View Source

We Asked Congress’s Freshmen to Give Up Stock Trading. Few Were Willing.

Additional attention in this area is a notion with bipartisan support, in an era that lacks much of that. In June, Representatives Chip Roy, Republican of Texas, and Abigail Spanberger, Democrat of Virginia, introduced what they called the Trust Act.

The bill would require their colleagues, spouses and dependent children to use a qualified blind trust, as Mr. Ossoff and Mr. Kelly are doing. With such vehicles, a third party would control individual stocks, if any, and some other investment assets and keep the beneficiary from knowing much about the contents or from trading on specialized knowledge of coming legislation. (Owning and trading common investments like mutual funds would be fine.)

“This is about making it easier for members of Congress to do their job,” Mr. Roy said at the time.

And let us not forget what I outlined in detail in a November column: They’ll all end up with more money in the end, on average, if they (or their stockbrokers) stop believing that they’re smart enough to beat the market. The studies on this are legion, and a particularly fun one showed how badly people in Congress did, on average, when they tried to outsmart the market between 2004 and 2008.

It is perhaps not surprising that those who would be elected officials would not be passive investors. The same enhanced sense of self that propels many of them to run for office may well make them think they have some kind of stock-picking superpower. They almost certainly don’t — and neither do the financial advisers who are charging them handsomely. Perhaps they’ll come to their senses eventually.

Others may own stock or trade it to blow off steam, as a form of gambling. If they can afford to lose the money, and are truly not using any inside information or in a position to influence the policies that affect the companies they bet on, then there is no real harm.

But do they wish to lose elections over it?

Certainly, stock trading wasn’t the only issue at play in Georgia. But in purple parts of the country or districts where upstarts in their own party would try to make a case of it, these newly elected officials could be vulnerable. If they avoid individual stocks for political reasons rather than more principled reasons, so be it. It’s all to the good.

View Source

Amazon Union Vote: Labor Loss May Bring Shift in Strategy

“Everywhere they tried, they were defeated,’’ Nelson Lichtenstein, a labor historian at the University of California, Santa Barbara, said of the unions. “Walmart would send teams to swamp the stores to work against a union. They are good at it.”

As with Walmart, labor leaders believed it was critical to establish a foothold at Amazon, which influences pay and working conditions for millions of workers thanks to the competitive pressure it puts on rivals in industries like groceries and fashion.

But the labor movement’s failure to make inroads at Walmart despite investing millions of dollars has loomed over its thinking on Amazon. “They felt so burned by trying to organize Walmart and getting basically nowhere,” said Ruth Milkman, a sociologist of labor at the Graduate Center of the City University of New York.

It was only a relatively small, scrappy union, the Retail, Wholesale and Department Store Union, that felt the election in Alabama was worth the large investment. As the votes were being tallied, Stuart Appelbaum, the union’s president, attributed the one-sided result to a “broken” election system that favors employers.

Amazon saw things differently. “It’s easy to predict the union will say that Amazon won this election because we intimidated employees, but that’s not true,” the company said in a statement. “Our employees made the choice to vote against joining a union. Our employees are the heart and soul of Amazon, and we’ve always worked hard to listen to them.”

Yet even as elections have often proven futile, labor has enjoyed some success over the years with an alternative model — what Dr. Milkman called the “air war plus ground war.”

The idea is to combine workplace actions like walkouts (the ground war) with pressure on company executives through public relations campaigns that highlight labor conditions and enlist the support of public figures (the air war). The Service Employees International Union used the strategy to organize janitors beginning in the 1980s, and to win gains for fast-food workers in the past few years, including wage increases across the industry.

View Source

Skims Raises Funds At $1.6 Billion Valuation

Chewy’s co-founder is set to become GameStop’s chairman. Ryan Cohen’s investment in GameStop last year was one of the factors driving its torrid run as the “meme stock” of choice. Mr. Cohen and several others with connections to the online pet retailer are expected to be elected to GameStop’s board in June, pledging to turn GameStop retailer into the “Chewy of gaming.”

John Coates, the acting director of the corporate finance division at the S.E.C., issued a lengthy statement yesterday about how securities laws apply to blank-check firms. In particular, he is interested in a crucial (and controversial) difference between SPACs and traditional I.P.O.s: blank-check firms are allowed to publish often-rosy financial forecasts when merging with an acquisition target, while companies going public in an I.P.O. are not.

“With the unprecedented surge has come unprecedented scrutiny,” Mr. Coates wrote of the recent boom in blank-check deals. Investors raise money for SPACs via an I.P.O., and those funds are used to merge with an unspecified company in the future, thereby taking it public. Because the so-called “de-SPAC” deal is technically a merger, it’s given the same “safe harbor” legal protections for its financial forecasts as a typical M.&A. deal. With traditional I.P.O.s, companies can’t issue such projections to prospective investors, because regulators consider it too risky for firms as yet untested by the public markets.

The S.E.C. thinks financial forecasts for SPACs might be a problem. They can be “untested, speculative, misleading or even fraudulent,” Mr. Coates wrote. At the end of his statement, he suggested a major rethink of how the “full panoply” of securities laws apply to SPACs, which could upend the blank-check business model:

If we do not treat the de-SPAC transaction as the “real I.P.O.,” our attention may be focused on the wrong place, and potentially problematic forward-looking information may be disseminated without appropriate safeguards.

The letter serves as a warning. Unless the S.E.C. issues new rules (as it did for penny stocks) or Congress passes legislation, SPAC projections will continue. But this strongly worded statement could moderate or even mute them. “The S.E.C has now put them on notice,” Lynn Turner, a former chief accountant of the agency, said.


Leon Black’s announcement that he was stepping down from Apollo sooner than expected came just days after directors learned of sexual harassment allegations against him, The New York Post reports. Mr. Black denied the claims, which the woman, Guzel Ganieva, tweeted about in mid-March.

View Source

German lawmakers move to strengthen the government’s powers in the pandemic.

BERLIN — Germany’s government plans to ask lawmakers to grant it stronger powers in order to introduce a nationwide lockdown as the country is gripped by a third wave of the coronavirus.

The country’s approach has so far been to have the governors of Germany’s 16 states agree to any nationwide pandemic policies. But as calls from public health officials have grown stronger for a new nationwide lockdown in recent weeks, Chancellor Angela Merkel has had trouble gaining all of the governors’ support.

The lawmakers’ new plan seeks overcome regional differences in how to curb the latest surge in cases. It will be put before Ms. Merkel’s cabinet next week, Ulrike Demmer, a spokeswoman for the chancellor, told reporters on Friday.

The law would spell out which restrictions would be imposed in areas with over 100 new cases per 100,000 residents over a period of seven days.

offered a public apology.

Speaking on national television, she then raised the idea of seeking Parliament’s support in consolidating her government’s powers to ensure that all states abide by the same rules. Germany has been wary of consolidating power in the central government since World War II, but several lawmakers have backed the idea for this specific circumstance.

“The aim here is to create uniform national rules,” Ms. Demmer said, adding that the law change would be put before cabinet on Tuesday.

The German authorities registered 25,464 new infections on Thursday, 3,576 more than a week ago. On Thursday, nearly 300 people died of the virus.

“There will be, once again, a couple of difficult weeks,” Health Minister Jens Spahn said on Friday, calling for a unified lockdown. “It is about not overburdening our health care system. It is about protecting human lives.”

A planned meeting between the chancellor and state leaders that was planned for Monday was canceled as part of the decision, Ms. Demmer said.

Christopher F. Schuetze contributed reporting.

View Source

Are Your Illegal Drugs Pure? New Zealand Will Check Them for You.

According to the most recent data from the Ministry of Health, around 9 percent of New Zealanders have used an illicit drug in the past year, with cannabis the most popular. Synthetic cannabis is a common problem, with more than 40 deaths associated with the drug reported in 2018. (The country narrowly voted against legalizing marijuana in a referendum last year.) Drugs are the third most common reason young people are kicked out of school.

While New Zealand has long struggled with methamphetamine abuse, party drugs are increasingly common. In 2019, the New Zealand police seized more than two million Ecstasy tablets and their equivalents, up 560 percent from 2018.

It is these party drugs in particular that have resulted in injury or death, sometimes as a result of people taking mislabeled or contaminated drugs. This year, KnowYourStuff received almost 1,000 messages from festivalgoers who reported atypical reactions to drugs sold to them as MDMA, including paranoia, seizures, severe nausea and days of insomnia. The drugs are believed to have been contaminated with synthetic cathinones.

Speaking in Parliament last year, Andrew Little, the minister of health, emphasized that the current New Zealand government saw drug policy as a health matter rather than a criminal one.

A prosecution-led approach has not worked, he said, adding: “It’s not changing. If we want to change behaviors, then we’ve got to take a different approach.”

The data is spotty, but promising.

A survey from Victoria University found that 68 percent of surveyed festivalgoers who used the testing services changed their behavior, with some reducing the amount they took while others disposed of their drugs altogether.

A similar study held at a festival in Canberra, Australia, in 2019 found that “all those who had a very dangerous substance detected disposed of that drug in the amnesty bin.”

View Source

With Warning to Democrats, Manchin Points the Way for Biden’s Agenda

Republican senators, singed by their experience on the pandemic aid bill, responded to Mr. Biden’s gestures to bipartisanship by issuing a chilly statement saying that the last time he made a public plea to work together, “the administration roundly dismissed our effort as wholly inadequate in order to justify its go-it-alone strategy.”

In an appearance on “Fox News Sunday,” Senator Roy Blunt, Republican of Missouri, pushed the administration to negotiate an infrastructure measure that would represent about 30 percent of the $2.25 trillion being proposed, before turning to budget reconciliation for any additional spending increases.

“My advice to the White House has been, take that bipartisan win, do this in a more traditional infrastructure way and then if you want to force the rest of the package on Republicans in the Congress and the country, you can certainly do that,” Mr. Blunt said.

Importantly, Republicans have no interest in the corporate tax increase that would essentially undo their most significant legislative achievement of the Trump era. Neither do business groups, which have helped broker some bipartisan compromises on economic issues in the past but have lost some power in recent years as populist impulses have swept both parties.

Senator Mitch McConnell, the Kentucky Republican and minority leader, called the tax proposal “an effort to rewrite the 2017 tax bill,” which itself passed via budget reconciliation with no Democratic votes.

The Trump tax law “in my view was principally responsible for the fact that in February 2020 we had the best economy of 50 years,” Mr. McConnell said. “But they are going to tear that down.”

Still, business lobbyists and some lawmakers remain hopeful that Mr. Manchin’s appeal could prod Mr. Biden and congressional leaders toward a set of mini-compromises on infrastructure. Such deals could including spending big on research and development for emerging industries, like advanced batteries, in the supply chain bill, which carries bipartisan sponsorship in the Senate. They could also include spending a few hundred billion dollars on highways and other surface transportation projects. That could satisfy at least some of Mr. Manchin’s quest for bipartisanship and give both parties the ability to claim victory.

View Source

Biden Plan Spurs Fight Over What ‘Infrastructure’ Really Means

“Many people in the states would be surprised to hear that broadband for rural areas no longer counts,” said Anita Dunn, a senior adviser to Mr. Biden in the White House. “We think that the people in Jackson, Miss., might be surprised to hear that fixing that water system doesn’t count as infrastructure. We think the people of Texas might disagree with the idea that the electric grid isn’t infrastructure that needs to be built with resilience for the 21st century.”

White House officials said that much of Mr. Biden’s plan reflected the reality that infrastructure had taken on a broader meaning as the nature of work changes, focusing less on factories and shipping goods and more on creating and selling services.

Other economists back the idea that the definition has changed.

Dan Sichel, an economics professor at Wellesley College and a former Federal Reserve research official, said it could be helpful to think of what comprises infrastructure as a series of concentric circles: a basic inner band made up of roads and bridges, a larger social ring of schools and hospitals, then a digital layer including things like cloud computing. There could also be an intangible layer, like open-source software or weather data.

“It is definitely an amorphous concept,” he said, but basically “we mean key economic assets that support and enable economic activity.”

The economy has evolved since the 1950s: Manufacturers used to employ about a third of the work force but now count for just 8.5 percent of jobs in the United States. Because the economy has changed, it is important that our definitions are updated, Mr. Sichel said.

The debate over the meaning of infrastructure is not new. In the days of the New Deal-era Tennessee Valley Authority, academics and policymakers sparred over whether universal access to electricity was necessary public infrastructure, said Shane M. Greenstein, an economist at Harvard Business School whose recent research focuses on broadband.

“Washington has an attention span of several weeks, and this debate is a century old,” he said. These days, he added, it is about digital access instead of clean water and power.

View Source

Inside Corporate America’s Frantic Response to the Georgia Voting Law

On March 11, Delta Air Lines dedicated a building at its Atlanta headquarters to Andrew Young, the civil rights leader and former mayor. At the ceremony, Mr. Young spoke of the restrictive voting rights bill that Republicans were rushing through the Georgia state legislature. Then, after the speeches, Mr. Young’s daughter, Andrea, a prominent activist herself, cornered Delta’s chief executive, Ed Bastian.

“I told him how important it was to oppose this law,” she said.

For Mr. Bastian, it was an early warning that the issue of voting rights might soon ensnare Delta in another national dispute. Over the past five years, corporations have taken political stands like never before, often in response to the extreme policies of former President Donald J. Trump.

After Mr. Trump’s equivocating response to the white nationalist violence in Charlottesville, Va., in 2017, Ken Frazier, the Black chief executive of Merck, resigned from a presidential advisory group, prompting dozens of other top executives to distance themselves from the president. Last year, after the killing of George Floyd, hundreds of companies expressed solidarity with the Black Lives Matter movement.

But for corporations, the dispute over voting rights is different. An issue that both political parties see as a priority is not easily addressed with statements of solidarity and donations. Taking a stand on voting rights legislation thrusts companies into partisan politics and pits them against Republicans who have proven willing to raise taxes and enact onerous regulations on companies that cross them politically.

Major League Baseball pulled the All-Star game from Atlanta in protest, and more than 100 other companies spoke out in defense of voting rights.

The groundswell of support suggests that the Black executives’ clarion call will have an impact in the months ahead, as Republican lawmakers in more than 40 states advance restrictive voting laws. But already, the backlash has been swift, with Mr. Trump calling for boycotts of companies opposing such laws, and Georgia lawmakers voting for new taxes on Delta.

eliminate a tax break for Delta, costing the company $50 million.

Yet as 2021 began and Mr. Bastian focused on his company’s recovery from the pandemic, an even more partisan issue loomed.

In February, civil rights activists began reaching out to Delta, flagging what they saw as problematic provisions in early drafts of the bill, including a ban on Sunday voting, and asking the company to use its clout and lobbying muscle to sway the debate.

Delta’s government affairs team shared some of those concerns, but decided to work behind the scenes, rather than go public. It was a calculated choice intended to avoid upsetting Republican lawmakers.

In early March, Delta lobbyists pushed David Ralston, the Republican head of the Georgia house, and aides to Gov. Brian Kemp to remove some far-reaching provisions in the bill.

followed the same script, refraining from criticizing the bill.

That passive approach infuriated activists. In mid-March, protesters staged a “die in” at Coca-Cola’s museum. Bishop Reginald Jackson, an influential Atlanta pastor, took to the streets with a bullhorn and called for a boycott of Coca-Cola. Days later, activists massed at the Delta terminal at the Atlanta airport and called on Mr. Bastian to use his clout to “kill the bill.” Still, Mr. Bastian declined to say anything publicly.

Two weeks to the day after Delta dedicated its building to Mr. Young, the law was passed. Some of the most restrictive provisions had been removed, but the law limits ballot access and makes it a crime to give water to people waiting in line to vote.

The fight in Georgia appeared to be over. Days after the law was passed though, a group of powerful Black executives frustrated by the results sprang into action. Soon, Atlanta companies were drawn back into the fight, and the controversy had spread to other corporations around the country.

spoke with the media. “There is no middle ground here,” Mr. Chenault told The Times. “You either are for more people voting, or you want to suppress the vote.”

“This was unprecedented,” Mr. Lewis said. “The African-American business community has never coalesced around a nonbusiness issue and issued a call to action to the broader corporate community.”

Mr. Bastian had been unable to sleep on Tuesday night after his call with Mr. Chenault, according to two people familiar with the matter. He had also been receiving a stream of emails about the law from Black Delta employees, who make up 21 percent of the company’s work force. Eventually, Mr. Bastian came to the conclusion that it was deeply problematic, the two people said.

accused Mr. Bastian of spreading “the same false attacks being repeated by partisan activists.” And Republicans in the Georgia house voted to strip Delta of a tax break, just as they did three years ago. “You don’t feed a dog that bites your hand,” said Mr. Ralston, the house speaker.

Senator Marco Rubio of Florida posted a video in which he called Delta and Coca-Cola “woke corporate hypocrites” and Mr. Trump joined the calls for a boycott of companies speaking out against the voting laws.

Companies that had taken a more cautious approach weren’t targeted the same way. UPS and Home Depot, big Atlanta employers, also faced early calls to oppose the Georgia law, but instead made unspecific commitments to voting rights.

declared their opposition to proposed voting legislation in that state. And on Friday, more than 170 companies signed a statement calling on elected officials around the country to refrain from enacting legislation that makes it harder for people to vote.

It was messy, but to many activists, it was progress. “Companies don’t exist in a vacuum,” said Stacey Abrams, who has worked for years to get out the Black vote in Georgia. “It’s going to take a national response by corporations to stop what happened in Georgia from happening in other states.”

View Source

American Airlines and Dell push back against restricting voter access in Texas.

More large companies have voiced their opposition to Republican-led efforts to restrict voting, this time in Texas.

On Thursday, American Airlines and Dell Technologies declared their objections to proposals in the state that would restrict local measures intended to make voting easier, such as by extending early voting hours.

The pushback in Texas came just a day after Delta Air Lines and Coca-Cola spoke out against similar efforts in Georgia, though both companies waited until after Georgia’s governor had already signed the law to criticize it.

“I need to make it crystal clear that the final bill is unacceptable and does not match Delta’s values,” Ed Bastian, Delta’s chief executive, wrote in an internal memo to employees on Wednesday that the company has posted on its website. Delta is Georgia’s largest employer.

Coca-Cola, which had also declined to take a position on the legislation before it passed, made a similarly worded statement.

Those comments came a day after a group of Black executives, led by the former chief executive of American Express and the current chief executive of the drugmaker Merck, called on companies to oppose proposed bills making it more difficult to vote across the country — saying that they would particularly impact the voting rights of Black Americans.

On Thursday, American Airlines and Dell each addressed separate bills making their way through the Texas legislature.

“Earlier this morning, the Texas State Senate passed legislation with provisions that limit voting access, ” the airline said in a statement on Thursday, referring to Senate Bill 7. “To make American’s stance clear: We are strongly opposed to this bill and others like it.”

Michael Dell, the chief executive of the Round Rock, Texas-based company that bears his name, took to Twitter to voice his company’s opposition to House Bill 6, a measure that would stop local election officials from proactively sending out applications for mail-in ballots.

“Free, fair, equitable access to voting is the foundation of American democracy,” Mr. Dell wrote on Thursday. “Those rights — especially for women, communities of color — have been hard-earned. Governments should ensure citizens have their voices heard. HB6 does the opposite, and we are opposed to it.”

Southwest Airlines, which is based in Dallas, declined to comment on specific legislation. “In our view, the right to vote is foundational to our democracy and a right coveted by all,” the company said in a statement on Friday. “We believe every voter should have a fair opportunity to let their voice be heard.”

View Source