Where Harris’s running mate stands on the issues
It’s been nearly 24 hours since Kamala Harris announced Gov. Tim Walz of Minnesota as her running mate, catapulting him into the national spotlight.
Unlike other candidates for the position, including Gov. Josh Shapiro of Pennsylvania and Senator Mark Kelly of Arizona, the Midwestern politician hasn’t been closely scrutinized — until now. Here’s where he stands on some key business issues.
Taxes: Under Walz, Minnesota has adopted a “moderately progressive tax system,” according to the Institute on Taxation and Economic Policy.
As governor, he approved lowering taxes for middle- and lower-income Minnesotans, including via rebates and a child tax credit. Those were funded by rises elsewhere, including a 1 percent surtax on capital gains, dividends and other investment income over $1 million a year, and higher taxes on multinationals’ overseas income.
That suggests Walz would favor Democratic proposals to increase taxes on the wealthy to close loopholes in the estate tax. (What Harris supports is unclear.)
Labor: Walz garnered endorsements from prominent union officials, including Shawn Fain of the United Automobile Workers and Sara Nelson of the Association of Flight Attendants-CWA. Supporters pointed to legislation he signed into law last year that included:
State-funded paid family and medical leave, which allows workers to take off up to 12 weeks a year to care for a newborn or a sick relative, up to 12 weeks to recover from their own illness, or a cap of 20 weeks for both
A ban on most noncompetes
A prohibition on companies requiring workers to attend anti-union briefings
Additional protections for workers in warehouses and nursing homes
One wrinkle: Walz vetoed a bill that would have set minimum wages for Uber and Lyft drivers, after Uber said it would drastically scale back in the state.
Energy: Walz has set a goal for Minnesota to rely entirely on renewable electricity by 2040, having signed legislation prioritizing the creation of greener plants in areas that previously featured fossil-fuel ones. He has also said that he wanted electric vehicles to account for 20 percent of cars on Minnesota roads by 2030, and has set stricter limits on vehicle emissions.
But Walz’s record on energy is more nuanced than that suggests: As a congressman, he supported the Keystone XL oil pipeline.
Other notable issues: Walz backed legalizing marijuana; state-funded meals to schoolchildren, regardless of income; strict regulation of crypto (differing from Shapiro’s approach to the industry); providing a pathway to citizenship for the undocumented immigrants known as Dreamers; and guaranteeing access to abortions.
HERE’S WHAT’S HAPPENING
The Biden administration reportedly plans to escalate its trade war with China. Officials plan to propose limits on the sale of Chinese software for internet-connected and autonomous driving as soon as this month, Bloomberg reports. The potential measure is meant to prevent U.S. drivers’ data from being sent to China and to block Chinese suppliers from gaining a foothold in America.
Novo Nordisk disappoints investors. The Danish drug maker’s stock fell as much as 7 percent on Wednesday after it lowered its profit outlook for the rest of the year. Sales of Wegovy, its blockbuster obesity drug, grew an impressive 55 percent last quarter, but analysts have worried that it may lose market share amid growing competition from products from Eli Lilly and Roche.
Apple Store workers clinch a groundbreaking labor deal. A union representing about 85 workers at a store in Towson, Md., agreed to a new contract with the iPhone maker. The agreement includes a roughly 10 percent raise over the next three years and severance pay; benefits are in line with those in nonunion stores. It’s a win for organized labor, which has struggled to unionize other Apple Stores.
How big-money donors feel about Walz
For weeks, big-money Democratic backers have speculated about whom Vice President Kamala Harris would pick as her running mate, in large part because it could be seen as a sign of what it might say about her political leanings.
They’re now digesting the choice — Gov. Tim Walz of Minnesota — which raised some eyebrows given his generally progressive stances.
Some donors were disappointed, but not distraught. Many whom DealBook spoke with preferred Gov. Josh Shapiro of Pennsylvania, citing both his more moderate politics and a belief that he could deliver a key battleground state. (Polling done by the Harris campaign reportedly cast doubt on the latter.) DealBook has heard that some backers were upset because they speculated that Shapiro, who is Jewish, was overlooked because of his stances on the war in Gaza.
Her choice of Walz bolstered concern that she was tilting to the left. But many donors are now focused on Walz’s potential benefits, including helping Democrats win over Midwestern voters. Some acknowledged that other factors, like personal chemistry, may have been motivations for picking Walz. And some hope that selecting Walz could appease progressives while allowing her to tack to the center.
What donors are saying publicly:
“As Gov. of Minnesota, Walz fostered a pro-business climate, attracting substantial investment and positioning the state as a top contender for business development,” Reid Hoffman, the billionaire LinkedIn co-founder, posted on X. “I’m confident that as VP, he’ll continue to protect America’s innovation power and fuel economic growth.”
“People are tired of the ideologues and hate from both parties,” Mark Cuban wrote on X. “They want to vote for normal people they can relate to.”
There’s a legal wrinkle. Campaign finance rules limit the ability of bankers and investors to donate to an elected official from a state with which they do business.
There are workarounds, such as giving to the Democratic National Committee instead of to the Harris-Walz campaign directly. Still, some donors plan to sit out the campaign entirely rather than risk violating the rules, DealBook has heard.
This most likely won’t matter much, Kenneth Gross, a lawyer specializing in campaign finance at Akin Gump, told DealBook: Given early speculation that Harris would choose a sitting governor, many donors probably gave money ahead of Walz’s selection.
Besides, the Harris campaign said overnight that it had raised $20 million from grass-roots supporters since the Walz announcement.
‘Now it is war’
The billion-dollar question hanging over Elon Musk’s digital media empire on Wednesday is whether his latest attack on advertisers will pay off, or create a deeper rift that could further jeopardize its shaky finances.
Musk’s X filed an antitrust lawsuit against a coalition of major advertisers, accusing it of arranging a boycott against the platform that cost the social media company “billions of dollars in advertising revenue.”
Named in the suit is the World Federation of Advertisers, an industry group, and prominent brands, including Unilever and Mars.
Musk has fumed about advertisers for some time. At last year’s DealBook Summit, he used an expletive multiple times to lash out at brands, particularly Disney, for halting advertising on X. Earlier this summer, he appeared to reverse course, attending the Cannes Lions advertising festival in southern France to try to woo back ad executives.
That effort to play nice now appears over. “We tried peace for 2 years, now it is war,” Musk wrote on X on Tuesday. He also urged other companies to sue advertisers who boycott media companies. The online video platform Rumble on Tuesday filed a similar suit, naming the World Federation of Advertisers, as well as the advertising giant WPP and its GroupM subsidiary.
That said, the ad industry itself is under pressure: Shares in WPP are down in London today after the company warned of lower revenues.
An ad-dependent business suing advertisers carries obvious risks, given the strained state of X’s finances. Musk’s goal of turning X into a forum for unfettered free speech has scared off some advertisers.
It has also drawn scrutiny from regulators around the world over a rise in hate speech and disinformation on the platform.
That latter tension is playing out in Britain, where government officials have reportedly grown frustrated that X and Musk are not doing enough to remove inflammatory posts that are believed to have incited riots around the country over the past week.
The consumer looms large as markets bounce back
Global stocks are rebounding for a second straight day. (Donald Trump has largely stayed quiet about that.)
But the bounce hasn’t recouped recent market losses, and it hasn’t alleviated concerns about an economic downturn and reduced consumer spending power.
Here’s the latest:
S&P 500 futures were up 1.1 percent on Wednesday, after eking out a similar gain on Tuesday. All sectors in the S&P 500 finished in the green, with real estate and financial stocks leading the way.
Japan equities, an area of significant trading volatility in recent days, closed higher. The Nikkei 225 rose 1.2 percent, helped by reassuring remarks from a Bank of Japan official that the central bank would not raise interest rates in times of market instability.
Bitcoin and Brent crude, the global benchmark for oil, were also up.
As hard-landing fears swirl, the consumer is in focus. Consumer spending remains strong. But high interest rates and elevated (but slowing) inflation are squeezing wallets.
Aggregate credit card debt in the United States just hit a record of $1.14 trillion, according to the New York Fed. And data shows that people are saving less.
Some companies have noted a pullback. McDonald’s, which last week reported a rare decline in global same-store sales and has been promoting a value-meal menu, said that some lower-income customers were “dropping out of the market, eating at home and finding other ways to economize.”
It isn’t just lower-income consumers who are being cautious. Williams-Sonoma, a higher-end housewares retailer, has noted that some customers are buying fewer big-ticket items. And Amazon said some shoppers were shifting to lower-cost items. (Separately, Walmart said that it had gained higher-income customers.)
The good news: Few companies fear a recession. Corporate leaders mentioned “recession” or “downturn” 766 times on analyst calls last quarter, and about 2,553 times in the third quarter of 2022, according to AlphaSense, a the data provider. This quarter: just 282 mentions.
And on Tuesday, David Solomon, the C.E.O. of Goldman Sachs, said, “We probably won’t see a recession.”
What to watch: Next week will bring retail sales data, earnings reports from Walmart and Home Depot, and the Consumer Price Index, all of which should offer new insight into the state of the U.S. consumer.
THE SPEED READ
Deals
KKR agreed to buy a majority stake in FGS Global, the communications consulting firm, from WPP at a $1.7 billion valuation. (Axios)
The mining giant Glencore abandoned a plan to spin off its coal business, and may instead add to the unit. (Reuters)
Elections, politics and policy
Senator Joe Manchin, independent of West Virginia, was instrumental in shaping the Inflation Reduction Act. That may have cost him his seat. (Politico)
“The Google decision is the right ruling — at the wrong time” (WaPo opinion essay)
Best of the rest
Disney reported a profit in its streaming services for the second quarter, but showed new weakness in its theme-parks business. (NYT)
A federal judge declined to block a lawsuit against Harvard accusing the university of not doing enough to protect Jewish students against antisemitism. (WSJ)
The business empire of MrBeast, the YouTube superstar, is under pressure. (Business Insider)
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