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Jul 18, 2019

Breaking News | Trump likely to tap Scalia’s son for Labor chief

By GABBY ORR, MARIANNE LEVINE, ANITA KUMAR and IAN KULLGREN



Donald Trump
Chip Somodevilla/Getty Images
President Donald Trump is likely to nominate Eugene Scalia, son of the late Supreme Court Justice Antonin Scalia, to be the next Labor secretary, according to three sources familiar with the plans.
The younger Scalia, a partner at the law firm Gibson, Dunn & Crutcher, is a management-side attorney who in 2006 argued on behalf of Wal-Mart against a Maryland law that would have required the retail giant to spend more health care money on its employees.
Story Continued Below
Scalia‘s expected nomination comes about a week after Labor Secretary Alexander Acosta was forced to resign over a lenient 2008 plea agreement for wealthy sex offender Jeffrey Epstein. He will be replaced Friday by his deputy, Patrick Pizzella, who many Republicans had expected to get a formal nomination.

Source: Politico

Economics Education | Greenback Definition

Reviewed by James Chen



What is a Greenback?

A greenback is a slang term for U.S. paper dollars. Greenbacks got their name from their color. In the mid-1800s, the Continental Congress did not have taxing authority. The "greenback" was a negative term because they did not have secure financial backing authority and banks were reluctant to give customers the full value of the dollar.

Understanding Greenbacks

It took half a century to get all foreign coins and competing state currencies out of circulation, but by the early 1800s, the U.S. was ready to try the paper money experiment again. Bank notes had been in circulation for a while, but because banks issued more notes than they had coins to cover, these notes often traded at less than face value.
In the 1860s, the U.S. created over $400 million in legal tender to finance its war against itself. The government had earlier issued bonds to raise capital. However, the war's timeline depleted its finances. The idea of issuing paper money was opposed by bankers because it would bring the federal government into markets and could potentially translate to its bankruptcy, if the war failed to go in its favor. To prevent such an eventuality, the paper money's value depended on the health of individual banks issuing the currency.
They were called greenbacks simply because the backs were printed in green. The government backed this currency and stated that it could be used to pay back public and private debts. However, despite the government backing, they were not exchangeable for gold or silver.

Key Takeaways

  • Greenbacks, or U.S. dollars, were first created to finance the civil war and were called as such because their backs were printed in green.
  • Their value against gold depreciated during the war but recovered after the war ended.

Demand Notes vs. Paper Notes

Greenbacks came in two forms; demand notes and U.S. paper notes. Demand notes were issued in 1861 and 1862 to pay for salaries and other government expenses during the civil war. In February of 1862, the Legal Tender Act saw the government issue paper notes, which would eventually become the official currency of the U.S. as demand notes were phased out.
During this period the value fluctuated according to the North's success or failure at certain stages in the war. However, due to the size of the issue - $400 million - the value of greenbacks against gold steadily declined. According to H. W. Brand's book "Greenback Planet: How the Dollar Conquered the World and Threatened Civilization as We Know It," the value of the greenback had a temporary recovery in value after the battle of Gettysburg before plummeting to a value of 258 greenback to 100 gold (its lowest point) in 1864. When the war ended in 1865 the value of the greenback recovered to 150 greenback to 100 gold.
Greenbacks are reported to have funded 15% of the war's costs. But the rise in their value also increased the cost of everyday goods and supplies. Inflation was 14% in 1862 and 25% in 1863 and 1864.
Today, the term greenback is an anecdotal term used by foreign exchange traders for the U.S. dollar.

Source: Investopedia

Congress I House votes to raise minimum wage, uniting Dems after months-long struggle

By SARAH FERRIS



U.S. Capitol Building
John Shinkle/POLITICO
The House passed legislation to gradually raise the federal minimum wage to $15 per hour, following through on a key Democratic campaign promise and ending a six-month struggle within the caucus.
The roughly party-line vote comes after months of behind-the-scenes jockeying between progressives and centrists to shape the plan and delivers a much-needed policy win for the party.

Source: Politico

Politics | Judge denies Jeffrey Epstein bail in child sex trafficking case, citing 'danger' to public

Dan Mangan,Kevin Breuninger




H/O: Jeffrey Epstein courtroom sketch bail hearing 190715 1
Courtroom sketch showing Jeffrey Epstein at his bail hearing in New York on July 15th, 2019.
Artist: Christine Cornell
A federal judge on Thursday denied bail to wealthy investor Jeffrey Epstein, citing the potential danger he poses to the public and the risk that Epstein will flee to avoid trial on child sex trafficking charges.
The decision by Judge Richard Berman in U.S. District Court in Manhattan means that the 66-year-old Epstein will remain in jail pending trial in the case, where he faces up to 45 years in prison if convicted.
“I doubt any bail package could overcome dangerousness .... to community,” Berman said, agreeing with the recommendation by prosecutors to keep Epstein locked up.
He noted that two women who claim they were abused by Epstein “gave compelling testimony” at a court hearing on Monday, where they had expressed “fear for their safety.”
The judge also called Epstein’s proposal for bail “irretrievably inadequate.”
Epstein had asked Berman to release him on a bond of as high as $100 million or more, with conditions that would include requiring him to remain in his New York City mansion, round-the-clock security monitoring and an electronic trafficking device.
Berman said that prosecutors had established that Epstein could be dangerous by “clear and convincing evidence,” and by a “preponderance” of evidence that he could flee.
The judge noted that Epstein’s “great wealth and his vast resources,” which include private planes and a residence in Paris, France.
And Berman said Epstein’s possesion of a passport issued by the country of Austrian. That passport has Epstein’s photo but a different name on it, and was used in the 1980s for travel to Saudi Arabia.
The judge additionally noted that Epstein recently made payments to potential witnesses against him, and that there have been allegations that Epstein failed to comply with requirements for registered sex offenders, and that agents of his intimidate witnesses in a prior investigation.
This is a breaking news story. Check back for updates.
Prosecutors wanted to keep Epstein locked up without bail, calling him a serious flight risk, and a danger to the public. They also have said that in recent months Epstein, who is worth as much as $500 million, had made payments to “co-conspirators who might provide information against him.”
Epstein, a former friend of Presidents Donald Trump and Bill Clinton, was arrested July 6 at a New Jersey airport after a federal grand jury in Manhattan indicted him on a charge of sex trafficking, and conspiring to commit sex trafficking.
U.S. financier Jeffrey Epstein appears in a photograph taken for the New York State Division of Criminal Justice Services’ sex offender registry March 28, 2017 and obtained by Reuters July 10, 2019. New York State Division of Criminal Justice Services/Handout via REUTERS.
New York State Division of Criminal Justice Services | Handout | Reuters

Source: CNBC

DealBook Briefing: Trade Talks Are Stalled Over Huawei

12-16 minutes



CreditRodrigo Garrido/Reuters
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CreditCreditRodrigo Garrido/Reuters
Good Thursday morning. (Want this by email? Sign up here.)
Revived trade negotiations between the U.S. and China are said to have stalled again. One big problem, according to William Mauldin and Chao Deng of the WSJ: how much Washington should ease up on Huawei.
• Though President Trump has allowed companies to resume selling some American technology to Huawei, his administration still considers the Chinese tech giant a threat to national security.
• “So far administration officials haven’t reached consensus on which semiconductor chips and other products can be provided to Huawei without triggering security concerns or giving the company a strategic edge,” the WSJ reports, citing unnamed sources.
• “Beijing is waiting to see what the U.S. does on Huawei before making commitments.”
There are other issues as well, including that the Chinese aren’t buying the huge amount of U.S. agricultural products that Mr. Trump says President Xi Jinping of China promised.
Mr. Trump repeated his threat of further tariffs on Chinese goods yesterday at a cabinet meeting, saying, “If we want, we have another $325 billion we can put a tariff on.”
Government officials are pessimistic about the prospects for a deal. “With the conflict dragging on, reaching a comprehensive trade deal as Trump gears up for re-election next year increasingly seems like a remote possibility,” Jenny Leonard of Bloomberg writes, citing unnamed sources.
The new season of “Stranger Things” came too late to help Netflix’s second quarter.CreditNetflix
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CreditNetflix
The streaming giant said yesterday that it had lost U.S. subscribers for the first time in 12 years, after it raised prices several months ago.
The company lost 126,000 domestic subscribers in the three months ended June 30. And it signed up 2.7 million new customers globally in the quarter, well short of the five million that investors had been expecting.
Its shares fell 10 percent in after-hours trading as investors fretted about the news. That erased around $17 billion in market value.
Netflix didn’t seem worried. Its C.E.O., Reed Hastings, declared on an analyst call that the company’s position was “excellent,” and suggested that an absence of fresh episodes of major hits like “Stranger Things” and “The Crown” was behind the slump. The company expects numbers to improve in the current quarter.
But there is reason to worry. The company raises prices about every 18 months, largely because it’s spending billions of dollars to buy new content. If more people walk out on Netflix, Shira Ovide of Bloomberg Opinion writes, “that isn’t a great sign for the company’s pricing power” or its ability to keep customers from straying to streaming rivals.
This will be “one of the pivotal moments in the Netflix story,” the analyst Gene Munster told CNBC. “As much as I love the company, I just think its best days, unfortunately, are in fact behind it.”
David Marcus of FacebookCreditAndrew Harnik/Associated Press
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CreditAndrew Harnik/Associated Press
A day after a contentious Senate hearing, David Marcus, the Facebook executive leading the company’s Libra cryptocurrency initiative, was back in the hot seat for four hours of questioning by the House Financial Services Committee, Nathaniel Popper and Mike Isaac of the NYT write.
Lawmakers criticized Facebook, again. “I think before you move on to Libra, you ought to clean up the messes of the past,” Representative Madeleine Dean, Democrat of Pennsylvania, said at the hearing.
But there was more interest in practical hurdles yesterday.
• “Facebook’s plans raise serious privacy, trading and monetary policy concerns,” said Representative Maxine Waters, the committee’s chairwoman, a Democrat.
• The system would “yield immense economic power that could destabilize government,” she said.
• “We think you’re a bank, but you’re not quite like a bank,” said Representative Ed Perlmutter, Democrat of Colorado. “If you’re bank, we regulate the heck out of you. That is the resistance you’re feeling.”
Mr. Marcus was conciliatory but firm. He said that Facebook was “owning” its past mistakes and “working to remedy them.” And he reiterated for a second day that the company wouldn’t launch Libra until regulators signed off. Yet he refused to agree to a moratorium on the project, or to running a small-scale pilot beforehand.
His ambitions aren’t diminished. “We would like for Libra to be a digital, global currency, and to be one unit of digital currency for the whole world,” he said.
More: Despite the ire targeted at Big Tech in Washington this week, there seems to be little consensus among lawmakers on how to fix things.
Five of America’s biggest banks collected tens of billions of dollars in profits in the first half of the year. That was because of the strong economy — and President Trump’s 2017 overhaul of the tax code, Emily Flitter of the NYT writes.
Tax rates for major banks are now below 22 percent, compared with 30 percent three years ago. JPMorgan Chase’s is currently just under 15 percent; Wells Fargo’s is 17 percent; Bank of America’s is 18 percent.
That “helped offset a general decline in Wall Street trading revenue and added some pep to what would have otherwise been unremarkable quarterly performances by most of the banks,” Ms. Flitter writes.
But this quarter may have been a peak, bank executives suggested, warning that the slowing global economy could affect trading, M.&A. and consumer spending, according to Bloomberg.
Jeroen DijsselbloemCreditYves Herman/Reuters
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CreditYves Herman/Reuters
Finance ministers from the Group of 7 nations have been discussing who will lead the International Monetary Fund on the sidelines of a meeting in Chantilly, France, according to the WSJ and the FT.
One name keeps popping up: Jeroen Dijsselbloem, the former Netherlands finance minister and former Eurogroup president. He’s the early frontrunner, according to the FT, with support from Germany and France. But he is opposed by southern European countries, according to the WSJ.
And one has fallen out of favor. Mark Carney, the Bank of England governor and an early favorite to assume the role, is not on the short list, according to both publications. One unidentified European diplomat told the FT that Mr. Carney was “not European enough for the Europeans.”
If opposition against Mr. Dijsselbloem grows, there are other names on the shortlist, according to the WSJ. They include: Mário Centeno, the current head of the Eurogroup and Portugal’s finance minister; Olli Rehn, the governor of Finland’s central bank; and Nadia Calviño, Spain’s economy minister.
France’s finance minister, Bruno Le Maire, left, with U.S. Treasury Secretary Steven Mnuchin.CreditEric Piermont/Agence France-Presse — Getty Images
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CreditEric Piermont/Agence France-Presse — Getty Images
Another big topic of debate for finance ministers at the Group of 7 meeting is how to fairly tax big technology companies across national borders. The discussions aren’t going well, according to the FT.
• The Organization for Economic Cooperation and Development is trying to broker an international system for taxing digital profits, though an agreement is not expected until next year at the earliest.
• France voted last week to impose its own digital tax of 3 percent on the revenue that large tech companies earn from providing digital services to French users.
U.S. Treasury Secretary Steven Mnuchin “locked horns” with his French counterpart, Bruno Le Maire, at the meeting, according to the FT.
• “I am ready to wait, but not to wait for eternity,” Mr. Le Maire said.
• “When seven member states are not able to find a compromise,” he said, “I cannot imagine that 129 states would be able to find a compromise at the O.E.C.D. level.”
CreditJenny Kane/Associated Press
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CreditJenny Kane/Associated Press
FaceApp captured the imagination of the social media world this week, with celebrities using its photo-altering feature to post images of how they might look decades from now. But a backlash has erupted, Niraj Chokshi of the NYT reports.
The app was created by Wireless Lab of St. Petersburg, Russia. When users realized that it was uploading more data than they had expected, some people called FaceApp a national security threat.
• The Democratic National Committee urged staff members on presidential campaigns to delete the app immediately, citing its ties to Russia, according to CNN.
• And the Senate minority leader, Chuck Schumer, wrote a letter to the F.B.I. director, Christopher Wray, saying that the app posed “national security and privacy risks for millions of U.S. citizens.”
At least some of those concerns are overblown, several security researchers told Mr. Chokshi. Other than the photograph being edited, the amount of data being uploaded was “very limited.” And the developers of FaceApp insisted that data wasn’t transferred to Russia, but processed on servers owned by Amazon and Google.
Boeing has hired Kenneth Feinberg, the lawyer who oversaw the Sept. 11 victims’ claims fund, to distribute $50 million to families of the victims of two 737 Max crashes.
Deals
• San Francisco has delayed a proposed ballot measure to nearly quadruple the tax on stock-based compensation, which is meant to target companies staging big I.P.O.s, like Uber and Pinterest. (WSJ)
• The German online bank N26 raised $170 million in new funding from investors like Tencent and Peter Thiel’s Valar Ventures, at a valuation of $3.5 billion. (FT)
• DouYu, a Chinese rival to the video-game streaming service Twitch, raised $775 million in its Wall Street I.P.O. yesterday. (WSJ)
• Curaleaf, one of the most valuable cannabis companies by market value, agreed to buy a rival, Grassroots Cannabis, for $875 million. (Bloomberg)
• The venture capital firm Fifth Wall has raised $503 million for its latest real estate investment fund. (Fortune)
Jeffrey Epstein
• Footage has emerged of President Trump and Mr. Epstein partying at Mar-a-Lago with N.F.L. cheerleaders in 1992. (WaPo)
• High society in New York City and Washington are braced for more revelations about big names tied to the financier. (Vanity Fair)
• Ohio State University will review more than $5 million in donations linked to Mr. Epstein. (Bloomberg)
Politics and policy
• The House speaker, Nancy Pelosi, set Friday as a deadline for reaching a deal on raising the debt ceiling. But there’s no sign that President Trump is prepared to sign one off. (WSJ, Politico)
• The Senate approved updates to international tax treaties for the first time in a decade. (NYT)
• The House approved a measure to repeal the Affordable Care Act’s tax on high-cost, generous healthcare plans, which was intended to help fund the law. (NYT)
• Federal prosecutors have concluded their investigation into campaign finance violations by the 2016 Trump campaign. It’s unclear whether they will file additional charges. (NYT)
• Mr. Trump repeated his attacks on four Democratic congresswomen at a rally yesterday. The crowd shouted of Representative Ilhan Omar, who immigrated to the U.S. from Somalia, “Send her back!” (NYT)
Trade
• Russia said it was interested in joining an E.U. plan to avoid U.S. sanctions that ban trading with Iran. (FT)
• “What Brexit could mean for the U.S. economy.” (CNBC)
Tech
• President Trump is reportedly interested in looking into the controversial bidding process for the Pentagon’s new cloud computing system, which is likely to be awarded to Amazon or Microsoft. (Bloomberg)
• Google and Facebook are tracking people on sex websites. (NYT Op-Ed)
• South Koreans are unimpressed by the nation’s 5G network, which is the world’s first and largest. (FT)
• Iran, North Korea and Russia have carried out hundreds of cyberattacks on U.S. political groups over the past year, according to Microsoft. And Google’s tool to fight election interference is reportedly flawed. (WSJ)
• Oakland has become the third U.S. city to ban the use of facial recognition by local government and law enforcement. (Gizmodo)
Best of the rest
• Is the Boeing 737 Max crisis a failure of leadership? (NYT Op-Ed)
• The Ebola outbreak in the Democratic Republic of Congo has been declared a global public health emergency. (NYT)
• Why the amount of money that developing countries owe Beijing is worrying. (Bloomberg Opinion)
• The Louvre in Paris has removed the Sackler family name from its walls. (NYT)
• Raj Chetty, the influential economist, says he wants to “revive the American dream.” (Atlantic)
Thanks for reading! We’ll see you tomorrow.
We’d love your feedback. Please email thoughts and suggestions to business@nytimes.com.

Source: NYT

Tech Policy | Federal regulators eye update to rules governing kids’ privacy and the Internet

By Tony Romm and Tony Romm Senior tech policy reporter Email Bio Follow



The Federal Trade Commission cited ‘rapid technological changes’ for the effort


(Alex Brandon/AP)
Federal regulators this week began considering ways to update and potentially expand enforcement of the country’s kids online privacy law, questioning whether swift advances in technology have outpaced rules meant to protect children under age 13.
The effort by the Federal Trade Commission is in its initial phases, but the agency’s reevaluation of the Children’s Online Privacy Protection Act, or COPPA, could eventually lead to tougher enforcement of the 1998 law against apps and websites that illegally collect personal information from younger users.
“In light of rapid technological changes that impact the online children’s marketplace, we must ensure COPPA remains effective,” said FTC Chairman Joe Simons in a statement.
Among the FTC’s concerns are websites, video games and other services that aren’t explicitly marketed for children but still attract large numbers of kids anyway. An FTC investigation into YouTube that’s now underway originated with complaints from consumer groups, which argued the Google-owned streaming site violates COPPA through its large number of highly popular channels featuring content for young children, such as nursery rhymes and simplistic cartoons. YouTube says the site is not intended for children.
COPPA prohibits companies from collecting kids’ data in most circumstances or targeting them with personalized advertising, but the law applies only to websites or apps that are directed at children or have “actual knowledge” that users are under 13. Consumer and privacy groups long have complained this has allowed YouTube, Instagram, Snapchat, Fortnite and others to avoid the legal restrictions of COPPA, despite polling and other evidence showing they are popular with preteens.
In response, the FTC is seeking comment on how it might update its rules for enforcing COPPA to address the potential gap. The commission also seeks to determine if COPPA sufficiently covers newer technologies, including smart televisions, educational technologies and interactive games, which could include such new, massively popular titles such as Fortnite. The issues count among the 29 questions the agency posed for public comment in the Federal Register, the first step in what could be more than a year of work that leads to an update in the was COPPA is enforced.
The FTC’s five commissioners — three Republicans and two Democrats — voted unanimously to initiate the review, which came as a surprise to some consumer advocates but illustrates that their complaints about the limits of COPPA have garnered attention at the FTC.
“I can only speculate that in trying to determine whether companies were violating COPPA, it became clear that there were many situations where the rules were ambiguous, did not clearly cover privacy-invasive conduct or were simply ineffective,” said Angela Campbell, a law professor at Georgetown University who represents a coalition of consumer advocates and privacy groups that have filed FTC complaints about alleged COPPA violations by several technology companies.
Mark Eichorn, an assistant director at the FTC's Division of Privacy and Identity Protection, said the commission has heard the "frustration from [privacy] groups that the statute and the rule don't really account for those sites that certainly are not directed to kids, they're not intended to be directed to kids, but they know they have a significant number of kids on there."
The FTC’s new efforts to update COPPA come as lawmakers on Capitol Hill continue to push for a legislative overhaul of the law. Legal experts say that COPPA has limitations built into the statute that could make meaningful expansion of its reach difficult without action from Congress.
One bill by Democratic Sen. Ed Markey (Mass.) and Republican Sen. Josh Hawley (Missouri), for example, would expand it to cover kids up to age 15 and also broaden the definition of covered companies to include those with demonstrably large numbers of underaged users — even if there is not “actual knowledge” about a particular user’s age. In a statement Thursday, Markey said an FTC update “will not eliminate the dire need for Congress to pass” the bill.
“But if the Commission is truly serious about protecting young people online, it will enforce existing protections, hold violators accountable no matter how powerful they are, and act as a forceful check against the ever-increasing appetite for children’s data,” he added.
Under Simons, the FTC has sought to step up its enforcement of kids privacy rules. In February, the commission took aim at the social media app Musical.ly — now known as TikTok — for allegations that it illegally collected the names, email addresses, pictures and locations of kids under age 13. The settlement included a $5.7 million financial penalty, a record for a COPPA violation at the FTC. TikTok is also now under investigation in the United Kingdom.
“Our recent enforcement action involving TikTok, which is a rapidly growing social media product in this country and throughout the world, demonstrates our focus on new trends we’re seeing and our desire to protect children consistent with COPPA,” said Noah Phillips, a Republican FTC commissioner.
"My view is that we are hearing enough from all sorts of stakeholders, and we're seeing changes in the market," he added, "and so expedited review of this rule is warranted."
When COPPA first passed, there was no YouTube, no Facebook and no iPhone, and the commission has struggled to keep pace with rapidly advancing technology while applying a law more than two decades old. The FTC did extensive updating to its rules regarding COPPA enforcement beginning in 2010, expanding several definitions of personal data to include videos, photos or voice clips.
News that the FTC was considering another overhaul to COPPA prompted some anxiety among consumer and privacy advocates, who expressed worry that the process could lead to the weakening of enforcement or other accommodations to technology companies.
“The biggest problem with COPPA is not the rules – it’s the lack of enforcement, a problem which could be solved immediately without a lengthy comment period and proceeding,” said Josh Golin, executive director of the Campaign for a Commercial Free Childhood, an advocacy group based in Boston. “In addition, many of the questions the Commission is asking suggest they are considering loosening the rules to the benefit of Big Tech.”