fortune--2020-10-15--Xi Jinping’s new economic strategy for China: ‘Dual circulation’ or doublespeak?

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Chinese President Xi Jinping traveled to Shenzhen on Wednesday to mark the 40th anniversary of that city’s establishment as a “special economic zone.”
The trip was billed as a celebration of the policy change that set in motion Shenzhen’s extraordinary transformation from rural backwater to global manufacturing colossus. Modern Shenzhen is home to 13 million people, the world’s biggest Foxconn factory, and the headquarters of tech powerhouses like Huawei Technologies, Tencent Holdings, and DJI Technologies. Since 1980, Shenzhen’s GDP has expanded by an estimated 10,000-fold to $360 billion and now exceeds that of Hong Kong, the financial hub just across the Pearl River.
The catalyst for that metamorphosis was a decision by Deng Xiaoping, then China’s “paramount leader,” to create a capitalist enclave in communist China and open it to foreign investment, global trade, and Western technology. Shenzhen became the testbed for economic reforms gradually introduced throughout the rest of China. Deng called the hybrid model “capitalism with Chinese characteristics.”
Xi embraced Deng’s legacy yesterday. He laid flowers at the feet of the six-meter bronze statue of Deng that stands in Shenzhen’s Lianhuashan Park. In a 50-minute speech he vowed to carry on Deng’s agenda of “reform and opening up.”
But Xi made clear that his interpretation of “reform and opening up” differs starkly from that of his predecessor. At the top of a long list of lessons from Shenzhen’s success, Xi cited not entrepreneurialism, private sector initiative or market competition but “adhering to the Party’s leadership.”
Xi invoked a favorite Deng aphorism: China must “cross the river by feeling the stones.” Deng meant that the nation must be flexible, pragmatic, and willing to adapt to obstacles as they emerged. Xi, meanwhile, wrapped it in clunky bureaucratic jargon that communicated the exact opposite: “We must have greater political courage and wisdom and combine ‘crossing the river by feeling the stones’ with strengthened top-down design to steadily deepen reforms in important areas and pay more attention to the system.”
Xi’s own economic agenda to date has been all about “strengthened top-down design.” He has consolidated the Communist Pary’s control over nearly ever major economic policy-making body and his own control of the party. He has leaned on China’s giant state-owned banks to prop up state-owned enterprises, pushed private companies and investors into partnerships with state-owned firms, forced private companies to set up party committees with increasing say over strategy, and doled out vast state subsidies to induce companies to pursue state-led industrial policy objectives.
Last month, even as Chinese companies like Huawei and TikTok parent ByteDance scrambled to persuade American lawmakers that they are independent private entities—and would never compromise the privacy of American customers even if ordered to by Beijing—Xi publicly exhorted the United Front Work, a department responsible for projecting party’s influence at home and abroad, to unite the private sector around the party.
In recent months, as the Trump administration has stepped up its efforts to restrict Chinese companies’ access to American technologies, Xi has amplified his call for Chinese firms to develop their own technologies and become more self-reliant. In Shenzhen yesterday, Xi warned that “the world has entered a period of turbulence and transformation,” and praised Shenzhen for showing that China must “gain the initiative in the global technological revolution.”
In May, Xi floated a new strategic concept he called “dual circulation growth strategy,” which he referred to again yesterday. China watchers seem mostly perplexed by the concept. The Wall Street Journal‘s Lingling Wei ventured that the strategy involves “prioritizing domestic consumption, markets and companies as China’s main growth drivers” while relegating investments and technologies from overseas to “more of a supporting role.” The New York Times‘ Chris Buckley tried to explain the idea this way: “The grandly technocratic name…means China should rely on a robust cycle of domestic demand and innovation as the main driver of the economy while maintaining foreign markets and investors as a second engine of growth.”
But as Buckley observes, China has been promising since before the Great Financial Crisis to boost domestic consumption and reduce its dependence on exports, with mixed results. The danger for China is that Xi’s dual circulation strategy is mostly doublespeak for import substitution and massive misallocation of resources by government planners—an approach closer to Mao’s disastrous Great Leap Forward than Deng’s triumph in Shenzhen. This brilliant piece by Financial Times correspondent Kathrin Hille suggests that’s exactly the outcome of China’s headlong rush to catch up with the U.S., Taiwan, and South Korea in the semi-conductor industry.
Bo Zhuang, chief China economist at TS Lombard, argues dual circulation strategy “is not a proposition to turn China into a ‘closed economy,’ as was the case during the Mao era. Rather it is a pragmatic policy choice against the backdrop of de-globalization and the worsening U.S.-China relationship.” The strategy, Zhuang contends, “aims to build up domestic economic strength through rebalancing in the face of intensifying external risks while maintaining China’s deep engagement with the global supply chain.”
Whatever it is, Xi’s “dual circulation strategy” seems destined to be the centerpiece of China’s 14th five-year economic plan, to be endorsed later this month at a meeting of the party’s Central Committee. Stay tuned.
More Eastworld news below.
Clay Chandler
clay.chandler@fortune.com
This edition of Eastworld was curated and produced by Grady McGregor. Reach him at grady.mcgregor@fortune.com.
Eastworld news
The state of Jio
2020 has been a breakout year for Mukesh Ambani, India’s richest man. This year Ambani has helped transform Reliance Jio, traditionally an energy giant, into India’s hottest tech company via his empire’s tech offshoot Jio Platforms. Starting with Facebook’s $5.7 billion investment into Jio Platforms this spring, Ambani has raised over $20 billion from firms in Silicon Valley and elsewhere. Ambani now dreams of turning his empire into a global tech behemoth and his influence in India is reportedly unparalleled. “Reliance operates as an independent state within a state,” an anonymous government official told the Financial Times.
America’s decline, China’s triumph
Trump is accelerating America’s decline, and that’s good for China. Or at least that's the prevailing thinking among China’s top policymakers, argues Rush Doshi, director of the Brookings China Strategy Initiative, in a new Foreign Policy essay. Doshi says Chinese strategists viewed Brexit and the election of Donald Trump as the West voluntarily abandoning the very global order it set up, providing China with an unprecedented opportunity to fill the void. Dosh sites a Chinese scholar who says Beijing would prefer the U.S. to realize the “decline of its hegemony” but it is “not necessary.” Foreign Policy
Pain and gain
On Oct. 7, Kim Nam-Joon (known as RM), leader of K-pop band BTS, said that the U.S. and South Korea shared a history of “pain” and “sacrifices” at a ceremony commemorating the Korean War. Chinese social media users were offended that the group did not acknowledge the sacrifices of Chinese soldiers who fought for North Korea. The backlash against BTS prompted major South Korean brands like phone maker Samsung and car company Hyundai to scrub references to BTS from their Chinese social media accounts. The controversy seemingly did not dent the blockbuster debut of Big Hit Entertainment, BTS’ management label, which had its stock price double after it started trading in South Korea on Thursday. Fortune
The casual wear epidemic
Who needs a business suit in a pandemic? Tadashi Yanai, founder of casual clothing empire Uniqlo, has banked his success on the idea that people no longer seek to demonstrate material success through clothing. This idea has flourished amid a pandemic that has more people at home—and in less formal clothing—than ever before. During the pandemic, Uniqlo has also moved more sales online and launched a popular ‘quarantine wear’ line that includes a smash hit new face mask. Now, Yanai is planning expansion. “We are going to set up more stores than before," Yanai told the Nikkei Asian Review. "Southeast Asia, especially, is a dollar box." Nikkei Asian Review
Tea time
Milk Tea and a three fingered Hunger Games salute have unexpectedly become symbols of solidarity for activists across Asia in various political struggles. This spring Thai, Taiwanese, and Hong Kong activists formed the #Milkteaalliance, a nod to drinks popular in each place, to counter the influence of Chinese social media users and bots on social media platforms. The alliance has since inspired offline meet-ups and grown to galvanize pan-Asia support for pro-democracy struggles. The Atlantic
Huawei's little brother
While the U.S. has waged a war against Chinese telecom giant Huawei, it has also quietly thrown a lifeline to ZTE, Huawei’s state-backed telco rival. Over the last few years, ZTE has paid fines of $2.3 billion to the U.S. for violating U.S. sanctions against Iran and North Korea, but, as Trump announced in a tweet, the U.S. in 2018 decided to re-allow ZTE to purchase American equipment and do business around the world. Experts believe that the U.S. may be effectively opting to spare ZTE as a means to sharpen focus on defeating ZTE’s more powerful and sophisticated rival, Huawei. The Wire China
Coronavirus by country
Sri Lanka
This spring, Sri Lanka managed to largely contain COVID-19 outbreaks via a highly restrictive two-month lockdown. The country also drew global praise for its hi-tech public health surveillance and reporting system. But after months of relative calm, the country is now dealing with its largest outbreak to date, after a factory cluster in early October has now infected thousands. The outbreak is putting the country’s pandemic response system to the test, and while authorities have avoided another full-fledged lockdown, the government has imposed curfews, closed bars, restaurants, and casinos, and banned Sri Lankan expats from returning home. Even with the outbreak, only 13 of the country’s roughly 5,038 confirmed cases have succumbed to the virus, ranking among the lowest death rates in the world. Bloomberg
Markets and movers
Lufax – The Chinese financial technology firm filed for a U.S. IPO last week in a debut that may raise the company $3 billion, potentially the largest Chinese IPO in the U.S. in 2020. Lufax’s case shows that the U.S. remains a popular IPO destination for some Chinese companies, even as U.S. regulators have increased scrutiny of Chinese companies on American exchanges. Fortune
Ant Group – The U.S. state department has proposed adding the Alibaba-backed financial services firm to the U.S.’s trade blacklist in the run-up to the firm’s upcoming blockbuster IPO in Shanghai and Hong Kong. In China, Ant Group is facing scrutiny over a proposal to sell retail investors shares exclusively through its own mobile payments app. Reuters
Evergrande – The Chinese property giant only raised half of a targeted $1.09 billion after founder Hui Ka Yan cut out his billionaire friends from the fundraising round. Hui’s measure was designed to increase investor confidence in the firm but appears to have had the opposite effect as shares in Evergrande tumbled 17% on Wednesday. Bloomberg
Tiktok – On Wednesday, the ByteDance-owned video streaming service asked a U.S. federal judge to block proposed restrictions that would halt downloads of the app following a Nov. 12 deadline for the U.S.'s TikTok ban. Bloomberg
Tencent – The Chinese tech giant plans on increasing its stake in Universal Music Group from 10% to 20% through exercising an option that expires in January. Last year, Tencent purchased a 10% stake in the world's largest music company in a deal that valued Universal Music at $35 billion. Bloomberg
Final figure
13.2%
China’s imports and exports rose 13.2% and 9.9%, respectively, in September compared to the same month in 2019. The numbers signal a remarkable resilience in China’s economy amid a global, pandemic-inflicted economic slowdown. A surge in American soybean and pork imports has helped drive China’s boost in imports as China attempts to meet the terms of January’s phase I trade deal. But even with the uptick, China remains far behind the targets set forth in the deal. Fortune


fortune--2020-10-15--How the NBA kept the bubble from bursting

On the second Sunday in October, an unprecedented 12 months after the National Basketball Association’s 74th season tipped off with preseason games, the league finally crowned a champion—the Los Angeles Lakers. It was a made-for-TV moment: LeBron James captured his fourth title and, more historically, did it with his third team. By leading the Lakers to victory against the feisty Miami Heat—the team with which he won his first two rings—James completed his mission to restore the storied franchise to its past glory. He also solidified his claim as one of the game’s all-time greatest players.
But the night was about so much more than the triumph by James and his teammates. It also was the capstone to a year of unprecedented tumult that included a financially painful spat with China last fall, the unexpected death of former commissioner David Stern on New Year’s Day, and the tragic demise weeks later of retired Laker superstar Kobe Bryant in a helicopter crash. And that was all before the NBA suspended its season on March 11 after a Utah Jazz player tested positive for COVID-19—a watershed moment in the early days of the pandemic that reinforced the seriousness of the health crisis at hand.
That James was able to hoist the Larry O’Brien trophy at all is a testament to how the NBA rebounded in the weeks and months after the shutdown. By now the outline of the story is well known. Shuttered for much of the spring and early summer, the NBA crafted a plan for a Disney-hosted bubble in Orlando and worked out an arrangement with the players to restart play with 22 of the league’s 30 teams. (The bubble excluded teams without a realistic shot at the playoffs to reduce headcount.) It then proceeded to stage 172 games over two-plus months without a single player, league official, or team staffer testing positive for the novel coronavirus.
The NBA’s fractured season came at a tremendous cost. Bubble expenses alone totaled about $180 million, and the league undershot its preseason revenue projections by as much as $1.5 billion because of the pandemic. Yet the overall success of the NBA in the face of adversity is something many other businesses can only dream of. The bubble not only salvaged what could have been a devastating year financially, but it also put a global spotlight on the league’s product. And it further boosted the reputation of NBA commissioner Adam Silver, considered by many to be the best in professional sports.
To create practice space in the bubble, the NBA installed courts in a Disney hotel ballroom. Joe Murphy—NBAE/Getty Images
Restarting a season after stopping it cold was an operational feat of epic proportions. And pulling it off with a minimum of dissent and drama represents a textbook case of labor relations done right—a nontrivial achievement given the amount of money and the size of the egos involved. The feat is all the more remarkable given that it came about during a period of generational social justice upheaval that profoundly affected the NBA’s players, from superstars to scrubs, and that at more than one point threatened to torpedo the season.
Those with the most on the line seem to appreciate the victory of a shortened but healthy season. “I think the league did a masterful job of doing the best it could to keep revenue coming in for both the teams and the players,” says Los Angeles Clippers owner Steve Ballmer, the former Microsoft CEO and a member of the NBA’s board of governors, which met weekly throughout the crisis. “Juggling those interests and being willing to put in some significant costs with some significant benefit, I just think the league was phenomenal.”
The NBA wasn’t the only sports league to snatch victory from the jaws of a pandemic. The WNBA pulled off a similar bubble experience in Bradenton, Fla., on the state’s west coast. NHL teams finished the season shuttling between two Canadian cities, Toronto and Edmonton. And even Major League Baseball, though hampered by multiple outbreaks of the virus over the course of a truncated schedule, has managed to make it deep into its playoffs with televised games in stadiums with cardboard cutouts for fans.
SCREEN TIME: To bring fans into the mix virtually, the league installed giant video displays in the arenas. Among the fans “attending” Game 1 of the finals were TV anchor Robin Roberts, retired NBA star Shaquille O’Neal, and former President Barack Obama. David Dow—NBAE/Getty Images
But by mastering the bubble the way it did, the NBA showed once again why it is viewed as one of the world’s best-managed sports leagues. “I don’t think there’s a brand in America that is more consistent than the NBA,” says David Carter, a sports business professor at USC’s Marshall School of Business, strategic marketing consultant, and longtime observer of the league. “To me, a brand is a promise, and you know what you’re going to get out of the NBA, just as you know what you’re going to get out of Tiffany and Harley-Davidson.”
Compared with other professional leagues, says Carter, the NBA “just seemed to be more uniform, more in lockstep for how they handled major issues, whether it’s COVID, or social justice, or putting together a bubble that works.” And understanding why reveals valuable lessons for businesses and leaders well beyond the realm of sports.
Chris Paul, the star guard for the Oklahoma City Thunder and the president of the National Basketball Players Association, knows firsthand what, and who, it took to make the bubble work. In fact, when he arrived in Orlando he says he sought out Kelly Flatow, executive vice president for events for the NBA. “I just wanted to give her the biggest hug,” says Paul. “Because we had been on all these Zooms together where we’d been talking about this, talking about that, talking about logistics.”
The logistics were like nothing Flatow, a 14-year veteran of the NBA, had ever seen. Her group puts on more than 200 events a year, from the All-Star weekend to games outside the U.S. Planning for these events begins years in advance, though, and they never involve more than two teams. “This was having 22 teams and roughly 350 players, all coming together in one environment,” she says. “There was no playbook or blueprint for this.”
Flatow’s team spent the late spring and early summer on Zoom calls and messaging each other on Slack from their respective homes near New York City. After they got to the Disney World ESPN World Wide Sports Complex, home base to the bubble, a core group of 15 met daily at 8 a.m. to discuss the tasks of the day—whether it was building seven practice facilities, including one that went up in a Disney World hotel ballroom, or erecting a broadcast center for games without fans. Every Sunday Flatow hosted an all-hands meeting for the cross-functional staff of nearly 150 that spanned communications and medical to IT and security.
0 Number of players in the bubble who tested positivE for COVID-19
172 Number of games played in the NBA’s bubble after the restart
By the time games were in full swing, it took an even larger number, a proverbial 6,500-person village, to service the entire community in the bubble in Orlando. “I analogize it a bit to when you go to a movie and you see the actors on the screen and then the credits start rolling at the end, and they keep rolling and they keep rolling,” Adam Silver, the NBA commissioner, said at a press conference before the finals series began. (Silver gamely tried to persuade people to use the word “campus” rather than “bubble.” Everyone called it a bubble.) He singled out Flatow for praise, calling her “in essence the concierge” for the assembled crew.
She did “everything from making sure the buses run on time to [assisting] those of you in this room who requested feather pillows. I know who you are. I know all the personal requests that everyone here has made.”
BUBBLE BUDDIES: NBA commissioner Adam Silver (being interviewed before a finals game) was in constant communication with players’ union president Chris Paul as the bubble plan came together. Douglas P. DeFelice—Getty Images
More seriously, the NBA also had to invent health protocols from scratch. A former corporate lawyer named David Weiss, the NBA’s senior vice president for player matters, quickly learned enough about infectious diseases and testing to work with a team of doctors to design the elaborate health rules that governed the bubble. Weiss also regularly briefed the owners. “It was absolutely stunning how fast some of the league staff came up to speed on the health issues,” says Ballmer.
The league established a daily testing regimen for everyone who stayed on the campus at an expense of more than $100 per test. Everyone not playing, coaching, or officiating games were required to wear masks in the presence of others, particularly because support staff left the bubble after their shifts.
But while league officials were able to stay ahead of the virus, there were other challenges they didn’t see coming.
On Aug. 26, in the middle of the playoffs, the Milwaukee Bucks chose not to come out of their locker room for their Game 5 playoff matchup with the Orlando Magic. They made the decision not to play in order to protest the shooting of a Black man named Jacob Blake by a police officer in Kenosha, Wis. What began as a one-game walkout—some called it a boycott, while Silver let it be known he preferred “work stoppage”—quickly cascaded into a full cessation of play in the NBA as well as other sports leagues. The next day the remaining players and coaches in Orlando gathered to decide if they would return to the court. The season—and the revenue all parties would reap from completing the playoffs—hung in the balance.
Before the meeting, Paul, the players’ union president, spoke with Silver. The directness of the exchange is illustrative of the trust that the two sides have in each other. “I just said, ‘I’ll let you know,’ ” says Paul. “I know it sounds simple. But that’s real, you know? At the end of the day, obviously we’re partners and it’s all about the game. But I’m a player. I know how players feel. And this was bigger than the game.”
The meeting itself was an extraordinary moment of mass catharsis for the athletes. “It was not fun, but it was really astonishing to see 150 men spend hours in this crowded banquet hall screaming, yelling, laughing, crying, but ultimately coming together as brothers,” says Michele Roberts, executive director of the National Basketball Players Association. “I’ve never seen anything like it. That’s what democracy looks like. And it was quite stunning.”
Chris Paul (driving to the basket for Oklahoma City in a playoff game in August) was in constant communication with NBA commissioner Adam Silver as the bubble plan came together. Nathaniel S. Butler—NBAE/Getty Images
After more discussion the next day, the players agreed to go back to work, encouraged by an agreement with team owners that stadiums across the country would be used as polling stations for the upcoming election.
Businesses everywhere, especially those with unionized workforces, have had to deal with sensitive labor-relations issues during this time of pandemic-induced business shortfalls. But more than most leagues, the NBA came into its difficult year enjoying a history of mutual accommodation with its players. “Silver and Roberts have a ton of credibility,” says Joshua Mendelsohn, a labor lawyer and author of The Cap, a new history of labor relations at the NBA centered on the introduction of a salary cap in 1983. When the season was suspended and revenue stopped flowing, the owners could have ceased paying salaries. They didn’t. “The owners continued to pay the players,” says Mendelsohn. “The union did a good job of negotiating, including upping the liability if someone got sick. They listened to the players. Without the players, there is no game.”
That mutual understanding paid dividends before play even began in the bubble. After the killing of George Floyd by police officers in Minneapolis in late May, and the surge in social justice demonstrations that it sparked, many of the league’s stars were unsure they should resume the season. They feared distracting from the national conversation about race.
$180 million TOtal costs incurred by the NBA to put on the bubble
$1.5 billion Total hit to revenue incurred by the NBA from the disruption of the season
6,500 Number of workers needed to make the bubble possible
But the players also recognized the platform they would have by returning. “We understood the economic ramifications and the financials of not returning,” says Andre Iguodala, the Miami Heat forward and first vice president of the players’ union. “But the political landscape of the country and what was happening with race relations made it bigger than money. And I think that’s what made it special for a lot of us to say, ‘Let’s do it for a bigger reason than just us going out and getting a check.’ ”
So they negotiated to have certain approved messages—like “Vote” and “Say Their Names”—associated with the Black Lives Matter movement printed on the backs of their jerseys. It’s the kind of compromise that Silver and Roberts are experienced at negotiating. “I have had fights with Adam. It’s not hunky-dory all the time,” says Roberts. “But at the end of the day, we do behave like adults.”
No matter how successful the NBA was in making the best of a bad situation this year, the fact remains that the pandemic slammed the league’s finances in the same manner it has hurt so many businesses around the world. The league entered last fall expecting to collect $10 billion for the season, with about 40% of that figure coming from so-called game-night revenue: tickets, concessions, merchandise, and the like. Though the league did complete about 80% of its season before it was suspended, this revenue stream went away the moment fans stopped being able to attend games.
The pandemic exacerbated what already had been a financially traumatic year. When Daryl Morey, general manager of the Houston Rockets, last October tweeted an image showing support for protesters in Hong Kong, Chinese authorities quickly canceled an exhibition game in Shanghai and pulled NBA games from state broadcaster CCTV. Silver took heat from multiple quarters. The NBA initially issued a statement saying that the league recognized that Morey’s tweet had “deeply offended many of our friends and fans in China, which is regrettable.” Some politicians and pundits interpreted it as bowing to pressure from China, and rushed to criticize the NBA for not backing Morey. Silver then put out a second statement to clarify the league’s stance, saying “[v]alues of equality, respect and freedom of expression have long defined the NBA” and that the league “will not put itself in a position of regulating what players, employees and team owners say or will not say on these issues. We simply could not operate that way.” Feathers remained ruffled in China. The NBA estimates the imbroglio cost $400 million in lost revenue. And the incident badly jeopardized relations with its fastest-growing market.
Signs of a thaw appeared just as the season was ending: CCTV aired the last two games of the finals. “We were only given 12 hours’ notice that we were returning to CCTV, without a lot of explanation,” says Silver. “Ultimately there was a sense coming out of China that we were not going to change. We are who we are. We are exporting American values.”
STEADY VOICE: Michele Roberts, the executive director of the National Basketball Players Association and a onetime public defender, advised the union on how to turn the bubble into a platform for social justice advocacy. Courtesy of Michael Patton/NBPA
Adds Silver: “What came from the NBA with those last two finals games on CCTV were images of players wearing T-shirts that say ‘vote’ and ‘equality’ and ‘liberty,’ not necessarily values people have traditionally associated with China.”
Television was challenged in the NBA’s home market, too, for very different reasons. The first game of the best-of-seven championship series broadcast on Disney-owned ABC, garnered the smallest television audience ever recorded for a single game in the NBA Finals—a 4.1 rating with 7.41 million viewers, according to analyst Jon “Paulsen” Lewis of Sports Media Watch. Lewis estimates that viewership for this year’s series was down by at least 40% from last year.
I have had fights with Adam. It’s not hunky-dory all the time. Michele Roberts, Executive Director of the National Basketball Players Association
The NBA is hardly alone among professional sports leagues in seeing viewership declines. Viewership for the NHL’s Stanley Cup Final was down 61%, Lewis estimates. And the reworked MLB regular season lost a quarter of its audience from the year before.
Unfortunate timing is partly to blame for the NBA’s ratings slide. The finals usually conclude in June rather than October, when it is competing with football and baseball, among other sports. One extraordinary day in September featured events from 12 top sports, including Major League Soccer, the WNBA, tennis’s U.S. Open, and college football. The NBA even had to contend with a crazy election season. Game 3 of the finals competed, for example, with wall-to-wall coverage of President Trump’s surprise COVID-19 diagnosis.
The end of the bubble means the beginning of a new, difficult chapter. There’s plenty of work ahead—for the players, the owners, and league officials. Negotiations to revisit the collective bargaining agreement already are underway. The delayed NBA draft is slated for Nov. 18. And the league has floated the idea of beginning the next season in January, with the presence of fans uncertain. Indeed the biggest debate in the weeks ahead will likely be about the best and fairest way to share the financial hit the league is facing. Says Roberts: “It’s no secret the conversation will entail how to spread the loss over a longer period.”
The NBA’s 1,500 or so league-office employees, at least, got some post-finals good news. Silver told them by email that each would receive a one-time $1,000 bonus as well as four consecutive Fridays and all of Thanksgiving week off.
I don’t think there’s a brand in America that is more consistent than the NBA. David Carter, sports business professor at USC
As for the commissioner himself, he didn’t fly north when most of the rest of the league staff fled the bubble following the last game. “Believe it or not, I’m still in Orlando,” he told Fortune a couple of days later. “My wife and our two daughters came down, and we’re going to Disney World for two days. It’s like that commercial: ‘What are you going to do after the championship? We’re going to Disney World.’”
It’s not entirely a fairy tale ending. The pandemic is still raging, after all. But it’s about as close as anyone’s going to get to one in a year like this.
Additional reporting by Andrew Nusca.
This article appears in the November 2020 issue of Fortune.
Editor’s note: This version has been updated to clarify and add detail about the NBA’s statements regarding Daryl Morey’s tweet in October 2019.


fortune--2020-10-15--CEOs discuss the power of purpose

CEOs discuss the power of purpose

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The U.S. presidential race is a near dead heat , this A.I .
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Good morning.
Fortune assembled a dozen CEOs yesterday for the fourth in our series of discussions on the power of purpose in business, held in partnership with McKinsey. It was an uplifting discussion, with each of the CEOs agreeing that purpose and profit are not at odds in today’s business world. Some excerpts from the conversation:
“The most important lesson for me has been the importance of making all of our employees part of something bigger than themselves…The impact that can have, and the power that has more broadly on our organization, can’t be understated.”
—Alex Gorsky, CEO, Johnson & Johnson
“I think the big insight that I had is that having a purpose as a company and being a profitable successful company are not at odds with each other. They go hand in hand. In fact, I would argue that if you don’t have a purpose, you’ll be less successful.”
—Dan Schulman, CEO, PayPal
“You unleash massive potential when you tie your employees’ personal purpose to the purpose of the company. They will help steer you toward what is important and the stance you will take. Not everyone is going to be happy. But if you stay clear on your purpose…you unleash massive amounts of commitment.”
—Corie Barry, CEO, Best Buy
“It’s important to talk about the values you want to speak out on internally, (and explain) why it is core to your business. Nike has a strong history of fighting for racial and social justice. (That’s) core to our mission and purpose as a company. When the George Floyd events occurred, we ran the ‘Don’t Do It’ campaign, and we made a $140 million dollar commitment on racial and social justice.”
—John Donahoe, CEO, Nike
“You can’t take for granted the notion of purpose, of putting that trust in the bank, so that at a time when you really need your employees, they feel good about stepping up and doing more.”
—Mary Dillon, CEO, Ulta Beauty
“(You need to) take the purpose and demonstrate it with real proof points…We back up our climate strategy with investments to prove we are making progress.”
—Lynn Good, CEO, Duke Energy
After George Floyd, “we took a strong stand that said we are not going to provide or sell any facial recognition technologies. Not at all…That so strongly motivated our employees, our communities and our clients….And purpose and profit go together. Things like that allow us to retain our most talented employees.”
—Arvind Krishna, CEO, IBM
“The pandemic actually brought a purpose to our drivers, warehouse workers, people on a cross dock…they suddenly had a big purpose in getting peoples’ toilet paper delivered, getting peoples’ Purell delivered, getting medicines delivered. That was the prime thing that led to our employee satisfaction figures going up 5%.”
—Brad Jacobs, CEO, XPO Logistics
“There is a rapid increase in the demand for social responsibility from the constituents that each of us work with. Social media is testing us to make sure we are authentic. And I think that’s great.”
—Stan Bergman, CEO, Henry Schein
“Mining has a huge impact on local communities.” Social issues and business issues “come together and they are not things that you can really separate.”
—Richard Adkerson, CEO, Freeport McMoRan
Separately, the folks at Just Capital, who yesterday released their annual ranking of 100 companies that best address stakeholder needs, did an analysis of how members of the Business Roundtable did in that analysis. Some 56 of Just Capital’s top 100 companies were signatories of the Business Roundtable’s statement on corporate purpose last August. And of the 152 companies who signed the BRT statement, half ranked in the top half of Just Capital’s rankings. The point? That the BRT’s commitment to serve stakeholders, and not just shareholders, is more than just words—it is backed by action. More here.
Other news below.
Alan Murray
@alansmurray
alan.murray@fortune.com
Editor’s note: An earlier version of this newsletter misstated the name of Duke Energy.
TOP NEWS
Starbucks diversity
Starbucks will link executive pay to success in meeting its diversity targets, as of next year. There are as yet few details on how executive pay will be affected, but the targets include 30% BIPOC (Black, Indigenous and People of Color) employees at the corporate level, and 40% BIPOC employees in retail and manufacturing, by 2025. CNN
Europe's vaccines
Europe has, for the first time since the start of April, overtaken the U.S. in terms of daily confirmed COVID-19 cases per million people. Germany has recorded a record daily increase in cases, and France is introducing nighttime curfews. The markets are tanking again, over fears of incoming restrictions. In that context, the European Commission has urged member countries to get their vaccine distribution plans in order now, and has given them criteria for developing their vaccine strategies. Fortune
TikTok appeal
A U.S. appeals court has agreed to expedite the Justice Department's attempt to push through its ban on new downloads of the TikTok app in the U.S. TikTok's Chinese owner, ByteDance, won a preliminary injunction against that ban on Sept. 27; it is this injunction that the government is appealing. The company is also trying to get a preliminary injunction against the government's imminent (as in Nov. 12) ban on TikTok's use in the U.S. Reuters
BTS IPO
The members of K-pop supergroup BTS just got a whole bunch richer—by around $20 million each—as their management company Big Hit Entertainment went public today. Big Hit's debut was South Korea's largest listing in three years, raising around $840 million. But the company really, really relies on BTS, which accounted for 90% of the company's revenue in the first half of the year. Fortune
AROUND THE WATER COOLER
Restricting misinformation
Facebook and Twitter are limiting the spread on their networks of a New York Post article that reports on what is claimed to be the contents of a laptop left by Hunter Biden, Joe Biden's son, at a Delaware computer repair shop last year. Facebook is restricting links to the article because of its dubious validity—in other words, its anti-disinformation policy has kicked in—while Twitter is rather invoking its policy against posting hacked material. Guardian
A.I. polling
Using an A.I. technique called social-media sentiment analysis, a company called Expert.ai has concluded that Joe Biden is ahead of Donald Trump—but only just, and certainly not by anywhere near as big a margin as official polls suggest. Expert.ai's model correctly called the U.K.'s Brexit referendum, which confounded polling-based information, and researchers have said sentiment analysis would also have outperformed polling in calling the 2016 U.S. election. Fortune
EU pharma
There's a push underway to reshore drug manufacturing in the EU—expect a European Commission initiative on this front late November. But that will mean higher costs, and it is not yet clear who will pay for the increases. Politico
Black unemployment
Michael Collins, the vice president of Jobs for the Future, writes for Fortune that college degree requirements may be holding back Black job-seekers: "Research suggests that short-term training programs now en vogue among policy elites may not yield the sort of sustainable wage gains that policymakers (and employers) expect…For economic equity and justice, we need to make sure that short-term programs complement degrees rather than replace them, and that we increase access to longer-term credentials such as bachelor’s and graduate degrees." Fortune
This edition of CEO Daily was edited by David Meyer.


fortune--2020-10-15--The U.S. 2020 election will be the ‘most impactful’ event for ESG investment this year

A win for Biden in the 2020 U.S. elections could be the best thing to happen to climate change investors this year, according to a Morgan Stanley survey of investors, released Monday.
According to the poll, 51% of investors think the U.S. election will be the “most impactful event” of the year for sustainable investing. An “impact” could be negative or positive, of course, but Morgan Stanley has previously said it considers a second Trump term simply status quo, so a Biden victory is the only outcome that will have an “impact” at all—and it will be largely positive.
In August, Biden unveiled his $2 trillion plan to tackle climate change, targeting a carbon neutral electric grid by 2035, the development of a decarbonized transport sector, and massive investment in new green tech and clean energy.
Besides the obvious environmental impacts of those goals, the switch to clean energy could create new jobs—10 million by the Biden campaign’s estimate, although critics are sceptical of such a high number.
(It’s worth pointing out that the Biden plan is not the Green New Deal advanced by Democrats in 2019, despite President Donald Trump asserting at the first presidential debate that it is.)
Of course, Washington wouldn’t be the only major government tackling climate change next year (in the event of a Biden presidency). In December, the European Commission, which heads the EU, announced its own $2 trillion Green New Deal tying post-pandemic recovery to decarbonized growth. It was the largest green stimulus package ever at the time, earmarking $572 billion for climate action.
Last month China announced an ambitious plan to go carbon neutral by 2060, too. Decarbonizing China—the world’s largest emitter of carbon dioxide—would mean completely eradicating the nation’s coal consumption by 2050. But only 7% of Morgan Stanley’s survey respondents thought Beijing’s pledge would be the “most impactful” event of the year.
That’s understandable. China’s decarbonization drive will likely be fueled more by state-owned enterprises than publicly-listed private companies, creating few investment opportunities.
The EU’s green deal isn’t deemed as significant as a Biden victory, either, with 37% ranking it as the most impactful event of the year. That may be because any action by the U.S., the world’s largest economy and second-largest carbon emitter, overshadows moves by the EU, which is smaller in terms of GDP and emissions.
But investors will likely continue to seek sustainable projects even if there is no Biden victory. The number of sustainable-minded index funds has doubled over the past three years, covering $250 billion. That capital flow might be enough to lobby for greener regulation regardless who’s in the White House.
But it’d be better for change to come from the top.
More below.
Eamon Barrett
— eamon.barrett@fortune.com
CARBON COPY
Smoke
Supreme Court nominee Amy Coney Barrett described climate change as a “very contentious matter of public debate” when questioned by Sen. Kamala Harris on the topic. Barrett agreed cigarettes cause cancer—because warnings on the packages say so—but referred to climate change as a “matter of public policy.”
Slow
The IEA published its World Energy Outlook report on Tuesday. It predicts that energy demand might not recover until 2025 and, even then, the “damage sustained during a decade of subdued recovery” will leave “deep scars” in the 2030s. For more on this, see Katherine Dunn’s reporting below.
Regulate
A leading executive at one of the world’s largest commodity traders, Trafigura Group, says the brokerage would welcome stricter regulations that force the shipping industry to green. Last month, the group proposed a tax of $250-$300 per ton of CO2 for ships, but board member Jose Maria Larocca says the call isn’t financially motivated. “We are doing this because we believe in this,” Larocca says.
Risk
Australia’s banking and insurance regulator warned the country may have to spend $3.5 billion a year to limit damage from climate disasters. The money would be spent on mitigation measures—such as clearing to prevent bushfires, or on advanced storm warning systems. It’s a steep bill but the cost of simply repairing damage after disaster strikes could be 11 times higher.
Sustain
The Journal has published a list of what it considers the 100 most sustainably managed companies. Topping the list are a cluster of heavy goods manufactures, such as steel, glass and cement makers—all heavy polluters. The logic appears to be that because heavy industries have greater financial exposure to climate change, they will be more compelled (possibly by regulation) to mitigate climate risks.
IN CASE YOU MISSED IT
Facebook A.I. researchers push for a breakthrough in renewable energy storage by Jeremy Kahn
Solar power is “the new king of electricity” by Geoff Colvin
‘Risky and dangerous’: Energy industry body IEA sounds the alarm on oil demand and even uses the P-word by Katherine Dunn
Inside the plan to radically remake BP by Beth Kowitt
The next President must tackle the intertwined crises of racial injustice and climate change by Adrien Salazar and Lennox Yearwood Jr.
5 years in, damages from the VW emissions cheating scandal are still rolling in by Geoff Colvin
With backing from Hollywood, French startup Ÿnsect plans to bring edible insects to America by Vivienne Walt
CLOSING NUMBER
50%
The Great Barrier Reef—the 133,000 square mile ecosystem off the coast of Australia—has lost more than 50% of its corals over the past 25 years. The destruction is an existential threat to fish that thrive in the coral habitat, creating a potential food shortage for humans, too. Most of the coral death has been caused by “mass bleaching events,” propagated by rising sea temperatures. As more coral dies, the reef’s ability to heal itself diminishes since new coral are spawned by the old.


fortune--2020-10-15--As COVID-19 numbers boom and markets tank, Europe’s leaders urge vaccine coordination

The European Commission urged the EU’s member countries on Thursday to develop a common strategy for the deployment of coronavirus vaccines, if and when they become available in a safe form.
Health Commissioner Stella Kyriakides warned that “time is running out” owing to the rapid rise of infection rates in Europe.
Germany has just seen a record daily increase in new cases—6,638 reported on Thursday—while France is introducing new nighttime curfews for the next four weeks, and the British government is about to introduce tough restrictions in London, too. Overall Europe has now overtaken the U.S. in new-case rates for the first time since the early days of the pandemic.
European stock markets tanked Thursday—the Stoxx 600 was down 2.4% in late morning trading—on fears over incoming restrictions, plus the likely failure of U.S. leaders to agree on a new stimulus package anytime soon.
In this context the Commission, the EU’s executive body, on Thursday released a set of criteria that countries have to take into account.
These include the capacity of their vaccination services to deliver the shots; making the vaccines easy and affordable for people to access; figuring out logistical issues such as cooled transport and storage; and “clear communication on the benefits, risks, and importance of COVID-19 vaccines to build public trust.”
Avoiding lockdowns
“We are helping EU countries prepare their vaccination campaigns: who should be vaccinated first, how to have a fair distribution, and how to protect the most vulnerable. If we want our vaccination to be successful, we need to prepare now,” said Commission President Ursula von der Leyen in a statement.
“Everyone’s first priority should be to do what it takes to avoid the devastating consequences of generalized lockdowns,” said Kyriakides. “The vaccine will not be a silver bullet, but it will play a central role to save lives and contain the pandemic. And when and if a safe and efficient vaccine is found, we need to be prepared to roll it out as quickly as possible, including building citizens’ trust in its safety and efficacy.”
Public trust in vaccinations has actually been increasing in Europe over recent years. A study published last month in The Lancet found improvements even in countries, such as France and Italy, that have strong anti-vaxxer movements. Nonetheless, that study ended before COVID-19 struck, and the pandemic has seen many conspiracy theories around the concept of a coronavirus vaccine, including the idea that the pandemic was somehow planned in order to inject everyone with microchips.
The Commission has already been playing a coordinating role in the potential procurement of a coronavirus vaccine. It has signed advance purchase agreements with AstraZeneca, Johnson & Johnson, and Sanofi-GSK to secure supplies when they become available, and is still in negotiations with BioNTech/Pfizer, Moderna, and CureVac.
The pandemic has seen an unprecedented push in the pharmaceutical industry, but the road to a successful and safe COVID-19 vaccine is not yet clear, as demonstrated this week when J&J had to pause its late-stage trials owing to a volunteer’s illness.
Prioritizing distribution
When it comes to distribution, all EU member states will be able to get their hands on the vaccines at the same time, with the size of their orders being pegged to the size of their populations. They will buy the vaccines from the drug companies at prices that were established during the negotiations.
The Commission is not telling member states the order in which they have to distribute the vaccines internally, but on Thursday it did provide examples of what the priority groups of recipients should be, namely: health care and long-term-care facility workers; people over the age of 60; people at high risk owing to health issues; essential workers; people who can’t socially distance; and “more disadvantaged socioeconomic groups.”
This chimes with a warning issued by the World Health Organization, whose chief scientist Soumya Swaminathan said healthy young people could have to wait until 2022 to get vaccinated, assuming a safe vaccine appears next year.
“There will be a lot of guidance coming out, but I think an average person, a healthy young person might have to wait until 2022 to get a vaccine,” Swaminathan said.


fortune--2020-10-15--Dollar up, stocks down as curfews, COVID and underwhelming corporate results spook investors

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. Weak bank earnings and a dimming outlook for stimulus spending sent shares tumbling on Wednesday. That risk-off mood is hanging over the markets again today. Europe is falling even harder as COVID numbers spike again, and tough curfew measures come into place. On cue, the dollar, that classic safe haven, is up.
Let’s check in on the action.
Markets update
Asia
The major Asia indexes are in the red with Hong Kong’s Hang Seng off 1.2% in afternoon trading.
are in the red with off in afternoon trading. IPO-bound Ant Group is the latest Chinese tech company in the sights of the Trump Administration. Reuters reports the U.S. State Department has submitted a proposal to add the payments company to a trade blacklist .
is the latest Chinese tech company in the sights of the Trump Administration. Reuters reports the U.S. State Department has submitted a proposal to add the payments company to . In Korean boy band news, Big Hit Entertainment, the music label for K-pop group BTS, had a rousing stock market debut in Seoul today. Not familiar with BTS or K-pop? Here’s Fortune‘s Grady McGregor on all you need to know about the phenomenon.
Europe
The European bourses fell at the open, and kept falling. The Stoxx Europe 600 was down 2.4% two hours into the trading session.
fell at the open, and kept falling. The was down two hours into the trading session. Europe’s COVID numbers hit a record in the past 24 hours, forcing France to impose strict 9 p.m. curfews across nine cities, including the City of Light , Paris. Tighter restrictions in London are imminent as well.
hit a record in the past 24 hours, forcing France to impose strict 9 p.m. curfews across nine cities, including the , Paris. Tighter restrictions in are imminent as well. Hold your nose. The latest on post-Brexit trade talks took a surprising turn with Germany pressing the French to back down on a key sticking point in the negotiations with its cross-Channel neighbor: fish.
U.S.
U.S. futures point to another weak open. They’ve been sliding all morning. The Dow and S&P fell for a second straight day on Wednesday, this time with tech and bank stocks leading the fall.
point to another weak open. They’ve been sliding all morning. The and fell for a second straight day on Wednesday, this time with tech and bank stocks leading the fall. Shares of Wells Fargo and Bank of America fell more than 5% after reporting big earnings drops. The weak numbers by the bellwether banks indicates the economic recovery is still on shaky ground.
after reporting big earnings drops. The weak numbers by the indicates the economic recovery is still on shaky ground. The other worrying news comes from Washington. Treasury Secretary Steven Mnuchin acknowledged yesterday that the odds of reaching an imminent stimulus package are just about zero. He and House Speaker Nancy Pelosi meet again today, but the two sides are still a good $300 billion apart in their numbers.
Elsewhere
Gold is down, plunging below $1,900/ounce .
is down, plunging below . The dollar is up, climbing as equities fall.
is up, climbing as equities fall. Crude is down, with Brent trading above $42/barrel.
***
Buzzworthy
On politics and portfolios
This one comes courtesy of Fortune columnist Ben Carlson who breaks down the markets performance by president.
inflation with a little i
When a few ticks over 1% counts as high(ish).
Don’t tell anyone looking to buy a new set of wheels that inflation is dead. “Used car and truck prices surged by 6.7% m/m in September, reflecting strong demand that is outpacing supply,” notes Berenberg chief economist Mickey Levy.
Central banks with a big c
When Abenomics goes global.
Il grande zero
I’m old enough to remember when the bond markets helped knock Silvio Berlusconi out of power, not the Communists as he’d been warning about for years. This week, the Italian Treasury sold zero-coupon bonds. It was over-subscribed. You can thank the European Central Bank’s appetite for sovereign debt for that.
***
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
The polls are all wrong. Since politics and Wall Street are largely intertwined these days, I thought I'd share this fine piece by Fortune's Jeremy Kahn.The race for the White House is a lot closer than the polls suggest. It's a near dead heat, says this "sentiment analysis" A.I. tool that successfully predicted the right outcome of the 2016 Brexit vote.
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
10.3%
That's the "real" unemployment rate, which is a good bit higher than the official unemployment rate of 7.9% cited by the Bureau of Labor Statistics (BLS). Economists always squabble over how precisely to measure the jobless rate. No matter how you look at it, the labor market is hurting.


fortune--2020-10-15--Silicon Valley is responding to wildfire season by making firefighting more proactive

Christine McMorrow won’t deny it: California’s fire season was historically bad this year. As a representative of Cal Fire, the largest fire department in the state, McMorrow has witnessed the severity of these fires firsthand, believing them to be among the deadliest and most destructive on record.
Fortunately, Silicon Valley’s tech community is responding.
Joaquin Ramirez and his team at Technosylva have been developing machine learning technology that makes firefighting efforts more proactive than reactive. Ramirez’s company provides Cal Fire with two main services: its “firecast”––which takes in data on weather, terrain, vegetation, and several other factors and predicts which locations pose the biggest fire threats––and predictive mapping, which gives firefighters insight on the direction a fire will go in and how it will act.
On this episode of Fortune Brainstorm, a podcast detailing how technology is changing our lives, McMorrow speaks with Fortune’s Michal Lev-Ram and Brian O’Keefe about how these innovations make the department’s job more manageable.
“This technology, it allows us to do within minutes what previously would take hours or even days to do,” says McMorrow. “We’ve already seen the difference that it’s made this year. But into the future, once we have this in the hands of all of our incident commanders in our emergency command centers, it’s going to make a really big difference in how we operate on the ground.”
While Technosylva focuses on ways that data and machine learning can be of help, Eric Appel, an assistant professor at Stanford University, joins the podcast to discuss a different type of technology that can assist in preventive efforts.
“There’s this general misunderstanding that fires sort of start willy-nilly at random in the forest, but that’s not really true,” Appel says. “The vast majority of fires happen routinely near roadsides, near utilities infrastructure, and unfortunately, before our technology, there was no way to stop them preemptively. So, we’ve developed a gel-like fluid that you can spray in these hotspot areas, and it sticks on vegetation and remains there throughout the duration of the fire season.”
Appel says over 80% of all fires in California over the past decade began in these hotspots, and thus his product, which was inspired by a casual conversation with his brother-in-law, drastically limits the resources departments spend in terms of both personnel time and money to put out these types of fires.
Around the 17:00 mark, Lev-Ram and O’Keefe bring on longtime tech entrepreneur Gina Bianchini to share her opinion on why Silicon Valley should be focused on more than just innovative ways to predict and fight fires. Finding ways to make rebuilding from fires easier, she asserts, should also be of importance.


fortune--2020-10-15--BTS members’ net worth balloons by millions as their music label stages a massive IPO

South Korea’s Big Hit Entertainment, the company that manages K-pop supergroup BTS, went public on Thursday at $236 per share, twice its initial public offering price, to hit a value of $8.38 billion.
The IPO made Big Hit founder and co-CEO Bang Si-hyuk a billionaire, and—at the highest share price on Thursday—raised $20 million each for the seven members of BTS, who received an equal stake in the company from Bang in August.
Big Hit’s debut is South Korea’s largest listing in three years, raising around $840 million. BTS, arguably the biggest musical act in the world at the moment, is responsible for the vast majority of Big Hit’s revenue and generated much of the hype surrounding the label’s IPO.
Subscribe to Eastworld for weekly insight on what’s dominating business in Asia, delivered free to your inbox.
Big Hit made $86 million in profit last year and was valued at $4 billion before its Thursday debut. BTS accounted for almost 90% of Big Hit’s total sales of $249 million in the first half of 2020, meaning the label relies heavily on the success of the band.
That dependence comes with risks.
One concern is that the band members still need to complete the two years of compulsory military service required of all South Korean men. Jin, the oldest member of BTS, is nearing 28, the upper age limit for conscription. The band’s legions of loyal fans—and some politicians—are calling for delays to BTS’s military service or the formation of an alternative option, like working abroad to represent South Korean interests.
In August, BTS released “Dynamite”—the group’s first song recorded entirely in English—and it debuted at No. 1 on the Billboard Hot 100, becoming the group’s first No. 1 single in the U.S.; it topped the charts in at least 11 countries.
The global success of BTS has been an economic boon for South Korea as well as for Bang and the seven band members.
A December 2018 report by the Hyundai Research Institute estimated that BTS contributes around $3.5 billion to South Korea’s economy each year. The band’s contributions include $1.12 billion in exports of BTS-related merchandise. The band is also responsible for one in every 13 visitors to South Korea annually, as superfans attend concerts or make pilgrimages to the members’ homeland.
More must-read international coverage from Fortune :


fortune--2020-10-15--How chief health officers could help campuses navigate COVID

Good afternoon, readers.
We held the latest in our series of virtual Brainstorm Health panel discussions on Thursday with a conversation about why having a chief health officer (CHO) is so important to ensuring public health safety on college campuses.
We were joined by Dr. William Kassler, deputy CHO at IBM; Dr. Sandro Galea, dean of Boston University’s School of Public Health; and Dr. Preeti Malani, CHO at University of Michigan, in a conversation moderated by Fortune editor-in-chief Clifton Leaf.
While college and university campuses have dedicated medical units to look out for student safety, the idea of having, specifically, a chief health officer is still fairly new. But that position could prove critical during the COVID pandemic as even some of the most cautious schools across the nation see outbreaks.
“Universities are very complex,” said Kassler. “They’re large employers. They function like a business, they’re an important economic business. And then you add to that fact that they’re a population in and of themselves. People congregate together, there’s socializing, sports and all that.”
Kassler went on to say that universities’ responsibility to public health extends beyond simple health services or HR. It’s now a matter of epidemiological logistics which cross paths with all of those other issues, as well as policy considerations such as remote learning, making the role of a chief health officer particularly important.
Malani of the University of Michigan has a truly unique perspective on this issue: She’s a CHO herself at the school, she’s a professor of medicine and infectious disease expert, and the parent of a junior at Michigan.
“There is loneliness, and it’s gotten worse” on campuses, she said. “Frankly, the residential experience could become so sub-optimal that it’s not worth the lift. “The idea of putting thousands of people together in tight quarters is difficult. College campuses aren’t meant for social distancing, they’re meant for togetherness.”
Among the advice that she has for students is to establish tighter social circles, to keep on masks, and to try not to eat and drink in groups, especially indoors.
Galea ended the talk on a more sober note, pointing out that so much of the conversation around coronavirus has been gloom and doom that it’s become difficult to have more mature and adult discussions about what we can do to address the crisis. “I don’t think the narrative has served the public well,” he said.
Read on for the day’s news, and see you next week.
Sy Mukherjee
sayak.mukherjee@fortune.com
@the_sy_guy
DIGITAL HEALTH
Zocdoc lambasts former CEO's lawsuit claims. Digital health firm Zocdoc is facing a lawsuit from its former CEO, Cyrus Massoumi, who alleged in a September lawsuit that the company had ousted him in a "fraudulent coup." Zocdoc had a few things to say about that in a blog post on Thursday slamming how the business worked under Massoumi's tenure, and the way that it had evolved since then, including by implementing video doctor visits earlier this year as the pandemic began. It also went straight for the company's previous financial record: "In 2015, Zocdoc generated $71 million in annual revenue. However, we also burned through $43 million in cash that year. Despite this high burn rate, revenue had flat-lined, growing by just one percent month-over-month by October 2015," the firm said, also pointing to significantly lower attrition rates in the past few years.
INDICATIONS
Regeneron gets the first-ever FDA nod for an Ebola drug. Regeneron (which you may remember from the recent news about its drug cocktail that was used to treat a certain President of the United States) just reached another milestone: An historic Food and Drug Administration (FDA) approval for an Ebola therapy. This particular cocktail of antibodies called Inmazeb treats one of the deadliest strains of the Zaire Ebola virus, one which kills anywhere from 60% to 90% of patients.
COVID is delaying cancer diagnoses. A Wall Street Journal analysis of insurance claims data and lab testing information finds that critical cancer diagnostics such as mammograms have taken a backseat during the pandemic. “There’s really almost no way that doesn’t turn into increased mortality,” with the full effects likely to play out over a decade, National Cancer Institute (NCI) director Ned Sharpless told the Journal. The shutdown of so-called "elective procedures" during the pandemic's early days included screenings and cancer biopsies, especially since such patients may be especially vulnerable to COVID. (Wall Street Journal)
THE BIG PICTURE
How the NBA nailed its coronavirus bubble. Fortune's Adam Lashinsky and Brian O'Keefe have a fantastic deep dive into how the NBA was able to pull off the near-impossible with its playoff bubble. The league, somehow, was able to manage a heavily-postponed season at Disney World in Florida without a single positive COVID test while also addressing its players' demands for a bigger commitment to social justice. How? Discipline, communication, education, and good old fashionied leadership. “I think the league did a masterful job of doing the best it could to keep revenue coming in for both the teams and the players,” Los Angeles Clippers owner Steve Ballmer, the former Microsoft CEO and a member of the NBA’s board of governors, which met weekly throughout the crisis, told Adam and Brian. “Juggling those interests and being willing to put in some significant costs with some significant benefit, I just think the league was phenomenal.” Read the entire worthwhile piece here. (Fortune)
REQUIRED READING
Italy is beginning to turn the COVID corner, by Bernhard Warner
How Silicon Valley is responding to wildfire season, by Brett Haensel
HP's CEO on how the pandemic is accelerating change in business and technology, by McKenna Moore


fortune--2020-10-15--Russian and Chinese spacecrafts could collide in space junk super-spreader

Update at 10 P.M. ET: The sky-watchers at space-gazing startup LeoLabs reported “no indication of collision“ and “no sign of debris” after the two spacecrafts’ time of closest approach.
The coronavirus pandemic has accustomed people to the cruel reality of “superspreader” events, when an unusually contagious virus, like the one behind COVID-19, infects many people at once.
Now the world is preparing for a superspreading contingency of another sort. On Thursday night, two decommissioned spacecraft could collide, spraying dangerous space junk across the sky. The encounter is expected to occur at 8:56 p.m. ET, according to estimates from LeoLabs, a sky-mapping startup based in Menlo Park, Calif.
This visualization shows our latest information on the event: pic.twitter.com/qaI2NXhZmi — LeoLabs, Inc. (@LeoLabs_Space) October 15, 2020
The star-crossed machines are an old Soviet satellite formerly used for navigation and a discarded part of a Chinese rocket. The approximately car-sized artifacts are set to cross paths more than 600 miles above the South Atlantic, off the coast of Antarctica.
LeoLabs puts the odds of a smashup at roughly 10%. Because the crafts are orbiting earth at blazingly fast speeds (they complete a full orbit about every 90 minutes), projecting ahead compounds margins of error in the company’s models, creating uncertainty. Other factors, such as atmospheric conditions, like the nudging effects of solar radiation, limit precision.
Even though Daniel Ceperley, LeoLabs’ chief executive, pegs the probability of a smashup at about 1-in-10, he deems the situation “extremely high risk.”
“In addition to being exceptionally close, these objects are also very large—and I mean, massive,” Ceperley tells Fortune. “That’s a big problem because if they hit, they’ll turn into a lot of fragments of debris,” which will, he says, “spread out into a shell around earth.”
According to its most recent reports, the European Space Agency estimates that, as of February, there were more than 34,000 pieces of space debris greater than 10 centimeters in size circling Earth.
Jonathan McDowell, an astrophysicist at the Harvard-Smithsonian Center for Astrophysics, says that, if Thursday’s collision indeed happens, it will cast vast amounts of shrapnel into low-earth orbit, the region of the upper atmosphere inhabited by many commercial and government satellites. The quantity of space junk could increase by 10-to-20%, he estimates.
More space junk means more future collisions. As that region of the sky gets polluted, it amplifies an “already significant” risk of collisions, he says.
That would have big consequences for people who increasingly rely on data beamed from space. Space is becoming a fertile frontier for businesses and governments alike.
“It would not be surprising if one or more of these active satellites were damaged or destroyed by the resulting debris over the next few years,” McDowell says. “If such collisions continue” over the course of decades, he says, “then key orbital regimes could become unusable.”
The possible collision will likely not be visible to the naked eye. Ceperley says his firm will be using its three radar arrays—in Texas, Alaska, and New Zealand—to observe the aftermath of the crossing, scanning for any signatures of fragments that would indicate a dreaded bullseye.
Then, Houston, we would have a major problem.


fortune--2020-10-15--Stocks fall as Europe reports rising covid rates

U.S. stock indexes erased much of their early losses and closed modestly lower Thursday, extending the S&P 500’s losing streak to a third day.
The S&P 500 fell 0.2% after having been down 1.4%. Technology, health care and communications stocks accounted for most of the selling, outweighing slight gains in banks and elsewhere in the market.
Wall Street has turned cautious this week amid a confluence of worrisome trends for the economy, which is still hampered by the pandemic. Coronavirus infections are rising in Europe, prompting governments in France and Britain to impose new measures to contain the outbreak. European stock indexes fell broadly Thursday as traders pulled money out of riskier investments.
In the U.S., investor optimism that the Trump administration and Congress will soon reach a deal on another round of stimulus for the economy has waned. And the government said Thursday that the number of Americans seeking unemployment aid increased more than expected last week.
“The stimulus talk continues to be a little negative, and the virus outbreak in Europe that’s going to probably cause more shutdowns in various cities and countries, that’s a little bit of a negative, too,” said Scott Wren, senior global market strategist, Wells Fargo Investment Institute.
Still, Wren added, the market is expecting Washington will deliver another round of stimulus at some point, and continues to expect that various efforts to develop COVID-19 treatments and vaccines will pan out, eventually. If that wasn’t the case, the recent pullback in stocks would be much more severe, he said.
“The market is still pretty convinced we’re going to see good news on both fronts, it’s just not sure when,” Wren said.
The S&P 500 fell 5.33 points to 3,483.34. The Dow Jones Industrial Average dropped 19.80 points, or 0.1%, to 28,494.20. It had been down 332 points in the early going. The Nasdaq composite gave up 54.86 points, or 0.5%, to 11,713.87.
Smaller company stocks fared better than the broader market. The Russell 2000 index of small-cap stocks bounced back from an early slide and rose 17.23 points, or 1.1%, to 1,638.88.
Stocks have been mostly climbing this month, but have pulled back this week as ongoing talks between Democrats and Republicans on an economic stimulus package have failed to deliver results. Investors have been hoping that Washington would provide more financial support for the economy since July, when a $600-a-week extra benefit for the unemployed expired.
The government’s latest weekly tally of unemployment claims underscores how the economy continues to be hobbled by the pandemic and recession that erupted seven months ago. The Labor Department said Thursday that the number of Americans seeking unemployment benefits rose last week to 898,000, a historically high number that exceeds analysts forecasts.
The report follows recent data that have signaled a slowdown in hiring. The economy is still roughly 10.7 million jobs short of recovering all the 22 million jobs that were lost when the pandemic struck in early spring.
The 10-year Treasury yield held steady at 0.73%.
Investors continued to weigh the latest batch of earnings reports from major U.S. companies. Several reports so far have been better than expected, but the health crisis continues to cloud the outlook.
United Airlines slumped 3.8% Thursday after reporting that its revenue plummeted over the summer. Morgan Stanley rose 1.3% after the investment bank said its third-quarter profit jumped 25%, thanks to a surge in trading revenue and higher fees. Walgreens Boots Alliance gained 4.8% after the drugstore chain’s latest quarterly results topped Wall Street’s forecasts.
Across the S&P 500, analysts are expecting companies to report another drop in profits for the summer from year-ago levels. But they’re forecasting the decline to moderate from the nearly 32% plunge from the spring as the economy has shown signs of improvement.
A resurgence in coronavirus infections in Europe has also given investors cause to turn cautious. Fears are rising that Europe is running out of chances to control the new outbreak, as infections hit record daily highs in Germany, the Czech Republic, Italy and Poland. France slapped a 9 p.m. curfew on many of its biggest cities and Londoners face new travel restrictions as governments take increasingly tough actions.
The limits on public life are not as strict as the full lockdowns imposed during the spring, but will stunt or even reverse the economy’s recovery from recession, experts say.
European markets fell broadly after France imposed a curfew on many of its biggest cities and Londoners faced new travel restrictions. Germany’s DAX lost 2.5%. The CAC 40 in France slid 2.1%. The FTSE 100 in London fell 1.7%.
In Asia, the Shanghai Composite Index lost 0.3% and the Nikkei 225 in Tokyo sank 0.7%. The Hang Seng in Hong Kong lost 2.1%.
The Kospi in Seoul shed 0.8% despite a strong market debut by the company that manages popular South Korean boy band BTS. The group faces criticism by Chinese internet users after its leader thanked Korean War veterans for their sacrifices.
Big Hit Entertainment Ltd.’s share price doubled by midday but ended the day close to its opening. Its market value after an initial public offering that raised more than $800 million was about $7.5 billion.


fortune--2020-10-15--Name that tune: Google can now identify songs based on hums and whistles

Google Search can now help users find the name of that pesky tune stuck in their heads, even if they only remember the melody.
The search engine announced on Thursday that users can hum or whistle a song to their mobile devices, and Google Search will find its name and artist as well as relevant search results like music videos.
“People ask Google, ‘What song is playing?’ almost 100 million times a month,” Aparna Chennapragada, vice president and general manager for consumer shopping at Google, said during an unveiling of new search features on Thursday.
Here’s how it works: A user can tap the mic icon in Google’s search app or the Google search widget and either tap the “search a song” button or tap the mic button and say, “What’s this song?” If using Google Assistant, they can say, “Hey, Google, what’s this song?” Then, the user just sings, hums, or whistles the tune—even imperfectly—for 10 to 15 seconds.
Google’s machine learning converts the audio into a number-based sequence that represents the song’s melody. Users will get a list of options that are likely matches.
The new feature is available in English on iOS devices and on Android devices, along with more than 20 other languages.
During Thursday’s event, Google also unveiled new uses for Google Lens, its image recognition technology. For example, starting next month users can tap and hold on any image they see within the Google app or Chrome on Android, and Google will surface shopping search results similar to what’s in the picture. It will also offer styling suggestions for clothing items.
Similarly, Google will soon use the technology to help with buying a car. When users search for a car, Google will let them see an augmented-reality version of it in front of them or in their driveway using their camera. Users can also change the car’s color and zoom in to see features on the dashboard. Google did not say when this feature would debut.


fortune--2020-10-15--Sports betting booms in New Jersey: Record $748 million in September bets

New Jersey’s fast-growing sports betting market blew past its own national record in September, taking in more than $748 million in bets from sports gamblers finally able to wager on football amid the coronavirus outbreak.
Figures released Thursday from the New Jersey Division of Gaming Enforcement show Atlantic City’s nine casinos and the horse racing tracks that offer sports betting handled over $748 million in bets, easily surpassing the national monthly record they set just a month earlier, when $668 million was wagered on sports in August.
Both figures easily eclipsed what had been the U.S. record of $614 million set in Nevada in Nov. 2019.
So far this year, New Jersey casinos and tracks have taken in nearly $3.3 billion in sports bets alone. That equals or surpasses what Atlantic City used to make in an entire year from casino gambling before sports betting was legalized.
The $748 million includes the total amount of bets accepted by the casinos and tracks; after paying off winning bets and expenses, they kept $45 million of that total.
Including casino games, the gambling industry in New Jersey won $323.2 million in September, an increase of 6.5% over last September, when there was no pandemic and casinos were operating at full capacity. Casinos are currently limited to 25% occupancy as a precaution to prevent the spread of the coronavirus.
The Borgata won $64 million in September, down 2.8% from a year earlier. Golden Nugget won $37.5 million, up 16.3%; Hard Rock won $35.8 million, up 12.5%; the Ocean Casino Resort won $29.5 million, up nearly 22%; Tropicana won $26.1 million, down nearly 10%; Harrah’s won $19.5 million, down 26.6%; Caesars won $18.9%, down 1.8%; Resorts won $13.9%, down 7.5%; and Bally’s won $12.9%, down 15.6%.
The Ocean Casino showed the largest percentage increase in September revenue in Atlantic City, and CEO Terry Glebocki said that was due to serval factors.
“The combination of Labor Day weekend and the return of indoor dining, limited to 25%, afforded us the opportunity in September to continue the momentum created here at Ocean,” she said. “Our guests have enjoyed dining again at their favorite restaurants within our casino resort, and our year-over-year gaming revenue growth of nearly 27% is indicative of the successes we have achieved.”
James Plousis, chairman of the New Jersey Casino Control Commission, was heartened by the pace of recovery of casino gambling revenue.
“Casino win was 85 percent of last September’s performance, aided by the reopening of casino restaurants on September 4, and the resumption of food and beverage service on casino floors,” he said. “These results were promising in the midst of continuing travel advisories that decrease visits from out of state, as well as restrictions on capacity, amenities and entertainment that have made 2020 not reasonably comparable to last year.”
Internet gambling revenue was $87.6 million in September, up 113% from the $41.1 million it produced in Sept. 2019.
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fortune--2020-10-15--How fast will Apple’s new 5G iPhones be?

Apple this week unveiled its first iPhones compatible with 5G wireless networks that, theoretically, offer download speeds 10 to 100 times as fast as current 4G LTE. But don’t count on actually getting such zippy service.
In many cities, 5G networks provide much slower speeds. As a result, many people who buy any of Apple’s new phones, from the $700 iPhone 12 Mini to the $1,100 iPhone 12 Pro Max, will have to wait for telecom companies to improve their networks.
Why do 5G speeds vary so much?
AT&T, Verizon, and T-Mobile are spending tens of billions of dollars to add 5G. But the three carriers have made different choices about which airwave bands to use.
AT&T and Verizon are deploying two kinds of 5G. One flavor uses the same lower-frequency airwave bands that cell phones have always used. Signals in these lower bands travel relatively long distances, making the networks broadly available to hundreds of millions of customers. Unfortunately, those bands are also already crowded with 4G users, and the carriers lack spare capacity. In fact, tests have found that 5G connections via lower bands aren’t much faster than 4G, and, in some cases, are even slower.
But AT&T and Verizon are also using some ultrahigh-frequency bands, also called millimeter wave bands, for 5G that haven’t typically been used for cell phones. These bands can carry huge amounts of data and provide very high speeds, but don’t travel far. As a result, the millimeter wave networks are limited to only parts of a few dozen cities (55 for Verizon and 35 for AT&T).
T-Mobile, meanwhile, has a three-pronged 5G strategy. The carrier has a nationwide low-band network like its rivals and, additionally, has deployed millimeter wave in a few cities. But after buying Sprint this year, T-Mobile gained access to some extra airwaves in a mid-band frequency that better balance availability and speed. So far, T-Mobile’s mid-band network is available in areas where just 25 million people live, but the carrier expects to reach 100 million people by year-end.
The federal government plans to auction more mid-band spectrum later this year, which could help AT&T and Verizon catch up if they win licenses up for bid. Craig Moffett, an analyst with MoffettNathanson Research, said that only then will AT&T’s and Verizon’s 5G be much speedier than their 4G in most places. Until then, he said, “T-Mobile is well out in front.”
What speeds can I expect with a 5G iPhone?
As explained, the download speeds on a new 5G iPhone will depend on the type of network used. On the carriers’ low-band 5G networks, speeds may reach 50 to 100 megabits per second, comparable to 4G and fast enough to download a new music album almost instantly, but requiring five or 10 minutes for a high-definition movie.
On T-Mobile’s mid-band 5G network, a movie may take a minute or two to download. And on a millimeter wave 5G connection, it could take just a few seconds.
What else can I use 5G for besides downloading movies?
Ten years ago, before streaming music and video were ubiquitous, people needed to download much of their online entertainment. But today, downloading entertainment is almost unnecessary.
Apple and the carriers, therefore, have tried to emphasize a few other potential uses for 5G. The most practical is real-time, multiplayer video games like League of Legends (which Apple demonstrated at its iPhone event) or Fortnite (which isn’t currently available in the iPhone app store owing to a legal dispute). That’s because, in addition to providing fast download speeds, 5G also provides quicker connectivity with less lag. Gamers need that kind of low-latency to match people playing on wired home Internet connections.
In the future, real-time virtual reality gaming or conferencing may be a big selling point for 5G because it would allow for creating more realistic-looking environments. Furthermore, Apple is pushing other data intensive ideas, like doctors sharing high-resolution medical scans and architects sharing augmented reality architectural mock-ups of buildings over their phones.
But the bottom line is that even when consumers can get a superfast 5G connection with a new iPhone, they may not notice much of a difference. As Barclays analyst Tim Long wrote after watching Apple’s announcements during an online event on Tuesday: “We don’t feel the event effectively demonstrated why consumers need 5G for their iPhone.”


fortune--2020-10-15--YouTube follows Facebook in banning QAnon, but with caveats

YouTube will ban videos that promote QAnon and other conspiracy theories, but only if they target specific people or groups, seeking to crackdown on potentially dangerous misinformation after criticism the service helped these fringe movements expand.
The decision comes a week after Facebook said it would remove accounts associated with QAnon, a far-right movement that the FBI has reportedly labeled a domestic terrorism threat.
YouTube’s ban is an attempt to stamp out the conspiracy without hindering the massive volume of news and political commentary on its service. Rather than a blanket prohibition of QAnon videos or accounts, YouTube is expanding its hate and harassment policies to include conspiracies that “justify real-world violence,” the company said on Thursday.
“Context matters, so news coverage on these issues or content discussing them without targeting individuals or protected groups, may stay up,” YouTube, a unit of Alphabet Inc.’s Google, wrote in a blog post.
Technology platforms have released a blitz of new rules to curb misinformation after mounting momentum for movements such as QAnon. Twitter Inc. recently said it would make it harder for people to find tweets supporting QAnon, while Etsy Inc. removed QAnon-related merchandise from its online marketplace.
Pressure for these companies to act has been building for months. YouTube already instituted a policy similar to Twitter’s, although it did not publicize it. Starting last year, the service began to treat QAnon videos as “borderline content,” meaning the clips are recommended and shown in search results less often. Views from recommendations on “prominent” QAnon videos have dropped 80% since then, the company said.
YouTube was a key driver of QAnon’s early popularity, according to Angelo Carusone, president and chief executive officer of Media Matters for America, a non-profit group that analyzes conservative misinformation.
A QAnon evangelist called PrayingMedic has almost 400,000 subscribers on his YouTube channel, for instance. And even after YouTube’s borderline content move last year, QAnon videos spread from the Google service to other sites. YouTube broadcasts about the conspiracy theory featured regularly in Facebook groups and pages, until Facebook’s recent ban. YouTube QAnon clips also continued to be shared on other niche services such as Parler.
Still, Carusone said YouTube’s efforts to slow the spread of the conspiracy theory have been relatively effective in recent months.
The tech platforms and QAnon supporters will now likely enter into a game of cat and mouse, where users come up with new hashtags and different claims to evade automated filters. QAnon followers have proven particularly adept at this, according to Carusone.
“There has never been a community where their participants are as adaptable,” he said.
A significant unanswered question is how well YouTube can identify videos designed to be less obvious upon initial inspection, Carusone added.
“It is very easy for them to identify explicitly identified QAnon content and accounts,” he said. “What they have not articulated is how well that can be applied to less-explicit accounts.”


fortune--2020-10-15--White House ‘desperate’ to make a stimulus deal as layoffs increase

Amid the back and forth over a new stimulus deal, nearly 900,000 Americans filed initial jobless claims last week.
“It feels persistently disappointing in the sense that the economy, while having made some progress, isn’t where I think anyone wants it to be,” Bankrate.com’s senior economic analyst Mark Hamrick tells Fortune. “We were sort of bracing for a disheartening transition from summer to fall, and here we are.”
Unemployment claims, which shot up to record levels in April, have leveled off but still remain much higher than before the onset of the pandemic:
State unemployment offices received 898,000 benefit claims the week ending Oct. 10, up from 845,000 the week prior. That is a “disappointing increase” as the economic recovery continues to slow, Hamrick notes (though notably continued claims—individuals on state unemployment rolls— ticked down by 1.1 million last week). Indeed, economists have long observed the speed of the recovery is slowing: “Without additional support it threatens to stall out or even backslide,” Mark Zandi, chief economist at Moody’s Analytics, recently told Fortune.
But some like Hamrick are concerned that politics have overshadowed the economic reality (including the massive job losses) when it comes to stimulus talks, especially as President Trump falls behind former Vice President Joe Biden in the polls, and the odds of Democrats taking control of the Senate increase.
“While an argument could be made that it should be the economic pressure that’s driving [the push to get a stimulus deal], that is inconsistent at best, meaning the political pressure is paramount,” Hamrick suggests. “That’s why Pelosi is not willing to accept anything or everything because she knows the pressure is most acute on the Republicans and the White House.”
The White House has recently signaled it may be ready to concede on some points of dispute. On Thursday, Treasury Secretary Steve Mnuchin told CNBC’s “Squawk Box” that he would tell Speaker Nancy Pelosi that “we’re not going to let the testing issue stand in the way,”—a key point of contention between Republicans and the Speaker. “We’ll fundamentally agree with their testing language subject to some minor issues. This issue is being overblown,” Mnuchin said.
Both parties are in agreement on issues like $1,200 stimulus checks, more funding for small businesses, and more money for coronavirus testing and education. Instead, the overall price tag is holding up the deal: Democratic leaders want $2.2 trillion, while the White House has offered $1.8 trillion.
Meanwhile, President Trump also said on Fox Business Thursday that he would be willing to raise the stimulus package price tag above the $1.8 trillion mark Republicans have offered, though some Senate Republicans reject such a deal. Some observers argue the White House appears desperate.
“We’ve seen the back and forth that [President Tump has] been engaged in with respect to taking [stimulus] off the table then looking for a piecemeal [deal] then looking for a large deal, I just think that smacks of desperation and a lack of focus,” Bankrate’s Hamrick argues.
The back and forth on Capitol Hill comes against a backdrop of a 7.9% unemployment rate and rising cases of the coronavirus across the country.
And in terms of timing, Hamrick is skeptical a deal will get done this side of Election Day, suggesting “it may well be that something comes either after the election or early [next] year, but in the meantime, it may be the case of many Americans suffering the financial equivalent of famine before federal legislation provides the opportunity for something that’s closer on the scale to a feast.”
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fortune--2020-10-15--Presidential debates are broken

Presidential debates are broken

Sixty years is a good run, and the televised presidential debate lived a long and fruitful life. But all things must end, ashes to ashes, dust to dust.
Or maybe not, perhaps these are the chaotic years where we figure out how to do debates correctly, and we will emerge from 2020 with a better and more informative system in place.
Either way, there will be no presidential debate Thursday night.
Instead, there will be two competing town halls, with former Vice President Biden taking over ABC’s airwaves at 8 p.m. Eastern Time, and President Donald Trump doing the same on NBC. In all likelihood, those who like Biden will watch Biden, and those who prefer Trump will watch Trump. Afterward, there will be some argument about who got the higher ratings, with Trump claiming victory no matter what the outcome. There will be little to no comparing and contrasting on policy between the two.
There was supposed to be a debate in which both candidates participated, but it was shifted to a digital platform after Trump was diagnosed with COVID-19. The President rebuffed and said he would only debate in person, so the event was canceled.
Maybe that’s not such a bad thing. The debate was nixed just days after vice presidential candidates Kamala Harris and Mike Pence went head-to-head for 90 minutes on most major television networks. The winner? A fly.
The fly that briefly landed on Mike Pence’s head got more media attention than either candidate. The fly was mentioned in nearly 18% of all post-debate headlines, according to an analysis by A.I. company CREOpoint. The coronavirus, the next most popular topic discussed, was mentioned in just 5% of headlines.
Flygate occurred less than two weeks after the first presidential debate, which featured a whole lot of name-calling and very little policy discussion, frustrating viewers.
The events prompt the question: millions of viewers, thousands of tweets, hundreds of hours of prep work, dozens of analysts and spin-room surrogates arguing about who won—and for what?
What happened last month and what will happen tonight with dueling town halls highlight just how farcical this round of political debates have become. It’s pure entertainment and not much else.
While Harris and Pence were certainly more polite than Trump and Biden during their debate last month, they failed to directly answer a number of questions asked by moderator Susan Page. When asked about President Donald Trump’s diagnosis of COVID-19 and the White House’s response, Pence spoke instead about trusting Americans. When asked about the possibility that she would become President at some point during the next four years, Harris deflected.
If candidates prefer to answer questions with tangential preplanned talking points instead of actually debating, then perhaps individual town halls are a better fit.
And even if genuine policy discussion had occurred during the debates, data finds that just 3% of voters are still undecided. A poll taken immediately after Wednesday evening’s vice presidential debate found that the majority of Americans said that debate has no effect on their vote. The same was true of the Sept. 29th presidential debate.
There is also the question of fact-checking, which moderators have said is not their job. Both parties misled or told untruths dozens of times, although data shows that Pence was fact-checked by the media three times as much as Harris. And so the debates have become not just sparring matches or a battle of the tongues, but also superspreader events of false information.
Debates, wrote Hossein Derakhshan, a researcher at the MIT Media Lab, “have become entertaining enough to boost ratings,” but, he asked, “do they really help the democratic process?”
Derakhshan says that debates should still occur, just not on television. “Representative democracy was supposed to rely on informed voters who think. But with television…you can’t think, you can’t make arguments, and you cannot explicate. It’s the realm of emotions and feelings, not reason and thinking,” he said.
Instead, Derakhshan argues, they should move to radio. Americans, who are now used to receiving information from long-form podcasts (even Trump was interested in a debate moderated by epic podcaster Joe Rogan), would be able to listen to in-depth, policy-oriented arguments with less pageantry and distraction.
While radio may feel preposterously old-school, the history of the televised debate does not stretch that far back. Yes, the history of the television is also a shallow one, but the debate came way after. The first on-camera debate took place 60 years ago, between Richard Nixon and John F. Kennedy. And while Nixon was believed to have the upper hand policywise, he did not dress for television or wear makeup, and he appeared underweight and pale. From the outset, the pageantry was there, and Kennedy was declared the winner largely because he looked like the winner. The experience was so jarring that there wasn’t another face-to-face televised debate for 16 years. In 1976 Gerald Ford and Jimmy Carter took to the stage once more. There have been televised debates since then.
Even if we stick with the same medium, some say we should change the process. Instead of hosting back-and-forth debates, the Commission on Presidential Debates (CPD) should focus on one-on-one Q&A-style policy conversations with each candidate, they argue. Like a town hall, but not a dueling one.
During a pandemic it is easy to question the point of in-person debates. Pence, who has so far tested negative for COVID-19 but who attended a superspreader event at the White House late last month, was separated from Harris by just a thin plexiglass divider and 12 feet of space. At the end of the debate he stood maskless on stage with his wife, who also attended the event, potentially putting Harris and the 100 debate attendees at risk.
Trump pulled out of the second presidential debate because he didn’t want to do it virtually even though he was deemed a public health risk.
“It’s shameful that Donald Trump ducked the only debate in which the voters get to ask the questions—but it’s no surprise,” said Andrew Bates, a Biden campaign aide, of the decision to skip the town hall–style debate.
But perhaps things are just paused. The commission has not yet canceled the third debate, slated for Oct. 22 in Nashville, and both candidates have agreed to participate.
Following the first presidential debate, the nonprofit corporation, which receives private funding from companies, said it would work to make changes. “Last night’s debate made clear that additional structure should be added to the format of the remaining debates to ensure a more orderly discussion of the issues. The CPD will be carefully considering the changes that it will adopt and will announce those measures shortly,” it said in a statement. The commission has yet to elaborate on what those changes will entail.