IBM insists that its revised A.I. strategy — a pared-down, less world-changing ambition — is working. The job of reviving growth was handed to Arvind Krishna, a computer scientist who became chief executive last year, after leading the recent overhaul of IBM’s cloud and A.I. businesses.
But the grand visions of the past are gone. Today, instead of being a shorthand for technological prowess, Watson stands out as a sobering example of the pitfalls of technological hype and hubris around A.I.
The march of artificial intelligence through the mainstream economy, it turns out, will be more step-by-step evolution than cataclysmic revolution.
A New Wave to Ride
Time and again during its 110-year history, IBM has ushered in new technology and sold it to corporations. The company so dominated the market for mainframe computers that it was the target of a federal antitrust case. PC sales really took off after IBM entered the market in 1981, endorsing the small machines as essential tools in corporate offices. In the 1990s, IBM helped its traditional corporate customers adapt to the internet.
IBM executives came to see A.I. as the next wave to ride.
Mr. Ferrucci first pitched the idea of Watson to his bosses at IBM’s research labs in 2006. He thought building a computer to tackle a question-answer game could push science ahead in the A.I. field known as natural language processing, in which scientists program computers to recognize and analyze words. Another research goal was to advance techniques for automated question answering.
After overcoming initial skepticism, Mr. Ferrucci assembled a team of scientists — eventually more than two dozen — who worked out of the company’s lab in Yorktown Heights, N.Y., about 20 miles north of IBM’s headquarters in Armonk.
The Watson they built was a room-size supercomputer with thousands of processors running millions of lines of code. Its storage disks were filled with digitized reference works, Wikipedia entries and electronic books. Computing intelligence is a brute force affair, and the hulking machine required 85,000 watts of power. The human brain, by contrast, runs on the equivalent of 20 watts.
Internet infrastructure operators like Didi must now prove their political and legal legitimacy to the government, Ma Changbo, an online media start-up founder, wrote on his WeChat social media account.
“This is the second half of the U.S.-China decoupling,” he wrote. “In the capital market, the model of playing both sides of the fence is coming to an end.”
Didi, Ms. Liu and Mr. Liu didn’t immediately respond to requests for comment.
China’s internet companies have benefited from the best of two worlds since the 1990s. Many received foreign venture funding — Alibaba, the e-commerce giant, was funded by Yahoo and SoftBank, while Tencent, another internet titan, was backed by South Africa’s Naspers. They also copied their business models from Silicon Valley companies.
The Chinese companies gained further advantages when Beijing blocked almost all big American internet companies from its domestic market, giving its home players plenty of room to grow. Many Chinese internet firms later went public in New York, where investors have a bigger appetite for innovative and risky start-ups than in Shanghai or Hong Kong. So far this year, more than 35 Chinese companies have gone public in the United States.
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Now the Didi crackdown is changing the calculations for many in China’s tech industry. One entrepreneur who has set her sights on a listing in New York for her enterprise software start-up said it would be harder to go public in Hong Kong with a high valuation because what her company did — software as a service — was a relatively new idea in China.
A venture capitalist in Beijing added that because of China’s data security requirements, it was now unlikely that start-ups in artificial intelligence and software as a service would consider going public in New York. Few people were willing to speak on the record for fear of retaliation by Beijing.
At the same time, the United States has become more hostile to Chinese tech companies and investors. As Washington has ramped up its scrutiny of deals that involve sensitive technologies, it has become almost impossible for Chinese venture firms to invest in Silicon Valley start-ups, several investors said.
BALTIMORE — When Target announced that it was opening a store in Mondawmin, a predominantly Black neighborhood in this city struggling with crime and poverty, it seemed like a ticket to a turnaround.
And from the start, it was a practical success and a point of community pride. The store, which opened in 2008, carried groceries, operated a pharmacy and had a Starbucks cafe, the only one in this part of Baltimore’s west side.
People came from across the city to shop there, helping to soften the Mondawmin area’s reputation for crime and the looting that followed protests over the 2015 death of Freddie Gray, who was fatally injured while in city police custody. As an employer, Target seemed to cater to the community’s needs, making a point of hiring Black men and providing an office in the store for a social worker to support the staff. Elijah Cummings, the congressman from Baltimore, was known to shop there.
But in February 2018, with almost no warning or explanation, Target closed the store.
Residents, especially those without cars, lost a convenient place to shop for quality goods. And a marker of the community’s self-worth was suddenly taken away.
shut two stores in predominantly Black neighborhoods on Chicago’s South Side as the company made plans to build a new store on the wealthier and mostly white North Side.
according to local legend, visited the property in the 19th century and observed the area’s bountiful cornfields. Mondawmin is derived from a Native American phrase for “spirit of corn.”
In the 1950s, the property was sold to a real estate developer, who turned the rural lot into the city’s first shopping mall.
The Mondawmin Mall featured a Sears, a five-and-dime, and eventually an indoor fountain and spiral staircase, advertised as the “seventh wonder of Baltimore,’’ according to Salvatore Amadeo, an amateur historian who makes YouTube documentaries about malls, including a segment on Mondawmin.
When the assassination of the Rev. Dr. Martin Luther King Jr. in 1968 sparked protests across Baltimore and caused “white flight” to the suburbs, the mall struggled. Over time, it ceased to be a big draw for shoppers outside the area.
The stores became more focused on Black fashion and neighborhood services. A large barbershop occupies the mall’s bottom floor, and there is an agency that helps formerly incarcerated people find jobs.
a forceful statement, promising to reopen one of its stores in Minneapolis damaged in the protests against police violence.
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The closing of a Target store shows the limits of a pledge to help Black communities: “A business exists to make money. Period. If it doesn’t it will close, move, or change the business. This is the limits of capitalism.” sjs, Bridgeport, Conn.
She writes about the law. But could she really help free a prisoner?: “Justice has to keep growing for the masses of incarcerated innocents in the U.S. I will share in hopes that this article will be read and shared again and again.” Diane, Chicago.
Masks again? The Delta variant prompts a reconsideration of precautions.: “Wearing a mask indoors for sparing amounts of time (for the majority) is a minor inconvenience. While I, too, am annoyed by those who are choosing not to be vaccinated— my actions are based on those who are medically vulnerable and/or ineligible.” SB, Massachusetts.
“The murder of George Floyd has unleashed the pent-up pain of years, as have the killings of Ahmaud Arbery and Breonna Taylor,” Mr. Cornell said in the statement. “We say their names and hold a too-long list of others in our hearts. As a Target team, we’ve huddled, we’ve consoled, we’ve witnessed horrific scenes similar to what’s playing out now and wept that not enough is changing.”
One of the names on that “too-long list” is Freddie Gray. Mr. Gray was from Baltimore’s west side and was arrested a few blocks from the Mondawmin Mall in April 2015 for possessing a knife.
prosecutors described as a “rough ride,” his spinal cord was 80 percent severed.
One of the first big waves of protests over his death occurred at the Mondawmin Mall. Protesters began throwing rocks at police officers, and the mall was looted. Some students from Frederick Douglass High School, across from the mall and the alma mater of the civil rights giant Thurgood Marshall, the first Black man to serve on the U.S. Supreme Court, were caught up in the melee.
Target was spared serious damage. But for a time, many shoppers, both Black and white, stayed away from the store, recalled Mr. Johnson, who now works for the Postal Service.
“Mondawmin already had a bad rap with out-of-towners,” he said.
Shoppers eventually returned to the Target in Mondawmin, he said. But he noticed that the city’s other Target store, which had opened in a trendy area near the harbor in 2013, was getting more popular.
In November 2017, Mr. Mosby, then a state lawmaker, got a call from a resident whose family worked at the store: The Target in Mondawmin was shutting its doors in a few months. “I thought it was a just a rumor at first,” Mr. Mosby said.
Some residents and neighborhood leaders were told that the store struggled with high rates of theft, known in the retail industry as “shrinkage.” But Mr. Ali, the store’s former manager, said, “That was untrue,” at least while he worked there. The store met its profit and shrinkage goals during his four years as manager, which ended in 2012, years before the store closed.
Still, Mr. Ali, now the executive director of a youth mentoring group, acknowledged challenges that he said were unique to a store in a “hyper-urban area.”
A significant amount of inventory was once damaged in a fire in a storage area next to the store, and the company had to spend $30,000 a month for an armed Baltimore police officer to keep watch, he said.
There may have been additional considerations. “I think what happened after Freddie Gray spooked Target,” Mr. Ali said.
Other national chains reacted differently. TGI Fridays stuck with its plans to open a restaurant at the Mondawmin Mall, months after the protests. The restaurant remains one of the neighborhood’s only free-standing, sit-down chain restaurants.
Mr. Mosby and other officials tried to negotiate with Target to keep the store open, but the company said its mind was already made up.
“They weren’t interested in talking to us,” Mr. Mosby said. “They wouldn’t budge.”
A storefront still sitting empty
The temperature gauge outside Pastor Lance’s car registered 103 degrees as he drove through Greater Mondawmin and its surrounding neighborhoods. He was wearing a white shirt emblazoned with his church’s logo — a group of people, of all races and backgrounds, walking toward the sun, holding hands.
A Baltimore native, Pastor Lance used to work as a computer programmer at Verizon. He made “lots of money,” he said. “But I didn’t feel fulfilled.”
He became a pastor and took over a nonprofit company that develops park space and playgrounds and hosts a summer camp for schoolchildren with a garden surrounded by a meadow near the mall.
“But some days, I wonder if I made a mistake,” he said. “It’s great to have a park, but if you don’t have a good job, you aren’t going to be able to enjoy a park.”
He drove along a street with liquor stores and houses with boarded-up windows. A woman tried to flag him down for a ride. But the poverty he saw was not what made him most upset.
It was when Pastor Lance steered through an enclave of big houses and immaculate lawns, only a short distance away, that the anger rose in his voice.
“You are telling me that these people wouldn’t shop at Target for lawn furniture or school supplies,” he said. “I am not trying to gloss over the problems, but there is also wealth here.”
“If shrinkage was a problem, hire more security guards or use technology to stop people from stealing,” he added.
He circled back to the Mondawmin Mall, where families ducked into the air conditioning for a bubble tea or an Auntie Anne’s pretzel. He drove past the TGI Fridays and then past the Target, its windows still covered in plywood and the trees in the parking lot looking withered and pathetic.
Pastor Lance refused to accept that a Target could not succeed here.
“If you are really interested in equity and justice,” he said, “figure out how to make that store work.”
Disagreements over the company’s management, including the handling of an accounting scandal, put Toshiba at odds with its new investors, some of whom pushed for change on its board, including the addition of more independent directors.
Tensions rose further last year when voting irregularities at the annual general meeting led to a shareholder revolt. Some investors cast blame on Mr. Nagayama, a former chief executive and director of the pharmaceutical giant Chugai who had also served as an outside director at Sony, after an internal investigation into the irregularities glossed over problems at the company.
“Nagayama tried to position himself as an agent for change, but he’s been there for a year and a lot has happened in that year, where he did not take action,” Mr. Saribas said.
In March, Toshiba shareholders, dissatisfied with the conclusions of the internal report into the problems at the general meeting, forced the company to undertake a second independent investigation.
A proposal for new directors by the Singapore-based Effissimo Capital Management had riled Toshiba’s corporate suite, according to the independent investigation. In response, executives reached out to officials at Japan’s trade ministry to coordinate tactics intended to make the firm back off.
In conversations with Effissimo, which is Toshiba’s largest shareholder, ministry officials implied that the hedge fund could be subject to investigation under a foreign investment law that had been newly revised to counter rising concerns about Chinese influence over Japanese firms.
When that effort failed, the trade ministry sent a representative to pressure Harvard’s endowment fund, another Toshiba investor, the report said. Ultimately, Toshiba got its way, and investors approved its slate of board members. The tactics had not affected the final outcome of the election, the report concluded, but were unfair nonetheless.
LONDON — The top economic officials from the world’s advanced economies reached a breakthrough on Saturday in their yearslong efforts to overhaul international tax laws, unveiling a broad agreement that aims to stop large multinational companies from seeking out tax havens and force them to pay more of their income to governments.
Finance leaders from the Group of 7 countries agreed to back a new global minimum tax rate of at least 15 percent that companies would have to pay regardless of where they locate their headquarters.
The agreement would also impose an additional tax on some of the largest multinational companies, potentially forcing technology giants like Amazon, Facebook and Google as well as other big global businesses to pay taxes to countries based on where their goods or services are sold, regardless of whether they have a physical presence in that nation.
Officials described the pact as a historic agreement that could reshape global commerce and solidify public finances that have been eroded after more than a year of combating the coronavirus pandemic. The deal comes after several years of fraught negotiations and, if enacted, would reverse a race to the bottom on international tax rates. It would also put to rest a fight between the United States and Europe over how to tax big technology companies.
has been particularly eager to reach an agreement because a global minimum tax is closely tied to its plans to raise the corporate tax rate in the United States to 28 percent from 21 percent to help pay for the president’s infrastructure proposal.
EU Tax Observatory estimated that a 15 percent minimum tax would yield an additional 48 billion euros, or $58 billion, a year. The Biden administration projected in its budget last month that the new global minimum tax system could help bring in $500 billion in tax revenue over a decade to the United States.
The plan could face resistance from large corporations and the world’s biggest companies were absorbing the development on Saturday.
“We strongly support the work being done to update international tax rules,” said José Castañeda, a Google spokesman. “We hope countries continue to work together to ensure a balanced and durable agreement will be finalized soon.”
said this month that it was prepared to move forward with tariffs on about $2.1 billion worth of goods from Austria, Britain, India, Italy, Spain and Turkey in retaliation for their digital taxes. However, it is keeping them on hold while the tax negotiations unfold.
Finishing such a large agreement by the end of the year could be overly optimistic given the number of moving parts and countries involved.
“A detailed agreement on something of this complexity in a few months would just be lighting speed,” said Nathan Sheets, a former Treasury Department under secretary for international affairs in the Obama administration.
The biggest obstacle to getting a deal finished could come from the United States. The Biden administration must win approval from a narrowly divided Congress to make changes to the tax code and Republicans have shown resistance to Mr. Biden’s plans. American businesses will bear the brunt of the new taxes and Republican lawmakers have argued that the White House is ceding tax authority to foreign countries.
Representative Kevin Brady of Texas, the top Republican on the House Ways and Means Committee, said on Friday that he did not believe that a 15 percent global minimum tax would curb offshoring.
“If the American corporate tax rate is 28 percent, and the global tax rate is merely half of that, you can guarantee we’ll see a second wave of U.S. investment research manufacturing hit overseas, that’s not what we want,” Mr. Brady said.
At the news conference, Ms. Yellen noted that top Democrats in the House and Senate had expressed support for the tax changes that the Biden administration was trying to make.
This article was produced in partnership with the Pulitzer Center’s Rainforest Investigations Network.
RIO DE JANEIRO — Facing strong international condemnation over the destruction of the Amazon, President Jair Bolsonaro’s government came up with a strategy: It offered companies the chance to “adopt” a patch of rainforest.
But the plan — which invites companies to contribute money to help preserve the forest — has been marred by disorganization and met with skepticism by critics, who see it as an effort to “green wash” the Bolsonaro administration’s poor record on the environment.
It also hasn’t found many takers.
The program was announced in February, as the Biden administration made clear that it expected Brazil to reverse some of the forest loss and dismantling of environmental protections that marked Mr. Bolsonaro’s first two years in office.
the Adopt-a-Park program would accomplish two of the Bolsonaro administration’s goals: redeem Brazil’s tarnished environmental image, which industry leaders have feared could shut them out of international markets, and outsource the costs of conservation at a time of tightening budgets.
“Many of these companies, investment funds that signed letters demonstrating their concern about the Amazon,” said Ricardo Salles, the minister of the environment, “now have in Adopt a Park a concrete, very simple and efficient possibility of transforming their statements into action.”
The government offered 132 federal reserves in the Amazon for sponsorship. So far, only three foreign companies — the grocery chain Carrefour, Coca-Cola and Heineken — and five Brazilian corporations have enrolled. Their donations total just over $1 million — a tiny fraction of the $600 million that Mr. Salles aspires to raise.
Protected Areas of the Amazon program has raised tens of millions of dollars from governments and companies for protected areas in the Amazon.
Through the Adopt-a-Park program, sponsoring companies pay at least $9.5 per hectare of the reserve’s area per year. To sponsor the biggest park costs almost $35 million annually, while the smallest go for $23,000 a year.
Once sponsorship deals are finalized, companies donate goods and services — which could include vehicles or a fire brigade — to the Chico Mendes Institute office in each reserve.
July to share responsibility for protecting the Amazon with nongovernment actors. As protests over fires in the Amazon rainforest intensified, he challenged the actor Leonardo DiCaprio, one of the government’s most prominent critics, to sponsor a reserve.
“Are you going to put your money where your mouth is?” Mr. Salles wrote on Twitter in September.
Beyond proposing the park-adoption program before the climate change summit convened by the Biden administration last month, Brazil’s government seems to have done little to improve its environmental policies.
At the summit, Mr. Bolsonaro vowed to allocate more money to environmental protection agencies. But the very next day the government did the opposite, signing into law a budget that further slashed funding for the agencies.
And federal lawmakers are considering a bill that would make it easier for companies to get environmental permits for new farming, mining and infrastructure ventures.
“Is receiving donations as they are proposing going to compensate for all that?” asked Natalie Unterstell, a climate policy expert who has been tracking the program. “No. It’s a palliative measure.”
When Allegra Brochin and her boyfriend adopted Sprinkles, a feisty white Maltese, last year, they set about finding pet care.
“I immediately started looking,” said Ms. Brochin, 23, who works as a communications coordinator for Michael Kors in New York.
She saw ads for Bond Vet pop up on her Instagram feed, and when she took in Sprinkles for her shots, she was won over by the look and feel of the clinic, “especially when it’s for a pet you care about and feel responsible for,” she said.
Ms. Brochin is not alone in her devotion to her pandemic pet. More than 12.6 million households adopted animals from March to December of last year, according to the American Pet Products Association, helping to propel an increase in visits and revenue to veterinary offices, as new owners took pets in for their first checkup.
pet care business is riding a growth spurt: Morgan Stanley projected that it would be a $275 billion industry in 2030, up from $100 billion in 2019, with vet care the fastest-growing segment over the next decade.
“Ten years ago, there was a baby boom,” Arash Danialifar, chief executive of GD Realty Group, a California company that has leased space to a veterinary start-up, said about the proliferation of shops selling children’s fashion. “Now it’s all about pets.”
Small Door Veterinary recently announced it had raised $20 million and planned to go from a single location to 25 by 2025. The firm operates on a membership model, with 24/7 telemedicine and waiting areas with arched, white oak-paneled alcoves that give owners and their pets an intimate place to chill before appointments. Designed by Alda Ly Architecture, the clinics are rented storefronts of 2,000 to 3,000 square feet and cost about $1 million to kit out, said Josh Guttman, Small Door’s co-founder and chief executive.
Bond Vet, another New York start-up, models itself on CityMD clinics; it recently raised $17 million and now has six offices, including its first suburban location, in Garden City on Long Island.
Modern Animal, has an office in a high-end shopping district in West Hollywood, with three more to come in the city by year’s end and a dozen clinics in California by 2022, said the company’s founder and chief executive, Steven Eidelman.
new pet owners during the pandemic. Seventy-six percent of millennials own pets, according to a recent survey, and they are spending generously on their charges.
Terravet Real Estate Solutions, founded in 2016, now owns more than 100 buildings in 30 states, many of them housing practices owned by consolidators. For instance, Terravet owns the building housing CountryChase Veterinary Hospital in Tampa, Fla., and the American Veterinary Group, which operates practices across the South, owns the business.
Hound Properties, founded two years ago, has been buying buildings with an investor-backed fund. And Vetley Capital, started this year, has a portfolio of 20 buildings in nine states, most of them on the small side, ranging from 2,500 to 4,000 square feet and costing around $1 million, said Zach Goldman, the company’s founder and president.
The price of real estate has risen, but the returns are generally modest. “It’s the ultimate slow and steady income,” said Tripp Stewart, co-founder and chief executive of Hound Properties, who is also a practicing vet.
Despite the interest, there are obstacles to opening pet hospitals. Zoning sometimes limits their locations. In Pasadena, Calif., GD Realty had to request a zoning change for Modern Animal.
Because such businesses revolve around animal doctors, who are in demand as veterinary companies expand, there are shortages of vets in some parts of the country, according to the American Veterinary Medical Association.
The improvements in vet facilities are thus aimed not only at pets and their owners, but also at the doctors themselves, who can choose where they want to work.
“It used to be that when you went to a vet, it was a family vet who worked out of a kitchen in an old house,” said Dr. Stewart. “Today, you’re not going to attract new young vets to an old house.”
WASHINGTON — From California to Virginia, many states that faced devastating shortfalls in the depths of the pandemic recession now find themselves flush with tax revenues because of a rebounding economy and a soaring stock market. Lawmakers who worried about budget cuts are now proposing lucrative increases in school spending, tax cuts and direct payments to their residents.
That turnaround is partly the product of strong income tax receipts, particularly in states that heavily tax high earners and the wealthy, whose finances have fared well in the crisis. The unexpectedly rosy picture is raising pressure on President Biden to repurpose hundreds of billions of dollars of federal aid approved this year, in order to help fund a potential bipartisan infrastructure deal.
Last week, Senator Mitt Romney, Republican of Utah, suggested that Mr. Biden and Republican negotiators look to “some of the funding that’s been sent to states already under the last few bills” to help pay for that agreement. “They don’t know how to use it,” Mr. Romney said. “They could use that money to finance part of the infrastructure relating to roads and bridges and transit.”
Some economists and budget experts support that push, arguing that the money could be better spent elsewhere and that states’ spending plans could add to a risk of rapid inflation breaking out across the country. Other researchers and local budget officials say that the federal aid is rescuing harder-hit cities and states, like New York City and Hawaii, from a cascade of layoffs and spending cuts.
$1.9 trillion economic assistance package that Mr. Biden signed in March. They say the aid will help ensure that the economic rebound does not repeat the years of state and local budget cutting that followed the 2008 financial crisis, which slowed the recovery from recession and contributed to millions of Americans waiting years to reap its benefits.
“We still feel strongly that the state and local plan is critical to ensuring we have a strong insurance policy for the type of strong growth we want, the type of equitable recovery the country deserves,” Gene Sperling, a senior adviser to Mr. Biden who oversees fulfillment of the March assistance package, said in an interview, “and to coming back from the 1.3 million jobs lost at the state and local level.”
Even if the administration wanted to recoup or divert the funds, it is unlikely that it could repurpose the money or make significant changes to how it is used without congressional action.
The debate over the state and local funding comes as Mr. Biden navigates a critical week of negotiations with Republicans over infrastructure in search of a deal, and as he prepares to travel to Cleveland on Thursday to speak about the economy. How to pay for any new spending is a primary hurdle in the talks, with Mr. Biden pushing to raise taxes on corporations and Republicans preferring increased user fees like the gas tax.
Repurposing unspent funds could help advance an agreement, particularly given Republican opposition to bankrolling state aid in previous rescue packages. Democrats pushed hard to include lucrative financial assistance for states, cities and tribes in Mr. Biden’s rescue bill. Republicans fought those efforts, warning they would serve as a “bailout” to high-tax, high-spend liberal states. They also cited a series of projections from Wall Street firms and other analysts suggesting that many states’ revenues were faring better than officials had feared in the early months of the pandemic.
do not need more federal money. That is particularly true in states that do not rely primarily on the tourism or hospitality industries for tax revenues. Those with progressive tax systems that have caught surging revenues from investment income enjoyed by wealthy residents — like Silicon Valley moguls — are also faring well.
California officials expect a $15 billion surplus this fiscal year, after fearing a $54 billion shortfall. Virginia has seen nearly $2 billion in unanticipated revenues. As has Oregon, where economists recently upgraded the state’s revenue forecasts — moving it from projected deficits to surplus — in a report that surprised and delighted many lawmakers.
“It’s extremely surprising,” said Mark McMullen, the Oregon state economist.
“Obviously, when the shutdowns first set in and we saw these catastrophic employment losses, we treated them as a normal recession in our forecasts,” he said.
But surging income tax revenues and several rounds of federal assistance have now put the state “above our prepandemic forecasts,” Mr. McMullen added.
The strong revenue figures come as more federal relief money is just beginning to roll out the door. The Treasury Department began sending funds to states this month and has so far distributed more than $100 billion — about half of what is available to be disbursed immediately. Local governments are expected to receive the rest next year, although states still experiencing a sharp rise in unemployment will get a lump sum right away.
as a much lower risk than Mr. Summers does.
Other analysts warn that state budget situations could sour if the stock market dips sharply or economic growth fizzles. Many cities, like New York, have struggled with sluggish tax revenues and still are reliant on federal to help avoid further layoffs.
New York expects to receive more than $22 billion in Covid-19 federal aid, according to the nonpartisan Citizens Budget Commission. Despite the funds, the city is still anticipating budget gaps in the coming years, the result of declining revenues like property taxes.
In retrospect, said Lucy Dadayan, a senior research associate at the Tax Policy Center, the March law should have included “more targeted funding” for the states and cities that need it most.
$8.8 billion from the federal government. Ben Watkins, the director of the Florida Division of Bond Finance, said the state was using the relief money to invest in infrastructure and water quality projects and directing some of its surplus funds to hurricane preparedness.
He described the windfall as staggering.
“It’s a good problem to have,” Mr. Watkins said, “but that doesn’t mean that it’s not excessive.”
States have substantial leeway in how they use the money, though they are prohibited from using the funds to subsidize tax cuts. Several Republican-led states have sued the Treasury Department, arguing that the restriction infringes on state sovereignty.
The lawsuits do not appear to be slowing the delivery of the funds. Ohio failed to win an injunction blocking the restrictions from being enforced this month, and Missouri had its case thrown out of court after a federal judge said the state did not demonstrate that the law caused it harm.
$26 million corporate tax cut last week, and lawmakers have told The Omaha World-Herald that they believe that by keeping the federal funds in a separate account from the state’s general fund, they will be in compliance with the law.
Nicholas Fandos and Dana Goldstein contributed reporting.
Good morning and happy Sunday. Here’s what you need to know in business and tech news for the week ahead. — Charlotte Cowles
had a rough week. Digital currencies saw several ugly crashes, with Bitcoin ending Friday nearly 30 percent below its price a week before. The plunge followed an announcement from China that effectively banned its financial institutions from providing services related to cryptocurrency transactions. (Elon Musk’s sudden about-face on Bitcoin probably didn’t help, either.) The volatility shook some investors’ confidence in crypto, which has ridden a seemingly unstoppable wave of popularity — and gained traction with mainstream investors — over the past year.
Texas, Oklahoma and Indiana joined more than a dozen other states that are ending federal pandemic unemployment benefits early, citing the need to incentivize people to get back to work. The decision will get rid of the $300-a-week supplement that unemployment recipients have been getting since March and were scheduled to receive through September. It will also end all benefits for freelancers, part-timers and those who have been out of work for more than six months. Some lawmakers believe that cutting off benefits will encourage more people to apply for jobs, but that’s not always the case — a persistent lack of child care has also prevented many parents from returning to work.
can cause premature death, according to a new study by the World Health Organization. Long hours — also known as overwork — are on the rise and are associated with an estimated 35 percent higher risk of stroke and 17 percent higher risk of heart disease compared with working 35 to 40 hours per week, researchers said.
give the Internal Revenue Service more money to chase down wealthy individuals and companies who cheat on their taxes. As part of the same effort to close tax loopholes, the U.S. Treasury Department is trying to convince other countries to back a 15 percent global minimum tax rate on big companies. The policy is meant to deter corporations from sheltering their operations in tax havens such as Bermuda and the British Virgin Islands. But a number of governments have been hesitant to sign on for fear that they’ll scare off businesses.
Eyeing the Competition
Congress wants to bolster the United States’ ability to compete with China and is willing to throw money at the problem. The senate is working on a bill that would invest $120 billion in the nation’s development of cutting-edge technology and manufacturing. Known as the Endless Frontier Act, the legislation would fund new research on a scale that its proponents say has not been seen since the Cold War. In related news, the European Union blocked an investment deal with China on Thursday, citing concerns with the country’s abysmal human rights record.
C.E.O.s in the Hot Seat
Executives from the largest U.S. banks, including JPMorgan, Bank of America and Goldman Sachs, will testify before lawmakers this week about their actions (or lack thereof) to help struggling Americans and small businesses during the pandemic. Democrats on the Senate Banking and House Financial Services committees organized the hearings to scrutinize the banks’ role in lending money to alleviate the financial pressures of the past 15 months. The testimony could affect how lawmakers seek to regulate Wall Street in the coming years.
soared 30 percent in its initial public offering on Wednesday. Amazon indefinitely extended its ban on police usage of its facial recognition software, which has faced ethical criticism. And New York City lifted nearly all of its pandemic restrictions, allowing businesses to welcome customers back at full capacity.
“We should be on track for a fantastic American comeback summer, full steam ahead,” Senator Mitch McConnell of Kentucky, the Republican leader, said this month on the chamber floor. “From vaccinations to job growth, the new Biden administration inherited favorable trends in every direction.”
“But in several important ways, the decisions of elected Democrats have contributed to slowing the return to normalcy,” he added.
Critics have also questioned the wisdom of the Fed’s commitment to keeping interest rates low and buying bonds even as prices begin to rise. Senator Patrick J. Toomey, Republican of Pennsylvania, said last month that while the Fed “maintains that this bout of inflation will be mild and temporary,” it “may be time for the central bank to consider the alternative.”
Mr. Biden’s aides say they continue to monitor the threat that consumer prices could spiral upward, forcing a rapid policy response that could slam the brakes on economic growth. They say that those risks remain low, and that they see no reason to change course on the president’s agenda, including proposed infrastructure and social programs that the president asserts will bolster the economy for years to come. That agenda could prove a more difficult sell, even among congressional Democrats, if job growth continues to disappoint and inflation soars higher than expected.
Fed officials also remain undaunted. They show no sign of raising interest rates soon and are continuing to buy $120 billion in government-backed bonds each month. Officials have given only the earliest hints that they might begin to tiptoe away from that emergency policy setting. They argue that their job is to manage risks, and the risk of withdrawing help early is bigger than the risk that the economy will overheat.
“I don’t think it would be good for the industries we want to see thriving as the recovery continues for us to close off that recovery prematurely,” Randal K. Quarles, the Fed’s vice chair for supervision, said at a House committee hearing this week as lawmakers pressed him on the threat of inflation. The Fed is independent of the White House, but responsible for keeping prices in check.
Voters give Mr. Biden high marks for his economic stewardship thus far. A solid majority of Americans — including many Republicans — approve of the president’s plans to raise taxes on high earners and corporations to fund new spending on water pipes, electric vehicles, education, child care assistance, paid leave and other programs, according to polling for The New York Times conducted by the online research firm Survey Monkey from May 3 to 9.