fortune--2020-06-09--To bail out or not: Governments decide whether to aid Asia’s embattled airlines

Morgan Stanley says these four factors could clip the wings on the S & P 500 rally

Few sectors have been hit harder by the economic fallout of the pandemic than the airline industry. Asia is expected to see the steepest dropoff in passenger revenue, with airlines in the region forecast to lose an estimated $113 billion this year. Air traffic there plunged 98% in April compared to the year before.
“Governments need to ensure that airlines have sufficient cash flow to tide them over this period,” Conrad Clifford, regional vice president for Asia-Pacific for the International Air Transport Association (IATA), said in an April 3 statement.
Clifford called for “direct financial support” from governments to airlines, loan facilitation, and tax and levy waivers. “[Countries] need to act now—and urgently—before it is too late.”
Several governments have heeded that advice, rushing to help cash-strapped carriers; other have so far failed to act, leaving some airlines to flounder.
Cathay Pacific
On Tuesday, the Hong Kong government announced it will spend almost $4 billion to bail out the city’s flagship airline, Cathay Pacific. The airline had a net loss of $581 million in the first four months of 2020. Travel restrictions and border closures have battered Cathay particularly badly since, unlike other regions, it has no domestic flight routes to restart ahead of international borders opening.
The coronavirus was a second crisis for the embattled Cathay. It saw its revenue drop 3.7% year over year in 2019 after months of protests in Hong Kong, which prompted Cathay employee strikes, canceled flights, and several countries issuing travel warnings for Hong Kong.
Singapore Airlines
To get itself through the downturn, Singapore Airlines announced on Monday that it has raised more than $7 billion from credit lines and a rights issue, with backing from Singapore government state fund Temasek Holdings, which owns 55% of the airline. Temasek also announced a $13.3 billion funding package for Singapore Airlines in late March.
Thai Airways
Last month, the Thai government said it would submit a rehabilitation plan—similar to filing Chapter 11 bankruptcy in the U.S.—for Thai Airways, Thailand’s national carrier, eschewing a previous plan to lend the airline $1.81 billion.
Thai Airways could take as long as seven years to complete rehabilitation, its legal adviser said on Monday. The carrier had already been struggling financially before the coronavirus hit and grounded its entire fleet on April 4, save a few repatriation flights.
AirAsia
Malaysia-based AirAsia Group, Southeast Asia’s biggest low-cost airline, is slashing its 20,000-person workforce by up to 30% and cutting staff salaries by as much as 75% in an effort to save money in lieu of government financial aid. IATA named Malaysia as one of the countries that “[has] yet to take decisive and effective action” to support its aviation industry.
AirAsia founder Tony Fernandes, who said in April he was talking to the government about a possible loan, may also sell a 10% stake in the discount carrier to raise cash, the Nikkei Asian Review reported on Friday.
AirAsia shares rose the highest in three months on Tuesday after the Malaysian government said it would allow domestic tourism to resume from Wednesday.
Australian airlines
Australia’s biggest airlines have shifted tactics now that government assistance is drying up. After the Australian government stopped subsidizing international flights for Qantas and Virgin Australia, the two airlines halted flights abroad.
Qantas will resume 15% of domestic flights by the end of June, which the government said it would continue to subsidize until September. Virgin Australia, meanwhile, has been up for sale since April, when it went into voluntary administration after the pandemic forced it to ground its fleet and led it to financial collapse.
Chinese airlines
Early signs of recovery for air travel in China—the first country to endure a coronavirus outbreak and the first to restart its economy—may offer hope to the rest of the region’s beleaguered airlines.
China’s three biggest airlines—Air China, China Eastern, and China Southern—suffered losses of more than $697 million each in the first quarter of 2020, but domestic travel started to pick up from March onward, as China emerged from its coronavirus lockdowns earlier than the rest of the world.
The future of air travel
The next step for the aviation sector after domestic travel rebounds may be international flights by way of “travel bubbles,” or designated zones encompassing several countries that have largely contained their COVID-19 outbreaks.
Australia and New Zealand hope to launch a “Trans-Tasman” travel bubble by September, and some Pacific island nations desperate for tourism income are also clamoring to join it. Japan plans to talk with Australia, New Zealand, Thailand, and Vietnam about potential bubbles for business travel.
Such bubbles would open up more opportunities for regional air travel and provide much-needed economic respite for struggling airlines.


fortune--2020-06-09--Insurance redlining is real—and it will hurt neighborhoods hit by looting

Though the millions of protesters taking to the streets in recent weeks to protest George Floyd’s death have been largely peaceful, the pockets of unrest that broke out have led to fires, broken windows, and theft. For business owners, the good news is that the insurance industry is poised to pay for most of the losses—a different outcome than what resulted from coronavirus shutdowns, which saw many merchants denied coverage because of exclusions in their policies.
But whether stores and restaurants can recoup losses caused by looting and vandalism depends, of course, on their having adequate insurance coverage in the first place. And not all of them do.
In South Minneapolis, Bridget Schoffman started a GoFundMe page to help four immigrant-run small businesses that had been badly damaged by arson and looting. The businesses—a nursery service, an ice cream parlor, a grocer, and a wireless shop—are tenants in a building owned by her parents and had bare-bones insurance or none at all.
“The windows were broken, the doors were broken, their merchandise was stolen and looted. This is devastating for all of them and their families,” said Schoffman, calling special attention to Luis Tamay, the grocer who had opened his shop only weeks before and lost most of his inventory after vandals damaged his fridges and freezers.
The destruction of such businesses is obviously devastating for the owners but also for the communities they serve. When the likes of Target and Starbucks are hit by vandalism, they typically reopen days later—in part thanks to insurance—whereas inner-city businesses in low-income areas damaged during the same unrest may never open their doors again. The result is blight and a lack of services for communities that are often struggling already.
So why do businesses like Tamay’s lack insurance in the first place? While failing to purchase insurance does reflect a risk calculation by business owners, there are also larger economic and historical forces that have made it hard for those in underprivileged communities to obtain coverage in the first place.
Those forces were apparent in the aftermath of the riots that destroyed parts of Los Angeles following the police beating of motorist Rodney King in 1992. A contemporary news report recounted how, in impoverished neighborhoods, some businesses had obtained policies from fly-by-night operations based in the Caribbean that did not pay claims. And according to Robert Hunter, a former commissioner of insurance for the State of Texas, 45% had no coverage at all.
One result was L.A. store owners taking up arms to defend their shops—an increase in violent confrontation during the unrest. There have been similar reports of merchants trying to physically defend their businesses during the unrest of the past week. These include Ricardo Hernandez, the owner of the ice cream parlor in South Minneapolis. According to Schoffman, Hernandez spent the entire night of May 29 pleading with vandals not to destroy his shop even as five separate fires erupted on the block.
A long history of inequality
The inability of businesses in low-income urban neighborhoods to obtain adequate insurance is not lost on policymakers. According to Ken Abraham, who teaches insurance law at the University of Virginia and estimated that damage from the recent unrest could be in “the billions but not tens of billions,” the issue received special attention from a commission struck by President Lyndon Johnson to assess the riots that beset Detroit, Los Angeles, and other cities in the 1960s.
In a report titled Communities Without Insurance Are Communities Without Hope, the commission pointed to a lack of fire insurance coverage in poor urban areas. This in turn led to a federal program to subsidize riot coverage for disadvantaged communities. But according to Hunter, who now works for the Consumer Federation of America, the initiative was detested by the insurance lobby, which persuaded President Ronald Reagan to kill it in the 1980s.
Meanwhile, many state governments came to offer so-called FAIR plans, which serve as policies of last resort in areas where insurers would otherwise refuse to operate. But the scope of these initiatives has diminished in recent years in the absence of political will to support them, and Hunter notes many of these policies are neither affordable nor comprehensive.
Today most state governments provide scant data about whether the insurance industry is providing fair coverage to low-income neighborhoods. But a 2017 investigation by ProPublica on auto insurance concluded that people in nonwhite neighborhoods paid as much as 30% more than those with similar driving records in white areas. The report accused the industry of a form of redlining—a historical term that refers to a time when banks would draw lines on maps to exclude nonwhite communities from receiving home loans—when it came to car insurance.
The Insurance Information Institute (III), a trade group, blasted the ProPublica report when it came out, labeling it as “incendiary” and saying race or ethnicity plays no role in actuarial calculations.
“Insurance is a color-blind business. Policies are priced to reflect the risk to the insurer,” Michael Barry, a spokesperson for the III, told Fortune this week.
Barry said it is in the interest of the industry to sell as many policies as it can and noted that big insurers have worked in recent years to expand sales in majority nonwhite communities, in part by hiring salespeople fluent in languages other than English. He also noted that insurance policy is regulated by states rather than the federal government, and that state officials have done an excellent job in protecting consumers and ensuring insurers remain solvent.
Hunter, however, scoffs at the idea that the insurance industry doesn’t discriminate.
“Insurance companies may say they’re color-blind, but they’re not zip code blind. They don’t like selling to poor people—they prefer people they can multi-line,” he says, referring to customers who might buy multiple types of policies.
And while insurance companies do not use race or ethnicity to determine rates, Hunter says the industry uses a variety of surrogate metrics that can result in higher prices or lack of coverage for communities of color. Those metrics include zip codes but also ones like education, occupation, and home ownership—all of which typically favor customers who are affluent and white.
“Selling policies to a small deli owner from Bangladesh is not their first order of business,” says Hunter. “There’s a sort of nouveau redlining going on.”
And while a handful of states—notably California and Massachusetts—have regulations that restrict insurance companies from using metrics that are proxies for race, most do not.
On a broader level, insurance is primarily regulated by states, but that doesn’t mean the federal government doesn’t influence policy—and in some cases, Congress has taken actions that benefit wealthy Americans over poorer ones.
Subsidies for affluent homeowners
Indeed, the federal government subsidizes certain forms of insurance—most notably for wealthy homeowners in areas prone to flooding. This means the affluent and mostly white denizens of Cape Cod in Massachusetts and Florida’s Gold Coast can obtain policies on the cheap and count on the federal disaster agency FEMA to pick up most of the tab when disaster strikes. A similar phenomenon exists in states like Texas, which have programs like the Windstorm Insurance Association to make policy coverage affordable for many coastal counties.
No such taxpayer-backed schemes exist to help businesses in poor urban communities. This is the case even though they already face significant social challenges, and a lack of insurance makes community recovery difficult or impossible after a disaster.
So in the aftermath of the George Floyd protests, chains like Target and Starbucks, which had their windows smashed and merchandise stolen, as well as posh shops on L.A.’s Rodeo Drive and Center City in Philadelphia, simply instructed their legal counsel to redeem their property damage policies.
But in South Minneapolis, Bridget Schoffman and her tenants had only a GoFundMe to help them pick up the pieces. As of Monday, they had raised $6,296 of their $10,000 goal.


fortune--2020-06-09--Protests and property: Can architects rebuild our broken cities?

To bail out or not : Governments decide whether to aid Asia ’ s embattled airlines

This is the web version of Business x Design, a newsletter on the power of design. Sign up here to get it in your inbox.
The top editor at the Philadelphia Inquirer resigned Saturday after the headline on a column by the newspaper’s architecture critic led to a walkout by dozens of members of the editorial staff.
The column, which lamented the destruction of buildings in downtown Philadelphia during protests over the killing of George Floyd, opened a fraught debate about wealth, power, and race in the city. The headline that triggered the backlash: “Buildings Matter, Too.”
The Inquirer, in a subsequent apology, acknowledged that the headline had “offensively riffed on the Black Lives Matter movement and suggested an equivalence between the loss of buildings and the lives of black Americans.”
On the Inquirer website, the headline has been amended, and now reads: “Damaging buildings disproportionately hurts the people protesters are trying to uplift.” Notably, though, the column beneath it, by Pulitzer Prize winner Inga Saffron, remains as written.
Opinion editors at the Wall Street Journal were quick to decry the purge at the Inquirer as another example of “cancel culture journalism.” They lumped the exit of long-serving Inquirer editor Stan Wischnowski with the ouster of New York Times opinion editor James Bennett following a staff revolt over the publication of an essay by Republican Senator Tom Cotton calling for military troops to restore order in strife-torn American cities.
“All of this shows the extent to which American journalism is now dominated by the same moral denunciation, ‘safe space’ demands, and identity-politics dogmas that began in universities,” the Journal fumed. “The agents of this politics now dominate nearly all of America’s leading cultural institutions.”
Such fulminations obscure an important difference between the two controversies. Unlike Cotton’s screed, Saffron’s column was nuanced and thoughtful. No one has faulted its accuracy.
Saffron states right up front in her essay that she thinks protesters’ “anger was fully justified” and that “the grotesque killings of George Floyd, Ahmaud Arbery, and Breonna Taylor—and many others before them—are attacks on the fundamental promise of our democracy.”
She acknowledges the argument that “people’s lives are more important than property” and the claim that “those protests would never have gained America’s undivided attention if they had stuck to the usual polite rounds of hey-hey chants.”
She notes that, on her architecture-centric social media feeds, defenders of the destruction include architects, preservationists, and her own daughter. She recognizes, moreover, that protests aren’t just a reaction to racism in the police force, but a far more complex phenomenon created by deindustrialization, rising inequality, and the larger defects of global capitalism.
But she comes back to those buildings. “‘People over property’ is great as a rhetorical slogan,” she writes. “But as a practical matter, the destruction of downtown buildings in Philadelphia—and in Minneapolis, Los Angeles, and a dozen other American cities—is devastating for the future of cities. We know from the civil rights uprisings of the 1960s that the damage will ultimately end up hurting the very people the protests are meant to uplift.”
Is this a legitimate point-of-view about which there is room for debate? Or is it an “unempathetic” defense of mostly white wealth and privilege that deflects genuine examination of how racism corrodes the fundamental institutions of American cities?
An open letter to leaders of the Inquirer from journalists of color who participated in the walkout doesn’t mention Saffron’s column. Clearly, though, its authors are fed up with elite preoccupation over structures. “We’re tired of working for months and years to gain the trust of our communities—communities that have long had good reason to not trust our profession—only to see that trust eroded in an instant by careless, unempathetic decisions. It’s no coincidence that communities hurt by systemic racism only see journalists in their neighborhoods when people are shot or buildings burn down.”
It’s a particularly tricky discussion for architecture which, as Karen Lu and Mary-Margaret Zindren of the Minnesota chapter of the American Institute of Architects point out in a recent essay, is a “predominantly white profession.” Zindren and Lu offer sound advice for architects—as well as urban planners, designers, and journalists—who care about race and the future of broken cities:
“Instead of…assuming we know what is right and jumping in to assert our experience, expertise and good intentions, we need to step back, listen, and be ready to learn, unlearn, and adapt. Rebuilding what’s been lost is impossible—and it’s the wrong goal. The buildings, systems, and relationships that existed before came about through design and construction. Before rebuilding, the architecture community must join with others in rethinking, reimagining, and redesigning what’s next.”
More design news below.
Clay Chandler
clay.chandler@fortune.com
Many companies are speaking out against racial injustices right now. But how do they fare in their own workplaces? Black employees in the corporate world, Fortune wants to hear from you: Please submit your anonymous thoughts and anecdotes here.
NEWS BY DESIGN
ABOUT FACE
IBM announced it will stop selling facial recognition software and halt future R&D on the technology. CEO Arvind Krishna called out bias in A.I. algorithms and questioned the morality of allowing law enforcement to use facial recognition tech.
CAUGHT ON CAMERA
Why does the fear and even reality of being filmed fail to deter police brutality? Ethan Zuckerman, a professor of public policy, says the panopticon has failed—but filming violent officers still serves a purpose.
SAFE SPACE
Wash basins by the front door; vestibules to remove shoes; a UV light tower that disinfects phones: a look at how the coronavirus might change the interiors of our homes.
SPEAK UP
As Black Lives Matter protests continue across the U.S. (and the world), public art institutions and museums are struggling to strike the right tone. Some are chastised for staying silent, others for not being loud enough. The debate over how galleries should reflect or direct public opinion continues.
THE WRONG HANDS
A report from IBM outlines how technology designed to help can be corrupted by perpetrators of domestic abuse and recommends how designers can work to make sure it isn't. The report, published late last month, is especially timely as lockdowns intended to protect people from the pandemic have trapped victims with their abusers.
EVENTS BY DESIGN
June: The month-long London Festival of Architecture is running a stripped back event online this year, with the core public program moved to (hopefully) later this year. The San Francisco Design Week, which starts June 15, has gone digital too. Also, London Fashion Week: Men’s would have walked June 12-14. Instead, it will sit online.
July: Christie’s is planning a semi-virtual auction for July 10. The “first of its kind” event will livestream auctions from four cities—Hong Kong, New York, Paris and London; D&AD’s New Blood Festival—a celebration of upcoming talent in design—will be running online this year, July 6-10. The digital festival marks New Blood’s 40th anniversary.
September: Art Basel in Switzerland—initially rescheduled from June to September—has been cancelled, set to return in June 2021.
Ongoing: Dezeen’s Virtual Design Festival has been extended to July 10
EXECUTIVE SUMMARY
Limina recently released its 2020 report on how companies can integrate design thinking across all levels of business operations. There are six “best practices” highlighted in the report:
Embed a human-centered design culture company-wide
Communicate for the common good of the business
Integrate design resources with specific business functions
Capture and manage specific business metrics
Create and use artifacts and repeatable processes
Invest in artifacts, the processes, then systems
The idea of “artifacts” is worth expanding on. According to Limina, the term refers to models, diagrams, documents and the “tacit knowledge” carried by employees. It’s in a sense the legacy of previous work that can be reused to streamline future projects. Yet, referring specifically to user experience (UX) design, Limina says it found 49% of companies don’t reuse “artifacts” and instead start UX projects from scratch each time.
“Starting every new project from scratch can lead to unnecessary costs and labor, poor quality, and a slow time to market,” Limina says. The consultancy advocates companies devise a means to archive artifacts—especially the “tacit knowledge” of its employees.
Facilitating knowledge sharing among employees will help businesses get back to normal as staff return to work following a prolonged spell out of office.
QUOTED BY DESIGN
“For nearly every injustice in the world, there is an architecture that has been planned and designed to perpetuate it.”
Says Bryan Lee Jr., setting out what he calls a “key principle” of the Design Justice movement, in a sentence amid a powerful call to architects and designers to consider how they can put their profession to good use. As Lee explains, Design Justice seeks to “dismantle the privilege and power structures that use architecture as a tool of oppression and sees it as an opportunity to envision radically just spaces centered on the liberation of disinherited communities.” Very well worth a read.
This week’s edition of BxD was curated by Eamon Barrett. Email him at eamon.barrett@fortune.com


fortune--2020-06-09--How Cisco is responding to the death of George Floyd

This is the web version of CEO Daily. To get it delivered to your inbox, sign up here.
Good morning.
I took notice this weekend when the New York Times quoted a law professor saying most CEO statements about the George Floyd killing “were put together by the marketing team that was trying not to offend white customers and white employees.” Maybe some were. But it’s pretty clear to me, having spent a lifetime poring over dull corporate press releases, that some definitely were not.
Chuck Robbins, CEO of Cisco, falls into the second camp. He called it “horrific,” “maddening” and “truly abhorrent”–words not normally found in the PR playbook. For Robbins, it seems, this was quite personal.
So Fortune’s Ellen McGirt and I decided to invite him to join us on Leadership Next, our podcast about the changing rules of business leadership, out this morning here.
Robbins says Cisco will work on making its highest ranks more diverse, and emphasizes internal communications with its employees.
“Times have changed,” Robbins says. “Running a company, the most important asset you have are your people. In order to create an environment where you want the best talent to be, there is an expectation that you will talk about these issues.” The interview is well worth 20 minutes of your time.
By the way, Robbins said he read the book White Fragility nine months ago, and it helped prepare him for communicating in this difficult moment. My daughter recommended the same book to me over the weekend. It’s next up on my reading list.
More news below. And tomorrow, we’ve got a stellar selection of Asian CEOs meeting virtually with members of the Fortune CEO Initiative, to talk about lessons they’ve learned from reopening. The group includes Alibaba’s Daniel Zhang, Grab’s Anthony Tan, Rakuten’s Hiroshi Mikitani and Yum China’s Joey Wat. I’ll report back here.
Alan Murray
@alansmurray
alan.murray@fortune.com
Many companies are speaking out against racial injustices right now. But how do they fare in their own workplaces? Black employees in the corporate world, we want to hear from you: Please submit your anonymous thoughts and anecdotes here.
TOP NEWS
It's here
The U.S. is officially in a recession now, having peaked in February. The longest economic expansion in American history began in June 2009 and lasted 128 months—the previous record, of 120 months, took place between March 1991 and March 2001. The National Bureau of Economic Research: "The unprecedented magnitude of the decline in employment and production, and its broad reach across the entire economy, warrants the designation of this episode [of the last few months] as a recession, even if it turns out to be briefer than earlier contractions." Fortune
Hong Kong
Hong Kong's hedge funds have their eye on the exit, fearing they will lose out when Beijing imposes its national security law. One hedge fund adviser told the Financial Times: "Hong Kong as we know it is dead. It will become just another city in China. The hedge fund community will move on to Singapore and elsewhere." Financial Times
Cathay Pacific
The Hong Kong government is giving Cathay Pacific a $3.87 billion bailout. The flag carrier has been hit by the double whammy of unrest in Hong Kong and the coronavirus pandemic around the world. The bailout comprises a loan and the acquisition of a large stake in the company. Cathay chairman Patrick Healy: "We are grateful to the HKSAR Government’s capital support, which allows Cathay Pacific to maintain our operations and continue to contribute to Hong Kong’s international aviation hub status." Fortune
Facial recognition
IBM has taken the drastic step of scrapping its general-purpose facial recognition and analysis software products, in response to police brutality. CEO Arvind Krishna: "IBM firmly opposes and will not condone uses of any technology, including facial recognition technology offered by other vendors, for mass surveillance, racial profiling, violations of basic human rights and freedoms, or any purpose which is not consistent with our values and Principles of Trust and Transparency." Fortune
AROUND THE WATER COOLER
Patient data
Peter Thiel's Palantir has acquired the personal data of millions of British citizens from the country's National Health Service (NHS). The data-sharing agreement was intended to help Palantir and others set up a national platform for understanding the spread of the coronavirus. Palantir is charging a mere $1.27 for this, and Google is offering its technical and advisory support for free. CNBC
Coal free
At midnight tomorrow, Britain will have gone a whole two months without burning coal for power. The National Grid's coal-fired plants were the first to be shut down when the coronavirus pandemic struck, and the last came off the system on April 9. The previous record was 18 days, 6 hours and 10 minutes. Just a decade ago, two-fifths of the country's power came from coal. BBC
Defunding police
When people call for the defunding of the police, what do they mean? As Fortune's Nicole Goodkind explains: "The idea is that American communities have come to rely on their more than 18,000 police agencies to do much more than police. They’re fighting terrorism abroad, performing homeless services, working with children in schools, responding to calls for mental health crises, performing social work and welfare checks, mediating domestic disputes, and responding to drug overdoses. Often, they’re not trained to perform these tasks. Those who call for police defunding say they would rather have some duties handled by nonviolent specialists trained in social work, education, or drug counseling." Fortune
Dismantling racism
Black employees should not be given the sole responsibility of leading diversity and antiracism efforts at companies that want to dismantle systemic racism, writes Logitech marketing reinvention chief Najoh Tita-Reid in a piece for Fortune: "Nonblack leaders, please just be aware that while you may want to lift up black voices right now, you must be mindful of the physical and emotional bandwidth of black employees and leaders—and first take responsibility to be the change before asking black workers to lead the change." Fortune
This edition of CEO Daily was edited by David Meyer.


fortune--2020-06-09--IBM pulls out of facial recognition, fearing racial profiling and mass surveillance

IBM has pulled out of the facial recognition game—the boldest move yet by a Big Tech firm to repudiate the discriminatory use of the technology.
The company announced late Monday that it was no longer offering general purpose facial recognition or analysis software, in a letter to senators and members of Congress.
“IBM firmly opposes and will not condone uses of any technology, including facial recognition technology offered by other vendors, for mass surveillance, racial profiling, violations of basic human rights and freedoms, or any purpose which is not consistent with our values and principles of trust and transparency,” wrote CEO Arvind Krishna.
IBM has not been the only company in the space to see a need for caution when deploying facial recognition technology, particularly in contexts in which its use might lead to the infringement of people’s rights.
In March, following controversy over a deployment on Israel’s border with the West Bank, Microsoft said it would no longer take minority stakes in companies selling facial recognition systems. Its venture arm said Microsoft would instead focus on “commercial relationships that afford Microsoft greater oversight and control over the use of sensitive technologies.” Microsoft chief legal officer Brad Smith has repeatedly called for greater regulation of the technology, and the company has, on at least one occasion, refused to sell its facial recognition system to a U.S. law enforcement agency.
Krishna’s letter addressed lawmakers including those Democrats who on Monday introduced a bill that would reform police rules, in order to combat misconduct and racial discrimination. The legislation was unveiled two weeks after the death of George Floyd, a black man killed by a white police officer in Minneapolis.
“We believe now is the time to begin a national dialogue on whether and how facial recognition technology should be employed by domestic law enforcement agencies,” Krishna wrote. “Artificial intelligence is a powerful tool that can help law enforcement keep citizens safe. But vendors and users of A.I. systems have a shared responsibility to ensure that A.I. is tested for bias, particularly when used in law enforcement, and that such bias testing is audited and reported.”
Krishna also backed elements of the new bill such as the creation of a federal registry of police misconduct and measures that increase police accountability—including, in his words, “modern data analytics techniques.”
Bias is a hot topic in the A.I. community, particularly regarding facial recognition. Researchers often find that such systems are more likely to misidentify people with darker skin, and activists say this fosters discrimination. This issue, along with privacy fears, led the University of California at Los Angeles to drop its campus-wide facial recognition plans a few months ago.
And as the activist and research organization Algorithmic Justice League noted last week, facial recognition’s use by police is a particularly live issue at this juncture—thanks to deployments at protests over police brutality.
“The use of facial recognition technology for surveillance…gives the police a powerful tool that amplifies the targeting of Black lives,” wrote the group’s Joy Buolamwini, Aaina Agarwal, Nicole Hughes, and Sasha Costanza-Chock. “Not only are Black lives more subject to unwarranted, rights-violating surveillance, they are also more subject to false identification, giving the government new tools to target and misidentify individuals in connection with protest-related incidents.”
IBM tried to combat the misidentification problem last year by releasing a data set containing a million diverse faces, in order to better train facial recognition systems. Its own systems have certainly come in for criticism over the years. Buolamwini, an MIT researcher, found in 2018 that IBM Watson’s facial recognition system had an error rate of 0.3% for identifying lighter male faces, while for darker-skinned females the error rate was as high as 34.7%.


fortune--2020-06-09--An inclusion expert and a CEO on how businesses can keep the anti-racist momentum going

Following the death of George Floyd on May 25 at the hands of Minneapolis policeman Derek Chauvin, protests have erupted across the globe calling for increased resources for things like social services and decreased policing in black communities. The business world has taken note, as evidenced by an outpouring of messages from companies and their executives saying they stand with black people in their struggle under the racist system in which they live in America.
In the latest episode of Leadership Next, Fortune’s podcast on the evolving role of CEOs, senior editor Ellen McGirt and Fortune CEO Alan Murray discuss with their guests the news of the past two weeks and their expectations moving forward into what seems to be a changed world. McGirt, who has many years on the race beat under her belt, notes that this movement feels different than the protests against police brutality in the past—at least in the world of business.
“It’s all starting to weave together,” she said, adding that the black people leading the charge in the widespread protests are the most likely to be negatively affected by COVID-19.
As the intersectionality of the movement to dismantle storied, racist systems in America becomes clearer, companies have been posting about their commitment to diversity and inclusion.
“It is, at this point, just words,” Murray says. “How are those words going to be followed up with actions?”
Erin Thomas, Ph.D., a researcher, social scientist, and the head of diversity, inclusion, and belonging at freelancing platform Upwork, said she’s not sure if we can trust the current moment. Many of the companies seem to be performing allyship with the black community, rather than committing to be better with any measurable goals, she said.
“That says nothing about what the company is investing in or committing to going forward,” she said.
Another category of problematic statements she is seeing fall into “a new wave of colorblindness.” In that case, she said, it seems that companies are trying to stand with too many communities, rather than centering their outreach and solidarity on the black people that need it most right now.
The episode’s second guest, Cisco CEO Chuck Robbins, said the company’s new mission, decided upon last year, made it clear that he and Cisco needed to be vocal in condemning the killing of Floyd and the racism that led to it. That mission is “to power an inclusive future for all.” That means the company focuses on technological access around the world, but also that it speaks up against injustices like Floyd’s.
One of the ways Robbins says Cisco plans to improve its business is by diversifying its highest ranks, which are now majority-white. Cisco has also placed emphasis on internal communications with its employees, which Thomas believes is key.
That, and a sustained approach to dismantling racism within their own organizations is imperative for companies, Thomas said.
“We need to get to long-term sustainability planning with regards to black inclusion and belonging, and that’s where that accountability and action needs to be doubled down upon,” she said. “Companies should only commit to what they can do, but once they make that commitment, they need to follow through.”
Toward the end of the podcast, around the 28:40 mark, Thomas shares some suggestions for companies’ next steps.


fortune--2020-06-09--The stock market’s breathtaking rally has some investors worried about another correction

The stock market continued one of the more extraordinary rallies in recent memory on Monday, with the major indexes gaining more steam less than two months after one of the most precipitous selloffs in history.
Despite historic unemployment and evidence that the U.S. economy has been in a recession since February, Wall Street remained almost giddy as sectors of the U.S. economy slowly started to reopen. Whatever shape the post-coronavirus recovery looks like, markets that have rebounded more than 40% from their March lows—effectively wiping out their losses—would lead one to believe that the worst is behind us and the recovery is well underway.
But for some investors, it may be too good to be true. Rupert Thompson, chief investment office at London-based wealth management firm Kingswood Group, warns that the markets are “now well ahead of the economic reality” and warns that “a correction remains on the cards over the coming months.”
Thompson points to last week’s surprisingly optimistic jobs report and additional fiscal stimulus efforts in Europe as having fueled some of the market’s recent bullishness, with investors eager to get in on the rally while they can.
“Fear of missing out—and quite a few investors have missed out, as the sharpness of this rally has caught most people by surprise—could yet carry equities higher near-term,” Thompson says.
Still, he notes that unemployment “remains higher than it ever reached in the global financial crisis,” and that it remains to be seen “how easily the newly unemployed will find jobs again even if lockdowns continue to be relaxed.” With generous unemployment benefits slated to expire in the coming months, Thompson cautions that “the real test for the economy will come as government support programs are wound down.”
Meanwhile, underlying metrics continue to indicate an equities market in which valuations are detached from underlying fundamentals. According to Kingswood, the global forward price/earnings ratio now stands at 17.5x, a 16-year high.
“Even if one looks through the sharp hit to earnings this year and focuses on next year’s likely rebound, price/earnings ratios now look high,” Thompson says.
That raises a conundrum for those debating whether to hitch a ride on the current rally or exercise caution. As Marc Chaikin, founder of quantitative investment research firm Chaikin Analytics, puts it: “Investors are now faced with the unenviable decision of whether to jump on a moving train or risk missing out on further advances in stock prices.” While the S&P 500 closed at more than 3,232 points on Monday, Chaikin believes the S&P’s rally should meet resistance at between 3,280 and 3,300 points.
Equity strategists at Bank of America are among those skeptical of the market’s ability to sustain its rally, as well as its reflection of the economy at large. They forecast a year-end level of 2,900 for the S&P 500 (up from a previous target of 2,600) and say the run-up has been mostly driven by growth stocks in the tech sector, which have helped take the Nasdaq composite to an all-time high.
“If the rally were from economic recovery inklings, the distressed, GDP-sensitive cohort of the [Nasdaq] would have led—a subset that has not rebounded until recent weeks,” BofA Global Research said in a note Monday. “Instead, liquidity looking for a home settled mostly into secular growth/stay-at-home beneficiaries.”


fortune--2020-06-09--Hong Kong government throws flag carrier Cathay Pacific a lifeline

Hong Kong’s flag carrier airline, Cathay Pacific, is receiving a HK$30 billion ($3.87 billion) bailout from the Hong Kong government as the combined challenges of political unrest at home and a global coronavirus pandemic hammer the airline’s bottom line.
“We are grateful to the HKSAR government’s capital support, which allows Cathay Pacific to maintain our operations and continue to contribute to Hong Kong’s international aviation hub status,” Cathay chairman Patrick Healy said Tuesday.
Cathay is majority-owned by U.K. conglomerate Swire Group, which holds a 45% stake in the company. The second-largest shareholder is state-owned Air China, with a 30% stake. Cathay, Swire, and Air China halted trading of their shares ahead of the announcement.
The government is offering Cathay a HK$7.8 billion loan and is also taking a HK$19.5 billion stake in the company. The acquisition reportedly marks the first time Hong Kong’s government has made a direct investment in a private company and comes at a time when businesses in the city are facing greater pressure to support local government leaders and, by extension, national government officials to whom they answer in Beijing.
Turnaround
Cathay and its subsidiary Cathay Dragon posted a net loss of HK$4.5 billion ($581 million) in the first four months of this year. Healy claims the company has hemorrhaged roughly HK$3 billion per month since February.
Plummeting demand and pandemic-related travel restrictions reduced Cathay to flying cargo and skeleton passenger flights along just 12 routes. In February, the group asked its 33,000 staff to each take three weeks’ unpaid leave.
“The infusion of new capital that we have announced today does not mean we can relax. Indeed quite the opposite. It means that we must redouble our efforts to transform our business in order to become more competitive,” Healy said Tuesday. To that end, Cathay said it will implement a new round of executive pay cuts and a second round of voluntary unpaid leave for staff.
Cathay had returned to profit in 2018, following two years of losses. The company’s upward trajectory was masterminded by former CEO Rupert Hogg, who took on the role in 2017 and set out a three-year plan to turn Cathay’s losses around. Two years in, however, Hong Kong became embroiled in a mass political movement as protesters in Hong Kong staged regular demonstrations against a proposed extradition agreement with mainland China.
Political turmoil
The airline was thrust into the center of the political turmoil last August when protesters shut down Hong Kong’s airport by staging a mass sit-in. Some Cathay Pacific employees joined the protests while others participated in strike action, which forced Cathay to cancel 130 flights in a week. As the protests escalated, a number of countries issued travel warnings to Hong Kong. Cathay’s revenue for the year dropped 3.7% over 2018.
Facing pressure from officials in Beijing and Hong Kong to denounce the protests, chairman John Slosar told reporters the company “wouldn’t dream” of telling staff “what they have to think.”
The next day, however, the Civil Aviation Administration of China (CAAC) said it would ban any Cathay staff who partook in protests from entering China. The CAAC demanded staff rosters of all Cathay flights for preapproval, too, and threatened to block unapproved flights from China’s airspace. In a remarkable U-turn, Hogg then told staff the airline had a “zero tolerance” policy toward staff engaging in “illegal protests.”
A week later, Hogg resigned, followed by Slosar shortly thereafter. After the two executives departed, some staff members complained of living under a “white terror”—a phrase used to refer to a period of extreme political persecution—as employees faced new disciplinary measures for supporting the protest movement.
Resizing
A statement released by Cathay on Tuesday, announcing the government bailout, hinted that the company will undergo significant downsizing in future. According to Cathay, the company’s management team will recommend to the board the “optimum size and shape of the Cathay Pacific Group” in the fourth quarter.
“We are in a very dynamic situation. We need to make the right decisions to adapt to the new reality of global aviation and secure our long-term future,” Healy said. “This will require reevaluating all aspects of our business model in light of the rapidly changing macro and industry dynamics.”


fortune--2020-06-10--Insurance telemarketers fined $225 million for a billion robocalls

Nasdaq Composite trades over 10,000 for the first time ever , but the rally may be going ‘ too far @

The U.S. communications regulator on Tuesday proposed a $225 million fine, its largest ever, against two health insurance telemarketers for spamming people with 1 billion robocalls using fake phone numbers.
The Federal Communications Commission said John Spiller and Jakob Mears made the calls through two businesses. State attorneys general of Arkansas, Indiana, Michigan, Missouri, North Carolina, Ohio and Texas also sued the two men and their companies, Rising Eagle and JSquared Telecom, in federal court in Texas, where both men live, for violating the federal law governing telemarketing, the Telephone Consumer Protection Act.
The FCC said the robocalls offered plans from major insurers like Aetna and UnitedHealth with an automated message. If consumers pressed a button for more information, however, they were transferred to a call center that sold plans not connected to those companies. The FCC said the Missouri attorney general sued Rising Eagle’s largest client, Health Advisors of America, for telemarketing violations last year.
Over more than four months in early 2019, the FCC said, these telemarketers faked the number their calls displayed in caller ID with intent to deceive consumers; purposefully called people who are on the Do Not Call list; and called people’s mobile phones without getting permission first.
Consumers weren’t the only ones bothered. The telemarketers faked their calls to make them appear they came from other companies, which then received angry calls and were named in lawsuits from consumers. The FCC didn’t name these companies, but said one got so many calls that its phone network “became unusable.”
The fine is not a final decision. Spiller and Mears will have a chance to respond.
As robocalls became a pressing issue for consumers, both as an annoyance and as a vehicle for fraud, the FCC has pushed carriers to do more to stop them. A new law beefs up enforcement and mandates that the phone industry not charge for call-blocking tools and put in place a system designed to weed out “spoofed” calls made using fake numbers.
Reached by phone at the number listed for JSquared, Spiller declined to comment. He declined to provide contact information for Mears and said neither would speak before talking to an attorney.


fortune--2020-06-09--Dear white people: Our nation turns its racist eyes on you

It feels like a reckoning.
Major companies have been making statements of support for police reform and racial justice and matching those words with monetary support for organizations like Black Lives Matter, the NAACP Legal Defense Fund, and Color of Change. And for every monumental moment, like this Twitter act of solidarity between Adidas and Nike, or this outstanding statement from Ben & Jerry’s, there are plenty of public statements that are being held to a higher standard by employees, customers, and the public.
The reckoning has taken some seats of power.
One of them belonged to Andrew Alexander, the CEO of the famed improv theater, Second City. In a statement, he said he “failed to create an anti-racist environment wherein artists of color might thrive. I am so deeply and inexpressibly sorry.” Wait until you see what went down at Crossfit. Reformation. Refinery29. Bon Appétit! A longtime actor from the CW series The Flash got fired for racist and misogynist tweets. And, in a slightly different turn, the head of the New York Times editorial page has resigned for publishing an editorial by Republican Sen. Tom Cotton calling for federal troops to end the protests in support of police accountability. The uproar was led by employees.
Trouble keeping up? Simply Google “steps down amid.”
These leadership reckonings are the result of long-simmering internal tensions, now illuminated by the bright light between what leaders say publicly and how they behave inside their companies. I expect many more to come.
My takeaway: What happens inside a company now is an important clue to how they will fare going forward.
“Don’t get me wrong: Black Americans are glad that finally after 400 years, there is mass outrage at racial injustice,” says Najoh Tita-Reid, the senior executive of marketing reinvention at Logitech, in this Fortune opinion piece. “But I want to shed light on the fact that while this is indeed a unique moment, the responsibility of dismantling systemic racism must not be placed solely on black employees by asking them to fully lead diversity and antiracism efforts.”
Or, keeping them from their day jobs by asking them to explain it all to you.
White allies need to get up to speed on the reality of this moment, says Michelle Alexander, a civil rights lawyer and advocate and the author of The New Jim Crow: Mass Incarceration in the Age of Colorblindness. “Only by pausing long enough to study the cycles of oppression and resistance does it become clear that simply being a good person or not wishing black people any harm is not sufficient,” she says in a New York Times opinion column.
By now, you’ve been inundated with lists of anti-racist information to read, watch or listen to. (Here’s Fortune’s.) These resources are amazing. And now, they are legion. How to wade in?
I suggest any under-informed potential ally begin with this simple strategy.
Choose one book, film, or podcast recommended by a friend you know well.
Finish it.
Discuss the material with your friend, and get comfortable with the experience of talking about the issue.
Choose a second resource, this time recommended by a person who you may not know well (any list works well here) and which has been created by someone as different from you as you can possibly imagine. That’s your opportunity to encounter a truly new point of view.
Pay it forward by recommending that resource to your peer-group for later discussion.
Do it all again.
By the time you’ve plowed through barely half a semester’s worth of material, you will be more confident, fluent, and prepared to have these important conversations in the wider world. And you’ll be more likely to feel able to understand and support any conversation about race and equity in your workplace.
Trust me on this.
This terrible moment will not be resolved without you—but you must do the work and survive the journey.
We’ll leave a light on for you.
Ellen McGirt
@ellmcgirt
Ellen.McGirt@fortune.com
On point
George Floyd was laid to rest today, next to his mother His casket arrived at the Fountain of Praise church in Houston, Texas, this morning, after a public viewing before a crowd of thousands. New York Times reporter Astead Herndon was in line with mourners. “[M]asks and social distancing enforced. temp taken at the door. struck by the amount of kids in the line,” he tweeted. “[F]ull UH bball team was behind me." The funeral was by-invitation-only, and it was a tribute to his life and the issues his death has raised. Rest in power, sir.
New York Times
A man who drove his car through a crowd of protesters in Virginia turned out to be a high-ranking Klan member Harry Rogers, 36, is currently being held without bond, and has been charged with attempted malicious wounding, felony vandalism, and assault and battery. The Richmond area march was organized by Black Lives Matter; several witnesses reported the attack. According to Henrico County Commonwealth's Attorney, Rogers is an "admitted leader of the Ku Klux Klan and a propagandist for Confederate ideology.” Crazy, right? Even crazier, nobody was seriously hurt.
CNN
We are all BTS Army now. Fans of the South Korean music group BTS, known as Army, have come out in force for racial justice and have matched the group’s donation of $1 million to a variety of equity-focused non-profits. The Army—some graduate student is studying these people, right?—self-organized under the #MatchAMillion and #MatchTheMillion hashtags. The amount is now $1.35 million and rising—click through for the organizations they’re supporting.
Fortune
What does “de-fund” the police really mean? It’s not what it sounds like, or more accurately, it’s not what people seem to fear it to mean—the removal of the last barrier between order and a crime wave without end. In many ways, it is a reinvestment in the kinds of services that police themselves have asked for. “To fix policing, we must first recognize how much we have come to over-rely on law enforcement,” explains Christy E. Lopez, a Georgetown Law School professor and a co-director of the school’s Innovative Policing Program. Everything from accident reports to domestic fights, to rounding up the homeless, to jailing people with addiction disorders instead of offering treatment. And yes, arresting—instead of citing people who may or may not have passed a counterfeit bill. “Defunding the police means shrinking the scope of police responsibilities and shifting most of what government does to keep us safe to entities that are better equipped to meet that need.”
Washington Post
A candid conversation about race with Cisco CEO Chuck Robbins I love all the episodes of Leadership Next, the podcast I share with my own CEO, Alan Murray, equally. I really do. But I hope I will be forgiven for saying that this one meant so much – in part because it spoke to the moment we’re in. We talk about how a national conversation about race, including police policy, became a business issue at Cisco, and how Robbins is building a culture or courage, trust, and respect. And I talk with Erin Thomas, PhD, the Head of Diversity, Inclusion & Belonging at Upwork – who offered some heartfelt advice on any organization that wants to support Black employees and do the difficult work around race and equality in their own organizations. BONUS- Leadership Next has a whole new joint on LinkedIn! Join the conversation and subscribe here.
Leadership Next
Are you 'Working While Black?' Many companies are speaking out against racial injustices right now, right? But how do those statements compare with the lived experiences of Black employees? If you’re a Black employee in the corporate world, we want to hear from you. We’ve created a Google form to capture your thoughts and stories. If we choose to publish your comment, we only publish your first name and age and no other identifying info. The responses are fascinating. Including the ones from white people! Which we've removed.
Fortune
Amplifying Black voices
“I am proud to be black. And also…being black is exhausting,” says writer, community builder and tech policy adviser Corey Ponder.
Dr. Ibram X. Kendi, the powerhouse who has made anti-racist thinking accessible in the modern era, sat down with Brené Brown to discuss policy, empathy and how to examine the racist ideas we’re all steeped in.
The reckoning must begin with unlearning, says Michelle Alexander, who should know.
Black Lives Matter is not a design challenge, by the way. Pencils down.
“Companies, the lifeblood of our economy, must step forward not just in solidarity, but more importantly in leadership,” says tEQuitable CEO Lisa Gelobter. Now is the time to get your cultural house in order—“the beliefs, values, and behaviors that are communicated, even indirectly, to employees and dictate how people will be treated and valued.”
Todays' raceAhead was edited by Karen Yuan.
Today's mood board
Let us know.


fortune--2020-06-09--Bristol Myers Squibb CEO: Why the COVID-19 pandemic has me optimistic about the future of medical re

Bristol Myers Squibb CEO: Why the COVID-19 pandemic has me optimistic about the future of medical research

If there is any good news coming out of the coronavirus pandemic, it’s that those of us who help people live longer, healthier lives are working faster and more collaboratively than ever before. COVID-19 is not the first pandemic in human history. It isn’t even the most lethal. But it is the first to grow from local to global in a matter of months. And with our ever-more populated and connected planet, it is not likely to be the last.
As I’ve watched institutions mobilize behind a singular mission for the greater good, it gives me great hope that we are setting a new standard for collaboration to innovate and make scientific progress. We are witnessing an unprecedented moonshot effort among companies, academia, regulatory bodies, and even individuals to defeat COVID-19.
This overwhelming collaborative effort has two key lessons for the future.
First, collaboration is allowing us to move at speeds previously unimaginable. The Food and Drug Administration has exercised its authority to shave years from normal timelines for research, treatment testing, and the approval of diagnostics tests. Manufacturers have shifted workloads to prepare to make billions of vaccine doses.
The biopharma industry and its research partners have added new drug development programs in a matter of weeks. For instance, under Operation Warp Speed, a public-private partnership aimed at fast-tracking COVID-19 treatments, the government is supporting five companies with the goal of having 100 million vaccine doses available by November—a project of scale and speed never seen in the life sciences industry.
Global biopharma leaders and smaller biotechs alike are scanning their portfolios to find and advance treatments that show even the slightest promise. Companies in our space are eagerly collaborating to support production of the most promising ones. For example, Sanofi is using technology developed by GlaxoSmithKline to accelerate experimental vaccine development. After only a few months, 228 potential COVID-19 treatments are under consideration and 160 vaccines are in development, according to the Milken Institute.
Second, the impressive collaborative response to the pandemic is also pushing the boundaries of improving health with technology. Scientists and the biotech industry are using gene sequence snippets to make new generations of vaccines that can be produced more rapidly and can potentially be more effective and less expensive than traditional ones.
I am hopeful that we can apply the lessons we are learning now to tackle other unmet medical needs more aggressively and effectively going forward.
As a medical doctor, I have a special appreciation for the life-changing impact that innovative medicines and collaborative care can have on patients. Deadly diseases like HIV/AIDS and some cancers have become manageable conditions, and some diseases like hepatitis C have been cured. Imagine moving at the pace we are today on other pressing public health issues like heart disease and cancer, the top two killers in America. At Bristol Myers Squibb, we make medicines that treat these conditions.
We must continue to approach clinical research with the level of collaboration we have witnessed in the past few months. Groundbreaking ideas, a wider array of resources, and numerous skill sets at the table have enabled us to move with new speed and broach new possibilities. For instance, companies like ours are partnering with wearable technology companies to accelerate the detection and diagnosis of atrial fibrillation.
U.S. health care may gain much more than medical insights from this effort. We will learn and remember the value of collaboration in health care more broadly—and in doing so, better meet the needs of our patients and communities. That would be a much-needed silver lining of this devastating pandemic.
Giovanni Caforio is chairman and CEO of Bristol Myers Squibb.


fortune--2020-06-09--Twitter and Square make Juneteenth a company holiday

Twitter and digital payments company Square have made June 19 a company holiday, commemorating the end of slavery in the United States.
Jack Dorsey, the CEO of both companies, tweeted the news on Tuesday, placing Twitter and Square among the few that offer workers a paid day off for what’s known as Juneteenth. It marks the date—June 19, 1865—when Union soldiers read the Emancipation Proclamation, an executive order ending slavery, to black slaves.
Dorsey’s decision comes as the Black Lives Matter movement fuels protests nationwide for racial justice following the recent death of black Minneapolis resident George Floyd after a police officer kneeled on his neck. Many business leaders have expressed solidarity with the protests and have pledged money to civil rights groups.
Twitter, for example, updated its profile by changing its signature bright blue bird to the color black and adding the hashtag #BlackLivesMatter to its description. Dorsey also donated $3 million to former NFL quarterback Colin Kaepernick’s Know Your Rights Camp, which is aimed at helping young people learn about higher education, self-empowerment, and interacting with law enforcement.
At the same time, Twitter is grappling with how to deal with inflammatory comments by President Trump, who has gone on the attack against the protest movement and anything related. For the first time recently, the company obscured one of Trump’s tweets in which he said, “when the looting starts, the shooting starts” by hiding it behind a warning that said the tweet had violated Twitter’s policy against “glorifying violence.”
But on Tuesday, Twitter left untouched a tweet by Trump that suggested a Buffalo protester, who was severely injured after being shoved to the ground by police, “could be an ANTIFA” provocateur. Twitter said the comments did not break the rules.
Dorsey said that Twitter and Square, which both operate internationally, plan to also mark the Juneteenth celebration in other countries, on dates related to emancipation in those locations.


fortune--2020-06-09--Nasdaq Composite trades over 10,000 for the first time ever, but the rally may be going ‘too far’

Bristol Myers Squibb CEO : Why the COVID-19 pandemic has me optimistic about the future of medical research

There is no stopping this market.
Despite terrible economic data (including massive, yet improving, unemployment numbers) and some of the headiest valuations the market has seen, the tech-heavy Nasdaq Composite reached a new record on Tuesday by passing the vaunted 10,000-point mark briefly in intraday trading for the first time, before closing up 0.3% at 9,953.75. That means the index, dominated by tech names like Amazon and Facebook, now has recovered all its losses from the coronavirus recession, and has bounced back more than 45% off its March lows. The index is now up 9% for the year. On Monday, the Nasdaq surpassed its February 19 record of 9817.18 by closing at 9924.74.
Yet in light of the enormous run-up—not to mention the fact that the U.S. economy is officially in a recession—those like Randy Frederick, vice president of trading and derivatives at Charles Schwab, caution: “We’ve gone maybe just a little bit too far at this point.” Frederick tells Fortune he’s been calling this run-up a new bull market since it first rose 20% from lows. “Most people have been sending me nasty comments for the last four weeks on that, but now I think they’re all on board,” he says.
That said, now the danger is that things have gotten overheated.
“We always overshoot a little too far, and then we have to correct,” he says. “What concerns me is if we get too overheated, we set ourselves up for another pullback. In the last two weeks, we’ve just been going to the moon,” says Frederick. The broader market, however, still hasn’t surpassed old records yet: The S&P 500 still trades about 4.5% below its high in February.
The Nasdaq, meanwhile, has gotten the benefit of the rally in tech: Big names like Amazon, Alphabet, and Netflix have hit highs in recent weeks, up 36%, 37%, and 20% respectively from March 23, and are trading at eye-popping multiples. The S&P 500 is currently trading well over 20 times the next 12 months earnings, according to S&P Global data. So, why is the market roaring on, when equities come at these price tags?
Analysts say support from the Fed and unprecedented fiscal and monetary policy have given markets a safety net. “How can the market not be optimistic when there’s enormous amounts of liquidity out there?” asks Frederick. And while the economic data is still abysmal, it’s marginally improving.
Indeed, investors have grown broadly more optimistic about the economic recovery. “The risk-on trade really is gaining traction,” analysts at RBC Capital Markets wrote in a note. “Valuations have spiked to historical highs in many industrial sub-sectors, signaling a strong recovery is potentially taking hold.”
Tech on a tear
And when it comes to tech stocks, investors seem to have stopped caring about valuations altogether. Investors are “completely ignoring them. I don’t think valuations matter at all right now,” suggests Frederick. But investors are also hanging on to stocks that are seen as having huge catalysts for growth during the crisis and after (think Amazon Microsoft, and Apple). “In a market where there’s quite a bit of uncertainty, investors almost always, … are on the hunt for growth and certainty,” Wells Fargo Investment Institute’s senior global market strategist Sameer Samana told Fortune back in April. “That’s the magic combination.”
But even the optimists see reason for caution. With the tech-heavy index’s record Tuesday, Frederick notes “It’s really hard to see the Nasdaq at an all-time high now when the economy was significantly better in January, and yet the market is even higher now.” He adds: “That makes me a little bit uncomfortable.”


fortune--2020-06-09--Apple to debut Mac trade-in program at retail stores

Apple plans to launch a trade-in program for Mac computers next week at its retail stores in the U.S and Canada, adding the devices to an effort already in effect for other products.
The Cupertino, Calif.—based technology giant informed retail employees that the new program will begin on June 15 in the U.S. and June 18 in Canada, according to people familiar with the matter. Customers can exchange a Mac for credit toward a new computer or apply the trade-in value to an Apple gift card.
Customers have previously been able to trade in their Macs via Apple’s website. Apple already offers trade-in programs at its stores for many other products, including the iPhone, iPad and Apple Watch.
The move could help boost sales of Macs by giving customers a way to get credit toward a new model at the point of purchase. However, the full impact of the program will likely take several more weeks because about 200 of Apple’s retail stores are still closed due to Covid-19 precautions.
Mac sales generated about $25.7 billion in fiscal 2019, or almost 10% of the company’s total annual revenue.
Bloomberg News reported this past Saturday that Apple is also preparing to launch installment payment plans for the Mac, iPad, AirPods and other devices via the Apple Card in the near future.


fortune--2020-06-09--What U.S. police spending looks like in 3 charts

The killing of George Floyd has sparked a national conversation about bias in policing—and widespread calls for police departments to be defunded or dismantled. Arrested in Minneapolis on May 25 for allegedly using a counterfeit $20 bill to buy cigarettes at a convenience store, Floyd was pinned on the ground by police officers. Video footage showed a white officer, Derek Chauvin, pressing his knee to the neck of the 46-year-old black man for eight minutes and 46 seconds. Chauvin has been charged with second-degree murder, and three other officers at the scene have been charged with aiding and abetting murder.
Two weeks after Floyd’s death, a veto-proof majority of the Minneapolis city council said that they planned to defund and reorganize the police department. Council president Lisa Bender told CNN that she and eight other members of the council were “committed to dismantling policing as we know it in the city of Minneapolis and to rebuild with our community a new model of public safety that actually keeps our community safe.” Minneapolis Mayor Jacob Frey, on the other hand, has come under heavy criticism from protesters for saying that he does not support abolishing the city’s police department.
In New York City, home to the country’s largest police force, Mayor Bill de Blasio said in early June that he planned to make a significant cut to the police department’s nearly $6 billion annual budget and shift funds to social services. The mayor of Los Angeles, Eric Garcetti, has also said he plans to redirect money from policing into community-outreach programs. Police unions have pushed back forcefully against the idea of cutting budgets.
At a recent meeting with law enforcement leaders at the White House, President Trump made his own position clear. “We won’t be defunding our police,” Trump said. “We won’t be dismantling our police, and there’s not going to be any disbanding of our police.” With the debate about police budgets sure to continue, here are three charts that show the scale of spending by state and local governments across the country. According to the most recent census data, New York led all states in combined per capita spending on law enforcement, driven by the scale of the New York City police budget. Washington, D.C., spent more than $900 for each of its roughly 700,000 residents. State and local governments spent a combined total of $115 billion on police in fiscal 2017, according to the Urban Institute, equal to about 4% of their cumulative expenditures. While that total was up from $42 billion in 1977 (calculated in inflation-adjusted dollars), the 4% portion of total spending is approximately the same and has remained consistent over the past four decades. Among the 50 largest cities in the U.S., Washington, D.C., had the highest number of police officers per resident, according to the most recent figures available from the FBI, followed closely by New York.


fortune--2020-06-09--‘Forget about making money’: Asia’s CEOs share lessons on reopening and the post-pandemic business l

‘Forget about making money’: Asia’s CEOs share lessons on reopening and the post-pandemic business landscape

Their businesses were among the first to feel the effects of COVID-19. Now the CEOs of some of Asia’s leading companies are providing a road map for what businesses around the world can expect as they reopen.
The top executives of Alibaba Group, Yum China, Grab, and Rakuten met virtually with members of Fortune’s CEO Initiative on Tuesday to discuss how they are slowly transitioning their business operations and their employees out of quarantine. Their advice ranged from practical workplace considerations to thoughts about the lasting shifts in customer behavior and corporate social responsibility that all top executives and leaders should anticipate, as cities and regions slowly reopen around the world.
Below are three top lessons from these CEOs’ efforts to reopen and recover from the global pandemic:
Reopenings will be slow and cautious—for a long time. The CEOs say they are balancing the benefits of reopening with the continued wariness of both customers and employees. Pizza Hut and KFC operator Yum China, for example, is seeing more in-person business at restaurants with wide-open spaces—and less at those in shopping mails, train stations, and airports. Until internal and international travel recovers, “those businesses will continue to struggle a little bit,” says Joey Wat, CEO of Yum China.
For these CEOs’ employees, meanwhile, slow reopenings have pros and cons. “Working from home is very, very efficient” but also makes some employees feel “isolated and lonely,” says Hiroshi Mikitani, founder and CEO of Rakuten. The Japanese e-commerce company hopes to eventually reach a mix of roughly 70% of people working in the office and 30% working from home; but right now, Mikitani says, “we are making a baby step.”
Technology will permanently replace some offline operations, even as the non-virtual world rebounds. The pandemic-caused surge in video meetings, online shopping, and digital payments is here to stay, these CEOs predict. “COVID has accelerated cashless adoption,” says Anthony Tan, CEO and cofounder of Grab. The Singapore-based ride-sharing company, which operates throughout Southeast Asia, has now made all of its ride-sharing payments cashless in the Philippines, even though “cash is still very much king here,” Tan says.
Meanwhile, Alibaba Group has seen a quarantine-related boost not only in the online shopping that helped the company become an e-commerce giant, but also in internal and external usage of its video and workplace collaboration tools. “We do see a very efficient collaboration online, which I believe will fundamentally change the model of working collaboration in the future,” says Alibaba CEO Daniel Zhang.
“Forget about making money for now this year.” That’s the bottom line from Yum China’s Wat, whose company instituted some expensive new programs for employees and customers during the pandemic. Yum China expanded health insurance coverage to the spouses and parents of its store managers, and served free food to over 1,450 hospitals and community health centers across China. This sense of social responsibility is paramount for all companies, she argues: “This year is to build a brand; it’s not about making money. Hopefully we can build a brand that can help shareholders make money for the next 100 years.”


fortune--2020-06-09--GoFundMe donations for elderly Buffalo man injured by police soar after baseless Trump tweet

A GoFundMe page for Martin Gugino, a 75-year-old protester knocked bloody and unconscious by Buffalo police, eclipsed its fundraising goal of $30,000 this week, thanks to more than a thousand donations, many of them for $5 or $10. The GoFundMe page says the funds raised will be sent to Gugino to help pay for medical and legal fees.
The video of Gugino’s assault, which came during a protest against the death of George Floyd while under police custody, has been viewed tens of millions of times on TV and social media, and has spurred additional calls for police reform.
News reports on Tuesday stated that Gugino remains in the hospital following a shove by two police officers that led him to fall and bleed from his head and ears. President Trump suggested Tuesday morning that Gugino might have staged the attack as part of a conspiracy by the fringe group antifa.
Buffalo protester shoved by Police could be an ANTIFA provocateur. 75 year old Martin Gugino was pushed away after appearing to scan police communications in order to black out the equipment. @OANN I watched, he fell harder than was pushed. Was aiming scanner. Could be a set up? — Donald J. Trump (@realDonaldTrump) June 9, 2020
Trump’s claim appears to be founded on a baseless report by an obscure cable channel, One America News Network, where an anchor made the nonsensical allegation that Gugino’s fall could be “the result of a false flag provocation by far-left group antifa.”
In response to a question from Fortune, a Twitter spokesperson said the tweet by Trump, which some have alleged is defamatory, is “not in violation of the Twitter rules.”
Meanwhile, numerous people on Twitter came to Gugino’s defense, including a prominent Jesuit priest who noted the elderly man’s role in the Catholic Worker movement.
#MartinGugino is a peace activist and volunteer with the Catholic Worker movement. Why spread rumors about someone who embodies the Beatitudes? In case you've forgotten what's in the Bible you were carrying, Jesus said, "Blessed are the peacemakers," not the rumormongers. https://t.co/LMEAO16LvQ — James Martin, SJ (@JamesMartinSJ) June 9, 2020
Gugino’s lawyer has issued a statement affirming his client’s commitment to peaceful activism, and questioning why the President made false allegations against him.
Martin Gugino is a member of PUSH Buffalo, the Western New York Peace Center and the Catholic Worker Movement. A close friend describes him as someone who understands his privilege.
Statement by Gugino’s attorney on the @realDonaldTrump tweet about him to @DanTelvock: pic.twitter.com/gRoX2357lK — Amee Vanderpool (@girlsreallyrule) June 9, 2020
Trump’s tweet appears to have spurred a new flood of small donations and, by late Tuesday morning, the total raised for Gugino was over $34,000. The page’s organizers say the money will go to pay for any legal and medical expenses.
The two Buffalo police officers who allegedly carried out the attack on Gugino, Aaron Torgalski and Robert McCabe, have been charged with felony assault.
More must-read finance coverage from Fortune:


fortune--2020-06-09--Uber CEO and Rockefeller Foundation chief: American workers need a better safety net

The COVID-19 crisis has crippled America’s economy, bringing unemployment to its highest level since the Great Depression. The sudden shift in economic fortunes has awoken most Americans to the downsides of the U.S. labor model. In addition to the coronavirus pandemic, current events and new attention to an old problem of systemic racist systems and their effect on black lives and livelihoods have stirred a conviction that we must renew and not simply restore the pre-crisis status quo.
Our economy has fundamentally changed. We will have to change with it.
In the decade since the 2008 financial crisis, productivity in the United States has risen, but real wages have not, making it tough for people to save. Even before the current crisis hit, nearly 80% of families said they were living paycheck to paycheck, with no ability to withstand an emergency. About 40% of Americans had less than $400 in savings.
With the COVID pandemic, one in four American workers has filed for unemployment over the past 10 weeks. More than half the workforce has lost either a job or some income owing to illness or closures stemming from the virus. Today, 21 million Americans are not only out of work but have also lost access to basic support like health care. And many who are still working, especially at jobs labeled “essential,” must choose between feeding their families and protecting their health.
Giving people the ability to get through tough times is critical if we want the economy to be stronger and more resilient. And our current labor framework, which provides a safety net to some kinds of workers but not others, is not up to the task.
Our labor systems were changing even before this economic crisis. Over the past decade, tech platforms including Uber connected millions of people to quick access to work. But the pre-COVID status quo of safety-net benefits supporting workers—particularly independent workers—has been neither sufficiently flexible nor sufficiently sturdy. America’s current travails have made it clear we need wider worker protections that don’t limit benefits to one legal classification of work.
For more than a century, labor laws have created a false choice between independence and protection. It’s a choice that no longer serves workers and must be reformed.
A new nationwide survey of 1,200 likely voters conducted for the Bipartisan Policy Center (BPC) and funded by the Rockefeller Foundation shows most Americans agree. Three in four Americans (76%) say they are not content to simply return to the same safety-net systems that existed prior to the COVID-19 economic crisis. This desire for change was articulated by independents, Democrats, and Republicans alike.
About the same share, three in four, support more pragmatic solutions. They want fixes to the safety net such as unemployment-assistance reform, the ability to take their benefits from job to job, and expanded family leave benefits. A large number also want a rollback in rules regulating certain trades so that they can take their skills across state lines without having to be relicensed. Such regulatory reform would also allow ride-share workers, including Uber drivers, to more easily find work wherever they go across state lines.
In the current crisis, it has been heartening to see, for the first time ever, independent workers become eligible for unemployment assistance through the federal CARES Act. That marks an important recognition that our economy has fundamentally changed and that choosing independent work need not mean forgoing basic protections that every worker deserves. At the same time, COVID has forced employers to be more flexible, allowing more people to work from home and on their own schedule.
There is some disagreement on the best next steps, including between us. Uber has opposed efforts by legislators to require workers to choose between employment with some benefits but limited flexibility and independent work with more freedom but without basic benefits. We believe that we should instead raise the standards for independent work, so workers can have the best of both worlds. This includes providing these workers with benefits and protections that they can depend on when they’re injured at work, get sick, want to take time off, or retire.
The Rockefeller Foundation sees policies that require gig economy companies to classify workers as employees as an important step in recognizing the need for worker benefits, no matter where you work, and pushing these companies to take on more of that responsibility. But despite that disagreement, both of us agree what matters most is changing the status quo and working together to find a bold new way to fundamentally change the day-to-day reality for hardworking Americans. A good place to start is with a modernized federal framework that mandates protections nationwide—whether provided by governments or employers, but available to everyone—so benefits are portable across the country.
This crisis has laid bare long-term systemic problems in our economy and our society. Change comes slowly when the lives of those less affected by hardship are easy, but becomes imperative during times of true hardship for all. The Rockefeller Foundation and BPC survey shows that, even in our hyper-partisan era, the majority of Americans want to change how our laws protect the average worker. The path to recovery starts with recognizing that just as our notions of work have evolved, so must the rules and benefits surrounding that work.
Dara Khosrowshahi is the CEO of Uber. Dr. Rajiv J. Shah is the president of the Rockefeller Foundation.


fortune--2020-06-09--The Coronavirus Economy: A Methodist minister on preaching to the iPhone (and losing the choir)

Like many places of work and worship across America, life changed practically overnight at St. Paul’s United Methodist Church in Cedar Rapids, Iowa, when the coronavirus pandemic hit the U.S. in mid-March.
Make that literally overnight. On Saturday, March 14, Pastor Sherrie Ilg, was preparing to minister to her congregation just as she had on any other Sunday; the next morning, she found herself giving her first-ever sermon over Facebook Live. In the time since, the church has expanded its virtual offerings and community outreach, as Ilg and her parishioners have worked to adjust to swift, practical, and deeply profound change.
In her 10th year at the church and her sixth as lead pastor, Ilg spoke with Fortune in late May for a new series, The Coronavirus Economy, about how the pandemic has affected St. Paul’s services, members, and clergy like herself—and how church, as she once knew it, may never be the same.
The following interview has been lightly edited for clarity.
Pastor Sherrie Ilg addresses the congregation with Fidel Taylor, African National Choir Director, in an English and Swahili service at at St. Paul’s United Methodist Church in Cedar Rapids, Iowa in a time before the pandemic. Sherrie Ilg
Fortune: How would you describe life at St. Paul’s pre-pandemic?
Ilg: St. Paul’s is a core-of-the-city church. We were the first Protestant church in the city, the first public religious service in Linn County, Iowa. So we have this long traditional history and a historic building that’s on the National Register of Historic Places. We have traditional services as well as a casual, contemporary service; a chapel service; and in the most recent years, an African National service with worship in African languages. We’re known for music ministry and our work with youth and children. We’re connected with the community. We’re known for the missional connections that we have in Cedar Rapids. And of course, the United Methodist Church has worldwide connections where mission is very important.
When did you realize COVID-19 might impact St. Paul’s?
Around March 6 or 7, I returned from a short break, and we learned through that week of the threat coming closer and closer. I remember having a conversation with our associate pastor and others saying that we may need to make some changes soon. We felt that we would have a little more time to make those decisions.
But on Saturday night, March 14, we received word and strong encouragement from the Iowa bishop to move to online services only and maybe even begin that the next morning. So there was a Saturday night conversation and posting on local media that we would go online only on March 15. We took what we had planned and got a phone on a tripod and went live with Facebook. That that was our first attempt. It happened a week sooner than we had prepared for.
What was that like?
Doing anything over Facebook was totally new, as was not having anyone in the pews. We are now preaching to the space between us and someone watching on a computer across the city or across the country.
You don’t have a response or a reaction to see, “Are you listening folks?” With that void of people, your mind and your imagination take you to connecting with those across all space and time.
It’s interesting, in the month of February, I had just finished a sermon series in which we looked at Mr. Rogers and the movie A Beautiful Day in the Neighborhood and some themes from that. I had read about how Mr. Rogers preached. He was a Presbyterian pastor and saw his children’s work was actually his calling to ministry. And he saw the television camera and the space between where he was and where the children were watching as the sacred space—that it was holy ground. For me, that was preparation for what I was doing myself: imagining and holding the space between where I was to where someone might be.
You mentioned music ministry is a big part of St. Paul’s. How are you handling music right now?
We have had one or two musicians, someone on the keyboard and someone singing, or the same person on the keyboard and singing. We have a postlude and a prelude on the organ, which is meaningful to people, to simply have music touch their hearts.
How has the congregation reacted with this sudden shift?
I don’t remember the numbers on that first Sunday, but certainly it has grown. In the weeks to follow, we had a real effort to try to help everyone understand, those at least who had a computer at home, how you access Facebook and how you find us. And we’d ask, “Would you please call someone you know that might be new to a computer and help coach them through?” We’ve definitely had people grow in their confidence in using online technology.
For those who don’t have access to technology, we’re trying to have a phone call strategy in place so that everyone’s going to get at least a phone call: “How are you doing? Do you need anything?”
Our Easter services, normally we would have 500 to 600 people in the sanctuary. We had 2,600 people online, so there are things that we’ll continue doing with online worship and spiritual formation, post-pandemic. We’ve learned some new things. It has been a catalyst for us to step into some things that we were more slow to do.
Can you talk about some of those things? How have you been using technology for worship and other activities?
We’ve been able to add some spiritual formation opportunities. We have something happening every day of the week now, and we’re able to connect with folks who, for whatever reason, might not have been able to physically go to church, but they can take a lunch hour on Monday from wherever and join in a Lectio Divina prayer practice or a half-hour on Thursday morning to engage in prayer and praise. We’ve broadened our reach that way.
We’ve found that Facebook Live is a good way to do a hymn sing. We’ll do a half-hour, and you put in whatever hymn is meaningful to you, and we’ll play it and sing it. People love that, being able to hear old favorites and sing along.
We’ve added some small groups. I find myself in my role, as a pastor, in more direct spiritual leadership roles because I can do a small group on Facebook Live or Zoom. There are some good new opportunities that way.
Zoom technology has become our friend for all of our committee meetings. There’s a sense of efficiency there and also a struggle and anxiety with each of those meetings, trying to have people sign on and have it all work. There’s the level of frustration but also just a gratefulness to actually see someone’s face. It’s interesting how just a person’s face can tend to somebody’s heart.
We have the whole African National ministry, too. When asked how our African members are best connected, Pastor Daniel Niyonzima indicated that through WhatsApp messages communication flows pretty easily. We were able to get all of our members into a new group there so that as we had reliable information from COVID-19, we could make sure that that was getting into homes.
And that’s been used beyond just COVID-19 information for Pastor Daniel to sing a prayer and pray. I was listening yesterday; that piece of technology has been a wonderful tool for connection through these times. Community is so strong with African families who have come here without much of anything, and the faith community is certainly a home. Being unable to come together physically in the church building is really, really difficult.
How are members of your congregation doing with the pandemic? What do you hear from them?
It is kind of evolving how we’re experiencing this pandemic. Now that we’ve been in it for 10 weeks, there’s an acknowledgement of this fear, of that initial fear and the lingering grief and all sorts of losses. We’ve had members of our congregation die from COVID-19. We’ve had other members test positive. We’ve had, of course, dealing with a disappointment and ministering to all sorts of disappointment. We’ve experienced the loneliness—many people who may be living alone or may be in a care facility. We’ve embraced what the role of faith is in a time like this. But we’re also a people of hope, and Easter was right in the middle, so we find that place of hope as well.
We’ve been thinking, “How is it that we can respond to our community?” We’ve been sewing face masks and offering those. We’ve had some care baskets delivered around the city. And we’ve started a whole new initiative called “Share Love, Share Hope, and Share Life,” an invitation for those who do have economic resources to share with others. A love gift can be made, and you can indicate what part of your gift you would like to give to help individuals or families who have been economically impacted by this virus or what money you would want to give to our local mission partners. We’ve identified seven of those that are really working with the most vulnerable.
So it’s trying to be mindful of how we’re experiencing it as a congregation, and then also just our own care, ourselves as clergy. We need to take care of ourselves in order to be able to care for others as well. Our bishop has required that all of the clergy in the state of Iowa take three days off for renewal leave sometime within the month of May so we can catch our breath. They prepared a worship service so that we could use that and have a Sunday off.
How would you describe how this experience has been for you?
I think it’s just been a really, really full time. We do look to all of what we’re called to do: We’re called to love God and love our neighbors, and so we keep those things in front of us and all of the decisions that we’re making. With all the decisions, there’s a weariness that comes from that, and you do feel tired out. I’ve been trying to self-isolate, working from my dining room table for the most part. I do go into the church, but I really haven’t gone many other places because I have my own family members who are especially vulnerable, and I want to be able to be with them as needed.
I think I’ve found myself in more times of prayer, with others online but also just for my own self. I’m trying to get outside as much as I can. Knowing that I’ve got a lot of support—we’ve had just a lot of outpouring from the congregation back to the pastors, and that’s meaningful. It is meaningful to say we’re doing okay.
I really have a dedicated team. We have a fairly large staff to divide things up and have people tending all of these various areas of ministry and coming together in a weekly staff meeting where we start just by having people check in and say, “How are you doing?”
How has the moment changed your message?
I’ve not had to really change our worship themes that we had envisioned for the summer. We’re going to be looking at a theme called “Drawn In: Living a Creative Life with God.” Creativity is important. I’m excited about those themes. Of course, the rhythm of service changes a little bit each week, and naming where we’re at, especially in the early weeks of this when we’ve just had to name—we are grieving, we are in a place of loss, we are fearful, and a sense of lament. Now we’re in this place of, “Gosh, this is how we’re going to be for a while.” So let’s think about that and begin to get a new, hopeful perspective, recognizing that it won’t be exactly how it used to be.
You don’t write sermons six months in advance, but you have a theme. So the application of those themes certainly connect to the day-to-day life of what our experience is and as we would understand the hearts of those who are worshipping with us.
Now we have new guests, and it’s interesting to think about, How do you follow up with them? How do you connect with guests that you’ve never met that found you online? That’s one of those kinds of strategy questions: How do you follow up and provide the next step in someone’s faith journey, if they’ve been stepping into the questions of faith more and more as a result of this time of pandemic.
Have you figured out how to do that?
You can certainly be anonymous watching something online. But if the person reached out, we do have prompts to share. Sometimes in a sermon, I will ask a question.
Last Sunday, we were celebrating graduates from high school. It was our graduation Sunday, and I didn’t explicitly ask it, but we have someone from our St. Paul’s staff who was monitoring the comments. And she picked up on something I said and posed the question, “What advice would you give to high school seniors graduating?” People just started adding all this advice in the comments section. So, if people do add a thought, or they offer the peace of Christ to someone online or they name someone for prayers, then we have a chance of following up. It’s a whole new world.
How are you thinking about reopening?
We’re getting some general guidelines from our Iowa Annual Conference. They have a red light, yellow light, green light strategy in place. We are all in the red-light strategy as United Methodist Churches until the end of May. Then they’ll be looking at that again to say if they feel they can move to a yellow-light place where, depending on your own local church, you would decide if it’s time to proceed with caution or not. For churches such as St. Paul’s, which has over 50 people in worship, it’s still recommended that we would continue online only. We may begin to open up with some smaller groups.
There’s not only the when question, but there’s the how and the what: What will church look like? People may have in their minds that when they come back, it will look as it did before, and it will not. We won’t be able to have a choir. We won’t be able to have congregational singing because of all of those concerns. There’ll be so much that will look different. We may end up reopening in various small group ways—or maybe small groups outside in the parking lot—because there would also be all of the decisions around sanitation of spaces, hard surfaces, cloth surfaces, and not running the air conditioning through the service so that it’s not moving virus particles. We have lots of work to do ahead of us.
Passing in the offering plate, that won’t happen anymore. Communion, all of those practices. What pews could people fit in? Taking a list of who’s present in case we need to do any contact tracing afterward. We’re working with our insurance company for liability issues, there’s a list of things that we’ll be tending to.
No churches have gone through this. A lot of churches are trying to share best practices. There are consulting firms, there are conferences, there’s tons of information for churches and conferences to read and ponder. Ultimately, our local church will make decisions in line with what the government says and what our bishop would say, but then there’s freedom for us to decide.
Anything you would add?
I trust that God is always doing a new thing. The Scripture tells us that, so we’re just trying to pay attention to what that might be and how it will look at St. Paul’s as well as the Church universal. There are times in history where there are dramatic changes. And so this is one of those times. The heart of what church is, and the mission and the vision of church, will not change. But the ways that we will live it out and the methodology of being church and doing church will change.
There’s some new energy to that, balanced with the sadness and the grief and the loss through death and other things. But we’ll be okay. We’re people of hope, so we continue on and give thanks for the gift of life every single day. We’re in a theme right now called “Grateful Life,” and I had that theme selected prior to any pandemic. That seems to be spot-on for us to continue to be thinking about the gift of life and an orientation of gratefulness. Don’t take anything for granted.