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Business and Industry



All Reason.com articles with the "Business and Industry" tag.



Published: Tue, 12 Dec 2017 00:00:00 -0500

Last Build Date: Tue, 12 Dec 2017 06:53:21 -0500

 



Markets Deliver Social Justice Better Than Government Does

Thu, 30 Nov 2017 11:00:00 -0500

(image) Markets are much more effective handmaidens of social justice goals than government is, I argue in a New York Times piece responding to NBC's firing of 20-year Today Show veteran Matt Lauer.

"Social media takes a lot of punches for enabling sexual harassment," I point out, "but the past two months have shown that it has also provided consumers with an unprecedented power to make their market preferences heard loud and clear. And right now, the market is demanding that companies do something about sexual predators and pests in their midsts."

Lauer's dismissal is the latest in a long list of powerful private-sector men felled by recent revelations of workplace sexual misconduct—Harvey Weinstein, Kevin Spacey, Charlie Rose, and Louis C.K., to name just a few. From my op-ed:

"Everybody knew" is the stomach-churning line we have heard about so many men revealed as serial sexual offenders in the workplace. And yet they held on to their cushy jobs for years. What changed? Companies like NBC, HBO, Netflix, CBS and the Weinstein Company are more vulnerable to our outrage than ever before.

While this gives many sides something to gripe about—that it didn't happen sooner, that victims weren't believed earlier, that this purge may ensnare the innocent—there's an optimistic note we shouldn't overlook: Consumers now have more power to make themselves heard than ever before. And this is forcing big corporations to reconsider how they respond to scandals, how they hold bad actors accountable, and the weight they attach to character—something those in political power have much less incentive to do.

To attest to this, look no further than Nancy Pelosi's response to allegations involving Rep. John Conyers (D-Mich.), or the response from Alabama Republicans all the way up to President Donald Trump on child-chasing Roy Moore.

"Character may no longer count in politics and public service—if it ever did," I write,

but it matters more than ever in the private sector, where consumer preferences prevail....As we observe and adjust to the sociosexual storm we're all in, let's appreciate the powers and paradigms making it possible: feminism, but also free markets.

Read the whole thing here.




Should the Government Get to Define ‘Native-American’ Art? One Woman’s Free Speech Fight.

Wed, 15 Nov 2017 15:15:00 -0500

Peggy Fontenot has had a successful career as a Native American artist working in beading, silver jewelry and black-and-white photography. She's won numerous awards at art shows and has shown her work at top-tier museums.

Today her career is in jeopardy because of a 2016 state law that says only members of federally-recognized tribes can market their work as "Native American" or "Indian made." Fontenot is a part of the Patawomeck tribe, which is recognized only in the state of Virginia.

Now she's suing the state on the grounds that the law violates her First Amendment rights. "To call every state-recognized tribe fake and illegitimate is just broad sweeping and wrong," Fontenot told Reason.

Anastasia Boden of the non-profit Pacific Legal Foundation, which is representing Fontenot, says the law is intended to restrict competition. She notes that State Rep. Chuck Hoskin (D), who sponsored the bill, has also served as the chief of staff for the federally-recongized Cherokee Nation. The group "certainly would have an interest in putting a law on the books that says that only federally recognized tribes can call themselves Native American," Boden says. (Rep. Hoskin declined our interview request.)

Rebecca Tushnet, a Harvard law professor, says the Oklahoma law may have been poorly crafted, but was well-intentioned. She says fraud in the Native American art market is big problem.

Oklahoma isn't enforcing the law as the case is being deliberated, allowing Fontenot to continue marketing her work as she always has. A decision is expected by the end of the year.

Produced by Paul Detrick. Shot by Detrick, Alex Manning, Mark McDaniel and Meredith Bragg.

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Yulia Tymoshenko Warned Us About Paul Manafort Years Ago

Tue, 31 Oct 2017 06:48:00 -0400

Yulia Tymoshenko warned us about Paul Manafort years ago. In a civil complaint, the former Ukrainian prime minister accused Manafort—who would go on to chair Donald Trump's 2016 presidential campaign—of conspiring with Ukrainian and Russian partners to launder dirty money through "a labyrinth of shell companies" in the U.S. These companies, it claims, "were solely used for purposes of furthering the unlawful objectives" of people like Dmytro Firtash, a Ukrainian businessman indicted in 2009 for U.S. racketeering and money laundering, and Russian crime boss Semyon Mogilevich, who made the FBI's "Most Wanted" list for suspected fraud, racketeering, and money laundering. Documents filed in the civil action reveal many similar allegations to those Manafort and Gates are now facing at the hands of U.S. Department of Justice special prosecutor Robert Mueller. On Monday, a federal grand jury indicted the former Trump-campaign chairman and Rick Gates, a Manafort business associate, for conspiracy to launder money, making false statements, failing to register as an agent of foreign principal, and failing to file reports on foreign bank accounts. (For a detailed breakdown of the charges, see Popehat.) They pleaded not guilty Monday afternoon. The DOJ indictment accuses Manafort and Gates of "extensive lobbying" in the U.S. on behalf of Ukrainian interests and "in connection with the roll out of a report concerning the Tymoshenko trial commissioned by the Government of Ukraine." Manafort and Gates paid $4 million to law firm Skadden Arps to monitor and report on the Tymoshenko proceedings, ostensibly on behalf of an "independent" European Centre for a Modern Ukraine (which they had helped set up), the indictment says. And it claims that "between at least 2006 and 2015, Manafort and Gates acted as unregistered agents of the Government of Ukraine, the Party of Regions (a Ukrainian political party whose leader Victor Yanukovych was President from 2010 to 2014), Yanukovych, and the Opposition Bloc (a successor to the Party of Regions that formed in 2014 when Yanukovych fled to Russia), generating "tens of millions of dollars in income as a result" and "launder[ing] the money through scores of United States and foreign corporations, partnerships, and bank accounts." The work was done through Davis Manafort Partners (DMP), which Manafort co-founded in 2005, and DMP International (DMI), founded in Manafort and his wife Kathleen in 2011. Rick Gates worked for both entities Through these agencies, Manafort and Gates helped propel Viktor Yanukovych to the Ukrainian presidency and oversaw a "watchdog" report on the prosecution of his opposition. Tymoshenko, who served as prime minster from 2007 through 2010, was not just an enemy of Tanukovych's but also of Firtash and Mogilevich. In an agreement with Russia, she helped cut Firtash's company out as a profitable middleman in natural-gas deals between the two countries. Tymoshenko's suit against Firtash and unnamed Yanukovych officials was first filed in U.S. court in April 2011, when Yanukovych was still president. Later amended complaints were eventually filed—the second in November 2014, after Yanukovych had been forced to flee Ukraine amid protests over his administration's corruption and thuggery—and also named Manafort and his partners at CMZ Ventures. The suit accused Manafort, Firtash, and the other defendants of financing politically motivated and "unlawful investigations and prosecutions of Tymoshenko" and her associates through secret payments to Yanukovich and others in his administration or control. Their money-laundering and shell-company scheme "was the proximate cause of Tymoshenko's damages, since it provided the necessary funds to make the unlawful payments to the Ukraine prosecutors and other corrupt administration officials," the complaint alleges. Documents show that in December 2008, Manafort met with Firtash in the Ukraine, where Firtash agreed to an initial capital investment of $100 million in a global fund [...]



D.C. Threatens to Punish Manufacturers for Failing 'Flushability' Standards It Won't Define

Wed, 20 Sep 2017 11:25:00 -0400

To flush or not to flush? The Kimberly-Clark Corporation is suing D.C. over the question, after a law the city passed last year tried to keep the company from labeling its disposable wipes "flushable." The whole matter might seem a little silly for those outside the septic or paper product industries. But it provides a perfect case study in arbitrary regulation and government incompetence. Under the Nonwoven Disposable Products Act of 2016, passed last December, disposable paper products such as cleansing wipes are forbidden from being labeled as flushable "unless there is competent and reliable scientific evidence to substantiate that the non-woven disposable product is flushable sewer safe, and septic safe." Products that don't meet this standard must be labeled with "Do Not Flush." Come January 1, 2018, manufacturers of everything from facial tissues to paper towels could face civic penalties and fines for failure to meet the new labeling requirements. Yet the city has offered no guidance on what counts as "competent and reliable scientific evidence" of flushability, nor information on how the city will test suspicious paper products. And repeated requests by Kimberly-Clark for more information went unanswered. At hearings about the rule, experts for the city suggested that no disposable cleansing wipe currently on the market was fit to be flushed, and that even some toilet paper wasn't flushable. This puts companies like Kimberly-Clark—a major manufacturer of personal care products (including several lines of cleansing wipes that can supposedly be flushed without clogging toilets and pipes)—in a bind. They have no way to determine how to ensure their products will meet D.C.'s standard. But if they fail to follow these unknowable rules, D.C. can punish them. In a lawsuit filed September 15 in the U.S. District Court for the District of Columbia, Kimberly-Clark contends that the law is unconstitutional for a host of reasons, including its failure to set clear standards for avoiding sanctions. The suit also argues that D.C. is violating Kimberly-Clark's First Amendment rights by forcing the company to make untrue statements about its products and that it impermissably seeks to hold Kimberly-Clark "vicariously liable for the actions of others, namely the unaffiliated businesses that buy Kimberly-Clark's flushable wipes elsewhere in the United States and then—lawfully—choose to resell them to local consumers." And then there is the question of the Constitution's Commerce Clause, which grants Congress the power to regulate interstate commerce. Kimberly-Clark products are made in South Carolina, where labeling the wipes as flushable is legal. Thus, the suit argues, D.C.'s flushable-product policy "invalidly seeks to regulate the conduct of manufacturers in other states by imposing civil sanctions on conduct that is entirely lawful" there. Meanwhile, the act entirely fails to regulate any local activity: It remains lawful under the Act for retailers to buy wipes labeled as flushable and to resell those products to consumers in D.C., regardless of whether that labeling is deemed consistent with the Act. Likewise, it remains lawful for D.C. consumers to purchase and use those very same products, no matter how they are labeled. But it is the manufacturers who exclusively bear liability for this activity, as the only thing regulated by the Act is non-local manufacturing and labeling activity. Thus, whether construed as a per se invalid regulation of out-of-state commercial conduct or as a regulation that inordinately burdens interstate commerce, the Act violates the Commerce Clause. According to a company statement, Kimberly-Clark wipes "are engineered to rapidly lose strength as soon as they are flushed" and "meet or exceed widely accepted industry guidelines for flushability." In the "largest sewer collection study, conducted in New York City in 2016, not a single Kimberly-Clark flushable wipe was found," it notes. A Federal Trade Commi[...]



CrossFit Founder Greg Glassman: 'I Don't Mind Being Told What To Do. I Just Won't Do It.'

Mon, 28 Aug 2017 12:10:00 -0400

(image) "I don't mind being told what to do," said CrossFit founder Greg Glassman recently. "I just won't do it. Say anything you want."

Spoken like a true libertarian.

But Glassman's libertarian bona fides go beyond an individualistic streak. In a new 60 Minutes segment, Glassman credits his program's success with a free market approach to franchising and a personal belief in what we might (to borrow a buzzword) call "conscious capitalism."

Chances are, you know someone devoted to CrossFit. Part fitness regimen, part gym, part spectator sport, and part lifestyle, CrossFit—now the largest fitness chain in the world—was launched by Glassman in 2001 and now boasts around 14,000 gyms, or "boxes," globally. Glassman is sole owner and director of the private company, which is estimated to be worth millions.

"One reason CrossFit's grown so fast is because just about anyone who wants to open a 'box' can after paying a $3,000 yearly fee and passing a two-day seminar," reports 60 Minutes. "It's how the company makes most of its money."

Glassman quickly shuts down skepticism from interviewer Sharon Alfonsi about this process:

Sharyn Alfonsi: "Two days to take a course, then I can open a gym?"

Greg Glassman: Amazing, huh?

Sharyn Alfonsi: I mean, to me, is that enough?

Greg Glassman: Well, the— here was the alternative. Here's what it used to be: All ya had to have was the money. And you don't even have to take a test. That's where every other chain came from, someone just launched 'em.

The show goes on to report that "unlike most gym chains, Glassman...relinquishes nearly all control over his affiliates," a philosophy they attribute to his being "a die-hard libertarian." (CrossFit and Glassman have previously donated to the Reason Foundation, the nonprofit that publishes Reason.)

There are no rules, for instance, about one CrossFit gym locating too close to another; Glassman's philosophy is that the strongest will survive.

Sharyn Alfonsi: —they can do it any way they want to do it.

Greg Glassman: —this isn't Kentucky Fried Chicken or— yeah, it's— it's CrossFit.

Sharyn Alfonsi: You let them do what they want to do once they—

Greg Glassman: I do.

Information about CrossFit exercises and philosophy can all be found for free on the company's website. "How does that make sense?" asks Alfonsi.

Greg Glassman: Yeah. It didn't until we did it, you know, the more video we give away, the more money we make.

In other words, Glassman isn't capitalizing on some secret knowledge or specialized equipment that only CrossFit boxes contain but creating the kind of program and philosophy that thrives on community. Explaining CrossFit's enviable business growth, Glassman explained, "I'm not trying to grow a business...I'm doing the right things for the right people for the right reasons."

Kudos to Glassman for demonstrating what libertarians like to preach to oft-resistant audiences: doing the right thing can be profitable, and doing the profitable thing can be right.

Reason TV talked to Glassman in 2013. Check out the interview below:

src="https://www.youtube.com/embed/-EB0XyBUl0U" allowfullscreen="allowfullscreen" width="560" height="315" frameborder="0">




Trump vs. the Business Community

Sun, 20 Aug 2017 00:00:00 -0400

Most business executives fumed and groused for the eight years Barack Obama was in the White House. He was a former community organizer who had never met a payroll, and those in the corporate boardrooms thought he was no friend of free enterprise. In 2010, New York real estate and media tycoon Mortimer Zuckerman said Obama's "demonization of business" was discouraging investment, sapping job growth and generally creating an "economic Katrina." Gary Shapiro, head of the Consumer Technology Association, called Obama "the most anti-business president" in his lifetime. Former General Electric Chairman Jack Welch implored the president, "Stop it. You can't go industry by industry ... through intimidation, business by business by business." As ordeals go, though, theirs was notably mild. The stock market soared; corporate profits nearly tripled; and the unemployment rate declined from 7.8 percent to 4.8 percent. From the depths of the Great Recession, the economy began what is now the third-longest expansion on record. When it came to the economy, the Obama years looked more like Mardi Gras than Hurricane Katrina. Now, instead of a liberal lawyer in the White House, CEOs have one of their own. And they're finding it's not everything they hoped. The stock market and other economic indicators look about the same as they did before Donald Trump took office. In Obama's final six months, the economy added an average of nearly 181,000 jobs per month. In Trump's first six months, it added 179,000 per month. GDP growth has even slowed a bit. More troublesome at the moment is Trump's insistence on defending Confederate monuments and stoking white racial resentments. In recent days, so many CEOs resigned from the president's two business advisory councils that Trump closed them down. Some of the executives no doubt were genuinely upset at the president's coddling of bigots and his inability to behave with a dignity befitting his office. Some were fearful of alienating customers who find Trump toxic. Other business executives are edging away from the president as though he were an erratic panhandler, and for the same reason: Best not to be close to him if he flips out. You don't want to have to stand there in silent mortification, as White House chief of staff John Kelly had to do the other day, while the president makes a fool of himself on national TV. It would not be good for your company or your career. But even before Trump's Charlottesville debacle, he was not covering himself with capitalist glory. His January travel order put him at odds with some 100 tech firms that sued to block it, arguing, "It disrupts ongoing business operations. And it threatens companies' ability to attract talent, business, and investment to the United States." His decision to pull out of the Paris climate accord didn't go down well with many big companies, 25 of which had signed a letter urging him to stay in. Even oil giants Exxon Mobil and ConocoPhillips opposed the withdrawal. In abandoning the Trans-Pacific Partnership trade deal, Trump spurned the recommendation of the U.S. Chamber of Commerce. His insistence on renegotiating NAFTA has the Big Three automakers worried about their supply chains. A lot of executives applaud Trump's war on federal regulation. But what else has he done for them? His failures on Obamacare have generated uncertainty among insurance companies and health care providers. His sour relations with Congress make tax reform less plausible every day. Infrastructure is what he was supposed to focus on Tuesday when he appeared before reporters at Trump Tower. But he buried that issue by venting about Charlottesville. Perhaps worst of all, he has been the arrogant bully that Jack Welch and others accused Obama of being. Trump slammed Boeing over the cost of Air Force One. He blasted Ford over a planned factory in Mexico. He has repeatedly attacked Amazon.com CEO Jeff Bezos, who also owns The Washing[...]



Cindy McCain's Charities Are Plagued With Scandal and Corruption. Now Trump Wants to Make Her Human Rights Ambassador

Tue, 20 Jun 2017 10:30:00 -0400

(image) After "aggressively courting" her for the role, President Donald Trump has reportedly nabbed Cindy McCain to serve in his State Department as an ambassador-at-large for human rights. She would almost certainly concentrate on sex trafficking, which has been the main focus of her recent advocacy—and on which she has a track-record of spreading misinformation, promoting policies that make prostitution more dangerous, and partnering with people who use human trafficking as a cover for all sorts of rights-violating behavior. And this is just one of myriad red flags that the beer empress and senator's wife isn't quite as consistent or staunch a humanitarian as she's made out to be.

It turns out the "freedom, democracy, and human rights" institute launched by Cindy and Sen. John McCain is supported by large donations from entities known for persistent rights violations, including Saudi Arabia, a U.S. defense contractor selling smart bombs to the Saudis, and a Moroccan mining company occupying land in Northwest Africa.

As Elizabeth Nolan Brown explains, examining McCain's philanthropic record reveals a long history of personal abuse of nonprofit resources, shady connections, and shoddy work. For years, McCain has been playing the role of crony philanthropist, and now she is poised to bring her dubious advocacy to the highest levels of government.




Are You Ready for the "Intimacy Economy"?

Fri, 26 May 2017 10:00:00 -0400

We've all heard of the "sharing economy" and the "gig economy," app-driven services such as Uber and Airbnb that have radically altered transportation, travel, and an infinite number of other business sectors. But are you ready for the "intimacy economy"? That's economist and media-studies professor Glenn Platt's term for the ways in which the internet and connectivity are shrinking the distance between performer and audience, producer and consumer, and celebrity and fan. "When I talk about the intimacy economy, I'm talking about this growing category of successful business models that are built on one-to-one relationships and experiences that are personal, authentic, and unscripted," explains Platt, the founder and director of the Armstrong Institute for Interactive Media Studies (AIMS) at Miami University of Ohio. He points to an example involving Craig Finn, best-known as the frontman for the indie rock band The Hold Steady. As a way to raise money for his latest album and tour, Finn set up a crowd-funded pledge drive through which fans could sign up to download the album or have it shipped early. The really interesting thing, though, were the higher-level offerings for funders, says Platt. These included paying a couple of hundred dollars to go record shopping with him in New York. "Here you are, a music fan," he says, "and [Finn] is willing to go record-shopping with you. You're getting to do the equivalent of going to church with one of your rock-and-roll heroes....It's different than saying, If you pay extra, you're going to get an autographed picture." In a wide-ranging conversation about technology and disruption, Platt tells Reason's Nick Gillespie how the intimacy economy will revolutionize not only business but also political and cultural practices. In a world where mass personalization and individualization is the new normal, the intimacy economy provides a bold new way of thinking about the future of interactive media. Produced by Ian Keyser. Subscribe, rate, and review the Reason Podcast at iTunes. Listen at SoundCloud below: src="https://w.soundcloud.com/player/?url=https%3A//api.soundcloud.com/tracks/324529279%3Fsecret_token%3Ds-QZ6Aa&auto_play=false&hide_related=false&show_comments=true&show_user=true&show_reposts=false&visual=true" width="100%" height="450" frameborder="0"> Don't miss a single Reason podcast! (Archive here.) Subscribe at iTunes. Follow us at SoundCloud. Subscribe at YouTube. Like us on Facebook. Follow us on Twitter. This is a rush transcript—check all quotes against the audio for accuracy. Nick Gillespie: Hi, this is Nick Gillespie and this is the Reason podcast. Please Subscribe to us at iTunes and rate and review us while you're there. Today we're talking with Glenn Platt. He's the C. Michael Armstrong professor of interactive media studies and the founding director of the Armstrong Institute for Interactive Media Studies at Miami University. Glenn thanks for joining us. Glenn Platt: Hey Nick. Nick Gillespie: Let's talk about this concept of the intimacy economy that you've talked about. I've actually used it in a couple of articles that I've written at Reason and elsewhere. What do you mean when you talk about the intimacy economy and why is it so important? Glenn Platt: Sure, when I talk about the intimacy economy what I'm talking about is this is a growing category of successful business models that are built on one to one relationships and experiences, that are personal. authentic and unscripted. And so we're starting to see more and more of the non stylized relationships and I say "brands" here because I come from a business perspective. But, really, when I say "brands" we're talking about celebrities, we're talking about if any ... I don't know, institution of the third kind that normally interacts with people in a one to many fashion. Nick Gillespie: Right, or in a bureaucratic way. [...]



New Book Offers Bleak Look at Paul Ryan's Hometown

Mon, 24 Apr 2017 16:00:00 -0400

Barack Obama showed up at the General Motors factory in Janesville, Wisconsin, during the 2008 presidential campaign and proclaimed, "I believe that, if our government is there to support you and give you the assistance you need to retool and make this transition, that this plant will be here for another hundred years." Instead the plant closed, leaving thousands of its workers and those at related businesses unemployed. Nor is Obama the only politician to intersect with the Janesville story. It's Paul Ryan's hometown. Ryan is Speaker of the House and was the Republican vice presidential candidate in 2012. His father lost the tip of his thumb to a piece of machinery in the plant, working summers during law school. A reporter at The Washington Post, Amy Goldstein, tells this tale in her new book, Janesville: An American Story. It's almost unbelievably grim. Auto worker wages, once $28 an hour, have declined to $14 for new hires—$10 for some workers working for "suppliers" on the same factory floor. Janesville, which you might have imagined as a wholesome, prosperous, middle class American city—something out of a Land's End catalog—turns out to have 400 homeless children, some of whom have been abandoned by their parents. A United Auto Workers local that a decade ago had 7,000 active members now has 438, with 4,900 retirees. Another large employer in the city, Parker Pen, was sold three times. The final buyer shut the factory and laid off the staff, but first paid longtime workers to fly to Mexico and train people there to do their old jobs. One former auto industry employee goes back to school to become a prison guard, then commits suicide after cheating on her husband with an inmate. Others become "GM gypsies," leaving their families behind for days at a time to commute to far-away GM jobs in other states. Some families can't qualify for health care at a free clinic because the food stamps they are receiving push their income over the limit. One family was turned away from a food pantry because their teenager, working three after-school jobs, earned too much for the family to qualify for help. The line at the food pantry starts forming outside two hours before it opens. These are the sort of disgruntled Americans, facing economic anxiety, who elected Trump, right? Goldstein points out, though, that while Trump did carry Wisconsin's electoral votes, Janesville itself went for Hillary Clinton in the 2016 election, as it went for Obama in 2012, notwithstanding Ryan's presence on the 2012 ticket. What's the remedy? Not education or job training, necessarily: Goldstein reports that laid-off workers who went back to school at the local technical college ended up worse off, financially, than those who did not. Someone who understands Washington better than I do once explained to me that if you really want to understand a politician you need to know their home district. That was the genius of Michael Barone's classic Almanac of American Politics: it didn't just tell you about the congressman and where he or she went to college, it told you about who the big employers were, and what countries the great-grandparents of the voters in the district had come from. Ryan comes off as a bit remote in Goldstein's telling, more absorbed in the long-term details of the federal budget than in the up-close trauma of Janesville families. But if you want to understand his motivations when it comes to bringing manufacturing back to the American heartland, finding more effective ways to combat poverty, and strengthening economic growth, you can do a lot worse than to start in Janesville. President Trump was talking about urban crime when he spoke of "carnage" in his inaugural address. But he could have been talking about how the layoffs ripped through Janesville families. The economic picture is different in more prosperous q[...]



The Only Solution to the Trumps’ Conflicts of Interest

Sun, 23 Apr 2017 00:00:00 -0400

Pundits at CNN and other news outlets are much distressed over the report that Ivanka Trump's clothing and accessories company won trademark recognition from the government of China just as that country's president was sitting down with President Trump and the First Daughter for dinner at Mar-a-Lago. "Conflict of interest!" they protest. "Conflict of interest!" They then set off on an inquiry into how such conflicts can be prevented, an effort beset by a growing sense that nothing can be done about the problem. They are justified in that sense of futility because within the range of options they would consider acceptable, nothing can be done. Ivanka Trump is a federal worker, albeit at a salary of zero. But it would make no difference if she had no job in the White House because she would still be the president's daughter and that's not going to change. Any foreign leader—or anyone else, for that matter—who wants to curry favor with President Trump can easily calculate that doing something nice for his daughter at least can't hurt. After all, she doesn't have to be a Special Adviser to the President to be a special adviser to her father, the president. And if she is talking to her father about the country, her comments could be colored—even unconsciously—by her business interests. But even if they were not, Trump himself, who is famously a sucker for flattery and, presumably, for praise for his family, might be influenced by the kindness of strangers. So how can conflicts of interest be avoided? It would be unreasonable to demand that Ivanka Trump divest herself of her company and have no business interests: she does have rights. She no longer manages her company, but she still holds a stake, even if she has put her assets into a trust. Moreover, she also has resigned as executive vice president of the Trump Organization and sold her common stock in it. CNNMoney reported that her lawyer says that "Ivanka Trump has converted her stake in her father's company into fixed payments, which means she can't benefit from the financial performance of the Trump Organization…. At the White House, Ivanka Trump's role will be to advise her father and concentrate on issues related to women in the workplace, child care, parental leave and job training, [the lawyer] said." In another story CNNMoney reported that Ivanka's lawyer "said her client would recuse herself from certain policy matters, like trade agreements, that are specific enough to affect her line of clothing and accessories." But, as I said, this makes no difference whatever. People seeking Trump's good will might still think it advantageous to direct benefits to Trump family business interests. Even with her reduced roles, Ivanka Trump surely wants to see her company and the Trump Organization prosper. So we appear to be stuck with four to eight years of potential conflicts of interest. We'll never know if decisions coming out of the executive branch were ultimately influenced by conduct calculated to please Trump. But maybe all is not so hopeless after all. Recall that I said the pundit class knows no solution that it would regard as acceptable. That leaves open the possibility of a solution that is unacceptable to them. "Unacceptable," however, does not necessarily mean unreasonable. The heart of the potential for conflicts of interests is not the Trumps' business empire. Rather it's presidential power to steer benefits to particular interests. So the surest way to eliminate the potential for conflicts is to eliminate the president's power to steer benefits to anyone. This would include not only favors granted by executive action but also those that a president can push through Congress. Here we have an analogy with campaign finance. Those who fret over that issue don't want to understand that no one would make mega-cont[...]



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[...]



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[...]



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

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. 

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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.

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