Biden’s stumbles have caused concern among Democrats about their ability to beat Trump. Former New York City Mayor Michael Bloomberg is reconsidering a campaign for president after closing the door to the idea earlier in the year. He is the founder and majority owner of Bloomberg LP, the parent company of Bloomberg News.Warren’s campaign swing in North Carolina and South Carolina was an opportunity for her to make some inroads among a constituency where she’s weak and Biden is strong: non-white voters.At a Latino forum in Raleigh hosted by the group Mijente, she said she’d be “open to suspending deportations” to push Congress to pass an immigration overhaul — a plank that wasn’t in her immigration policy plan.At a roundtable with educators at Scotts Branch High School in Summerton, South Carolina, she pressed her case for a national health insurance plan, saying that “the idea behind Medicare for All is just to say health care is a basic human right.”“If you switch to Medicare for All, you don’t go through the state government any more,” she said, implying that Republican governors or legislators wouldn’t be able to hinder its implementation like they have with Obamacare. “That’s an important distinction when you’re in a place like South Carolina.”To contact the reporter on this story: Sahil Kapur in Washington at skapur39@bloomberg.netTo contact the editors responsible for this story: Wendy Benjaminson at wbenjaminson@bloomberg.net, Steve GeimannFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Bloomberg

    There’s No Such Thing as Millennials or Boomers

    (Bloomberg Opinion) -- Most of the stereotypes tied to so-called generations are ugly and insulting — whether it’s the greed and materialism associated with “boomers,” the narcissism and entitlement associated with “millennials,” or the aimlessness associated with “Gen X.”Such unpleasantness is not only mean-spirited but also scientifically wrongheaded. The closer researchers look, the more arbitrary they find the boundaries between so-called generations. There’s no evidence that any sorts of personality traits or character flaws go along with so-called boomers, Gen X-ers, millennials or members of Gen Z.You’d think from the seriousness with which people take these things that, rather than continuously producing babies, humans collectively spawn just once every 20 years. Generational labels cropped up just a few days ago in a medical report claiming that millennials are in worse health than were so-called Gen X people at the same age.Around the same time, New York Times columnist Maureen Dowd  generated chatter by writing about her own self-perceived boomer status, using the recent exit of Representative Katie Hill to preach to so-called millennials about the hazards of letting people take nude photos of you. It’s good advice, but it didn’t have to be about generations at all. It could instead be about experience, and hard-won lessons about the ways love sometimes goes rotten.But it’s so much more exciting to invoke generational warfare. People love generation labels in the way they love astrological sign categories — maybe Ms. Hill would still be in office if she’d known not to trust a Scorpio. Some people get deep meaning out of astrology despite a total lack of evidence. Both kinds of labels are social constructs — they affect us only because so many people believe in them.“When you dig into research into differences in discrete generations, there’s no evidence they exist,” says Cort Rudolph, a psychologist at Saint Louis University who has studied age and work-related behavior. “All this generation stuff is total nonsense.”There are two real things that are going on, however. One is that as people age, they go through different stages in life — not quite in lock step, since people reach various maturity levels and adulthood milestones at different times (or not at all). But there’s a progression.And there are events (wars, recessions) and new technologies which may affect those in college or seeking their first jobs differently from those who are older and more established.But those things don’t create generational boundaries. Different studies use different boundaries between the major generations, says Rudolph, making the whole notion of generations into a moving target and therefore not conducive to scientific probing. People roughly classify “boomers” as those between their late 50s and early 70s, Gen X as those in their late 30s to early 50s, and millennials as those in their 20s to late 30s, but this is always shifting, leaving many of us unsure what generation we’re supposed to be in.A few years ago, the U.S. Army funded research into generations to learn how to convince young people to stay in the military. George Washington University psychologist David Costanza, who was involved in that effort, says there was a theory floating around that historical events — such as wars and economic shifts — shaped whole cohorts of people, giving them distinct traits.It’s not that wars, depressions and disease outbreaks such as AIDS don’t shape people — they do. But not, it would seem, in any uniform or predictable way across artificially drawn generational categories. There’s a stereotype that so-called millennials are narcissistic job-hoppers because they have helicopter parents, he says, and that something about the Vietnam War made baby Boomers materialistic.His research suggests that’s all wrong. Millennials are no more narcissistic than anyone else, he says, and not unusually fickle about jobs. A bad economy may force young people to take undesirable first jobs — from which many will hop to something more rewarding when the economy improves. The big misconception, he says, is that merely being in a particular “generation” will endow you with certain traits.Last month, psychologists at UC Santa Barbara published a paper in Science Advances called “Kids These Days: Why Youth of Today Seem Lacking.” They found there’s nothing wrong with kids these days, even though many older people wrongly think younger people have less respect for elders and less love for reading than they themselves had when young.The authors looked into ways to cure these bad assumptions. What they found was that, in the case of reading, if they wrongly told good readers they scored poorly in a test of literary achievement, then suddenly those people got over themselves and they cut younger people more slack.Perhaps younger people, too, might not be so quick to judge so-called boomers if they were not so confident in their own technological proficiency and small carbon footprints. The good news is that with the rise of Gen Z, those who make up these trendy labels will very soon run out of letters. If we’re lucky, that will help put an end to them.To contact the author of this story: Faye Flam at fflam1@bloomberg.netTo contact the editor responsible for this story: Sarah Green Carmichael at sgreencarmic@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Faye Flam is a Bloomberg Opinion columnist. She has written for the Economist, the New York Times, the Washington Post, Psychology Today, Science and other publications. She has a degree in geophysics from the California Institute of Technology.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • Instagram Will Remove ‘Likes’ From Posts for Some U.S. Users

    Instagram Will Remove ‘Likes’ From Posts for Some U.S. Users

    (Bloomberg) -- Facebook Inc.’s Instagram plans to remove the number of “likes” visible on posts for some users in the U.S. to decrease competitive pressure among people on the photo-sharing service.Instagram has been hiding like counts in some markets since April, beginning in Canada, and later expanding to Japan and Brazil. The U.S. is one of Instagram’s largest markets with more than 106 million users, according to data analyst EMarketer.“What we’re hoping to do is depressurize Instagram a little bit, and make it a bit less of a competition,” Instagram boss Adam Mosseri told Bloomberg after announcing the new test at a conference in San Francisco sponsored by Wired magazine. “The idea is to try and reduce anxiety and social comparisons, specifically with an eye towards young people.”Users will still be able to see the likes they receive on their posts if they want, but those metrics won’t be visible to others on Instagram, the company said. Mosseri said the test will begin next week, and will impact just a portion of Instagram’s U.S. user base.Instagram’s follower counts and likes have made it one of the top places online to compare one’s popularity with others, especially among teens and young adults. The company has tried for years to combat the competitive trend by promoting good role models via posts on its @instagram account, hoping to reflect the parts of the app that are about creativity and art as opposed to self-promotion. Still, striving for the metrics was irresistible for its users, contributing to mental health issues and other ills, like users paying for fake likes and followers from bots.Even some of the app’s most prolific celebrities have said a service without likes may be healthier for its users.“It would be really beneficial,” said Kim Kardashian, speaking at the New York Times DealBook conference on Wednesday. Kardashian, who has 151 million Instagram followers and regularly receives more than 1 million likes on her posts, said the Instagram team has been discussing the changes with select users to get feedback, “and that makes me happy.”Instagram, Facebook and Twitter have been at the center of debate around issues like smartphone addiction and online health in recent years. As a result, product “health” has become a priority at the social-media companies, which are trying to balance the need to drive user growth and engagement with the outside perception that they are contributing to problems such as online bullying.Instagram, for example, has also announced a feature where users can limit the amount of time they spend on the app in a given day. Apple Inc. built a similar “time spent” feature into its iPhone software, and Google offers tools like this for Android phones. Twitter has a beta version of its main product that hides engagement metrics, including likes and retweets, from user replies and interactions.(Updates with quote from Mosseri.)\--With assistance from Sarah Frier and Candy Cheng.To contact the reporter on this story: Kurt Wagner in San Francisco at kwagner71@bloomberg.netTo contact the editors responsible for this story: Jillian Ward at jward56@bloomberg.net, Andrew Pollack, Alistair BarrFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Bloomberg

    Buttigieg Proposes Hiking Capital Gains Tax: Campaign Update

    (Bloomberg) -- Pete Buttigieg’s presidential campaign is proposing increases in the capital gains tax to pay for $2.1 trillion of domestic spending he outlined earlier Friday.Buttigieg’s plan would target the top 1% of taxpayers, forcing them to use mark-to-market accounting that taxes assets as they appreciate instead of when they’re sold or when the owner dies. And he would raise capital gains rates for the top 1% of income earners by taxing them at the higher rate for ordinary income.Those changes would raise the $2.1 trillion over 10 years. That’s the amount of new spending the South Bend, Indiana, mayor proposed earlier Friday on education, housing, job training and tax cuts for working-class families, said spokeswoman Tess Whittlesey.That spending includes:Battleground Democrats Want Moderate Nominee (12:35 p.m.)A majority of Democrats in six battleground states want their nominee to be a moderate who works with Republicans, but they are evenly divided on their party’s agenda, according to a poll by the New York Times and Siena College.The survey of voters in the key states of Michigan, Pennsylvania and Wisconsin as well as the potential swing states of Arizona, Florida and North Carolina may give a hint of the enduring popularity of former Vice President Joe Biden. But it also showed why he’s facing competition from Senators Elizabeth Warren and Bernie Sanders.Biden was the top pick of respondents in each of the states except Wisconsin, where he and Warren were essentially tied. Among those surveyed, 62% said they preferred a candidate who would “promise to find common ground with Republicans” and be more moderate than most Democrats, two themes of Biden’s campaign.But while 49% said they would prefer a candidate who would “promise to bring politics in Washington back to normal,” 45% wanted one who would “promise to bring fundamental, systematic change to American society” -- a description that is closer to the kinds of campaigns Warren and Sanders are running.The poll of 1,568 Democratic primary voters in six states was conducted Oct. 13-26. It has a margin of error of 2.8 percentage points, though that may be higher in specific states. -- Ryan Teague BeckwithButtigieg’s Economic Plan Includes Free College (12:05 p.m.)Pete Buttigieg unveiled an economic plan Friday that would pay full public college tuition for families making less than $100,000 and reduced tuition for families earning up to $150,000.Buttigieg’s $500 billion higher education plan is less ambitious than those of some of his Democratic rivals. Elizabeth Warren, for example, would also cancel student debt up to $50,000 for former students. Buttigieg has proposed national service to help students pay off student loans.All told, Buttigieg’s economic programs would cost at least $2 trillion. He also wants to expand Earned Income Tax Credits and housing subsidies, raise the minimum wage to $15 an hour, and give everyone paid sick leave and free child care.The plan did not explain how Buttigieg would pay for the new spending. -- Gregory KorteCOMING UPJoe Biden will take questions from Iowa voters at a town hall hosted by CNN on Monday. Tom Steyer will take part in a similar event on Sunday.The major Democratic candidates -- including Biden, Warren, Bernie Sanders and Buttigieg -- will appear Nov. 17 at the Nevada Democratic Party’s First in the West dinner, a major event that in 2015 drew thousands to hear from presidential hopefuls.Ten candidates have qualified for the fifth Democratic debate, on Nov. 20 in Atlanta: Biden, Warren, Sanders, Buttigieg, Kamala Harris, Amy Klobuchar, Andrew Yang, Tulsi Gabbard, Cory Booker and Steyer.\--With assistance from Ryan Teague Beckwith.To contact the reporter on this story: Gregory Korte in Washington at gkorte@bloomberg.netTo contact the editors responsible for this story: Wendy Benjaminson at wbenjaminson@bloomberg.net, Max Berley, Bill FariesFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Trump Courts 2020 Black Vote Betting Job Gains Draw Support

    Trump Courts 2020 Black Vote Betting Job Gains Draw Support

    (Bloomberg) -- Donald Trump has alienated large swathes of minority communities during his presidency, but he thinks he has an argument to win some of them over in the 2020 election: the economy.Trump announced the formation of a new group -- “Black Voices for Trump” -- on Friday in Atlanta to recruit and engage African-American voters after launching a Hispanic outreach campaign earlier this year. Both efforts will rely heavily on the president’s economic record -- primarily the decline in unemployment among minorities during his tenure.“We’re going to campaign for every last African American vote in 2020,” Trump said. “We’re going to make 2020 a year of change in black communities all across the country.”But it’s not clear whether job gains will be enough to overcome damage from his own divisive rhetoric on race, such as saying there were “very fine people” on both sides of a white nationalist rally in Charlottesville, Virginia, that erupted in violence and left one person dead, and recently calling himself the victim of a “lynching” in the House impeachment inquiry.Republicans have long trailed Democrats among minority groups, but Trump has taken that disparity to new levels. A September poll by the Associated Press and NORC at the University of Chicago showed that 92% of African Americans disapprove of Trump’s handling of race relations.The survey results reflect multiple controversies that left critics accusing him of enabling a resurgence of white supremacists and nationalists.Secretary of Housing and Urban Development Ben Carson, the only black member of Trump’s cabinet, introduced the president in Atlanta Friday, thanking the crowd for having the “courage to be here.”Carson said African Americans who support Trump are told “you are somehow an Uncle Tom, a horrible person, a demon,” he said. “What a bunch of crap.”Deep ‘Hostility’Polling data suggest that many African-American voters view Trump’s comments on race as showing “hostility” that’s “so deep and profound that perhaps it is preventing him from finding points of commonality that he might be able to find if his racial rhetoric was different,” said Keisha Lindsay, a political science professor at the University of Wisconsin in Madison.The issue surfaced again at his own rally in Louisiana on Tuesday.Eddie Rispone, Louisiana’s GOP gubernatorial nominee stood alongside Trump and said: “We have a president here that has had the lowest unemployment for minorities in the history of the United States and they’ll call him a racist?”The unemployment rate for blacks dipped to a record low 5.4% in October from nearly triple that level a decade ago. Among whites, the rate is lower at 3.2%. The gap between the two has remained, though has tightened this year as more black workers are brought in from the sidelines.Still, Rispone’s comments illustrate how steep a climb Trump faces in winning over minority voters. On top of actively courting those votes, he must first combat perceptions and claims from critics that he is racist.Impeachment InquiryThe new push with minorities comes as Trump tries to face down the House impeachment inquiry, which has delivered a series of damaging blows to his popularity and crushed the prospect of pushing any major new initiatives through Congress before the election.But for Trump, it’s less about winning than narrowing his wide margin of loss among black and Hispanic voters, who accounted for 21% of the electorate in 2016. He would also benefit by simply quelling enthusiasm in those groups to get to the polls and vote for Democrats.His re-election path runs through swing states and potentially vulnerable strongholds with large non-white populations. Georgia, Michigan, and North Carolina have significant black communities; Arizona, New Mexico and Texas have major Hispanic communities; and Trump’s new home state of Florida has both.Trump’s primary argument thus far has been economic. He consistently points to record-low unemployment among blacks and Hispanics, and his campaign is looking to the new group to spread that message to minority communities across the country. He argues that Democrats -- who have won the lion’s share of black votes since the 1964 Civil Rights Act -- have failed their communities. Asking for black voters’ support in 2016, Trump said: “What the hell do you have to lose?”Trump’s RhetoricBut Trump’s own rhetoric has repelled the groups he’s now trying to attract.In addition to his divisive comments about the 2017 Charlottesville violence, Trump has described places such as Haiti and African nations as “sh--hole” countries. He labeled Baltimore -- a black-majority city -- a “disgusting, rat and rodent infested mess.”Trump has regularly attacked the legacy of Barack Obama, who still enjoys wide support among black voters. More recently, Trump said four Democratic congresswomen who are minorities should “go back” to where they came from. This summer, he declined to recant his claim that the Central Park 5 -- young black men wrongly convicted for a crime -- should have faced the death penalty.Last month, Trump said the House’s impeachment inquiry against him amounted to a “lynching,” invoking a violent period of racism in America’s history. His campaign quickly responded with past instances of Democrats, including Joe Biden, employing similar rhetoric as Bill Clinton faced impeachment.But Trump, who rejects claims that he’s racist, has made gestures on race that have ranged from meaningful policy to what critics have considered superficial, including inviting Kanye West to the White House and sending a hostage negotiator to help rapper A$AP Rocky, who had been arrested in Sweden after getting into a street brawl.Reducing Prison SentencesTrump points to other actions his administration has taken, such as the First Step Act, which reduces prison sentences. He’s announced he wants to expand federal funding for faith-based historically black colleges. And his tax overhaul included an opportunity zones program targeting inner-city communities.Ja’Ron Smith, a deputy assistant to the president and one of the administration’s highest-ranking black officials, said: “When President Trump talks about forgotten communities, he’s talking about those low-income communities that still look the same since almost the riots of the late ‘60s and have been decimated by trade policies that have chased middle class opportunities away from those communities.”He said Trump’s approach is that every community should get “a chance at the American dream.”But Corey Fields, a sociology professor at Georgetown University and author of “Black Elephants in the Room: The Unexpected Politics of African-American Republicans,” said the Trump campaign “is not talking to black people in ways that are resonating.”“The likelihood that it’s going to move black voters at all is not very likely,” Fields said.Mixed SignalsThere are mixed signs that 2020 will be closer. A New York Times poll published this week showed that each of the three democratic front-runners -- Joe Biden, Elizabeth Warren and Bernie Sanders -- have smaller leads over Trump among blacks and Hispanics than Hillary Clinton carried in 2016.In a statement, the Republican party said it continues to engage black voters. “Our permanent, data-driven ground game allows us to expand upon our presence in black communities from previous election cycles and connect with voters in their communities about issues they care about,” they said.Georgetown’s Fields said the messaging could also be aimed at white voters who are uncomfortable with Trump’s suggestion that criticisms of his race relations are invalid because he’s praised by Diamond and Silk, the African American Trump supporters and social media stars. Last month, after Trump’s “lynching” comments, the duo backed the president.“They want us to follow the law, but they want to do everything they can to railroad a sitting president and I’m sorry, it’s the truth, it’s a political lynching. Our president is being lynched and we are not going to stand for it,” Lynnette “Diamond” Hardaway said.(Updates with Carson comment in seventh paragraph.)To contact the reporters on this story: Mario Parker in Washington at mparker22@bloomberg.net;Josh Wingrove in Washington at jwingrove4@bloomberg.net;Justin Sink in Washington at jsink1@bloomberg.netTo contact the editors responsible for this story: Alex Wayne at awayne3@bloomberg.net, Joshua Gallu, Justin BlumFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Democrats Worried Over Wealth Tax Design Other Plans to Tax the Rich

    Democrats Worried Over Wealth Tax Design Other Plans to Tax the Rich

    (Bloomberg) -- Moderate Democrats in Congress are crafting viable alternatives to Elizabeth Warren’s wealth tax, amid increasing concerns that her soak-the-rich strategy won’t pass even if the party captures both chambers of Congress in 2020.With growing confidence that they could win the White House and Senate in 2020 and maintain their House majority in 2020, Democrats are devising ideas that could raise trillions of dollars from the wealthy without the technical and constitutional challenges of Warren’s wealth tax, which Bernie Sanders, her rival on the party’s left flank, has also embraced.Warren, who had already proposed a series of tax increases on the top 1%, last week doubled down on wealth taxes for billionaires -- literally. She increased the wealth tax rate for those worth at least $1 billion to 6% from 3% in her plan to finance her massive government-run health care program. She would also levy a 2% tax on the fortunes of those worth between $50 million and $1 billion.Lawmakers who want the rich to pay higher taxes say they are concerned that Warren’s ideas -- while popular with voters -- are unrealistic, could face legal challenges and harm their ability to move the rest of a progressive agenda.“There are certain concerns about whether the wealth tax is constitutional,” Representative Don Beyer, a Virginia Democrat, said Thursday. “There are a lot of complexities. It is easy to gain and difficult to determine” the value of wealth. The Constitution prohibits the federal government from taxing property, so a court challenge is likely.Democrats are hoping they can solidify bills that would increase taxes on the wealthy before the election, giving them options in case Warren or Sanders is elected and sends a wealth-tax to Capitol Hill for their consideration.Beyer, along with Senator Chris Van Hollen of Maryland, on Thursday introduced a 10% surtax on wages and capital gains income topping $2 million. They’re touting the idea as a simple revenue raiser that would be difficult for the wealthy to avoid.Senator Ron Wyden of Oregon, the top Democrat on the Senate Finance Committee, is also finalizing a plan to tax some investments annually, rather than when they’re sold. That would apply to taxpayers who earned at least $1 million or have assets worth $10 million. Wyden’s plan could be difficult to administer, but is less likely to run afoul of the Constitution.Warren also proposes a version of Wyden’s plan on top of the wealth tax, so the rich would pay taxes on the appreciation of their assets -- including stocks, bonds and real estate -- even if they haven’t sold the property or received any cash income. That means some of the richest Americans could face millions in taxes even without any cash income.That’s starting to worry some billionaires. Microsoft. Corp. founder Bill Gates said Wednesday he has paid more than $10 billion in taxes and would happily double his bill to $20 billion.“When you say I should pay $100 billion, OK, then I’m starting to do a little bit of math about what I have left over,” he said at a New York Times Dealbook event. Warren responded to Gates on Twitter, saying she like to explain to him how the tax works and “promises” he wouldn’t pay $100 billion.The congressional Democrats’ plans don’t raise anywhere near the $3.75 trillion over a decade that Warren estimates her wealth tax would bring to the Treasury.Democrats could combine several of their ideas to match that total. For example, they could couple the surtax -- estimated to raise $635 billion -- with Wyden’s proposal -- estimated to raise $2 trillion -- with other ideas popular among Democrats.Several bills to tax financial trades of stocks, bonds and derivatives have been introduced in the House and Senate, which could yield $777 billion over a decade.Raising the top individual income tax rate to 39.6%, the rate before the 2017 Republican tax cut, generates another $111 billion. All told, that’s about $3.5 trillion in new tax revenue from wealthy taxpayers, without the implementation problems or court challenges that worry them about Warren’s approach.Taxing wealth is a new approach to address inequality and raise revenue because the super wealthy don’t earn their income through paychecks, but from investments.Warren Buffett, for example, is worth $87.5 billion, according to the Bloomberg Billionaires Index. But his 2015 tax returns show he only earned $11.6 million in income and paid about $1.8 million in federal income tax.Patriotic Millionaires, a group that advocates for higher taxes on the wealthy, hosted an event on Wednesday to discuss a more progressive tax system.Chuck Collins, a member of the Patriotic Millionaires and an heir to the Oscar Mayer fortune, said he supports an income surtax plan and called it a “plutocracy prevention program.”“You’ve heard the discussion of the wealth tax — the wealth tax is a critical part, but it’s going to require a whole new regime,” Collins said. “This is a tax proposal that’s laser focused.”Van Hollen says the proposals Democrats are working on aren’t meant to preclude a wealth tax -- but they’re ideas that have a greater chance of passing Congress more quickly.“We don’t see these proposals in conflict with one another,” he added. The surtax idea “from a political and policy perspective is ready to go now.”\--With assistance from Sophie Alexander.To contact the reporter on this story: Laura Davison in Washington at ldavison4@bloomberg.netTo contact the editors responsible for this story: Joe Sobczyk at jsobczyk@bloomberg.net, Wendy Benjaminson, John HarneyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Financial Times

    A selection of the FT’s biggest stories and best reads every Friday

    Greetings from London, where we’re all extremely excited about the prospect of another election and more rolling political coverage. Keeping me happily distracted from Brexit and Prime Minister Boris Johnson is a series of cracking corporate stories, including the departure of the McDonald’s chief executive following a relationship with a colleague and changes at Japanese mega-investor SoftBank — plus the FT’s exposé of pollution on the London Underground.

  • NY Times (NYT) Q3 Earnings Surpass Estimates, Decline Y/Y

    NY Times (NYT) Q3 Earnings Surpass Estimates, Decline Y/Y

    The New York Times Company's (NYT) digital advertising revenues decrease during the third quarter of 2019. Management now expects digital advertising to be "fairly challenging" in the final quarter.

  • The Mancession Is Finally Over

    The Mancession Is Finally Over

    (Bloomberg Opinion) -- The U.S. labor market has just hit another happy landmark. Of Americans aged 25 through 54 who were neither in military uniform nor behind bars, 80.3% have jobs. That equals the January 2007 high of the last economic expansion.This measure, also known as the prime-age employment-population ratio, or Epop,(2) avoids a key limitation of the headline unemployment rate, which only counts people actively looking for jobs. According to the unemployment rate, the current job market is the best since the late 1960s; according to prime-age Epop, it’s still not as strong as it was in 1999 and 2000.Then again, if you go by Epop the current labor market is much, much stronger than that of the 1960s, which doesn’t sound quite right. The limitation of Epop in measuring labor market conditions is that it also happens to measure societal change. Epop is so much higher now than in the 1960s because more women have joined the paid workforce. Still, that’s easy enough to sort out by looking at men and women separately:To emphasize a few things that may not be immediately obvious from eyeballing the above chart, especially if you’re reading this on a phone:Women’s prime-age Epop is nearly back to the all-time high set in 2000; men’s is still nearly three percentage points below, and more than a percentage point below the peak from the previous expansion. The prime-age Epop gap between men and women shrank to an all-time low in the immediate aftermath of the last recession as men lost jobs at a faster rate (the mancession). It grew again after that as men returned to work at a faster pace (the mancovery), but since 2015 it’s been shrinking again. Men’s prime-age Epop passed 95% several times in the 1950s, and hit it again in the late 1960s. As of October it was 86.5%. To sum up: there are more than five million prime-age men who didn’t have paid jobs in October who would have had them if 1950s/1960s conditions still prevailed and Epop was 95%.What are they doing? The Census Bureau asks about that in the Annual Social and Economic Supplement to the Current Population Survey. In 2018, 10.4% of men aged 25 through 54 (about 6.5 million men) were not in the labor force — that is, not working for pay and not looking for a job. Here are the reasons they gave, and the reasons they’ve given every year since 1991.(1) It may help in reading the chart to be aware that the different causes are listed along the top in the order that they appear on the bars from top to bottom.Being ill or disabled is the main reason prime-age men give for not being in the labor force, and by far the biggest driver of the group’s decline in labor force participation since 1991. Some of this has to do with the outdated design of the Social Security Disability Insurance program, which effectively forces disabled people to choose between leaving the labor force entirely or getting no aid at all. Eligibility changes enacted by Congress in 1984, which made it easier qualify due to hard-to-verify conditions such as chronic pain and mental illness, also enabled its increasing use as a fallback economic safety net, economist David Autor argued in a 2011 paper:The secular decline in earnings and employment opportunities for U.S. workers with high school or lower education over the last three decades has also made SSDI an increasingly attractive option for job losers and long-term unemployed.Over the course of the current business cycle, though, this hasn’t really been that big an issue. The number of new Social Security disability awards peaked in 2010, has fallen 35% since and is now lower than at any time since 2001. The ill/disabled share of prime-age men is up only 0.1 percentage points since 2006.There is the macabre possibility that the sharp rise in opioid deaths, with 317,000 American men dying of drug overdoses from 2007 through 2017, reduced the ill/disabled numbers. But on the whole the message from these data seems to be that the great exodus of prime-age men from work to inactivity, the subject a couple of years back of numerous reports, research papers, opinion columns (including a few by me) and at least one book, has paused or maybe even ended.That research generally painted a picture of men with few educational credentials, and often with a criminal history, seeing so little promise in the job market that they didn’t even contemplate looking for work. A 2014 poll by the Kaiser Family Foundation, CBS News and the New York Times found that 85% of jobless prime-age men did not have bachelor’s degrees, and 34% had criminal records. The great crime wave of the 1970s and 1980s is long over, and the great incarceration wave that followed it is receding, so criminal records should be less prevalent going forward. Also, for the past couple of years at least, the low-credential end of the job market has been doing quite well, and even a criminal background has ceased to be the barrier it once was.It’s true that the prime-age male Epop and labor-force participation rate are still more than a percentage point lower than they were just before the last recession. But by far the biggest driver of the decline since 2006 has been men attending school. Other major contributors, especially over the longer haul, include home responsibilities and very early retirement. I’m guessing the latter is more about men who can’t find good work but have spouses who can than evidence of the spectacular success of the “Fire” (financial independence, retire early) movement, but who knows. Overall, these choices don’t seem to reflect economic desperation in quite the way that rising disability numbers did. They may well be signs, though, of continuing shifts in men’s and women’s labor market roles.(1) Why not "EPOP," which is the more commonly used shorthand? Mainly because it's pronounced "Epop," not "E-P-O-P," and Bloomberg's stylebook calls for capitalizing all the letters in an acronym only when each letter is separately pronounced. Same goes for "Fire" later in the column. (I hope these will get me as many angry emails as writing "Nascar.")(2) These numbers aren't published on a regular basis, but Steven F. Hipple of the Bureau of Labor Statistics reports on them occasionally, and provided me with the chart data.To contact the author of this story: Justin Fox at justinfox@bloomberg.netTo contact the editor responsible for this story: Sarah Green Carmichael at sgreencarmic@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Justin Fox is a Bloomberg Opinion columnist covering business. He was the editorial director of Harvard Business Review and wrote for Time, Fortune and American Banker. He is the author of “The Myth of the Rational Market.”For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.

  • iPhones Are Big in China, But Apple’s Services Play Gets Mired in Censorship

    iPhones Are Big in China, But Apple’s Services Play Gets Mired in Censorship

    (Bloomberg) -- When it comes to many of Apple Inc.'s latest services, iPhone users in China are missing out. Podcast choices are paltry. Apple TV+ is off the air. News subscriptions are blocked, and Arcade gaming is nowhere to be found.For years, Apple made huge inroads in the world's most populous nation with hardware that boasted crisp displays, sleek lines and speedy processors. It peddled little of the content that boxed U.S. internet giants Google and Facebook Inc. out of the country. But now that Apple is becoming a major digital services provider, it’s struggling to avoid the fate of its rivals. Apple services such as the App Store, digital books, news, video, podcasts and music, put the company in the more precarious position of information provider (or at least overseer), exposing it to a growing online crackdown by China’s authoritarian government. “There's a headwind around services there, and it's unclear what services can be available,” said Gene Munster, a veteran Apple analyst and co-founder of Loup Ventures. “It points to an issue with China more broadly with how U.S. companies can operate there, and it will likely remain a headwind on Apple services for a long time."While standard iPhone services like iMessage work in China, many paid offerings that help Apple generate recurring revenue from its devices aren’t available in the country. That includes four new services that Apple announced this year: TV+ video streaming, the Apple Card, Apple Arcade and the News+ subscription. Other well-known Apple services can’t be accessed in the country either, including the iTunes Store, iTunes Movie rentals, Apple Books and the Apple TV and Apple News apps. This is a concern for investors because Apple is relying on services to power future revenue and profit. If the company can’t sell these offerings in the world’s large internet market, it will be harder to keep growing. About 10% of Apple’s services revenue comes from China, while the country accounts for roughly 18% of iPhone sales, according to Dan Ives, an analyst at Wedbush Securities. "The missing puzzle piece for services is China,” he added. An Apple spokesman declined to comment.Older services, such as the App Store, Apple Pay, and Apple Music are available in China. So is iCloud, but, unlike in other countries, it is operated by a local provider backed by the government, giving authorities greater access to Chinese user data. Other Apple apps are in the country, too, but sometimes lack features offered in the rest of the world. When an iPhone owner in mainland China opens Apple’s Podcasts app, the experience is far more limited. Search results turn up a fraction of the podcasts available globally. And Categories, the easy way to find podcasts that fit users’ interests, are nowhere to be found. Over the past year, Apple’s Weather app lost its ability to show air quality index, or AQI, data for Chinese cities — regardless of the user's location. AQI is an important metric given high levels of pollution in many areas of the country. AQI support for China was announced at Apple’s developer conference in June 2016, and users started reporting that the feature stopped consistently showing data for China last year. Recent Bloomberg tests confirmed that the information isn’t available for Chinese cities such as Shanghai, while it continues to work for other supported regions, including the U.S., India and parts of Europe. Air pollution is a sensitive issue for China’s government. It has made sweeping efforts to improve the situation but has also blocked some air-quality information online, including one episode in 2014 that was reported by the Washington Post. AQI data for the Apple Weather app comes from the Weather Channel, a unit of International Business Machines Corp. Apple removed the information for Chinese cities after the Weather Channel changed how it collects the data in the country, according to a person familiar with the situation. The Weather Channel used to get AQI information on the ground in China, but now collects it via satellites, which is less accurate, said the person, who asked not to be identified discussing private deliberations. A spokeswoman for the Weather Channel didn’t respond to a request for comment.Greater China became Apple’s second-largest region in the 2015 fiscal year, generating $59 billion in revenue. Chief Executive Officer Tim Cook visits frequently and the company employs about 10,000 people there directly. More than a million other workers assemble Apple products in the country for Foxconn and other Apple manufacturing partners. China’s first major move to limit an Apple service happened in 2008, when the company’s iTunes Music Store was axed in the region. In 2016, iTunes Movies and iBooks, the former name of Apple Books, were blocked in China. This wasn’t so much of an issue when iPhones were selling well and revenue was surging. But more recently, iPhone sales have slowed and the company switched some of its focus to services. This is a $46 billion-a-year business now, and Apple expects it to be a major source of future growth, topping $50 billion a year in 2020. So Apple has a lot more at stake as China continues to crack down on online activity.Apple’s $50 Billion Dilemma: Listen to Bloomberg’s Decrypted podcast here.The App Store, Apple’s most lucrative services business, has been particularly affected in recent years. The company has been forced to remove several apps from the App Store in China, including the New York Times and Quartz news apps. The government’s media control and censorship is likely why Apple's own News app, launched in 2015, is barred. The company’s News+ subscription service, rolled out this year, is not available on Apple devices purchased in China, and the app loses its functionality for users from other countries who travel there. Apple has also pulled hundreds of VPN apps that helped users evade China’s Great Firewall and access banned Western internet services such as Facebook, Google and Twitter. In the second half of last year, Apple removed 634 apps from its App Store due to take-down requests. More than 80% of those were in mainland China, according to Apple’s latest transparency report. Each app that disappears is a lost revenue opportunity. When iPhone and iPad users pay to download apps, Apple takes a 30% cut. And when consumers make in-app purchases or sign up for paid app subscriptions, the company takes a cut too. Last year, the Chinese government slowed down Apple’s ability to approve new video games for the App Store, and this contributed to a sales decline in the region. Chief Financial Officer Luca Maestri said in January that the issue was “affecting our business.” Apple’s Arcade gaming subscription service would likely be hard to pull off in China given this tortured approval process.On its fiscal fourth-quarter call last week, Cook was more upbeat, saying Apple’s services business in China grew at a “double digit” rate. But his comments showed how much the company relies on China’s government for digital services like this. “We began to see more gaming approvals in the quarter, or I should say some key gaming approvals. It's not all about quantity, but about which ones,” he added. A few weeks earlier, one of Apple’s App Store decisions sparked a rare rebuke from the People’s Daily, a mouthpiece of China’s ruling Communist Party. Apple was excoriated by the newspaper for approving an app called HKmap.live that let users monitor Hong Kong police activity to stay safe in the midst of democracy protests in the city.“People have reason to assume that Apple is mixing business with politics, and even illegal acts. Apple has to think about the consequences of its unwise and reckless decision,” the paper said. “Apple and other corporations should be able to discern right from wrong. They also need to know that only the prosperity of China and China’s Hong Kong will bring them a broader and more sustainable market.”Soon after, Apple removed the app, saying it violated local laws and endangered law enforcement. The paper also said the song “Glory to Hong Kong,” which has become a rallying cry for pro-democracy demonstrators, had reappeared on Apple Music. Soon after, the track was unavailable on Apple’s service, in addition to Spotify. Even Apple’s new TV+ video service has felt the influence of China’s censorship. BuzzFeed recently reported that Apple told show creators to avoid portraying China in a poor light. The TV+ offering launched Nov. 1 in more than 100 countries, but not in China. Apple’s new credit card is only available in the U.S., but would also be a hard sell in China given the dominance of local payment providers like Alipay and WeChat. Still, some analysts are optimistic about the longer-term outlook for Apple services in China. “At some point, it will be economic forces that drive access to Apple services, and that will be a major boon for Apple along with other companies that are currently restricted from access to China,” said Ivan Feinseth, chief investment officer at Tigress Financial Partners. “You can only hold back access to information for so long.”Apple’s App Store and other services have so much potential that the company can also keep growing with limited access to Chinese consumers, he added. “They have barely scratched the surface of penetration into their almost 1 billion iPhone installed user base globally, and even if you exclude China, there is still a tremendous market,” Feinseth said. For a few years, Apple highlighted Chinese features when it announced major new versions of its iOS and macOS operating systems. At its 2012 annual conference for software developers, Craig Federighi, Apple’s software engineering chief, said, “It’s going to be important, get your apps ready for China,” during a presentation slide dedicated to new China features. That year, iOS 6 added support for Baidu web search and the micro-blogging service Sina Weibo, in addition to new text-input features. 2013’s iOS 7 came out with a Chinese-English dictionary, handwriting recognition and support for Tencent’s Weibo service. A year later, iOS 8 had turn-by-turn maps for China and the lunar calendar.Apple hasn’t promoted China features as much in recent years, but it is still adding some. iOS 10 in 2016 added the air-quality-index data that have now been removed. The following year, iOS 11 came out with QR code scanning. This year, Apple upgraded that QR feature, improved the handwriting keyboard and added a new Junction View feature to its Maps service for improved local lane guidance on complicated highways. To keep growing in China, Apple will either need to get more of its services up and running in the country or find its next hardware hit beyond the iPhone.“The company still has an opportunity on hardware there, especially for future iPhone models, the AirPods, Apple Watches and other wearables,” Munster said. \--With assistance from Yuan Gao.To contact the author of this story: Mark Gurman in Los Angeles at mgurman1@bloomberg.netTo contact the editor responsible for this story: Alistair Barr at abarr18@bloomberg.net, Andrew MartinFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Alphabet Board Investigates Executives Over Relationships

    Alphabet Board Investigates Executives Over Relationships

    (Bloomberg) -- Alphabet Inc.’s board is investigating how the company dealt with accusations of sexual harassment and misconduct against some of its executives."As has already been confirmed in public court filings, in early 2019, Alphabet’s Board of Directors formed a special litigation committee to consider claims made by shareholders in various lawsuits relating to past workplace conduct," Alphabet said in an emailed statement on Wednesday.The investigation includes the behavior of Chief Legal Officer David Drummond, a long time senior executive who has been accused of having relationships with employees, CNBC reported earlier on Wednesday. The board of directors has hired a law firm to help with the investigation and contact alleged victims, CNBC also said.A 2018 New York Times report detailed three accounts of senior Google executives, including Drummond, having relationships with employees. Alphabet is the parent of Google. Two of those executives, Andy Rubin and Rich DeVaul, have since left the company, but Drummond remains.In August, a former Google employee, Jennifer Blakely, who participated in the New York Times story, elaborated on accusations she made to the New York Times about Drummond, saying she was forced out of the company and that he refused to pay child support after their relationship ended.Drummond has acknowledged the relationship with Blakely. "Other than Jennifer, I never started a relationship with anyone else who was working at Google or Alphabet," he said in a statement in August. He did not return an email seeking comment.The New York Times also reported last year that Rubin, the founder of Android, was given a $90 million severance package when he left Google in 2014. That prompted a walkout by thousands of Google employees, and has spurred efforts to reform how the company handles sexual harassment and misconduct complaints.Some shareholders have sued the company over this episode and other workplace conduct, and the Alphabet board’s special litigation committee is considering these claims, the Alphabet spokeswoman said on Wednesday.To contact the reporter on this story: Gerrit De Vynck in New York at gdevynck@bloomberg.netTo contact the editors responsible for this story: Jillian Ward at jward56@bloomberg.net, Alistair Barr, Andrew PollackFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Bloomberg

    Bill Gates Criticizes Warren’s Wealth Tax Plan

    (Bloomberg) -- Microsoft Corp. co-founder Bill Gates on Wednesday became the latest billionaire to criticize Elizabeth Warren for her signature wealth tax.In an appearance at the New York Times DealBook Conference, Gates said he’s paid $10 billion in taxes and wouldn’t have minded paying twice that, but joked that, “When you say I should pay $100 billion then I’m starting to do a little math about what I have left over.”