These 4 sectors are set to benefit from President Biden’s American Families Plan, UBS says

Joe Biden Stimulus
  • President Biden is set to unveil the second part of his infrastructure-spending package, dubbed the American Families Plan.
  • UBS Wealth Management says greentech, semiconductors, financials, and industrials will benefit from the new bill.
  • The UBS team also believes Biden’s planned tax increases will only mildly affect earnings per share.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

In a new client note, UBS Global Wealth Management laid out four sectors set to benefit from President Biden’s second infrastructure spending bill, dubbed the American Families Plan.

Mark Haefele, the firm’s chief investment officer, said that unlike many market commentators, he doesn’t believe Biden’s infrastructure spending has been fully priced in.

According to Haefele, President Biden’s American Families Plan – together with the American Jobs Plan – could amount to a $4 trillion investment in US infrastructure, and much of it has yet to be accounted for.

Haefele’s UBS team said they believe four sectors will see gains from the historic infrastructure spend: greentech, semiconductors, industrials, and financials.

(1) Green tech

With “a meaningful portion” of President Biden’s infrastructure spending plan dedicated to decarbonization initiatives, UBS expects Greentech companies to be the biggest beneficiary of the incoming record spend.

Companies that operate in electric vehicles, renewable power, clean energy, energy efficiency, and water and electric grid upgrades should perform well, according to UBS.

The suppliers for Greentech firms are also set to outperform during 2021. UBS said it has been “tactically adding exposure” in Greentech firms and their suppliers over the last few months amid a pullback for high-flying tech names.

(2) Semiconductors

President Biden has allocated $50 billion to subsidize domestic semiconductor manufacturing and research in a move to combat China’s growing dominance in the field.

UBS expects this will help US-based manufacturers expand their footprint in 2021 and beyond, making the sector a top pick for investors.

Intel already announced plans to add $20 billion worth of foundry capacity in March.

(3) Industrials

The obvious pick to benefit from infrastructure spending is industrials, and UBS agrees. The wealth management office said steel and aggregate (cement) companies stand to benefit from Biden’s spending.

However, the UBS team also said it cut exposure to steel companies recently due to outperformance in the sector caused by supply imbalances.

The wealth management group said as supply constraints improve over the next year they expect steel companies to “come under pressure.” US Steel is already up nearly 250% over the past year alone.

(4) Financials

Finally, UBS believes the financial sector will benefit from infrastructure spending due to higher interest rates.

The wealth management office said a move toward higher interest rates as the economy reopens will “more than offset” modest drags from tightening regulations.

The team also said they see President Biden’s combined infrastructure plans boosting GDP by 0.5 percentage points and that earnings per share will grow 12% next year thanks to above-trend GDP growth.

Higher taxes, which are expected to pay for at least part of the infrastructure spending, will also only trim S&P 500 profits by about 4% in 2022, based on UBS’ research.

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‘Bring it up now!’ Biden demands action in the Senate on guns during wide-ranging press conference with the prime minister of Japan

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President Joe Biden, accompanied by Japanese Prime Minister Yoshihide Suga, speaks at a news conference in the Rose Garden of the White House, Friday, April 16, 2021, in Washington.

  • President Biden called on the Senate to address gun control “now” at a Friday press conference.
  • Following another mass shooting Thursday, Biden called the uptick in gun deaths a “national embarrassment.”
  • The president reaffirmed his support for universal background checks and a ban on assault rifles.
  • See more stories on Insider’s business page.

President Joe Biden put public pressure on Majority Leader Chuck Schumer at a Friday press conference, demanding the Senate consider House-passed gun control bills immediately, in response to a recent uptick in mass shootings.

Biden was joined by Japanese Prime Minister Yoshihide Suga for a wide-ranging news conference following the leaders’ in-person summit which was focused on American-Japanese cooperation in countering China

During the event, Biden and Suga fielded questions about the upcoming Tokyo Olympics, the South China Sea, and Iran. But it was a question about Biden’s legislative progress, or lack thereof, on gun control and police reform that sparked the president’s most impassioned response.

“This has to end,” Biden said. “It’s a national embarrassment…every single day there’s a mass shooting in the United States if you count all those who are killed out on the streets of our cities and our rural areas.”

The president reaffirmed his support for universal background checks and bans on assault weapons. Biden also said upon taking office, he immediately asked the attorney general to investigate the possible executive actions available to him relating to gun control.

But Biden bucked the suggestion he wasn’t prioritizing the issue, noting he doesn’t set the Senate agenda and instead urged Congressional leadership to “step up and act.”

He specifically asked Senate leadership to bring up a House-passed gun control bill as soon as possible.

Last month, the House passed HR 8, the Bipartisan Background Checks Act of 2021 in a 227-203 vote. The bill would extend background check requirements on almost all gun transfers, including between private sellers. It would also require that gun sales between private parties be handled by a licensed firearms dealer, who would take control of the weapon while the background check was in progress.

Around the same time, the House also passed HR 1446, the Enhanced Background Checks Act of 2021, which would increase the amount of time to a minimum of 10 business days that an unlicensed person must wait to receive a completed background check prior to transfer.

But Schumer, who is in charge of setting the Senate agenda as majority leader, has been waiting to bring gun control legislation to the floor, in part, because Democrats and Republicans in the chamber are trying to find a bipartisan compromise on the issue, according to PBS correspondent Lisa Desjardins.

The calls for increased gun control come on the heels of yet another mass shooting Thursday at a FedEx in Indianapolis that left eight dead.

Read the original article on Business Insider

These 3 sectors are set to boom on the back of Biden’s massive infrastructure spending plan, Morgan Stanley says

Biden
President Joe Biden has framed his infrastructure plan as a means of strengthening democracy and undermining autocracy.

  • President Biden has proposed around $4 trillion in infrastructure spending in two separate plans.
  • Morgan Stanley laid out three sectors set to benefit from the spending in the “Thoughts on the Market Podcast.”
  • The healthcare, clean energy, and cement/steel sectors were the investment bank’s top picks.
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

Morgan Stanley highlighted three sectors set to benefit from President Biden’s infrastructure plan in the “Thoughts on the Market Podcast” with Michael Zezas on Wednesday.

President Biden unveiled his $2.3 trillion American Jobs Plan in late March and is reportedly readying another spending package that would bring the administration’s total infrastructure spend to roughly $4 trillion.

Morgan Stanley said the cement and steel, clean energy, and healthcare sectors will be the top three beneficiaries of the historic cash infusion.

This isn’t the first time the investment bank has recommended a group of stocks based on the recent rise in infrastructure spending.

In an early April note to clients, Michael Wilson, Morgan Stanley’s Chief Investment Officer, said he believes “investors should consider a mix of traditional cyclicals and new beneficiaries that will gain from the combination of strong economic growth, as well as federal initiatives to bring US infrastructure into the 21st century.”

Clean Energy

The extension of key green energy tax credits coupled with potential new tax credits from Biden’s spending plan are set to buoy the clean energy sector moving forward, according to Morgan Stanley.

The president’s plan also contains over $170 billion for electric vehicle technology, which Morgan Stanley says will help to bolster the sector despite high valuations.

In a note to clients on April 9, Wedbush’s Dan Ives echoed similar sentiments to the investment bank, saying that he believes Biden’s plan will bring about a “green title wave” for electric vehicles.

“The lifting of the 200k EV tax credit ceiling (restored to Tesla and GM) and a likely $10k+ EV tax rebate will be a major catalyst for EV growth in the US,” Ives said.

Cement and Steel

Morgan Stanley also highlighted the obvious beneficiaries of the infrastructure spending, cement and steel companies.

With $1 trillion set to be spent on transportation, water, and affordable housing, analysts at Morgan Stanley believe we are headed for an “infrastructure supercycle.”

The investment bank said over 200 million tons of cement will be used due to the infrastructure spending alone.

However, some market commentators question how much of the spending package has already been priced in.

When asked about which sectors may benefit from infrastructure spending, Burton Hollifield, a professor of finance at Carnegie Mellon University, told Insider that he believes much of the infrastructure spending bill has already been priced into equities.

Stock prices in the sector appear to back up Hollifield’s belief. Shares of US Concrete have already jumped 62% in 2021, and US Steel has followed suit, with shares rising 33% year-to-date.

Healthcare

Finally, Morgan Stanley analysts said they believe the healthcare sector will get a boost from President Biden’s new “human infrastructure” spending.

These “human infrastructure” measures include the expansion of affordable care act subsidies and a possible lowering of the medicare age.

Morgan Stanley says these changes would be a “fundamental positive for larger healthcare providers” as there will be more healthcare business to do overall, and larger healthcare companies would have the “scale to engage profitably.”

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Millionaire New Yorkers are now set to pay the highest taxes in the country

wealthy new yorkers
The wealthiest New Yorkers might see their tax rates increase to the highest in the country.

New York City millionaires will soon be subject to the highest tax rate in the country.

Gov. Andrew Cuomo and state legislative leaders finalized a $212 billion budget proposal for 2022 on Tuesday that’s set to raise an extra $4.3 billion a year by raising income and corporate taxes, The New York Times’ Luis Ferré-Sadurní and Jesse McKinley reported. The proposal calls for two new personal income-tax brackets, set to expire by the end of 2027, per exclusive details given to the Times earlier this week.

Those earning between $5 million and $25 million will be taxed on 10.3% of their income. That increases to 10.9% for those earning more than $25 million. And individuals raking in over $1 million and couples bringing in over $2 million will see tax rates climb from 8.82% to 9.65%.

These tax rates hit especially hard for New York City’s highest earners. The city already has a top income-tax rate of 3.88%, which means they’ll now be shelling out between 13.5% and 14.8% in both state and city taxes. That exceeds the highest top marginal income tax rate in the country: 13.3% for top earners in California.

However, they may not be the highest taxed for long if Hawaii’s legislature passes a bill imposing a 16% tax on residents earning over $200,000.

New York is dealing with economic pain

Cuomo said in January he planned on raising taxes if the White House didn’t help the state recover from its $15 billion deficit, Insider’s Grace Dean reported. It’s the highest deficit in New York’s history, exceeding the previous high of $10 billion, which Cuomo said was “very, very hard” to manage.

In an address, Cuomo attributed New York’s deficit to the state being “assaulted by the federal government” in recent years as well as to the cost of COVID-19, which caused the state’s revenues to fall by $5.1 billion.

As the epicenter of the US’ first wave of COVID-19, New York City was slammed with small-business closures and saw many of its top-earning residents move to take advantage of lower taxes in other states. Urbanism expert Richard Florida told Insider the flight of the wealthy caused a lot of financial pain for superstar cities like New York.

Cuomo called for the federal government to provide New York with emergency pandemic relief. He said that if Washington gave the state only $6 billion in a “worst-case scenario,” he would hike taxes to cover the difference.

“We have a plan in place, a strength that we have not had before and I believe our future is bright, but Washington must act fairly if we are to emerge on the other side of this crisis,” he said.

While Democrats considered raising more than $7 billion in new revenue for the state, The Times reported, such discussions fell to the side when President Joe Biden’s $1.9 trillion stimulus package was approved, which included $12.9 billion in direct aid for New York state. It also included $5.6 billion for New York City, which Insider’s Juliana Kaplan reported might have saved catastrophic cuts to the city budget.

Cuomo has resisted raising taxes for years out of fear it would drive businesses and the wealthy to other states. If all of the wealthiest New Yorkers fled the city, they could take more than $133 billion with them. That’s how much the top 1% of New Yorkers earned in income in 2018, a report from Bloomberg found.

The Times attributed Cuomo’s change of mind to the economic fallout of the pandemic, a growing progressive influence in the legislature, and the governor’s own “waning influence.”

The budget proposal is finalized as Biden reportedly gets even more serious about taxing the wealthy. He’s said that Americans making over $400,000 will see a “small to significant” tax increase and high-earning Americans could see their top income-tax rate increase to 39%.

If Biden’s tax proposal is enacted now that Cuomo’s has been, that means some of the richest New York City dwellers could be paying out more than half of their earnings in taxes.

Read the original article on Business Insider

Millionaire New Yorkers could soon be paying the highest taxes in the country

wealthy new yorkers
The wealthiest New Yorkers might see their tax rates increase to the highest in the country.

New York City millionaires are about to fall under the highest tax rate in the country.

Gov. Andrew Cuomo and state legislative leaders are coming close to agreeing on a 2022 budget proposal that would create an extra $4.3 billion a year by raising income and corporate taxes, The New York Times’ Luis Ferré-Sadurní and Jesse McKinley reported. The proposal calls for two new personal income tax brackets set to expire by the end of 2027, per exclusive details given to the Times.

Those earning between $5 million and $25 million would be taxed on 10.3% of their income. That increases to 10.9% for those earning over $25 million. And individuals raking in over $1 million and couples bringing in over $2 million would see tax rates climb from 8.82% to 9.65%.

These tax rates hit especially hard for New York City’s highest earners. The city already has a top income tax rate of 3.88%. If the budget proposal is approved, they would be shelling out between 13.5% and 14.8% in both state and city taxes, per the Times. That exceeds the country’s current marginal income tax rate high: 13.3% for top earners in California.

New York is dealing with economic pain

Cuomo said in January he planned on raising taxes if the White House didn’t help the state recover from its $15 billion deficit, Insider’s Grace Dean reported. It’s the highest deficit in New York’s history, she wrote. The state’s biggest deficit prior to this was $10 billion, which Cuomo said was “very very hard” to manage.

In an address, Cuomo attributed New York’s deficit to the state being “assaulted by the federal government” over recent years as well as to the cost of COVID-19, which caused the state’s revenues to fall by $5.1 billion.

As the epicenter of the US’ first wave of COVID-19, New York City was slammed with small business closures and saw many of its top-earning residents move to take advantage of taxes in other states. Urbanism expert Richard Florida told Insider the flight of the wealthy caused a lot of financial pain for superstar cities like New York.

Cuomo called for the federal government to provide New York with emergency pandemic relief. He said that if Washington only gave the state $6 billion in a “worst-case scenario,” he would hike taxes to cover the difference.

“We have a plan in place, a strength that we have not had before and I believe our future is bright, but Washington must act fairly if we are to emerge on the other side of this crisis,” he said.

While Democrats considered raising more than $7 billion in new revenue for the state, the Times reported, such discussions fell to the side when President Joe Biden’s $1.9 trillion stimulus package was approved, which included $12.9 billion in direct aid for New York state. It also included $5.6 billion for New York City, which Insider’s Juliana Kaplan reported may have saved catastrophic cuts to the city budget.

Cuomo has resisted raising taxes for years out of fear it would drive businesses and the wealthy to other states. If all of the wealthiest New Yorkers fled the city, they could take more than $133 billion with them. That’s how much the top 1% of New Yorkers earned in income in 2018, a report from Bloomberg found.

The Times attributed Cuomo’s change of mind to the economic fallout of the pandemic, a growing progressive influence in the legislature, and the governor’s own “waning influence.”

The budget proposal is due to be finalized as Biden reportedly gets even more serious about taxing the wealthy. He’s said that Americans making over $400,000 will see a “small to significant” tax increase and high-earning Americans could see their top income-tax rate increase to 39%.

If both Biden and Cuomo’s tax proposals are enacted, that means the richest New York City dwellers could be paying out more than half of their earnings in taxes.

Read the original article on Business Insider

President Biden’s dogs must resign

biden dog thumb
President Biden’s dogs, Major and Champ, relax on the lawn amid accusations of bites and poops.

  • President Biden’s dogs, Major and Champ, have engaged in serious misconduct.
  • They must do the right thing and resign as White House pets.
  • This is an opinion column, the thoughts expressed are those of the author.
  • See more stories on Insider’s business page.

When then-Vice Presidential candidate Biden promised his family in 2008 that they’d purchase a puppy if he and Barack Obama won the presidential election, he surely could not have imagined the level of corruption this canine would bring to the White House.

Indeed, “Champ” – a purebred German Shepherd who came from a breeder in Pennsylvania – has been clouded in scandal ever since he first stepped foot in the nation’s capital more than a decade ago. “We are surprised that Sen. Biden chose to purchase a dog from a commercial kennel since he has been a leader on animal-protection issues,” said the Humane Society in 2008.

Three presidential elections later, Champ is still at the center of various misdeeds, only this time, with a new partner in crime. The Biden’s second dog “Major” is also a German Shepherd, but – likely due to the backlash from the Bidens’ buying a kennel dog in 2008 – was adopted from the Delaware Humane Society in 2018. Upon the adoption, the humane society posted on Facebook that it was a “very lucky day” for Major.

But if you ask any of Champ or Major’s victims, they’re anything but lucky. I am calling on both Champ and Major to look inward and realize that they are no longer in a position to lead. They must resign from their roles as White House pets.

Major pain

On March 9, Major locked his eyes on a secret service member in the White House and, as White House Press Secretary Jen Psaki put it, “reacted in a way that resulted in a minor injury to the individual.”

There’s a reason Psaki used language befitting of an “officer-involved” shooting: to shift blame from the attacker and place it on the victim. Long have authorities used the “passive voice” to describe misconduct, and this is just the latest example of a corrupt need to protect the powerful. Major didn’t “react in a way that resulted in injury,” Jen, he attacked someone. Bad dog.

In response to the incident, Major spent some time away in Delaware, presumably on administrative leave. He is said to have received White House training within the past couple of weeks, and is now being walked with a leash. Despite these preventative measures – implemented to protect the staff and visitors of the White House just trying to go about their day from a dog with a history of violence – Major would once again find himself in a “biting-involved” incident on March 30. This time, the victim required medical attention. Next time? I shudder to think.

Champ, on the other hand, is the possible culprit of a pile of feces left in the hallway outside of the White House’s Diplomatic Reception Room. More disrespectful than pooping inside is the fact that he did so on the White House’s famous red carpet.

Some have tried to blame these actions on the shock of the move to DC or the high number of people coming in and out of the White House, but the time for excuses has passed. Such callous acts are indicative of an apathy towards responsibility and a lack of respect for the position of White House pet.

Suffice it to say, these dogs have a huge platform. Indeed, over 7,500 people attended Major’s “indoguration,” an event so big it landed singer Josh Groban as its musical act. Their popularity and influence cannot be overstated, and it is for this reason that their actions must be highly scrutinized.

They had an opportunity to meet this role with dignity, and instead, have behaved unlike any major or champion I’ve ever heard of. By breaking our trust, they have conceded their inability to lead, and they must resign as White House pets. For the good of the White House staff and the country, they should return to being civilians, perhaps spending more time with family in Delaware.

Read the original article on Business Insider

Biden’s infrastructure plan is a ‘green tidal wave’ that will revive the EV sector after its recent pullback, Wedbush says

president joe biden

President Biden’s infrastructure plan is set to be released on Wednesday afternoon and some analysts argue it will help revive the EV sector after its recent pullback.

Wedbush’s Dan Ives said in a note to clients on Wednesday morning that he expects a “green tidal wave” from the plan to boost EV stocks.

The analyst said around $200 billion or roughly 10% of President Biden’s plan could go towards electric vehicle initiatives “based on chatter out of the Beltway.”

That’s good news for EV stocks that have been battered recently by a rotation away from highly valued growth and tech names into more value-oriented plays.

Tesla stock is down some 28% from its January 26 highs, while EV names like Nikola and Lordstown Motors are down roughly 22% and 42%, respectively, over the past month alone.

In his Wednesday note, analyst Dan Ives said that “the Street” needs to see two specific components of the infrastructure bill pass through the House and get enacted in order to “change the game” for the EV sector in the US after the pullback.

First, Ives said he hopes to see an expansion of tax credits for EVs “to the $10k range or potentially higher in a tiered system.”

Second, the analyst said he expects to see Biden lift the 200,000 vehicles per manufacturer ceiling on EV credits which would restore the incredibly valuable tax credits for veteran manufacturers like Tesla and GM.

Ives also said that an expansion of charging stations around the US over the next decade would help support a “groundswell EV green tidal wave for consumers/trucking.”

The Wedbush analyst highlighted EV battery companies, recyclers, supercharging infrastructure firms, and commercial EV plays that are set to benefit from the infrastructure plan and EV boom as well.

Ives noted a considerable runway of growth for EVs in the US. EV sales represent just 2% of auto sales in the US compared to 4.5% in China and 3% globally.

According to Ives, the EV market represents a $5 trillion total addressable market over the next decade, which means “many EV OEMs/supply chain players are poised to be major winners over the coming years.”

One thing that wasn’t mentioned in the Wedbush note was that the infrastructure bill is set to be funded by tax hikes for corporations, which may hurt earnings.

Some reports say Biden’s upcoming tax plan could contain up to $3.5 trillion in tax hikes for wealthy individuals and corporations.

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Biden says July 4 could become Independence Day from the coronavirus in the US

Joe Biden mask
President Joe Biden.

  • July 4 could mark the start of US “independence from this virus,” President Biden said Thursday.
  • There was a “good chance” of safe, small-scale Independence Day celebrations outside, he said.
  • This depended on Americans doing their part, such as by getting a COVID-19 vaccine, Biden said.
  • See more stories on Insider’s business page.

July 4 could mark the start of US independence from the coronavirus pandemic, President Joe Biden said Thursday during his first national primetime address since his January inauguration.

Biden said that if Americans did their part to curb the spread of the virus, such as by getting vaccinated, there’s “a good chance” they could have small-scale outdoor Independence Day celebrations this year.

“After this long hard year, that will make this Independence Day something truly special, where we not only mark our independence as a nation, but we begin to mark our independence from this virus,” he said.

During Thursday’s address, Biden also said that all adult Americans would be eligible to get a vaccine “no later than May 1.”

“That doesn’t mean everyone’s going to have that shot immediately, but it means you’ll be able to get in line beginning May 1,” he added.

To achieve this, the US planned to administer more than 2 million doses a day, he said.

As of Thursday, just over 64 million Americans – or 19.3% of the population – had received at least one dose of a COVID-19 vaccine, per data from the Centers for Disease Control and Prevention (CDC).

As states ramped up their rollout of the vaccine, some have rescinded their COVID-19 safety protocols.

Texas lifted its statewide mask mandate Wednesday, becoming the largest state to do so yet. Other states including Michigan, Mississippi, Massachusetts, and Louisiana have lifted some of their COVID-19 restrictions, such as mask mandates and capacity limits for venues such as restaurants.

In his speech, Biden urged Americans to keep wearing face masks and “follow the scientists.”

He had previously called Texas and Mississippi’s decisions “a big mistake” and a result of “Neanderthal thinking.” Public-health experts also told Insider that it was too early to lift mask mandates.

Biden made the speech just hours after he signed his $1.9 trillion stimulus package into law, which included $1,400 stimulus payments for most taxpayers, $300 weekly federal jobless aid through early September, and an expansion of the child tax credit.

It also contained $400 billion of measures to curb the spread of COVID-19, including money for vaccination, testing, and research.

The US reported 60,264 new COVID-19 cases and 1,513 deaths on Wednesday, CDC data showed. Its total death toll, at nearly 528,000, remains the highest in the world.

Read the original article on Business Insider

The global ‘infodemic’ will be Biden’s biggest challenge

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Democratic presidential nominee Joe Biden holds his phone as he arrives at Atlanta International Airport on October 27, 2020 in Atlanta, Georgia. Biden is campaigning in Georgia on Tuesday, with scheduled stops in Atlanta and Warm Springs.

  • Misinformation is one of the greatest national threats to American democracy. 
  • Biden has an opportunity to turn the table against misinformation by uniting the private sector and public sector in a way that disincentivizes false information.
  • It is far past time for the White House to make a real commitment to misinformation.
  • Theresa Payton is CEO and founder of Fortalice Solutions and author of “Manipulated: Inside the Cyberwar to Hijack Elections and Distort the Truth.”
  • This is an opinion column. The thoughts expressed are those of the author.
  • Visit the Business section of Insider for more stories.

Whether it’s the COVID-19 vaccine rollout, the outcome of the 2020 elections, or the violence that followed in its wake, misinformation is shaking the foundations of America’s public institutions. 

An entire ecosystem of social media and “news” outlets is building and spreading an alternate reality for Americans. In his inaugural address, President Joe Biden said, “We must reject the culture in which facts themselves are manipulated and even manufactured.”  He correctly recognized that America’s “infodemic” represents the biggest threat not just to the Biden presidency, but to the future of democratic governance in the United States.

72% of Republicans believe some version of a conspiracy theory that the election was “stolen.” 27% of Americans are hesitant to get the COVID-19 vaccine, due in part to the spread of online conspiracy theories that the vaccine is harmful to public health. A poll in the UK found that 8% of people believe that 5G technology spreads the virus. 17% believe in a conspiracy by online trolls known as QAnon that the government is secretly waging a war against pedophile rings in Hollywood. All of these theories are part of an infodemic that has spread largely unchecked on social media platforms. 

It doesn’t have to be this way. President Joe Biden has an opportunity to turn the table against misinformation by uniting the private sector and public sector in a way that disincentivizes false information while protecting every American’s right to free speech, even if it has no basis in reality. 

The social network of misinformation

There’s no place misinformation spreads faster and reaches more people than social media. As private entities, companies like Twitter, Facebook and Instagram have the full power to craft their own policies about misinformation, but to date, they are ad hoc and reactive, instead of strategic and forward-looking. 

Twitter has added “disputed” labels on dubious tweets about election fraud, for example, and Facebook has removed pages for several groups dedicated to election disinformation. Misinformation campaigns spreading slightly altered or completely fictional news reports are cost-effective and pay off: Research shows that a false story about any topic, not just politics, reaches 1,500 people six times faster than legitimate news does. One rough estimate shows that misinformation on public health generated billions of views on Facebook in just one year. While social media platforms have taken steps to curb misinformation, they need to do more. 

President Biden has the opportunity to take a different approach than the previous administration by working with social media platforms to promote healthier and factual online discourse. The Biden Administration should convene a task force of tech CEOs and cybersecurity experts to examine how new policies can flag misinformation and discourage its virality. 

President Biden can demand quarterly transparency reporting on governance processes from Big Tech and social media companies and can work with lawmakers on Capitol Hill to determine once and for all whether these companies are merely platforms that have to be neutral with respect to viewpoints, publishers with editorial standards, or critical infrastructure that are critical to the health of our democracy. 

In recent months, there have been increased calls to hold Big Tech accountable for the content on their platforms — including calls to repeal or review Section 230 of the Communications Decency Act. While the Biden Administration is likely to review this legislation, repealing Section 230 alone would be unlikely to stop the spread of misinformation online. Biden will have to work in partnership with Big Tech to establish actionable policies to slow the spread of misinformation online. 

It’s also true that to curb this infodemic, the United States cannot operate alone. The Biden Administration will need to work with international leaders to create international accords and standards that punish state actors guilty of using misinformation in other countries. Just like NATO’s Article V, a misinformation attack against a person, issue, or country, is an attack on all of us and should be treated as such. International, third-party oversight can help ensure the fine line between allowing freedom of speech while recognizing the dangers of misinformation. 

Misinformation campaigns are often not about elections, picking winners or losers, or even  specific issues. They are designed to make you not believe the truth even when you are presented with. They are designed to discredit all authoritative sources, leaving a vacuum to be filled by even more misinformation.  

As we have seen in 2016, foreign adversaries like Russia play a critical role in boosting and supporting posts on social media. By sowing discord, these autocratic countries want to undermine American power abroad and show that democracy is unstable. 

America is in the midst of a digital arms race with misinformation as its chief weapon and we are losing. Defending global freedoms and democracy is now being fought in the digital domain.  Just as our nation and the world came together to fight back against the COVID-19 pandemic, we need to employ similar efforts to fight against cybercrime, hacking, the spread of misinformation, and online manipulation in the digital space.  It is far past time for the White House to make a real commitment to misinformation – and the Biden administration has an opportunity to do so now, before it’s too late.

Theresa Payton is CEO and founder of Fortalice Solutions and author of “Manipulated: Inside the Cyberwar to Hijack Elections and Distort the Truth.”

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3 ways the US economy is uniquely positioned for a great new era in the 2020s

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America is ready for a new era that won’t be like times past.

Vaccines are rolling out and picking up speed. There’s finally a light at the end of America’s long coronavirus tunnel as massive advances in public health provide reason to be optimistic about 2021.

But the world that reopens won’t be the same one that shut down nearly a year ago, and the good news could go beyond a return to “normalcy:” the American economy of the 2020s could be the best in decades, with real optimism about enough jobs being created to put 10 million-plus Americans back to work. 

The pandemic has already transformed the personal and professional worlds in ways that will have long-lasting repercussions.

First, the Biden administration wants to “go big” on a $1.9 trillion stimulus that could supercharge the economy when the world comes out of lockdown (without overheating it), following more than $3 trillion of stimulus spending in 2020. Second, regulatory actions announced at the end of the Trump era have the potential to reshape the tech sector that dominated the first two decades of the 21st century and still dominates the stock market.

And finally, the world of work was changed to a largely remote one, with ripple effects for both worker productivity and across the housing market. With office workers doing their jobs from home, the era of the “superstar city,” where New York and San Francisco hoovered up the best jobs and talent, may have ended in 2020. 

President Joe Biden promised in mid-February that big stimulus spending would bring the economy “roaring back” but all of these changes may add up to more than just a new “roaring twenties,” but a whole new economic era.

Because of prior stimulus, American consumers are sitting on approximately $1.6 trillion of pent-up spending after 11 months of solitary leisure activities, according to Commerce Dept. figures released on Friday.

In other words, the boom is coming. And based on the three drivers outlined below, the ensuing recovery could usher in a wholly unique era of American economic prosperity.

(1) Wall Street sees stimulus sparking a boom

As momentum gathered for Democratic passage of Biden’s stimulus in February, Wall Street banks began to upgrade their projections for economic growth, factoring in expectations of a successful vaccine rollout.

A team of JPMorgan strategists led by John Normand wrote on February 12 that the economic expansion over the next year “will be much stronger than average” on account of pent-up demand, augmented incomes through stimulus, and support from the Federal Reserve including quantitative easing. US strategists at the bank believe the consumer’s recovery will be the dominant theme for 2021 with “blowout expectations for the rest of the year.”

Baby Boomer
Experts are predicting a return to “normalcy” and a surge in economic growth by the end of 2021.

Bank of America strategists led by Candace Browning Platt wrote that the service sector is “like a coiled spring waiting to be let loose,” with a reopened economy not just meeting demand repressed by the pandemic but also boosting employment since some services sectors account for an outsized share of jobs. 

BofA’s Michelle Meyer agreed, writing that it was time to “fasten your seatbelts” as evidence pours in to support the view of strong economic growth in 2021 – in fact, “the strongest in nearly four decades.” Rather than a coiled spring, she wrote of a “rubber-band” cycle, with a big decline leading to just as fast a snapback. 

The recovery should avoid the sluggishness of the post-2008 decade, according to Meyer, because of healthy household savings and aggressive stimulus, two interrelated factors. Finally, BofA’s Ethan Harris wrote that while the 2010-2019 recovery was the slowest in history, the 2021 recovery may be among the fastest.

The Commerce Dept. data from January show consumer finances are strong, as the $900 billion stimulus passed in December boosted spending by 2.4% and personal household income by 10% – the second highest on record

(2) A tech breakup could create (a lot) more jobs

The FAANG (Facebook, Apple, Amazon, Netflix, Google) stocks drove 40% of the stock market rebound in July 2020, per BofA Research, but what if they get broken up in the 2020s?

As the Trump administration drew to a close in 2020, the Dept. of Justice and Federal Trade Commission launched respective actions against Google and Facebook. The case against Facebook, in particular, seeks a true break-up including the forced separation of Instagram and WhatsApp. These cases wouldn’t reach the trial stage until well into the new decade, but they have the potential to transform the economy.

Scott Galloway, professor of marketing at NYU and well-known tech industry pundit, told Insider that Facebook, WhatsApp, and Instagram could be worth more if they were forced to break up into three separate companies – and this could translate into more jobs for workers, more opportunities for entrepreneurs, and more value for investors. 

As independent companies, Instagram and WhatsApp could engage in aggressive hiring that they previously couldn’t do under Facebook, he said. What’s more, with Facebook and other monopolies weakened, investors would be more willing to allocate more funds to more companies that challenge these big tech players.

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A tech breakup could be coming this decade.

“Consider that two years after the federal government broke up Rockefeller’s Standard Oil into 34 separate firms, their combined value had doubled,” Galloway added. “The companies spun out of the breakup of AT&T in 1983 outperformed the S&P 500 for the next decade. We’ll see the same thing in big tech.”

A 2018 report by anti-monopoly think tank Open Markets Institute, called “America’s Concentration Crisis,” revealed just how many industries have come to be dominated by certain power players in recent years. Three companies hold 85% of social networking site market share – Facebook comprises 70% of that share alone. It’s a similar story for the search engine industry, where the two largest firms own 97% of the market share, with Alphabet leading the way at 91%.

Matt Stoller, director of American Economic Liberties Project and author of “Goliath,” a 100-year history of antitrust policy, also said that a tech break-up would benefit the economy.

“Facebook is suppressing the growth of new and vital sectors of the economy by refusing to allow anyone else to create innovations within the social networking space,” he told Insider. “It’s similar to IBM, which blocked the creation of a software industry until the antitrust case of the late 1960s forced the company to unbundle its hardware from its software.”

(3) The work-from-home revolution could bolster new cities

Around the 1990s, the “superstar effect” became a feature of the American economy. The concept explains the vast difference in earnings between a star and a superstar in the same field. Think: Michael Jordan, Bill Gates, and New York City.

But there’s another word for the dynamic when a superstar gobbles up most of the gains: monopoly. Stoller has argued for years that a shift in antitrust regulation since the 1970s has allowed for the rise of more monopolies across the economy, resulting in less competition and greater inequality. Starting in the 1970s, Stoller wrote for Vice in 2019, regional inequality widened as a result of airlines cutting routes to the rural, small, and medium-sized cities they no longer needed to serve in a more concentrated economy.

new york city
New York City has been a “superstar city” in recent decades, gobbling up a big share of the job market.

New York City, the country’s media and finance hub, had 10.1 million employees in its metropolitan area in November 2019, and Los Angeles, center of the entertainment industry, had 6.2 million employees. San Francisco, the heart of tech, has 2.5 million employees, although that doesn’t account for the millions more in the Bay Area’s other cities: Oakland and San Jose. These three superstar cities house more jobs than some entire states have alone: Consider Alabama’s 2 million employees in the same time period.

Such job concentration leads to a higher cost of living. The median home value in the US is $266,104, but that jumps to $512,941 in the NYC metro area and $1.3 million in San Francisco.

But when it comes to cities, the pandemic may have snapped that thread, freeing up remote work for white-collar employees on a massive scale. So what happens when the workers that were locked for decades into superstar cities – especially San Francisco and New York – are free to fan out around the country? The answer could well be a new era of more broadly shared prosperity and a correction to decades of increasing regional inequality.

The labor and real-estate markets both still have underlying inequities. Service workers still have to physically report to their jobs while remote workers don’t, and some of those who have fled expensive addresses have endured salary cuts. Meanwhile, the housing market got so expensive in 2020 that it’s discouraged many from the dream of homeownership for good.

Richard Florida, urban studies theorist and economics professor at the University of Toronto, told Insider that remote working will accelerate the movement of families out of superstar cities into suburbs and the 1% who are seeking lower taxes. Anywhere from 14 million to 23 million remote workers plan to move, mostly from big cities, an Upwork study found in October

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Californians have been trading in San Francisco for Austin, Texas.

“I have long said that we will see the rise of the rest, given the incredible expensiveness and affordability of existing superstar cities,” he said. “But it’s not going to be the rise of everywhere. It’s going to be the rise of a dozen or two dozen places.” These places will consequently attract new talent, changing economic development. 

Florida doesn’t see bigger cities going away, though, predicting a resurgence as we inch closer to widespread vaccination, even if remote work is likely here to stay. He did predict that post-pandemic cities will be reshaped and revived by a newfound focus on interpersonal interaction that facilitates creativity and spontaneity.

“Even as offices decline, the community or the neighborhood or the city itself will take on more of the functions of an office,” he said. “People will gravitate to places where they can meet and interact with others outside of the home and outside of the office.”

Insider’s Josh Barro has already argued that 2021 should be great for the economy in general. Indeed, markets hit record highs at the turn of the year, seemingly pricing in a vaccine-led recovery. Just a few months later, it’s beginning to look like the biggest boomtime for the US economy in a generation. Some experts have even floated the idea of a new “Roaring ’20s,” with animal spirits unleashed after roughly 18 months of isolation, as pent-up capitalist energy explodes when lockdown finally lifts.

Instead of flappers and a jazz revolution, we’ll have digital nomads and zoom concerts, but one thing is certain: increased competition among cities and technology companies, if done right, has the potential to improve life for all Americans over the next decade. 

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