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      The Crypto Crash: all Ponzi schemes topple eventually

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      The Crypto Crash: all Ponzi schemes topple eventually Robert ReichWe’re back to the wild west finances of the 1920s as the crypto industry pours huge money into political campaigns One week ago, as cryptocurrency prices plummeted, Celsius Network – an experimental cryptocurrency bank with more than one million customers that has emerged as a leader in the murky world of decentralized finance, or DeFi – announced it was freezing withdrawals “due to extreme market conditions.”Earlier this past week, Bitcoin dropped 15 percent over 24 hours to its lowest value since December 2020. Last month, TerraUSD, a stablecoin – a system that was supposed to perform a lot like a conventional bank account but was backed only by a cryptocurrency called Luna – collapsed, losing 97 percent of its value in just 24 hours, apparently destroying some investors’ life savings.Eighty-nine years ago, Franklin D Roosevelt signed into law the Banking Act of 1933 – also known as the Glass-Steagall Act. It separated commercial banking from investment banking – Main Street from Wall Street – to protect people who entrusted their savings to commercial banks from having their money gambled away.Glass-Steagall’s larger purpose was to put an end to the giant Ponzi scheme that had overtaken the American economy in the 1920s and led to the Great Crash of 1929.Americans had been getting rich by speculating on shares of stock and various sorts of exotica (roughly analogous to crypto). These risky assets’ values rose solely because a growing number of investors put money into them.But at some point, Ponzi schemes topple of their own weight. When the toppling occurred in 1929, it plunged the nation and the world into a Great Depression. The Glass-Steagall Act was a means of restoring stability.But by the 1980s, America forgot the financial trauma of 1929. As the stock market soared, speculators noticed they could make lots more money if they could gamble with other people’s money – as speculators did in the 1920s. They pushed Congress to deregulate Wall Street, arguing that the United States financial sector would otherwise lose its competitive standing relative to other financial centers around the world.Finally, in 1999, Bill Clinton and Congress agreed to ditch what remained of Glass-Steagall.As a result, the American economy once again became a betting parlor. Inevitably, Wall Street suffered another near-death experience from excessive gambling. Its Ponzi schemes began toppling in 2008, just as they had in 1929.The difference was this time the US government bailed out the biggest banks and financial institutions. The wreckage was contained. Still, millions of Americans lost their jobs, their savings, and their homes (and not a single banking executive went to jail).Which brings us to the crypto crash.The current chair of the Securities and Exchange Commission, Gary Gensler, has described cryptocurrency investments as “rife with fraud, scams, and abuse.” In the murky world of crypto DeFi, it’s hard to know who provides money for loans, where the money flows, or how easy it is to trigger currency meltdowns.There are no standards for risk management or capital reserves. There are no transparency requirements. Investors often don’t know how their money is being handled. Deposits are not insured. We’re back to the wild west finances of the 1920s.Before the crypto crash, the value of cryptocurrencies had kept rising by attracting an ever-growing number of investors and some big Wall Street money, along with celebrity endorsements. But, again, all Ponzi schemes topple eventually. And it looks like crypto is now toppling.Why isn’t this market regulated? Mainly because of intensive lobbying by the crypto industry, whose kingpins want the Ponzi scheme to continue.Trillion-dollar crypto collapse sparks flurry of US lawsuits – who’s to blame?Read moreThe industry is pouring huge money into political campaigns.And it has hired scores of former government officials and regulators to lobby on its behalf – including three former chairs of the Securities and Exchange Commission, three former chairs of the Commodity Futures Trading Commission, three former US senators, one former White House chief of staff, and the former chair of the Federal Deposit Insurance Corporation.Former Treasury Secretary Lawrence Summers advises crypto investment firm Digital Currency Group Inc. and sits on the board of Block Inc., a financial-technology firm that is investing in cryptocurrency-payments systems.If we should have learned anything from the crashes of 1929 and 2008, it’s that regulation of financial markets is essential. Otherwise, they turn into Ponzi schemes that eventually leave small investors with nothing and destabilize the entire economy.It’s time for the Biden administration and Congress to regulate crypto.
      Robert Reich, a former US secretary of labor, is professor of public policy at the University of California at 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
      TopicsCryptocurrenciesOpinionE-commerceInternetUS politicsBiden administrationcommentReuse this content More

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      Elon Musk suggests he may vote for Republican Ron DeSantis in 2024

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      Elon Musk suggests he may vote for Republican Ron DeSantis in 2024World’s richest man says in tweet he is leaning towards Florida governor after voting Republican in Texas special election The tech billionaire Elon Musk said on Wednesday that he would possibly vote for Florida’s Republican governor, Ron DeSantis, if he were to run in the 2024 US presidential election.The billionaire tech mogul’s expression of support for DeSantis, albeit vague, was among several tweets in which he discussed some of his political leanings after he recently declared himself a Republican.Musk claimed to back the successful Republican congressional candidate Mayra Flores during a special election in Texas on Tuesday.“I voted for Mayra Flores – first time I ever voted Republican. Massive red wave in 2022,” Musk said.Mayra Flores wins special election to turn Texas House seat RepublicanRead more“I assume republican for president 2?” an account called Tesla Owners Silicon Valley asked.Musk replied, “tbd,” prompting the follow-up: “What are you leaning towards?”“DeSantis,” Musk said.Musk’s seeming support of DeSantis comes as the high-profile Republican – who is both a staunch ally to Donald Trump as well as a potential rival – appears to be a strong contender in the party’s presidential primary.The rising star has bested Trump in recent polls of Republican activists, as some conservative diehards seem to be tiring of the ex-president’s insistence that he won the 2020 election.Trump’s “big lie” claim has repeatedly been proven wrong. Joe Biden won the presidency and there is no evidence that he did so unlawfully.DeSantis has been ramping up his efforts to position himself as a true conservative. He has signed into law legislation that strips Black voters’ power through gerrymandering congressional districts to benefit Republicans, for example. DeSantis also curtailed the discussion of race and diversity in schools and businesses. He has also signed off on bills that ban discussion of gender identity and sexual orientation in some Florida classrooms with his “Don’t Say Gay” legislation.His attack on what he called “wokeism” has come to include bans on math textbooks that supposedly include “prohibited” subjects, such as critical race theory. He has also tried banning medical care for transgender youths and engaged in a sparring match with Disney.Disney publicly opposed DeSantis’s attack on LBGTQ+ rights. DeSantis’s dogged rhetoric on social issues has built a strong brand, with political science professor Michael Binder previously telling the Guardian: “He’s nicknamed Governor Grievance.”TopicsRepublicansElon MuskUS politicsRon DeSantisnewsReuse this content More

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      Palantir, the all-seeing US data company keen to get into NHS health systems | Arwa Mahdawi

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      Palantir, the all-seeing US tech company, could soon have the data of millions of NHS patients. My response? Yikes!Arwa MahdawiYou might never have heard of tech billionaire Peter Thiel’s CIA-backed analytics company. But it could know all about you if it wins a contract to manage NHS data Peter Thiel has a terrible case of RBF – reclusive billionaire face. I’m not being deliberately mean-spirited, just stating the indisputable fact that the tech entrepreneur, a co-founder of PayPal, doesn’t exactly give off feel-good vibes. There is a reason why pretty much every mention of Thiel tends to be peppered with adjectives such as “secretive”, “distant” and “haughty”. He has cultivated an air of malevolent mystique. It’s all too easy to imagine him sitting in a futuristic panopticon, torturing kittens and plotting how to overthrow democracy.It’s all too easy to imagine that scenario because (apart from the torturing kittens part, obviously), that is basically how the 54-year-old billionaire already spends his days. Thiel was famously one of Donald Trump’s biggest donors in 2016; this year, he is one of the biggest individual donors to Republican politics. While it is hardly unusual for a billionaire to throw money at conservative politicians, Thiel is notable for expressing disdain for democracy, and funding far-right candidates who have peddled Trump’s dangerous lie that the election was stolen from him. As the New York Times warned in a recent profile: “Thiel’s wealth could accelerate the shift of views once considered fringe to the mainstream – while making him a new power broker on the right.”When he isn’t pumping money into far-right politicians, Thiel is busy accelerating the surveillance state. In 2004, the internet entrepreneur founded a data-analytics company called Palantir Technologies (after the “seeing stones” used in The Lord of the Rings), which has been backed by the venture capital arm of the CIA. What dark magic Palantir does with data is a bit of a mystery but it has its fingers in a lot of pies: it has worked with F1 racing, sold technology to the military, partnered with Space Force and developed predictive policing systems. And while no one is entirely sure about the extent of everything Palantir does, the general consensus seems to be that it has access to a huge amount of data. As one Bloomberg headline put it: “Palantir knows everything about you.”Soon it might know even more. The Financial Times recently reported that Palantir is “gearing up” to become the underlying data operating system for the NHS. In recent months it has poached two top executives from the NHS, including the former head of artificial intelligence, and it is angling to get a five-year, £360m contract to manage the personal health data of millions of patients. There are worries that the company will then entrench itself further into the health system. “Once Palantir is in, how are you going to remove them?” one source with knowledge of the matter told the FT.How worried should we be about all this? Well, according to one school of thought, consternation about the potential partnership is misplaced. There is a line of argument that it is just a dull IT deal that people are getting worked up over because they don’t like the fact that Thiel gave a bunch of money to Trump. And to be fair, even if you think Thiel is a creepy dude with creepy beliefs, it is important to note that he is not the only guy in charge of Palantir: the company was co-founded in 2003 by Alex Karp, who is still the CEO; he voted for Hillary Clinton and has described himself as a progressive (although, considering his affinity for the military, he certainly has a different view of progress than I do).My school of thought, meanwhile, is best summarised as: yikes. Anyone who has had any experience of the abysmal US healthcare system should be leery of private American companies worming their way into the NHS. Particularly when the current UK government would privatise its own grandmother if the price was right. I don’t know exactly what Palantir wants with the NHS but I do know it’s worth keeping an eye on it. It’s certainly keeping an eye on you.
      Arwa Mahdawi is a Guardian columnist
      Do you have an opinion on the issues raised in this article? If you would like to submit a letter of up to 300 words to be considered for publication, email it to us at guardian.letters@theguardian.comTopicsTechnologyOpinionArtificial intelligence (AI)NHSUS politicsHealthcommentReuse this content More

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      in World Politics

      The Right to Fair Recollection

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      The Fair Observer website uses digital cookies so it can collect statistics on how many visitors come to the site, what content is viewed and for how long, and the general location of the computer network of the visitor. These statistics are collected and processed using the Google Analytics service. Fair Observer uses these aggregate statistics from website visits to help improve the content of the website and to provide regular reports to our current and future donors and funding organizations. The type of digital cookie information collected during your visit and any derived data cannot be used or combined with other information to personally identify you. Fair Observer does not use personal data collected from its website for advertising purposes or to market to you.As a convenience to you, Fair Observer provides buttons that link to popular social media sites, called social sharing buttons, to help you share Fair Observer content and your comments and opinions about it on these social media sites. These social sharing buttons are provided by and are part of these social media sites. They may collect and use personal data as described in their respective policies. Fair Observer does not receive personal data from your use of these social sharing buttons. It is not necessary that you use these buttons to read Fair Observer content or to share on social media. More

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      Seen and Unseen review: George Floyd, Black Twitter and the fight for racial justice

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      Seen and Unseen review: George Floyd, Black Twitter and the fight for racial justiceMarc Lamont Hill and Todd Brewster’s brilliant book considers the history of communications technology in a racist society Nearly all the books I have read about the internet have deepened my fears about the net effect of social media on the health of our body politic. For example, I thought three facts from the congressman Ro Khanna’s recent book, Dignity in a Digital Age, were enough to scare anyone concerned about the future of democracy.Dignity in a Digital Age review: a congressman takes big tech to taskRead moreKhanna reported that an internal discussion at Facebook revealed that “64% of all extremist group joins are due to our recommendations”; he revealed that before 2020, “QAnon groups developed millions of followers as Facebook’s algorithm encouraged people to join based on their profiles”; and he pointed to a United Nations report that Facebook played a “determining role” in events in Myanmar that led to the murder of at least 25,000 Rohingya Muslims and the displacement of 700,000 others.Seen and Unseen, a brilliant new book by Marc Lamont Hill, a Black professor, and Todd Brewster, a white journalist, certainly doesn’t ignore those dangers. But the authors’ focus is overwhelmingly on the positive effects of Twitter and Black Twitter, which they argue have democratized access to information, and the power of the smartphone to provide the incontrovertible video evidence needed to prosecute the murderers of men like George Floyd and Ahmaud Arbery.The book is a brisk, smart, short history of the effects of new communication technologies, from the photographs of the 19th century to the movies and television of the 20th and the internet of our own time.It includes terrific mini-portraits of many of the heroes and several of the villains of the Black-and-white battle which has dominated so much of American history, including the great Black abolitionist, Frederick Douglass, who turns out to be the most photographed American of the 19th century, and the white supremacist Thomas Dixon Jr, whose novel The Clansman was the basis for the 1915 film The Birth of a Nation.There is a great section about the impact of The Birth of the Nation, which single-handedly revived the Ku Klux Klan and did more to rewrite the history of Reconstruction than any other book or movie. Its director, DW Griffith, was frank about wanting to give white southerners “a way of striking back”.“One could not find the sufferings of our family and our friends – the dreadful poverty and hardships during the war and for many years after – in the Yankee-written histories we read in school,” Griffith wrote. “From all this was born a burning determination to tell … our side of the story to the world.”As the authors note: “His movie did that spectacularly.”The book also reminds us that this was the first movie shown in the White House and the host, Woodrow Wilson, was a friend and Johns Hopkins classmate of Thomas Dixon Jr. Wilson, of course, was also the president who allowed the segregation of the federal government.But what makes this volume especially valuable is the authors’ capacity to see the good and the bad in almost everything.WEB Du Bois said The Birth of the Nation represented “the Negro” either “as an ignorant fool, a vicious rapist, a venal or unscrupulous politician, or a faithful but doddering idiot”. James Baldwin called it “an elaborate justification of mass murder”.And yet the film was so egregious it also had a tremendous positive effect – it “did more to advance the NAACP”, which had been founded six years earlier, “than anything else to that date. In essence it jump-started the movement for civil rights.” At that time, that term did not yet have any meaning.Du Bois and the NAACP hoped to hit back “in kind” with a movie called Lincoln’s Dream but were stymied by “the lack of enthusiasm” of white capital.In our own time, Hill and Brewster identify the unique power of the video of the murder of George Floyd, which “resonated with whites because the cruelty inflicted on him was so undeniable, so elemental … and so protracted (nine minutes 29 seconds) that it could be neither ignored nor dismissed”.For Black people of course it was much more personal: as they watched “the last breaths being squeezed from Floyd’s body, they could see themselves in his suffering; or an uncle, or a sister, or even a long-departed ancestor”.A beautiful mini-biography of James Baldwin includes many of his most pungent observations, including, “Not everything that is faced can be changed; but nothing can be changed until it is faced.” And, “To be a Negro in this country, and to be relatively conscious, is to be in a rage almost all the time”.A Lynching at Port Jervis review: timely history of New York race hateRead moreIt turns out that “one of the most frequently cited BLM counterpublic voices is Baldwin’s”. He is “the movement’s literary touchstone, conscience, and pinup” as well as its “most tweeted literary authority”.That is the most positive contribution of Twitter – and particularly Black Twitter – I have ever heard of.The authors write that Baldwin “was impatient with America because he saw it as trapped in its own history”, and wanted America to admit “that it owed its very existence to an ideology of white supremacy”.There was a time in my life when I considered that an exaggeration. But once you have acknowledged that ours is a nation that was literally founded on genocide and slavery, Baldwin’s judgment becomes an indisputable truth.
      Seen and Unseen: Technology, Social Media, and the Fight for Racial Justice is published in the US by Atria Books
      TopicsBooksRacePolitics booksHistory booksUS politicsGeorge FloydAhmaud ArberyreviewsReuse this content More

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      America’s billionaire class is funding anti-democratic forces | Robert Reich

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      America’s billionaire class is funding anti-democratic forcesRobert ReichBillionaire donors are pushing an unsettling agenda for America – backing Trump’s lie that the 2020 election was stolen, calling for restrictions on voting and even questioning the value of democracy itself Decades ago, America’s monied interests bankrolled a Republican establishment that believed in fiscal conservatism, anti-communism and constitutional democracy.Today’s billionaire class is pushing a radically anti-democratic agenda for America – backing Trump’s lie that the 2020 election was stolen, calling for restrictions on voting and even questioning the value of democracy.Peter Thiel, the billionaire tech financier who is among those leading the charge, once wrote, “I no longer believe that freedom and democracy are compatible.”Thiel is using his fortune to squelch democracy. He donated $15m to the successful Republican Ohio senatorial primary campaign of JD Vance, who alleges that the 2020 election was stolen and that Biden’s immigration policy has meant “more Democrat voters pouring into this country.”Thiel has donated at least $10m to the Arizona Republican primary race of Blake Masters, who also claims Trump won the 2020 election and admires Lee Kuan Yew, the authoritarian founder of modern Singapore.The former generation of wealthy conservatives backed candidates like Barry Goldwater, who wanted to conserve American institutions.Thiel and his fellow billionaires in the anti-democracy movement don’t want to conserve much of anything – at least not anything that occurred after the 1920s, which includes Social Security, civil rights, and even women’s right to vote. As Thiel wrote:
      The 1920s were the last decade in American history during which one could be genuinely optimistic about politics. Since 1920, the vast increase in welfare beneficiaries and the extension of the franchise to women – two constituencies that are notoriously tough for libertarians – have rendered the notion of “capitalist democracy” into an oxymoron.
      Rubbish. If “capitalist democracy” is becoming an oxymoron, it’s not because of public assistance or because women got the right to vote. It’s because billionaire capitalists like Thiel are drowning democracy in giant campaign donations to authoritarian candidates who repeat Trump’s big lie.Not incidentally, the 1920s marked the last gasp of the Gilded Age, when America’s rich ripped off so much of the nation’s wealth that the rest had to go deep into debt both to maintain their standard of living and to maintain overall demand for the goods and services the nation produced.When that debt bubble burst in 1929, we got the Great Depression.It was also the decade when Benito Mussolini and Adolf Hitler emerged to create the worst threats to freedom and democracy the modern world had ever witnessed.If freedom is not compatible with democracy, what is it compatible with?Last Tuesday night, Doug Mastriano, a January 6 insurrectionist and Trump-backed big lie conspiracy theorist, won the Republican nomination for governor of Pennsylvania (the fourth largest state in the country, and the biggest state that flipped from 2016 to 2020). Mastriano was directly involved in a scheme to overturn the 2020 election by sending an “alternate” slate of pro-Trump electors to the electoral college – despite the fact that Trump lost Pennsylvania by more than 80,000 votes.If Mastriano wins in November, he will appoint Pennsylvania’s secretary of state, who will oversee the 2024 election results in one of the most important battleground states in the country.Meanwhile, the major annual event of the Conservative Political Action Conference (Cpac) – the premier convening organization of the American political right – was held this past week in Budapest.That’s no accident. The Hungarian prime minister Viktor Orbán and his ruling Fidesz party have become a prominent source of inspiration for America’s anti-democracy movement. Steve Bannon, Trump’s former adviser, describes Orbán’s agenda as that of a “Trump before Trump”.Orbán has used his opposition to immigration, LGBTQ+ rights, abortion and religions other than Christianity as cover for his move toward autocracy – rigging Hungary’s election laws so his party stays in power, capturing independent agencies, controlling the judiciary and muzzling the press.He remains on good terms with Vladimir Putin and has refused to agree to Europe’s proposed embargo of Russian oil.Tucker Carlson – Fox News’s progenitor of white replacement theory – broadcast his show from Budapest. Trump spoke remotely. Trump’s former chief of staff Mark Meadows also spoke (although he refuses to speak to the House committee investigating the January 6 assault on American democracy).If America and the world should have learned anything from the first Gilded Age and the fascism that began growing like a cancer in the 1920s, it’s that gross inequalities of income and wealth fuel gross inequalities of political power – which in turn lead to strongmen who destroy both democracy and freedom.Peter Thiel may define freedom as the capacity to amass extraordinary wealth without paying taxes on it, but most of us define it as living under the rule of law with rights against arbitrary authority and a voice in what is decided.If we want to guard what is left of our freedom, we will need to meet today’s anti-democracy movement with a bold pro-democracy movement that protects the institutions of self-government from authoritarian strongmen like Trump and his wannabes, and from big money like Peter Thiel’s.
      Robert Reich, a former US secretary of labor, is professor of public policy at the University of California at 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
      TopicsUS politicsOpinionRepublicansSilicon ValleyPeter ThielcommentReuse this content More

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      White House announces internet program for low-income Americans

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      White House announces internet program for low-income AmericansWith new commitment from 20 internet providers, about 48m households will be eligible for $30 monthly plans The Biden administration announced on Monday that 20 internet companies have agreed to provide discounted service to people with low incomes, a program that could effectively make tens of millions of households eligible for free service through an already existing federal subsidy.The $1tn infrastructure package passed by Congress last year included $14.2bn in funding for the Affordable Connectivity Program, which provides $30 monthly subsidies ($75 in tribal areas) on internet service for millions of lower-income households.Jill Biden makes unannounced visit to Ukraine and meets first ladyRead moreWith the new commitment from the internet providers, about 48m households will be eligible for $30 monthly plans for 100 megabits per second, or higher speed, service – making internet service fully paid for with the government subsidy if they sign up with one of the providers participating in the program.Biden, during his White House run and the push for the infrastructure bill, made expanding high-speed internet access in rural and low-income areas a priority. He has repeatedly spoken out about low-income families have struggled to find reliable wifi, so their children could take part in remote schooling and complete homework assignments early in the coronavirus pandemic.“If we didn’t know it before, we know now: high-speed internet is essential,” the Democratic president said during a White House event last month honoring the National Teacher of the Year.The 20 internet companies that have agreed to lower their rates for eligible consumers provide service in areas where 80% of the US population, including 50% of the rural population, live, according to the White House. Participating companies that offer service on tribal lands are providing $75 rates in those areas, the equivalent of the federal government subsidy in those areas.Biden and Vice-President Kamala Harris on Monday were set to meet with telecom executives, members of Congress and others to spotlight the effort to improve access to high-speed internet for low-income households.The providers are Allo Communications, AltaFiber (and Hawaiian Telecom), Altice USA (Optimum and Suddenlink), Astound, AT&T, Breezeline, Comcast, Comporium, Frontier, IdeaTek, Cox Communications, Jackson Energy Authority, MediaCom, MLGC, Spectrum (Charter Communications), Starry, Verizon (Fios only), Vermont Telephone Co, Vexus Fiber and Wow! Internet, Cable and TV.American households are eligible for subsidies through the Affordable Connectivity Program if their income is at or below 200% of the federal poverty level, or if a member of their family participates in one of several programs, including the Supplemental Nutrition Assistance Program (Snap), Federal Public Housing Assistance (FPHA) and Veterans Pension and Survivors Benefit.TopicsUS newsBroadbandInternetBiden administrationIncome inequalityTelecommunications industryUS politicsnewsReuse this content More

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      Corporate America buckles down for culture war on Roe v Wade

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      Corporate America buckles down for culture war on Roe v WadeRepublicans are mulling retaliation against firms providing benefits such as travel assistance for employees seeking abortion After a supreme court decision that overturns Roe v Wade was leaked and signaled the impending end of federal constitutional protection for abortions, a trickle of companies have slowly started to announce policies that provide abortion access for their employees. But while the protections may keep employees and consumers happy, the threat of retaliation from conservative lawmakers looms.Abortion surveillance: in a post-Roe world, could an internet search lead to an arrest? Read moreCitigroup, one of the biggest banks in the US, quietly started covering the travel expenses of employees who want to get an abortion but are banned from getting one in their home state.The benefit was not announced publicly. Instead, the company mentioned the change in benefits in a March filing for shareholders. Once news outlets began to report on the new benefit, the Republican ire began.Conservatives in Congress asked House and Senate administrators to cancel its contract with the company, which issues credit cards to lawmakers to use for work-related flights, office supplies and other goods. A state lawmaker in Texas, infuriated by Citigroup, introduced a bill that would prevent companies from doing business with local governments in Texas if they provide abortion-related benefits to their employees.“Citigroup decided to pander to the woke ideologues in its C-suite instead of obeying the laws of Texas,” said Briscoe Cain, the Texas state representative who introduced the bill, in a statement. “We will enact laws necessary to prevent this misuse of shareholder money and hold Citigroup accountable for its violation of our state’s abortion laws”.Citigroup has now been joined by Amazon, Apple, Yelp, Match Group, Tesla and Levi Strauss & Company, all which have said they will offer travel assistance to employees who are in states that restrict abortions. Insiders at JP Morgan and Goldman Sachs have told news outlets they too are considering similar policies.“I expect there will be a significant shift and the most leading companies are going to recognize that they need to protect the healthcare of their employees,” said Shelley Alpern, director of shareholder advocacy at Rhia Ventures. “Most companies would like to avoid taking a public stance on this issue because it’s so controversial, but there are higher risks for companies when they don’t protect their employees’ healthcare access.”In today’s heated political climate – and with midterm elections looming – corporate America can expect a fiery response to any stance it takes on Roe’s fall. But given the widespread impact the end of Roe v Wade will have on much of the country – 26 states will restrict abortion access if the decision is overturned – it is unlikely that companies can get away with not responding to the issue once the supreme court makes its final decision.Neeru Paharia, an associate professor at Georgetown University McDonough School of Business, said that people expect more out of companies as trust in government has fallen.“People are enacting their political will in the marketplace,” she said. For consumers, a purchase from a company can be a symbolic sign of support. For employees, their identities can be tied to the ethical positions of the company they work for.Over the last few years, corporate America has started to become more vocal on various issues that have gotten the attention of conservative lawmakers, including voting rights and LGBTQ+ issues. But conservative politicians have gotten bolder at fighting back against what they consider to be “woke capitalism”.While the GOP has historically positioned itself as the business-friendly, tax-cutting political party, conservative lawmakers have been emboldened to threaten and punish companies who speak out on controversial issues.Last month, Florida’s governor, Ron DeSantis, revoked special land use privileges the state gave to Disney for its Disney World theme park in Orlando after the company – responding to backlash from employees and consumers – spoke out against the state’s “don’t say gay” law. The move appeared to catch people by surprise. Lloyd Blankfein, former Goldman Sachs CEO, tweeted that the move “smacks of government retaliation for exercising free speech. Bad look for a conservative.”“That was really shocking,” Paharia said. “Now you have a situation where consumers and employees want companies to take a political stance, but then you have governments that are possibly retaliating against them.”When it comes to abortion, “even though it might not be [explicitly] taking a side … [companies] are taking a position based on the kind of benefits they are going to offer their employees”.The threats lawmakers have made have so far not come to fruition, but the party seems serious on trying to penalize companies in some way. The Republican senator Marco Rubio introduced a bill this week that would not allow companies to deduct abortion-related travel benefits as regular employee benefits when a company files its taxes.“Our tax code should be pro-family and promote a culture of life,” he said in a statement.With these warnings, companies may try to keep the introduction of abortion-related quiet or downplay their significance. When Citigroup’s CEO, Jane Fraser – the first woman to lead a major American bank – was asked in a shareholders meeting about the company’s new abortion travel benefit, she said the benefit “isn’t intended to be a statement about a very sensitive issue”.“What we did here was follow our past practices,” she said, adding that the company had “covered reproductive healthcare benefits for over 20 years. And our practice has also been to make sure our employees have the same health coverage, no matter where in the US they live.”Jen Stark, senior director of corporate strategy at Tara Health Foundation, who helped coordinate the signatures of over 180 executives in a statement against abortion bans in 2019, said the potential backlash from conservative lawmakers proves that companies need to act on abortion restrictions beyond mitigating effects for their employees.“They can buy all the plane tickets their workers need, and that addresses the immediate harm, but the structural deficiency is the collateral damage,” she said. “The supreme court case didn’t happen in a bubble … you’re kind of walking over the rubble.”Beyond benefits for employees, Stark has been advocating for companies to use their lobbying powers and scrutinize political donations as state lawmakers prepare to restrict abortions.“We are at the moment everyone’s cried wolf about. It’s here, but there was also a lot of headwind,” she said. “What companies can do with a stroke of a pen to mitigate some of the harm is important, but the larger issue is getting out of this structural whirlpool that we’re in.”TopicsRoe v WadeCitigroupBankingGoldman SachsAppleUS politicsfeaturesReuse this content More