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Here’s What You Need to Know

Russia has been mentioned in news headlines on a nearly daily basis for the past couple weeks. Between allegations of Russian involvement in the DNC email hack and Donald Trump’s comments on U.S.-Russian relations under a Trump administration, both Hillary Clinton and Donald Trump have been accused of inappropriate relationships with Russian industrial and political leaders. These accusations are being thrown around as consensus has been formed that Russia presents the greatest geopolitical threat to the U.S., a contention made by Mitt Romney in 2012 that President Obama then mocked.

To Make Sure You’re Properly Armed for Your Facebook Fights, Here Are the Facts You Need To Know About Clinton, Trump, and Russia.

HILLARY HEARTS RUSSIA’S SILICON VALLEY: As Secretary of State, Hillary Clinton worked to convince American companies to invest in an “innovation city” – Skolkovo – which was billed as Russia’s Silicon Valley. The FBI warned tech companies that these types of Russian investments could serve as cover for theft of their proprietary technology. Despite this warning, Clinton brought in top U.S. tech firms, and noted Clinton Foundation donors like Google, Intel, and Cisco. Meanwhile, various Russian leaders tied to the Skolkovo project made multi-million dollar donations to the Clinton Foundation.

PODESTA HID HIS PUTIN CONNECTION: In 2011, current Clinton campaign chairman John Podesta sat on the board of Joule Unlimited, a small energy company that received $35 million from a Putin-controlled tech project called Rusnano. Podesta failed to reveal this on his personal financial disclosure documents required of him when he became a senior advisor to President Obama in 2014.

HILLARY’S URANIUM STAMP OF APPROVAL: In 2013, Russia completed a takeover of Uranium One, a Canadian mining company that gave them control of one-fifth of the uranium production capacity in the United States. Due to the national security implications of the sale, it required U.S. government approval, which included a sign off from then-Secretary of State Hillary Clinton. At the same time, Uranium One’s Canadian sellers continued to make multi-million dollar donations to the Clinton Foundation and former President Clinton received $50,000 in speaker’s fees from a Kremlin-connected Russian investment bank shortly after the deal was announced.

MANAFORT’S URKRANIAN ADVENTURES: Trump campaign chairman Paul Manafort managed the successful 2010 campaign of pro-Russian Ukrainian presidential candidate Viktor Yanukovych. Manafort also helped reshape the image of Yanukovych’s pro-Russian political party before the Ukrainian President was removed from power and exiled to Russia in 2014. In 2005 Manafort served as an advisor on corporate communications strategy for Ukrainian steel and iron magnate Rinat Akhemtov. Akhemtov was a notable supporter of Yanukovych.

TRUMP’S CAMPAIGN CHAIR IS AN OLIGARCH’S MONEY GUY: Manafort managed tens of millions of dollars on behalf of Russian oligarch Oleg Deripaska. Some have reported Deripaska is “close to Vladimir Putin,” but it should be noted that in 2009 Putin very publicly humiliated Deripaska by likening the Russian billionaire to a cockroach and forcing him to tour a factory to witness the state of Russian social unrest.

TRUMP HAS HIS OWN OLIGARCH TOO: Russian oligarch and Putin ally Aras Agalarov helped Trump bring the Miss Universe competition to Moscow in November 2013. At the time, Trump and Agalarov were in discussions to build a Trump Tower in Moscow but the deal never materialized.

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OBAMACARE CONFESSIONAL
From 2009 to 2010, Dr. Bob Kocher served as special assistant to President Obama and an architect of Obamacare. Now he claims, “I was wrong. Wrong about an important part of Obamacare.” He penned a Wall Street Journal op-ed explaining that the consolidation of doctors he and the other policy minds behind Obamacare believed would benefit the healthcare consumer has done the opposite, creating large, inefficient medical bureaucracies. This failure illustrates why reforms perform best when done organically in the marketplace rather than through centralized bureaucracies in Washington. These officials made assumptions about what was best, got it wrong, and saddled the American public with the consequences. In a free marketplace, alternatives would have been present and his error would have been corrected by others without requiring political and policy fights for years to come. Americans are suffering from his error, but at least he got his guilt off his chest.

FOIA FOIBLE AT LABOR
Six years ago, Americans for Limited Government (ALG) requested a set of records from the Department of Labor under the Freedom of Information Act (FOIA). ALG was told the records existed and they were being reviewed. But now federal officials are claiming the documents do not exist and the communication proving otherwise has been deleted. ALG President Nathan Mehrens said, “At best, this is a case of mismanagement. At worst, well, use your imagination. Are they hiding something and trying to run out the clock in order to avoid sunlight into their operations?” It’s another case of FOIA request obfuscation from government agencies over the past several years. So much for the Obama administration declaring themselves the “most transparent administration in history.”

HILLARY’S NOT SO “RIGHT” ON THE MIDDLE EAST
The conventional wisdom is that Hillary Clinton’s supporters are more pro-Israel than Bernie Sanders’ supporters and that there are concerning signs of anti-Semitism among Trump voters. But an analysis from the Brookings Institute shows “there is generally little difference between the supporters of Clinton and Sanders on these issues.” Just over half of both Clinton and Sanders supporters favor punitive measures against Israel on the issue of settlements, and over 80% of Clinton and Sanders supporters say America should generally favor neither side in the Israeli-Palestinian conflict. Conversely, Trump supporters hold decidedly more pro-Israel views, with 74% of them opposing punitive action against Israel and 55% saying U.S. policy should generally lean towards Israel.

SIGTARP VS. SMALL BANKS
The Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) was created in 2008 to investigate and root out crimes committed by banks and their executives related to the financial crisis. Since its creation, the office has charged 102 bankers, including 22 chief executives and presidents, for criminal and civil misdeeds leading up to and during the financial crisis while also recovering more than $10 billion. But critics of the office point out that most of SIGTARP’s investigations have involved community and regional bankers and ignored prominent Wall Street executives that many consider more responsible for the 2008 meltdown. The TARP program is winding down and SIGTARP’s future is unclear, but either way it looks like those still seeking prosecutions of Wall Street executives will continue to be disappointed.

NERVOUS NONPROFITS
Massachusetts nonprofits are on edge as a new proposal has come up in the state legislature challenging the property tax exempt status of nonprofits and schools in certain circumstances. The issue has risen out of the city of Lowell, where the University of Massachusetts Lowell has purchased a large piece of property and has left the city with a substantial budget hole due to the University’s tax exempt status. Some states, like Connecticut and New Jersey, have addressed this problem by limiting the tax exempt status of well endowed, property rich entities like schools and hospitals, but some of these measures have also hurt smaller, traditional nonprofits like local Elks clubs or charities. The challenge for policymakers is to ensure municipalities have the revenue to fund basic services for their citizens while protecting the existence of charities and nonprofits’ ability to function in expensive real estate markets.

THE DNC’S OTHER RUSSIA PROBLEM
Political conventions are often showcases of how proudly American each party is, and videos featuring the U.S. military are commonplace. So it was not out of place that at last week’s Democratic National Convention, retired Adm. John Natham, a former commander of Fleet Forces Command, spoke in front of a video of giant warships. What was out of place was the warships themselves. The vessels were, in fact, Soviet-era Russian Kara-class cruisers. It’s not the first time stock footage has embarrassed a campaign and it probably isn’t the last. But, it does show how a little fact-checking and research can avoid simple mistakes.

SHOULD UNCLE SAM REFI?
A Wall Street Journal editorial recently argued given the staggering and ever increasing national debt, the U.S. government should consider “taking advantage of today’s cheap financing by borrowing for the long term.” Locking in current debt at today’s low rates may only kick the can down the road in terms of actually addressing the looming debt crisis, but it would at least insulate taxpayers from some of the cost of government spending. Without pro-growth policies and comprehensive fiscal reform being enacted, the next best thing may be to make it a little bit more affordable for the American public to pay for deficit spending.

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Monday, September 26: First Presidential Debate, Hofstra University, Hempstead, NY

This is the third in a series of insights we’ll be providing on different policy platform fights in the weeks leading up to the Republican and Democratic National Conventions.

Here’s What You Need to Know

The platform committee of the Democratic National Convention has adopted decidedly anti-free trade policies and the Republican National Convention’s platform committee has raised more questions about whether America benefits from its current trade agreements than it has in many decades. Both platform drafts are likely to be officially approved in Philadelphia and Cleveland respectively. While not specifically criticizing the Trans-Pacific Partnership (TPP), both platforms have language that took firm positions calling for tough restrictions on trade deals.

There’s been plenty of discussion on how politically unprecedented this is. But, there are fundamental questions on how a few different key political stakeholders will handle the shift.

What Do The White House And GOP Congress Do? Bernie Sanders fell short of his desired platform amendment specifically criticizing TPP, with Democrats opting for language calling generally for tough restrictions on trade deals in order to avoid embarrassing President Obama. The White House must now decide how to get TPP enacted before leaving office. Republicans in Congress – who may lose the Senate – could work with President Obama move TPP in a lame duck Congress. Regardless of who wins in November, TPP will be dead-on-arrival come inauguration day 2017. But yesterday, House Speaker Paul Ryan seemed to dash the hopes of those aiming for lame duck passage, telling Politico he has “got problems” with TPP and “think[s] they made some pretty big mistakes” during negotiations.

What Do Pro-Trade Democrats Do? Despite the especially vocal progressive wing of the Democratic Party, many coastal Democrats like Sens. Patty Murray, Diane Feinstein, and Chuck Schumer still represent constituencies that benefit with hundreds of thousands of jobs created by free-trade agreements. With their party’s standard bearer now officially toughening her stance on these policies, how Democrats balance the needs of their constituents with the demands of their party should be watched closely.

What Do Business Groups Do? On the right, traditionally pro-GOP business associations like the U.S. Chamber of Commerce and the National Association of Manufacturers have already openly opposed the party’s newly critical stance on trade promoted by Donald Trump. Now that Trump’s “America First” policy on trade has officially been adopted by Republican delegates on the platform committee, how will these pro-trade business groups respond? These groups may be exploring the option of using their political muscle to go after anti-trade Republicans.

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WE’RE IN THE DICTIONARY. The Oxford English Dictionary (OED) recently announced their list of new definitions being added to the benchmark of English language and the term “TL;DR” is now among them. The OED defines the term as, “’too long; didn’t read’ (also occasionally ‘don’t read’): used as a dismissive response to an account, narrative, etc., considered excessively or unnecessarily long, or to introduce a summary of a longer piece of text.” We certainly endeavor to make sure our version of TL;DR falls into the latter definition.

S.F. KILLING GOOSE LAYING GOLDEN EGGS. Three San Francisco city supervisors have announced plans to propose a 1.5 percent payroll tax on the city’s tech companies to be voted on in November. The measure has received resounding opposition from other city officials including Supervisor Mark Farrell, who called it, “the worst idea I’ve heard in months,” and Mayor Ed Lee, who’s spokeswoman called it a, “job killing measure.” The tech industry has provided San Francisco with decades of prosperity and the lowest unemployment rate of any city in the country. Singling out the industry out for a tax would likely lead tech firms to find new homes even faster than they are already.

INFLUENCING NOT-SO-REFORMED. Nine years ago, Democrats retook Congress under a banner of ending Washington’s “culture of corruption,” passing lobbying reforms aimed at slowing the spin of the revolving door between Capitol Hill and K Street. But little if anything has changed. Politico’s Isaac Arnsdorf recently concluded, “Not only did the [Honest Leadership and Open Government Act of 2007] fail to slow the revolving door, it created an entire class of professional influencers who operate in the shadows, out of the public eye and unaccountable.” The lobbying reform bill is just another example of Congress’ staggering ability to achieve the opposite of their stated goal when crafting laws.

HOT TUB LOBBYING MACHIN. The $28.6 billion Japanese spa industry relies on the use of the country’s massive geothermal reserves for their naturally occurring hot springs. And now the industry is blocking attempts to tap into those geothermal reserves as a source of alternative energy. The Japan Spa Association has aggressively and effectively lobbied to ensure that the bulk of Japan’s clean-energy program funding has gone to solar instead of geothermal. Those pushing for geothermal expansion were caught off-guard by the spa association’s lobbying effort, a perfect example of the value of identifying your opponents before engaging in a public affairs campaign.

OBAMA’S LOSING SCOTUS RECORD. Presidential administrations are under constant scrutiny by the U.S. Supreme Court. However, Cato Institute fellow Ilya Shapiro explains that the Obama administration has a 79-96 SCOTUS win-loss record, garnering them a success rate of just above 45 percent, lower than any modern President going back to 1960. Even President Obama’s own Justices aren’t voting in support of the administration’s policies. This record is a direct byproduct of President Obama’s attempts to stretch the use of unchecked executive powers to push through his agenda. As Justice Anthony Kennedy wrote in an opinion against one such example of executive overreach, “federalism protects the liberty of the individual arbitrary power. When government acts in excess of its lawful powers, that liberty is at stake.”

WINK-AND-NOD REGULATION. Everyone has read the story of VW’s $15 billion scandal surrounding their attempt to circumvent carbon emissions regulations. While the company’s behavior may be worthy of admonishment, Solutions Consulting President William O’Keefe asks why “manufacturers engage in schemes to beat the required certification tests.” O’Keefe argues the EPA “continues to believe that if it demands the impossible, manufacturers will find a way to comply.” All the while it remains an open secret that regulatory compliance tests in no way reflect real-world conditions. Until this accepted yet unrealistic “wink-and-nod regulation” is reformed, engineers, like those at VW, will continue believing that gaming the certification process is just how business is done in the manufacturing industry.

BUSINESS CARROT VS. STICK. How can the U.K. encourage globally-focused businesses to stay post-Brexit? UK Chancellor of the Exchequer George Osborne has proposed a further reduction in the country’s corporate tax rate from 20 to 15 percent to do just that. Meanwhile, President Obama and Treasury Secretary Jack Lew have been busy using regulations to deal with corporate inversions as U.S. companies seek to move their headquarters’ abroad to avoid the U.S. corporate tax rate. On the one hand, the UK seeks to offer companies the carrot of favorable tax rates, while the U.S. is brandishing a stick in the form of regulations. As Caroline Baum of MarketWatch bluntly puts it, “Carrots are always better than sticks.”

FOOD STAMP FAVORITISM. By the end of the year, the USDA wants to adopt a set of rules that would require stores wishing to redeem food stamps to stock a wider variety of meats and vegetables while selling fewer hot meals, like pizza. The move has been criticized for favoring major grocery chains like Walmart and Kroger Co. – who have the capacity to carry a wider selection of products – while hurting smaller corner grocery and convenience stores who can only offer limited selection. The debate has not garnered much attention, but a group of bipartisan lawmakers on Capitol Hill are opposing the measure, warning that if small stores stop accepting food stamps, both those in need and small businesses will suffer.

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This is the first in a series of insights we’ll be providing on different policy platform fights in the weeks leading up to the Republican and Democratic National Conventions.

Here’s What You Need to Know

While several left-wing environmental organizations are now coalescing around Hillary Clinton, many in the environmental movement are still unsatisfied. Liberal donors to these organizations have threatened to pull funding if they endorsed Clinton, hurting their ability to provide grassroots support to the presumptive Democratic nominee. These concerns are partly why the Democratic establishment struck a deal with the Sanders campaign that gave them five of the 15 slots on the convention’s platform committee for them to air out their policy views.

Yet, by making this concession to Sanders, the DNC has lit the fire of a messy debate. One of Sanders’ picks for the platform committee attacked Clinton earlier this year for being “slow, halting and grudging” in her efforts on climate change. And last weekend in Phoenix, the DNC held hearings that turned into a left vs. far-left dispute on energy policy.

The fault line being drawn focus on these three energy issues that are likely to come up on at the Democrats’ convention next month:

• Fracking: Earlier this month, several environmental groups petitioned the DNC to ban fracking in the party’s platform. Sanders has attacked Clinton for not supporting such a ban as recently as two weeks ago. But Clinton’s supporters have told “the ban’s proponents [they] are being unrealistic.” If environmental activists don’t get a fracking ban in the platform, whether or not they sit on the sidelines for the rest of the election should be closely watched.
• Pipelines: A recently released report from an electric reliability watchdog notes President Obama’s “Clean Power Plan” will spur the need for additional pipeline infrastructure to deliver natural gas and reduce emissions. But some environmental activists are joining the Rockefeller Family Fund, who convened a meeting this week to “craft a strategy to fight the use of eminent domain for pipelines and other fossil-fuel infrastructure.” Watch for activists to demand a ban on any future pipeline construction.
• How To Meet Paris Goals: A former Sierra Club lawyer said last week that Clinton’s choices on how to meet emissions reduction goals from the Paris climate agreement are limited to what’s available in the Clean Air Act. But some may want Clinton to go even further by promoting a cap-and-trade program that went down in flames six years ago under a Democratically-controlled Congress. Clinton has avoided mentioning cap-and-trade for good reason, but environmental activists on the platform committee may force her to take a position.

Clinton has tried to play small ball on energy issues so far with a focus on solar panels and conservation, while attempting to walk back her statements suggesting the coal industry should be put out of business. But energy issues have increasingly become ‘up or down’ items for a large segment of the Democratic base Hillary needs to unify in order to win in November. What happens at platform committee will be the first indication of how far left Clinton is willing to go without sacrificing voters in the middle.

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Voting is already underway in the UK referendum on EU membership. Check out our “Here’s What You Need To Know” from earlier this month on some of the unexpected factors that could drive turnout and voting preferences.”

REPUBLICAN RED TAPE REMOVAL PLAN
Can Congressional gridlock be good for business? If House Speaker Paul Ryan gets his way, it can. The Congressional Republicans’ economic policy agenda released last week includes a plan to require Congressional approval of any federal regulations that would have a significant impact on businesses. As Speaker Ryan explained, “No major regulation should become law unless Congress takes a vote.” Throughout the Obama administration, Republicans have been searching for a better way to block regulations that have hurt the economy and they may now have finally found their solution in the form of Congressional logjam.

RETWEETS = GROUPTHINK
A new Columbia University study found that 59 percent of links shared on social media outlets were not clicked before being shared. The study discovered that these peer-to-peer shares play an important role in determining what news gets circulated online and what news get brushed aside. As more and more people get their news almost exclusively online, these trends mean thoughtless retweets driven by confirmation bias are actually shaping our political and cultural discussion.

BOARD MEMBER NOT FOUND
Lululemon Athletica has had recent financial troubles, and founder Chip Wilson is quick to blame the company’s longest serving board members. And yet, on closer inspection, the single longest serving board director, Rhoda Pitcher, appears to have no traceable personal history, no identifiable photo, a business that could not be found, and a degree from an unaccredited entity with a residential street address. The discovery has prompted uncomfortable questions for the company’s management, board and auditor: who is ensuring proper due diligence is done on board members? We happen to know a good firm for that.

PRESIDENTIAL EMAIL PROJECT
Michael Winters of EdSurge.com recently published a Medium post after reading 3,000 campaign and fundraising emails from various 2016 presidential candidates. His effort determined “there is precious little to be learned from emails from our presidential candidates.” Winters formed key conclusions that candidates email A LOT, it’s almost always to ask for money and never to discuss issues, the emails are only unintentionally entertaining, and every other 2016 candidate hates Hillary Clinton. Not surprisingly, the project confirmed that campaigns merely use email for fundraising from loyal supporters by scaring them with visions of a world where their political rivals win the election.

OBAMA’S RULES OF ENGAGEMENT
President Obama’s desire to deliver on his campaign promise of ending the American combat mission in Afghanistan is beginning to complicate achieving some of the ongoing U.S. foreign policy goals in the region. With the end of the official combat mission, the U.S. is no longer technically at war with the Taliban, requiring the remaining Special Forces troops in the country to consider the legality each time they fire on Taliban fighters. By forcing into reality his goal of declaring mission accomplished in Afghanistan, President Obama has actually created a situation that makes it even more difficult to achieve stability there.

INTIMIDATION GAME
In the wake of the 2012 shooting of Trayvon Martin, several left-wing groups saw a unique opportunity to go after their long-time opponent the American Legislative Exchange Council (ALEC) in a way that shut down all reasonable debate over their true policy differences. As Kimberley Strassel outlines for the Wall Street Journal, these groups used ALEC’s support of controversial stand-your-ground laws to apply pressure to ALEC and its members. This style of boxing in center-right organizations, trade groups, and corporations using highly divisive issues unrelated to the true policies being debated is going to remain a staple of left-wing groups looking to attack and smart observers should review the ALEC incident as an important warning sign of things to come.

DEMOCRAT’S ABORTION TROUBLE
Senator Tim Kaine of Virginia is seen as a likely VP pick for Democratic presidential nominee Hillary Clinton. On the plus side, he is a white man fluent in Spanish from a crucial swing state with solid fundraising experience as a former Chairman of the Democratic National Committee. But on the negative side, The Hill notes, his abortion stance may be too mainstream for some Democrats. As The Hill explains, “While Kaine does not back overturning the Roe v. Wade decision legalizing abortion, he is personally opposed to the practice and has backed controversial restrictions, such as parental notification laws and a ban on late-term abortions.” With turnout among the party bases being crucial to any winning strategy in this election year, Kaine’s divergent opinion on an issue that many liberal voters see as fundamental could trip up the Clinton campaign’s plans.

TRUMP’S UNEXPECTED BACKERS
Despite Hillary Clinton’s latest offensive claiming a Donald Trump presidency would be bad for the economy, a new Bloomberg/Morning Consult national poll found a majority of voters with a stake in the stock market believe that a Trump White House would serve their portfolios better than Clinton. Even among women, a demographic with which Trump has fared poorly, many female business owners have flocked to support the GOP nominee, arguing they connect with him over their shared spirit of entrepreneurship. Democrats are trying to sell Trump’s economic plan as “bad business that’s bad for you,” but it appears business owners and investors are not buying it (yet).

ASSASSINATION ATTEMPT NOT HEARD ‘ROUND THE WORLD
Last weekend at a California campaign rally for Donald Trump, a British citizen named Michael Sandford tried to pull a police officer’s gun with the intention of completing a yearlong plan aimed at assassinating the real estate mogul. Despite the gravity of attempted murder, the incident received almost no media coverage as the Trump campaign’s lagging fundraising numbers and the firing of campaign manager Corey Lewandowski dominated the news cycle. The Washington Post attempted to argue the lack of coverage was justified since Sandford did not come close to achieving his goal, but it is difficult to imagine the coverage not becoming wall-to-wall if the same incident had occurred at a Clinton campaign rally.

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Here’s what you need to know…

Last Friday’s jobs report “landed with a thud.” Employers only added 38,000 jobs last month, while March and April numbers were revised down by a total of 59,000 jobs. The Obama administration quickly tried to point out the unemployment rate fell to 4.7 percent in May, its lowest level since November 2007.

But as Delve’s Executive Vice President Matt Moon writes in a new Medium post, as a political talking point, and maybe even as an economic statistic, “The unemployment rate is dead.”

• Our “New Normal”: With the decline in the unemployment rate “owed almost entirely to 458,0000 people leaving the labor force,” it’s dead as a political statistic because it is no longer a meaningful indicator of how people are doing economically. In this “new normal,” it can’t be used in the vacuum of a campaign talking point and it can’t be divorced from other economic indicators as well as voters’ wavering confidence in America’s future.
• How Does This Affect The Election? Any Democrat that attaches their political hopes to Obama’s economic record and using the “improving” unemployment situation to their advantage will have a very difficult case to make. It has left Hillary Clinton and Democrats down ballot in a position where there is no clear message on how to achieve economic prosperity.
• Clinton’s Conundrum: Clinton has the impossible mission of courting both “Bernie or Bust” voters and ticket-splitting independents, both of whom are unhappy with the economy. If she tacks towards the middle to gain those ticket-splitters, she will head into November with a deeply divided Democratic electorate. If she embraces Sanders’s left-wing economic populism, she risks losing voters that will decide this election.

Read Matt’s Medium post here.

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FRIENDS DON’T LET FRIENDS FUND OBAMACARE
University of Michigan law professor Nicholas Bagley, who has generally voiced his support for the legal maneuverings of the Obama administration, recently publisheda piece on how the White House got it wrong with their justification for using taxpayer dollars to fund Obamacare’s consumer healthcare subsidy provision. Bagley argues the administration has run afoul of the Constitution’s appropriations clause in its claim that by passing the Affordable Care Act Congress granted authority for the spending in question. It gives serious credence to House Republicans’ fight against this facet of Obamacare that even ardent supporters of the President admit this funding process represents unconstitutional executive overreach.

THE INTERNET IS FLAT
A recently released Internet Trends report concluded the number of internet users worldwide is essentially flat and growth in smartphone users is trailing off as well. The report attributed the stymied growth to historic stagnation in global GDP, as well as difficulty expanding internet access and increasing affordability in third-world countries. The lack of growth in user bases has many in the tech industry concerned, but the report also highlighted opportunities for growth in areas like online shopping, live sports viewing, messaging, advertising and artificial intelligence.

GLOBAL WAR ON BIG TECH
During the past decade five American tech firms – Apple, Amazon, Facebook, Microsoft and Google’s parent company, Alphabet – have effectively conquered the global business world and become so invaluable it has some countries concerned with pervasive American hegemony. In response to this anxiety, European governments have begun a concerted effort to limit the reach of these U.S. tech giants through new privacy regulations and antitrust investigations. As Farhad Manjoo of the New York Times writes, “The European efforts are just a taste of a coming global freak-out over the power of the American tech industry.” As such, the next few years will likely yield increasing friction between these tech companies and foreign governments.

OUT-UBERING UBER?
China’s biggest ride-hailing company, Didi, says it books four times as many daily rides as the entire U.S. market while only reaching 1 percent of the Chinese population. These staggering figures have recently attracted a $1 billion investment from Apple to help support the company’s market growth. Many more established Western companies may look to engage with Chinese firms like Didi, that are in their infant stage but possess huge potential for profitability.

SODA TAX IS ALL ABOUT THE MONEY
President Obama’s former chef and senior adviser for nutrition policy, Sam Kass, admitted flat-rate soda taxes do little to combat obesity in America. “The soda tax, that’s a revenue generator that’s not designed for public health outcomes,” Kass said. The criticism comes as at least five cities and states – Philadelphia, San Francisco, Oakland, Boulder and Illinois – are considering implementing flat soda taxes.

ARMAN-EQUALITY
Apparently hypocrisy is on trend this spring. It was recently revealed that, while delivering a speech on the issue of income inequality in April, Hillary Clinton wore a $12,495 Giorgio Armani tweed jacket. Bloggers and Twitter were quick to point out the cringe-worthy juxtaposition of talking about the plight of poor Americans while wearing a jacket worth more than many of Americans’ entire wardrobes.

VICTIM OR VILLAIN
In the wake of the housing crisis, Countrywide Financial Corp. executive Rebecca Mairone became a face of corporate greed and a target of those looking to assign blame for the mortgage meltdown. The Justice Department sensed this and pursued civil-fraud charges against her, leading to a 2013 ruling that the 49-year old mother of two must personally pay $1 million in fines. Now she is looking more like the victim than the villain as a federal appeals court recently overturned the ruling thus clearing Mairone of wrongdoing. Despite many people’s desire to seek out and punish individuals responsible for the financial and housing crisis, the Mairone case has proven that assigning that level of personal blame for institutional failures creates substantial legal and ethical challenges.

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Here’s What You Need to Know

Earlier this week, the Obama administration announced a major new rule on how the federal government views overtime pay. The goal of the measure is to expand overtime protections to millions of American workers. But after a year of drafting, many suggest the final rule contains a series of unintended consequences that could lead those millions of American workers to lesser jobs at hourly wages with limited hours.

• What’s The Rule? The rule is set to go into effect December 1st and would double the salary threshold for workers automatically eligible for time-and-a-half overtime wages, bringing the salary at which workers would qualify for overtime benefits from $23,660 a year to $47,476 a year.
• Left-Wing Dissent: While the new rule has certainly taken flak from businesses, surprisingly to some, non-profits, including the Ralph Nader-founded U.S. Public Interest Research Group (PIRG), have been vocal opponents. They’ve argued the regulation will force organizations relying on small donations to “hire fewer staff and limit the hours those staff can work – all while the well-funded special interests that we’re up against will simply spend more.”
• Startup Trouble: Startups will be especially hurt by the change and have voiced their frustration. Alexander Pessala, a partner at the DC-based venture capital firm Middleland Capital, argued the new executive order will force startup executives to hire more contractors rather than full-time employees. Startups who pay their employees, at least partially, in stock options will also be forced to count more employees for overtime since the value of their stock is not measured in the salary figure used to determine who qualifies for the new overtime protection.
• Salary to Hourly: Historically, transitioning from an hourly wage to a salary has marked the upward trajectory of one’s career and progress toward the American Dream. Salaried workers also tend to receive more lucrative benefits and have more flexible work schedules. James Sherk, a labor economics expert, points out, “The administration’s new overtime regulations will effectively turn [salaried employees] into hourly employees.” The result being managers who worked their way up from hourly to salaried may find themselves going backwards with this new rule.

There’s still roughly five months before the rule comes into effect and a bill designed to override the overtime executive order has already been released by Congressional Republicans. But if the rule does end up in place, the President has already offered a silver lining to those workers whose hours may be cut: At least you’ll get to spend more time with your family.

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JUST-NOT SORRY
During a particularly tense session of the Canadian House of Commons last week, Prime Minister and self-proclaimed feminist Justin Trudeau, threw some elbow to usher along a vote. Unfortunately, that elbow landed squarely in the face of a female MP as Trudeau attempted to manhandle a Conservative lawmaker. Compounding the problem is the Prime Minister’s “unreserved” apology, which came with quite a few reservations. Just like children are taught in grade school, an apology with a “but” is no apology at all.

DOJ LAWYERS SENT BACK TO SCHOOL
In the process of litigating President Obama’s executive orders on immigration, several Justice Department attorneys misled the court about when the Department of Homeland Security would begin granting “deferred action” to undocumented immigrants whose children are citizens. Now, a federal judge has declared that the DOJ attorneys engaged in “intentionally deceptive” behavior while they were defending the executive order against a jointly filed lawsuit by 26 states. The judge ordered any DOJ lawyers wishing to practice in those states to attend annual ethics classes.

(PROOF)READING IS FUNDAMENTAL
The Texas Republican Party learned the value of verb usage when their recent party platform accidentally declared the majority of Texans were gay. In a section on sexual orientation, a line read, “Homosexuality is a chosen behavior that is contrary to the fundamental unchanging truths that has been ordained by God in the Bible, recognized by our nations founders, and shared by the majority of Texans.” Because the sentence uses the word “has” instead of “have,” it suggests homosexuality is approved by a higher power, the writers of our Constitution, and practiced by a majority of Texans. It seems safe to assume this is not the point the drafters intended to make and it’s yet another example of why you proofread before you go public: a golden rule of public affairs.

TERRY GUNS FOR CRIMINALS
Democratic Virginia Governor Terry McAuliffe took unilateral action last week to restore voting rights to over 206,000 felons. But perhaps he moved a little too fast, because the order also eliminated much of the oversight process for felons who seek to have their gun rights reinstated. Of course this wasn’t Gov. McAuliffe’s intention, and he later admitted, “I didn’t think it had anything to do with gun rights. I stayed away from that.” Such oversights are often addressed during the legislative debate that Gov. McAuliffe chose to forgo. No wonder his own legislature is suing him over this order.

DNC’S ISRAEL FIGHT NIGHT
After being recently granted the opportunity to name five members of the Democratic National Convention’s platform committee, the Sanders campaign has announced their first two appointees. And, they’re likely to reignite the embarrassing 2012 debate over the party’s position on Israel. President of the Arab American Institute Jim Zogby and prominent Princeton professor Cornel West have both been longtime critics of U.S. policy toward Israel, and are likely to balk at any pro-Israel language put forth for the platform. Some close to Sanders claim he has no desire to debate the party’s Israel policy. But empowering the progressive wing of the Democratic Party makes it likely that foes of America’s closest ally in the Middle East will seek to influence the platform committee on the issue.

AIRBNB GOES GRASSROOTS
Airbnb has faced an onslaught of regulatory hurdles across the country, but they’re perfecting use of a powerful tool of persuasion to influence government decision makers: their users. With the company’s future on the line in various regulatory fights, the company has mobilized users who offer their homes up for rent on the site and transformed them into a grassroots lobbying machine complete with prepared talking points, targeted legislators, and matching t-shirts. As companies like Airbnb, who already have easy access to massive user bases, continue to face regulatory pressure, smart startups are going to be able to structure these ready-made grassroots activist armies.

MAINE WORKS
Controversial welfare reform measures put in place by Maine’s Governor Paul LePage have begun to pay off. A new report from the state’s Department of Health and Human Services and Office of Policy Management shows the new welfare process has led to increased employment, higher wages, and decreased dependency on state programs. Many suggest that more data in the coming years will only show more success. As Josh Archamault, a senior fellow with the Foundation for Government Accountability, wrote, “Congress should learn from these successes and give states better tools to re-emphasize work across the board – not just in food stamps, but in all welfare programs.

Mark Your Calendars

Here’s What You Need to Know

Some of the #NeverTrump supporters are floating the possibility of a third party candidate, and if Hillary Clinton is not successful in bringing Sanders supporters to her side after the nomination process, some on the Left may consider a similar effort. So is it even possible, at this point in the cycle, for someone to mount a third party bid? The answer lies somewhere between not likely and completely impossible.

For a third party candidate to rise to prominence they would have to overcome several key hurdles:

• Ballot Access Without Money, Time, or Expertise: A presidential campaign is already an expensive process requiring roughly a billion dollars. For a third party candidate, the price tag would be even higher to account for the monumental effort required to get on the ballot in all fifty states. Time is also a factor. Filing deadlines for independent candidate ballot access begin in July and filing deadlines for other political parties have already passed in some states. Lastly, only the political know-how one would find in a major party organization would be able to guide a candidate through the 50 different processes to get on the ballot especially in such a short time frame.
• Sorry, You’re Already A Loser: A number of states have “sore loser” laws that prohibit candidates who failed to win their party’s nomination from running for that office as an independent or as another party’s candidate in the same election.
• I Like You, But You Can’t Win: Assuming a candidate could address the above challenges, they still need a path to victory. Getting American voters to like you is one thing; convincing them they are not wasting their vote is a different story. Any real third party candidate would need a VERY convincing argument for how they can get to 270 electoral votes.
• Who Could Do It? The only parties that could potentially mount a viable third party candidate are the Libertarian and Constitution parties. That said, neither party has a nominee yet and any candidates they pick would still have to overcome the ideological issues that have traditionally kept these parties at the fringe of the political arena – not to mention the high bar to make it into the televised debates and get significant media attention.
• If Bloomberg Can’t Do It, Can Anyone? In March, former New York City Mayor and billionaire Michael Bloomberg ruled out running as an independent citing the functional deadline to get on ballots as one of many reasons. So if a possible candidate who had the finances, high national name ID, political experience, and his very own global media empire feels a third party run is impossible, it seems unlikely anyone else is going to be able to make it work.

News You Can Use

DEFINING DONALD
Successful 21st century campaigns thrive on defining their opponents before they can define themselves. No one can has taken this mantra more to heart than Donald Trump, dubbing his opponents “Lyin’ Ted”, “Liddle Marco”, “Low energy Jeb,” and now “Crooked Hillary.” Mark Leibovich of The New York Times recently spoke with Trump about how he takes aim at his political opponents. The DNC is trying to match Trump’s magic touch on branding, referring to Trump as “Dangerous Donald,” though Leibovich finds that a “lame effort.”

CORPORATE TROLLING
Ever wonder what would happen if internet trolls took over a multinational corporation’s twitter account? It might look something like car rental giant Avis’ new aggressive twitter campaign against chief rival Hertz. Avis’ twitter account has started directly responding to Hertz customers who tweet complaints of poor service with offers of discounts, upgrades, and status match. Could this style of bareknuckle marketing become the norm?

TOO TAX EFFECTIVE?
Cries for lowering the U.S. corporate tax rate can be heard from Capitol Hill to Wall Street, but no one seems to be able to agree on how to get there. Tax Analysts reporter Jeremy Scott argues that’s because the statutory rate is high but the effective rate for many companies is considerably lower. As Scott writes, “The low effective tax rate is why there is no consensus in the business community supporting 1986-style corporate tax reform. Sure, every corporation would love a lower statutory rate. But companies that benefit from deferral, lax transfer pricing rules, separate company accounting, and bonus depreciation don’t want to sacrifice to get there.” Until a consensus emerges, tax reform will prove difficult.

HILLARY HECKLERS BEWARE
The internet has long been a place for unbridled, unfiltered, and often unwarranted criticism. But a new pro-Hillary Clinton super PAC seeks to bring order to the chaos. The “Correct the Record” super PAC is spending roughly $1 million to “find and confront social media users who post unflattering messages about the Democratic front-runner.” While the Clinton campaign has suffered from a lack of organic online engagement, especially when compared to Bernie Sanders and Donald Trump, “using a super PAC to create a counterweight to movements that have sprung up organically is another reflection of the campaign’s awkwardness with engaging online, digital pros” told the Los Angeles Times.

BETTER CONSUMERS, WORSE ECONOMY
Why has the post-financial crisis economic recovery been so weak? The Washington Post’s Robert Samuelson suggests the economy’s “sluggishness reflects a profound psychological transformation of American shoppers.” The new consumer saves more, spends prudently, manages their credit, and is “the real drag on the economy.” Even as the economy slowly improves, the psychological scars of the Great Recession may have caused a paradigm shift among consumers, creating a “new normal” on the demand side of the curve.

ENDING HOMEOWNERS’ DOUBLE TAXATION
Currently, U.S. home owners living in home owner association communities pay fees to the association as well as local property taxes even though in practice, both payments often fund some of the same services. A measure put forth by Republican Congresswoman Barbara Comstock (R-Va.) and Democratic Rep.s Anna Eshoo (D-Ca.) and Mike Thompson (D-Ca.) would allow those home owner association fees to become tax deductible. For the legislation to catch fire, it will need to become more clear how the Congressional Budget Office may score this proposal and how this might fit into a larger comprehensive tax reform regarding housing and state tax deductions.

LATE TO THE LABOR PARTICIPATION PARTY
While some have been sounding the alarm on America’s low labor force participation for months and years, former chair of President Obama’s Council of Economic Advisers Alan Kruerger is now free from the shackles of politics and acknowledging this economic reality. Krueger said the latest decline in long-term unemployment may be a bad thing because, “the longer a person was unemployed, the lower the odds that they would find a job in a given month—and the higher the odds that they would exit the labor market.” This means the economic uncertainty and angst that has driven much of the support of Bernie Sanders and Donald Trump is going to remain a factor and economic indicators beyond simply unemployment and jobs created will play a large part in campaign debate.

OBAMA’S MISSING MILLION
During the 2012 presidential campaign President Obama made a lot of promises, but few were as specific as his goal to create 1 million new manufacturing jobs by the end of 2016. It now appears the President will fall well short of that target, with only 331,000 manufacturing jobs created since the start of Obama’s second term. While there have been many factors contributing to the lackluster growth in manufacturing, Obama’s own policies, from increased regulatory red tape that costs even small manufacturers $35,000 per year per employee to unfriendly labor policies, have left the President attempting to grow an industry after tying his own hand behind his back.

Mark Your Calendars

Tuesday, May 17: Kentucky Democratic Primary, Oregon Primaries
Tuesday, May 24: Washington Republican Primary

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