India’s Leaders Must Decide Between Growth and Protectionism

After negotiating a trade pact with Mexico and Canada, President Donald Trump has turned his attention toward trade policy with India. In characteristic Trump fashion, he mixed insults, praise and bravado in his opening salvo.

“India, which is the tariff king—they called us, and they say, ‘We want to start negotiations immediately.’ … They said, ‘No, we want to keep your President happy.’ Isn’t that nice? Isn’t that nice? It’s true. They have to keep us happy because they understand that we’re wise to what’s been happening,” Trump said.

Larry Kudlow, Trump’s top economic advisor, confirmed with reporters Thursday at the White House that trade discussions have started with India, a “very valuable ally.” Lower-level U.S. officials and India’s trade ministry  have been haggling for weeks over tariffs on a range of products. India, which did not receive a waiver from Trump’s steel and aluminium tariffs, has deferred retaliatory tariffs until Nov. 2.

Amid that backdrop, India’s prime minister Narendra Modi faces a critical test Monday, when the Reserve Bank of India plans to begin enforcing a data localization mandate. The regulation scheme, strongly opposed by many global financial institutions as a non-tariff barrier to trade, will require financial firms providing services in India to house their data within the country’s borders.

Ultimately, Indian leaders must decide if they want to promote open trade and economic growth or pursue this protectionist path. Global payment firms such as MasterCard, Visa and PayPal have urged the RBI to delay the diktat to allow more time to comply, but recent news reports indicate Modi’s government remains steadfast. Many U.S.-based firms such as Google and Amazon have signaled they will comply with the regulation, loathe to lose market share in a country of 1.3 billion people—78 percent of adults have a bank account, which covers 99 percent of households.

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How Bloomberg Embeds Green Warriors in Blue-State Governments

A New York University School of Law program funded by billionaire Michael Bloomberg is placing lawyers in the offices of Democratic state attorneys general and paying them to prosecute energy companies and challenge Trump administration policies on energy and the environment.

Nine states and Washington, D.C., including New York, Illinois and Pennsylvania, are participating in the multimillion-dollar program funded by the media magnate and ex-New York City mayor, who re-registered as a Democrat this week amid expectations of a run for president in 2020.

The 14 current fellows in the program report to the attorneys general, but they are paid by NYU’s Bloomberg-funded State Energy & Environmental Impact Center. State AG offices hire these trained lawyers – not students but seasoned professionals with years of experience – as special assistant attorneys general. Under terms of the arrangement, the fellows work solely to advance progressive environmental policy at a time when Democratic state attorneys general have investigated and sued ExxonMobil and other energy companies over alleged damages due to climate change.

Although many government agencies have employees funded by outside sources, critics say using special interest money for targeted government action is inappropriate. Christopher Horner, a senior fellow at the Competitive Enterprise Institute, who wrote a report on the NYU center, said the fellowships come with specific strings attached. “[AG] offices must agree to use prosecutors to ‘advance progressive clean energy, climate change, and environmental legal positions,’” Horner said.

Read the full piece at RealClearInvestigations:

Report: Amazon Falls Short on Gender Equity

A new report from the Free & Fair Markets Initiative (FFMI) examines female employees’ experiences at Amazon — which touts itself as a corporate leader in diversity and inclusion. The group’s analysis of government, corporate and legal records, “Amazon’s Unfair Deal of the Day: Undercutting Women,” was released today.

The report details several civil employment lawsuits filed by women who worked at Amazon alleging discrimination and unlawful firing after taking leave protected by the Family and Medical Leave Act (FMLA). It also finds that 78 percent of senior leadership roles at Amazon are occupied by men, and that administrative support is the only division where women represent a majority. Further, of the 10 people who report to CEO Jeff Bezos, only one — Beth Galetti, the head of human resources — is a woman.

These findings come amid a larger conversation among policymakers in Washington, D.C., state lawmakers and Silicon Valley companies about what steps — if any — major tech firms should take to increase the number of women in leadership positions. Experts say that while Amazon’s record on gender equality is comparable to its peers in the tech sector, the company’s rhetoric on gender equity doesn’t match the reality of its business practices.

Read the full story at RealClearPolicy:

Washington Post Targets Verizon With Unverified Comments From Anonymous Internet Crank

“Democracy Dies in Darkness,” the slogan of The Washington Post, has another iteration on Reddit, a social news aggregation and discussion platform. Last year, the Post established a Reddit profile—modifying its tagline to “Democracy Dies in Dankness”—to build connections with that audience and increase traffic to its website.

Dankness—defined as “disagreeably damp” or slang for high-grade marijuana—is perhaps a more apt term for a recent Post story based on an anonymous Redditor’s criticism of a Fortune 500 telecommunications company. As the trustworthiness of news outlets is under constant assault by President Trump, partisans of all stripes, and the American public, the Post’s article adds credence to charges of sensationalist “fake news.”

The episode involves a story on based on an alarming complaint that an anonymous person posted on Reddit about Verizon. The story, “Verizon denies allegations that it’s degrading mobile data service for Hurricane Florence victims,” was written by business and technology policy reporter Brian Fung. It provides a curious case study of how one comment from an anonymous agitator can generate a negative headline in one of the most authoritative newspapers in America.

Fung’s article relied on a single Reddit post from an anonymous source alleging that Verizon deprioritized his mobile data in the wake of Hurricane Florence.

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Martin Act Gives New York Politicians Way Too Much National Power

On Thursday, a few hundred thousand Democrats in New York will elect their party’s nominee for the next national regulator of every publicly-traded company in America: the state’s attorney general. In almost every respect, New York’s top lawyer has greater prosecutorial authority than any other state attorney general—or even the Securities and Exchange Commission—to investigate potential corporate fraud.

The office’s unique authority is derived from a century-old law called the Martin Act. It gives the attorney general total discretion to sue or seek indictments of companies without even having to prove intent to defraud.

Democrats vying for the nomination include Fordham law school professor Zephyr Teachout, Rep. Sean Patrick Maloney, D-N.Y., and New York City public advocate Letitia James. Gov. Andrew Cuomo appointed Barbara Underwood acting attorney general in May after then-Attorney General Eric Schneiderman resigned amid domestic abuse allegations. She is not seeking election to the post.

Republicans tapped corporate lawyer Keith Wofford as their nominee. He faces tough odds in a state that hasn’t elected a Republican as attorney general in more than two decades. Wofford says that past Democratic attorneys general have too often ignored political corruption while pursuing flimsy cases that foster an anti-business climate.

“You have an environment of hostility to business,” he told a local newspaper Friday. “The concrete example is settlement after settlement after settlement, fine after fine… the power of the state is sort of a machine gun spraying everywhere.”

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As Malaysia’s Mahathir Threatens U.S. Investors, Trump Must Step In

After riding a populist wave to election in May, Malaysian Prime Minister Mahathir Mohamad has threatened to eliminate major foreign investments in the southeast Asian country by fiat. As Mahathir escalates his threats, the Trump administration must signal it is prepared to retaliate if American investments are jeopardized.

Mahathir’s criticism of investors out-negotiating past administrations on deals and foreigners taking Malaysian jobs is downright Trumpian. The Malaysian leader, who served as prime minister from 1981 to 2003, imprisoned political foes, exploited racial divisions and suppressed the media.

But since assuming office, he has cast himself as a reformer focused on rooting out pervasive waste, fraud and graft. Mahathir recently said he will try to cancel multibillion-dollar Chinese-backed energy pipeline and rail projects in his latest effort to curb corruption, promote economic nationalism and shrink a staggering debt load. Construction of the projects, estimated to cost more than $22 billion, has been indefinitely delayed as Mahathir seeks a better deal with China.

“We don’t think we need those two projects. We don’t think they are viable. So if we can, we would like to just drop the projects,” he told the Associated Press in an interview.

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Activist investors push companies to choose virtue-signaling over profit

American companies face increasing pressure from activist investors to pursue more noble purposes than profit. In response to this clamor, virtue-signaling by corporations has run amok. Starbucks is the poster-child for self-styled sustainable companies, issuing $500 million in “green” bonds and pledging a “commitment to create global social impact.”

The coffee conglomerate announced earlier this month it will phase out plastic straws after caving to pressure from environmentalists. Nevermind that Starbucks, by ditching straws in favor of plastic “nitro” lids, will almost certainly increase its use of plastics by volume. Moreover, the Associated Press reported that plastic straws account for just 0.02 percent of plastic waste estimated to litter oceans each year. Starbucks’ decision to go suckless received fawning coverage in media outlets, many of which cited a debunked “study” by a then-9-year-old claiming that Americans use more than 500 million straws per day to justify the initiative.

This policy will have a negligible, or perhaps negative, environmental impact while imposing real costs on Starbucks as a profit-generating enterprise. This example illustrates one of the most challenging aspects of Environmental, Social and Governance (ESG) investing: How can a company’s social responsibility be accurately and fairly measured for investors?

Read the full piece at the Washington Examiner:

Curb the Power of Shady Proxy Advisory Firms!

The average American who owns stock in a public company through a 401(k) or a brokerage account has likely never heard of Institutional Shareholder Services. The firm is perhaps the most influential proxy advisor, advising pension funds and other institutional investors how to vote on shareholder proposals. Nonetheless, the secretive firm holds a vast amount of influence over how public companies operate.

ISS has great potential for conflict of interests because it provides shareholder voting recommendations on publicly traded companies and consulting services to those companies.

In the case of ISS, this means the subtle threat of adverse shareholder votes if companies don’t pay fees to ISS to become clients. Even Glass Lewis, which is owned by two activist pension funds, opposes the ISS model, calling the provision of consulting services “a problematic conflict of interest that goes against the very governance principles that proxy advisors like ourselves advocate.”

Read the full piece at The Weekly Standard:

Tort Lawyers and Attorneys General: A Corruptible Combination

Like former high school football stars in middle age, plaintiffs’ attorneys, who make their money by taking a percentage of the damage awards to clients, have been trying to relive their glory days of tobacco settlements. Back in the 1990s, five Texas lawyers earned $3.3 billion, a firm in Tampa scored $3.4 billion and a Mississippi attorney made an estimated $1.6 billion.

The lawyers’ playbook: team up with state attorneys general (AGs) to sue businesses.

“The novel, liability-expanding theories underlying these lawsuits are often developed by private lawyers, then ‘pitched’ to state attorneys general as money-making enterprises,” according to a 2013 reportby the Institute for Legal Reform of the U.S. Chamber of Commerce.

Over the past 20 years, plaintiffs’ attorneys applied this model to lawsuits against drug, financial-services, food, financial companies and more – with some success, but never on the scale of tobacco. Now, some tort lawyers believe they have found a new pot of gold: suing energy companies for supposedly worsening the effects of climate change on local communities.

But that gambit appears to be backfiring. The municipal clients of the tort lawyers may themselves end up on the receiving end of lawsuits – filed by angry bondholders and ordinary taxpayers. It’s a sordid tale, but with a nice twist.

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End the Political Games With Public Pensions

There’s a link on New York City Comptroller Scott Stringer’s website to an outline of his office’s Powers and Duties Under New York State Law. The 159-page overview covers an extensive spectrum of legal responsibilities, ranging from arts and cultural affairs to worker compensation. Nowhere does the list reference shareholder activism, directing city environmental policies, or — for that matter — leveraging the $190 billion in pension fund assets his office stewards to pursue a political agenda.

And yet that’s exactly what Mr. Stringer is doing. The professional investment managers of the city’s five public-sector pension funds, their board members, and Stringer himself are all exploiting their positions as custodians of the retirement savings of the city’s workers to promote their own political objectives. Politics seems to pervade every action of the city comptroller’s office, which just last month announced a plan to divest pension holdings from fossil-fuel interests, regardless of the impact on financial performance.

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