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US Treasury’s blacklist could provide a huge boost for Russia’s budget

January 31, 2018 by Leave a Comment

Entrepreneur, founder of the Tinkoff brand, head of the bank Some Russian businessmen made the US blacklist just for being successful

“The return of capital to the country began a few years ago when Russian citizens began to lose assets abroad, and foreign governments did not always follow the law. This has already led to the consolidation of rich people around the country’s leadership,” Gleb Zadoya, head of analytics at Analitika Online, told RT.

Sanctions and pressure in the West do not necessarily mean that capital will return to Russia, as there are other markets like India and China, and this is why the Russian government offers its tycoons capital amnesty, low taxes, and other benefits. And if the sanctions continue for at least one year more, “Russia will have the opportunity to use ‘external’ investments,” if the necessary infrastructure is created by both business and government, Zadoya said.

“Most likely, citizens who are on the Kremlin List will at least think about returning capital to Russia or other jurisdictions in order to protect themselves if the Americans begin to impose real restrictions. Moreover, Russia has special tools that would allow the oligarchs to bring their money back into the country. These are confidential bonds, designed for the return of money back into the country,” Forex Optimum analyst Ivan Kapustiansky said.

If wealthy Russians decide to keep their assets and capital abroad, they risk losing them forever, according to Sergey Kostenko, an investment analyst at Global FX. It’s one thing when you go somewhere else to spend money; it’s quite another thing when you try to become part of the local elite, he added.

© The Association of European Businesses - AEBEuropean investors warn of potential damage from US Treasury ‘Kremlin List’

“Assessing the potentially gloomy prospects, we can say that a significant part of the capital will return to their homeland with a high degree of probability. There will be bargaining with the authorities on the terms, but in the end it will be done, not because it is desirable to do so, but because there will be no choice,” Kostenko said.

There is also a point of view that the ‘Kremlin List’ will hardly change anything, as it doesn’t come out of the clear blue sky.

“Most likely, some measures have already been taken, because the first sanctions were introduced almost four years ago. It was obvious that the sanctions are here to stay, given the positions of Russia and the US on Crimea; it is possible they are forever. The ‘Kremlin List’ was announced six months ago; why wait for it? It is better to take care of everything in advance. Some rules will change, but, most likely, we should not expect any massive return of capital to Russia,” Teletrade financial consultant Mikhail Grachev said.

Mikhail Mashchenko, an analyst at a social network for investors in Russia and the CIS – eToro – says the new list does not imply sanctions yet.

“There are no specifics on this list, and it is likely that those wishing to continue their life abroad can find loopholes. It is unlikely that such a broad list will be subject to stringent restrictions and it is possible that in the future it may be reduced,” he said.

For more stories on economy finance visit RT’s business section

Article source: https://www.rt.com/business/417462-russia-budget-kremlin-list-treasury/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Filed Under: Global Business

Thomson Reuters Sells Stake in Unit to Blackstone-Led Group

January 30, 2018 by Leave a Comment

The financial and risk unit, which provides research and analysis tools to financial markets professionals, had revenue of $6.1 billion in 2016, a figure that accounted for more than half of the company’s total sales. The business includes Eikon, Thomson Reuters’s flagship information terminal system.

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The Eikon system trails Bloomberg in terms of market share: Bloomberg had about a third of the market in 2016, while the Thomson Reuters service had about 23 percent, according to data from Burton-Taylor International Consulting.

Thomson Reuters, which is based in Toronto, will retain a 45 percent equity stake in the financial and risk business and full ownership of its legal, tax and accounting, and news operations, according to the statement.

Blackstone brings more than cash to the joint venture with Thomson Reuters. The private equity firm also owns Ipreo, another financial data firm, which it and Goldman Sachs bought for $975 million in 2014.

“We are excited to partner with Thomson Reuters — one of the most trusted companies in financial technology,” said Martin Brand, a senior managing director at Blackstone.

Shares in Thomson Reuters were up more than 7 percent to $46.52 at the close of trading on the New York Stock Exchange on Tuesday.

Correction: January 30, 2018

An earlier version of this article misstated which day shares in Thomson Reuters rose more than 8 percent after it was reported that the company was in discussions the Blackstone Group about deal for a stake Thomson Reuters’s financial and risk division. It was on Tuesday, not Thursday.

Follow Chad Bray on Twitter: @Chadbray.

Michael J. de la Merced contributed reporting.

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Article source: https://www.nytimes.com/2018/01/30/business/dealbook/blackstone-thomson-reuters-talks.html?partner=rss&emc=rss

Filed Under: Media Business

Complaint Accuses Contractor of Underpayment at Medicare Call Centers

January 30, 2018 by Leave a Comment

“We value our people and the work that they perform,” he said. “Similar to other federal contractors, the company is subject to routine compliance reviews by the Department of Labor. As with any notice received, we will engage with the relevant parties, including our employees and the Department of Labor.”

The complaint follows a move, authorized by congressional Republicans and signed by President Trump, to overturn an Obama-era executive order meant to crack down on wage theft by contractors. The practice of misclassifying workers on federal contracts remains illegal. “I think this is a real test of whether the law will be enforced under the Trump administration,” said Guerino J. Calemine III, the general counsel for the union.

Federal guidelines stipulate how much contractors like General Dynamics must pay workers in various job classifications, depending on where they live. That means that, to receive a raise in their workplace, employees in the company’s call centers must either move into a more demanding, higher-paid job — which typically requires additional training — or hope that the government increases the pay rates for everyone.

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The complaint says that General Dynamics underpaid workers by slotting them into positions that required duties associated with higher-paying jobs.

Agents in the call center “do jobs that require them to select from hundreds of scripts and procedures, adapt these materials to suit caller needs, and use specialized terminology and other subject-matter knowledge gleaned from their training and experience as front-line workers for the Medicare and Federal Marketplace programs,” the complaint says. The union says that those tasks fit the description of positions that correspond to a wage of $11.41 or $12.80 an hour, but that the company classified most of its workers in a position that pays $9.05 an hour.

Two workers at General Dynamics call centers say they have long worried that the company was not paying them sufficiently for the work they were asked to do. Adrian Powe, 26, who works in the Hattiesburg center, said he had completed three company skills trainings, but that none of them had resulted in a wage above $10 an hour.

“I was baffled at the fact that there was no raise” after the trainings, he said. “I knew something wasn’t right.”

Kathleen Flick, 62, works in the Louisiana center that is the subject of a continuing investigation by the Labor Department. She said she believed that based on the work she does, she should be paid an additional dollar or two an hour above her current wage of $13.38.

“It makes me feel horrible,” she said. “Stealing from the working poor, which I am, is low. Really low. I can’t afford to run my air conditioning in the summer.”

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The complaint asks the Labor Department to “investigate urgently these allegations,” to require the company to properly classify its workers and to force it to pay back wages to any employees who are found to have been misclassified.

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Article source: https://www.nytimes.com/2018/01/30/us/politics/medicare-call-centers-wages.html?partner=rss&emc=rss

Filed Under: Economy News

A Paper Tears Apart in a City That Never Quite Came Together

January 30, 2018 by Leave a Comment

For all its successes, Los Angeles has not developed the political, cultural and philanthropic institutions that have proved critical in other American cities. The turmoil at The Times comes just months after Eli Broad, who has been the city’s biggest philanthropist, announced he was retiring.

There are many reasons for this problem. Los Angeles County is made up of 88 different cities, including the City of Los Angeles, rolling across 4,571 square miles that stretch from the ocean to the desert. People here are more likely to identify themselves with the city or neighborhood where they live — be it Glendale, Compton, Beverly Hills or Whittier — rather than Los Angeles. The worsening traffic has encouraged people to stay close to the places where they live and work.

“It’s so vast,” said William Deverell, a historian of California at the University of Southern California. “L.A. was self-consciously designed to be a decentralized place. What we call sprawl in the 21st century was part and parcel of the decentralized nature of the place.”

There has been an exodus of Fortune 500 companies to other parts of the country from Los Angeles over the past 20 years — among them, Occidental Petroleum, which moved to Houston in 2014 — and with it the loss of business leaders who in other cities fill key civic roles. There were three Fortune 500 companies here in 2017, compared with seven in the City of Los Angeles in 1987. Many Hollywood executives and actors have homes in other parts of the country, and with some notable exceptions, have not played a major role in civic life here.

The region has become increasingly economically and ethnically diverse, a challenge for any political or civic leader looking to unify a community. And this is a relatively young city, filled with recent arrivals who do not have the history of the kind of old-line families who have defined civic foundations in established cities like Boston and Philadelphia.

The overlapping maze of governments works against the emergence of a single powerful political leader, such as an Edward I. Koch, the former mayor of New York City. The mayor here has little control over the school board or the health system.

Unlike New York, which has two feisty daily tabloids and a 24-hours news station devoted only to New York news, The Los Angeles Times has stood increasingly alone as other news organizations have gone out of business, such as The Los Angeles Herald Examiner, which closed in 1989. That has meant the absence of different voices and the kind of competition that can ensure a live civic debate, particularly since Los Angeles does not have the prodding that comes with an aggressive tabloid culture.

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Marylouise Oates, who was an influential society columnist for The Times in the 1980s, writing closely followed columns that covered every aspect of life here — politics, Hollywood, culture, along with events in the Jewish, Latino and African-American community — said she was distressed that there were few journalistic voices in the community today.

“This city is so silo-ized,” Ms. Oates said. “I covered everything. At the time it was all one city. Otis Chandler made that possible. He decided it was a good thing to do.”

Antonio R. Villaraigosa, a former two-term mayor, said the lack of these kinds of forces was a constant obstacle to accomplishing anything ambitious when he was in City Hall.

“Rallying the city around big challenges becomes more difficult when you don’t have the broad cross-section of institutional players,” said Mr. Villaraigosa, a Democrat who is running for governor. “We don’t have anything like that here. We’ve been struggling for 50 years with weakened institutions.”

But he said he thought that was changing. “We are a global city,” he said. “We need to see ourselves as a global city.”

The other factor is the lack of philanthropy. There is no shortage of wealth in Los Angeles, but leaders of cultural institutions have long struggled to raise money or solicit contributions of art. Los Angeles ranked 14th in charitable giving in 2017, according to The Charity Navigator; San Diego ranked first. The Walt Disney Concert Hall, by any measure a landmark work of architecture in this city and the world, almost did not get completed; Richard Riordan, a former mayor, made a personal plea to Mr. Broad to help come up with the needed financing.

Mr. Broad said he was not worried that no one would step up to fill the shoes he has left since retirement. For example, he suggested, David Geffen, the Hollywood mogul who lives in Beverly Hills and New York, pledged $150 million last year for the construction of a new Los Angeles County Museum of Art building.

“It’s a changing city,” Mr. Broad said. “It’s a younger city. We’re growing up.”

Geography may be seen as an impediment to strong institutions, but it is also a central piece of Angeleno identity — a landscape of beaches, mountains, valleys, open skies and clusters of buildings. “Geography is part of our values,” said Zev Yaroslavsky, a former member of the county board of supervisors and a professor at the Luskin School of Public Affairs at the University of California, Los Angeles. “We don’t want to live on top of each other, like in New York or Philadelphia.”

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Southern Californians, he said, “want to be independent.”

Bill Boyarsky, a former editor at The Los Angeles Times and the author of “Inventing L.A.: The Chandlers and Their Times,” a book on the newspaper, described the idea that people in Los Angeles “can’t see beyond their block” as an East Coast stereotype.

“I always thought geography was an unusual but true way of binding the city together,” he said.

The developments come as Los Angeles — by many other measures — is on an upswing. The economy is humming. Its youthful mayor, Eric M. Garcetti, is traveling the country, a potential presidential candidate in 2020, which in some circles provokes eye-rolling, but is also a source of pride, particularly at a time when political activism in this relatively apolitical city has risen since the election of President Trump.

The city now has two professional football teams — after 20 years when there were none — and was chosen as the site of the 2028 Olympic Games. And a raft of new museums are opening or are being renovated, including one financed by the Academy Museum of Motion Pictures and another by George Lucas in downtown Los Angeles.

“We are a trendsetting city,” Ms. Bojarsky said. “And we look much more like what cities of the future are going to look like. We have the diversity of the economy, the diversity of the people. There are no all-white cities or single-economy cities anymore.”

Still, the absence of progress on big issues — homelessness, education and battered streets, to name a few — is a source of frustration and embarrassment for many civic leaders.

“Los Angeles plays small ball really well,” said Austin Beutner, a former deputy mayor who served briefly as the publisher of The Times. “What’s missing oftentimes is the ability to bring the entire community together on behalf of issues or opportunities that will benefit the community as a whole.”

The contrast with the era when Otis was a power at his newspaper and in the city is striking. Upon arriving here, Otis, through subterfuge, conspired to steal water from the Owens Valley and bring it to Los Angeles, making rapid growth possible. The newspaper’s power helped secure funding for a new harbor, opening the city to global trade.

With special sections, the newspaper marketed Los Angeles to the rest of the country, attracting waves of striving migrants with the promise of sunshine, cheap land and abundant opportunity. In politics, the newspaper bent City Hall to its will, and along the way propelled the rise of favored leaders, including Richard Nixon and Ronald Reagan. The Chandlers sold the family-controlled Times Mirror Company to the Tribune Company in 2000.

The newspaper developed from being less a political player and more a civic leader — a paper with international prestige that helped set the conversation every morning here. “It proved to be the golden age for an organization like The L.A. Times to engage citizens of Los Angeles,” Mr. Beutner said. “With everything going on here today you’d expect it to be a leader in the conversation. Meanwhile, it is being pummeled from above.”

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Article source: https://www.nytimes.com/2018/01/30/us/los-angeles-times.html?partner=rss&emc=rss

Filed Under: Media Business

Kenyans Name a ‘People’s President,’ and TV Broadcasts Are Cut

January 30, 2018 by Leave a Comment

Mr. Njoka said the criminal designation was based on evidence that the government had seen but did not plan to share, which he alleged may link the group to armed activity in the country.

“We’ve seen that they want to almost form a militia, and the government has to take action and deal with them before the government gets into that kind of situation,” Mr. Njoka said.

Mr. Njoka did not explain why the government had not previously spoken about the allegations of armed activity. “A number of reasons may not be shared with the media,” he said.

Salim Lone, an adviser to Mr. Odinga, said that the accusations were unfounded and that the group would not change its plans.

“We’re not paying any attention to such a declaration,” Mr. Lone said.

Earlier in the day, police officers and officials from the Communications Authority of Kenya descended on a broadcast transmission station in Limuru, about 18 miles outside Nairobi, the capital, and disconnected broadcasting equipment, according to Linus Kaikai, the chairman of the Kenya Editors Guild and the general manager of the television division at Nation Media Group, which owns NTV, one of the three channels disconnected.

Mr. Kaikai said that the authorities had disabled the equipment shortly before 9 a.m. “There was no explanation given,” he said.

Repeated calls to multiple officials at the Communications Authority were not returned.

The television blackout and the criminal designation seemed to add legitimacy to Mr. Odinga’s oath, which some observers had earlier dismissed as political theater.

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“We’ve urged them to ignore it, to downplay it,” said one Western diplomat, who asked for anonymity because of the sensitivity of the matter. “It has no legal or practical effect, so the best solution here would be to just ignore the entire thing. But they’re not doing that.”

Mr. Njoka, the Interior Ministry spokesman, described the oath as an assault on legitimate government. He also said the government had “good reasons” for interrupting television broadcasts of the gathering.

“The government had to do what it did because the lives of Kenyans are more important than what you call freedom of the press or what might turn out to be an inciting broadcast,” he said.

Mr. Odinga in Nairobi in November. He lost his presidential bid last year to Uhuru Kenyatta, but says the voting was plagued by fraud. Thomas Mukoya/Reuters

When their transmissions were interrupted, the private broadcasters Citizen TV, KTN and NTV were showing people sitting peacefully in Uhuru Park in Nairobi. The stations continued to stream footage online, albeit with some interruptions, showing a growing but peaceful crowd.

Mr. Kenyatta summoned the owners of several media outlets to a meeting on Friday at the State House, the official residence of the president, and warned them against broadcasting any ceremony for Mr. Odinga.

Mr. Kaikai, the Editors Guild chairman, issued a statement denouncing the meeting, which he called a “brazen threat” that was “intended to intimidate the media from performing its rightful role of informing the public on matters affecting them.”

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Hanningtone Gaya, chairman of the Media Owners Association of Kenya, attended the meeting on Friday, describing it as a “dressing down” at which media owners were “read the Riot Act,” according to Mr. Kaikai’s statement.

It is unclear what, specifically, prompted the government to dismantle the stations’ broadcasting equipment Tuesday morning.

“As far as I know, that has got absolutely no precedent,” said John Githongo, a longtime civil rights advocate, former government official and publisher of the nonpartisan political magazine The Elephant.

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Mr. Githongo cited a government ban on live broadcasts during postelection violence in 2008, out of fear that bloodshed on television could incite further violence. Though live news broadcasts of the violence were banned, stations continued to transmit programming.

“I am not certain there is any precedent for this since the advent of multiparty politics in 1991,” Mr. Githongo said.

In November, the government considered imposing restrictions on news outlets after television stations broadcast a six-hour standoff between Mr. Odinga’s supporters and the police. Viewers watched as supporters of the opposition marched across Nairobi pursued by police officers who fired water cannons and tear gas and, according to witnesses and medical workers, live bullets. (The police have denied using live ammunition.)

At that time, Mr. Njoka told The New York Times that the broadcasts could be considered incitement to violence and that the government was weighing whether to further restrict coverage of opposition demonstrations. But no moves against the news media were made until Tuesday.

By 3 p.m. Tuesday, Mr. Odinga had taken an oath as the “people’s president” and had given a short speech in front of a crowd of thousands denouncing Kenya’s “electoral autocracy” and “election stealing.” The park emptied immediately after he spoke.

David Aduda, a veteran Kenyan journalist, said the government’s interruption of private broadcasts had “exploded” tensions that were building between the media and the government for months. Local journalists have complained privately that the government began interfering with coverage last year, as the political campaign season kicked off, but few wanted to go on the record about political interference in their work.

“There’s no doubt anymore that the government is out to cripple the media,” Mr. Aduda said. “Previously, you would hear of anecdotal evidence here and there, but there was no concrete evidence. Now, here we have it.”

“There is no justification for this,” he added, speaking of the broadcast disconnections. “This shows that we have a very intolerant government that does not respect media freedom, and for that reason, the media have every reason to keep fighting for every space to be able to operate according to the law.”

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While Mr. Njoka, of the Interior Ministry, suggested that the television blackout was meant to maintain calm, Mr. Githongo of The Elephant said it could have the opposite effect.

“I’m getting calls from my relatives up country, who obviously know this is happening, and they’re getting bits from social media and telephone calls talking about mayhem in Nairobi, about a police crackdown — things that are not happening,” Mr. Githongo said.

“That’s what happens” with a blackout, he said. “The quality of the information goes down.”

Follow Jina Moore on Twitter: @itsjina.

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Article source: https://www.nytimes.com/2018/01/30/world/africa/raila-odinga-kenya.html?partner=rss&emc=rss

Filed Under: Media Business

Facebook Bans Ads for Bitcoin and Other Cryptocurrencies

January 30, 2018 by Leave a Comment

Although Facebook’s chief executive, Mark Zuckerberg, has expressed an interest in digital currencies, the company said ads for them were “frequently associated with misleading or deceptive promotional practices.” Jeff Roberson/Associated Press

SAN FRANCISCO — Want to get rich quick through Bitcoins or other virtual currencies? You’ll have to do it without Facebook.

The social network said Tuesday that it would ban all ads for Bitcoin and other cryptocurrencies, in order to stop promotions that it sees as “frequently associated with misleading or deceptive promotional practices.”

Under Facebook’s new policy, no ads from well-known digital currency exchanges or for initial coin offerings will be allowed. Among those who will be affected is James Altucher, a self-described “crypto genius” whose viral ads have become a talking point in how the cryptocurrency boom has led to scams and wild price fluctuations.

The New York Times Explains…

Facebook’s move followed questions about whether it has done enough to protect its site from bad actors. The company has been trying to clamp down on misinformation and false news after admitting last year that Russian agents had used it to spread divisive and polarizing messages.

The world of cryptocurrencies, which people have flooded into as prices soared in recent months, has also increasingly raised fears that parts of the market are dogged by scams. The Securities and Exchange Commission said Tuesday that it had halted what may have been a fraudulent initial coin offering that asked people to fund what was supposed to be the world’s first “decentralized bank.”

Rob Leathern, a Facebook product management director, announced the ban on cryptocurrency ads in a blog post. He said the ban was intentionally broad, as Facebook seeks to “better detect deceptive and misleading advertising practices.”

Mark Zuckerberg, Facebook’s chief executive, has recently expressed an interest in digital currencies. In a Facebook post this month, he wrote that he was studying how to introduce cryptocurrency to his company, adding that he thought it would “take power from centralized systems and put it back into people’s hands.”

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Article source: https://www.nytimes.com/2018/01/30/technology/facebook-cryptocurrency-ads.html?partner=rss&emc=rss

Filed Under: Media Business

Vice Media’s Digital Chief Loses Job After Sexual Harassment Investigation

January 30, 2018 by Leave a Comment

The Brooklyn offices of Vice Media, which said Tuesday that its chief digital officer, Mike Germano, would not return from a leave. Natalie Keyssar for The New York Times

Vice Media announced Tuesday that its chief digital officer, Mike Germano, would not return to the company after the public disclosure of sexual harassment allegations against him prompted an internal investigation into his behavior.

Mr. Germano was placed on leave after a New York Times investigation last month detailed the treatment of women at the company. The article included allegations made by two women against Mr. Germano, including that he told a former employee at a holiday party in 2012 that he had not wanted to hire her because he wanted to have sex with her and that, in 2014, he had pulled an employee onto his lap.

Mr. Germano declined to comment. In an earlier statement, he said he did “not believe that these allegations reflect the company’s culture.”

Mr. Germano was a co-founder of Carrot Creative, the digital ad agency that Vice acquired in 2013. In an email to the staff on Tuesday, Sarah Broderick, Vice’s chief operating officer, said that Vice’s creative ad agency was completing “the long planned integration of Carrot Creative” and that more details regarding the group’s leadership would be announced in the weeks ahead.

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A spokesman for Vice said its investigation into Andrew Creighton, the company’s president, was continuing. Mr. Creighton was also put on leave after the Times investigation, which found that he had reached a $135,000 settlement in 2016 with a former employee who claimed she had been fired after she rejected an intimate relationship with him.

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Ms. Broderick said in a memo to the staff this month that a special committee of Vice’s board was “reviewing the facts” related to the settlement and had planned to make a recommendation regarding the matter to senior management before the company’s Jan. 11 board meeting.

The Times’s investigation, published on Dec. 23, found four settlements involving allegations of sexual harassment or defamation against Vice employees, including Mr. Creighton. In addition, more than two dozen women said they had experienced or witnessed sexual misconduct at the company, including unwanted kisses, groping, lewd remarks and propositions for sex.

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Article source: https://www.nytimes.com/2018/01/30/business/media/vice-media-sexual-harassment.html?partner=rss&emc=rss

Filed Under: Media Business

Exxon Mobil Tripling Its Bet on the Hottest U.S. Shale Field

January 30, 2018 by Leave a Comment

Exxon Mobil, the nation’s largest oil company, said the tripling of oil and natural gas production would bring its output in the Permian Basin to 600,000 barrels a day. To support that increased production, it said, it will invest more than $2 billion to expand a recently acquired transport terminal and other production infrastructure. It noted in a statement that “recent changes in the U.S. corporate tax rate create an environment for increased future capital investments.”

It also said that “reduced drilling costs, technology improvements and expanded acreage” gave the company the opportunity to produce efficiently in the Permian.

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Energy companies are quickly building pipelines to move Permian oil and gas to Gulf of Mexico ports for export as well as pipelines to Mexico, where natural gas from the United States is replacing oil and coal to remake the country’s electricity system and clean up urban air.

On Monday, Exxon Mobil said it would spend $50 billion on United States operations over the next five years. Much of that spending had been previously announced, but it highlighted the company’s continued shift in preference to operations in the United States and the Western Hemisphere, after decades of searching to replace reserves in far-flung regions that are frequently unstable.

With the price of West Texas intermediate crude oil rising to around $65 a barrel from below $40 in recent years, the Energy Department predicts that daily domestic oil production will increase to an average of 10.3 million barrels a day this year from an average of 9.3 million in 2017 — setting a production record and surpassing the output of Saudi Arabia. The department projects an additional 500,000 barrels of production in 2019.

But not all oil companies have prospered. Some of the smaller independent companies that pioneered the shale boom borrowed heavily and suffered when oil and gas prices swooned in recent years. There have been scores of bankruptcies.

Chesapeake Energy, based in Oklahoma City and once an active driller in the Permian, laid off roughly 400 employees on Tuesday, about 13 percent of its work force, after selling off about a quarter of its wells over the last three years.

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Article source: https://www.nytimes.com/2018/01/30/business/energy-environment/exxon-shale.html?partner=rss&emc=rss

Filed Under: Economy News

Economic Scene: After Globalization, a New Specter Could Feed Populist Politics

January 30, 2018 by Leave a Comment

Immigration pressures are likely to persist across the Atlantic, continuing to drive the populist revolt against the establishment elite in Europe. But in the United States, the population of unauthorized immigrants is declining, disproving one of Mr. Trump’s core claims to power.

Economists studying the changes in the nature of work that produced such an angry political response suggest, however, that another wave of disruption is about to wash across the world economy, knocking out entire new classes of jobs: artificial intelligence. This could provide decades’ worth of fuel to the revolt against the global elites and their notions of market democracy.

As Frank Levy of the Massachusetts Institute of Technology noted this month in an analysis on the potential impact of artificial intelligence on American politics, “Given globalization’s effect on the 2016 presidential election, it is worth noting that near-term A.I. and globalization replace many of the same jobs.”

Consider the occupation of truck drivers. Mr. Levy expects multiple demonstrations of fully autonomous trucks to take place within five years. If they work, the technology will spread, starting in restricted areas on a limited number of dedicated highway lanes. By 2024, artificial intelligence might eliminate 76,000 jobs driving heavy and tractor-trailer trucks, he says.

Similarly, he expects artificial intelligence to wipe out 210,000 assembler and fabricator jobs and 260,000 customer service representatives. “Let’s not worry about the future of work in the next 25 years,” he told me. “There’s plenty to worry about in the next five or six years.”

These may not be big numbers, but they are hitting communities that expressed their contempt for the status quo in 2016. White men and women without a four-year college degree accounted for just under half of Mr. Trump’s voters — compared with fewer than a fifth of Hillary Clinton’s. Seventy percent of truck drivers, 63 percent of assemblers and fabricators, and 56 percent of customer service representatives share these characteristics.

The Surge of Populism

Populist parties’ share of the vote is rising around the world.

Populist parties’ share of vote worldwide*

25

%

20

15

10

5

0

’61-

’65

’66-

’70

’71-

’75

’76-

’80

’81-

’85

’86-

’90

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’95

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’01-

’05

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’10

’11-

’16

Populist parties’ share of vote worldwide*

25

%

20

15

10

5

0

’61-

’65

’66-

’70

’71-

’75

’76-

’80

’81-

’85

’86-

’90

’91-

’95

’96-

’00

’01-

’05

’06-

’10

’11-

’16

JAN. 30, 2018

By The New York Times | Source: Dani Rodrik, based on the Global Elections Database (http://www.globalelectionsdatabase.com) and the Constituency-Level Elections Archive (http://www.electiondataarchive.org/).

To be sure, economic dislocations don’t have to produce populist politics. Daron Acemoglu of M.I.T. notes that geography makes a difference: If the dislocation from A.I. is concentrated in big cities, where workers have more options to find new jobs, the backlash will be more muted than it was when trade took out the jobs of single-industry company towns.

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What’s more, Mr. Acemoglu added, the political system can respond in different ways to workers’ pain: The Great Depression not only led to Nazi Germany, it also produced Sweden’s social democracy.

It’s not immediately obvious that artificial intelligence will produce the same kind of political reaction that trade did. Sure, machines inspired the most memorable worker rebellion of the industrial revolution — when the Luddites smashed the weaving machines that were taking over their jobs. The word “sabotage” comes from the French workers who took to destroying gears.

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Unions are suspicious of technology. The United Farm Workers loudly protested tomato-harvesting machines after they were introduced in California in the 1960s.In New York, the local of the “sandhogs” who dig subway tunnels negotiated a deal where it gets $450,000 for each tunnel-digging machine used, to make up for job losses caused by “technological advancement.”

Yet though automation has displaced many more jobs than trade ever could, robots have never inspired the fury that trade routinely does. “By all accounts, automation and new digital technologies played a quantitatively greater role in deindustrialization and in spatial and income inequalities,” wrote Dani Rodrik of the Kennedy School of Government at Harvard University. “But globalization became tainted with a stigma of unfairness that technology evaded.”

It’s easier to demonize people — especially foreigners — than machines, the children of invention. What’s more, imports from countries with cheaper labor, weaker worker protections and threadbare environmental standards will be seen as unfair. Thea Lee, a former deputy chief of staff of the A.F.L.-C.I.O. who now heads the Economic Policy Institute, notes that workers’ anger is directed against “the particular set of rules about globalization that we chose,” which spreads benefits among financiers and corporations while disregarding workers.

This time could be different, though. “That sense of unfairness can be attached to technological changes, too,” Mr. Rodrik told me. “It’s not Bill Gates, who came out of nowhere, but big corporations that are getting bigger and becoming monopolists.”

Indeed, artificial intelligence could move populism in a different direction. Mr. Rodrik proposes two varieties, of right and left. The two share an anti-establishment flavor and claim to speak for the people against the elites. Both oppose classic liberal economics and globalization. Both are often authoritarian.

But right-wing populism — like that harnessed in Europe — is provoked by immigration. Its clan consciousness exploits cleavages of race, religion and nationality. On the left, by contrast, the “us versus them” narrative focuses on the economic divide between the capitalists and the working class. Populists of the left mostly take aim at trade.

The United States was ripe for both reflexes. Over the last 50 years, as the nation opened its markets to foreign trade, it never set up a social safety net to help workers dislodged by change, as Europe did. It also experienced large-scale immigration across the southern border. And it was walloped by a financial crisis that proved to typical workers that Wall Street would always get a better deal.

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Mr. Trump’s discourse straddles the divide between the ideological domains, vilifying both trade and immigration. But his policies — tax cuts and immigration restrictions — hew decidedly to the right.

It is not a great fit for a big-tech future. A world in which immigration is on the decline yet some Google technology is taking the jobs of truckers and cashiers sounds compatible with a leftist policy platform that takes on Wall Street and corporate behemoths.

That is a world in which, say, Bernie Sanders would thrive. And that alone could give the cocktail class that gathered in Davos something to worry about.

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Article source: https://www.nytimes.com/2018/01/30/business/economy/populist-politics-globalization.html?partner=rss&emc=rss

Filed Under: Economy News

European investors warn of potential damage from US Treasury ‘Kremlin List’

January 30, 2018 by Leave a Comment

The list, published by the US Treasury earlier on Tuesday, features 210 people, including the entire Russian government and prominent businessmen. While the document is not a “sanctions list,” it is still a matter of “deepest concern,” the Association of European Businesses (AEB) warned.

Putin reacts to US Treasury ‘Kremlin List’: ‘Dogs bark but the caravan moves on’

“The members of the Association are convinced that the US Treasury’s Report increases the uncertainty in the Russian business environment and can also affect the interests of European investors, European companies doing business in, or trading with Russia,” the association said in a statement. 

The organization, which brings together over 500 European companies in Russia, urged all the parties to abstain from any harsh moves after the publication of the document.

“The Association reiterates its calls on the Heads of States and Governments of the EU, the USA and Russia to refrain from actions, which can undermine the prospects of future economic cooperation,” it said.

Russian Energy Minister Aleksandr Novak also warned of sanctions potentially backfiring on the whole global economy, especially its energy sector. The official found himself on the US Treasury’s list alongside fellow Russian ministers.

“All sanctions, in fact, apart from political motives, aim to create obstacles for business which means hindering free market competition. I’m sure neither the American companies, nor the world economy as a whole, will benefit from them, since our countries are the major powers in the energy field. We’d be able to do much more for the industry with our efforts combined,” Novak said.

Article source: https://www.rt.com/business/417418-european-investors-kremlin-list/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Filed Under: Global Business
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