All eyes on the economy
Kamala Harris on Wednesday is expected to deliver a detailed economic address in which she will seek to define herself as a defender of the middle class, entrepreneurs and consumers who will also take on bad actors in the business world.
The stakes of the speech are high. Harris is locked in a polling dead heat with Donald Trump, who spoke about his own vision of a “new American industrialism” on Tuesday. According to polls, many undecided voters say they want to hear more from the vice president about her plans.
Harris will seek to draw a contrast with Trump on the economy. She is expected to argue that she is not bound by ideology, an effort to shake off concerns that she’s too progressive, especially as business leaders worry about her stance on antitrust. Her speech is expected to point to her track record as California’s attorney general and as vice president in convening public-private partnerships to protect consumers and support small businesses.
In recent weeks, she has promised to help home buyers, raise taxes on big corporations and high-income Americans and offer tax breaks for small businesses. By contrast, she is expected to say on Wednesday, Trump is focused on improving the economy for the top 1 percent of society.
She’s still behind when it comes to voter perceptions of the economy. While she may have gotten a political boost from the Fed lowering borrowing costs last week, momentum that’s been captured in recent polls, over all Americans appear to still favor Trump on the matter. Consumers are still concerned about the job market and their finances.
Speaking in Georgia on Tuesday, Trump — who labeled Harris a “communist” — pitched an economic plan that was full of sticks and carrots. Among its components were issues both familiar, such as vowing to slap huge tariffs on importers that run afoul of the Republican Party’s free-trade wing, and new, such as giving foreign companies access to federal lands to move their production (and create jobs) on American soil.
That said, neither candidate has given extensive detail on their economic agendas. That could change, with Harris expected to release a roughly 80-page document soon.
In other political news: Senator Joe Manchin, the independent of West Virginia who isn’t seeking re-election, said he wouldn’t endorse Harris after she supported eliminating the Senate’s filibuster to aid abortion-rights legislation.
HERE’S WHAT’S HAPPENING
Caroline Ellison is sentenced to two years in prison over FTX fraud. Ellison, a former top adviser to Sam Bankman-Fried and his on-and-off girlfriend, was a star witness for the prosecution, but the judge said he couldn’t give her a more lenient sentence. Separately, Bankman-Fried is living in the same Brooklyn jail unit as Sean Combs, the music mogul charged with racketeering conspiracy and sex trafficking.
OpenAI reportedly pitched the Biden administration on giant data centers. The parent company of ChatGPT submitted a document promoting the economic and national security benefits of building five-gigawatt centers across the U.S., according to Bloomberg. (Five gigawatts is roughly the equivalent of five nuclear reactors.) It’s part of OpenAI’s push to upgrade A.I. infrastructure around the world, but building such huge data centers would be a challenge.
The F.B.I. is said to be investigating a Chinese-backed venture capital firm. The agency is examining whether Hone Capital, which has invested in 360 American start-ups, obtained trade secrets that could benefit its Beijing-based parent company or the Chinese authorities, according to The Financial Times.
A split in Silicon Valley’s approach to politics
Silicon Valley’s role in the election has been in focus, with attention on how Elon Musk and others on the right have thrown their weight behind Donald Trump.
But the campaign is also shining a light on how two other tech billionaires — Laurene Powell Jobs and Mark Zuckerberg — are taking very different approaches to politics, The Times’s Theodore Schleifer writes for DealBook.
Powell Jobs is one of Kamala Harris’s closest friends and a key player in her White House run. Powell Jobs, the widow of the Apple co-founder Steve Jobs, is a billionaire investor and philanthropist, and the pair have a two-decade-long relationship: Powell Jobs donated $500 to Harris’s first campaign to be San Francisco district attorney in 2003, and has given millions to an organization backing her White House run. They moved in the same elite Silicon Valley circles, and Powell Jobs has helped raise Harris’s profile.
Powell Jobs played a role in pushing President Biden not to run again. One of her top advisers circulated research to other donors after Biden’s disastrous debate that showed the president’s re-election chances were dire.
Powell Jobs and Harris were in close contact during that period as the vice president planned her moves. If Harris wins, some expect Powell Jobs to have a role, either in the administration or behind the scenes.
Meanwhile, Zuckerberg wants nothing to do with the election. The Meta C.E.O. used to lean into liberal politics. But Zuckerberg now says he regrets much of that work, and he and the company are retreating after years of getting hammered by lawmakers on both sides of the aisle. The rethink extends to some of his Bill Gates-inspired philanthropy, with Zuckerberg seeing his openly political aims as ineffective.
Political engagement could only draw more scrutiny to his companies. Zuckerberg views both parties as anti-tech after years of blowback in Washington.
And while he isn’t close to Harris, he is trying to repair his relationship with Trump. He held two one-on-one calls with the former president this summer.
To be fair, Powell Jobs and Zuckerberg have different incentives and pressures. Powell Jobs is a private person who works for herself and can support whomever she wants — including her friends. Zuckerberg runs a trillion-dollar tech giant that faces political pressure from around the globe, and supporting personal projects could easily make that harder.
In related news: Chris Hughes, a Facebook co-founder and Democratic donor, explains in a Times guest essay what’s behind Silicon Valley’s rightward shift toward Trump and his policies.
How regulators might rewrite Visa’s business model
The Justice Department’s lawsuit against Visa, the latest in an expansive effort to reshape antitrust enforcement in the U.S., lays out a broad case against the financial giant. It accuses the payments giant of maintaining a monopoly in large part by imposing, or threatening to impose, higher fees on merchants that also use other payment networks to process debit card transactions.
Now that the Justice Department has laid out its case, DealBook’s Lauren Hirsch has a few more questions about it.
What will the impact be on Visa’s business? Visa called the lawsuit “meritless” and said it would defend itself “vigorously.” For its part, the Justice Department has not yet decided what it will demand from Visa to resolve the lawsuit. One likely course of action, antitrust experts told DealBook, would be to block Visa from entering those kinds of contracts, which could reshape how it interacts with merchants and card issuers.
It’s not easy to quantify the effect of changing those relationships — that rests on how much Visa does, or does not, overcharge. But the Justice Department noted how lucrative these deals are for Visa, given the 83 percent profit margins in its U.S. debit card business.
What will the total damages to Visa be? If Visa processes government credit cards, the government could seek financial damages from that. There’s also the likely rush of plaintiffs’ cases, which have the ability to triple their damages under federal antitrust law.
Visa would probably look to settle those suits, but that legal slog could drag on for years: In June, a federal district court judge rejected a $30 billion antitrust settlement tied to litigation dating to 2005.
What could this mean for Capital One’s pending takeover of Discover Financial Services? That $35.3 billion deal has been under regulatory review since it was announced in February. Capital One and Discover have said that the deal could create a stronger competitor to Visa and Mastercard, and the Justice Department’s lawsuit could bolster that argument.
While a similar argument didn’t sway regulators in JetBlue’s attempted acquisition of Spirit, financial industry advocates quickly latched onto the line of reasoning. The Visa lawsuit “seems a strange use of limited resources when multiple regulators, including the D.O.J., are simultaneously scrutinizing the merger of Capital One and Discover,” Jessica Melugin of the Competitive Enterprise Institute, a libertarian think tank, said of Tuesday’s move.
Inside the star-studded Clinton Global Initiative
Midtown Manhattan over the past two days has been chaos to navigate, thanks to conferences and meetings in New York that have drawn prominent names in politics and business.
Among them — including the United Nations General Assembly and Climate Week NYC — the biggest may have been the Clinton Global Initiative, hosted by Bill, Hillary and Chelsea Clinton.
Consider the huge trucks filled with sand that lined the Midtown Hilton, where the Clinton conference took place. That’s because President Biden made a surprise appearance Monday afternoon, when he received the Clinton Global Citizen Award for what Bill Clinton said was his “uncommon decency, goodness, and grace.”
The conference was a who’s who of business and philanthropy, including Emma Walmsley, the C.E.O. of the pharmaceutical giant GSK; the billionaire investor and philanthropist Laurene Powell Jobs; and the venture capitalist Chris Sacca.
One of the event’s most memorable moments was delivered by José Andrés, the chef and founder of the nonprofit World Central Kitchen, who spoke about the war in Gaza and how seven of his aid workers were killed in Israeli airstrikes while bringing food to Palestinians. “I was supposed to be there,” he said. “I was tired, and that’s why I was not there.”
But Andrés added, “In the worst moments of humanity, the best of humanity shows up.” He described how when he was in Israel, some Israelis came up to him and said: “Jose, I have another passport, I would love to go to Gaza to show solidarity with the people of Palestine.” He also recalled a Palestinian woman telling him, “If I could go to Israel, I would go there to tell them that I don’t have anything against them.”
“These are the voices of humanity,” Andrés said.
THE SPEED READ
Deals
Wiz, which broke off talks to sell itself to Google this summer, is reportedly in discussions to sell some of its existing shares at a valuation of up to $20 billion. (Bloomberg)
Andrea Orcel, the C.E.O. of UniCredit, said on Wednesday that the Italian lender’s efforts to acquire a 21 percent in Commerzbank shouldn’t be viewed as a takeover bid, and that it wasn’t seeking board seats at the German bank. (ANSA)
Elections, politics and policy
Senator Kyrsten Sinema, independent of Arizona, wants to work in the private sector when her term ends: “That’s where the money comes from,” she said. (Business Insider)
“Hollywood is coming out in force for California’s A.I. safety bill” (The Verge)
Best of the rest
“Argentina Scrapped Its Rent Controls. Now the Market Is Thriving.” (WSJ)
Brett Favre, the Hall of Fame quarterback, revealed in a congressional hearing that he had been diagnosed with Parkinson’s disease. (The Athletic)
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