fortune--2020-05-07--The coronavirus is driving a mental health crisis. Tech can help tackle it

As accusations about source of COVID-19 grow , WHO says it will consider new mission into virus ’ origins

The emerging and yet untold toll of COVID-19 is so far-ranging that it’s hard to grasp. But one fast-rising threat has me deeply concerned: The coronavirus isn’t just ravaging bodies, it’s creating a mental health crisis.
COVID-19 is the proverbial perfect storm of stressors. They include everything from job loss, economic instability, and food insecurity to the uncertainty of when (or even if) life will return to normal. Social distancing is key to protecting our physical health, but social isolation can take a toll on mental health. At the same time, caregivers are juggling greater demands, in close quarters, and under trying circumstances. And of course, there’s the fear of getting sick or dying from the novel virus, and of losing loved ones to it. Alcohol misuse and suicide are expected to rise as people struggle to cope.
In a national survey released by the American Psychiatric Association in March, 36% of respondents said that COVID-19 was seriously impacting their mental health; 48% were anxious about getting infected; and 57% reported concern that COVID-19 will seriously impact their finances. Another indicator of the current state of mind: Express Scripts reported a 34% increase in anti-anxiety medication prescriptions between mid-February and mid-March of this year.
People tend to keep their mental health issues from others. While the stigma of mental illness has decreased in recent decades in the U.S., it is still deeply ingrained in our culture, and in ourselves. Just because you can’t see depression or PTSD on an X-ray or in a blood test doesn’t mean these aren’t real—and very serious—conditions that require treatment. Depression and anxiety disorders left untreated can affect people’s education and livelihoods; together they’re estimated to cost the global economy $1 trillion each year in lost productivity.
One challenge with mental health conditions is the delay in recognizing them and seeking treatment. It can take from six to eight years for those with mood disorders to seek treatment, and from 20 to 23 years for those with anxiety disorders to do so, according to a 2015 study. Yet people might turn to resources online earlier, even if they are not ready to ask another human being in-person.
In this time of uncertainty what people need is simple: Access to reliable information and the ability to get help if they need it. The reach of this pandemic is unprecedented for modern times, but so too is the reach of the Internet in sharing lifesaving information on treatment and prevention. And part of making sure people have access to quality information, of course, is safeguarding people from misinformation. When people come to Google or YouTube to learn about COVID-19, we’ve been able to surface information from authoritative sources like the Centers for Disease Control and Prevention (CDC) and the World Health Organization (WHO), for instance.
But for all the ways the Internet has become such a critical source of authoritative information about the crisis already, it can help bring the same level of attention and access to information to mental health, too.
While COVID-19 has been devastating, it’s had one surprisingly positive impact: The fast-growing availability of telehealth services. Though the earliest crisis hotlines date back to at least the 1950s, only recently have mental health care services become widely available via technology. Now, in large part due to social distancing, old barriers to telehealth—including lack of consumer awareness or limited insurance reimbursement—are falling away as insurers and regulators make it easier for people to receive professional mental health care help via phone, video conference, and even chat. A growing number of online provider platforms such as TalkSpace and BetterHelp have risen to the fore to help those with depression, anxiety, PTSD, and other conditions to get the care they need, remotely.
In March, the government enacted new laws to waive restrictions on Medicare and state Medicaid reimbursements for telehealth services, including for mental health, during emergencies such as COVID-19. These changes should extend to after this public health emergency subsides because consumers who have discovered telehealth care will expect—and need—ongoing access.
Online platforms can also take steps to make it easier for people seeking out information to take action. There’s a disconnect that prevents people from getting the mental health care they need but online platforms are uniquely positioned to help bridge that gap. For example, Google Search is surfacing clinically-validated online screeners when people look up depression and PTSD that securely ask some of the same questions a mental health professional would so that people can be more informed—and encouraged to seek help. Technology can—and should—help move people towards action, whether it’s through online platforms connecting people to mental health services that might work for them or starting a conversation on mental wellbeing and mental health.
COVID-19 is an invisible yet deadly virus; so, too, are mental health disorders invisible and potentially lethal conditions that need to be diagnosed and treated. Just as the U.S. public health infrastructure may be strengthened from lessons learned during the pandemic, this is our opportunity to use technology to help people get the mental health care they need, now, and in the future.
Dr. David Feinberg is vice president of Google Health, a former child psychiatrist, and former president and CEO of Geisinger. Follow him on Twitter.
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—Coronavirus is making clear there is no solidarity in the EU
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—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
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fortune--2020-05-07--Does the U.S. need more industrial policy? Bridgewater’s CEO thinks so

Sheryl Sandberg : The coronavirus pandemic is creating a ‘ double double shift ’ for women .
Employers must help

This is the web version of CEO Daily. To get it delivered to your inbox, sign up here.
Good morning.
Bridgewater CEO David McCormick published a 37-page piece in the Texas National Security Review calling for a much more active government role in developing and promoting American technology and economic power in the world. McCormick and his coauthors call for a national innovation policy to help build a wide range of key technologies like 5G, A.I., bioengineering and more. And he calls on policy makers to “integrate economic and national security policy” to address growing concerns about “the rise of China, the erosion of the American dream, the perceived failures of American leadership, and America’s relative loss of power.”
I spoke with McCormick yesterday, and asked him why the head of the world’s largest hedge fund is calling for a vastly expanded national industrial policy. He cited “a very personal set of experiences”—he is a West Point graduate who served as Undersecretary of the Treasury in the Bush administration before joining Bridgewater in 2009—that has convinced him that “national security and economic security is very bifurcated” in the U.S. government, and needs to converge. “The world is changing a lot, China is the main strategic competitor, and we don’t have as clear a strategy as China in promoting primacy.”
McCormick said he started thinking about the piece six months ago, before the coronavirus hit. But the pandemic “has accelerated the strategic competition and brought to the forefront some of the challenges with China, and raised concerns about supply chains.” You can read the full treatise here, but be prepared: McCormick shares his predecessor Ray Dalio’s aversion to brevity.
More news below. And take time today to read Shawn Tully’s smart take on whether Apple’s share buybacks make sense.
Alan Murray
@alansmurray
alan.murray@fortune.com
TOP NEWS
Chinese exports
Beijing has reported a 3.5% rise in April exports, which is extremely surprising as everyone expected a sharp drop. The surprise was pleasant for the markets, with the Stoxx Europe 600 up 0.6%—despite a 14% fall in the British economy and forecasts for a 7.7% contraction of the eurozone economy this year—and U.S. futures are also looking good. Reuters
Task force
The White House's coronavirus task force will stay operational but will shift its focus to reopening the economy. Thousands of Americans are still dying of COVID-19 each day, with the official death toll (without doubt an underestimate) standing at over 72,000 as of yesterday. Because of the task force's success under VP Mike Pence, Trump tweeted, it will "continue on indefinitely with its focus on SAFETY & OPENING UP OUR COUNTRY AGAIN." Wall Street Journal
Telecoms giant
Liberty Global and Telefónica have finally concluded a $39 billion deal that will create the U.K.'s biggest telecoms group from the merger of Liberty's Virgin Media (the country's second-largest broadband network) and Telefónica's O2 (its biggest mobile network). The parent companies will have equal ownership of O2 and Virgin Media, which combined have 46 million customer accounts. Bloomberg
U.K. economy
The Bank of England has forecast a whopping 30% contraction in economic output over the first half of this year—or even worse if banks drive companies into bankruptcy by refusing to lend to them. The BoE also says the unemployment rate will rise to 9% (worse than during the financial crisis) despite the government's extraordinary decision to pay people's wages. The central bank isn't launching any new stimulus programs, though. Financial Times
AROUND THE WATER COOLER
Layoff innovation
If ever there was a time to find better ways to lay people off, this is it, writes Fortune's Michal Lev-Ram. The traditional approach of only announcing layoffs as they are carried out is looking shaky, and companies—especially tech startups—are beginning to give people a transparent heads-up weeks before the event strikes. Fortune
NY hospitalizations
Two-thirds of the New Yorkers hospitalized with COVID-19 had been staying at home, Governor Andrew Cuomo has said with surprise. It should be noted that China sees the home as a major breeding ground for infections, which is why it puts infected people in quarantine centers—but then again, New York has to some extent also taken this approach, using hotels for the same purpose. Meanwhile, Cuomo has tapped former Google chief Eric Schmidt to head an effort to "reimagine" the state post-pandemic. Fox News
Facebook appeals
Would you like to know more about Facebook's new "independent" appeals court for users who disagree with the removal of their content from the social network? You should, because it's extremely controversial. Interestingly, as Fortune's Danielle Abril writes, "the cases that are likely to get priority are those that either affect a large number of users, have a major impact on public discourse, or may raise significant policy questions on Facebook." Fortune
Axl vs. Mnuchin
Guns N' Roses frontman Axl Rose has gotten into a Twitter spat with Treasury Secretary Steven Mnuchin. After the hard-rock star tweeted that Mnuchin was "officially an a**hole" (his specific reason for doing so was unclear), Mnuchin retorted with: "What have you done for the country lately?" It's a mark of how weird politics has become that this exchange seems only mildly remarkable. CNBC
This edition of CEO Daily was edited by David Meyer.


fortune--2020-05-07--India and Japan offer land and funding to lure factories out of China

As accusations about source of COVID-19 grow , WHO says it will consider a new mission into virus ’ origins

Political posturing between China and the U.S. has flared again recently, as members of the Trump administration seek to hold China “accountable” for covering up the initial coronavirus outbreak. Amid the rhetoric, a trade war-era threat to pull U.S. manufacturing out of China has reignited.
According to a report by Reuters, taking U.S. manufacturing out of China is receiving a “whole of government push.” Last month, White House economic advisor Larry Kudlow advocated “paying the moving costs” of firms that want to leave and return to the U.S.
Closer to China, however, Japan and India have already introduced policies to help manufacturers get out of the Middle Kingdom.
Landing zone
India, with a population roughly the size of China’s but less than half the average income, has long been tipped to replace China as the world’s workhouse. That hasn’t happened yet. Investors have been put off, in part, by India’s slow process for acquiring land, which at times requires manufacturers to negotiate with multiple small plot owners.
According to Bloomberg, India is seeking to ease that process by setting aside a land bank roughly twice the size of Luxembourg for manufacturers to use. Prime Minister Narendra Modi’s government has reportedly also reached out to over 1,000 U.S. companies to see what sort of amenities would make India a viable alternative to China.
At the same time, India has amended its laws on foreign direct investment (FDI) in a way that would limit Chinese access to the country. Under the new rules, introduced mid-April, investors from any country that shares a land border with India must first seek government approval.
In a note announcing the change, the Ministry of Commerce said the policy was designed to curb “opportunistic takeovers/acquisitions of Indian companies due to the current COVID-19 pandemic.” Among the countries implicated by the policy, China is by far the largest source of FDI.
Between 2000 and 2019, China’s investment in India totalled $2.3 billion, according to data from India’s Ministry of Commerce (MOC). Reported FDI from India’s six other land-border neighbors in the same period was $14.74 million.
China’s embassy in New Delhi claims China has invested a cumulative $8 billion in India. (That figure is closer to the total from China, Hong Kong and Taiwan combined over the same period: $6.9 billion, according to India’s MOC.) In a statement denouncing the new restrictions as a violation of World Trade Organization standards, the Chinese embassy in New Delhi said the “impact of the policy on Chinese investors is clear.”
Cash support
Japan has been more explicit in pledging support for domestic companies leaving China. In April, Tokyo launched a $2.2 billion initiative to fund manufacturers that want to move out; the bulk of the funding is available only to companies that return to Japan.
“Products that depend on one country and have high added value will be returned to Japan as production bases,” Prime Minister Abe Shinzo said during a governmental meeting of the Council on Investments for the Future in March. “Even if the products do not depend on one nation, and do not have high added value, the manufacturing will be diversified to ASEAN.”
As of April 21, however, only one company had applied for a subsidy from the $2.2 billion scheme. Iris Ohyama, a consumer product manufacturer, wants to open a new mask-making facility in Japan and has applied for relocation funding to do so.
Iris currently manufactures masks at facilities in two Chinese provinces and sources raw material from China. The new factory will make the material from scratch in Japan, but it’s unclear whether its current facilities in China will close.
Mask action
Makers of personal protective equipment (PPE), such as face masks, are among the companies arguably most likely to leave China. Renaud Anjoran, president of advisory firm China Manufacturing Consultants, says the world “has been horrified at seeing how we depend on China for PPE” and expects Western governments will enact legislation to repatriate the process.
The pandemic proved quickly how easily items like surgical masks could be made at home—either literally, in home workshops, or domestically, as a nation.
Manufacturing surgical masks for export in China, Anjoran says, was never a smart move anyway. The procedure “is not very labor intensive and shipping the raw products is cheaper than shipping the finished products.”
Convincing makers of more sophisticated equipment to leave China, however, might prove more of a challenge.
More coronavirus coverage from Fortune:
—The Rebuild Program: A project to help small businesses reopen amid a pandemic
—The pandemic makes the case for more transparent layoffs
—Reopening of Shanghai Disneyland is a proving ground for pandemic-era theme parks
—Photo essay: What life looks like in Europe as the continent starts to reopen
—Goldman Sachs doubts there will be a Round 3 of PPP loans for small businesses
—Most college students won’t get stimulus checks—but they should
—How the film industry is planning its post-pandemic return
—PODCAST: How Marc Benioff is helping out during the coronavirus pandemic
—WATCH: Fortune’s top 10 heroes of the coronavirus pandemic
Subscribe to How To Reopen, Fortune’s weekly newsletter on what it takes to reboot business in the midst of a pandemic


fortune--2020-05-07--Global markets rebound despite trade tensions and weak corporate results

This is the web version of the Bull Sheet, Fortune’s no-BS daily newsletter on the markets. Sign up to receive it in your inbox here.
Good morning, Bull Sheeters. There’s plenty of green on the screens this morning. That’s despite further China-U.S. trade worries and weak corporate results.
Let’s take a closer look.
Markets update
Asia
The major indices are mixed . Japan’s Nikkei was up. Hong Kong and Shanghai were in the red.
. Japan’s was up. and were in the red. That’s despite better-than-expected trade data coming out of China . Exports still fell, but by a degree that outpaced analysts’ expectations.
trade data coming out of . still fell, but by a degree that outpaced analysts’ expectations. Japan is close to approving remdesivir , Gilead Science’s drug to treat coronavirus patients.
is close to approving , Gilead Science’s drug to treat coronavirus patients. Investors continue to warily eye the deteriorating trade tensions between the U.S. and China, wondering if the pandemic will give the Trump Administration an excuse to draw up new tariffs.
Europe
European bourses climbed out of the gate. The benchmarked Stoxx Europe 600 began the day up 0.4% with similar gains on London’s FTSE and Germany’s Dax .
bourses climbed out of the gate. The began the day up with similar gains on and . There’s more reason to marvel at the Germans’ handling of this crisis. The country expanded the easing of lockdown measures on Wednesday. The Bundesliga (that’s professional soccer) will return later this month .
on Wednesday. The (that’s professional soccer) will return . In announcing the measures, Merkel uttered my favorite quote of the day: “ we can afford a little audacity .” They’ve earned it.
.” They’ve earned it. There’s that rarest of headlines today: a mega merger . John Malone’s Liberty Global and Spain’s Telefonica cinched a deal to combine O2 and Virgin Media in a £31.4 billion ( $38.9 billion ) deal, creating a telecoms and broadband behemoth in the U.K.
. Liberty Global and Spain’s cinched a deal to combine and in a £31.4 billion ( ) deal, creating a telecoms and broadband behemoth in the U.K. “Materially worse.” That’s how brewing giant AB InBev views Q2, and that’s after a pretty terrible Q1. It’s not that consumers are turning their nose up at Budweiser and Stella Artois. South Africa has banned alcohol during lockdown. Peru shut down bottling plants. And supply chain disruptions are scattered around the globe.
U.S.
The Dow , S&P 500 and Nasdaq futures all point to a positive open. I wrote the exact same thing yesterday, but only the Nasdaq finished in the green.
, and futures all point to a positive open. I wrote the exact same thing yesterday, but only the Nasdaq finished in the green. The Nasdaq will aim for a fourth straight day of gains, and it might just get there with some help from Peloton .
will aim for a fourth straight day of gains, and it might just get there with some help from . PTON was up 10% in pre-market trading after it reported yesterday sales jumped 66% . Lockdown has been good for business.
in pre-market trading after it reported yesterday . Lockdown has been good for business. Investors this morning are also happy with Lyft , which managed to cut costs dramatically in Q1, and PayPal , which forecast a strong recovery in Q2 payment volumes.
, which managed to cut costs dramatically in Q1, and , which forecast a strong recovery in Q2 payment volumes. It’s Thursday, which means jobless claims will be announced before the opening bell. Economists expect another 3 million workers will have filed for unemployment benefits, pushing the number to more than 30 million over the past seven weeks.
will be announced before the opening bell. Economists expect another workers will have filed for unemployment benefits, pushing the number to more than over the past seven weeks. Brace yourself: COVID-19 may kill off more than half (52%) of America’s small businesses—a huge engine of the U.S. economy—over the next six months. That’s according to a report by the Society for Human Resource Management.
Elsewhere
Gold is up.
is up. The dollar is down.
is down. Crude is flat. WTI has traded sideways over the past 24 hours, slipping below $24/barrel.
Earnings season report card
As of last Friday, May 1, just over half (55%) of the S&P 500 companies had reported results. On aggregate, it’s a mixed bag. According to FactSet’s John Butters, a majority of S&P companies have reported top-line (revenue) gains that exceed analyst estimates. The bottom line—both EPS and earnings—is a different story, however, as today’s chart (courtesy of FactSet) shows:
First the good news: 65% of S&P 500 report EPS above analysts’ expectations. Bad news: that percentage of beats is below the five-year norm.
Which sectors have come out on top in delivering EPS beats? Consumer staples, IT and healthcare. No surprise there. But also energy—you read that right: energy—and utilities. The laggards include real estate, financials and consumer discretionary.
It’s important to note these are Q1 results. Next quarter will be far more ugly—or, as AB InBev said today, “materially worse.” We’ve already seen a slew of firms remove guidance, which will muddy the picture about the overall health of Corporate America.
There’s been a lot of market commentary about how investors are overlooking this earnings season, and instead focusing on the macro picture: coronavirus infection rates and headlines of economies reopening for business. That makes sense as much of the shutdown damage won’t be baked into corporate performance until companies reveal their Q2 results in mid-summer.
Once this earnings season concludes, I’ll provide an updated report card for the S&P. It will include a big asterisk—the quarterly reports to keep your eye on still lie ahead.
***
Have a nice day everyone. I’ll see you here tomorrow.
Bernhard Warner
@BernhardWarner
Bernhard.Warner@Fortune.com
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Today's reads
The case for buying AAPL. Last week, Apple said it's amassed a $90.5 billion war chest to buy back shares. It has the cash, no problem. But is it wise at these elevated prices when everything seems so fragile? Shareholders, before you cheer on management to buy up shares, do yourself a favor: read Shawn Tully's analysis on the merits of such a mega purchase.
"Historic proportions." Every quarter the European Commission puts out an economic forecast for the eurozone, and yesterday's was a doozy. Southern Europe is expected to see GDP drop by 9% this year should the EU fail to rally to an emergency pact. The uncertainty is pushing the euro to new lows as fresh doubts over the union form.
(Some of these stories require a subscription to access. There is a 50% discount for our loyal readers if you use this link to sign up. Thank you for supporting our journalism.)
Market candy
Locked down with Kafka
The Belgians have eased lockdown measures. But if you must venture outside there are a dizzying list of do's and don'ts that read as if they were written by Dr. Seuss. For example, "it’s mandatory to wear masks when outside between Monday and Saturday from 8 a.m to 6 p.m if you are over 12 years old, but only in specific streets of the borough, and not for the full length of the streets—for example, in Rue Gray, masks are compulsory in front of number 2, and between numbers 1 and 17." Bloomberg has a brilliant take on the maddening Belgian bureaucracy of lockdown.


fortune--2020-05-07--Exclusive: Alphabet vets raise $400 million to remake America’s infrastructure

As the U.S. hunkered in lockdown mode in mid-April, the influential venture capitalist Marc Andreessen published a viral essay titled “Time to Build.” The essay decried the complacency of Western democracies prior to the COVID crisis, and called for a mass rebuilding of physical and social infrastructure. It’s time, Andreessen said, to start over with everything: Roads, housing, education, the health system, the works.
Andreessen is not the only one to see an opportunity in the pandemic. Angela Merkel, the German Chancellor, has called for using economic recovery funds to further climate protection. And in the U.S., two veterans of Google’s parent company, Alphabet, tell Fortune that they are embarking on a massively ambitious plan to reimagine four pillars of the country’s infrastructure—and are drawing on an equally massive purse to do so.
The Google vets, Jonathan Winer and Brian Barlow, are co-CEOs of a new holding company called Sidewalk Infrastructure Partners (SIP for short) that is a spin-off of Alphabet’s cities-of-the-future arm, Sidewalk Labs. According to a securities filing, SIP has raised a Series A funding round of $400 million from Alphabet and investment giant, Ontario Teachers Pension Plan.
SIP claims it has a novel tech-powered approach to modernize the country’s infrastructure like never before. In the company’s first interview, Winer described how SIP plans to transform everything from recycling to how America deploys driverless cars—and how the new venture plans to avoid the political and public relations pitfalls that have tripped up Sidewalk Labs.
Solving the plastics problem
For a company looking to take on intractable infrastructure problems, SIP has more than a few to choose from. Take plastics. Right now, the U.S. is drowning in plastic waste. The country has never been able to recycle plastic to the same extent as metal or paper, and China’s recent decision to stop accepting overseas waste means piles of plastic garbage are growing ever higher. Now, the pandemic is exacerbating the problem as more stores and consumers revert to single-use plastics as a health measure. As with so many other infrastructure challenges, plastic recycling now seems beyond America’s capacity to solve.
SIP, however, believes it has a solution. The company has invested in a startup called AMP that claims its technology can perform recycling feats that others cannot. SIP plans to build a facility in the Midwest that will obtain cast-off plastic from nearby recycling plants, and then sort it with AMP’s robotic arms and artificial intelligence software. SIP says its planned sortation plant will yield plastic that it will sell to the likes of Coca-Cola and Procter & Gamble—big, plastic-dependent companies that have pledged to reduce their environmental footprint.
The plastic venture is part of SIP’s quest to build a “circular economy”—a term popular in environmentalist circles that refers to incorporating trash and waste water into the production cycle. The circular economy is one of the four infrastructure priorities SIP is pursuing. The others revolve around transportation and mobility—particularly autonomous vehicles—as well as energy and digital infrastructure.
In every case, Winer says SIP’s approach is the same: The company identifies an infrastructure need, and then spends months developing a master plan to deploy a mix of technology and physical assets to solve it. Crucial to SIP’s approach, he says, is its network of influential people—such as Coke and P&G executives. “Once we have a thesis, we act as a convener. We bring together groups of people, including technologists, Alphabet executives, traditional infrastructure players and policy makers,” Winer says.
Over the long run, SIP plans to use the same playbook to spur inter-city highways for driverless cars or, in the case of digital infrastructure, build out network and storage capacity to bring highspeed Internet to both rural and urban communities.
The plan is an ambitious one, perhaps even a noble one. It is also fraught. To understand the perils, Winer and Barlow can look to the troubles of their former employer, Sidewalk Labs. Like SIP, its spinoff, Sidewalk Labs touted think-big ideas to transform the modern city with tools like sensors and data analytics. When it came to deploy Sidewalk Labs’ vision in the real world city of Toronto, however, the project became mired in political wrangling and a pushback from citizens fearful of Google gobbling their data. Today, the project is moving forward but so far it has done little to transform Toronto. Update: On May 7, Google announced it would abandon the project.
A new approach to building infrastructure
Winer is very much aware of the political headwinds that Sidewalk Labs has encountered, but believes SIP’s approach can overcome them. For starters, he says the company is not trying to offer up futuristic versions of the city, but rather to identify infrastructure that towns already need, and then help to build it. In many cases, this will be in the form of unglamorous—but sorely needed—facilities like those sorting plants for recycling.
Winer adds that SIP is taking care to consult mayors and other local officials about their needs, and does not engage in lobbying. “We’re not trying to sell our widgets,” he says, stressing that company is playing a very long game.
SIP also cites its unusual corporate structure as an asset. The company does not fit within the traditional business ecosystem of tech, which is driven by startups focused on a narrow set of products or services. Those startups are in turn funded by venture capital firms, which amass large funds of capital from investors who typically anticipate a return within seven years. This structure incentivizes startups to grow at a breakneck pace as their VC backers press them to achieve an “exit” by being acquired or going public.
Winer says that SIP, as a holding company, is set up to build and invest over a longer timeline and that its two large investors will not be pressing it to deliver returns in the near future. The holding company structure also affords SIP a greater degree of flexibility than other tech firms, allowing it to both acquire assets—like the Midwest sorting plant—and also invest strategically in startups that complement those assets. SIP also plans, in many case, to help operate the companies it backs.
Currently, SIP has 15 full-time employees, including finance veterans like Winer and Barlow, as well as data scientists and technologists. The company expects its ranks will grow over the next year.
As for delivering returns to Alphabet and Ontario Teachers, Winer says the timeline is longer than in the venture capital world but also not infinite. “We don’t have a timeline for liquidity or a return by date X, but we’re not doing 20 year science projects. It’s multi-year not multi-decade,” he says.
Like everyone else, SIP did not anticipate the coronavirus crisis, though Winer believes the company may be able to accelerate its mission as Americans reassess their priorities in the pandemic’s aftermath. And indeed the crisis appears to be creating a new political energy for tackling longstanding problems. In Italy, for instance, officials in Milan are pursuing a plan to limit air pollution by converting 22 miles of roads into cycling and pedestrian routes. Meanwhile, in New York City, some are calling for a massive upgrade of crumbling subway and highway system while the city is in partial lockdown.
All of this suggests that it may indeed be “Time to Build”—and SIP is ready.
Our mission to help you navigate the new normal is fueled by subscribers. To enjoy unlimited access to our journalism, subscribe today.
More must-read finance coverage from Fortune:
—Saving lives vs. saving the economy is a false tradeoff, economists say
—ExxonMobil’s CEO is banking on a return to normal, but most others aren’t so sure
—Cybercriminals adapt to coronavirus faster than the A.I. cops hunting them
—How cannabis purveyors are coping during the pandemic
—Inside the chaotic rollout of the SBA’s PPP loan plan
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: Why the banks were ready for the financial impact of coronavirus
Subscribe to How To Reopen, Fortune’s weekly newsletter on what it takes to reboot business in the midst of a pandemic


fortune--2020-05-07--Therapy to reduce men’s testosterone seen as promising coronavirus treatment

Therapy to reduce testosterone and other hormones in men with prostate cancer may have a protective effect against the new coronavirus, a study of thousands of Italian patients showed.
Men with the disease who got hormone therapy had a fourfold lower risk of virus infection than patients who didn’t get such treatment, the study showed. The difference was even more pronounced when the research team compared prostate cancer patients on hormone therapy with people who had any other type of cancer.
The results don’t mean that virus patients should start taking hormone therapy, cautioned Fabrice Andre, director of research at the Institut Gustave Roussy in Paris and editor-in-chief of Annals of Oncology, where the results were published. But the data show that it would be worth studying the therapy in infected people, Andre said.
“This is really a new piece in the puzzle,” said Andrea Alimonti, a professor of oncology at the Universita della Svizzera Italiana and ETH Zurich in Switzerland. Researchers are preparing a follow-up study in which high-risk virus patients would be randomly assigned to take the hormone treatment, and plan to be ready to start if there’s a second wave of infections later this year, Alimonti said.
Reducing testosterone might help because a receptor for male hormones also regulates a protein called TMPRSS2, shown in other research to help Covid-19 infect healthy cells. Therapies that suppress male hormones can also decrease TMPRSS2 — not just in the prostate, but in other tissues in the body, Alimonti said.
The study looked at 4,532 men infected with Covid-19 in Italy’s Veneto region, finding that about 10% had cancer, while 2.6% had prostate cancer. Cancer patients had nearly twice the risk of getting the virus compared with the male population as a whole, and got sicker once they were infected. However, among the 5,273 men on hormone therapy for prostate cancer in Veneto, just four got the coronavirus, and none died.
One confounding factor could have been that cancer patients on hormone therapy are treated at home instead of going to a hospital, making them better able to stick to social distancing, Alimonti said.
More coronavirus coverage from Fortune:
—The Rebuild Program: A project to help small businesses reopen amid a pandemic
—The pandemic makes the case for more transparent layoffs
—Reopening of Shanghai Disneyland is a proving ground for pandemic-era theme parks
—Photo essay: What life looks like in Europe as the continent starts to reopen
—Goldman Sachs doubts there will be a Round 3 of PPP loans for small businesses
—Most college students won’t get stimulus checks—but they should
—How the film industry is planning its post-pandemic return
—PODCAST: How Marc Benioff is helping out during the coronavirus pandemic
—WATCH: Fortune’s top 10 heroes of the coronavirus pandemic
Subscribe to How To Reopen, Fortune’s weekly newsletter on what it takes to reboot business in the midst of a pandemic


fortune--2020-05-07--WHO raises prospect of deliberately infecting healthy volunteers to speed up coronavirus vaccines

Deliberately infecting healthy volunteers with the virus that causes Covid-19 may speed studies of vaccines against the deadly pathogen, the World Health Organization said.
Such studies, which pose significant potential dangers to subjects, may be considered in dire situations and with certain disclosures and protections, a working group of the United Nations health agency said in a report posted Wednesday on its website.
Researchers around the world are racing to develop vaccines to protect against the deadly coronavirus and allow countries to rebuild teetering economies. So-called challenge studies, where treatments or preventatives are tested directly against the infection in informed volunteers, might speed the path of vaccines to the public.
Challenge studies “can be substantially faster to conduct than vaccine field trials,” according to the working group paper, “in part because far fewer participants need to be exposed to experimental vaccines in order to provide (preliminary) estimates of efficacy and safety.”
The report laid out eight conditions that would need to be fulfilled for challenge studies to be considered, including scientific justification, an assessment of potential benefits and the fully informed consent of subjects.
Challenge studies hold the potential to reduce coronavirus mortality around the world but pose significant potential dangers for volunteers, scientists led by Marc Lipsitch, a Harvard School of Public Health epidemiologist, suggested in a recent paper.
“Obviously, challenging volunteers with this live virus risks inducing severe disease and possibly even death,” they said in March in an article in the Journal of Infectious Diseases.
Vaccines are usually tested in large groups, and the results are compared with a separate group of unvaccinated people. Waiting for both groups to become exposed to the illness in their regular daily lives can take months, while challenge studies would ensure that the subjects were promptly exposed to the virus.
Volunteers would typically be healthy, young adults at a relatively low risk of serious disease, and would be monitored and cared for, the scientists said.
Officials at Moderna Inc., where the lead vaccine for Covid-19 is in development, aren’t enthusiastic about the idea.
“I’m not sure I am a huge fan of it really for both practical and ethical reasons,” said Tal Zaks, Moderna’s chief medical officer, during a presentation put on by the health news organization Stat on Wednesday. “As is often the case, the devil is in the details.”
Zaks said he wasn’t sure that a challenge study, which could take months to design and implement, would speed development of the company’s product, which is already entering the second of three phases of study. The shot would have to prevent the development of disease, not just mild infections, or it would be hard to know if the dose picked was the right one, he said.
Foundation 1daysooner has a website where people can sign up to participate in a human challenge trial for Covid-19, if one were to occur. Nearly 14,000 volunteers from 102 countries have signed up so far.
More coronavirus coverage from Fortune:
—The Rebuild Program: A project to help small businesses reopen amid a pandemic
—The pandemic makes the case for more transparent layoffs
—Reopening of Shanghai Disneyland is a proving ground for pandemic-era theme parks
—Photo essay: What life looks like in Europe as the continent starts to reopen
—Goldman Sachs doubts there will be a Round 3 of PPP loans for small businesses
—Most college students won’t get stimulus checks—but they should
—How the film industry is planning its post-pandemic return
—PODCAST: How Marc Benioff is helping out during the coronavirus pandemic
—WATCH: Fortune’s top 10 heroes of the coronavirus pandemic
Subscribe to How To Reopen, Fortune’s weekly newsletter on what it takes to reboot business in the midst of a pandemic


fortune--2020-05-07--Uber’s food delivery helps cushion the blow of COVID-19 on rides business

‘ This crony doesn ’ t cut it.
’ Democrats speak out against the new head of the USPS

Uber has laid off thousands of employees and lost billions of dollars because of the coronavirus pandemic. But the company’s shares got a lift on Thursday after it reported weak quarterly results that were not quite as bad as analysts had expected.
First-quarter revenue rose 14% year over year to $3.54 billion, slightly beating already lowered analyst estimates of $3.51 billion. Its losses ballooned to $2.95 billion, $2.1 billion of which was from write-downs in the value of investments—compared to a $1 billion loss in the same quarter in 2019.
While rides bookings were down 80% in April, Uber’s overall bookings for April fell 40% due to a rise in demand for its food delivery service, Uber Eats. In recent weeks, CEO Dara Khosrowshahi had said the rides business was on the “comeback trail,” led by states that are beginning to ease their stay-at-home restrictions like in Georgia, where demand jumped 43%, and in Texas, where it increased 50%.
In after-hours trading, Uber’s stock initially dropped 2%, but it later popped 6%, to $32.82 per share, following Khosrowshahi’s suggestion during a call with investors that the business was recovering. It’s shares had already risen 11% during regular trading on Thursday.
The earnings come just a day after Uber said that it would cut 3,700 jobs, or 14% of its global workforce, and shuttered 180 support centers for drivers. Khosrowshahi had previously warned investors that Uber would survive the slowdown given its “strong” balance sheet. One month after those comments, he withdrew the company’s full-year financial guidance for 2020, a year in which he had said the company to become profitable, excluding certain expenses.
But Khosrowshahi, on Thursday, said the difficulties created by the pandemic had only delayed Uber’s profitability, not squashed them. The company now expects to become profitable, minus certain expenses, in 2021.
“We believe the disruption caused by COVID-19 will impact our timeline by a matter of quarters and not years,” Khosrowshahi said.
Tom White, an analyst at investment bank D.A. Davidson, described Uber’s results as being “fine,” not “great.” And while the company sounded upbeat, its future performance is unclear.
“Uber for whatever reason was not willing to draw the line in the sand around the magnitude of losses” ahead, he said.
But Uber Eats may have helped cushion the blow the pandemic had on the company. Khosrowshahi said he expects the unit to continue to benefit from the explosive growth of food delivery as people avoid going into restaurants.
The food-delivery service generated $819 million in quarterly revenue, up 53% from the same period last year. And though the segment continues to add revenue, it still loses money. Excluding certain expenses, that amounted to $313 million during the first quarter, slightly more than during the same quarter last year.
But Khosrowshahi has big hopes for the service as well as the company’s foray into grocery deliveries. Uber acquired Latin American grocery delivery company Cornershop last year and expects to close the sale in the next few months. And during the pandemic, Uber has partnered with supermarket chains and convenience stores in various countries to deliver a limited number of items through its Uber Eats service.
The “big opportunity” the company assumed the food delivery service had just got “bigger,” Khosrowshahi said.
He also talked up a recent cost-cutting plan that he expects to save more than $1 billion annually. That includes an announcement by Uber earlier in the day that it had moved its bike-sharing brand JUMP into Lime, a rival in which it had just led a $170 million investment. Additionally, the company said that Uber Eats would exit eight regions to better focus on areas where it could be one of the top two providers—part of a strategy Khosrowshahi had announced last year.
More must-read tech coverage from Fortune:
—Remote work, online grocery shopping, cord cutting: What coronavirus trends will stick
—No buses, no problem. Some cities provide subsidized Uber rides amid pandemic
—How to choose a video chat app? Grade it on privacy
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: Zoom’s ups and downs since the coronavirus crisis
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.


fortune--2020-05-07--‘This crony doesn’t cut it.’ Democrats speak out against the new head of the USPS

Salesforce CEO Marc Benioff describes what office life will be like after COVID-19

The U.S. Postal Service’s Board of Governors announced Wednesday evening that President Donald Trump had appointed Louis DeJoy to be the next postmaster general. The businessman from North Carolina has donated millions to the Republican party and to President Donald Trump.
The appointment of DeJoy, said Democrats, is entirely political. They worry that he will work alongside the Trump administration to continue the Postal Service’s slow march towards privatization.
“When I heard that he had been appointed I quickly realized that the president is irrepressible in his move to destroy the USPS,” Congressman Emanuel Cleaver (D-MO), a long time advocate of keeping the Postal Service public, told Fortune. The president, he asserted, doesn’t like the Postal Service and appointed DeJoy with the “clear purpose of dismantling it.”
President Trump has recently been outspoken in his disdain for the Postal Service, linking it to sworn enemy Amazon founder Jeff Bezos. He has called the institution “a joke” and said that he believes the quasi-independent agency should “quadruple” the amount of money it charges Amazon to send packages.
“President Trump rewards a partisan donor by installing him at the United States Postal Service,” said Congressman Gerry Connolly (D-VA), chairman of the House Government Operations subcommittee in a statement to Fortune. “The Postal Service is in crisis and needs real leadership and someone with knowledge of the issues. This crony doesn’t cut it.”
DeJoy donated $1.2 million to the Trump Victory Fund, and his wife, Dr. Aldona Wos, served as ambassador to Estonia during the George W. Bush administration. She has been nominated by the current president to act as ambassador to Canada.
It was a piece of legislation crafted with the help of the Bush administration in 2006 that sent the Postal Service on its current spiral toward bankruptcy. The act requires the agency to pre-fund all employee retiree health benefits for 75 years in the future. That burden accounts for an estimated 80% to 90% of the agency’s revenue losses. When combined with steep drops in business mail because of COVID-19 closures, current Postmaster General Megan Brennan has predicted that the Postal Service may have to shutter by the end of summer.
Postal advocates say that the “onerous” and “draconian” 2006 bill was created with the intention of forcing the Postal Service to privatize. The Trump administration, under the leadership of treasury secretary Steve Mnuchin has also called for certain parts of USPS to be sold off.
“The post office going under is a major concern for our democracy, especially coming from a rural state where during this pandemic it’s one of the only ways that people can communicate in addition to technology, so I’m concerned about this nominee,” said Senator Amy Klobuchar in response to a question asked by Fortune on a press call. ”I don’t think we should be politicizing the post office, and I think at this time we should be working together to find reforms to make it stronger.”
The Postal Service is the most trusted federal agency in America, with an approval rating of more than 90%. It currently employs 640,000 staffers, many of whom are people of color and military veterans. Additionally, the USPS is the only mail agency required by the constitution to deliver to every address in the country equally and with uniform rates. A recent study by the Institute for Policy Studies found that without the USPS 70 million Americans would see an increase in surcharges for deliveries.
Some members of Congress and postal advocates are calling for a bailout and debt forgiveness for the Postal Service in the next COVID-19 stimulus package. They say that this is the only way to save the institution that has not relied on taxpayer funding in more than 30 years, and that it is especially vital to keep the agency healthy ahead of a big push for vote-by-mail this November due to the pandemic. There are some concerns that the appointment of a new postmaster general could end that push.
“This is a nail [in the coffin], but I don’t think it’s the final nail because I think that there are Republicans who are not going to stand for this. They know that we’re never going to get a private contractor to do what the USPS is doing,” said Cleaver. “If members of Congress remain silent and passive, the Post Office will not be in existence a year from now. People can blame this on Donald Trump all they want, but history will fault all of us who remain silent right now.”
DeJoy ran a logistics and distribution company called New Breed Corporation, which contracted with the Postal Service to repair equipment. In a 2016 interview with Triad Business Journal he claimed the contract between his company and USPS was worth between $3.5 and $4 billion. He sold his company in 2014 for $615 million.
In a statement about his appointment, DeJoy said that he looked forward “to working with the supporters of the Postal Service in Congress and the Administration to ensure the Postal Service remains an integral part of the United States government. Postal workers are the heart and soul of this institution, and I will be honored to work alongside them and their unions.”
The Postal Board of Governors also issued a statement praising DeJoy.
“Louis DeJoy understands the critical public service role of the United States Postal Service, and the urgent need to strengthen it for future generations,” wrote Robert Duncan, chair of the board. “The Board appreciated Louis’ depth of knowledge on the important issues facing the Postal Service and his desire to work with all of our stakeholders on preserving and protecting this essential institution.”
Board member David Williams resigned shortly before the appointment, signaling that perhaps not all was well. A postal insider told Fortune that he expects Congress to hold hearings with Williams to ask why he resigned from the Board of Governors.
DeJoy will be the 75th postmaster general in the United States and is expected to fill his role beginning June 15th.
More must-read stories from Fortune:
—Real unemployment rate soars past 24.9%—and the U.S. has now lost 33.5 million jobs
—Inside China’s reopening: 7 personal stories of life after lockdown
—Sheryl Sandberg: The pandemic is creating a “double double shift” for women
—Trump’s demand that China pay coronavirus reparations evokes an ugly history
—Now is the time to invest in preschool education. Here’s why
—PODCAST: How Marc Benioff is helping out during the coronavirus pandemic
—WATCH: Why the banks were ready for the financial impact of coronavirus
Subscribe to How To Reopen, Fortune’s weekly newsletter on what it takes to reboot business in the midst of a pandemic


fortune--2020-05-07--Coronavirus hospitalization is the new barrier to military enlistment

The Defense Department has begun barring the enlistment of would-be military recruits who have been hospitalized for the coronavirus, unless they get a special medical waiver.
Under a Pentagon memo signed Wednesday, applicants who have tested positive for the virus but did not require hospitalization will be allowed to enlist, as long as all health and other requirements are met.
Those recruits who tested positive won’t be allowed to begin the enlistment process until 28 days after the diagnosis, and they’ll be required to submit all medical documentation. They’ll be cleared for military service 28 days after they’re finished with home isolation, and they won’t need a waiver.
The Associated Press obtained a copy of the guidelines, which say that people who were hospitalized may have longer-term physical limitations. Those people would be considered “permanently disqualified” but could then be allowed to request a waiver from the military service they want to enter.
The military services could then require additional medical testing or evaluation as part of that waiver process to determine if the applicant should get a waiver and be allowed to enlist. The new requirement adds COVID hospitalization to a long list of medical conditions — such as asthma — that require waivers.
It is unclear how many potential recruits could be affected by the new guidelines.
Some patients hospitalized with the virus have suffered lung damage. Long-term lung damage could hinder recruits from passing grueling physical requirements for military services.
“Residual and long-term health effects for individuals with severe outcomes, such as hospitalization or admission to an intensive care unit from COVID-19 are unknown,” the memo said.
For most people, the new coronavirus causes mild or moderate symptoms, such as fever and cough that clear up in two to three weeks. For some, especially older adults and people with existing health problems, it can cause more severe illness, including pneumonia, or death.
More coronavirus coverage from Fortune:
—The Rebuild Program: A project to help small businesses reopen amid a pandemic
—Real unemployment rate soars past 24.9%—and the U.S. has now lost 33.5 million jobs
—McConnell focuses Senate on conservative judge appointments rather than coronavirus
—Photo essay: What life looks like in Europe as the continent starts to reopen
—Trump’s demand that China pay coronavirus reparations evokes an ugly history
—The coronavirus is driving a mental health crisis. Tech can help tackle it
—IBM thinks tech tested by astronauts could help us take care of isolated loved ones
—PODCAST: How Marc Benioff is helping out during the coronavirus pandemic
—WATCH: Fortune’s top 10 heroes of the coronavirus pandemic
Subscribe to How To Reopen, Fortune’s weekly newsletter on what it takes to reboot business in the midst of a pandemic


fortune--2020-05-07--Salesforce CEO Marc Benioff describes what office life will be like after COVID-19

Life for thousands of Salesforce employees won’t be the same after they return to the office following months of working remotely during the coronavirus pandemic.
Salesforce CEO Marc Benioff explained on Thursday during a Fortune CEOI video call about how the business software giant has been navigating the uncertain times, describing the crisis as “unlike anything I’ve ever been through.”
“This is my first pandemic Alan, so I don’t know if I have the right answers,” Benioff told Fortune CEO Alan Murray, who was moderating the event.
Benioff said that 50 of the company’s 50,000 employees had contracted the coronavirus. Like other tech companies including Amazon and Microsoft, Salesforce urged its employees to work from home in early March, just before shelter-in-place rules started spreading across the country.
General anxiety about the coronavirus coupled with the isolation of being alone at home took an emotional toll on Salesforce’s workforce, with 36% saying they were experiencing mental health issues, Benioff said. The company now does daily mental health check-ins and calls with employees to gauge employee well-being, he explained.
Benioff cautioned that while Salesforce and other companies are starting to take steps “to get business happening” like it was previously, “we have to remember the virus is still out there.”
“That is a question mark,” Benioff said. “And there’s a high likelihood for the virus returning in the fall—that has to be taken into consideration.”
He noted that companies must take in account numerous scenarios for re-opening their businesses, even planning for the possibility of the pandemic extending until the middle of next year.
Salesforce workers in South Korea will likely return to the office on May 11, he said. Health experts have praised South Korea for its early actions to reduce the spread of the virus, such as quickly implementing nationwide coronavirus testing.
But office life will be different for those South Korean Salesforce employees, Benioff said. Workers will have their temperatures checked daily and will need to tell management if they’re feeling sick.
Workers will be “queued into the elevator” in an orderly manner and they will be ordered to allow for “appropriate distancing on the floors,” Benioff said. Salesforce will use its own contract-tracing technology to warn others of any spread of the virus. Employees will be notified if fellow Salesforce workers get a fever, and all workers will then be required to work from home for at least two weeks, he said.
When Salesforce workers in San Francisco, where the company is based, return to the office during the first week of June (as is currently planned), Benioff said that they will face a similar situation as their South Korean colleagues.
“When you come back, we won’t have 10, 20 people in the elevator—we will have a few people,” Benioff said. “They will get a ticket [informing them] when they can arrive in the elevator, much as you would arrive at Disney for a ride.”
Salesforce may even install plexiglass dividers at people’s desks, which would act like corporate versions of salad bar sneeze guards.
As Benioff put it, “It will be a slightly different work environment than it is today.”
“A jar of Gummi Bears is not going to be there,” Benioff said.
More must-read tech coverage from Fortune:
—Remote work, online grocery shopping, cord cutting: What coronavirus trends will stick
—How T-Mobile shifted 12,000 employees to work from home in less than two weeks
—Coronavirus patient data stored in electronic health records found difficult to study at scale
—The startup founder in India striving to improve mass transit through the pandemic
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: Zoom’s ups and downs since the coronavirus crisis
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.


fortune--2020-05-07--Gilead’s moral (and financial) COVID-19 conundrum

Good afternoon, readers.
When remdesivir, biotech giant Gilead’s experimental antiviral drug, was given Food and Drug Administration (FDA) emergency authorization to treat certain COVID-19 patients, you might have thought that investors would rush into the breach.
But life—and the life sciences market—has a way of throwing curveballs at you. Since President Donald Trump announced remdesivir had received FDA authorization last Friday, Gilead’s stock has actually fallen more than 6.8%. The slide began promptly after the announcement.
As experienced biopharma investor Brad Loncar told me last week, there are plenty of factors fueling that slide. “Biotech investors know there’s no money in this,” he said, in part referring to “biotech ‘generalists’ who are throwing money at everything they see in the headlines.”
Those generalists are just looking to make a quick buck off of anything related to COVID, but they’re anxious that public scrutiny will rob treatments like remdesivir of profitability. (Loncar argues that it’s more important to look to the long-term science demonstrated in remdesivir’s development, and the implications it has for a company like Gilead in the future.)
But it can be difficult for companies to strike a proper balance in the midst of a pandemic, especially in the short term. Gilead CEO Daniel O’Day is well-attuned to that reality. He’s stated on multiple occasions that the biotech will be under immense pressure to price remdesivir fairly. The firm has also committed to giving away its existing batches for free and investing $1 billion in scaling up availability—a gigantic sum with no assurance of anything approaching a big return.
And therein lies the rub. Just how might Gilead price this treatment over the long term?
The Institute for Clinical and Economic Review (ICER), a pharmaceutical pricing watchdog that has long been a thorn in the industry’s side, has a few ideas.
ICER believes the treatment would be cost-effective at a price tag of $4,460 per patient—with some caveats. The current version of remdesivir is administered via IV in a hospital setting for seriously sick COVID-19 patients, and while it’s nothing approaching a cure, it has shown results in cutting down on hospital stays and clearing up expensive medical equipment such as ventilators for wider use.
ICER lays out a number of different scenarios for remdisivir pricing ranging from a non-profit approach that might be justified at $10 per treatment to the $4,460 number that would require more evidence showing remdesivir decreases mortality risk.
So what will Gilead do? The company won’t be announcing a price point until more data may change the calculus. It will be a tightrope act between corporate citizenship during a disaster and financial imperatives.
Read on for the day’s news, and see you again next week.
Sy Mukherjee
sayak.mukherjee@fortune.com
@the_sy_guy
DIGITAL HEALTH
Using space strategies to care for the isolated during COVID-19. My colleague Jeremy Kahn has a fascinating piece on how IBM—a tech giant long associated with the American space program—believes that strategies for maintaining mental health aboard space stations may help care for the at-risk elderly here on Earth during the COVID-19 pandemic. A digital assistant being tested on the International Space Station (ISS) could, somewhere down the line (it's still in very early development stages), allow families to monitor their elderly loved ones who may not be able to leave the house or head to a hospital. (Fortune)
Livongo stock skyrockets on explosive earnings report and telehealth bullishness. Shares of digital health firm Livongo shot up more than 12% in Thursday afternoon trading after the company announced earnings that sped by Wall Street expectations, including quarterly revenue growth of more than 100%, according to a company spokesperson. Livongo's suite of offerings is meant to tackle chronic conditions such as diabetes by linking patients with health experts and coaches via a virtual platform. And multiple analysts, including from Morgan Stanley, have said that the coronavirus pandemic's downstream effects are positive signs for Livongo as more and more people turn to telemedicine services.
INDICATIONS
In pharma earnings season, Merck's Keytruda is still supreme. Merck's blockbuster cancer immunotherapy Keytruda continues to dominate its space, fueling $3.2 billion in first quarter 2020 adjusted earnings for the pharma giant compared with $2.9 billion during the same period last year. But the company has also warned that 2020 will be a tough year, with overall revenues falling due to COVID-19. Merck shares were down about 1.1% on Thursday. (TheStreet)
Moderna plots a summer late-stage trial launch for coronavirus vaccine. Biotech Moderna will attempt to start late-stage coronavirus vaccine trials in the early summer, the company said on Thursday, sending the company's stock up nearly 10%. If that timeline holds out, Moderna's so-called mRNA vaccine candidate, mRNA-1273, could—could—theoretically be approved early next year. And it would be the firm's first approved therapy to boot. But there's still plenty of questions about mRNA technology at large and how effective it might be. In other corners of the biopharma world, companies such as Pfizer and Johnson & Johnson are also actively engaged in COVID vaccine R&D. (FierceBiotech)
THE BIG PICTURE
Major insurers to offer discounts amid coronavirus. Three of the nation's largest health insurers say they will offer upfront savings to customers as a deep drop in demand for basic medical services has inflated their bottom lines. UnitedHealth, Cigna, and Humana (all Fortune 500 companies) announced they would take a variety of actions including rebates for certain customers, capping drug costs for people who have lost their jobs amid the crisis, and cost-sharing for elderly patients for primary care visits. While hospitals have suffered from a loss of revenue from elective surgeries postponed due to the outbreak, insurers have had to pay out significantly less money. (Fortune)
REQUIRED READING
Exclusive: Alphabet vets raise $400 million to remake America's infrastructure, by Jeff John Roberts
Real unemployment rate soars past 24.9%, by Lance Lambert
Employers must do more to support women during the pandemic, Sheryl Sandberg says, by Emma Hinchliffe
The pandemic makes the case for more transparent layoffs, by Michal Lev-Ram
Sign up for other Fortune newsletters.


fortune--2020-05-07--Zoom acquires encryption startup Keybase to help make video calls more secure

Video conferencing service Zoom is acquiring Keybase, a startup that will help it implement end-to-end encryption to protect calls from unwelcome guests and clandestine monitoring.
Financial terms of the deal, negotiated over Zoom calls amid shelter-in-place orders, were not disclosed.
As coronavirus drives vast swathes of economic and social life online, Zoom usage has exploded from 10 million daily meeting participants in December 2019 to 300 million by the end of April 2020. But that explosion has exposed security weaknesses in the videoconferencing software. A wave of so-called ‘Zoom bombings’, in which uninvited guests disrupted video calls, were particularly embarrassing, and led some schools and businesses to ban the software.
In early April, Zoom responded by announcing that it would freeze new features and focus its resources on a 90-day push to enhance its security. Though it already offers some encryption, Zoom says the Keybase acquisition will help it completely redesign how it encrypts calls. For instance, in Zoom’s current design, the codes used to encrypt a secure call are generated by Zoom’s own servers, which could compromise security if hackers gained access to them. Zoom said it will now develop an option for users to generate these encryption keys on their own devices.
The new end-to-end encryption feature will be limited to paid accounts, and will not be available for some time. Zoom said it will release a draft design for the feature on May 22, then seek feedback from users, experts, and other stakeholders. The heightened security will also come with some tradeoffs – recording of calls in will be disabled for encrypted meetings, as will ‘phone bridging,’ the ability to dial into a Zoom meeting by telephone.
One risk of the new encryption features is their potential use for nefarious purposes, including child abuse. While encryption is key to the online privacy of law-abiding users, it also make it impossible for law enforcement to monitor calls, leading advocacy groups to push back against end-to-end encryption on other digital services, particularly Facebook. Zoom seems acutely aware of this conundrum, saying that while it will not monitor meetings or create any ‘back door’ for law enforcement access, it will “look for evidence of abusive users based upon other available data.”
Though Zoom hasn’t disclosed any plans, other elements of Keybase’s existing products could also have broader appeal as the coronavirus pandemic continues. For instance, malicious hackers have tried to exploit the surge in white-collar employees working from home in a variety of ways. Many of Keybase’s existing features focus on verifying users’ digital identities, which could help combat cyberattacks based on online impersonation.
The type of secure and private digital technology Keybase is focused on could also be significant in the fight against the coronavirus. Many plans for reopening the economy include contact tracing to help slow the spread of the virus, but some solutions could also threaten user privacy. Privacy-protecting contact-tracing infrastructure currently in development by Apple and Google relies on encrypted communication systems similar to those used by Keybase—and, soon, Zoom.
More must-read tech coverage from Fortune:
—Remote work, online grocery shopping, cord cutting: What coronavirus trends will stick
—How T-Mobile shifted 12,000 employees to work from home in less than two weeks
—Coronavirus patient data stored in electronic health records found difficult to study at scale
—The startup founder in India striving to improve mass transit through the pandemic
—Listen to Leadership Next, a Fortune podcast examining the evolving role of CEO
—WATCH: Zoom’s ups and downs since the coronavirus crisis
Catch up with Data Sheet, Fortune’s daily digest on the business of tech.


fortune--2020-05-07--Sonos cofounder hits back at Spotify CEO Daniel Ek for complaining about Apple

Spotify CEO Daniel Ek reiterated previous gripes he’s had with Apple during an interview this week, saying its platform is still not open enough to third-party apps like the Sweden-based music streamer. But according to the cofounder of high-end speaker and home audio company Sonos, Spotify operates an even-more closed ecosystem than Apple.
In a tweet posted Wednesday, Sonos cofounder John MacFarlane said it was “solid irony” that Ek was criticizing Apple’s platform. “Having worked closely with both Apple and Spotify, I would say it’s more significantly more difficult to work within Spotify’s ‘closed’ ecosystem than Apple’s,” he wrote. “Respect and appreciate both companies, but ‘open’ Spotify is not.”
Solid irony here.
Having worked closely with both Apple and Spotify, I would say it’s more significantly more difficult to work within Spotify’s “closed” ecosystem than Apple’s.
Respect and appreciate both companies, but “open” Spotify is not. https://t.co/bf4pcyK0MN — John MacFarlane (@JohnLMacFarlane) May 6, 2020
Sonos products for the most part rely on third-party services like Spotify and Apple Music to stream music, podcasts, and audiobooks through the Sonos app. Industry analysts and commentators have suggested in recent years that Apple buy Sonos to boost its struggling HomePod smart speaker business.
In his tweet, MacFarlane shared a link to a recent Bloomberg interview with Ek. In it, Ek said that he has seen encouraging signs from Apple—like rolling out a feature allowing Siri to control music services other than Apple Music—since filing an antitrust complaint against Apple with the European Union a year ago.
In the complaint, Spotify accused Apple of disadvantaging rival services by taking a 30% cut of subscriptions and limiting functionality on the Apple Watch and Siri.
Apple responded to the complaint last year, saying its App Store helped Spotify become successful. “The majority of customers use their free, ad-supported product, which makes no contribution to the App Store,” Apple said in March 2019. “Even now, only a tiny fraction of their subscriptions fall under Apple’s revenue-sharing model. Spotify is asking for that number to be zero.”
In the Bloomberg interview, Ek said that he expects Apple to open up in the long term. “It’s moving in the right direction, but,” he added, “we still have many, many steps to go before we consider Apple an open and fair platform.”
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More must-read entertainment coverage from Fortune:
—Taika Waititi is officially directing a new Star Wars movie
—The best streaming services for live TV in 2020, according to critics
—‘The Last Dance’ director is racing to finish episodes. Kobe Bryant and “the price of global fame” is next
—How CBS legal drama All Rise made its virtual coronavirus episode
—Inside the earliest days of CNN and the birth of 24-hour cable news
—PODCAST: How Marc Benioff is helping out during the coronavirus pandemic
—WATCH: One on one with Grace Potter
Subscribe to How To Reopen, Fortune’s weekly newsletter on what it takes to reboot business in the midst of a pandemic


fortune--2020-05-07--Alamo Drafthouse joins the video-on-demand market

Get ready for more movie nights at home.
Alamo Drafthouse Cinema announced Thursday that it is launching a VOD platform, Alamo On Demand, in partnership with ScreenPlus and Vista Cinema. The new service from the Austin-based theater chain will feature a library of films, from recent releases to classics, that can be rented or bought.
“Alamo on Demand helps us to continue the conversation past the theatrical window and recommend movies we love to our community,” said Alamo founder and executive chairman Tim League in a statement. “And in these shuttered days and beyond, these rentals and purchases help support your neighborhood theater.”
The chain, known for organizing themed movie nights and similar events at its physical locations, will continue curating offerings via the on-demand platform. For instance, Weird Wednesday’s programmer will help organize genre classics. Meanwhile, later in the year, Enter the Clones of Bruce—a documentary about Bruce Lee imitator films that came out after the martial arts star’s death—will be paired with some of the referenced films, which will either be rented solo or as part of a larger package.
More recent film releases coming to the platform include the Academy Award-winning Parasite and Portrait of a Lady on Fire, as well as an exclusive premiere of documentary Kate Nash: Underestimate the Girl. Alamo On Demand will also work with new partners, such as Sony Pictures Classics, in coming weeks, while continuing conversations with other big studios.
Alamo on Demand is also launching with the future in mind—rentals and purchases on the platform will result in loyalty program credit, according to the theater chain’s announcement. And once studio tentpoles start hitting theaters again, Alamo Drafthouse may supplement its marketing with rental packages focusing on the director’s previous films or films that may have influenced the new release.
Alamo’s decision to launch its new on-demand platform comes as the majority of theaters around the country remain shuttered during the coronavirus pandemic. Many studios have also delayed major releases to later this year or next year. Theaters are looking at a variety of strategies for reopening, which include everything from incorporating social distancing measures to rereleasing older blockbusters as they’re able to open up.
Alamo On Demand is live, “with apps for iOS and Android coming very soon,” according to the company.
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fortune--2020-05-07--McConnell focuses Senate on conservative judge appointments rather than coronavirus

Majority Leader Mitch McConnell reconvened the Senate, with an average age of 63, to Washington D.C.—where there are still hundreds of new daily cases of COVID-19—this Monday. The primary reason was not just to pass an emergency stimulus bill or to pad protections for essential workers, but also to continue his agenda of quickly confirming conservative judges to lifelong appointments.
In an interview last week, McConnell confirmed his motivation. “As soon as we get back in session, we’ll start confirming judges again,” he told conservative radio host Hugh Hewitt. “We need to have hearings, and we need to confirm judges.”
McConnell has one particular judge in mind who some have referred to as his political protégé: the 38-year-old Judge Justin Walker of Kentucky. McConnell has known Walker since he was in high school and personally took him to the Oval Office to meet with President Donald Trump.
The seat Walker is set to occupy does not become vacant until September, but McConnell prioritized his hearing during the COVID-19 pandemic. The White House said last month that if Congress did not reconvene President Donald Trump would use a presidential power that has never been used to adjourn the legislative body and fill positions himself.
“The current practice of leaving town while conducting phony pro forma sessions is a dereliction of duty the American people can’t afford during this crisis,” said Trump. “They have been warned.” McConnell had spoken with the president earlier in the day about what he referred to as Senate Democrats’ “unprecedented obstruction” of judgeships.
Despite Walker being rated as non-qualified by the American Bar Association for the lower court job he now occupies because he did “not meet the minimum professional competence standard” and “has a very substantial gap” in experience, the Senate held a three-hour hearing Wednesday to discuss confirming him to the higher D.C. court, often seen as a stepping stone to the Supreme Court.
Democrats do not have the votes to block his confirmation without Republican defection, and Republicans voted unanimously in favor of Walker last year.
Walker began his career as a law clerk to Supreme Court Justice Brett Kavanaugh and was an ardent supporter of him during his controversial 2018 confirmation hearing. Both McConnell and Kavanaugh were in attendance when Walker was sworn in as a district judge in Louisville just six months ago. He is known for his ardent opposition to the Affordable Care Act, which he has referred to as “indefensible” and “catastrophic.”
Democratic members of the Senate pushed back against the decision to hold hearings on judge appointments, stating in a letter addressed to McConnell that “we respectfully urge you to have the Senate focus on COVID-19 related matters and oversight of all COVID-related legislation enacted by Congress,” instead of debating “non-COVID related nominations.” They also requested that McConnell create a plan to ensure the safety of senators, many of whom are in their 80s and highly susceptible to life-threatening complications should they be exposed to the virus.
“There is no way to do this without increased risk,” 86-year-old Sen. Dianne Feinstein said in a statement last Wednesday. “This is the wrong example for the country.”
There is minimal scheduled legislative or committee business related to COVID-19 health or economic emergencies on the docket. One of the few actions was confirming the inspector general for pandemic recovery at the Treasury Department.
Democrats say that the Senate was called to reconvene without proper safety measures in place. The Capitol’s physician, Dr. Brian Monahan, told Republicans on a conference call that he did not have enough COVID-19 tests to test all 100 Senators and would be unable to conduct any rapid testing. Some moderate Republicans protested the decision but were ultimately outranked.
“As much as judges are important, what people want us to be focused on is COVID,” Senator Lisa Murkowski of Alaska said on the call according to reports.
Since the beginning of the Trump presidency, McConnell has clearly stated his goal to stack federal courts with conservative-leaning judges who receive lifetime appointments to their role. And with the help of a Republican-majority Senate until at least January, he has added nearly 200 new judges since 2016. Together, the Trump administration and the Republican Senate have seated more (and younger) tenured judges than all but one other president, Jimmy Carter.
When Trump took office, Republican-appointed circuit judges occupied 40% of the 179 statutory judgeships. Today they occupy well over half. The Senate has filled more empty district courts seats in red states than blue states, leading to logjams in areas that tend to vote for Democrats.
“Judges are being vetted on whether they have these conservative ideological commitments in a much more rigorous way than we saw in past administrations,” said Alicia Bannon, managing director for the Democracy Program at New York University’s Brennan Center for Justice. “You have more conservative judges at the district level and the appellate level, so you may actually see judges confirming and upholding decisions more because you’re seeing shifts to the right on both levels. You may see a growing hostility to certain kinds of civil rights cases, those cases may end up being dismissed at an earlier phase.”
Republicans have dismissed the American Bar Association ratings when they’re unfavorable to their candidates. Senator Ben Sasse of Nebraska took to the floor to call the politically neutral association “a liberal organization that has publicly and consistently advocated for left-of-center positions for more than two decades now.”
Pamela Bresnahan, head of the litigation practice group at Vorys and former chair of the Standing Committee on the Federal Judiciary at the American Bar Association, is frustrated.
“This is an independent committee. What the Senate and Trump did was marginalize that voice,” she said. “If we found someone wasn’t qualified they said we were a bunch of left-wing liberals, and then if we found somebody well-qualified it wasn’t mentioned because that drove against their thesis that we were an independent voice.”
Bresnahan also expressed worry that the Trump administration was not working to nominate local judges who were familiar with their districts.
“A lot of the people that are appointed are not from the jurisdiction where they’re appointed,” she said. “They’re from out of state. Most of them, with a couple of notable exceptions, are super smart and went to fancy schools, but they may not have come from the bar where they’re sitting so they don’t know as much about the history of the cases in that court.”
Carl Tobias, the Williams Chair in law at the University of Richmond School of Law, has seen a noticeable difference.
“Ideology in the appeals courts has certainly changed, and the judges are extremely conservative,” he told Fortune.
The push to continue appointments through unsafe conditions during a global pandemic could point to fears that Democrats may be poised to take over the Senate after this November’s election and that McConnell believes time is of the essence.
McConnell is also facing increased scrutiny in his push for older judges to retire and make way for young Republican picks. The chief judge of the U.S. Court of Appeals for the District of Columbia opened an investigation last month into the role McConnell played in creating the vacancy filled by Walker. Reports by Kentucky’s Courier-Journal found that the leader privately lobbied for a judge to retire so that he could bring Walker to the seat.
“Justin Walker’s nomination was already controversial, but this emerging investigation means an even darker cloud is hanging over his appointment,” wrote Demand Justice executive director Brian Fallon in a statement. “The hearing on Walker’s nomination should not go forward until we know the truth about what ethical lines Mitch McConnell crossed to get Walker this seat. At the very least, McConnell should come clean about whether and when he contacted Judge Thomas Griffith prior to his sudden retirement.”
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fortune--2020-05-07--Neiman Marcus files for bankruptcy protection, expecting to emerge in the fall

Neiman Marcus’ mountains of debt and stores closures because of the COVID-19 outbreak proved to be too much for the luxury department store company.
On Thursday, the storied Dallas-based luxe purveyor, which also owns New York’s Bergdorf Goodman emporium, filed for Chapter 11 bankruptcy protection in a pre-packaged arrangement with creditors that will significantly lower its debt load. The arrangement should give it more breathing room to weather the global pandemic and rebuild its business.
Neiman Marcus, whose pre-filing long term debt was $5.1 billion—a bit more than its total annual sales—had begun to see improvements in its business, but the pandemic that forced it to close its stores starting in March threw those turnaround ambitions off track.
“Prior to COVID-19, Neiman Marcus Group was making solid progress on our journey to long-term profitable and sustainable growth,” said Neiman Marcus chairman and CEO Geoffroy van Raemdonck.
The company has had to redirect hundreds of millions of dollars a year in interest on its debt rather than capital spending, even as rivals like Nordstrom have invested heavily in stores and e-commerce.
This new plan will help Neiman on that front. The bankruptcy filing in federal bankruptcy court in Houston will eliminate $4 billion of its debt, the legacy of two leveraged buyouts by private equity firms. The deal with creditors is subject to approval by the judge. Neiman’s creditors will become majority owners.
The company, which operates 43 department stores, is not planning any mass store closings, a spokesman told Fortune.
The filing comes three days after J.Crew, also a private equity owned, debt-laden fashion retailer, sought bankruptcy protection in a deal that turned its lenders into owners.
Neiman has secured $675 million debtor-in-possession financing—money that will allow it to keep operating while in Chapter 11 and pay vendors and employees—from creditors holding over two-thirds of the company’s debt. Those creditors have also committed to $750 million in exit financing. Neiman said it expects to emerge from bankruptcy protection in the fall.
Until then, Neiman is likely to face a tough haul. The company gets 36% of sales online, which helps. But only a few stores have reopened.
What’s more, the macro environment is brutal for the luxury world: Bain & Company on Thursday estimated global spending on personal luxury items could fall 20% to 35% in 2020. Neiman is vulnerable to the sharp drop in overseas tourism, as well as the weak oil markets which spur much of the luxury spending in Texas, where it has six stores.
In addition to an economic downturn, U.S. luxury department stores are also struggling with many shoppers preferring to buy directly from brands. Barneys New York liquidated its stores earlier this year, and this week, Nordstrom announced it was closing 14% of its full service department stores.
While Neiman Marcus is undoubtedly a viable business, it has a lot of work to do. For starters, it needs to renew its clientele. Neiman Marcus “relies on its older, more traditional customer base,” says Neil Saunders, managing director of GlobalData Retail.
And as Fortune wrote last month, Neiman Marcus will need to redefine what kind of luxury it stands for at a time many of the same brands are sold by its competitors. The shopping experience will have to adapt to new ways customers research products and purchase them.
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fortune--2020-05-07--Trump’s demand that China pay coronavirus reparations evokes an ugly history

U.S. officials want China to pay reparations for the coronavirus. In China, those demands echo a history of foreign imperialism.
When asked about reparations at an April 27 press briefing, President Donald Trump said the U.S. will be seeking “very substantial damages” from China for the financial fallout of COVID-19, the disease caused by the coronavirus.
There are signs that this demand is translating into political action. On May 1, The Washington Post reported that senior-level officials in the Trump administration are mapping out a strategy to punish China; to seek financial compensation for China’s missteps and cover-ups early in the outbreak and the devastation the pandemic has subsequently wrought in the U.S.
At a briefing in late April, China dismissed the efforts and accused the U.S. of trying to divert attention away from its own mishandling of the pandemic.
“The sole purpose for some U.S. politicians trying to fool others with their obvious lies is to shift the blame of their own incompetence,” said Geng Shuang, a spokesman for China’s Ministry of Foreign Affairs at a briefing on April 28. “Their attempt [for reparations] is doomed to fail.”
Over the past week, the U.S. calls for reparations have spurred a string of editorials and social media posts in China that speak to the ugly history of such demands.
In 1900, thousands of Chinese rebels, known as the boxers, descended on Beijing to attack foreigners and Christian missionaries in a movement known as the Boxer Rebellion. The boxers were part of an anti-imperialist, populist movement that was frustrated with the influx of missionaries and the privileged status of foreigners.
After the boxers laid siege to the Beijing neighborhood where foreigners lived in June 1900, an alliance of eight foreign governments, including the U.S., sent 20,000 troops to China. After landing in China in July, the foreign troops broke the boxers’ hold on the city and defeated the uprising by the middle of August.
The foreign troops occupied Beijing for over a year, before eventually pressuring the Chinese government to sign the Boxer Protocol in September 1901. The deal gave China control of Beijing in exchange for reparations worth $330 million—equal to nearly $10 billion today—paid to the eight nations over the next 40 years.
For many in China, Trump’s new demands for COVID-19 reparations are an extension of this imperialist history.
“China now thinks that, basically, the foreigners are trying to do the same thing to us, a second treaty to force China to pay,” said Xu Guoqi, a Chinese history professor at the University of Hong Kong.
A Gengzi year
A search for the term ‘reparations’ on Weibo, China’s version of Twitter, reveals a string of posts denouncing the idea, with many referring to them as the ‘Gengzi reparations.’
One post from Wang Haiyun, a retired general in China’s military, has attracted over 30,000 views since it was published on Tuesday. He writes, “The national shame of the ‘Gengzi reparations’ cannot be repeated again.”
The term Gengzi, meaning metal rat, harkens back to superstitions based on China’s 12-year zodiac calendar. A Gengzi year falls on the year of the rat every six decades. 2020 is a Gengzi year, as was 1960, 1900, 1840, and so forth.
In China’s popular imagination, Gengzi years are associated with calamity, and evoke feelings of China being taken advantage of by foreign powers.
A medical assistance team supporting Wuhan attends a welcoming ceremony at the First Affiliated Hospital of Nanchang University in Nanchang in April. The suggestion that China would pay reparations for the coronavirus recalls for Chinese citizens past abuse by imperial powers. Xinhua/Wan Xiang via Getty Images
In 1840, the U.K. invaded China in the first opium war, and forced China to open its markets and cede land that would become Hong Kong. The 1900 Boxer Rebellion also marked a Gengzi year. In 1960, the Chinese government was carrying out the Great Leap Forward campaign, an initiative that sought to transform China from an agrarian nation into an industrial power. However, just as farmers were starting to shift their production to goods like steel, a deadly drought struck China. The ensuing famine killed up to 45 million people in China during the 1960s.
In 2020, COVID-19 has once again brought a Gengzi year disaster to China, and, in the eyes of Chinese citizens, Trump’s calls for reparations bear a striking resemblance to how foreign powers have abused China in the past.
“When the descendants of some of the Eight Nation Alliance shamelessly demand [COVID-19] compensation, they evoke our historical memory of humiliation,” writes Li Jiaming, a news broadcaster on China’s state-run China Central Television, in an editorial in the Global Times, referring to the eight nations that allied to quash the Boxer Rebellion.
Humiliation and distrust
In China, the Chinese Communist Party propaganda often dwells on the trauma of past imperial abuse to paint China as a one-time victim that’s since risen to power.
Chinese schools teach that the period from “the Opium Wars in the 1840s to [the founding of the People’s Republic of China in] 1949 is the century of shame and humiliation,” said Xu, which draws a stark contrast to the China of today. “The party instils this version of history… it’s a very powerful narrative.”
When criticism of China from Western powers evokes visceral reactions among Chinese citizens, it’s easier for the CCP to operate a tried and true strategy: to draw attention to China as the target of foreign distain and discrimination and away from the party actions that prompted the criticism in the first place.
“Calls for compensation provide an easy way for the Chinese Communist Party to present evidence [to Chinese citizens] of anti-Chinese sentiments abroad,” said Steve Tsang, the director of the SOAS China Institute in London. “The Chinese propaganda machinery redirects people’s attention from the failings of the government in China to the racist bullying of Western countries.”
Ultimately, the rising anti-China rhetoric among foreign governments such as the U.S. is likely to further cement distrust of outsiders among Chinese citizens.
“[The calls for reparations] make Chinese people think that no matter how much we try and work hard, the West will never accept us, foreign countries always treat us unfairly,” said Xu. “From a historian’s perspective, this all makes me very scared.”
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