fortune--2020-08-12--Primary care doctors seek overhaul in how they’re paid amid pandemic cuts and losses

For Dr. Gabe Charbonneau, a primary care doctor in Stevensville, Montana, the coronavirus pandemic is an existential threat.
Charbonneau, 43, his two partners and 10 staff members are struggling to keep their rural practice alive. Patient volume is slowly returning to pre-COVID levels. But the large Seattle-area company that owns his practice is reassessing its operations as it adjusts to the new reality in health care.
Charbonneau has been given until September to demonstrate that his practice, Lifespan Family Medicine, is financially viable—or face possible sale or closure.
“We think we’re going to be OK,” said Charbonneau. “But it’s stressful and pushes us to cut costs and bring in more revenue. If the virus surges in the fall … well, that will significantly add to the challenge.”
Like other businesses around the country, many doctors were forced to close their offices—or at least see only emergency cases—when the pandemic struck. That led to sharp revenue losses, layoffs and pay cuts.
Dr. Kevin Anderson’s primary care practice in Cadillac, Michigan, is also scrambling. The practice—like others—shifted in March to seeing many patients via telemedicine but still saw a dramatic drop in patients and revenue. Anderson, 49, and his five partners are back to about 80% of the volume of patients they had before the pandemic. But to enhance their chances of survival, they plan to overhaul the way the practice gets paid by Medicare.
Dr. Gabe Charbonneau, a primary care doctor in Stevensville, Montana, is struggling to keep his Lifespan Family Medicine practice alive. Patient volume is slowly returning to pre-COVID levels, and he has until September to prove his business is financially viable, or face possible sale or closure. Tommy Martino for KHN
Jodi Faustlin, CEO of the for-profit Center for Primary Care in Evans, Georgia, manages 37 doctors at eight family medicine practices in the state. She’s confident all eight will emerge from the pandemic intact. But that is more likely, she said, if the company shifts from getting paid piecemeal for every service to a per-patient, per-month reimbursement.
One of those 37 doctors is Jacqueline Fincher, the president of the American College of Physicians. Fincher said the pandemic “has laid bare the flaws in primary care” and the “misguided allocation of money and resources” in the U.S. health care system.
“It’s nuts how we get paid,” said Fincher, whose practice is in Thomson, Georgia. “It doesn’t serve patients well, and it doesn’t work for doctors either—ever, let alone in a pandemic.”
Physicians and health policy experts say the pandemic is accelerating efforts to restructure primary care—which accounts for about half the nation’s doctor visits every year—and put it on a firmer financial footing.
The efforts also aim to address long-festering problems: a predicted widespread shortage of primary care doctors in the next decade, a rising level of physician burnout and a long-recognized underinvestment in primary care overall.
No data yet exist on how many of the nation’s primary care doctors have closed up shop permanently, hastened retirement or planned other moves following the COVID-19 outbreak. An analysis by the American Academy of Family Physicians in late April forecast furloughs, layoffs and reduced hours that translated to 58,000 fewer primary care doctors, and as many as 725,000 fewer nurses and other staff in their offices, by July if the pandemic’s impact continued. In 2018, the U.S. had about 223,000 primary care doctors.
“The majority [of primary care doctors] are hanging in there, so we haven’t yet seen the scope of closures we forecast,” said Jack Westfall, a researcher at the academy. “But the situation is still precarious, with many doctors struggling to make ends meet. We’re also hearing more anecdotal stories about older doctors retiring and others looking to sell their practices.”
Three-quarters of the more than 500 doctors contacted in an online survey by McKinsey & Co. said they expected their practices would not make a profit in 2020.
A study in the journal Health Affairs, published in June, put a hard number on that. It estimated that primary care practices would lose an average of $68,000, or 13%, in gross revenues per full-time physician in 2020. That works out to a loss of about $15 billion nationwide.
One main problem, said Westfall, is that payment for telehealth and virtual visits is still inadequate, and telehealth is not available to everyone.
Re-engineering primary care payments
The remedy being most widely promoted is to change the way doctors are reimbursed—away from the predominant system today, under which doctors are paid a fee for every service they provide (commonly called “fee-for-service”).
Health economists and patient advocates have long advocated such a transition—primarily to eliminate or at least greatly reduce the incentive to provide excessive and unneeded care and promote better management of people with chronic conditions. Stabilizing doctors’ incomes was previously a secondary goal.
Achieving this transition has been slow for many reasons, not the least of which is that some early experiments ended up paying doctors too little to sustain their businesses or improve patient care.
Instead, over the past decade doctors have sought safety in larger groups or ownership of their practices by large hospitals and health systems or other entities, including private equity firms.
A 2018 survey of 8,700 doctors by the Physicians Foundation, a nonprofit advocacy and research group, found, for example, that only 31% of doctors owned or co-owned their practice, down from 48.5% in 2012.
Fincher, the American College of Physicians president, predicts the pandemic will propel more primary care doctors to consolidate and be managed collectively. “More and more know they can’t make it on their own,” she said.
A 2018 survey by the American Medical Association found that, on average, 70% of doctor’s office revenue that year came from fee-for-service, with the rest from per-member, per-month payments and other methods.
The pandemic has renewed the push to get rid of fee-for-service—in large part because it has underscored that doctors don’t get paid at all when they can’t see patients and bill piecemeal for care.
“Primary care doctors now know how vulnerable they are, in ways they didn’t before,” said Rebecca Etz, a researcher at the Larry A. Green Center, a Richmond, Virginia, advocacy group for primary care doctors.
Charbonneau, in Montana, said he’s “absolutely ready” to leave fee-for-service behind.
However, he’s not sure the company that owns his practice, Providence Health System—which operates 1,100 clinics and doctors’ practices in the West—is committed to moving in that direction.
Anderson, in Michigan, is embracing a new payment model being launched next year under Medicare called Primary Care First. He’ll get a fixed monthly payment for each of his Medicare patients and be rewarded with extra revenue if he meets health goals for them and penalized if he doesn’t.
Medicare to launch new payment system
The Trump administration—following in the footsteps of the Obama administration—has been pushing for physician payment reform.
Medicare’s Primary Care First program is a main vehicle in that effort. It will launch in 26 areas in January. Doctors will get a fixed per-patient monthly fee along with flat fees for each patient visit. A performance-based adjustment will allow for bonuses up to 50% when doctors hit certain quality markers, such as blood pressure and blood sugar control and colorectal cancer screening, in a majority of patients.
But doctors also face penalties up to 10% if they don’t meet those and other standards.
Some private insurers are also leveraging the pandemic to enhance payment reform. Blue Cross and Blue Shield of North Carolina, for example, is offering financial incentives starting in September to primary care practices that commit to a shift away from fee-for-service. Independent Health, an insurer in New York state, is giving primary care practices per-patient fixed payments during the pandemic to bolster cash flow.
Meanwhile, two of the nation’s largest primary care practice companies continue to pull back from fee-for-service: Central Ohio Primary Care, with 75 practices serving 450,000 patients, and Oak Street Health, which owns 50 primary care practices in eight states.
“Primary care docs would have been better off during the pandemic if they had been getting fixed payments per month,” said Dr. T. Larry Blosser, the medical director for outpatient services for the Central Ohio firm.
KHN (Kaiser Health News) is a nonprofit news service covering health issues. It is an editorially independent program of KFF (Kaiser Family Foundation) that is not affiliated with Kaiser Permanente.


fortune--2020-08-12--‘Hard times are here:’ The U.K. crashes into recession as it braces for a wave of job losses

What is Trump ’ s payroll tax holiday and how will it affect you ?
Everything you need to know

The U.K. economy suffered more than any major European nation during the coronavirus lockdowns, piling pressure on the government to ensure the withdrawal of its support programs doesn’t derail the nascent recovery.
Gross domestic product plunged 20.4% in the second quarter, the most since records began in 1955 and roughly double that of Germany and the U.S. It also pushed Britain into its first recession since 2009.
The report followed massive job losses since the start of the pandemic, and Chancellor of the Exchequer Rishi Sunak acknowledged that more pain is to come.
“I’ve said before that hard times were ahead, and today’s figures confirm that hard times are here,” he said following the release. “Hundreds of thousands of people have already lost their jobs, and sadly in the coming months many more will.”
That casts a light on the risks of winding down government support for companies and workers too soon. Almost 10 million jobs have been put on furlough programs under which the government pays the wages. Sunak, who has borrowed tens of billions of pounds to finance spending, insists the time has come to start phasing the plan out, although his critics say it should be extended.
‘Tricky job’
“Sunak has got a tricky job,” said James Smith, developed markets economist at ING. “There’s no easy answer to the Job Retention Scheme and that’s the main risk at the moment as that is unwound. There’s a real chance that the recovery stalls if unemployment broadens out.”
A rebound is under way — U.K. output jumped a record 8.7% in June, beating forecasts — but high frequency data such as credit card spending and electricity use are still well below pre-pandemic levels. They’ve more or less recovered in other major European economies, according to Bloomberg Economics.
The U.K. economy has been hit particularly hard because of its reliance on services and “social consumption,” such as eating out and shopping. And there are worrying signs that the upturn could soon run out of steam.
Localized jumps in infections have heightened concerns over more shutdowns, government wage support is being phased out, and companies face higher tariffs should Britain fail to agree a trade deal with the European Union by the end of the year.
Prime Minister Boris Johnson has come under fire for failing to respond quickly enough to the virus, and the opposition Labour Party wasted no time in blaming his government for the scale of the slump.
“A downturn was inevitable after lockdown — but Johnson’s jobs crisis wasn’t,” said Shadow Chancellor Anneliese Dodds. “Now he must take responsibility, scrap the one-size-fits-all withdrawal of wage support and bring the health crisis properly under control.”
Economists and investors expect the Bank of England to boost its monetary stimulus later this year by increasing bond purchases. The central bank has already pumped billions of pounds into the financial system and has cut its key interest rate to near zero.
Sunak on Wednesday once again ruled out a return to austerity to repair the huge fiscal damageinflicted by the pandemic, but warned of “difficult decisions” ahead — a hint that higher earners could face tax increases. The chancellor is due to hold a budget in the autumn.
U.K. government bonds signal continued pessimism toward prospects of a swift economic recovery. Yields on five-year debt, while rising, are still among the lowest points on the curve in a sign that the market still expects the BOE to ease further.
The latest figures add to evidence Britain is paying a heavy price for being slower than most of its peers to enter a lockdown in March, with GDP slumping to its lowest level since 2003 last quarter. The country also has Europe’s highest death toll from the coronavirus, and probably has the worst downturn of any major economy worldwide.
The damage in the second quarter was widespread, with the construction industry alone seeing a 35% contraction. The report also showed:
Services, the biggest part of the economy, shrank 20% and industrial production plunged 17%.
Government spending fell 14%, while business investment plunged 31.4%, and consumer spending declined 23.1%
Productivity, as measured by output per hour, fell a record 2.5%
The peak to trough decline in GDP between February and April was 25.6%
The BOE has highlighted the labor market as a key concern, with officials fearing a jump in unemployment when government job support is withdrawn later this year. Data Tuesday showed the number of employees on payrolls is already down around 730,000 compared with March.
The central bank warns that the longer the recovery takes, the greater the risk of economic “scarring.”


fortune--2020-08-12--Ben & Jerry’s rattles the U.K. government

This is the web version of CEO Daily. To get it delivered to your inbox, sign up here.
Good morning. David Meyer here in Berlin, filling in for Alan.
The British government is arguing with ice cream.
Surreal, yes, but the subject of the argument is deadly serious: it’s about migrants who crowd into small boats to cross the English Channel from France. After Home Secretary Priti Patel on Monday pledged to make these dangerous crossings “unviable,” Ben & Jerry’s U.K. took to Twitter to take her to task.
“Hey @PritiPatel we think the real crisis is our lack of humanity for people fleeing war, climate change and torture,” a thread from the ice cream brand began. Ben & Jerry’s went on to note that “the U.K. hasn’t resettled any refugees since March, but wars and violence continue.”
and once more for the back: PEOPLE CANNOT BE ILLEGAL. — Ben & Jerry's UK (@benandjerrysUK) August 11, 2020
It seems Ben & Jerry’s tweets rattled the government, because someone in Patel’s department, the Home Office, briefed the BBC that the firm’s ice cream was “overpriced junk food.” James Cleverly, a lawmaker from Patel’s Conservative Party, tweeted: “Can I have a large scoop of statistically inaccurate virtue signaling with my grossly overpriced ice cream please.”
Andrew Neil, a prominent conservative media personality, accused the brand of “posing as some kind of hippy ice cream play.”
“You’re now wholly owned by a massive global conglomerate called Unilever. Perhaps if it paid the taxes [the U.K. tax authority] thinks you should pay we could afford to accommodate many more asylum seekers,” Neil tweeted.
Indeed, Unilever is currently battling Her Majesty’s Revenue & Customs over a $166 million tax bill. But it’s not like Ben & Jerry’s has no form in this regard.
Ben & Jerry’s is the OG corporate activist. It may have recently run high-profile campaigns in support of Black Lives Matter—winning plaudits for an unequivocal statement saying “the murder of George Floyd was the result of inhumane police brutality that is perpetuated by a culture of white supremacy”—and the release of prisoners to reduce their exposure to COVID 19, but it’s been campaigning for progressive causes for decades.
That’s part of the Ben & Jerry’s brand, no matter who the parent company is (and Unilever is no slouch on the CSR front itself)—you may like it or disapprove, but “posing” doesn’t ring true in relation to a firm that’s always been this way. And whatever your views on the issues at hand might be, there’s no denying that Ben & Jerry’s activism still has the capacity to rattle the establishment.
More news below. And remember that Fortune is collecting nominations (until August 24) for our annual Most Powerful Women lists, which publish in our November issue.
David Meyer
@superglaze
david.meyer@fortune.com
TOP NEWS
Kamala Harris
Joe Biden has picked Senator Kamala Harris to be his running mate in November. Harris, 55, will be the first Black woman (and the first Asian-American) on a major party's presidential ticket in the U.S. Like Biden, she is a moderate within the Democratic spectrum—though that hasn't stopped President Trump's campaign team immediately branding her as "radical left." Fortune
U.K. recession
It's official: the U.K. is in its deepest-ever recession. Its economy contracted by 20.4% in Q2—the worst GDP drop of any G7 country during the pandemic, though at least it wasn't as bad as Spain's 22.7% shrinkage. This may have something to do with the U.K. being slower than its peers to impose a lockdown (its Q1 GDP fall was just 2.2%.) Guardian
TikTok tactic
TikTok has been caught out using an "unusual added layer of encryption" to hide user-tracking that violates Google's privacy policies. It seems the controversial app was, until November, covertly collecting device identifiers called MAC addresses. These are generally collected for the purpose of profiling users' activity, so as to better target ads at them. Wall Street Journal
Tesla stock
Tesla is splitting its shares in a 5-for-1 exchange, in a bid to make its stock more attainable for individual investors. So shareholders of record on August 21 will get a dividend of four extra shares of common stock for each share held at the time. Fortune
AROUND THE WATER COOLER
Airbnb IPO
Airbnb will reportedly file for IPO this month, with the aim of a listing by the end of the year. Morgan Stanley will apparently lead the offering. It's not yet clear what kind of listing Airbnb might seek (traditional, direct, or merging with a blank-check company) and, of course, the timeline could still fall apart due to wider events. WSJ
TSMC's role
Fortune's Eamon Barrett takes a close look at Taiwan Semiconductor Manufacturing Co., or TSMC, which is the world's biggest chipmaker, responsible for around half the world's contract processor production. He writes: "TSMC’s central place in the silicon ecosystem makes it particularly sensitive to the counterpunches of Sino-American trade tensions. As relations between China and the U.S. deteriorate, each is determined to insulate its supply of semiconductors from attack by the other—which means redefining their relationships with TSMC." Fortune
WeChat importance
So if and when President Trump's WeChat ban takes effect, how will that affect users in the U.S.? Many find the app "irreplaceable" because it makes it possible to keep in touch with older, less tech-savvy relatives in China. As Fortune's Naomi Xu Elegant writes: "It's one of the few apps that bridges the technological divide between China and the U.S." Fortune
Nestlé CEO
Mark Schneider, Nestlé's CEO, sets out his views on the pandemic and effects, along with many other issues, in this fascinating interview with Fortune's Beth Kowitt. Schneider on Nestlé maintaining its guidance for the year, while many other firms did not: "It was important to me that one of the ways as a company we can contribute to stability is by fully meeting our commitments. In Europe there was a debate that some companies should delay or reduce the dividends. We didn’t do that, because it’s someone else’s income." Fortune
This edition of CEO Daily was edited by David Meyer.


fortune--2020-08-12--Gold takes a battering, but investors aren’t losing faith

This is the web version of the Bull Sheet, Fortune’s no-BS daily newsletter on the markets. Sign up to receive it in your inbox here.
Good morning. The Dow and S&P’s seven-day rally faltered in the final hour of trade on Tuesday on fears a fiscal stimulus deal won’t materialize any time soon. (That the college football season now looks like a goner didn’t help sentiment either.) Gold too suffered its worst drop in seven years, losses that spilled into the early portion of the trading session.
But European equities are trudging higher and U.S. futures are nudging up too—as is gold.
Let’s check in on the action.
Markets update
Asia
The major Asia indexes are off their lows with Japan’s Nikkei up 0.4% in afternoon trade.
are off their lows with Japan’s Nikkei up in afternoon trade. The White House’s top economic advisor Larry Kudlow says the Phase One trade deal is “fine” and that China is “substantially” increasing purchase of American goods. This comes a day after President Trump downplayed the importance of the trade pact, telling reporters it “ means very little .”
Larry Kudlow says the is “fine” and that China is “substantially” increasing purchase of American goods. This comes a day after President Trump of the trade pact, telling reporters it “ .” A brutal year has forced SoftBank to pivot from tech firm/startup-incubator into asset management. The company announced yesterday it’s created an asset management arm with $555 million in capital. It’s already invested in Apple, Facebook and Amazon.
Europe
The European bourses were flat at the open, but gained momentum an hour into trading. London’s FTSE was up 0.4% even as U.K. GDP fell a staggering 20.4% in Q2, the worst performance of any G7 economy so far.
were flat at the open, but gained momentum an hour into trading. was even as U.K. GDP fell a staggering in Q2, the worst performance of any G7 economy so far. Russia’s pronouncement it had developed and registered a COVID-19 vaccine —so safe and effective Vladimir Putin’s daughter got the jab—proved to be a short-lived jolt to the markets yesterday. Health experts are highly dubious of the fast-tracked vaccine, to put it mildly.
it had developed and registered a —so safe and effective Vladimir Putin’s daughter got the jab—proved to be a short-lived jolt to the markets yesterday. Health experts are of the fast-tracked vaccine, to put it mildly. Is Boeing‘s 737 Max headed for further delays? Regulators in Europe and Canada are holding up approval until engineers can sort out a series of technical issues on the grounded jet.
U.S.
U.S. futures have taken off in the past hour, indicating a positive open. That’s despite real concern Washington will not get a deal done any time soon on a new fiscal stimulus coronavirus bailout. “If we don’t get a deal, I think markets will correct quite quickly,” Nicholas Brooks at Intermediate Capital Group told the Wall Street Journal.
have taken off in the past hour, indicating a positive open. That’s despite real concern Washington will not get a deal done any time soon on a coronavirus bailout. “If we don’t get a deal, I think markets will correct quite quickly,” Nicholas Brooks at Intermediate Capital Group told the Wall Street Journal. This should excite Robinhood investors: Tesla announced a five-for-one stock split . Shares are up 6% in pre-market trading.
. Shares are up in pre-market trading. Bookings at Airbnb may still be below pre-pandemic levels, but that’s not dashing the company’s IPO aspirations. It plans to file this month, the Journal reports.
Elsewhere
Gold had bombed early, down at one point below $1,900/ounce . It’s stormed back, however.
had bombed early, down at one point below . It’s stormed back, however. The dollar is off its highs as equities and gold rebound.
is off its highs as and rebound. Crude is climbing again, with Brent up 0.8%.
***
The sky is falling, stocks climb
Stop me if you’ve heard this one: the economic data bombs to historic lows and stocks go up. We’re seeing this phenomenon again this morning in the U.K.
GDP there fell by more than 20% in Q2, the worst performance in the modern records-keeping era. And the FTSE and pound are, after a sluggish start, gaining impressively.
Why do stocks keep rallying in the face of bad news? Investment pros are getting this question a lot these days.
BofA offers this explanation. They point to three factors that shed some light on why this investor exuberance is not as irrational as you might think.
The four-month rally, it says, stands on three legs: fiscal stimulus measures, investors pouring into a small sliver of pandemic-proof sectors and—everybody now: central bank liquidity.
Let’s take them one by one:
Fiscal stimulus: So far, U.S. lawmakers have earmarked $2.8 trillion. Those spending measures have been “a rousing success,” BofA says, in keeping American households solvent. It’s the biggest peacetime stimulus plan ever, as the chart here show:
But you know what? It’s probably not big enough, particularly as the coronavirus pandemic continues to rage on across much of the United States. As yesterday’s late-afternoon market tumble reminded us: failure to reach a deal on Round 2 would likely send the markets and the economy lower.
Moving on…
Health care and tech stocks: They’re soaring. And, no, they are not a proxy for the wider economy. These “defensive growth stocks,” as BofA calls them, “account for 18% of US jobs but now comprise 54% of the S&P 500 market cap.”
The biggest losers from the pandemic (e.g. retail, airlines, travel & leisure, oil & gas) accounted for 47% of job losses but only 10% of S&P 500 market cap.”
That paradox explains somewhat why the markets are flying even as so many Americans are out of work and suffering. In a word, BofA calls it a case of fiscal “inequality.”
Finally…
Central Bank largesse: So far in 2020, central banks around the world have issued 167 rate cuts and have pumped $8.4 trillion in monetary support into the global economy. Those measures have been great news for equities markets, but, BofA writes, “monetary policy can do little for the real economy.”
Without the central banks’ help, this rally would have never materialized, most market observers now agree. They’ve been a godsend for Wall Street. For the rest of America though—not so much. The American consumer—a not insignificant part of the U.S. economy— is much more reliant upon the first leg of the stool, the fiscal stimulus.
If there’s no CARES Act II, market observers now fear, both Wall Street and Main Street will feel it.
***
Have a nice day, everyone. I’ll see you here tomorrow… But first, more news below:
Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com
As always, you can write to bullsheet@fortune.com or reply to this email with suggestions and feedback.
Today's read
Where the jobs are—and aren't. On first glance, last Friday's non-farm payrolls report looked pretty good. The U.S. economy added a better-than-expected 1.48 million jobs. But Fortune's Shawn Tully digs into the numbers and finds some worrying data, sector-by-sector. "The pandemic crisis," he concludes, "is on track to permanently destroy many millions of positions, even more than were lost for good in the Great Recession."
King dollar gets crowned. It's amazing how far a bit of political solidarity can go in a devastating pandemic. The European Union struck a deal on €750 billion coronavirus stimulus package in mid-June and the euro has since taken off. It jumped 4.9% last month against the dollar, and now investors are dumping the greenback for the common currency.
MPW. As I mentioned yesterday... Fortune is collecting nominations for our annual Most Powerful Women lists, which publish in our November issue. We’re accepting submissions through this online form. The deadline for applications is Aug. 24
Some of these stories require a subscription to access. There is a discount offer for our loyal readers if you use this link to sign up. Thank you for supporting our journalism.
Market candy
Top Five
Fortune's Global 500 list went live this week, and I'll be breaking down the findings on Bull Sheet over the next few days. This caught my eye: five cities—Beijing, Tokyo, Paris, New York, and London—are home to one-third of the Fortune Global 500 companies. It should be interesting to check back in on that number a year hence to see what impact coronavirus has had on the world's major urban business centers. You can read the Global 500 list here.


fortune--2020-08-12--‘Irreplaceable’: U.S. WeChat users struggle to imagine life without the app Trump wants to ban

Every winter, when the Lunar New Year comes around, Shuyi’s 80-person WeChat group of extended family lights up with celebratory messages and “red envelopes,” digital versions of the red-packeted cash gifts that are central to the traditional Chinese holiday.
Shuyi and her relatives send each other red envelopes on WeChat, a messaging app, sometimes using a playful function where the first person to “snatch” the envelope gets the digital money.
For Shuyi, a recent college graduate living in New York City, it’s a simple way to keep a tradition going with loved ones who live thousands of miles away, some of whom she has not seen in years.
Shuyi, who asked that her last name not be included owing to the political sensitivity of the issue, is now worried that connection will be severed by the executive order President Donald Trump signed last week to ban U.S. individuals and companies from “any transaction” with WeChat, which is owned by Chinese tech giant Tencent Holdings.
The executive order on WeChat will take effect on Sept. 20, along with one placing similar restrictions on short-video app TikTok, which is owned by Chinese tech firm ByteDance Ltd.
Shuyi’s concern is shared by many U.S. WeChat users. The app has over 1 billion users worldwide and is the primary mode of communication for individuals in the U.S. whose professional or personal networks extend to China, including Chinese citizens living in the U.S. and many of the 3 million U.S. citizens of Chinese origin. WeChat averaged 19 million daily active users in the U.S. in the past three months.
Since Trump signed the order, WeChat users have begun posting their contact information for other messaging apps and planning ways to keep in touch with older, tech-shy relatives in China. But WeChat is “irreplaceable,” said Shuyi.
“WeChat really is the most intimate form of connection for many of us,” Shuyi said.
There is no U.S. app equivalent to WeChat—it’s a messaging tool, but it’s also a social media platform, a payment service, a news source, and host to an array of “mini-apps,” from mobile games to government-run health codes for coronavirus contact tracing and quarantine enforcement. Users in China can buy plane tickets, order groceries, book medical appointments, and hail cabs without ever exiting the app.
And currently, it’s one of the few apps that bridges the technological divide between China and the U.S.
An outdoor dining area in New York City’s Chinatown on Aug. 10, 2020, in New York City. WeChat is a vital communication tool for the Chinese diaspora in the U.S. Spencer Platt—Getty Images
The Chinese government’s system of Internet controls, known as the “Great Firewall of China,” blocks access to most popular U.S. social media and messaging platforms, including Facebook, WhatsApp, Instagram, Twitter, and Google-owned services like Gmail. Apple’s iMessage and FaceTime work in China, but those apps require iPhone users on both ends.
Email is scarcely used in China—the country’s Internet users largely leapfrogged PCs and moved straight to mobile communication—and a majority of companies and local governments use WeChat to communicate and make announcements. Even the U.S. embassy in China has an official WeChat account.
WeChat is ubiquitous among Chinese mobile users—79% of them regularly use the app. WeChat parent Tencent launched the app (known as Weixin in China) in January 2011, latching on to the rapid growth in Chinese sales of smartphones like Apple’s iPhone. WeChat’s user base surged a few months later when Tencent added a voice messaging function. WeChat’s popularity continued to rise, thanks to innovative app updates and the decade’s mobile wave.
WeChat’s voice message function is an important tool for Shuyi—she grew up in the U.S. and is “not 100% literate” in written Chinese, and some of her older relatives who didn’t attend school can’t read the written language. Instead, they record and send voice messages to one another in Fuzhounese, the Chinese dialect that her family speaks.
Shuyi uses WeChat every day to talk to her parents and cousins in the U.S. and her relatives in the coastal province of Fujian in southeastern China.
Before WeChat, Shuyi’s family would buy minutes of call time through a phone company when they needed to talk to relatives in China. It was expensive, she says, and made communication with family in China more difficult.
Shuyi is worried that a U.S. ban on WeChat will make it harder to connect with her relatives in China, who may not have the means to purchase and use a virtual private network (VPN), a tool that helps users bypass location-based Internet controls.
The scope of Trump’s executive order is not yet known, but it “could impact the ability of U.S. persons to download or utilize the apps,” according to a briefing from international law firm Steptoe & Johnson LLP.
If the ban takes effect, Apple and Google will have to remove WeChat from their app stores. U.S. cloud providers may be forced to stop providing services to WeChat, and the U.S. government could order U.S. telecommunications providers to block traffic from WeChat, according to a report from Eurasia Group, a political risk consultancy.
“[WeChat is] the only app that we can download and [family in China] can download…This is so important for people with family and friends overseas in China, because how else are we going to communicate with them?” Shuyi said.
WeChat is a “super-app” in that it enables users to carry out a variety of tasks via mini-apps without ever leaving the WeChat ecosystem. (Jay L. Clendenin / Los Angeles Times via Getty Images)
Stephanie, 21, a Chinese-American student who lives in Los Angeles, moved from China to the U.S. when she was 7 and initially relied on email or expensive international calls to talk to her father in Beijing. (She asked that her last name not be included owing to political sensitivities.) The limited forms of communication back then often left her feeling “alienated” from her home and her family.
WeChat was “life-changing,” Stephanie said. It “allowed spontaneous communication” with her family in China and helped her keep up her Chinese language skills. “It allows me to express myself,” she said.
For other WeChat users, the app is a vital business tool.
Joseph, 24, says it’s a crucial source of income. Joseph, who also asked that his last name not be included owing to political sensitivity, lives in New York City and works part-time for a Chinese company that helps students in China apply for U.S. universities. All his work is conducted over WeChat, from talking to students about their essays to communicating with his bosses, who are all in China.
Joseph says he will purchase a VPN if WeChat is blocked in the U.S., but he’s not sure it will work. If he loses the job because he can’t access WeChat, he said, “I’m quite worried I won’t be able to pay rent.”
Cameron, an American who has bounced between China and the U.S. for the past 10 years, owns an apartment in China and uses WeChat to pay property fees and make other payments. He communicates with friends in China every day on WeChat, and plans to download and use a VPN if the U.S. blocks access to the app.
“People can’t simply just switch to another application,” said Cameron, who also asked that his last name not be included over political sensitivity concerns.
In his executive order, Trump said WeChat poses a national security risk to the U.S., accusing it of being used in “disinformation campaigns,” censoring content, and collecting user data and sharing it with China’s government. WeChat says it stores U.S. user data on servers outside China and has denied allegations that it shares U.S. user data with the Chinese government.
Tencent shares plunged on news of the executive order on Friday and dropped again on Monday. The Hong Kong–listed company released a statement on Friday saying it was “reviewing the potential consequences of the executive order to develop a fuller understanding of its impact.”
Shuyi isn’t concerned by the claims that WeChat poses a data security risk to American users. “I don’t think it’s just a WeChat issue,” Shuyi said. “[U.S.] tech companies share and sell our data all the time, whether it’s with the [U.S.] government or other corporations and other businesses.”
Stephanie said she considers the potential WeChat ban a violation of U.S. free speech norms: “If we’re talking about free speech, why are you banning this platform for Asian-Americans who are just trying to reach out to their family?”
Tong Pow, a software engineer in San Francisco whose family lives in China, says many of his friends on WeChat are posting messages on the app urging contacts to add them on other apps like Line, a South Korean messaging app popular in Japan, and QQ, another Tencent-owned messaging app.
On a personal level, Pow is worried about keeping in touch with older relatives in China who have gotten accustomed to using WeChat. He says he will likely “resort to international calls again” to talk to them, and although “it’s not impossible to reach them…it feels like we are being cut off [and] regressing to the pre-Internet era before WeChat single-handedly connected us through group chats, calls, and stories.”
Pow says he understands some of the data privacy concerns about WeChat, but thinks there must be better solutions than a blanket ban, which he sees as a way for the Trump administration to signal it is “tough on China.” Pow says he is “saddened and worried” that the bans could lead to a larger trend in which the Internet is “partitioned by borders, moving further and further away from a more open and universal Internet that we were used to.”
Unlike a ban on TikTok, which isn’t available in China, a WeChat ban will have ramifications beyond the U.S., changing how some people in China use the app day-to-day. A U.S. ban of a high-profile app owned by Tencent, China’s most valuable Internet company, risks exacerbating the already rapid deterioration of U.S.-China relations and accelerating the two countries’ “technological cold war.”
Because WeChat isn’t just a messaging device, but also a social media platform like Facebook or Instagram where people post life updates, pictures, and videos, Pow said even if his relatives switch to another app to keep in contact, he will be cut off from the “network” of friends and family on WeChat.
Pow added, “The warm and fuzzy feeling of exchanging or [receiving] a virtual [red envelope] is something that I’d miss.”


fortune--2020-08-12--New Zealand investigates a common suspect in its mysterious new COVID cluster

New Zealand thought it had the coronavirus under control, and then four more people got sick.
Following a 102-day run without any local transmission of COVID-19, the country was placed back under lockdown Wednesday after four members of a family in Auckland were found to have contracted the virus.
“We are working hard to put together pieces of the puzzle on how this family got infected,” New Zealand’s Director General of Health Ashley Bloomfield said.
The island state had declared itself virus-free in June, with no active cases across the country. The government lifted all local lockdown restrictions, allowing people to meet and mingle at ease while maintaining strict quarantine for inbound travelers.
With no prior local cases and little chance of an infected person arriving in New Zealand, the country is now investigating whether the virus could have been imported through freight—specifically, refrigerated supply lines.
“We know the virus can survive within refrigerated environments for quite some time,” Bloomfield told a media conference. In Auckland, authorities are testing a cold storage unit, where one of the infected family members worked, for the virus.
The city—the largest city in New Zealand—is under a level 3 lockdown, requiring people to stay home except for essential trips, while officials attempt to trace the virus.
Members of the infected family had traveled to a local tourist site and another member had gone to work, where other staff are now showing symptoms.
The rest of the country is under a looser lockdown protocol, which will be in place until at least Friday.
Other countries have speculated previously that refrigerated supply lines helped transport coronavirus, too. In June, Beijing deployed “wartime” lockdown measures after a COVID-19 outbreak was traced to a seafood market; the virus was suspected to have been imported along with salmon.
In July, China’s coastal city of Dalian reported a new COVID-19 cluster, which it suspected was imported via frozen fish. And this week another Chinese city, Yantai, said it had found COVID-19 on imported packages of frozen seafood.
It’s important to note the virus isn’t thought to be transmitted by frozen food itself. Rather the virus can survive on the surface of shipped packages and products and infect people when the cargo arrives. Seafood has emerged as a potential risk because, according to China’s chief epidemiologist, “seafood products are typically stored and transported in cold containers, thus it is possible for the virus to be preserved for a long time” in a dormant state.
As an additional response to the outbreak, New Zealand Prime Minister Jacinda Ardern delayed dissolving Parliament—a political process that needs to be done before the country can hold its next general election, due in September.
“We’re seeking advice around the options of the issue of the election from the electoral commission, just so that we make sure we have all those options available to us,” Ardern said.


fortune--2020-08-12--Trump administration strikes another deal for a promising COVID-19 vaccine

Moderna Inc. reached a deal with the Trump administration to supply 100 million doses of its experimental vaccine for COVID-19, in a pact valued at up to $1.5 billion, the latest in a string of supply agreements the U.S. has reached to stockpile the most advanced vaccines in testing.
“I’m pleased to announce we’ve reached an agreement with Moderna to manufacture and deliver 100 million doses of the coronavirus vaccine candidate,” President Donald Trump said at a White House briefing. “The federal government will own these vaccine doses, we’re buying them.”
Moderna, which is already receiving $955 million in government assistance to test the vaccine, will be selling the vaccine for roughly $15 a dose, or $30 for a two-dose regimen.
Subscribe to The Capsule , a weekly brief monitoring advances in health care and biopharma, delivered free to your inbox.
The Trump administration has already reached supply agreements with several other vaccine front-runners. In July, it agreed to buy 100 million doses of a messenger RNA vaccine from Pfizer Inc. and its German partner BioNTech SE for $1.95 billion, should the vaccine work in trials. And earlier this month, the federal government also reached a supply pact with Johnson & Johnson for the company to provide 100 million doses of its vaccine for over $1 billion.
While Pfizer’s price is slightly more than what Moderna will get on a per-dose basis, Pfizer hasn’t received government money for testing its vaccine.
Shares gained 10% to $76.01 in late trading in New York. Earlier Tuesday, the company’s stock had fallen as much as 7% after Reuters and Axios flagged language in a Moderna filing last week concerning patent risks to its vaccine candidate.
Moderna will manufacture the vaccine as clinical trials continue, according to a statement from the U.S. Department of Health and Human Services.
“Today’s investment represents the next step in supporting this vaccine candidate all the way from early development by Moderna and the National Institutes of Health, through clinical trials, and now large-scale manufacturing, with the potential to bring hundreds of millions of safe and effective doses to the American people,” HHS Secretary Alex Azar said in the statement.
Despite the efforts to lock down domestic supplies of any successful vaccine, most Americans will likely need to wait until 2021 to be inoculated, Anthony Fauci of the White House Coronavirus Task Force has warned.


fortune--2020-08-12--Apple’s $44 billion China market threatened by Trump WeChat ban

Apple spent years building China into a $44 billion growth driver. Then the U.S. president last week cast all that in doubt.
IPhone loyalists across China are now reconsidering their attachment to the device after Donald Trump issued an executive order last week barring U.S. companies from doing business with WeChat, the super-app that has become integral to everyday life in the country. Scheduled to come into effect in roughly five weeks, the ban threatens to turn iPhones into expensive “electronic trash,” said Hong Kong resident Kenny Ou, who sees WeChat as one of the most essential software on his handset.
On Wednesday, Tencent executives on a post-earnings conference call stressed they believed the ban applied only to WeChat in the U.S. and shouldn’t affect its Chinese cousin, known as Weixin. But they added that they themselves were still seeking clarity, and the sweeping language of Trump’s order means it could still spell trouble for Apple.
The U.S. company has just come off a strong quarter in China, its most important international market and where it is facing intensifying competition from local Android rivals like Huawei Technologies Co. — which, unlike Apple and its locked-down app stores, are free to either offer WeChat directly or allow their users access to download it themselves. The Cupertino company’s strategy of tapping first-time buyers and wooing back consumers with cheaper devices like the iPhone SE could be entirely derailed if it can’t offer WeChat and U.S.-China trade tensions continue to worsen.
Tencent Holdings Ltd.’s flagship app connects a billion users globally and is used for everything from chatting with friends to shopping for movie and train tickets to paying restaurant and utility bills. While questions remain on how Trump’s orders will be implemented, any ban on the use of WeChat threatens to cut off a key communication link between China and the rest of the world and prevent U.S. companies like Starbucks Corp. and WalMart Inc. from reaching consumers in the world’s second-largest economy.
If Apple was forced to remove the service from its global app stores, iPhone annual shipments will decline 25% to 30% while other hardware, including AirPods, iPad, Apple Watch and Mac computers, may fall 15%-25%, TF International Securities analyst Kuo Ming-chi estimated in a research note. Apple didn’t immediately respond to Bloomberg News’ requests for comment.
A survey on the twitter-like Weibo service asking consumers to choose between WeChat and their iPhones has drawn more than 1.2 million responses so far, with roughly 95% of participants saying they would rather give up their devices. “The ban will force a lot of Chinese users to switch from Apple to other brands because WeChat is really important for us,” said Sky Ding, who works in fintech in Hong Kong and originally hails from Xi’an. “My family in China are all used to WeChat and all our communication is on the platform.”
Apple’s iPhones were first launched in China in 2009, two years after sales began in the U.S., and the company has shipped more than 210 million units in the country over the past five years, according to Bloomberg calculations based on IDC data. More than a fifth of all smartphone users in China used an iPhone as of June, second only to Huawei at 26%, according to researcher QuestMobile. The company has 42 stores in the country that also hosts most of the world’s iPhone manufacturing. And at its peak, Greater China accounted for 25% of Apple’s revenue though that share slipped to 17% in the last fiscal year, with sales in the region amounting to roughly $43.7 billion.
Apple had been counting on the next generation of its flagship handset — expected to be launched in October and the first in the series to feature 5G — to woo potential customers like Vincent Han, a Shanghai-based commodities trader who had been planning to replace his Huawei handset with an iPhone. He’s since nixed those plans and is considering alternatives including Samsung Electronics Co.
“I’m worried that WeChat will be banned on the iPhone. This will affect my work to a large extent, as 90% of my clients and colleagues communicate via WeChat,” said Han. “Still, even Samsung’s Android operating system is developed by Google and I’m concerned the Android platform will also bar WeChat.”
Ready to fill the iPhone void will be a legion of high-spec, high-value 5G devices from local brands Xiaomi Corp., Oppo and Vivo as well as market leader Huawei. Xiaomi just announced the Mi 10 Ultra flagship, destined solely for China, and it has a full portfolio of devices to replace Apple’s range, including fitness-tracking watches, wireless earphones, tablets and laptops.
Ou, an engineering student, is one of the millions of die-hard Apple fans in China who may need to make a difficult choice between his beloved iPhone and the ubiquitous app. “All my products are from Apple — my Macbook, iPad, iPhone and even AirPods,” he said in an interview from his hometown of Shanghai. “Apple has created a robust linkage of their products and made me heavily reliant on their brand. It would be a tremendous disaster to my studies and work if such a ban was imposed.”


fortune--2020-08-12--How to be a ‘virtual fan’ at NBA, MLB, and other games this summer

These are hard times for those who love to attend live sporting events. This week has brought more news of American sports leagues and teams deciding to either limit the number of fans able to attend their upcoming events, or opting to bar them entirely.
On Wednesday, it emerged that both the Masters and the Kentucky Derby—two of America’s most prestigious sporting events, which were already postponed from their traditional spring dates as a result of the pandemic—will go ahead this fall with no fans and significantly fewer fans in attendance, respectively.
Meanwhile, the NFL’s Washington Football Team announced Wednesday that it would play its 2020 season without fans in attendance at its home stadium. The team joins numerous other NFL franchises that have indicated they would have no fans or significantly fewer fans attending their games in the upcoming season.
Elsewhere, some leagues and their fans are making the best of an unfortunate situation. The NBA and the NHL as well as MLB are currently proceeding with their seasons even though fans are barred from attending—and each has taken its own unique approach to ensuring supporters still feel involved in the action.
Here’s a look at what each league is doing and how you can participate.
NBA
The NBA, which has resumed its season in its “bubble” at the Walt Disney World Resort in Orlando, has drawn plaudits for its particularly innovative approach to involving fans in its basketball games. At every game, the league displays more than 300 “virtual fans” on 17-foot-tall video screens standing next to the court—an arrangement made possible through a partnership with Microsoft.
If you’re a fan, you can sign up for free through your favorite team to be featured on the screens. Though it’s worth noting that the league has a conduct policy that means unruly “virtual fans”—no different than the real ones who attend games in person—can be ejected for inappropriate conduct.
MLB
Things have proved a little more complicated for Major League Baseball, which is not playing in a bubble but rather at ballparks around the country. The league has been plagued by positive COVID-19 tests among its players, forcing numerous games to be canceled.
While physical baseball games are presently closed to fans, MLB teams have taken measures to include their supporters. Many allow fans to purchase cardboard cutouts of their faces that are displayed in the stands during games. The price of those cutouts range anywhere from $25 for Atlanta Braves and Philadelphia Phillies season ticket holders to a $500 donation to the Boston Red Sox Foundation that gets fans a cutout placed atop the famed “Green Monster” at Fenway Park.
Meanwhile, Fox’s decision to include fake, computer-generated fans in its MLB broadcasts has drawn plenty of mockery online.
NHL
And then there’s the NHL, which has resumed its season via two bubbles located in Toronto and Edmonton. Unfortunately there are no fans—real or virtual—involved in the hockey games. Still, those watching from home have gotten a kick out of the league’s use of its Jumbotrons, and four cooling fans placed in the stands in Edmonton quickly became Internet sensations among the NHL’s online fan community.
The absence of actual human fans from American sporting events is undoubtedly a blow for these sports and their respective products—especially during playoff games that are usually characterized by a raucous atmosphere that elevates the competitiveness and makes for more compelling contests.
What’s more, the absence of fans during the pandemic is costing the sports industry billions of dollars in revenue from ticketing and other income streams, something that could put a considerable dent in the economics of many sports for years to come.
But like American society at large, sports leagues and their teams have had to make the best of an unprecedented situation—and that includes doing what they can to ensure their fans, the economic and cultural lifeblood of their sports, feel as engaged as possible.


fortune--2020-08-12--Instagram faces lawsuit over illegal harvesting of biometric data

Facebook is facing new allegations that it illegally harvests the biometric data of users, this time in a lawsuit that targets the company’s photo-sharing app Instagram.
Last month, the social media company offered to pay $650 million to settle a lawsuit in which it was accused of illegally collecting biometric data through a photo-tagging tool provided to Facebook users.
In the new lawsuit, filed Monday in state court in Redwood City, California, the company is accused of collecting, storing and profiting from the biometric data of more than 100 million Instagram users, without their knowledge or consent.
“This suit is baseless,” Stephanie Otway, a Facebook company spokesperson, said in an emailed statement. “Instagram doesn’t use face recognition technology.”
Kelly Whalen, an Illinois resident who says she’s been using Instagram regularly since 2011, alleged in her complaint that the photo-sharing app’s practice violates a state privacy law that bars the unauthorized collection of biometric data. Under the law a company can be forced to pay $1,000 per violation — or $5,000 if it’s found to have acted recklessly or intentionally.
Only at the beginning of this year did Facebook start informing Instagram users that it was collecting the biometric data, according to the suit.
Instagram’s online data policy on face recognition states: “If we introduce face-recognition technology to your Instagram experience, we will let you know first, and you will have control over whether we use this technology for you.”


fortune--2020-08-12--Breaking down Kamala Harris’s net worth as she steps into a new role as Joe Biden’s running mate

Our mission to help you navigate the new normal is fueled by subscribers. To enjoy unlimited access to our journalism, subscribe today.
Joe Biden’s running mate Kamala Harris, announced Tuesday, already stands out on the political field as the first woman of color on a presidential campaign ticket. Another factor sets the California senator apart: She is among the wealthiest of the Democratic candidates for the 2020 election.
Biden chose Harris as his potential Vice President after they campaigned against each other during the Democratic primary—with former VP Biden ultimately prevailing over rivals to be presumed the party’s nominee.
Harris’s net worth is as much as $6.3 million, based on the assets listed in her latest Senate financial disclosure, filed in May. That makes her wealthier by some measures than even her presidential running mate: Biden’s assets, according to his 2018 tax return, amounted to as much as $2.7 million.
By comparison, Sen. Elizabeth Warren—who initially ran alongside Harris and Biden for the Democratic presidential nomination, and was once thought to be a front-runner for Biden’s VP pick—disclosed up to $8.9 million in assets in her latest Senate financial filing. The financial disclosures include bank and investment accounts but not other assets such as real estate and property holdings.
Of Harris’s wealth, much of the money is held in the name of her husband, Douglas Emhoff, a partner at the big international law firm DLA Piper. Excluding Emhoff’s assets, Harris still has up to $1.7 million in her accounts.
As for income, Harris was also one of the highest-earning of the Democratic candidates, second only to Biden himself, according to a New York Times analysis last year. (The analysis predated Michael Bloomberg’s entry into the presidential race.) Harris and her husband reported nearly $1.9 million in adjusted gross income in 2018, the candidate’s most recently released tax returns show. They paid an effective 37% tax rate on that income—the highest rate of all the Democratic presidential candidates, including Biden, even though his income was greater.
Biden’s tax returns show he reported almost $4.6 million in income in 2018, paying an effective rate of 33.8%.
More recently, Harris disclosed that she personally made $277,763 in income in 2019 in her latest Senate financial disclosure, all from book publishing advances.
Politically, Harris has proposed some changes to U.S. tax policy, including taxing stock trades at 0.2% and bond trades at 0.1%—a change that could potentially increase the taxes she pays on her own investment accounts, which include both stock and bond funds.


fortune--2020-08-12--Another Airbnb house party ends in a shooting. What the company plans to do about it

Airbnb plans to pursue legal action against a Sacramento customer who hosted an unauthorized party in a rental home that ended with three people being shot.
The legal threat, announced Monday, marks the first time Airbnb will seek damages against a customer for throwing a party. It also comes after the company faced intense criticism last year after a shooting at another party held at one of its rentals in Orinda, Calif., that left five people dead and at least four others injured.
Airbnb alleges that the customer, whom the company has yet to publicly identify, was negligent and violated local health orders—which prohibit social and community gatherings—and booked the rental under false pretenses. The customer has been removed from Airbnb’s service.
“Airbnb has no tolerance for unauthorized parties,” Ben Breit, Airbnb spokesman, said in a statement.
On Saturday, authorities responded to several 911 calls about the shooting of three people, all in their twenties, at the Sacramento rental. All the victims were transported to a nearby hospital in stable condition. Police have not named any suspects.
Airbnb could not confirm exactly what legal action it intended to pursue and when or where it would file said actions. But the company said it is seeking “legal claims” and “damages” against the guest and that any money Airbnb recovers will be donated to a Sacramento nonprofit that fights gun violence.
For months, Airbnb has been ramping up its fight against unauthorized parties and trying to improve customer safety amid the pandemic. Those concerns about COVID-19 have curtailed reservations, complicating Airbnb’s planned filing for an initial public offering this year.
Following last year’s shooting at a Halloween party in Orinda, Airbnb debuted new safety measures, including a hotline manned by a rapid response team that neighbors can call. It also said it planned to increase the manual screening of reservations its systems flag as “high risk,” taking into account factors like length of stay and size of the property.
Airbnb also banned party houses, or homes that are listed only for the hosting of big parties. Airbnb still allows parties to be hosted with permission from the homeowner, as long they adhere to all local rules. Airbnb also implemented a new policy that prohibits customers under the age of 25 and who have fewer than three positive reviews from booking entire homes near where they live.
Airbnb CEO Brian Chesky previously told Fortune that he estimates the company’s new focus on safety will cost it an extra $150 million in 2020. It’s unclear if that plan has changed since the coronavirus outbreak. In May, Airbnb laid off nearly 2,000 employees, or 25% of its workforce.


fortune--2020-08-12--Forget Netflix. Gaming companies are winning the pandemic

This is the web version of Data Sheet, a daily newsletter on the business of tech. Sign up to get it delivered free to your inbox.
It’s a good time to be a gamer—and an even better time to be a gaming company. With so many people homebound and seeking indoor entertainment now, video-game makers are profiting wildly.
Take Nintendo. The latest installment of the Japanese firm’s anthropomorphic-homemaking hit Animal Crossing helped deliver “stratospheric” earnings for the company, as the Verge put it. The company reported skyrocketing operating profit of $1.37 billion, up 428% year-over-year. If Nintendo’s supply chain hadn’t been so disrupted by COVID-19 lockdowns, causing global shortages of the Switch console, it’s fair to say Nintendo might have reached the Mesosphere.
Tencent also recently reported a record-smashing quarter. Revenue rose 29% from a year earlier and operating profit leaped 43% for the quarter ended in June, both its highest ever gains. And while the White House is threatening to ban WeChat, the company’s super-popular chat app, the move will barely dent the Chinese giant as the U.S. market accounts for less than 2% of its revenues, per a Morgan Stanley estimate.
The recent spate of money-making is an industry-wide phenomenon. Madden NFL-maker Electronic Arts, Call of Duty’s Activision Blizzard, and Red Dead’s Take-Two Interactive all crushed their recent earnings expectations. Even Pokémon Go-maker Niantic, which adapted its ambling outside adventure game to the exigencies of the quarantined and couch-bound, is on track to pull in record sales. According to Sensor Tower, an app-usage data tracker, the game reaped $445 million in revenue for the first six months of 2020, up 12% year-over-year.
While much of the economy is struggling to restart, the gaming set is making money hand over controller-clenched fist. And investors have taken notice: Returns on video game-related exchange-traded funds exceeded 50% this year, Bloomberg reports. That beats out even Netflix’s stunning 45% rise.
Soon, Microsoft and Sony will release their long-awaited new video-game consoles: the Xbox Series X and Playstation 5 respectively. The debuts will come just in time for the holiday shopping season—one that is hopefully, let us pray, not accompanied by another wave of coronavirus infections.
By then a new generation of gamers will be thirsting for the latest screen-side diversions. Lucky for them and their suppliers, the consoles runneth over.
Robert Hackett
Twitter: @rhhackett
Email: robert.hackett@fortune.com
THREATS
Born again. Airbnb is planning to file IPO-related paperwork with regulators next month, meaning the home-rental business could go public before the end of the year, the Wall Street Journal reports. The company had put the process on hold a few months ago after coronavirus lockdowns ravaged its business and caused $1 billion in cancellations. Rental activity has rebounded since.
Son's second coming. SoftBank has bounced back. The Japanese conglomerate led by billionaire Masayoshi Son posted a quarterly profit of $12 billion, recouping historic losses it posted only a few months ago. Son can thank the company's recent sale of a stake in a newly merged T-Mobile and Sprint telecom giant, plus a widespread tech rally that has boosted the valuations of big holdings like Uber and Slack.
Jesus, take the wheel. Speaking of Uber, CEO Dara Khosrowshahi said in an interview with MSNBC that the ride-hailing firm will probably have to shut down operations in California, at least temporarily, if it loses a high-profile court appeal. Uber is seeking to overturn a ruling that its gig workers should be regarded as full-time employees, a legal distinction that could prove highly disruptive to its business model.
Schism. Pinterest's former chief operating officer Francoise Brougher is suing the company for gender discrimination. She alleges that the photo-sharing site's male-stacked management team excluded her from board meetings and ultimately fired her after she reported sexist comments made by one team leader to human resources. Pinterest said it is reviewing the complaint and planning to conduct an independent review.
The meek shall inherit the earth. Electric automaker Tesla is splitting its stock in a five-for-one exchange. The move will lower the price point on its shares and make them more affordable for retail investors. Tesla's share price has more than tripled since the beginning of the year to $1,500; with a market capitalization of $290 billion, it is the world's most valuable automaker, at least by the stock market's estimation. Tesla's stock-splitting move follows a similar 4-for-1 split approved by Apple's board last month.
Occupational hazard of competitive lock-picking: bruised fingers.
ACCESS GRANTED
We've all experienced the feeling before, that uncanny, spooky certainty that Facebook has been eavesdropping on us. It goes like this: Your friend happens to mention some new product or trend—an obscurely branded pair of yoga pants, a podcast about ghost stories, a celery water diet—and then—kablamo!—an advertisement for that very thing appears on your screen. Here's Simon Pitt, head of digital at the BBC, writing about his overwhelming compulsion to get to the bottom of the alleged conspiracy.
I write software. I have friends who work at Facebook. I do things with APIs and mobile apps, so I’m in as good a position as I can be to judge the veracity of these claims, and yet I still can’t shake the suspicion that they’re listening. Could they have somehow found a way around physics? It has become my “9/11 was an inside job.” Listengate.
FORTUNE RECON
How HBO—the treatment, not the TV network—could help doctors fight COVID-19 By Carolyn Barber
Microsoft just delayed Halo Infinite, but plans to release Xbox Series X in November By Jonathan Vanian
Kroger launches an online marketplace to better fight Amazon and Walmart By Phil Wahba
Hateful posts on Facebook and Instagram soar By Danielle Abril
The pandemic is speeding up automation, putting jobs in question by Jonathan Vanian
Salesforce launches Work.com for schools By Michal Lev-Ram
U.K. facial-recognition pilots broke privacy, data protection, and equality laws, court rules By David Meyer
ONE MORE THING
Last night witnessed the peak of the Perseid meteor shower. If you missed the shooting-star spectacle, worry not: The height of the show runs through dawn on Aug. 13, and the event extends, albeit less dazzlingly, through Aug. 22.
I'm planning to catch a bit of the display while camping in the wilds of New England next week.


fortune--2020-08-12--The S&P just hit an all-time record. Can it go higher from here?

Our mission to help you navigate the new normal is fueled by subscribers. To enjoy unlimited access to our journalism, subscribe today.
Big cap stocks just scored another triumph when the S&P 500 hit an all-time record in late afternoon trading on August 12, passing the previous high of 3386 and inspiring the Wall Street bulls to forecast more great gains ahead. (The index then pulled back slightly to close up 1.40% at 3380).
But here’s the question for serious, analytical investors: How do you handicap what you’ll reap over the next decade if you buy in today, at these newly-notched, pandemic-defying, record high prices?
What would you think if I told you that the best bet is an annual return for the S&P of 2.4%? You can be excused for not wanting to believe it. You might brand me a hopeless naysayer who’s clueless to the new market realities–– that Big Tech has raised profitability to a new plateau, that the Fed will always ride to the rescue, that trillions of cash sits on the sidelines poised to jump into stocks, or that, hey, with Treasury yields in the dumps, investors will just keep buying ’cause they have no where else to go. You’ll wonder if such a bleak forecast can possibly make sense, when you’ve heard nothing remotely this depressing from the traders and market strategists on CNBC and Fox Business who report from the trenches on every shift in momentum, technicals and sentiment, and mostly like what they see.
But you’d doubtless agree that buying a basket of big caps likely to give you 2.4% a year is a lousy investment. That’s one-sixth of the annual return of around 14% reaped over the past ten years. After all, the price of everything you pay for from cars to PCs to rent is bound rises at around 2%, and as for a building college funds for the kids and a fat nest egg for retirement, a portfolio that barely tops inflation won’t come close to delivering what you’ll need.
But if you ignore the current fog of hype and momentum, and focus on what history tells us about how fast profits normally grow, and what follows when valuations are this lofty and dividends this puny, you’ll see why 2.4% is indeed a reasonable forecast. “You can make assumptions that make that number a couple of points higher or a couple of points lower, but starting at these prices, that’s the most likely outcome,” says Chris Brightman, chief investment officer at Research Affiliates, a firm that oversees strategies for $145 billion in mutual funds and ETFs, for firms including Charles Schwab and Pimco.
Here’s how Research Affiliates, whose analysts hold strong grounding in academic finance, views the S&P’s future trajectory. Their methodology starts with the three components that determine future returns: the dividend yield, the growth in earnings, and the change, if any, in the “valuation,” or price-to-earnings multiple. As Brightman notes, if the P/E remains constant, the math dictates that the total gain will equal the dividend yield plus the growth in earnings.
Because the S&P prices have risen much faster than earnings, the dividend yield has fallen to a current 1.9%. That’s less than half the long-term average, and well below the 2.3% level as recently as late 2015. How fast can the second driver, profit growth, wax to compensate for the slender contribution from dividends? Research Affiliates predicts that EPS will expand at just 3.3% a year. Though that’s a lot lower the the mid-single digit performance of the past three decades, it’s the norm over the past 130 years. “Profits growth is mean-reverting,” says Brightman. “When they’ve been higher than the norm for a long period, they tend to go back closer to the historic trend.”
He adds that earnings-per-share grow much more slowly than that overall profits in the economy for a basic reason. “It’s like GPD versus GDP per capita,” he says. “GDP per person grows more slowly than GDP. That’s because part of GDP growth is growth in the population.” Likewise, EPS trails overall earnings because new shares grow faster than total profits. New companies are constantly challenging the incumbents, adding to the shares that are divvying up same sales and profits. Companies reward managers with stock options that get converted into extra shares, and make dilutive acquisitions using stock. Newcomers that are still private also play a role by grabbing earnings from the entrenched publicly-traded players, restraining how fast they can lift their EPS.
Let’s add it up. A dividend yield of 1.9% plus EPS growth of 3.3% gives an annual return of 5.2%. But embedded in that forecast is an important assumption regarding our third driver, valuation. A best-case, 5.2% return mandates that today’s elevated P/E keeps hovering at the same, rarefied heights. Only then will the S&P provide that mid-single digit return.
For Brightman, it’s much more probable that the current P/E retreats over the next decade, for the same reason jack-rabbit earnings will slow: Over time, a kind of gravitational force pushes the factors governing stock market gains back towards their historic norms. At its record of 3388 hit in the afternoon of August 12, the S&P 500’s P/E stood at 30, according to the metrics used by Research Affiliates. That’s far above the 130 year benchmark in the mid-to-high teens. “We assume that the multiple will go halfway back to its long-term level, though far from all the way back,” says Brightman. Hence, Research Affiliates posits that the S&P 500’s P/E a decade from now, in mid-2030, will settle at around 25, still a high number.
That shrinking multiple will erase most of increases in EPS of 3.3% a year, leaving only tiny annual gains of around .5% in the share price. So all told, investors would reap 1.9% from dividends, and just half a point from capital gains, for a total of our 2.4%.
Brightman adds that most on Wall Street will dispute Research Affiliates’ forecast as far too downbeat, in part because profits have been expanding two to three points faster than his 3.3% a year for so many years the trajectory looks permanent. “Keep in mind,” he explains, “that we’re not predicting that earnings-per-share will go flat or fall for a long time to compensate for so many years of above average growth. But that’s happened many times before, and poses an additional danger now.”
“The share of the economic output provided to labor and capital is not a force of nature it’s a social choice,” notes Brightman. The political climate, he adds, is unusually hostile towards big profit makers, and shifting towards better rewarding workers who’ve seen their pay inch higher while corporate profits soared. “A vocal base of the Democratic Party has noticed that profits have grown much faster than the economy and especially wages, and mean to change that,” he says. What’s more, an increasingly narrow group of tech giants now account for a giant share of earnings, and they’re prime targets for the populist wing of the Republican Party. Conservative critics are blasting the likes of Amazon, Apple and Facebook for allegedly using monopoly power to bilk consumers. That bi-partisan war on profits could bode ill for returns come.
The dynamic that’s made the future look so barren is the giant, record-smashing run-up, precisely what’s now winning kudos from analysts, pundits and market strategists. Only one journey will enable today’s buyers to garner the kind of gains investors have reaped over the past few years: A steep fall in prices, in a round-trip back to near the levels where all the fun began.


fortune--2020-08-12--We’re eating a lot more pizza during the pandemic. Why Domino’s is getting the biggest slice of the

We’re eating a lot more pizza during the pandemic. Why Domino’s is getting the biggest slice of the pie

Our mission to help you navigate the new normal is fueled by subscribers. To enjoy unlimited access to our journalism, subscribe today.
Once a week Brandi Johnson finds herself peeping through her red curtains, on the lookout for her favorite delivery—the one that means she doesn’t have to cook dinner. When the driver pulls around the corner and stops in front of her apartment, she runs upstairs to look out another window, this time to make sure the box is placed outside her front door.
Like many Americans during quarantine, Johnson has been ordering a lot of pizza.
“Pizza is the perfect comfort food for me—not too messy, hard to mess up, good whether it’s hot or cold, and I don’t need silverware,” says Johnson. “It’s just a perfect guaranteed meal to have during such uncertain times.”
Top pizza chains have benefited from the cravings of customers like Johnson. Papa John’s, for instance, reported that sales at its North American restaurants saw a 28% increase in the second quarter compared with the year before, with three straight months of double-digit gains. To keep up with that skyrocketing demand, the company said that it had hired 20,000 additional employees between March and June—and plans on hiring 10,000 more. As of early August, shares of Papa John’s had spiked some 55% this year, after a couple of years of underperforming.
Yum Brands’ Pizza Hut, which has been battling falling sales over the past few years, had its best week for delivery and carry-out sales in eight years in early May. The uptick in pizza delivery was a bright spot for Yum Brands—whose portfolio includes Taco Bell and KFC—in a quarter in which overall sales fell 15% worldwide.
“Pizza Hut’s off-premise business was up 21% in 2Q, and for a business that has underperformed over the last few years, the performance suggests there is a material industry-specific component to the pizza category’s share gains,” says Credit Suisse analyst Lauren Silberman.
But no delivery operator has benefited more from America’s increased appetite than Domino’s Pizza.
The largest pizza company in the world by sales, Domino’s had the biggest slice of the U.S. market coming into the pandemic. According to Bloomberg Intelligence, last year Domino’s captured 19% of total pizza sales in the U.S. thanks to its dominance in delivery. The company gobbled up a whopping 36% of U.S. delivery sales in 2019 versus a combined total of 26% for other major chains. (Regional chains and independent restaurants garnered 38%.)
As with its pizza peers, the company’s sales have spiked in recent months. In July, Domino’s reported that its U.S. same-store sales increased by 16% in the second quarter of 2020 and earnings per share leapt to $2.99 from $2.19 in the same quarter last year. Domino’s generated $240 million in net income through the first half of 2020, a 30% increase over last year, despite slower growth in international markets.
Shareholders of Domino’s have been well rewarded. Through the first week of August, the pizza giant’s stock was up 24% in 2020. And that’s on top of years of strong returns. Over the past three years, Domino’s stock has risen 99%—easily outpacing its pizza peers.
Analysts say that Domino’s was uniquely positioned to meet consumers’ increased demand for pepperoni-and-cheese–topped comfort food thanks to its commitment to innovation over the past several years.
“Domino’s has outperformed the industry over the last decade given its strong execution, which has allowed it to gain share from smaller competitors and Pizza Hut,” Silberman says. “Domino’s has an industry-leading digital and delivery infrastructure, which we view as the most powerful asset it has.”
Domino’s long-term investment in advancing its delivery capabilities and rehabbing its public image has paid off in a big way. When former Domino’s CEO Patrick Doyle was promoted in 2010 from his role as president of the company’s domestic retail operations, the company’s stock was trading at about $9 a share, and customers complained that the crust tasted like cardboard. The sauce? Like ketchup. Domino’s went on a mission to improve its reputation and, under Doyle’s leadership, to perfect delivery. When Doyle stepped down in 2018, Domino’s price per share had risen to more than $250, and its market value had increased by an astonishing $11.2 billion.
“When you consider the three big players in pizza, they are already an expert in delivery because the pizza industry has been using this model for decades,” says Shan Li, a professor at the Zicklin School of Business at Baruch College. “But Domino’s is the only one to rely on their own capabilities to deliver food to customers instead of working with a third party [such as Seamless or Uber Eats].”
Today, Domino’s technology leads the pack. Customers don’t have to be at a specific address to get their favorite pie—Domino’s rolled out hotspot locations in 2018, which allows people to get their pizza anywhere, from the beach to a stadium parking lot. The Ann Arbor–based company also introduced the dinner bell function in 2018. Using the mobile app, customers can create groups of their friends and family and the app will automatically “ring the bell” when their order is out for delivery.
There is another fundamental difference in how Domino’s does delivery compared to its rivals—one that allows it to maximize profits. While many Pizza Hut and Papa John’s stores deliver their pizzas directly to customers, those chains have also paired up with third-party delivery services in order to reach more customers. In 2019, Papa John’s partnered with DoorDash, while Pizza Hut has a similar arrangement with Grubhub. Local pizza chains are especially reliant on third-party operators. By contrast, Domino’s relies solely on its own delivery infrastructure.
Third-party delivery services allow local pizza places to scale up their delivery volume, but it comes at a cost. Uber Eats, for example, charges restaurants a fee equal to 30% of the order to deliver to their customers. So although mom-and-pop pizzerias may be getting more orders, that doesn’t always lead to a profit increase; with the costs of staying open and few dine-in customers, many small businesses are just hoping to break even. According to financial services firm BTIG, while Domino’s franchisees pay $0.25 per online sale, small businesses are charged $2 or $3 for a similar transaction by third-party operators.
The Nickerson family in Indian Harbour Beach, Fla., has been doing its part to keep their local pizza places busy. Since Caroline, 26, moved back home with her parents two months ago, they’ve been ordering pizza at least three times a week, all from restaurants within a three-mile radius of their home.
“I think we’re all stressed, so it’s also the first thing we think of,” Caroline Nickerson says. “Under normal circumstances, we wouldn’t be ordering so much pizza. We’d go out to eat at different restaurants, and we’d be living in separate houses.”
Nickerson planned to move to Philadelphia for a job, but when the opportunity went remote, she decided to move home. As the coronavirus pandemic drives millennials back home and forces families to juggle work and childcare, many households are turning to pizza for a quick, low-cost option, says Li, the Baruch College professor.
“From the budget perspective, many consumers have found themselves with smaller budget constraints due to the pandemic,” says Li, whose go-to order is California Pizza Kitchen’s Thai pizza. “To some extent, pizza is just one of the best options for many of us to feed a family at a lower cost.”
Riding the spike in demand, pizza chains must now find a way to keep these new customers. Papa John’s answered with its new flatbread sandwich, the Papadias, in February. And Domino’s rolled out a new recipe and sauces for chicken wings in July. Typically the most profitable menu item for a pizza company is still pizza, analyst Silberman says. But smart menu additions and sides, in particular, can help increase the average check and lead to more profit.
While experts don’t know how long the pandemic pizza boom will last, Li says consumer behavior will be altered by pandemic concerns for a long time. For instance, online grocery shopping, which has grown very slowly over the past 20 years, suddenly experienced huge growth over the past few months, according to a survey conducted by Brick Meets Click and Mercatus. People have adjusted to the new ease of ordering, Li says, and will stick to their new habits of using platforms like Instacart.
“People will not go back to their pre-COVID lives overnight,” she says. “I think this shift in consumer behavior and the impact of the pandemic is going be long-lasting and profound.”
And, perhaps, pizza-fueled.


fortune--2020-08-12--Kamala Harris could be the best thing that ever happened to Big Tech

The giants of Silicon Valley have endured a rough year in Washington, DC but, with Joe Biden’s selection of Kamala Harris as his Democratic running mate, things are looking up for the industry. Namely, Harris as Vice-President could turn down some of the political heat on the industry.
Sure, the office of Vice President is hardly a hotbed of influence (as anyone who has watched the show Veep is aware). But given Biden’s age, and his signals that he will only serve one term if elected, the choice of Harris is more consequential than any other VP pick in recent years—and a blessing for Big Tech.
Until yesterday, Silicon Valley faced the prospect of Biden selecting a running mate such as Susan Rice or Tammy Duckworth who had few ties to their industry, or else Elizabeth Warren—an active scourge of the tech giants who had vowed to break up the likes Facebook and Google. Instead, Biden chose a tech ally from their home state of California.
Unsurprisingly, tech moguls have hailed the selection of Harris in the same way as the oil industry would greet a VP pick from Texas, or Wall Street would applaud a candidate from New York. The moguls celebrating her pick included billionaire Laurene Powell Jobs:
Joe Biden you made a great choice! — Laurene Powell Jobs (@laurenepowell) August 11, 2020
Meanwhile, Harris ally and Facebook COO Sheryl Sandberg extolled the ground-breaking selection on Instagram:
Jobs and Sandberg are just some of the powerful players in the tech industry with whom Harris has ties. As Theodore Schleifer notes in Vox, the Vice-Presidential pick has raised money from Valley bigwigs like LinkedIn founder Reid Hoffman and venture capitalist John Doerr, and is pals with Facebook President Sean Parker.
And in a telling quote, Democratic super-fundraiser Cooper Teboe tells Vox that many in Silicon Valley were waiting to see who the VP nominee would be before opening their check book. Now, Harris is likely to trigger a flood of donations.
“She will be the pick that the California, Silicon Valley donor community — who are worried about things like tech and repatriation and taxes and so on and so forth — she is the pick that they will be happiest with,” Teboe told Vox.
All of this doesn’t mean, of course, that the arrival of a Vice-President Harris will end the recent political scrutiny of Silicon Valley. Companies like Facebook and Amazon are the targets of ongoing investigations by Congress—in addition to those by the Justice Department and FTC—and their behavior has attracted the ire of Democrats and Republicans alike.
Meanwhile, Harris herself has taken swings at Big Tech in the past. This included a 2019 CNN interview, where she raised the idea of “breaking up” Facebook:
Sen. @KamalaHarris: "Facebook has experienced massive growth and has prioritized its growth over the best interests of its consumers."
"We need to seriously take a look" at breaking up Facebook, "it is essentially a utility that has gone unregulated." #CNNSOTU pic.twitter.com/ywbJk6gxvC — State of the Union (@CNNSotu) May 12, 2019
During the Democratic primary debates, she suggested that Twitter should be forced to shut down Donald Trump’s account in the name of “accountability”—a heavy handed step beyond what other candidates have proposed.
But such pronouncements appear to have been rhetorical gimmicks more than serious policy proposals.
The reality is that Harris is infinitely preferable to the tech industry than Biden’s other choices, as well as the Trump Administration, which has attacked Silicon Valley relentlessly. In addition to the President himself, Trump’s close allies in Congress, such as Sen. Josh Hawley (R-Mo), have made attacking Silicon Valley a core part of their political platforms.
Which all goes to say the tech industry is likely breathing a sigh of relief today. Before they focus their efforts on that other project: winning in November.
More must-read finance coverage from Fortune:


fortune--2020-08-12--More than half of U.S. states are seeing coronavirus cases decrease

Our mission to help you navigate the new normal is fueled by subscribers. To enjoy unlimited access to our journalism, subscribe today.
The U.S. is continuing its retreat from its grim July record of more than 70,000 new daily coronavirus cases.
Yesterday, the New York Times reported 53,344 new cases and an average of 53,723 cases per day over the last week, a decline of 18% from the average two weeks earlier. Nationally, more than 5 million people have been infected with the coronavirus.
According to a Fortune analysis of New York Times data, 18 states have seen a seven-day moving average daily decrease of at least 150 cases when compared with two weeks ago, led by a decline of more than 3,700 cases in Florida and followed by 1,351 daily cases in Arizona. More than half the states are experiencing a decline in new cases.
Illinois was the only state to see a strong increase over the period with an average of 365 new daily cases.
Despite the decline in new cases in Florida, the state had the highest increase in average daily deaths (23) over a one-week period, compared to two weeks ago.
Even with the drop in new cases by state, the U.S. is still responsible for about 20% of all new daily cases globally, according to the Times.
Local and state data has shown that restaurants and bars are often the source of new cases, leading to the surges in states like Florida and Texas. For example, at least 158 new cases of COVID-19 were traced to a single bar in Lansing, Mich. New York and New Jersey, where cases have continued to fall, have yet to allow for indoor dining.
State-by-state breakdown of daily new cases
New cases based on a seven-day average


fortune--2020-08-12--Pelosi: Democrats and Republicans ‘miles apart’ on pandemic aid that would include second round of s

Pelosi: Democrats and Republicans ‘miles apart’ on pandemic aid that would include second round of stimulus checks

President Donald Trump over the weekend signed executive orders and memorandums that encompassed everything from enhanced unemployment benefits, to extending students loan deferments, to deferring some payroll taxes. That came after a breakdown of negotiations last week on a broad stimulus package between Democratic and Republican leaders.
But on other some items, like a second round of $1,200 stimulus checks or school funding, Trump can’t act without Congress. However, discussions on a broad stimulus bill between Democratic and Republican leaders have yet to restart.
“When commentators say to me: ‘Why can’t you resolve your differences?’ [It’s] because we’re miles apart,” House Speaker Nancy Pelosi said Wednesday on MSNBC.
On Friday the Senate minority leader Chuck Schumer told reporters that Democratic leaders offered to come down from $3.4 trillion to $2.4 trillion, if Republicans came up $1 trillion to $2 trillion. That way, “we could begin to meet in the middle,” he said. But Republicans rejected that offer, and hours later Trump announced his executive orders and memorandums.
Treasury Secretary Steven Mnuchin reiterated Wednesday that Republicans would like to do a stimulus package of “a little more than $1 trillion.”
Differences between Republicans remain on issues like funding for state and local governments—Democrats want more than a $1 trillion for it—and school funding—Republicans want more going to schools that open in-person. And Democrats still oppose Republican proposal to provide COVID-19 lawsuit immunity to businesses and schools. However, both parties are in agreement about another round of $1,200 stimulus checks.
But some fiscal hawks in Congress would like to see the stimulus negations continue to remain tabled.
“I hope the talks remain broken down,” said Senator Ron Johnson, R-WI on Monday. “From my standpoint, the breakdown in the talks is very good news. It’s very good news for future generations.”


fortune--2020-08-12--Why we’re introducing a bill to require temperature checks in airports

An interconnected nation like ours cannot stand still. Nowhere is this more obvious than in the airline industry. When people cannot move efficiently, it spills over to all sectors of our economy. In fact, before the pandemic, commercial aviation drove 5% of U.S. GDP and helped support 10.6 million U.S. jobs, according to the Federal Aviation Administration.
When commercial aircraft are not flying, our economy is dying.
To get our nation back on its feet, we must get back in the air. That means we must find ways to promote safe travel with measures that slow the spread of COVID-19. That is why we introduced the Healthy Skies Act along with Rep. John Larson (D-Conn.) on July 16. (Both of us represent districts near the Charlotte, N.C., international airport, which is a major hub for American Airlines. As a result, we have a significant number of constituents who are either employed by American Airlines or by the CLT airport itself.)
Air travel is critical to our economy, but a confined space can pose coronavirus contamination risks that must be taken into account. CEOs of major airlines such as United, American Airlines, and IAG recently declared in a letter to Vice President Mike Pence that “given the unquestioned importance of transatlantic air travel to the global economy as well as to the economic recovery of our businesses, we believe it is critical to find a way to reopen air services between the U.S. and Europe.”
This bill will begin that process.
The Centers for Disease Control and Prevention (CDC) and other leading medical institutions have declared that a fever above 100.4 degrees Fahrenheit is one of the most common symptoms of COVID-19. Under this legislation, the Transportation Security Administration (TSA) would identify at least 10 domestic airports for a limited experimental trial study. As part of the security screening at these airports, the TSA would use appropriate technology to perform temperature screenings of passengers in a safe and unobtrusive way. Passengers with fevers in excess of 100.4 would not be permitted through security.
The purpose of this bill is to help Congress and health officials better understand the degree to which TSA checkpoints could serve, in some capacity, as a means to help mitigate the spread of COVID-19 and future pandemics. Because some patients can be asymptomatic, it is not possible to identify every single infected traveler at a TSA checkpoint. We can, however, prevent passengers with one of the most common symptoms from boarding a commercial aircraft and possibly placing other travelers at risk. It is also important to note this legislation carves out exceptions for medical conditions unrelated to COVID-19 that could result in someone’s temperature running high.
Ultimately, our job in Congress is to help find ways to slow the spread of this pandemic and facilitate a great economic comeback. The Healthy Skies Act is one of several steps that could help return confidence to air travelers and allow our interconnected economy to once again soar to new heights.
Ted Budd is the U.S. representative for North Carolina’s 13th District.
Ralph Norman is the U.S. representative for South Carolina’s 5th District.
Neither congressman has companies in their respective districts that stand to benefit directly from this bill.