Business

Subterms

    More stories

    • 200 Shares109 Views

      in US Politics

      A US debt default could crush small businesses. So what can we do? | Gene Marks

      by

      The US is careening towards a debt crisis the likes of which we haven’t seen since 2011 when Barack Obama faced off against the Tea Party. No one knows for sure if the federal government is going to default on its debt by the end of this month. But if Democrats and Republicans can’t agree on a compromise, it will have an enormous impact on small businesses around the country.Some 65% of small businesses believe they would be negatively affected by a default, according to a recent report from Goldman Sachs. This is very bad news. Small businesses accounted for 45% of all private-sector jobs in the first quarter of 2022.The first small businesses that will be affected will be those that contract directly with the federal government. Tens of thousands of small businesses received more than $154bn in federal contracts in the fiscal year 2021 – about 27% of all government contract spending that year. And this doesn’t include the small businesses that indirectly received funding from larger construction and other firms that get government money and sub-contract out work to them. If Janet Yellen is forced to prioritize interest and debt payments above all else, then these federal contracts would be suspended and the negative cash flow impact on these small firms would be substantial. Let’s remember: almost half of small businesses have less than three months of cash on hand.Then there are the small businesses that service government properties. A report from the Cato Institute estimates that the federal government owns or leases more than 350,000 buildings and properties around the country. These facilities are a critical revenue source for countless small firms that perform construction, maintenance, security, cleaning, electrical, landscaping and other kinds of services, all which would be potentially interrupted. The employees that go to these buildings every day rely on neighboring businesses for their lunches, dry cleaning, yoga, happy hours and other products and services. If ordered to stay home, these businesses – already reeling from the number of employees now working remotely – would suffer a significant blow.Then there are government functions. Individuals and small business owners rely on many areas of the government for services. They’re applying for passports, questioning the IRS, waiting on regulatory approval and loan guarantees from the Small Business Administration. These and many other critical government services could be suspended if funding is re-directed.These are all immediate effects of what would happen if the government must avoid a loan default. The longer-term effects are even more devastating. If the situation persists credit and financial markets will be volatile and banks will be forced to limit financing to only the most secure (and usually) largest of their customers, which means many small businesses seeking loans will either have to wait or be denied. The Goldman Sachs study found that 77% of small business owners they surveyed were already concerned about their ability to get loans.According to the White House, a default lasting more than three months would cause a significant recession with as many as 8 million people losing their jobs. The stock market – where small business owners park a significant amount of their retirement savings and collateral – could collapse.All of this could not come at a worse time for small businesses. Optimism among business owners – as determined monthly by the National Federation of Independent Businesses – is already at a 10-year low. Bankruptcies are ominously on the rise too, with one research firm reporting a 20% increase in filings from a year ago. An extended shutdown would make these numbers much worse.If you’re a small business owner, what can you do?It sounds obvious but it’s a fact that my very best clients are always thinking ahead. So the first thing you should be doing is preparing. A federal default or shutdown may not happen at all, but that doesn’t mean you shouldn’t be ready for such an event by the end of this month.That means hoarding cash, confirming your credit availability (including credit cards) and communicating with your customers, suppliers, employees and partners. No one should be surprised by your actions – like delaying payments – if a shutdown occurs. They should know that this is something you may be forced to do and they should know this well in advance. The more you tell them of your plans the better they can also plan and the more appreciative they will be.Also, and this is probably no consolation for businesses right now, is to take away an important lesson: diversity is important. If your business relies too much on any one customer (ie the federal government) then once this problem is behind us you should be making it a priority to diversify your customer base. Too much dependence on one source of revenue is too big a risk and even the federal government can’t be relied on to pay its bills on time – or at all.The silver lining in this dangerous, avoidable situation is that it would take time for things to get really, really bad. Although Yellen warns of a default by the end of May, she does have options for at least funding major parts of the government. And quarterly tax payments – expected by mid-June – could help stave off disaster for a while longer. But none of this should stop a business owner from thinking about the consequences now and preparing for this event. Even if we escape this time, given the acrimonious environment in Washington, we shouldn’t be surprised if something like this doesn’t occur again – and soon. More

    • 150 Shares169 Views

      in US Politics

      OpenAI CEO calls for laws to mitigate ‘risks of increasingly powerful’ AI

      by

      The CEO of OpenAI, the company responsible for creating artificial intelligence chatbot ChatGPT and image generator Dall-E 2, said “regulation of AI is essential” as he testified in his first appearance in front of the US Congress.Speaking to the Senate judiciary committee on Tuesday, Sam Altman said he supported regulatory guardrails for the technology that would enable the benefits of artificial intelligence while minimizing the harms.“We think that regulatory intervention by governments will be critical to mitigate the risks of increasingly powerful models,” Altman said in his prepared remarks.Altman suggested the US government might consider licensing and testing requirements for development and release of AI models. He proposed establishing a set of safety standards and a specific test models would have to pass before they can be deployed, as well as allowing independent auditors to examine the models before they are launched. He also argued existing frameworks like Section 230, which releases platforms from liability for the content its users post, would not be the right way to regulate the system.“For a very new technology we need a new framework,” Altman said.Both Altman and Gary Marcus, an emeritus professor of psychology and neural science at New York University who also testified at the hearing, called for a new regulatory agency for the technology. AI is complicated and moving fast, Marcus argued, making “an agency whose full-time job” is to regulate it crucial.Throughout the hearing, senators drew parallels between social media and generative AI, and the lessons lawmakers had learned from the government’s failure to act on regulating social platforms.Yet the hearing was far less contentious than those at which the likes of the Meta CEO, Mark Zuckerberg, testified. Many lawmakers gave Altman credit for his calls for regulation and acknowledgment of the pitfalls of generative AI. Even Marcus, brought on to provide skepticism about the technology, called Altman’s testimony sincere.The hearing came as renowned and respected AI experts and ethicists, including former Google researchers Dr Timnit Gebru, who co-led the company’s ethical AI team, and Meredith Whitaker, have been sounding the alarm about the rapid adoption of generative AI, arguing the technology is over-hyped. “The idea that this is going to magically become a source of social good … is a fantasy used to market these programs,” Whitaker, now the president of secure messaging app Signal, recently said in an interview with Meet the Press Reports.Generative AI is a probability machine “designed to spit out things that seem plausible” based on “massive amounts of effectively surveillance data that has been scraped from the web”, she argued.Senators Josh Hawley and Richard Blumenthal said this hearing is just the first step in understanding the technology.Blumenthal said he recognized what he described as the “promises” of the technology including “curing cancer, developing new understandings of physics and biology, or modeling climate and weather”.Potential risks Blumenthal said he was worried about include deepfakes, weaponized disinformation, housing discrimination, harassment of women and impersonation frauds. “For me, perhaps the biggest nightmare is the looming new industrial revolution, the displacement of millions of workers,” he said.Altman said that while OpenAI was building tools that will one day “address some of humanity’s biggest challenges like climate changes and curing cancer”, the current systems were not capable of doing these things yet.But he believes the benefits of the tools deployed so far “vastly outweigh the risks” and said the company conducts extensive testing and implements safety and monitoring systems before releasing any new system.“OpenAI was founded on the belief that artificial intelligence has the ability to improve nearly every aspect of our lives but also that it creates serious risks that we have to work together to manage,” Altman said.Altman said the technology will significantly affect the job market but he believes “there will be far greater jobs on the other side of this”.“The jobs will get better,” he said. “I think it’s important to think of GPT as a tool not a creature … GPT 4 and tools like it are good at doing tasks, not jobs. GPT 4 will, I think, entirely automate away some jobs and it will create new ones that we believe will be much better.”Altman also said he was very concerned about the impact that large language model services will have on elections and misinformation, particularly ahead of the primaries.“There’s a lot that we can and do do,” Altman said in response to a question from Senator Amy Klobuchar about a tweet ChatGPT crafted that listed fake polling locations. “There are things that the model won’t do and there is monitoring. At scale … we can detect someone generating a lot of those [misinformation] tweets.”Altman didn’t have an answer yet for how content creators whose work is being used in AI-generated songs, articles or other works can be compensated, saying the company is engaged with artists and other entities on what that economic model could look like. When asked by Klobuchar about how he plans to remedy threats to local news publications whose content is being scraped and used to train these models, Altman said he hopes the tool would help journalists but that “if there are things that we can do to help local news, we’d certainly like to”.Touched upon but largely missing from the conversation was the potential danger of a small group of power players dominating the industry, a dynamic Whitaker has warned risks entrenching existing power dynamics.“There are only a handful of companies in the world that have the combination of data and infrastructural power to create what we’re calling AI from nose-to-tail,” she said in the Meet the Press interview. “We’re now in a position that this overhyped technology is being created, distributed and ultimately shaped to serve the economic interests of these same handful of actors.” More

    • 175 Shares169 Views

      in US Politics

      US lawmakers call to modernize Osha as hundreds die on the job each day

      by

      Every day 343 workers die from hazardous working conditions in the US. In 2021, the latest year with data available, 5,190 workers in the US were killed on the job and an estimated 120,000 deaths were attributed to occupational diseases.Since 1970, more than 429,000 workers have been killed on the job, but only 128 of those cases have been criminally prosecuted under the Occupational Safety and Health Act (Osha).Now a new report and reintroduced federal legislation is pushing to modernize Osha.Democratic congressmen Joe Courtney and Bobby Scott have co-authored the Protecting America’s Workers Act, which was reintroduced to Congress on 28 April, on Workers’ Memorial Day.“The history of Osha shows that there really is a systemic problem in terms of that mission of getting the rules aligned with the evolving technology that goes into a whole host of sectors in the US economy, whether it’s home construction, healthcare settings, manufacturing, the new processes, the new chemicals, the new machinery that as part of a very dynamic economy, it’s just kind of rocketed past the Osha rules that are in place to protect people,” said Courtney.“It’s just really trying to get a system of workforce protection that is really connected to the actual workplaces that people are going to every day in the 21st century.”The bill includes expanding Osha coverage to the estimated 8 million state and local government workers in 24 states not currently covered by Osha, reinstating an employer record-keeping rule of illnesses and injuries rolled back under the Trump administration, providing authority for increased civil penalties for serious Osha violations, and authorizing felony penalties against employers who knowingly commit Osha violations that result in the death or serious harm of a worker. The bill would also establish rights for families who lose a loved one to a workplace fatality and require Osha to investigate all cases of death or serious injury that occur in a workplace.The AFL-CIO’s Death on the Job 2023 report, released on 26 April, outlines the “toll of neglect” that comes from inadequately addressing workplace safety issues amid aggressive opposition from industry groups and employers against improving and enforcing workers protections.The report cites low civil penalties for safety violations issued by Osha, understaffing and underfunding at Osha, the millions of workers who are currently not covered under Osha which include independent contractors and federal, state and local public workers, inadequate retaliation protections for workers to speak out and report safety issues, and the need to improve and expand data on worker injuries and illnesses.For Black workers, the workplace fatality rate increased from 3.5 per 100,000 workers in 2020 to 4.0 in 2021, the highest rate in a decade, while Latino workers currently have a worker fatality rate of 4.5 per every 100,000 workers, 25% higher than the national average.Younger and older workers are at higher risk for workplace fatalities. Three hundred and fifty workers under the age of 25 died on the job in 2021, while workers over 65 have a risk of 2.3 times higher than other workers of dying on the job.Courtney cited a 2010 incident in Connecticut where six workers were killed in an explosion at a Kleen Energy Systems power plant during cleanup of debris in pipes as an example of an avoidable and tragic workplace fatality incident.“As the process of an investigation went on, it was clear that what caused that was really very well known, unsafe practices, that the Chemical Safety Board, which is a sort of an arm of OshaA, had long identified as being the wrong way to clean the tubes,” he said.The legislation has been introduced numerous times in Congress over the past two decades. Senator Pat Murray of Washington called the legislation “long overdue” when she was reintroducing it in 2013. Joe Biden was a co-sponsor of previous versions of the bill while serving in the Senate.In 2009 testimony in support of the bill, Osha’s assistant secretary David Michaels said the 1970 Osha Act was “tragically outdated and inadequate”, and yet few to no changes or updates have been made in over 50 years since its passage.Courtney noted the political challenges faced in passing the Protecting America’s Workers Act given the current House is under Republican control. But a companion bill in the Senate will be introduced and Courtney said it was important to keep introducing the bill to keep the issues visible.“I think that at some point, the external pressure is going to reach the breaking point in terms of getting this place to move,” he said. More

    • 163 Shares199 Views

      in US Politics

      Disney v DeSantis: what’s at stake for Florida as legal tug-of-war ramps up?

      by

      Lucy Mends was very nervous about vacationing at Disney World in central Florida this spring. From her home in Elkridge, Maryland, the 46-year-old romance novelist had read about a law approved by Governor Ron DeSantis in 2022 that banned discussion of gender identity and sexual orientation in public school classrooms for children between kindergarten and the third grade.Mends became more alarmed over a series of bills introduced during the current session of the state legislature that would extend that ban to include high school students and prohibit transgender people from amending their birth certificates and receiving transition-related care such as hormone therapy and puberty blockers for minors. “They’re demonizing trans people, and it’s very scary,” she said.Under pressure from its employees, the Walt Disney Company publicly opposed the so-called Don’t Say Gay law last year. An angry DeSantis retaliated by denouncing Disney as the “Magic Kingdom of woke corporatism” and signed a bill in February aimed at seizing control of the self-governing special district near Orlando that the corporation has been running ever since Disney World opened its doors in 1972.In any event, Mends went ahead with her Disney World holiday plans. Showing solidarity with the company was a big factor. “Spending money at Disney is like contributing to the fight against DeSantis,” said Mends. “They aren’t going to be deterred by a fascist, and I’m very supportive of that.”The ongoing dispute between DeSantis and his state’s second-largest employer has ramped up in recent days. Disney sued the Florida governor in a Tallahassee federal court in late April for allegedly punishing the company for exercising its first amendment freedom of expression rights by criticizing DeSantis over last year’s Parental Rights in Education Act. The suit seeks to void the governor’s takeover of Disney’s self-governing district after he recently filled its five-member board with allies.That board in turn countered with its own litigation in an Orlando state court that aims to reaffirm its control over design and construction decisions in Disney World’s special district, despite a series of last-minute decisions reached by the previous pro-company board that would strengthen Disney’s autonomy vis-a-vis the state government.The eventual outcome of the legal tug-of-war between DeSantis, who is widely expected to formally announce in the coming weeks whether he will seek the Republican presidential nomination in 2024, and Disney will have profound implications for the Sunshine state overall and the regional economy of central Florida in particular. The company pays more than $1bn in state taxes every year, and the lion’s share of those revenues is generated by the sprawling 25,000-acre (10,000-hectare) Disney World amusement park complex that employs an estimated 65,000 people.One potential casualty may have emerged. Owing to a $578m tax break approved during DeSantis’s first term in office, Disney had been planning to transfer about 2,000 high-paying creative jobs from California to a new regional hub of operations in south-east Orlando as early as this year. That major personnel move is reportedly now on hold in the absence of any specific timetable.The Guardian’s requests for an interview with a Disney executive or spokesperson went unanswered. The governor’s press secretary turned down a similar request on the grounds of what he called the newspaper’s “bias and agenda [which] come before news or truth”.But DeSantis has been very vocal about the company ever since Disney’s then chief executive officer Robert Chapek publicly voiced his “disappointment” over the enactment of the Don’t Say Gay bill in 2022. In his recently published book The Courage to Be Free: Florida’s Blueprint for America’s Revival, the governor blasted Disney for its supposed “support of indoctrinating young schoolchildren in woke gender identity politics” and boasted about how “things got worse for Disney” during DeSantis’s stewardship.That kind of talk worries many folks in central Florida. For starters, such rhetoric squares poorly with the Republican party’s traditionally pro-business policies and staunch opposition to excessive government intervention.“He’s clearly evolved from being a Tea party, small-government, Heritage Foundation type of guy to a more Trumpist, anti-woke leader,” said Congressman Darren Soto, a Democrat whose ninth district encompasses a chunk of the Disney World premises. “It’s a personal vendetta, he has been attacking anybody who stands in his way, and it’s terrible for the economy of central Florida.”Some prominent figures in the region’s hospitality industry feel the governor’s various crusades to further restrict abortion rights, scrap tests on African American affairs for advanced placement high school students, and establish a new law enforcement body to investigate rare instances of voter fraud are misplaced.skip past newsletter promotionafter newsletter promotion“He needs to focus on the shortage of workers and insurance issues, but DeSantis is more busy with his presidential race,” said hotelier Jan Gautam, who has seen his commercial property insurance premiums soar by an estimated 300% in just the last two years. “He has completely neglected those problems, and his approach has to change.”Among the issues at stake in its showdown with the governor is Disney’s unique degree of autonomy as a private corporation, and the charter that its executives negotiated with local government officials in 1967 was a sweetheart deal by any yardstick. It created the Reedy Creek Improvement District that allowed Disney World to function like a quasi-county government in charge of its own roads, construction services, building permits, fire department and waste collection services.According to Richard Foglesong, a political science professor and author of the 2001 book Married to the Mouse: Walt Disney World and Orlando, the company has at times acted like “a state within a state”. Disney attorneys have invoked the original charter to exempt the company from paying certain fees and taxes that were adopted by state and local government bodies during the intervening years. A case in point was a tax that Orange county officials assessed in the 1990s to help cover the budget of its sheriff’s department, which in the company’s view did not apply to Disney because the charter protected it “in perpetuity” from paying taxes adopted after 1967.A similar circumstance applies to impact fees that were introduced to partly defray the cost of construction of new highways and libraries and the establishment of new police and fire departments in Orange county as it entered a period of explosive growth in the 1980s. “They got powers that were excessive and that weren’t granted to competitors that arrived later like the Universal Orlando theme park,” said Foglesong. “That strikes me as unfair.”But the scholar parts ways with DeSantis over the governor’s motives for seeking to end the company’s privileged status and bring its operations under greater state government control. “Disney’s powers need to be addressed, but he’s attacking the company for all the wrong reasons,” he said. “When you look at DeSantis’s statements, it’s pretty clear that he is punishing Disney for talking back to him and challenging him on what can be taught in public schools. Its lawsuit is right on with respect to what it is alleging about the governor’s violation of Disney’s first amendment rights.”Even some of the governor’s sympathizers feel that DeSantis may have overstepped the accepted boundaries of his authority in the case of Disney. As he was awaiting a shuttle bus outside the Walt Disney World Swan hotel on Thursday morning, a 60-year-old Oklahoma City resident expressed unease over DeSantis’s ham-fisted tactics.“I generally support him and I understand where he’s coming from, but on this one he may have gone a little too far,” said James, a frequent visitor to Florida who is active in Republican party circles back home but declined to give his surname. “It seems a little vindictive to me – and if I were a local, I’d be concerned about the 65,000 Disney World employees and all the affiliated ancillary businesses and the jobs they represent.” More

    • 188 Shares189 Views

      in US Politics

      US workers deserve a break. It’s time for a 32-hour working week | Bernie Sanders

      by

      In 1938, as a result of a massive grassroots effort by the trade union movement, the Fair Labor Standards Act was enacted by Congress to reduce the work week to 40 hours. Back then, the American people were sick and tired of working 80, 90, 100 hours a week with very little time for rest, relaxation or quality time with their families. They demanded change and they won a huge victory. That’s the good news.The bad news is that despite an explosion in technology, major increases in worker productivity, and transformational changes in the workplace and American society, the Fair Labor Standards Act has not been reformed in 80 years. The result: millions of Americans are working longer hours for lower wages, with the average worker making nearly $50 a week less than he or she did 50 years ago, after adjusting for inflation. Further, family life is suffering, as parents don’t have adequate time for their kids, life expectancy for working people is in decline, and increased stress is a major factor in the mental health crisis we are now experiencing.Compared with other countries, our workplace record is not good. In 2021, American employees worked 184 more hours than Japanese workers, 294 more hours than British workers, and 442 more hours than German workers. Unbelievably, in 2023 there are millions of Americans who work at jobs with no vacation time.It’s time to reduce the work week to 32 hours with no loss in pay. It’s time to reduce the stress level in our country and allow Americans to enjoy a better quality of life. It’s time to make sure that working people benefit from rapidly increasing technology, not just large corporations that are already doing phenomenally well.Think about all of the extraordinary changes that have taken place in the workplace over the past several decades. When I was elected mayor of Burlington, Vermont, in 1981, there were no computers in city hall. There were no chatboxes, no printers, no emails, no calculators, no cellphones, no conference calling or Zoom.In factories and warehouses, robots and sophisticated machinery did not exist or were only used in primitive forms.In grocery stores and shops of all kinds, there were no checkout counters that utilized bar codes.As a result of the extraordinary technological transformation that we have seen in recent years, American workers are now 480% more productive than they were in the 1940s.In addition, there are far more workers today. In the 1940s, less than 65% of Americans between 25 and 54 were in the workforce. Today, with most families requiring two breadwinners to pay the bills, that number is over 83%.Yet despite all of these incredible gains in productivity, over 40% of US employees now work more than 45 hours per week; 12% work more than 60 hours a week; and the average worker now works 43 hours per week. Many are on their computers or answering emails seven days a week.Moving to a 32-hour work week with no loss of pay is not a radical idea. In fact, movement in that direction is already taking place in other developed countries. France, the seventh-largest economy in the world, has a 35-hour work week and is considering reducing it to 32. The work week in Norway and Denmark is about 37 hours.Recently, the United Kingdom conducted a four-day pilot program of 3,000 workers at over 60 companies. Not surprisingly, it showed that happy workers were more productive. The pilot was so successful that 92% of the companies that participated decided to maintain a four-day week, because of the benefits to both employers and employees.Another pilot of nearly 1,000 workers at 33 companies in seven countries found that revenue increased by more than 37% in the companies that participated and 97% of workers were happy with the four-day workweek.Studies have shown that despite working fewer hours, workers are either more, or just as, productive during a four-day work week. One study found that worker productivity increased 55% after companies implemented a four-day week. A trial of four-day work weeks for public-sector workers in Iceland found that productivity remained the same or improved across the majority of workplaces. In 2019, Microsoft tested a four-day work week in Japan and reported a 40% increase in productivity.In addition, 57% of workers in companies that have moved to a four-day work week have indicated that they are less likely to quit their jobs.Moreover, at a time when so many of our people are struggling with their mental health, 71% of workers in companies that have moved to a four-day work week report feeling less burnout, 39% reported feeling less stress and 46% reported feeling less fatigued.As much as technology and worker productivity has exploded in recent years, there is no debate that new breakthroughs in artificial intelligence and robotics will only accelerate the transformation of our economy. That transformation should benefit all, not just the few. It should create more time for friends and family, more time for rest and relaxation, more time for all of us to develop our human potential.Eighty-three years after President Franklin Delano Roosevelt signed a 40-hour work week into law, it’s time for us to move to a 32-hour work week at no loss of pay. More

    • 200 Shares159 Views

      in US Politics

      Federal Reserve increases interest rates by a quarter point to 16-year high – as it happened

      by

      From 6h agoThe Federal Reserve is set to raise interest rates this afternoon, with an announcement coming at 2pm ET from the central bank after its most recent board meeting. Analysts expect the Fed will raise rates by a quarter point, which will bring rates up to 5% to 5.25%. This would be the central bank’s 10th interest rate increase since March 2022, when rates were at zero.The interest rate increase will come at what in hindsight may seem like an inflection point for the economy. Inflation is down, consumer spending has flattened and growth in the job market is starting to slow down, but Fed officials, especially Fed chair Jerome Powell, have been stringent on getting inflation down to their target of 2%. Inflation in March was 5%, the lowest it’s been since 2021, but still quite far from 2%.Analysts and economists will be closely watching Powell’s press conference at 2.30pm, where he will discuss the direction Fed staff see the economy going, giving hints as to whether even more interest rate hikes are to come or whether the Fed will end its rate-hike campaign.Here’s a quick summary of everything that’s happened today:
      The Federal Reserve increased interest rates by a quarter point, bringing rates up to 5% to 5.25%. Fed chair Jerome Powell said that Fed officials no longer anticipate more hikes, but will monitor economic data to see if they are necessary in coming months. The stock market dipped slightly after the Fed’s announcement.
      The debate over the debt ceiling continued today, with news that Senate majority leader Mitch McConnell will keep himself out of the specific of negotiating talks and hints that senators Joe Manchin and Kyrsten Sinema are breaking from Dems and looking to take Senate negotiations seriously.
      2024 is already gearing up: Joe Biden released his second TV ad since launching his campaign last week, while US rep. Colin Allred of Texas announced his bid to unseat Texas senator Ted Cruz. In Nevada, Jim Marchant, an election denier and staunch supporter of Donald Trump, also announced a Senate big.
      We’ll be closing this blog for today. Thanks for reading.Democratic senator Raphael Warnock from Georgia said that his two young kids were on lockdown at school because of the shooting in midtown Atlanta.“They’re there. I’m here, hoping and praying they’re safe,” he said on the Senate floor. “Thoughts and prayers are not enough.”One person has been confirmed dead and at least four injured after a gunman opened fire in a building in midtown around 12.30pm ET. Police said they are still searching for a suspect.The Washington Post just published a cheery report that the White House and lawmakers on Capitol Hill technically have just six working days together before the US government potentially defaults on its debt on 1 June.With the House and Senate in session on different days, and Biden making international trips for the G7 summit in Japan and another “Quad” meeting with Australia, Japan and India in Australia, the legislative and executive branches are scheduled to have just six more days together to figure out the debt ceiling.Of course, negotiations can take place even when a chamber is not in session, but the precariousness of negotiations and the closeness of default makes the timing a tad inconvenient.Talking about the fallout of the collapse of Silicon Valley Bank in March, Federal Reserve chair Jerome Powell said that it seems the worst of the crisis is over.“The severe period of stress, those have now all been resolved and all the depositors have been protected,” he said, adding that JPMorgan’s acquisition of First Republic bank marked the end of the worst of it all.Asked about lessons that he learned from the crisis, he noted that there needs to be stronger regulation and supervision, but declined to offer any specifics as he has tasked Fed vice chair Michael Barr with drafting specific policy proposals.“I am not aware of anybody thinking [the collapse] could happen so quickly,” Powell said. “Now that we know that was possible… it will be up to vice chair Barr to design ways to address that.”Today’s Federal Reserve interest rate hike is its second quarter-point hike in a row, after a series of half- and three-quarter point hikes over the last year. Fed chair Jerome Powell said at his press conference this afternoon that “slowing down was the right move”.“I think it’s enabled us to see more data and it will continue to do so. We have to always balance the risk of not doing enough and not getting inflation under control against the risk of maybe slowing down economic activity too much,” he said. “We thought that this rate hike, along with the meaningful change in our policy statement, was the right way to balance that.Asked about the possibility of a recession, Powell seemed optimistic that the Fed could achieve a “soft landing” – keeping interest rates high without seeing huge impacts on unemployment. He noted that even as rates have hit 5% over the last 14 months, the unemployment rate stands at 3.5%.“It’s possible that we can continue to have a cooling in the labor market without having the big increases in unemployment that have gone with many prior episodes,” he said.Of course, Powell noted earlier in the press conference that the full impacts of the interest rate increases have yet to be seen, acknowledging uncertainty about the full economic impact of rate hikes.Federal Reserve chair Jerome Powell emphasized the importance of raising the debt ceiling, though noted that the debt limit is “fiscal policy matters”.“It’s essential that the debt ceiling be raised in a timely way so that the US government can pay all of its bills when they’re due. Failure to do that would be unprecedented,” he said. “We’d be in uncharted territory.Powell noted that the Fed doesn’t “give advice to either side” and also noted that “no one should assume that the Fed can protect the economy from the potential short- and long-term effects” upon default.He also noted that debt limit standoff did not play a role in the Fed’s decision today to increase interest rates.Federal Reserve chair Jerome Powell is holding a press conference after the central bank announced a quarter-point interest rate increase. Powell’s tone in the press conference has changed since he last addressed the press in March. The Fed is no longer anticipating needing more rate increases, but will monitor the economy in determining future interest rate changes.While Powell is still reiterating the Fed’s inflation target of 2%, he acknowledged that the economy is “seeing the effects of our policy tightening on demand and the most interest-rate-sensitive sectors of the economy, particularly housing and investment”. In other words, the Fed sees its interest rate hikes taking effect in the slowing of the economy.“There are some signs that supply and demand in the labor market are coming back into balance,” Powell said. He added that the “economy is likely to face further headwinds from tighter credit conditions”, meaning the full effects of the interest-rate hikes have yet to be seen.Taking a question from a reporter on whether the Fed’s statement today should be taken as a hint that officials will pause rate hikes, Powell said the officials did not make a decision on a pause, but noted that they intentionally updated their stance in today’s press statement that removed a line suggesting more increases would be appropriate.“Instead, we’re saying that in determining the extent to which [more hikes are needed], the Committee will take into account certain factors,” he said. “That’s a meaningful change that we are no longer saying we anticipate [changes] and we will be driven by incoming data meeting by meeting.”The press statement that came with the Federal Reserve’s announcement of another interest rate hike is nearly identical to the one that was released at its last meeting on 22 March, with one key exception.In its 22 March release, Fed officials in the Federal Open Market Committee (FOMC) hinted that more interest rates are to come, saying: “The Committee anticipates that some additional policy firming may be appropriate” in order to bring inflation down to the target of 2%.In today’s statement, that line was cut.The rest of the statement was in line with FOMC’s March meeting statement. They reiterated their stance that “inflation remains elevated” and the jobs market has been strong, with the unemployment rate low. They emphasized that “the US banking system is sound and resilient” and that they are “highly attentive to inflation risks”.Analysts have been wondering whether this interest rate increase will be the Fed’s last, with pauses to come after as the interest rate is held steady at future meetings.Any more hints about what is next for interest rates after this most recent hike will likely be made at Fed chair Jerome Powell’s press conference at 2.30pm ET.The Federal Reserve just announced a quarter-point interest rate increase. This brings the interest rate to a 16-year high at 5% to 5.25%. The central bank has been on a year-long campaign to temper inflation, though it has had to delicately balance the potential of shaking the economy too much with stringent rate increases.Fed chair Jerome Powell will lead a closely watched press conference, where he will discuss the Fed’s view on the state of the economy.The United Auto Workers (UAW) union said in an internal memo that it is holding off on a Joe Biden endorsement due to the president’s electric vehicle policies.UAW president Shawn Fain said in the memo that union leaders met with Biden last week and discussed “our concerns with the electric vehicle transition”, according to the New York Times. The union is concerned that auto workers will suffer during the transition to EV as less workers are needed to assemble EVs.“The EV transition is at serious risk of becoming a race to the bottom,” the memo reads, referring to electric vehicles. “We want to see national leadership have our back on this before we make any commitments.”The union has 400,000 members across the country, though members are primarily in auto-industry heavyweight Michigan, a key election battleground state.The FBI arrested a man in Florida on Tuesday for his involvement in the January 6th Capitol riots, specifically for setting off an “explosive device” in the US Capitol tunnel that leads into the building. Daniel Ball, 38, was first arrested last week by the Citrus County Sheriff’s Office for assaulting seven people, including law enforcement officers, in Florida. Ball’s probation officer, upon being shown photos and videos of the Capitol riot, identified Ball as the person throwing an explosive device in the tunnel, where law enforcement was blocking rioters.Ball faces multiple charges related to the riot, including assaulting police officers and entering a restricted area with a deadly weapon.The justice department said in March that at least 1,000 people have been arrested on charges related to the riots, with 518 pleading guilty to federal crimes so far.Election denier Jim Marchant announced that he will be running for US Senate, challenging Democrat incumbent senator Jacky Rosen for the seat she won last year.During his announcement speech on Tuesday, Marchant said that he is running to “protect Nevadans from the overbearing government, from Silicon Valley, from big media, from labor unions, from the radical gender-change advocates,” the Washington Post reported.His election campaign was acknowledged by Rosen on Twitter, who replied to Marchant’s announcement:
      Nevadans deserve a Senator who will fight for them, not a MAGA election denier who opposes abortion rights even in cases of rape and incest…
      While far-right politicians like Jim Marchant spread baseless conspiracy theories, I’ve always focused on solving problems for Nevadans.
      Marchant has described himself as a “MAGA conservative”, the Post reports, and is an avid supporter of Donald Trump. More

    • 113 Shares199 Views

      in US Politics

      DeSantis accused of favoring insurance-industry donors at residents’ expense

      by

      Ron DeSantis, the rightwing Republican governor of Florida and a likely 2024 presidential candidate, has handed favors to his big-money donors in the insurance industry at the expense of cash-strapped residents of his state, a new report claims.The report, “How Ron DeSantis sold out Florida homeowners”, draws on contributions from the American Federation of Teachers union, the non-profit Center for Popular Democracy, the voting rights group Florida Rising and the dark money watchdog Hedge Clippers.The report pinpoints the insurance industry as a crucial underwriter of DeSantis’s meteoric rise to the governor’s mansion and as a potential White House contender – and alleges that this may have influenced his decision making.DeSantis, who ran a successful re-election campaign last year, and Friends of Ron DeSantis, a political action committee that supported him, have taken a combined $3.9m in contributions from insurance industry players. If donations to the Republican party of Florida since 1 January 2019 – days before DeSantis assumed office – are added, this total swells to more than $9.9m.The authors’ analysis of campaign finance data also found that two property casualty insurance firms donated a combined total of $125,000 to DeSantis’s 2023 inaugural celebration, which marked the beginning of his final term as governor in the term-limited state.It is no coincidence, the report’s authors suggest, that DeSantis’s administration has put the insurance companies’ interests ahead of Florida’s own citizens, who are battling homeowner insurance rates nearly triple the national average.They write: “Instead of fixing problems with Florida’s property insurance industry, DeSantis has lavished the industry with favors and benefits while everyday Floridians suffer.”These benefits have included the creation of $2bn taxpayer-funded reinsurance fund. Such funds exist to insure the insurers and prevent them being wiped out during a catastrophic event. Usually, insurance companies buy such coverage on the open market but, in Florida, DeSantis chose to use tax dollars to provide access to a state-subsidised insurance fund.Second, the Florida legislature passed a bill that stripped policyholders of the ability to recover legal fees when suing insurance companies that refuse to honour legitimate claims. DeSantis trumpeted the signing of this bill on his official webpage.Home insurance is a hot-button issue in Florida, where communities vulnerable to the climate crisis face increasingly frequent and severe hurricanes and other weather events. Last year Hurricane Ian caused record levels of property damage and recent storms flooded some Fort Lauderdale neighbourhoods for more than a week.The report notes: “Communities of color and low-income neighborhoods with significant climate risks face crumbling infrastructure, soaring insurance premiums, and a lack of public investment. Florida cities like Jacksonville (where one in three residents is Black) and Orlando (where one in three is Latino) are at the highest risk nationally, based on the number of properties at substantial climate risk.”For many, it is getting worse. This year insurance price hikes are expected to average 40%, according to the Insurance Information Institute. This follows a reported 50% climb during the DeSantis administration, industry analyst John Rollins found. The increases are forcing Florida homeowners to forgo coverage at nearly twice the national rate or quit the state altogether.Tracy-Ann Brown, 53, said by phone from Miami: “The prices are horrendous. Our insurance went up to $1,800 per month and I could not afford it with my husband’s salary and my salary put together. We had a home that we had to take the insurance off and, unfortunately, our house caught fire on Easter Sunday and we didn’t have insurance on it.”Brown, a community liaison specialist for public schools, added: “The insurance everywhere here is crazy from Broward all the way to Dade. I’ve asked so many people and they’ve said the same thing. Their insurance has gone sky high.”The report argues that the Florida Office of Insurance Regulation is dominated by industry insiders who approved insurance price hikes at greater rates than were seen under previous governors.“Evidence is mounting that big insurance has blocked proposals that would have lowered costs for consumers,” it continues. “A 2022 proposal by state senator Jeff Brandes claimed to reduce insurance and save Floridians ‘$750 million to $1 billion a year’ by allowing smaller insurance companies to access the catastrophic reinsurance fund. The insurance-heavy business lobby reportedly blocked the plan.”The authors draw a contrast with Louisiana, which they say has a more robust property casualty insurance market despite similar hurricane risks. Unlike DeSantis’s insurance industry handouts, they contend, Louisiana conditions its subsidies to the insurance industry on increased participation in the state property insurance market.Randi Weingarten, president of the American Federation of Teachers, said: “Floridians are suffering from the threat of floods, hurricanes and other natural disasters, and homeowners are increasingly at risk of losing it all because they simply cannot afford spiraling insurance premiums.”She added: “Where is the governor? Well, he has picked sides: when given the choice of helping Florida’s working families or doing the bidding of the insurance lobby, Ron DeSantis puts his donors first. This report joins the dots. We can’t allow DeSantis to dismantle the livelihoods of millions of Floridians in the service of corporate interests.”DeSantis has not yet formally announced a 2024 campaign but is expected to do so after Florida’s legislative session ends later this month. In the meantime he has travelled to early-voting states to promote his new book, has met with donors and just returned from an overseas trade mission.The governor has also become embroiled in a legal battle with Disney. Days after the company sued him in federal court for what it described as retaliation for opposing the state’s so-called “don’t say gay” bill, members of Disney World’s governing board – made up DeSantis appointees – filed a lawsuit to countersue the entertainment giant.A CBS News-YouGov poll released on Monday showed former president Donald Trump leading a hypothetical Republican primary field with 58% of the vote, followed by DeSantis with 22%.The governor’s office did not respond to a request for comment. More