October 18, 2018

Corner Office: Eileen Fisher: ‘When Was Fashion Week?’

Having a boss.

Having a boss. As a family we were sort of fluid. We shared, we did things together. And then work was like, “Do this. And when you finish that, do this.” I hated it. I hated it. I had a definite authority problem.

Is that why you’re your own boss now?

I wanted to create a place where people weren’t powering over people. Where people were kind, and people were together and shared.

So you came to New York?

I started in interior design. I struggled, I really struggled. I had a Japanese partner. We did graphics together and ended up going to Japan. That’s how I found the kimono.

Did you know the kimono was something special to you when you saw it for the first time?

I did. I was very intrigued by the way it moved. I went to Kyoto and saw the women wearing the kimonos. And just to watch a couple of them walking: There were the colors, and the shape, and that was the same shape for like a thousand years in Japan. It was the only shape they wore. I was fascinated by that idea that one design, one shape, could transcend time, and be made new just by different patterns and colors.

So how did you start the company?

It was some kind of bizarre synergy and synchronicity of events. I had $350 in my bank account when I decided to start the business. But this pattern maker came and helped me. I cut the pieces on the floor in my loft, carried it all out on the subway in garbage bags to a little factory in Queens. People were kind, people helped. Then at a boutique show, I sold $40,000 worth of clothes.

At that point you had a real business going. What was it like to become a boss?

I still struggle with that. I don’t think being a boss is my strength. I think of myself as leading through the idea, trying to help people understand what I’m trying to do, or what the project is about, and engaging them. I always think about leading through listening. I was a designer, so I didn’t have preconceived ideas of how this business works. And I was kind of lucky to not know.


Article source: https://www.nytimes.com/2018/10/05/business/eileen-fisher-corner-office.html?partner=rss&emc=rss

The New New World: Private Businesses Built Modern China. Now the Government Is Pushing Back.

“Such statements as ‘there should be no state-owned enterprises’ and ‘we should have smaller-scale state-owned enterprises’ are wrong and slanted,” Mr. Xi said during a visit to a facility owned by China National Petroleum Corporation, a major state-controlled oil company.

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China’s leadership turned to entrepreneurs in the late 1970s, after the government had led the economy to the brink of collapse. Officials gave them special economic zones where they could open factories with fewer government rules and attract foreign investors. The experiment was an unparalleled success. When extended to the rest of the country, it created a growth machine that helped make China second only to the United States in terms of economic heft.

Today, the private sector contributes nearly two-thirds of the country’s growth and nine-tenths of new jobs, according to the All-China Federation of Industry and Commerce, an official business group. So pressures on private businesses could create serious ripples.

“The private sector is experiencing great difficulties right now,” wrote Mr. Hu, the retired minister, who as the son of a former top Communist Party leader is often a voice for reform in China, in an essay posted online last Thursday. “We should try our best not to replicate the nationalization of private enterprise in the 1950s and the state capitalism.”

The Chinese president, who has sought greater party control over the military, the media and civil society, is now focusing on business. The government is considering taking direct stakes in the country’s big internet companies. Regulators have stepped up existing requirements that businesses, even foreign ones, give Communist Party committees a greater role in management.

Leftist scholars, bloggers and government officials are providing theoretical and practical support. In January, Zhou Xincheng, a professor of Marxism at Renmin University in Beijing, declared that private ownership should be eliminated.

Article source: https://www.nytimes.com/2018/10/03/business/china-economy-private-enterprise.html?partner=rss&emc=rss

Macron, With Popularity Slumping, Tries Tax Cuts for France’s Working Class

If convincing French voters is an uphill battle, it is especially challenging for Mr. Macron, who is viewed internationally as a dynamic European leader. His policies at home have yet to help most households.

In his first year, he delivered tax breaks to corporations and to France’s wealthiest 10 percent, earning him a reputation for favoring the rich. Purchasing power fell for the bottom 5 percent of households, while the majority in the middle, about 70 percent, were largely unaffected, according to the French Economic Observatory, an independent think tank.

Changes to the labor code intended to stoke hiring have trimmed unemployment slowly. Joblessness has fallen to 9.3 percent, from 10.1 percent when Mr. Macron was elected, but is still more than double the German unemployment rate. Although a nascent recovery before he took office helped generate jobs, growth has cooled recently to a 1.7 percent annual pace, as it has in the rest of the eurozone.

Mr. Macron promised voters that he could whittle unemployment to 7 percent by the next presidential election in 2022. To meet that target, the economy would have to grow by at least 1.7 percent in each of the next four years, which is by no means certain, according to the French Economic Observatory.

Mr. Macron’s economic policies have encouraged companies like Facebook and Fujitsu to increase investments in France. But his style — the confrontation with the gardener is a case in point — has alienated him from working-class voters and older citizens, who view him as out of touch and inclined to favor big business at the expense of workers.

Mr. Macron’s 2019 budget tries to make some amends. It pivots toward those left behind in the previous round of tax cuts, targeting €6 billion in housing and payroll tax cuts at the working class, on top of reductions in employee health care contributions and unemployment insurance payments. A separate plan would set aside €8 billion to tackle rising poverty with aid and job-training programs for disadvantaged youths under 25.

The budget is aimed at “making work pay” by leaving more money in workers’ pockets. But to keep the deficit in check, Mr. Macron is also trimming benefits for those not working, and cutting over 40,000 jobs in the public sector.

Article source: https://www.nytimes.com/2018/10/04/business/economy/mcaron-popularity-tax-cuts-working-class.html?partner=rss&emc=rss

The New New World: Private Businesses Built Modern China. Now the Government Is Getting Involved.

“Such statements as ‘there should be no state-owned enterprises’ and ‘we should have smaller-scale state-owned enterprises’ are wrong and slanted,” Mr. Xi said during a visit to a facility owned by China National Petroleum Corporation, a major state-controlled oil company.

China’s leadership turned to entrepreneurs in the late 1970s, after the government had led the economy to the brink of collapse. Officials gave them special economic zones where they could open factories with fewer government rules and attract foreign investors. The experiment was an unparalleled success. When extended to the rest of the country, it created a growth machine that helped make China second only to the United States in terms of economic heft.

Today, the private sector contributes nearly two-thirds of the country’s growth and nine-tenths of new jobs, according to the All-China Federation of Industry and Commerce, an official business group. So pressures on private businesses could create serious ripples.

“The private sector is experiencing great difficulties right now,” wrote Mr. Hu, the retired minister, who as the son of a former top Communist Party leader is often a voice for reform in China, in an essay posted online last Thursday. “We should try our best not to replicate the nationalization of private enterprise in the 1950s and the state capitalism.”

The Chinese president, who has sought greater party control over the military, the media and civil society, is now focusing on business. The government is considering taking direct stakes in the country’s big internet companies. Regulators have stepped up existing requirements that businesses, even foreign ones, give Communist Party committees a greater role in management.

Leftist scholars, bloggers and government officials are providing theoretical and practical support. In January, Zhou Xincheng, a professor of Marxism at Renmin University in Beijing, declared that private ownership should be eliminated.

Article source: https://www.nytimes.com/2018/10/03/business/china-economy-private-enterprise.html?partner=rss&emc=rss

State of the Art: Silicon Valley’s Keystone Problem: ‘A Monoculture of Thought’

Consider, for instance, how women are treated in “The Big Disruption.” Anahanta is egregiously misogynistic, which Ms. Powell said was inspired by her time at Badoo more than Google (though Google, of course, has had its own well-documented struggles hiring more women).

There are no women of importance in Anahanta’s ranks, and the company exploits its few female employees in ways that make Uber look good in comparison. Still, the only female character in the book, a Friedan-spouting feminist, buys into the company completely. She’s happy to paper over Anahanta’s problems by offering some high-minded, fanciful justification for terrible behavior today — because to get ahead in tech is to join the cult.

Ultimately, it was the cultishness that got to Ms. Powell, too.

“There was a component that had been building for some time — a feeling that I was starting to, in some cases, defend the indefensible,” Ms. Powell said of her departure from Google. She pointed to the creeping extremism of YouTube, which is owned by Google — how its recommendation algorithms, tuned to maximize a business model built on engagement, can push viewers toward ever more extremist content, so you might start off watching a Trump rally and find the service suggesting white supremacist rants.

“The debate around that — what is our responsibility? — was building, and I didn’t always feel we had enough urgency,” she said. (Google has said that it has poured resources into fixing this issue.)

More than for any particular controversy, Ms. Powell said, she left Google for a reason that resonates with the primary theme of her novel — because of the industry’s dreary sameness.

Every morning, she rode a fancy shuttle bus to Google’s offices, where she was lavished with food and other perks and encouraged never to leave — and to work to exhaustion, if not burnout.

“I felt like I’d ceased to become anything else,” she said. “All I did was work all the time and talk about tech.” She concluded that a job that asked her to jump from crisis to crisis, that did not admit time or perspective to consider many ideas that were outside its small world, was not the best use of her time.

Article source: https://www.nytimes.com/2018/10/02/technology/silicon-valleys-keystone-problem-a-monoculture-of-thought.html?partner=rss&emc=rss

For Canada, a Sigh of Relief More Than a Celebration in New Nafta Deal

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The concessions on dairy enraged politicians in Quebec, the country’s second-largest province and the center of the dairy industry. All four party leaders vying for votes in the provincial election on Monday rejected the Canadian government’s promise of compensation for farmers.

“It is an expression of the systematic injustice that Quebec is suffering within Canada,” the leader of the separatist Parti Québécois, Jean-François Lisée, told reporters.

During much of the negotiations, Mr. Trump had threatened to impose 25 percent tariffs on Canadian autos and auto parts crossing into the United States, which would have crippled the Ontario economy, putting an estimated 250,000 people out of work, according to one forecast. It would also have become a potent issue in Mr. Trudeau’s re-election campaign next year.

The new agreement — which renames the North American Free Trade Agreement as the United States-Mexico-Canada Agreement — neutralizes that threat by effectively exempting Canada’s exports to the United States. By requiring 40 percent of auto parts to come from so-called “high wage factories,” it could even give unionized Canadian auto manufacturers a leg-up.

“I would argue we are in better shape today than we’ve been in the last 24 years,” Jerry Dias, the head of Canada’s largest private sector union, Unifor, said on a morning Canadian Broadcasting Corporation radio show. “So I’m absolutely thrilled with where we ended up.”

He added: “Look, we hung tough right to the bitter end. We got what we needed. We didn’t fold in the areas that the U.S. wanted us to fold in, so we’re in pretty good shape today.”

Compared with Mr. Trump, who triumphantly claimed the deal would see “cash and jobs pouring into the United States and into North America,” Mr. Trudeau was gracious and understated during his news conference.

Article source: https://www.nytimes.com/2018/10/01/world/canada/trudeau-nafta-canada.html?partner=rss&emc=rss

I.R.S. Tax Fraud Cases Plummet After Budget Cuts

The I.R.S. allowed Americans with foreign accounts to voluntarily disclose them and pay a smaller penalty than they would have had they been caught hiding the information. Some 56,000 people participated, netting the government $11.1 billion. The I.R.S.’s criminal division also brought several cases against people for concealing accounts.

For all this success, there has been little change in the amount of wealth stashed overseas. Americans have about $1.2 trillion of personal assets in tax havens, according to data compiled by Gabriel Zucman, an assistant professor of economics at the University of California, Berkeley, and two colleagues. It’s unclear what portion has been disclosed to the I.R.S.

“What has happened over the last 10 years is real progress,” Dr. Zucman said. “But what the data suggest is that it has not had a dramatic effect on the amount of offshore wealth.” Money has flowed out of Switzerland and into Asian tax havens like Hong Kong and Singapore.

Moreover, the I.R.S. has made little use of new weapons in the fight against wealth hidden overseas. In 2010, President Barack Obama signed a law that was supposed to provide a crucial tool for government auditors and prosecutors. That law, the Foreign Account Tax Compliance Act, required banks with American account holders to report information to the United States. Like W-2 forms that employers file to tell about their workers, these reports would force account holders to come clean.

Eight years later, the program is still getting off the ground. Countries around the world have signed agreements, and more than 100,000 foreign banks have sent information to the United States. But “there is no ongoing compliance impact of the FATCA at this time,” according to a report this year by the inspector general for the I.R.S.

The report found serious problems with the millions of records collected so far. About half, for example, didn’t include identification numbers for the taxpayers, making it difficult to match the accounts with individuals. The I.R.S. hadn’t set up a process for using the records. The agency said it was working on such a system.

Here, too, the cuts to the I.R.S.’s budget have had an impact. During the Obama administration, the I.R.S. asked Congress for hundreds of millions of dollars to carry out the program, but received nothing. Since Mr. Trump took office, the agency has stopped asking.

Article source: https://www.nytimes.com/2018/10/01/business/economy/irs-tax-fraud-audit.html?partner=rss&emc=rss

The Most Important Least-Noticed Economic Event of the Decade

The slowdown across emerging markets, in turn, meant less demand for oil and many other commodities. That helped cause their prices to fall. The price of a barrel of West Texas Intermediate crude oil fell to under $30 in February 2016 from around $106 in June 2014. The drops in the prices of metals like copper and aluminum, and agricultural products like corn and soybeans, were also steep.

That only heightened the economic pain for the many emerging economies that are major commodity producers, such as Brazil, Mexico and Indonesia.

Given falling prices and high debt loads among energy producers in the United States, the markets for stocks and riskier corporate bonds came under stress, especially in early 2016. That generated losses for investors and fears about the overall stability of the financial system.

Each of these forces has connections to the others. It wasn’t one problem, but an intersection of a bunch of them. That made it devilishly hard to diagnose, let alone to fix, even for the people whose job was to do just that.

When Federal Reserve officials meet eight times a year to set interest rate policy, their job, assigned by Congress, is to figure out what is best for the United States economy. Their job isn’t to set a policy that will be best for China or Brazil or Indonesia.

Entering 2015, things were looking pretty good for the United States.

Inflation was below the 2 percent level the Fed aims for, but the traditional economic models on which the central bankers had long relied predicted that it would start to rise thanks to a rapidly falling unemployment rate.

Even when prices for oil and other commodities started falling in the middle of the year, the Fed’s models viewed it as a positive for the overall economy. Sure, some oil drillers and farmers might experience lower incomes, but consumers everywhere would enjoy cheaper gasoline and grocery bills.

Article source: https://www.nytimes.com/2018/09/29/upshot/mini-recession-2016-little-known-big-impact.html?partner=rss&emc=rss

The Hot Property That’s Next on Tech’s Agenda: Real Estate

Its growth has spawned competitors: OfferPad and Knock offer comparable services to Opendoor, and Zillow and Redfin, which are both publicly traded, have entered the house-flipping market as well.

“For a while, we were literally the only ones doing this because it’s complex,” Mr. Wu said. Size is an advantage, he said: More transactions mean more data to help Opendoor price its offers more accurately, as well as more buying power with local suppliers for renovations.

Mr. Wu said he believed that reducing the annoyances and costs of moving would entice more people to do it, which would increase the size of the market.

“There are a finite number of homes, but if people are moving with more frequency, that increases the liquidity of the supply in the system,” he said.

Opendoor’s business model has not been tested by a major dip in the housing market, causing some skepticism about whether it can work over the long term.

“The vast majority of investors who hear about it initially think it’s a bad idea,” said Stephen Kim, an analyst at Evercore ISI, a market research company. But the skepticism often fades as they realize Opendoor makes money by providing a service to home sellers, rather than on price appreciation, Mr. Kim said. Even if the company breaks even on a sale, the transaction fees are a meaningful business.

Jason Childs, Opendoor’s chief financial officer, said the company’s geographic diversity and 90-day average flips helped shield it from a potential housing market crash. In the housing crash a decade ago, the holders of long-duration assets were affected the worst, he said.

Article source: https://www.nytimes.com/2018/09/27/technology/next-techs-agenda-real-estate-opendoor.html?partner=rss&emc=rss

Hotel Workers Fret Over a New Rival: Alexa at the Front Desk

In the 1960s and ’70s, dockworkers were walloped by one of the most revolutionary technical innovations of the 20th century: containers. At a stroke, containers slashed both the time and number of workers needed to load a ship, saving vast amounts of money.

Instead of trying to stop the big boxes, the union covering the longshoremen on the West Coast demanded a share of the spoils: rich retirement packages for workers who were let go, and hefty remuneration for those who stayed. As a result, longshoremen working full time, year round, now make $168,000 to $186,000 a year on average.

But you need a lot of power to get a deal like that. The longshore union could shut down ports at will, imposing huge costs on shippers. For workers lacking that kind of clout, the gains achieved by the longshoremen seem out of reach.

Unite Here is not powerless. Nationwide, only 7.6 percent of workers in the accommodation industry are unionized, according to government statistics. But in San Francisco, for instance, Unite Here represents 89 percent of workers at Class A hotels. That’s partly why housekeepers in San Francisco make $22.64 an hour, the union notes, more than double the national median of $10.09.

Unite Here’s victories so far have been hard won. “It was not an easy ask,” Mr. Taylor said of the language on technology in the Las Vegas deals. “It does infringe on hotels’ right to do what they want.”

The outcome might or might not deliver a greater share of the gains from technology to workers. But front-desk clerks and concierges will have better options than severance when Alexa or computer software takes over some of their tasks. “It was a good resolution,” Mr. Taylor said. “Time will tell if it is good enough.”

Article source: https://www.nytimes.com/2018/09/24/business/economy/hotel-workers-ai-technology-alexa.html?partner=rss&emc=rss