The NewCo Daily: Today’s Top Stories
If there is one lesson of this long news-week of business reaction to the Trump immigration ban, it’s that protest can actually work — something Americans once knew but have seemed to forget. Consider:
- Yesterday, Uber CEO Travis Kalanick announced that he was quitting the president’s business advisory board in the face of an employee rebellion and a public #deleteuber boycott movement that has cost it a reported 200,000 users (The New York Times). Also, of course, tons of Uber drivers are immigrants. Trump couldn’t have found a more perfect way to infuriate every stakeholder in the Uber ecosystem.
- Nordstrom announced that it was dropping Ivanka Trump’s merchandise because of poor sales (Bloomberg). Of course, we can’t know for sure what part the #grabyourwallet boycott that has targetted Trump-related businesses played to drive down those numbers. Maybe Ivanka’s clothing and shoes were just overpriced or underappealing?
- Trump cancelled a planned trip to Harley-Davidson’s factory in Wisconsin after an employee tipped off local protest organizers (The Washington Post). The White House said the trip had always been a “maybe.” But the Post found that preparations on the ground for the visit were far advanced.
You can find other examples. The pattern here is important: The most effective collective actions are those that combine outside pressure with internal efforts and then get supercharged by social networks and digital tools.
The caveat here comes from sociologist Zeynep Tufekci, who has studied the Arab Spring and other recent “Twitter uprisings” and keeps reminding us that these movements draw impressive crowds but remain fragile and tentative unless they organize and put down community roots.
In their perennial face-offs with protesters, the forces of government, business, and other large institutions have usually held the upper hand. There’s one new twist in the Trump era, however: Since the Trump administration revels in chaos and disdains planning, discipline, and long-term thinking, this may be the first administration that’s even less organized than its opponents in the streets.
Long-Awaited IPO Puts Snap’s Numbers On The Table
IPO filings, known as S1s, are rare enough in tech these days that when one emerges, it’s a major event — and an invitation to media overkill. Still, the filing by Snap — parent company of Snapchat — offered some real insights into the Los Angeles-based company’s business: more than $400 million in advertising revenue, more than 158 million daily average users, 2.5 billion messages a day, fewer than 2000 employees, $514 million in losses. Observers expect the IPO will value the company at between $20 and $25 billion.
Snap describes itself not as a social media network but as a “camera company,” which makes for ambitious market positioning. But most investors, writes Mathew Ingram in Fortune, will be trying to figure out whether the market will view Snap as the next Facebook (good!) or the next Twitter (not so good). Bloomberg also likens Snap to GoPro, another recent IPO that has fared poorly.
Snap faces direct competition from Facebook-owned Instagram, but its biggest challenge is likely to be generational: Will its youthful users lose their devotion to Snapchat as they grow up and get lives? Or will they carry Snapchat-style communication with them into adulthood?
Wall Street’s the Winner in Trump’s Finance-Rule Decrees
The government could have done a lot more after the 2008 financial crisis to make sure nothing like it ever happened again. But the closest we got to serious reform of our broken banking and brokerage system was the imperfect law known as Dodd-Frank, which took a variety of modest steps to rein in the worst abuses that led to the collapse a decade ago.
The financial industry always hated Dodd-Frank, though, and now our populist, stick-it-to-Wall Street new president is looking to gut its rules with an executive order ordering a review of them — even before Congress can get around to formally burying them (The Wall Street Journal).
People on the right thought Dodd-Frank was just growth-choking red tape, and people on the left were disappointed that the rules didn’t totally rein in risky financial engineering. But the law did make the financial system safer than it was before the mortgage meltdown (Vox). Tuck this fact in the back of your brain-file now — so that one or five or ten years from now, when the next panic hits, you’ll understand why.
Trump is also taking aim at an Obama initiative that required retirement-account salespeople to put their clients’ financial interests first (The Wall Street Journal). This “Fiduciary Rule,” which was supposed to go into effect in April, meant brokers actually had to disclose hidden costs, tell you when they were getting kickbacks from funds they peddled, and steer you toward good investment choices. Trump has put it on hold. Thank goodness such onerous obligations won’t be required after all!
U.S. Cities Don’t Get Their Share of Power or Money
Our cities are engines of economic growth, entrepreneurial innovation, and social tolerance. That is making them ground zero for opposition to many of the new policies emanating from Trump’s Washington. There’s one little problem: In legal terms, cities are the bottom of the political-power pecking order in the U.S. (David Graham in The Atlantic). Just as the feds can generally override states, states can overrule cities — and right now, the Republican Party controls two out of three statehouses and governorships.
The U.S. Constitution did lay out some boundaries protecting states from central-government aggrandizement, but, as Graham points out, “The constitution didn’t mention cities,” and for more than a century, the courts have viewed them as “creatures of the state.” When this arrangement came together in the 19th century, wealth and economic power lay with the rural farms, and poverty clustered in cities, but today, that has flipped.
Cities now pay more taxes and generate more economic activity per capita than rural areas, but are apportioned less political power — and receive less largesse from the feds. Disparities between taxation and representation are where our national experiment began. Sooner or later, we have to fix this.