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Business and Industry

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Published: Mon, 24 Oct 2016 00:00:00 -0400

Last Build Date: Mon, 24 Oct 2016 10:34:15 -0400


Drafter of U.S. Dietary Goals Was Bribed by Big Sugar to Demonize Fat

Tue, 13 Sep 2016 11:33:00 -0400

Newly released historical documents show how the sugar industry essentially bribed Harvard scientists to downplay sugar's role in heart disease—and how the U.S. government ate it up. The link between a high-sugar diet and the development of metabolic problems had begun emerging in the 1950s. In 1965, a group called the Sugar Research Foundation (SRF) funded a study assessing previous studies on this possibility. That literature review, published in the prestigious New England Journal of Medicine in 1967, concluded that fat and cholesterol were the real culprits when it came to coronary heart disease. "The SRF set the review's objective, contributed articles for inclusion, and received drafts," according to a new paper published in JAMA Internal Medicine "The SRF's funding and role was not disclosed." The New York Times wants this to be a story about junk-food bigwigs screwing with science to the detriment of American health. And it is, in part. But beyond that, the findings also indict "dietary science" that the U.S. government has been pushing for decades, and still continues to push. As we know now, high cholesterol levels in the blood may portend heart problems, but consuming high-cholesterol food—such as eggs, long demonized as a heart-health no-no—doesn't correlate to high blood-cholesterol. And saturated fats come in many forms, some bad for you and others some of the healthiest things you can consume. But for decades, conventional wisdom in America said that dietary fats and cholesterol were to be extremely rare in a nutritious diet. Meanwhile, sugar got a rep for rotting your teeth (and maybe packing on a few pounds) but was otherwise considered benign. And this demonization of fat actually helped increase U.S. sugar consumption, as health conscious Americans replaced morning eggs and sausage with carbs like bagels, or turned to low-fat and fat-free offerings where added sugar helped fill the taste void. How did Big Sugar pull this off? With a little help from Harvard scientists, for starters. SRF—now called the Sugar Association—paid three of them the equivalent of $49,000 in today's dollars to publish the misleading literature review. One of these scientists, the late D. Mark Hegsted, went on to become a major driver of U.S. dietary advice. In the early '60s, Hegsted had developed what came to be known as the "Hegsted equation," which allegedly showed how saturated fats in eggs and meat raise blood cholesterol. A few years after he was paid by the sugar industry to demonize fat and cholesterol, he was elected to the National Academy of Sciences and edited its Nutrition Reviews for a decade. Hegsted would also go on to help the U.S. Department of Agriculture (USDA) draft its first "Dietary Goals for the United States," a 1977-precursor to today's federal Dietary Guidelines for Americans, and to be hired by the agency as the head of its nutrition division, a position he held from 1978-1982. "Even though the influence-peddling revealed in the documents dates back nearly 50 years, more recent reports show that the food industry has continued to influence nutrition science," the Times notes. That's also true. What the Times doesn't say, however, is how much the food industry continues to influence federal food policy and advice even independent of any shady research. At the 2015 National Food Policy Conference, a two-day affair I attended in downtown D.C., food-industry associates gave talks alongside federal officials and their logos— Nestlé, Dannon, Cargill—were splashed everywhere. The food industry has and continues to influence nutrition "knowledge" because federal agencies encourage it. A report published last fall found that government nutrition rules have been and are still based more on money and politics than sound science. The latest update to federal dietary guidelines still cautions against saturated fat and sodium. Members of the committee that developed these guidelines have accepted funding from industry groups, such as the Tree Nut Council, and food companies such as Unilever. (Last f[...]

Can a Bot Run a Company?

Tue, 24 May 2016 08:30:00 -0400

Can a bot run a company? A hot new tech venture that wants to run entirely by code thinks so. It's called "The DAO"—short for Decentralized Autonomous Organization—and it aims to run as a for-profit corporate body that will obviate the need for human beings to make business decisions. That is, provided that the human beings behind The DAO can set it up right. While this leaderless digital profit-maximization machine may sound more like a clever science fiction plot device than a serious investment vehicle, The DAO has raised over $150 million worth of funding on the Ethereum platform since it first launched a mere month ago. For context, this blew the $116 million record for cryptocurrency-business financing raised by Silicon Valley darling 21 Inc. out of the water. An eyebrow-raising start to be sure, but The DAO faces a long and bumpy road to the world of ubiquitous, autonomous digital organizations that its founders envision. Disrupting Investing The DAO presents itself as part venture capital fund, part crowdfunding platform, and part super-cool engine of democratic capitalism for tomorrow. It seeks to raise investment into the platform by selling digital "DAO tokens" in exchange for ether (ETH), the cryptocurrency of the distributed computing platform Ethereum on which The DAO is built. The DAO, which defines itself as "the sum of those holding the DAO's representative tokens," will then invest these funds into promising projects that will hopefully yield big returns for token holders.  Where The DAO differs from traditional venture-capital firms is in its management structure. Like the similar BitShares project that preceded this effort, there are no executives or middle managers to call shots and guide activity. As its website proudly informs: "THE DAO IS CODE." Or maybe code plus consensus, but more on that in a moment. Purchasing a DAO token is a bit like entering into a new kind of business arrangement where you bind yourself to the financial outcomes of a crowd-influenced, pre-programmed directive.  Integral to this are "smart contracts." First conceived by the cryptographic legal theorist Nick Szabo two decades ago, a smart contract is a computer protocol that digitally enforces terms in way that is self-executing or self-enforcing. Relying on an established court of law to adjudicate contracts can be messy and costly. Digitization provides us an opportunity to secure agreements in a way that makes it expensive or even impossible to breach contractual terms—no taxing trips to the justice of the peace required! Smart contracts can largely enforce themselves. Vending machines are a kind of proto-smart contract. You insert the right amount of money into the machine, select your choice of snack or beverage, and the machine spits out your tasty treat. You did not need to engage with a physical human to munch on those Peanut M&M's since the parameters of each transaction are prefigured into the mechanics of the machine: It can tell how many of each kind of snack can be sold, and at what price. It's a cheap and low-risk way to do business. Smart contracts work similarly, but instead of physical currency and mechanical verification, cryptocurrency and digital consensus combine to execute conditional agreements. Parties can create a digital contract that is coded to perform certain functions in response to specific inputs. Futures contracts can self-execute when a market feed shows that a price moves in a particular way. Rental cars can unlock themselves for use upon receiving the right cryptocurrency payment. And, in the ambitious case of The DAO, investment firms can theoretically automate core business operations. The Humans Behind the Bots So, if The DAO is "run by robots," how do decisions get made? By humans, actually. Humans decide what terms to select, and the code executes. Here's how it is supposed to work.  There are three kinds of parties in The DAO: contractors, curators and token-holders. Contractors are teams who propose projects to be funded by The D[...]

The Beauty of Coca-Cola's New Parental Leave Policy

Wed, 13 Apr 2016 07:37:00 -0400

Coca-Cola this week announced a massive expansion of its parental-leave policy for non-union U.S. employees. The new policy covers not just female employees who give birth but dads, adoptive parents, and foster parents, all of whom will be entitled to six weeks paid leave. Biological mothers will be entitled to the six weeks parental leave plus six to eight weeks of short-term disability leave following the birth of a child. The new policy goes into effect January 1, 2017.  "Fostering an inclusive workplace means valuing all parents—no matter their gender or sexual orientation," said Ceree Eberly, Coke’s "chief people officer," in a statement. "We think the most successful way to structure benefits to help working families is to make them gender-neutral and encourage both moms and dads to play an active role in their family lives." Opening parental leave to all genders and sexual orientations will hopefully help combat the penalty new moms can face for taking maternity leave, the company says. "While lengthy maternity leave policies have helped some companies retain female talent, the lack of female senior executives has remained," it notes. "By removing gender from the equation and offering all new parents the same amount of paid leave, Coca-Cola hopes to combat bias and help pave the way for more women in leadership positions." So why should anyone outside Coca-Cola care about this change? Because the move comes at a time of increased pressure for cities, states, and the federal government to impose mandatory paid family leave requirements on private businesses. And this idea is predicated on the view that businesses won't adapt on their own accord. But Coca-Cola's new policy comes not from top-down regulations but movement within the organization, driven by millennial employees.  "Internal surveys and external research highlighted the value [millennials] place on parental leave and revealed that the average age of first-time, college-educated parents is 30—also the median age of Coke’s current and prospective Millennial employees," the company reports. "Millennials will account for more than half of the global Coca-Cola system workforce by 2020. "Paid parental leave isn’t just a nice thing to do, it’s the smart thing to do for our business," said 27-year-old Katherine Cherry, one of five millennial employees who worked with Coke’s HR team on the new parental leave policy. Just like employers began offering health insurance last century in order to attract top talent, big companies these days are increasingly realizing the value from a business perspective of offering flexible work arrangements and parental leave benefits. Major employers to recently expand their parental leave policies include Bank of America, Credit Suisse, Facebook, Microsoft, Amazon, Etsy, Netflix, and J.P. Morgan and, according to the Society for Human Resource Management, the number of large U.S. corporations that at least offer paid maternity leave jumped from 12 percent in 2014 to 21 percent in 2015. [...]

Virtually No Gender Pay Gap at Amazon

Thu, 24 Mar 2016 11:05:00 -0400

(image) Just a week after the Securities and Exchange Commission (SEC) ordered Amazon to let shareholders vote on "gender pay gap" disclosure, the company reports that its female employees earn 99.9 cents for every dollar that male employees in the same job do.

"Our recent review of the compensation we awarded last year at Amazon–including both base and stock–resulted in women earning 99.9 cents for every dollar that men earn in the same jobs, and minorities earning 100.1 cents for every dollar that white employees earn in the same jobs," the company said in an email statement Wednesday. "There will naturally be slight fluctuations from year to year, but at Amazon we are committed to keeping compensation fair and equitable." 

Amazon is not releasing more info at this time about the methods it used to come to these conclusions, but according to VentureBeat the survey "was conducted by an external labor economist" and "covered Amazon workers at various levels of the company’s organization in the United States." As of last summer, Amazon estimated that 39 percent of its global workforce was female and women held about a quarter of management positions. 

Earlier this month, the SEC rejected a request from Amazon to forego shareholder voting on a pay-gap proposal submitted by two shareholders and an activist investment firm, Arjuna Capital. The proposal, submitted to Amazon and eight other tech companies, said that shareholders should get to vote on whether companies included data on "the percentage pay gap between male and female employees, policies to address that gap, and quantitative reduction targets" in their annual reports. 

In a letter to the SEC, Amazon complained that the proposal "gives no indication of how earnings should be calculated for purposes of the requested report... makes no mention of whether the gender pay gap is calculated based on median earnings or mean average earnings, whether earnings are calculated based only on full-time employees or full-time/full year employees, or whether part-time employees should be included (and if so, whether their earnings should be converted to a full-time equivalent basis)... (and) gives no indication of which of the various definitions of earnings used ... is to be applied."

"Different calculation methods for determining 'earnings' could show significantly different results," Amazon continued, and "failing to adequately describe the standard, and in fact misleadingly suggesting that there is a single, clearly understood [standard] is impermissibly vague and misleading."

But some have accused Amazon of being misleading itself with the new pay data. "When the most senior, well-paid people at your company are almost exclusively male, is it really accurate to say your business pays men and women about the same amounts?" writes Emily Peck at the Huffington Post.

And here we go again... Whether to measure gender pay differences based on people in the same (or "substantially similar") jobs or as cross-company or country averages has been and continues to be a subject of fierce debate. I tend to think the former information is more useful, but the latter is better for propaganda and goal-post shifting purposes. 

Starbucks Gets Sappy About the 2016 Election in Full-Page Newspaper Ads

Thu, 24 Mar 2016 09:38:00 -0400

The New York Times and Wall Street Journal readers Thursday were greeted with a full-page ad calling for "compassion, respect, shared responsibility," and other high-minded virtues from Americans as we slog though the 2016 election season. "When you read the headlines... scroll through your social media feed," or "listen to the candidates," it's easy to mistake America as being "lost," the ad laments. But today, we must "go beyond the hatred and vitriol, and see a different story of America."

A "story that is not bound by party affiliations or religious beliefs."

A story that is neither "left-leaning or right-leaning."

A story about how some corporate-social-responsibility hack convinced the Starbucks leadership that this preening, saccharine call for unity was worthwhile...

"This is not about the choice we make every four years," the new Starbucks ad concludes. "This is about the choices we make every single day." And then comes the Starbucks logo, reminding you to choose your coffee wisely today. 


Of course, Starbucks has a history of silly kumbaya messaging and stunts. In 2015, the company embarked on an awkward mission to have baristas "start a dialogue about race" with customers by penning slogans on their coffee cups. If there's anything to be gleaned from this other than a good eyeroll opportunity, it's the way much of it could be read as an implicit criticism of Republican presidential frontrunner Donald Trump. There are lines condemning the "hatred and vitriol" you see in the news and on social media and celebrating the virtues of "those who work to include, rather than discriminate." 

Then again, that's pretty standard stuff for Starbucks' CEO Howard Schultz, who may be a good businessman but talks about culture and society like someone you would try to avoid late-night in the college dormitory. At Starbucks annual shareholders meeting in Seattle Wednesday, Schultz praised John F. Kennedy and Martin Luther King, Jr. and asked the assembled to "fill our reservoir back up with the true promise of our country and once again embrace what it means to be Americans."  

Update: Here's page two of the Starbucks ad that ran in the Times and Journal today.


How the NSA Is Killing American Small Businesses

Tue, 15 Mar 2016 15:58:00 -0400

The Small Business Web is a trade association for companies that sell cloud software to other small- and medium-size businesses. What began in 2009 right here at South by Southwest (SXSW) has grown into an organization with over 1,000 members, including companies like Constant Contact and Hootsuite. While attending the conference this weekend I had a chance to chat with Sunir Shah, founder and president of the group (and the chief marketer at Olark, itself a cloud software company that provides a live chat tool that businesses can use to talk to customers online). He shared some thoughts about the ways the federal government, especially via National Security Agency (NSA) domestic spying, is hurting small businesses like the ones his trade association represents. (The below transcript has been edited for clarity and length.) Q: Tell me about the ways the federal government is affecting what Small Business Web’s members are trying to accomplish. A: A great example is the current U.S.-E.U. Safe Harbor data privacy treaty that just got blown up in October 2015 by the European Court of Justice directly in response to the Edward Snowden leaks from the NSA. And so now every U.S. company that is doing business with European customers will be asked to sign these things called “standard contractual clauses.” The idea is to implement the same data privacy rights as the treaty, but it has to be signed one-on-one between each E.U. customer and each U.S. company. That's a lot of time and effort to negotiate with our customers’ lawyers. And it’s a very unstable environment with plenty of doubt that this patchwork system will be upheld. These issues are so big and so annoying that it eats up a lot of time. We’re in tech, so you might think of big companies like Google and Microsoft, but most tech companies are small businesses. We have no general counsel. We barely want to call a lawyer, because as soon as you spend money on a lawyer you’re going to lose money on the sale. When selling to small businesses, we need to do things quickly and efficiently. The biggest fear is that the European Union could make it illegal to do business with American companies as long as the data is stored in America. That’s possibly too expensive for most of the companies in the trade association, making them unable to transact in Europe. Q: The concern is that the NSA might gain access to the data that’s being stored here? A: That’s right. At Olark where I work we take a position that we want to have the best, safest privacy policy. We have internal training all the time. We have a security team to make sure that we are treating our customer data with utmost respect and good faith and fidelity. That’s just us acting as an independent company. And so you can negotiate with us, and you can sign a contract with us. The problem is that the government is an external party to every contract. So if the government can snoop on the data of foreign customers, they become a party to those contracts, and we can’t control that. We’re just businesses and private individuals. We have no power over what the government does, especially on national security. But it certainly has an impact on our growth. Because you’ve seen it—after the leaks from Edward Snowden, the sales of American cloud companies have been reduced in Europe. There are real economic burdens, not only on loss of sales because people are afraid and they don’t trust their data is safe; not only in the operational costs of having to move the data centers to Europe; but also in the transactional costs of having to keep up with all the regulatory negotiations around things that are just way beyond the expertise of most of the companies in the trade association. Q: If this is cutting into the bottom line of your members, why aren’t they organizing to stop it? A: We do talk about it, but government lobbying is so beyond most o[...]

Bosses Who Donate to Republicans Are Less Likely to Promote Female Staff

Tue, 01 Mar 2016 09:45:00 -0500

Are Republican-led companies less friendly to female employees? A look at large corporate law firms in the U.S. says yes.  For the study, business professors Seth Carnahan (University of Michigan) and Brad Greenwood (Temple University) examined individual political donations from partners at America's 200 largest law firms between 2007-2012, then weighed these against outcomes for female associates at the firm. The goal was to determine how much managers' personal political ideologies correspond to levels of organizational gender parity.  "In general, women are much less likely to be promoted, and much more likely to leave their firms," said Carnahan, an assistant professor of strategy at Michigan's Ross School of Business. "We found that this gender gap gets smaller when male bosses are more liberal, but it gets larger when male bosses are more conservative."   "Researchers have long argued that a manager’s political ideology, situated on a liberal-conservative continuum and defined as a 'set of beliefs about the proper order of society and how it can be achieved,' can influence organizational outcomes such as investments in corporate social responsibility initiatives, targeting by LGBT activists, and allocation of resources among business units," the authors note in their paper. "If these preferences influence managerial decision-making, a manager’s political ideology may drive considered choices or unconscious biases that have an important influence" on treatment and promotion of female employees.  As one way to test this, Carnahan and Greenwood explored merger-and-acquisition deals which U.S. law firms were involved in from 2007 through 2012—a sample that included 5,702 deals involving 16,860 partners and 18,215 associates at US law firms. Even after controlling for things such as an associate's number of years with a firm, their law-school ranking, shared law-school ties between associates and partners, and law-firm location, they found a "negative interaction between donations to Republicans and the selection of female associates" to serve with partners on client teams. Compared to politically moderate partners, conservative male partners were 2.7 percent less likely than other partners to choose female associates for their deal teams. Liberal male partners were 0.8 percent more likely than moderates to choose a female associate for their teams. The authors also pinpointed associates at America's top 200 law firms in 2006, and followed them until they received a promotion to partner or exited the company. Women made up about 45 percent of all associates. With or without controls factored in, Republican leadership in a practice area corresponded negatively to female promotion rates in that area and positively with turnover rates.  These conservative law-firm heads "are probably not consciously discriminating against women," Carnahan said in a statement, "but their beliefs could influence their willingness to invest in female subordinates. And this could happen on both sides of the spectrum. You could have conservative managers who don't promote women enough and you can have liberal managers who promote women more than they otherwise should." "It is important to emphasize that we don't know the right level of diversity for each office, each organization," said Carnahan. "Our results should not be interpreted as 'anti-conservative' or 'pro-liberal.'"  In the paper, Carnahan and Greenwood suggest that "the most valuable opportunity for future work is to examine whether ideologically driven gender role preferences affect firm performance."  A rapidly growing body of research suggests that gender diversity in corporate ranks can be a boon for business performance. It's not necessarily a matter of women being superior managers, however, or there being some delicate, ideal gender divide within companies that makes th[...]

How Star Wars Conquered the Galaxy

Wed, 09 Dec 2015 07:00:00 -0500

At the end of 1954, the same year that the family of a youngster named George Lucas bought its first television set, Walt Disney Productions aired four one-hour films about a Tennessee congressman who lost his life at the Alamo. The company was caught completely off guard when kids went wild for their new hero, pestering parents to buy Davy Crockett-themed toy guns, sheets, watches, lunch boxes, underwear, mugs, towels, rugs, and pajamas. Most especially, they bought his signature headgear, a coonskin cap, which sold at the reported rate of 5,000 units per day in 1955 alone (the price of raccoon fur jumped from 25 cents to $8 a pound). Within one calendar year, Davy Crockett would spin off an incredible $300 million worth of merchandise, the equivalent of about $2 billion today. Most of that windfall went to independent sellers; licensing as we know it today simply didn't exist back then. But the young Lucas witnessed the results all around him in California's Central Valley and stored the example away in his memory, to be drawn on two decades later as he labored over his third feature film. In 1976, after finishing principal photography on the movie that would create the modern blockbuster, Lucas cast his mind back to the mid-1950s. "Star Wars," he mused to Charles Lippincott, marketing director of the soon-to-be-released space opera, "could be a type of Davy Crockett phenomenon." That, of course, turned out to be the understatement of the century. Even before the December release of The Force Awakens, the Star Wars franchise pulled in an estimated $42 billion total in box office, DVD sales and rentals, video games, books, and related merchandise. And that's just the amount flowing into officially sanctioned channels; the unofficial, unlicensed Star Wars economy has generated untold billions more.                                    See: Star Wars by the Numbers Some $32 billion of that staggering revenue was derived from physical stuff rather than an audio-visual experience. Like Davy Crockett, the Star Wars universe made its biggest economic impact in the realm of merchandise—clothing, accessories, food and drink, housewares (Darth Vader toaster, anyone?), and especially toys. But unlike Walt Disney, George Lucas devised a way to pocket much of that money himself. That helped buy editorial freedom, which helped this obsessive creative make the rest of his movies how he saw fit, for good and ill, until Disney bought the rights to the franchise in 2012 for $4.06 billion. Lucas and Star Wars created a category of economic activity that previously did not exist, and in so doing forever changed the face of entertainment. Action Figure Mecca To understand the scale of Star Wars' physical presence in the modern world, you need to visit a former chicken ranch in the Northern California town of Petaluma—probably one of the few chicken ranches in the world where appointments are both desired and required. The wrought-iron gate at the entrance of the property is adorned with a portrait of Alec Guinness. You park by flagpoles flying the banners of the rebellion and the Empire, and walk past a private home that says "Casa Kenobi." There used to be 20,000 chickens on this ranch; now there are fewer than six in a single coop, near the corner of Yoda Trail and Jedi Way. The others have been replaced, in a long former chicken barn, by what the Guinness World Records book has recognized as the largest Star Wars collection in the world. Welcome to Rancho Obi-Wan. In the building, up a narrow stairway, Steve Sansweet greets you next to an alcove that has a talking head of Obi-Wan. The bust looks like actor Alec Guinness, Obi-Wan number one, but it has the prerecorded voice of James Arnold Taylor, Obi-Wan number three, from the Clone Wars cartoon. "Your[...]

Paris Climate Warriors in a Good Mood

Tue, 08 Dec 2015 09:38:00 -0500

Paris, France – I’ve reported from so many U.N. climate change conferences that I’ve lost count (11 or 12, I think), but I have never before experienced what is happening in the slapped-together particle board hallways of the Le Bourget exposition site: Optimism. Even a bit of giddiness on the part of the diplomats, and even among the always dour environmentalist groups. At earlier meetings the set ritual has been for activists during the second week to issue a constant stream of urgent denunciations. Sure, one still hears here that there is only 24 hours to get this or that deal done, but the upbeat tone is nevertheless widespread. For example, during a press conference John Coequyt, the Sierra Club's Director of Federal and International Climate Campaigns flatly said, “We are very optimistic; we continue to believe that a good deal is possible.” Luxembourg's Minister for the Environment, Carole Dieschbourg, speaking as the European Union’s representative stated, “The new agreement is within reach, a binding global agreement applicable to all parties.” There is another reason for a feeling of serenity at the conference: the absence of mobs of protestors. The commotion produced by of masses of demonstrators inside and outside the climate conferences contributed significantly to the fraught atmosphere that pervaded previous meetings. The French government has used the terrorist atrocities in November as a justification to ban all public protests and marches. This seems to have taken the heart out of lot of would-be climate agitators. Yes, the occasional campaigner dressed in a polar bear costume does wander by, but participants are not being hectored by throngs of doomsters constantly crying climate calamity from their various soapboxes. The result is that the conference venue is imbued with an unaccustomed sense of orderly calm. While many of the 40,000 conference participants may believe that the world is facing catastrophic climate change, they now seem confident that the negotiators will be able to conclude the first ever universal climate accord by the end of this week. As U.S. Special Representative for Climate Change Todd Stern noted during a press conference, the Paris Accord would then guide global energy decisions for essentially the rest of this century. “Paris can be a decisive turning point in history,” declared U.N. Secretary-General Ban Ki-Moon. Noting the presence of hundreds of representatives from business and industry at the meeting, Ban said, “The business community is asking for a clear signal from governments that the low emissions economy is inevitable.” In fact, a lot of participants at the meeting are proclaiming that global warming is really a huge business opportunity. Among others so saying was Union of Concerned Scientists (UCS) Director of Science and Policy, ecologist Peter Frumhoff. “Commitment to a clean energy future is a moral imperative grounded in science and one of the greatest business opportunities of all time,” asserted Frumhoff at a UCS press conference. In the same session, biologist Chris Field who heads up the Carnegie Institution’s Department of Global Ecology, mirrored Frumhoff’s assertion calling the imminently mandated transition away from fossil fuels “the biggest business opportunity of the second half of the 21st century.” For my part, I will just say that people who take investment advice from activist scientists get what they deserve. But what about investment advice from investment banks? On the eve of the Paris conference, Goldman Sachs released its report, The Low Carbon Economy, as an equity investor’s guide to a low carbon world through 2025. The company sees tightening regulations that force the shift away from fossil fuels as driving a market for low carbon power supplies and energy efficiency. The firm identi[...]

Clinton Wants to Tax U.S. Companies for Trying to Pay Less Taxes

Mon, 07 Dec 2015 16:00:00 -0500

The former secretary of state and senator from New York, Hillary Clinton, reportedly will on Wednesday announce plans to impose an "exit tax" on companies that move their headquarters out of America or merge with foreign firms to escape America’s unreasonably high corporate taxes. Back in 2012, when Sen. Chuck Schumer (D-NY) and the then-Speaker of the House, John Boehner (R-Ohio), proposed a similar tax on individuals who chose to leave America, the president of Americans for Tax Reform, Grover Norquist, noted that a similar policy "existed in Germany in the 1930s." Schumer, Norquist memorably suggested, "probably just plagiarized it and translated it from the original German." Indeed, the Reichsfluchsteuer, or Reich flight tax, was a 25 percent levy imposed originally not by the Nazis but rather, on December 8, 1931, by the pre-Hitler, centrist government of Heinrich Brüning, who had a doctoral degree in economics. Not exactly something to try to emulate.  The details of Clinton’s plan haven’t yet been disclosed. But it’s not too early to recognize it as a striking example of how, this election cycle, neither major American political party has the right idea when it comes to the free movement of people and capital across borders. The Republicans want to prevent immigrants from getting in. They usually say they are talking about illegal immigrants, but their rhetoric often indicates a hostility to legal immigrants, including Syrian refugees. The Democrats, meanwhile, want to prevent Americans from getting out. As I pointed out back in 2012, the Universal Declaration of Human Rights, a product of the United Nations, says, "Everyone has the right to leave any country, including his own" and "No one shall be arbitrarily deprived of his property."  Maybe it’s time for a third American political party that would let people and companies come and go freely. Neither the Republicans nor the Democrats as currently constituted seem to fit the bill. Yet the journey across borders is one that was once familiar history to many Americans, whether from the biblical Exodus or the waves of immigrants to the United States from Europe, East Asia, and South America. There is a "natural rights" argument for free flow of human and financial capital, which is to say that it is unjust to force people or companies to stay where they do not want to be. And there is a national history argument for it, which is to say that our own country had an imperfect but nonetheless long history of welcoming immigrants. Go visit Ellis Island or the Statue of Liberty if you doubt that. There’s also a utilitarian argument for these free flows, part of which is that the electorate and the politicians need to hear the signals they are sending. Running a country with sealed borders is like driving a car blindfolded and with sound-deadening headphones on. That is a lesson not only of interwar Germany but also of the Cold War. In 1963, at the Berlin Wall, President Kennedy said, "Freedom has many difficulties and democracy is not perfect, but we have never had to put a wall up to keep our people in, to prevent them from leaving us." Hillary Clinton’s exit tax would do exactly what Kennedy said we’ve never had to do: set up a virtual wall, in the form of a tax, to prevent companies from leaving America. A better option would be to create policies that would attract companies from overseas to flock to set up shop here in America. When we have foreign companies trying to sneak into America like Mexicans making their way across the Southern border, we’ll know something has been fixed. Until then, Hillary’s proposed Reichsfluchsteuer is likely only to hasten the rush by American companies for the exit.[...]

Why Intellectuals Hate Capitalism

Tue, 27 Oct 2015 06:00:00 -0400

"Intellectuals have always disdained commerce," says Whole Foods Market co-founder John Mackey. They "have always sided with the aristocrats to maintain a society where the businesspeople were kept down." Having helped create the global grocery chain intellectuals arguably like best, Mackey has evolved into one of capitalism's most persuasive champions, making the moral, practical, and even spiritual case that free exchange ennobles all who participate. More than any other retailer, Whole Foods has reconfigured what and how America eats. Since opening its first store in Austin, Texas, in 1980, the company has helped its customers develop a taste for high-quality meats, produce, cheeses, and wines, as well as for information about where all the stuff gets sourced. Mackey, 62, continues to set the pace for what's expected in organic and sustainably harvested food. Because of Whole Foods' educated customer base and because Mackey is himself a vegan and a champion of collaboration between management and workers, it's easy to mistake him for a progressive left-winger. Indeed, an early version of Jonah Goldberg's bestselling 2008 book Liberal Fascism even bore the subtitle "The Totalitarian Temptation from Hegel to Whole Foods." Yet that misses the radical vision of capitalism at the heart of Mackey's thought. A high-profile critic of the minimum wage, Obamacare, and the regulatory state, Mackey believes that free markets are the best way not only to raise living standards but to create meaning for individuals, communities, and society. At the same time, he challenges a number of libertarian dogmas, including the notion that publicly traded companies should always seek to exclusively maximize shareholder value. Conscious Capitalism, the 2013 book he co-authored with Rajendra Sisodia, lays out a detailed vision for a post-industrial capitalism that addresses spiritual desire as much as physical need. Reason TV's Nick Gillespie talked with Mackey earlier this summer at FreedomFest in Las Vegas. To see the full video, go to (Disclosure: Whole Foods Market is a supporter of Reason Foundation, the nonprofit that publishes this magazine.) reason: You believe capitalism is not only the greatest wealth creator but helps poor people get rich. But you see it as constantly being misrepresented, even by its champions. Why is capitalism under attack? John Mackey: Intellectuals have always disdained commerce. That is something that tradesmen did—people that were in a lower class. Minorities oftentimes did it, like you had the Jews in the West. And when they became wealthy and successful and rose, then they were envied, they were persecuted and their wealth confiscated, and many times they were run out of country after country. Same thing happened with the Chinese in the East. They were great businesspeople as well. So the intellectuals have always sided with the aristocrats to maintain a society where the businesspeople were kept down. You might say that capitalism was the first time that businesspeople caught a break. Because of Adam Smith and the philosophy that came along with that, the industrial revolution began this huge upward surge of prosperity. reason: Is it a misunderstanding of what business does? Is it envy? Is it a lack of capacity to understand that what entrepreneurs do, or what innovators do, is take a bunch of things that might not be worth much separately and then they transform them? What is the root of the antagonism toward commerce? Mackey: It's sort of where people stand in the social hierarchy. If you live in a more business-oriented society, like the United States has been, then you have these businesspeople, who [the intellectuals] don't judge to be very intelligent or well-educated, having lots of money—and they begin to buy poli[...]

Does Office Depot Have the Right to Refuse to Print Anti-Abortion Fliers?

Fri, 11 Sep 2015 15:15:00 -0400

Office Depot is facing a discrimination complaint for failing to accommodate a customer in suburban Chicago. The customer, Maria Goldstein, came in to get copies of an anti-abortion, anti-Planned Parenthood prayer flier printed up. Office Depot declined. From the Chicago Tribune: The prayer, composed by the Rev. Frank Pavone, national director of Priests for Life, an anti-abortion group, calls on God to "Bring an end to the killing of children in the womb, and bring an end to the sale of their body parts. Bring conversion to all who do this, and enlightenment to all who advocate it." The prayer also decries "the evil that has been exposed in Planned Parenthood and in the entire abortion industry." Karen Denning, a spokeswoman for Office Depot, said company policy prohibits "the copying of any type of material that advocates any form of racial or religious discrimination or the persecution of certain groups of people. It also prohibits copying any type of copyrighted material." "The flier contained material that advocates the persecution of people who support abortion rights," Denning said. Goldstein insists it does not call for their persecution, but their conversion. She’s claiming religious discrimination, and the story is getting press in conservative circles. She was invited to use the self-service copy machines, but told the Chicago Tribune that would have been an inconvenience. So she got a lawyer: Thomas Olp, a lawyer for the Chicago-based Thomas More Society, a public interest law group that represents Goldstein, said the situation fits into the public accommodation laws that date back to when businesses refused to serve African-Americans and Jews. "We're a country of diversity. We don't want to allow people to pick and choose based on their bigotry or hostility," he said. "You need to offer services to the public on a fair and equal basis. This is an example of religious expression. Therefore the law prohibits you from discriminating." Olp acknowledges that religious freedom and public accommodation laws occasionally might be at odds. Several states are debating whether to pass laws protecting business owners such as bakers and photographers who object to same-sex weddings as a matter of conscience. "It's a different issue. You can make arguments on both sides," he said. But a person's religion always affords special protection, he said. "To accommodate religion you have to go out of your way to do something you wouldn't normally do," he said. "If it was simply negative comments about Planned Parenthood, it wouldn't be as strong of an argument." While I don’t know all the intricacies of how Illinois anti-discrimination and public accommodation laws manifest, this reads as though Olp doesn’t know the difference between anti-discrimination laws and the First Amendment. His reference to “religious expression” seems to be an invocation of the First Amendment. But the First Amendment refers to government censorship, not Office Depot (or any other private actor). Illinois public accommodation law does indeed prohibit discrimination of customers on the basis of their religion. But that means it’s against the law to turn away Goldstein solely on the basis of her faith. It does not mean, as Olp seems to think, that Office Depot is required to participate in the production of a message with which it does not agree, religious foundations or not. That’s compelling speech, and that is a violation of Office Depot’s First Amendment rights. Let’s flip the politics around a bit. In Kentucky, a T-shirt company refused to print T-shirts that supported a gay pride event. They were charged with violating the county’s public accommodation laws. They originally lost, but eventually a judge ruled that the company had[...]

Labor Board Opens Door to Unionized Contract, Temp Employees

Fri, 28 Aug 2015 11:00:00 -0400

(image) Attention American employers: If you set some of the terms for the employment of temporary workers you hire through outside services or contractors (and you probably do), the National Labor Relations Board (NLRB) may consider you to also be their employer. As a result, you could be dragged into collective bargaining negotiations or potentially accountable for labor violations.

That's the result of a split ruling from the NLRB yesterday that determined Browning-Ferris Industries, a waste management company, is the joint employer over staff it retains through Leadpoint Business Services. The Teamsters have been trying to organize and represent these workers and told the NLRB they couldn't do so without forcing Browning-Ferris Industries to the table, according to the Wall Street Journal.

Businesses are expecting a huge impact from this ruling, split 3-2 on a partisan divide (Democrats, aye; Republicans, nay}:

"If this decision stands, the economic rationale for hiring a subcontractor vanishes," said Beth Milito, senior legal counsel for the National Federation of Independent Business. "It will make it much harder for self-employed subcontractors to get jobs and of course it will drive up operating expenses for the companies that hire them."

Union groups, meanwhile, have complained to regulators that many businesses exercise control over the pay and working conditions of certain workers but shirk their duties by refusing to claim them as employees.

Larry Daugherty, principal officer of the Teamsters local that brought the case, said, "We are pleased with this decision, which will provide justice to workers who have been fighting for fairness in the workplace for a long time."

Beyond the economic liberty issues of a government bureaucracy deciding whether a business's relationship to contractors and temp workers is what the business wants it to be, there is a non-so-slight issue of even trying to determine which businesses the ruling will impact. The NLRB said they would consider whether an employer exercises "indirect control" over employees hired through contractors or temp agencies on a case-by-case basis. So for anybody who uses temp employees, whether or not this ruling even applies to them will be determined, in the future, by the NLRB, if somebody complains.

The ruling has people also paying attention to the ongoing conflict of whether large corporations who operate through the use of franchises (such as fast food restaurants) are jointly responsible for labor decisions by the franchisees. McDonald's has been battling unions trying to organize and force wage increases coming directly at them instead of the franchises that actually run the restaurants. (I wrote about that situation last year.) A McDonald's representative wouldn't speak directly about this case (as the issues aren't directly the same), but repeated its regular response that McDonald's does not control any terms of employment or wages for its franchisees.

Could Legal Marijuana Lead to an Industrial Building Boom in Denver?

Tue, 25 Aug 2015 12:10:00 -0400

(image) Who else is cashing in on legal weed in Colorado, besides the retailers (and the taxing government)? Just as with any other market good, producing marijuana creates additional commercial demands. In Denver, one side effect is big money for the landlords of warehouses. As the Wall Street Journal notes, the success of legitimized marijuana has created a huge demand for places to grow them and create the product. Marijuana producers are snatching up all the available warehouse space and driving up rents:

The problem for Denver business owners: marijuana producers require lots of space to grow, package and store their products. In all, growers and distributors took up a third of all the warehouse space leased in Colorado over the past 18 months, according to Cresa Partners, a brokerage.

The warehouse crunch means many small businesses are struggling to find the space they need. Mr. Badgley, chief executive of Colorado Specialties Corp., a building-supply business, said his 7,500-square-foot warehouse and showroom is so crammed with bathroom fixtures and other materials that it is difficult to navigate. He would like to move to a building with triple the space, but can’t find anything affordable.

"It’s all just getting snatched up by these marijuana people," he said.

Rents for warehouses in Colorado grew 10 percent in the last year. One logistics company reports having to turn customers away because they simply don’t have the space. Clearly, Colorado needs more warehouses.

There are some other concerns (marijuana growers spend significant money adapting warehouse space to their needs, making these spaces difficult to relet if they leave), but if Colorado sees a clear boom in related logistics-focused commercial and industrial developments, then that’s going to be some great ammunition for other states pushing for legalization. Municipal governments absolutely love the logistics market, particularly in places where manufacturing is no longer (or never was) the source for blue-collar jobs. And of course, real estate professionals and developers have always been able to bend the ears of elected officials. Once the "right" people are also making money off legal marijuana, some resistance is likely to go up in smoke.

And it’s a lot of money. Colorado is expecting to see $1 billion in annual marijuana sales by 2016. ReasonTV interviewed Christian Sederberg, a Denver-based attorney at Vicente Sederberg LLC and one of the key members of Colorado’s Amendment 64 campaign to legalize cannabis, about how legalization has worked out. Watch below:

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Spending by Left-Leaning Mega-Foundations Deserves Equal Scrutiny

Mon, 06 Jul 2015 16:30:00 -0400

Measured purely in terms of philanthropic bang-for-the-buck, the $4.3 million that the Rockefeller Brothers Fund has spent since 2003 on promoting a nuclear deal between America and Iran has to be one of the greatest bargains in the history of political charity. That’s true regardless of whether America and Iran ultimately reach a nuclear deal, and regardless of whether you are in favor of such a deal or oppose it. The expenditure, exposed and detailed in a recent Bloomberg News article by Peter Waldman, amounts to less than the price of some two-bedroom apartments in Manhattan. It is a small fraction what Sheldon and Miriam Adelson spent supporting Newt Gingrich’s losing 2012 presidential campaign. Yet that sum has purchased a top item on President Obama’s foreign policy agenda, a directional change in American foreign policy toward Iran. The left often sees Republican policy in an oversimplified model of being bought and paid for by the Koch Brothers or the Adelsons. Similar philanthropy on the left—George Soros, for example—sometimes attracts scrutiny, but it seems to be less often. The Rockefeller Brothers Iran policy spending is a reminder that spending by left-leaning mega-foundations deserves watching carefully, without falling into the trap of a reverse version of the "Kochtopus" fantasy. The sometimes malevolent influence of Rockefeller money is, in one way or another, the subject of several recent books and one that is about to come out. In The Tyranny of Experts, an NYU economist, William Easterly, traces the loss of China to the Communists back to a Rockefeller Foundation-organized meeting at the Yale Club in Manhattan in February 1925. The Rockefeller Foundation-funded Institute of Pacific Relations pursued a top-down, technocratic model of development. Easterly faults the Rockefeller Foundation for "blindness to the Chinese as individuals," writing, "conspicuously missing in Rockefeller’s discussion of China is any respect for the initiative and rights of the Chinese people themselves." James Piereson’s new book Shattered Consensus describes the Rockefeller Foundation, along with Ford, MacArthur, and Carnegie, as dwarfing conservative foundations in size, and pioneering a strategy of "advocacy philanthropy," "designed to bring about large change by circumventing the electoral process." Even those on the Rockefeller payroll concede that results are sometimes mixed. Chef Dan Barber, in his book The Third Plate, quotes the Rockefeller family historian, Peter Johnson, describing the "green revolution" of super-productive wheat and rice crops developed by Rockefeller Foundation-funded scientist Norman Borlaug as "a classic case of unintended consequences." Barber credits the system of agriculture for saving a billion people from starvation—not bad!—but also blames it for being "disastrous for soil health," for accelerating urbanization, and for reducing crop diversity. To be sure, Rockefeller philanthropy has done plenty of unalloyed good. In a recent column, I credited a 1958 report of the Rockefeller Brothers Fund for setting the goal of 5 percent economic growth that John Kennedy ran on in his 1960 presidential campaign, and that Jeb Bush is echoing with his 4 percent growth goal. But the left-leaning foundations can do plenty of damage, too. The Ford Foundation, with $12 billion in assets, recently announced it will shift its grant-making to focus on inequality. It was an ironical move for a charity where executive compensation reaches into the seven figures. I’d rather this money be given away by those who earned it—even to foundations that exist long enough for the[...]