US Politics

Shou Zi Chew is not a prolific TikToker. The 40-year-old CEO of the Chinese-owned app has just 23 posts and 17,000 followers to his name – paltry by his own platform’s standards.Chew’s profile sees him attending football games, visiting Paris and London, trying Nashville hot chicken, or boating on a lake, often with generic captions. (“Love the outdoors!”). Users have noticed: “Bro the TikTok ceo with 41 likes,” one person commented on his video of the outdoors. “Shout out to this small creator,” another wrote.Suffice to say, Chew is not an influencer. But his influence over one of the world’s fastest growing, most popular and – some say – most dangerous social networks is under increasing scrutiny.On Thursday Chew will appear before a US congressional committee, answering to lawmakers’ concerns over the Chinese government’s access to US user data, as well as TikTok’s impact on the mental health of its younger user base. The stakes are high, coming amid a crackdown on TikTok from the US to Europe. In the past few months alone, the US has banned TikTok on federal government devices, following similar moves by multiple states’ governments, and the Biden administration has threatened a national ban unless its Chinese-owned parent company, ByteDance, sells its shares.It’s one of the biggest tests yet for the Harvard business alumnus, who counts stints at the consumer electronics giant Xiaomi, Yuri Milner’s investment firm DST and Goldman Sachs on his resume, and has only been in the TikTok job since May 2021.Chew’s low-key online presence is reflective of his public profile. In the two years since becoming CEO, Chew remained relatively quiet even as TikTok was thrust into the spotlight. Save for select interviews he operates largely in the background, staying under the radar as the company promises regulators increased transparency. There’s a lot riding on Chew’s first congressional appearance, which might explain why, in recent months, he’s been on a publicity tour. In addition to various interviews, Chew has been quietly meeting with lawmakers as he gears up for his testimony before the House Energy and Commerce Committee.Chew has also worked to mobilize the platform’s US user base. In a video posted to the TikTok main account, Chew warned that “some politicians” could take the app away from “all 150 million of you” and asked people to share what they love about using the video-sharing service in the comments.Over the past year, the company has attempted to address some lawmakers’ concerns about both data security and teen mental health. TikTok says it spent more than $1.5bn on security efforts and started the process of deleting the US user data that was backed up to its storage centers in Virginia and Singapore after it started routing all US traffic through Oracle-owned servers in the US. The company also recently announced it was limiting screen time for its under-18 users to one hour.But it’s unclear how much he stands to change lawmakers’ minds, especially as bipartisan efforts to appear tough on China gain momentum, making it difficult for him to find allies in either party.Regulatory pressure growsBy the time Chew took over in May 2021, he had his work cut out for him. The now seven-year-old company had already gone through two CEOs in just one year – Kevin Mayer, who ran the company for three months, and Vanessa Pappas, who served as a temporary global head before Chew replaced her. TikTok was seeing explosive growth, boasting 150 million users just in the US, but also increased regulatory pressure over potential ties to the Chinese government.Though Chew has not formally worked at TikTok for very long, he has been involved with its parent company since its early days. Chew was an early investor in ByteDance, founded in 2012, before it began to develop short-form video apps, according to an interview with David Rubenstein, the founder of private investment firm and ByteDance investor the Carlyle Group.Chew, whose promotion to CEO landed him a spot on Fortune’s 40 under 40 list in 2021, joined the ranks of tech executives like Mark Zuckerberg and Elon Musk at a time when people in those roles, once the subject of unadulterated adoration and hero worship, had become the subject of ire and disillusionment.While his lack of public persona may have largely saved him from personal scrutiny, it could hinder his attempts at making inroads among lawmakers and members of the public who have become wary of Chinese surveillance.“The mystery of ByteDance and TikTok and the uncertainty around whether they are doing anything that’s unscrupulous is part of the problem,” said Matt Navarra, a social media consultant and founder of the industry newsletter and podcast Geekout. “So [Chew’s] lack of profile and lack of awareness of who he is may be a blessing, but also it might be a downfall given people want to understand TikTok and ByteDance to understand what the level of risk is.”Within months of joining, Chew started working to combat those concerns. In June 2021, Chew wrote a letter to lawmakers, reiterating the company’s commitment to transparency and emphasizing the company was run by him, “a Singaporean based in Singapore” and not China-based ByteDance.Nearly two years later, those conversations appear to have deteriorated, and even appeals to individual lawmakers have not assuaged fears.Senator Michael Bennet, a Democrat of Colorado who called on Apple and Google to remove TikTok from their app stores in February, met with Chew last month but said he was still worried about the national security risks of the app and the “poisonous influence of TikTok’s algorithms on teen mental health”.“Mr Chew and I had a frank conversation,” Bennet said in a statement. “But I remain fundamentally concerned that TikTok, as a Chinese-owned company, is subject to dictates from the Chinese Communist party and poses an unacceptable risk to US national security.”Into the hot seatIt’s not the first time US lawmakers have grilled TikTok, but it will be Chew’s first time in the hot seat. In September 2022, battling national security concerns over whether ByteDance may be giving the Chinese government access to US user data, TikTok’s chief operating officer Vanessa Pappas testified in front of the Senate Committee on Homeland Security and Governmental Affairs, contending there is no basis for concern and that TikTok is working to minimize how much data non-US employees can access.Chew, who once interned at Facebook, has echoed the same sentiment since he started at TikTok: the company is not beholden to the Chinese government. “TikTok has never shared … US user data with the Chinese government. Nor would TikTok honor such a request if one were ever made,” Chew will say on Thursday, according to written testimony posted ahead of the hearing.In the past, Chew has pointed out that while ByteDance is based in China, TikTok itself is not available for download in China and all US user data is stored in Virginia with a backup in Singapore.Though the US government has offered no evidence that the Chinese government has accessed user data from TikTok, their concerns about the security of consumer information in the hands of the company aren’t unfounded. ByteDance employees have reportedly accessed US user data, and the Department of Justice and the FBI have launched an investigation into allegations that some ByteDance employees had obtained TikTok user data to investigate the source of leaks to US journalists.Several civil liberties and privacy advocates argue banning TikTok would amount to censorship, and that concerns over data security would be best addressed through a federal privacy regulation that limits how much user data all tech companies can collect and share with government agencies and third parties. The argument appears to have fallen flat and industry experts appear skeptical there is much Chew could say to assuage lawmakers’ concerns.“It’ll be interesting to see how believable and authentic he comes across or how rehearsed those answers [to Congress] are,” Navarra said. “I think that TikTok has to come in and tell these lawmakers something they haven’t already heard. Because if they don’t then the likelihood of banning is certainly gonna increase.” More

TikTok’s chief executive, Shou Zi Chew, will be questioned by lawmakers in Washington on Thursday with the app’s US future in severe doubt. The Biden administration wants TikTok’s Chinese owners to sell their stakes in the business or face a complete ban in the US. TikTok is owned by Beijing-based ByteDance.TikTok says such a move would not “solve the problem”. Under a plan dubbed Project Texas, which the White House now appears to have rejected, TikTok is moving its US user data to third party servers and is allowing its source code to be scrutinised by Oracle, a US tech firm which will also vet its app updates.For the White House and many US lawmakers, this does not go far enough to answer concerns about whether TikTok’s data, from more than 1 billion users, can be accessed by the Chinese state and whether TikTok’s recommendation algorithm could be manipulated by the security services in order to influence what users see.Here are some the questions that Chew, a Singaporean former Goldman Sachs banker, could be asked at the House energy and commerce committee hearing, which starts at 10am ET Thursday.Has the Chinese government ever sought to access TikTok user data?The regular answer to this question by TikTok is no. “TikTok has never shared, or received a request to share, US user data with the Chinese government. Nor would TikTok honor such a request,” Chew will say on Thursday, according to written testimony released by the committee. Indeed, the energy and commerce committee’s press release states that as well as asking Chew about TikTok’s privacy and data security practices, it will ask him about TikTok’s “relationship with the Chinese Communist Party”.Suspicions about the use of TikTok data, which critics say could be used to create profiles of people of interest like government employees, centre on Chinese security laws. These include the National Intelligence Law of 2017, which states that all organisations and citizens shall “support, assist and cooperate” with national intelligence efforts. The shooting down of a Chinese spy balloon off the east coast of the US in February has not helped. Trust was also severely damaged last year by revelations that ByteDance employees had used TikTok to spy on reporters.Will TikTok shed its Chinese ownership?TikTok says the Biden administration has asked its Chinese owners to sell their stakes in the business. TikTok is owned by ByteDance, which is located in Beijing and its ownership is divided as such: 60% by external investors including KKR, the US private equity firm; 20% by employees and 20% by its founders, Zhang Yiming and Liang Rubo, who carry stronger voting rights than the other shareholders.TikTok points to the fact that its US user data is stored on Oracle servers but the only option now appears to be a sale, which could raise around $50bn. However, the Chinese government could object to a deal that would put a prized tech asset in foreign hands, including TikTok’s successful recommendation algorithm. When Donald Trump tried to ban TikTok, and sell control of its US operation, he was stymied by legal action brought by the app and we can expect any renewed attempt at a ban to end up in court.Can the Toutiao app interfere with TikTok data flows?A former TikTok risk manager turned whistleblower has told congressional investigators that the Project Texas plan is deeply flawed. The former employee has shown the Washington Post a piece of code that shows TikTok could connect with systems linked to Toutiao, a Chinese news app owned by ByteDance. The whistleblower claims this could allow for interference in the flow of data from US users. TikTok says the Toutiao code does not link back to China.The whistleblower claims he was fired after warning Chew in a letter that senior TikTok managers were “intentionally lying” to US government officials about how the Project Texas controls had been tested and verified.Are US data controls much weaker than the company says they are?Another TikTok whistleblower has told the office of Republican senator Josh Hawley that TikTok’s access controls on US user data are much weaker than the company says. According to a report by Axios, the whistleblower allegations suggest that TikTok overstates its separation from ByteDance and uses Chinese software that could have backdoors. In a letter to the US treasury secretary Janet Yellen, Hawley details the whistleblower allegations including a claim that TikTok and ByteDance employees can switch between Chinese and US data at the click of a button.TikTok says the whistleblower allegations describes tools that are “primarily analytic tools” that don’t independently grant direct access to data. It adds that neither TikTok nor ByteDance engineers have access to US user data stored by Oracle.Can Project Texas answer lawmakers’ concerns about TikTok?The committee on foreign investment in the US, a multiagency task force that scrutinises foreign investments in American companies, is so unconvinced by the Texas proposals that it has demanded TikTok shed its Chinese ownership. But aside from taking the Biden administration to court, it is the only option that TikTok has. Alongside Oracle storing US user data, the Texas proposals include Oracle looking at TikTok’s source code and vetting its app updates, Chew will argue that Project Texas, and not a sale process, is the answer to lawmakers’ concerns.“The idea behind Project Texas is it won’t matter what the Chinese law or any law says, because we’re taking US user data and we’re putting it out of their reach,” Chew told the Wall Street Journal last week.What is TikTok doing to protect children from harmful content?The committee chair, Cathy McMorris Rodgers, says tech companies like TikTok use “harmful algorithms to exploit children for profit and expose them to dangerous content online”. So although data security will feature strongly in the hearing, expect questions about the protection of children online. TikTok has over 1 billion users worldwide and more than 100 million in the US, many of them under 18. According to the Center for Countering Digital Hate, TikTok’s recommendation algorithm pushes self-harm and eating disorder content to teenagers within minutes of them expressing interest in the topics.TikTok announced a “comprehensive” update to its content guidelines this month, including placing age restrictions on “mature content” such as videos of cosmetic surgery. It will also make content that is inappropriate for a “broader audience” ineligible for recommendation in its main For You feed. Expect Chew to refer to these guideline updates. More

Donald Trump may be in legal trouble over his alleged weakness for vice, but his predicament is increasingly placing Ron DeSantis – his chief rival for the Republican presidential nomination – in a political vise.The Florida governor must join Republican attacks on Alvin Bragg, the Democratic Manhattan district attorney whose indictment of Trump over a hush money payment to a porn star is reportedly imminent, while trying not to lose ground in a primary he has not formally entered.DeSantis has floated criticism of Trump over the hush money payment but on Tuesday a new poll showed how Trump, who is also fundraising off his legal peril, has tightened his grip on the primary race.The Morning Consult survey shows the former president has 54% support among likely primary voters and DeSantis has 26%, tying his lowest score since the poll began in December.The two men are still way ahead of the rest of the field. Trump’s former vice-president, Mike Pence, was third in the Morning Consult poll, with 7%, three points ahead of Nikki Haley, the former South Carolina governor.Liz Cheney, the former Wyoming representative who lost her seat after turning against Trump over the January 6 attack on Congress, and who has not ruled out a run, had 3% support. No one else, including likely candidates Mike Pompeo and Tim Scott, got more than a point.Like DeSantis, Pence has not declared a run but is seen to be positioning himself to do so. In a telling detail, Morning Consult noted that Pence’s favorability rating “declined from 60% to 55% during a week that featured news coverage of his condemnation of Trump’s behavior surrounding the January 6 attack”.Speaking to reporters in Florida on Monday, DeSantis was asked to comment on Trump’s looming indictment in the Stormy Daniels affair.Using a common rightwing attack line with antisemitic overtones, he condemned Bragg as a puppet of the progressive philanthropist George Soros.But DeSantis also took a shot at Trump, saying: “I don’t know what goes into paying hush money to a porn star to secure silence over some type of alleged affair. I just – I can’t speak to that.”Trump responded with typical aggression, recycling an attack line questioning DeSantis’s behaviour around young women when he was a teacher but also insinuating the governor might be gay.The following day, a close Trump ally warned of worse to come.“If you start this thing,” the South Carolina senator Lindsey Graham told Fox News, “you better be willing to take it. I don’t like it. You know, Trump is not into ‘Thou shall nots’. That’s not his thing.”DeSantis did not seem to listen, repeating his hush money jab to the British journalist Piers Morgan in an interview for Fox Nation excerpted in the New York Post.“There’s a lot of speculation about what [Trump’s] underlying conduct is,” DeSantis said. “[The payoff] is purported to be it and the reality is that’s just outside my wheelhouse. I mean that’s just not something that I can speak to.”Morgan wrote: “The message was clear: I’m nothing like Trump when it comes to sleazy behaviour.”DeSantis also said he would have handled Covid “different” to Trump, including firing the senior adviser Anthony Fauci and claimed that he governed without “daily drama”.He also called Trump’s attacks “background noise” and mocked the former president’s nicknames for him, saying: “I don’t know how to spell the [De]sanctimonious one. I don’t really know what it means, but I kinda like it, it’s long, it’s got a lot of vowels … you can call me whatever you want, just as long as you also call me a winner.”For leaders, DeSantis said, Americans “really want to look to people like our founding fathers, like what type of character … are you bringing?”Trump had switched from flattery to attacking him, DeSantis said, because “the major thing that’s happened that’s changed his tune was my re-election victory”.DeSantis beat the Democrat Charlie Crist by a landslide in November.Amid it all, the Morning Consult poll contained another worrying message for Republicans in general.According to the poll, if Trump were the nominee he would lose a head-to-head with Joe Biden by three points, 44% to 41%. If the Republican nominee were DeSantis, he would lose by one point less. More

Donald Trump has told advisers that he wants to be handcuffed when he makes an appearance in court, if he is indicted by a Manhattan grand jury for his role in paying hush money to adult film star Stormy Daniels, multiple sources close to the former president have said.The former president has reasoned that since he would need to go to the courthouse and surrender himself to authorities for fingerprinting and a mug shot anyway, the sources said, he might as well turn everything into a “spectacle”.Trump’s increasing insistence that he wants to be handcuffed behind his back for a perp walk appears to come from various motivations, including that he wants to project defiance in the face of what he sees as an unfair prosecution and that it would galvanize his base for his 2024 presidential campaign.But above all, people close to Trump said, he was deeply anxious that any special arrangements – like making his first court appearance by video link or skulking into the courthouse – would make him look weak or like a loser.The recent discussions that Trump has had about his surrender with close advisers at Mar-a-Lago and elsewhere opens a window on to the former president’s unique fears and anxieties as the grand jury, which next convenes on Wednesday, appears on course to return an indictment.Trump’s legal team in the hush money case has recoiled at the idea of him going in person and recommended that Trump allow them to quietly turn himself in next week and schedule a remote appearance, even citing guidance from his Secret Service detail about potential security concerns.But Trump has rejected that approach and told various allies over the weekend that he didn’t care if someone shot him – he would become “a martyr”. He later added that if he got shot, he would probably win the presidency in 2024, the sources said.It remains uncertain when the Manhattan grand jury might return an indictment in the hush money case and make him the first US president, sitting or former, to face criminal charges.People close to Trump could not be sure how serious he is about being handcuffed for a perp walk, but he may be thwarted in his supposed ambitions if the district attorney, Alvin Bragg, decides against handcuffing him and refuses to allow him to be marched past the cameras.Trump’s advisers have also been unsure whether he actually grasps the enormity of what an indictment might mean for him legally, in part because he has appeared disconnected at times from the recent flurry of activity in New York as the investigation has wrapped up.In recent days, Trump has generally weighed his predicament only in between lunches and dinners at Mar-a-Lago and playing his usual rounds of golf at his resort in Palm Beach, the sources said.When he eventually gets settled on strategizing his response to the hush money case, the sources said, he has been more focused on how he can project an image of defiance against the prosecution and that he is unfazed by being slapped with criminal charges that could turn out to rise to a felony.The case centers on $130,000 that Trump paid to Daniels through his then-lawyer Michael Cohen in the final days of the 2016 campaign. Trump later reimbursed Cohen with $35,000 checks using his personal funds, which were recorded as legal expenses to Cohen.It remains unclear what charges the district attorney might seek against Trump, though some members of his legal team believe the most likely scenario involves a base charge of falsifying business records coupled with potential tax fraud because Trump would not have paid tax on the payments.Trump has also been fixated on how an indictment might be a boon for his 2024 presidential campaign, betting that it would enrage his Maga base and force the rest of the Republican party to fall in line to defend him, in what he has already characterised as a politically motivated prosecution.In the past, publicity over political and criminal investigations have benefited Trump’s fundraising, and forced Republican rivals to stumble between criticizing prosecutors and defending otherwise politically indefensible allegations.Whether an indictment benefits Trump for the 2024 campaign remains to be seen given his grievance-driven campaigns have faltered in recent election cycles, with independent voters, in particular, seemingly exhausted by his constant refrains surrounding “witch-hunt” investigations. More

Taiwan’s president will visit diplomatic allies Guatemala and Belize next week while also making stopovers in the United States, as it aims to shore up ties in Latin America.Tsai Ing-wen will depart Taiwan on 29 March for the 10-day trip, stopping in New York and Los Angeles while en route to and from the Central American countries, the island’s ministry said on Tuesday.Belize and Guatemala are two of just 14 countries that officially recognise Taiwan over China, and Tsai’s trip comes after Honduras said earlier this month that it would be switching recognition to Beijing.China views self-ruled, democratic Taiwan as part of its territory, to be retaken one day – by force if necessary. Under its “One China” principle, no country may maintain official diplomatic relations with both China and Taiwan.During her trip, President Tsai will meet her Guatemalan counterpart Alejandro Giammattei and Belize’s prime minister Johnny Briceño, the foreign ministry said.Asked if Tsai would meet US House speaker Kevin McCarthy in Los Angeles, deputy foreign minister Alexander Yui said only that her “transit itinerary is being arranged appropriately with the US side”.McCarthy said earlier this month that he would see Tsai in his home state of California.On Tuesday, Chinese foreign ministry spokesman Wang Wenbin reiterated his country’s opposition to Tsai meeting with US officials.“We firmly oppose any form of official exchanges between the US and Taiwan,” he told a press briefing in Beijing. “China has made solemn representations to the US in this regard.”In Washington, state department spokesman Vedant Patel downplayed the significance of Tsai’s transit and said it was normal for Taiwanese dignitaries to meet members of Congress or hold public events while on US stopovers.“Transits are taken out of consideration for the safety and comfort and convenience and dignity of the passenger and are consistent with our One China policy, which also remains unchanged,” Patel told reporters.Washington is one of Taiwan’s key global allies and its largest arms supplier, despite itself switching diplomatic recognition to Beijing in 1979.In August of last year, a visit by McCarthy’s predecessor Nancy Pelosi to Taiwan drew condemnation from China, which conducted massive military drills around the island in response.McCarthy has vowed also to visit Taiwan but the stopover could give him an opportunity to sidestep a potentially explosive trip.Tsai’s trip comes at a critical time for Taiwan, after the Honduran president, Xiomara Castro, said last week that her country would establish “official relations” with China.Latin America has been a key diplomatic battleground for China and Taiwan since the two split in 1949 after a civil war.Honduras’s move – which would result in the severing of longstanding official ties with Taiwan – followed negotiations between it and China on building a hydroelectric dam in the country.It continues a trend in the region, with Nicaragua, El Salvador, Panama, the Dominican Republic and Costa Rica all switching diplomatic recognition to Beijing in recent years. More

Tens of thousands of workers in the Los Angeles unified school district, accompanied by teachers, walked off the job on Tuesday over stalled contract talks for higher pay and better working conditions, shutting down the nation’s second-largest school system.The strike, which is expected to last three days, upended the lives of more than 500,000 students and their families from schools in Los Angeles and the surrounding areas, as bus drivers, cafeteria workers and teachers demanded more support at a time when educators in the city and elsewhere are struggling to afford to live where they work.The latest strike comes years after a swirl of educator activism swept across the country, from Oklahoma to Chicago to Los Angeles itself, as teachers take more aggressive labor action to compel districts to improve working conditions during contract negotiations. In 2019, tens of thousands of teachers walked out of Los Angeles schools for six days and demanded higher wages, smaller class sizes, and more support staff.This time, the Service Employees International Union, which represents about 30,000 teachers’ aides, special education assistants, bus drivers, custodians, cafeteria workers and other support staff, led districtwide demonstrations. Support workers, who earn, on average, $25,000 a year, with many living in poverty and working limited hours, have demanded a 30% pay raise and more staffing.In what Los Angeles schools superintendent Alberto Carvalho called a “historic” offer, the district has proposed a pay increase of more than 20% over multiple years, with a 3% bonus and “massive expansion of healthcare benefits”, he said on Fox 11.Despite last-minute efforts to avert the strike, talks failed. The district’s support workers, who bring students to and from school, clean schools and feed students every day, have been working without a contract since June 2020.The strike started on Tuesday morning from a bus yard, with workers chanting for better wages and increased staffing in a steady rain before dawn. Some held signs that read: “We keep schools safe, Respect Us!”The district has more than 500,000 students from Los Angeles and all or part of 25 other cities and unincorporated county areas. Nearly three-quarters are Latino.Parent Danielle Peters rallied with union members outside Hancock Park elementary school, along with her children, Jack, 10, and Ella, seven. She said it was wrong that school workers earn as little as $15 an hour, a wage Peters remembers earning for babysitting.“They are underappreciated, they are underpaid, and they have the most important job in the world,” she said of support staff. “We care about them, and this is the least we can do.”Leaders of United Teachers Los Angeles, the union representing 35,000 educators, counselors and other staff, pledged solidarity with the strikers.The union’s 2019 strike resulted in a contract settlement, but teachers continue to negotiate with the district after that contract expired in June 2022. Teachers are asking for a 20% pay increase over two years, more targeted support for Black students, and more housing aid for low-income families, as they frame their demands around meeting the rising cost of living in Los Angeles county and the need for increased support in the years of the Covid-19 pandemic.On Friday, the teachers union informed the district that it was terminating its contract, allowing teachers to strike alongside SEIU workers and adding pressure on ongoing negotiations.“These are the co-workers that are the lowest-paid workers in our schools and we cannot stand idly by as we consistently see them disrespected and mistreated by this district,” the UTLA president, Cecily Myart-Cruz, told a news conference.Myart-Cruz was joined by Representative Adam Schiff, a Democrat and Senate candidate, who said the strikers were earning “poverty wages”.“People with some of the most important responsibilities in our schools should not have to live in poverty,” Schiff said.On the picket lines, Danielle Murray, a special education assistant, told KABC-TV working conditions had been declining every year.“We’re very understaffed,” Murray said. “The custodial staff is a ghost crew, so the schools are dirty. They’re doing the best they can.”She added: “Some people are saying, ‘If you want more money, get a better job.’ Well, some of us have bachelor’s degrees, but we choose to work with a special population that some people don’t want to work with. We want to make a difference to these students.”Superintendent Alberto M Carvalho accused the union of refusing to negotiate and said that he was prepared to meet at any time day or night. He said on Monday a “golden opportunity” to make progress was lost.“I believe this strike could have been avoided. But it cannot be avoided without individuals actually speaking to one another,” he said.Local 99 said on Monday evening that it was in discussions with state labor regulators over allegations that the district engaged in misconduct that has impeded the rights of workers to engage in legally protected union-related activities.“We want to be clear that we are not in negotiations with LAUSD,” the union said in a statement. “We continue to be engaged in the impasse process with the state.”Those talks would not avoid a walkout, the statement said.During the strike, about 150 of the district’s more than 1,000 schools are expected to remain open with adult supervision but no instruction, to give students somewhere to go. Dozens of libraries and parks, plus some “grab and go” spots for students to get lunches also planned to be open to kids to lessen the strain on parents now scrambling to find care.“Schools are so much more than centers of education – they are a safety net for hundreds of thousands of Los Angeles families,” the Los Angeles mayor, Karen Bass, said in a statement on Monday. “We will make sure to do all we can to provide resources needed by the families of our city.”Workers, meanwhile, said striking was the only option they had left.Instructional aide Marlee Ostrow, who supports the strike, said she was long overdue for a raise. The 67-year-old was hired nearly two decades ago at $11.75 an hour, and today she makes about $16. That isn’t enough to keep pace with inflation and rising housing prices, she said, and meanwhile her duties have expanded from two classrooms to five.Ostrow blames the district’s low wages for job vacancies that have piled up in recent years.“There’s not even anybody applying because you can make more money starting at Burger King,” she said. “A lot of people really want to help kids, and they shouldn’t be penalized for wanting that to be their life’s work.” More

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The global financial system is facing a crisis of confidence. Which makes this week’s meeting of America’s central bankers critically important.None of the 12 members of the Federal Reserve Board’s Open Market Committee were elected to their posts. The vast majority of Americans don’t even know their names, except perhaps for the chairman, Jerome Powell.But as they try to decide whether to raise interest rates and, if so, by how much, America’s central bankers are deciding on the fate of the American – and much of the world’s – economy.And they’re sitting on the horns of a dilemma.On one horn is their fear that inflation will become entrenched in the economy, requiring more interest-rate hikes.On the other horn is their fear that if they continue to raise interest rates, smaller banks won’t have enough capital to meet their depositors’ needs.Higher rates could imperil more banks, especially those that used depositors’ money to purchase long-term bonds when interest rates were lower, as did Silicon Valley Bank.That means that raising interest rates could cause more runs on more banks. The financial system is already shaky.The two objectives – fighting inflation by raising rates, and avoiding a bank run – are in direct conflict. As the old song goes: “Something’s got to give.” What will it be?The sensible thing would be for the Fed to pause rate hikes long enough to let the financial system calm down. Besides, inflation is receding, albeit slowly. So there’s no reason to risk more financial tumult.But will the Fed see it that way?The Fed’s goal last week was to stabilize the banks enough so the Fed could raise interest rates this week without prompting more bank runs.The Fed bailed out uninsured depositors at two banks and signaled it would bail out others – in effect, expanding federal deposit insurance to cover every depositor at every bank.On top of this, 11 of America’s biggest banks agreed to contribute a total of $30bn to prop up First Republic, another smaller bank caught in the turmoil.This “show of support” (as it was billed, without irony) elicited a cheer from Jerome Powell and the treasury secretary, Janet Yellen, who called it “most welcome”. (Of course it was welcome. They probably organized it.)But investors and depositors are still worried.Other regional banks across the US have done just what Silicon Valley Bank did – buying long-dated bonds whose values have dropped as interest rates have risen. According to one study, as many as 190 more lenders could fail.On Monday, First Republic remained imperiled notwithstanding last week’s $30bn cash infusion. Trading in its shares on the New York Stock Exchange was automatically halted several times to prevent a freefall.Multiple recent downgrades of banks by ratings agencies like Moody’s haven’t helped.Reportedly, the Biden administration is even in talks with Warren Buffett, the chairman of Berkshire Hathaway, who invested billions to bolster Goldman Sachs during the 2008 financial crisis.Meanwhile, on the other side of the Atlantic, the European Central Bank last week raised interest rates by half a percentage point, asserting its commitment to fighting inflation.Yet the higher interest rates, combined with the failure of the two smaller American banks, have shaken banks in Europe.Just hours before the European Central Bank’s announcement, the banking giant Credit Suisse got a $54bn lifeline from Switzerland’s central bank.Yet not even this was enough to restore confidence. After a several days of negotiations involving regulators in Switzerland, the US and the UK, Switzerland’s biggest bank, UBS, agreed over the weekend to buy Credit Suisse in an emergency rescue deal.Finance ultimately depends on confidence – confidence that banks are sound and confidence that prices are under control.But ever since the near meltdown of Wall Street in 2008, followed by the milquetoast Dodd-Frank regulation of 2010 and the awful 2018 law exempting smaller banks, confidence in America’s banks has been shaky.November’s revelation that the crypto giant FTX was merely a house of cards has contributed to the fears. Where were the regulators?The revelation that Silicon Valley Bank didn’t have enough capital to pay its depositors added to the anxieties. Where were the regulators?Credit Suisse had been battered by years of mistakes and controversies. It is now on its third CEO in three years.Swiss banking regulations are notoriously lax, but American bankers have also pushed Europeans to relax their financial regulations, setting off a race to the bottom where the only winners are the bankers. As Lloyd Blankfein, then CEO of Goldman Sachs, warned Europeans: “Operations can be moved globally and capital can be accessed globally.”One advantage of being a bank (whether headquartered in the US or Switzerland) is that you get bailed out when you make dumb bets. Another is you can choose where around the world to make dumb bets.Which is why central banks and bank regulators around the world must not only pause interest rate hikes. They must also join together to set stricter bank regulations, to ensure that instead of a race to the bottom, it’s a race to protect the public.Banking is a confidence game. If the public loses confidence in banks, the financial system can’t function.In the panic of 1907, when major New York banks were heading toward bankruptcy, the secretary of the treasury, George B Cortelyou, deposited $35m of federal money in the banks. It was one of the earliest bank bailouts, designed to restore confidence.But it wasn’t enough. JP Morgan (the man who founded the bank) organized the nation’s leading financiers to devise a private bailout of the banks, analogous to last week’s $30bn deal.Confidence was restored, but the underlying weaknesses of the financial system remained. Those weaknesses finally became painfully and irrevocably apparent in the great crash of 1929.
Robert Reich, a former US secretary of labor, is professor of public policy at the University of California, Berkeley, and the author of Saving Capitalism: For the Many, Not the Few and The Common Good. His new book, The System: Who Rigged It, How We Fix It, is out now. He is a Guardian US columnist. His newsletter is at robertreich.substack.com More