Showing posts with label APPLE. Show all posts
Showing posts with label APPLE. Show all posts
Tuesday, December 15, 2020
Tuesday, October 6, 2020
This is bullshit. Capitalism works best when the government gets the fuck out of the way. Politicians are fucking assholes, especially the fucking Democrats.
New York Times
BREAKING NEWS |
Amazon, Apple, Facebook and Google abused their monopoly power, House lawmakers said in a report that called for sweeping changes to antitrust laws. |
Tuesday, October 6, 2020 4:40 PM EST |
In a 449-page report that was presented by the House Judiciary Committee’s Democratic leadership, lawmakers said the four companies had turned from “scrappy” start-ups into “the kinds of monopolies we last saw in the era of oil barons and railroad tycoons.” The lawmakers said the companies had abused their dominant positions, setting and often dictating prices and rules for commerce, search, advertising, social networking and publishing. |
Tuesday, September 15, 2020
The moron politicians who attack Google, Amazon, and Apple, need to be tortured and killed.
Wall Street Journal
OPINION
COMMENTARY
The Misguided Antitrust Attack on Big Tech
Antitrust action would sap the benefits top companies have brought to consumers and ordinary investors.
By Phil Gramm and Jerry Ellig
September 14, 2020
Despite the many troubles of 2020, Congress has made more time than ever this year to target a different purported threat: America’s tech giants. This month the Senate Antitrust Subcommittee will hold the latest of several recent hearings on the issue, with one on Google’s online advertising influence on Tuesday and another on general antitrust enforcement Sept. 30. Yet after all this sound and fury, will Congress actually dismember the goose that laid the golden egg? Antitrust action against leading U.S. tech companies would shrink American dominance of the world’s fastest-growing industry and imperil the enormous buildup of stock equity that secures the retirements of some 78 million American workers.
Progressives want to use the antitrust laws to break up big tech companies because they believe that bigness is bad and leads to a host of other evils, including malign political influence. Conservatives want to use antitrust as a club to get social-media companies to curb their alleged political bias.
While there is a long and rich history of using antitrust laws to try to implement policies that proponents can’t enact into law, both parties would be wise to focus on consumer welfare, which has defined recent antitrust jurisprudence. No one can seriously challenge the hard evidence that big tech companies have delivered enormous consumer benefits. You don’t have to look any further than online shopping, smartphones and social networking.
Amazon got its start in 1994 selling books, then music and DVDs. Apple started selling music through iTunes in 2003. The Bureau of Labor Statistics started calculating consumer price indexes for recreational books, recorded movies and music in 1997. From December 1997 through December 2019, the price of recreational books fell by 4%, movies fell by 19%, and recorded music fell by 64%. Over the same period general prices increased by 59%.
BLS data show the price of smartphones fell by even more. RIM introduced the BlackBerry in 1999, and Apple introduced the iPhone eight years later. The BLS doesn’t report a separate CPI category for smartphones, but the cost of cellphones accounts for half of the CPI component for telephone hardware, calculators, and other consumer information items. Prices for this category of consumer spending have fallen by 85% since 1997 and by 59% since 2007.
Even these stunning price reductions understate the actual price decline and consumer benefits of new tech products. Since the cellphone didn’t enter the CPI until 14 years after it was introduced, the index never counted the initial 75% drop in cellphone prices that occurred before the inclusion of the cellphone in the CPI. Nor did the BLS start adjusting the CPI for changes in the quality of smartphones until 2018—missing the extraordinary improvements that occurred in early smartphones. A 2019 National Bureau of Economic Research study conducted in the Netherlands estimated the value of one quality improvement, the cellphone camera, at more than €818—more than 10 times the cost of adding the camera to the phone.
The NBER study also estimated that consumers place significant value on social media and apps. If the value to consumers of Facebook use was included in gross domestic product, the study concludes that annual real GDP growth would have been about 0.1 percentage point greater each year from 2003-17. The study’s authors also that found that the value consumers attach to WhatsApp, Instagram and map apps, which aren’t counted in measures of consumer prices or income, would give a measurable boost to GDP.
Many of these web-platform companies, including Google, make their money through advertising. The BLS started to include online advertising prices in its producer-price index in December 2009. Between December 2009 and December 2019, the price of search and text advertising fell by 52%, and the price of online display advertising fell by 24%. With the price of ads plummeting, it is hard to argue advertisers are getting squeezed to subsidize freebies for consumers.
There are striking similarities between today’s tech giants and the businesses that were accused of being monopolies during the Progressive Era. In the decade before the Sherman Antitrust Act was passed in 1890, the real price of pig iron fell by 21%, the wholesale price of sugar fell by 22%, and the price of copper fell by 10%. Inflation-adjusted prices of iron and copper actually rose in the 10 years after producers in those industries were threatened with antitrust enforcement, while the price of sugar fell at a much slower rate than before.
Before they dismember the goose, lawmakers should look not only at the benefits big tech has provided to consumers but also at the fact that U.S. tech companies’ world-wide lead depends on policies that encourage innovation and don’t punish companies simply for growing large. Fourteen of the largest 20 tech companies are based in the U.S. Apple, Microsoft, Amazon, Alphabet (parent of Google) and Facebook are the five largest tech companies in the world, with a market capitalization of $6.9 trillion. Public and private pension funds, 401(k)s, individual retirement accounts and insurance reserves guaranteeing death benefits and annuities own more than 70% of the stocks of these companies. Mandatory breakups or other draconian antitrust policies, especially when foreign competition is growing, would put at risk some $4.8 trillion of Americans’ retirement savings.
If progressives want to destroy America’s premier companies, at least they should do it through an open legislative process with public debates and votes. Conservatives, who believe companies are biased in their restrictions on user posts, can reconsider the liability protections Congress has granted tech companies with regard to content, and whether those protections remain beneficial in a time when tech companies shape political debate. Any action Congress wishes to take on these issues should come in the form of legislation rather than antitrust enforcement.
Mr. Gramm is a former chairman of the Senate Banking Committee. Mr. Ellig, a former chief economist at the Federal Communications Commission, is a research professor at the George Washington University Regulatory Studies Center. Mike Solon contributed to this op-ed.
Appeared in the September 15, 2020, print edition.
OPINION
COMMENTARY
The Misguided Antitrust Attack on Big Tech
Antitrust action would sap the benefits top companies have brought to consumers and ordinary investors.
By Phil Gramm and Jerry Ellig
September 14, 2020
Despite the many troubles of 2020, Congress has made more time than ever this year to target a different purported threat: America’s tech giants. This month the Senate Antitrust Subcommittee will hold the latest of several recent hearings on the issue, with one on Google’s online advertising influence on Tuesday and another on general antitrust enforcement Sept. 30. Yet after all this sound and fury, will Congress actually dismember the goose that laid the golden egg? Antitrust action against leading U.S. tech companies would shrink American dominance of the world’s fastest-growing industry and imperil the enormous buildup of stock equity that secures the retirements of some 78 million American workers.
Progressives want to use the antitrust laws to break up big tech companies because they believe that bigness is bad and leads to a host of other evils, including malign political influence. Conservatives want to use antitrust as a club to get social-media companies to curb their alleged political bias.
While there is a long and rich history of using antitrust laws to try to implement policies that proponents can’t enact into law, both parties would be wise to focus on consumer welfare, which has defined recent antitrust jurisprudence. No one can seriously challenge the hard evidence that big tech companies have delivered enormous consumer benefits. You don’t have to look any further than online shopping, smartphones and social networking.
Amazon got its start in 1994 selling books, then music and DVDs. Apple started selling music through iTunes in 2003. The Bureau of Labor Statistics started calculating consumer price indexes for recreational books, recorded movies and music in 1997. From December 1997 through December 2019, the price of recreational books fell by 4%, movies fell by 19%, and recorded music fell by 64%. Over the same period general prices increased by 59%.
BLS data show the price of smartphones fell by even more. RIM introduced the BlackBerry in 1999, and Apple introduced the iPhone eight years later. The BLS doesn’t report a separate CPI category for smartphones, but the cost of cellphones accounts for half of the CPI component for telephone hardware, calculators, and other consumer information items. Prices for this category of consumer spending have fallen by 85% since 1997 and by 59% since 2007.
Even these stunning price reductions understate the actual price decline and consumer benefits of new tech products. Since the cellphone didn’t enter the CPI until 14 years after it was introduced, the index never counted the initial 75% drop in cellphone prices that occurred before the inclusion of the cellphone in the CPI. Nor did the BLS start adjusting the CPI for changes in the quality of smartphones until 2018—missing the extraordinary improvements that occurred in early smartphones. A 2019 National Bureau of Economic Research study conducted in the Netherlands estimated the value of one quality improvement, the cellphone camera, at more than €818—more than 10 times the cost of adding the camera to the phone.
The NBER study also estimated that consumers place significant value on social media and apps. If the value to consumers of Facebook use was included in gross domestic product, the study concludes that annual real GDP growth would have been about 0.1 percentage point greater each year from 2003-17. The study’s authors also that found that the value consumers attach to WhatsApp, Instagram and map apps, which aren’t counted in measures of consumer prices or income, would give a measurable boost to GDP.
Many of these web-platform companies, including Google, make their money through advertising. The BLS started to include online advertising prices in its producer-price index in December 2009. Between December 2009 and December 2019, the price of search and text advertising fell by 52%, and the price of online display advertising fell by 24%. With the price of ads plummeting, it is hard to argue advertisers are getting squeezed to subsidize freebies for consumers.
There are striking similarities between today’s tech giants and the businesses that were accused of being monopolies during the Progressive Era. In the decade before the Sherman Antitrust Act was passed in 1890, the real price of pig iron fell by 21%, the wholesale price of sugar fell by 22%, and the price of copper fell by 10%. Inflation-adjusted prices of iron and copper actually rose in the 10 years after producers in those industries were threatened with antitrust enforcement, while the price of sugar fell at a much slower rate than before.
Before they dismember the goose, lawmakers should look not only at the benefits big tech has provided to consumers but also at the fact that U.S. tech companies’ world-wide lead depends on policies that encourage innovation and don’t punish companies simply for growing large. Fourteen of the largest 20 tech companies are based in the U.S. Apple, Microsoft, Amazon, Alphabet (parent of Google) and Facebook are the five largest tech companies in the world, with a market capitalization of $6.9 trillion. Public and private pension funds, 401(k)s, individual retirement accounts and insurance reserves guaranteeing death benefits and annuities own more than 70% of the stocks of these companies. Mandatory breakups or other draconian antitrust policies, especially when foreign competition is growing, would put at risk some $4.8 trillion of Americans’ retirement savings.
If progressives want to destroy America’s premier companies, at least they should do it through an open legislative process with public debates and votes. Conservatives, who believe companies are biased in their restrictions on user posts, can reconsider the liability protections Congress has granted tech companies with regard to content, and whether those protections remain beneficial in a time when tech companies shape political debate. Any action Congress wishes to take on these issues should come in the form of legislation rather than antitrust enforcement.
Mr. Gramm is a former chairman of the Senate Banking Committee. Mr. Ellig, a former chief economist at the Federal Communications Commission, is a research professor at the George Washington University Regulatory Studies Center. Mike Solon contributed to this op-ed.
Appeared in the September 15, 2020, print edition.
Thursday, August 27, 2020
There is nothing Fucktard Trump can't fuck up.
Wall Street Journal
WSJ NEWS EXCLUSIVE
BUSINESS
Corporate America Worries WeChat Ban Could Be Bad for Business
Companies including Apple, Disney and Walmart participate in call with White House over action against China’s most important app.
By John D. McKinnon and Lingling Wei
August 13, 2020
U.S. companies whose fortunes are linked to China are pushing back against the Trump administration’s plans to restrict business transactions involving the WeChat TCEHY -0.20% app from Tencent Holdings Ltd., TCEHY -0.20% saying it could undermine their competitiveness in the world’s second-biggest economy.
More than a dozen major U.S. multinational companies raised concerns in a call with White House officials Tuesday about the potentially broad scope and impact of Mr. Trump’s executive order targeting WeChat, set to take effect late next month.
Apple Inc., Ford Motor Co., Walmart Inc. and Walt Disney Co. were among those participating in the call, according to people familiar with the situation.
“For those who don’t live in China, they don’t understand how vast the implications are if American companies aren’t allowed to use it,” said Craig Allen, president of the U.S.-China Business Council. “They are going to be held at a severe disadvantage to every competitor,” he added.
Other participants in the call Tuesday included Procter & Gamble Co., Intel Corp., MetLife Inc., Goldman Sachs Group Inc., Morgan Stanley, United Parcel Service Inc., Merck & Co. Inc. and Cargill Inc., according to the people.
The companies either declined to comment or didn’t respond to requests for comment. Their participation in the call with the White House is another sign that deteriorating relations between Washington and Beijing poses a threat to commercial relations between the two nations.
The call between the companies and the White House was organized by the U.S.-China Business Council, the U.S. Chamber of Commerce and the Business Roundtable, the people said.
Organizers started the call by introducing participating executives from the companies, which included those who deal with international relations and trade.
A number of participants raised concern that the order’s language suggests it could be applied to U.S. businesses all over the world, including in China, where WeChat TCEHY -0.20% is a dominant commercial platform.
Some participants also raised concerns about lack of clarity over whether the order applies to Tencent and its other platforms, pointing to the potential problems the National Basketball Association faces in its marketing deals with Tencent, which streams NBA games in China.
NBA spokesman Mike Bass said the league is “awaiting further clarity on the executive order.”
Some participants questioned whether those deals could continue in China under the order, the people said.
The WeChat app is used by more than 1.2 billion people globally and is ubiquitous in China, where consumers, businesses and government alike use it for mobile payments, messaging, e-commerce, official communications and other functions. For anyone doing business in China, including U.S. companies, it is also a vital marketing hub to connect with consumers.
One aim of the call was to seek clarity on the precise meaning of the executive order signed by Mr. Trump last week, according to the people familiar with the matter. That order barred “any transaction that is related to WeChat” by Americans but left details of what is actually banned to the Commerce Department to be worked out.
Companies are hoping the administration will narrow the order as it is implemented over the coming weeks, according to the people familiar.
Asked about Tuesday’s conference call, a White House spokesman issued a statement saying the administration “is committed to protecting the American people from all cyber-related threats to critical infrastructure, public health and safety, and our economic and national security.”
In announcing the action against Tencent, the Trump administration said that WeChat captures “vast swaths of information from its users,” potentially exposing the personal information of Americans and Chinese nationals living in the U.S. to exploitation by China’s ruling Communist Party.
The Trump administration announced a similar action against the TikTok video-sharing app. TikTok’s owner, Beijing-based ByteDance Ltd., is in negotiations to sell its U.S. operations.
Both companies have said they protect the privacy of their users. On an earnings call Wednesday, Tencent Chief Financial Officer John Lo said the company believes Mr. Trump’s order applies only to the international version of WeChat and not its domestic Chinese market.
“We are in the process of seeking further clarification from relevant parties in the U.S.,” Mr. Lo said.
Even so, U.S. companies are concerned the administration’s action could effectively cut them off from access to the lucrative China market, for example by ending their ability to accept payments or advertise on WeChat.
Apple is among the U.S. companies with the most at stake. Being forced to remove the app from its devices could be devastating. Analyst Ming-Chi Kuo at TF International Securities projected that global iPhone shipments could fall by as much as 30%, if such a ban goes into effect. Apple declined to comment.
Some U.S. entertainment and sports concerns, meanwhile, are worried they could be cut off from Tencent’s other digital services.
Chinese Vice Premier Liu He, President Xi Jinping’s chief trade negotiator with Washington, is expected to bring up concerns over the executive orders against WeChat and TikTok during talks with U.S. Trade Representative Robert Lighthizer’s team in the coming days, according to people familiar with the matter.
The main thrust of the discussion is aimed at evaluating China’s compliance with a bilateral trade agreement signed in January. But Mr. Liu, who has direct oversight over China’s technology industry, is planning to seek a “wish list” of sorts from the U.S. side to try to address concerns over the Chinese companies, one of the people said.
So far, Beijing has largely refrained from retaliating against the U.S. sanctions. Still, China’s Foreign Ministry has reacted angrily to the U.S. restrictions on the use of WeChat and TikTok, saying Washington is “carrying out political manipulation and suppression.”
The restraint partly reflects the limited presence of comparable U.S. firms in China, making it hard for Beijing to hit back against Washington eye for eye. Facebook Inc. for instance, has been blocked by the Great Firewall since 2009. Alphabet Inc.’s Google unit pulled its popular search engine out of the country a year later.
Analysts say Beijing could bar Chinese companies from placing ads on Facebook or Google, but such action would hurt these companies’ ability to expand overseas.
What’s more, big U.S. corporations traditionally have been Beijing’s strongest supporters in Washington—as the lobbying against the WeChat ban demonstrates—though their influence has ebbed under the Trump administration. Previous lobbying by U.S. chip makers led the administration to roll back or delay harsh sanctions against Chinese telecom giant Huawei Technologies Co.
But navigating the political waters is particularly difficult right now, given the looming U.S. presidential election Nov. 3.
“I think companies are worried about offending either Washington or Beijing and to the extent possible want to keep out of the crossfire,” said Scott Kennedy, a China business expert at the Center for Strategic and International Studies. “Also no one wants to be seen as defending China’s system of surveillance or censorship or lack of reciprocity. So it is very difficult for companies to come out and say the U.S. is in the wrong and China is in the right.”
As tensions between the two world powers intensify, many more companies also find themselves caught up in the firefight. According to a survey released Tuesday by the U.S.-China Business Council, 86% of more than 100 member companies report that the bilateral tensions have caused lost sales or otherwise impacted their businesses in China. “We have been cut out of some bids because we are a U.S. company,” the report quotes one company as saying.
At the same time, according to the survey, conducted in May and June, 83% of the council’s members counted China as either the top or among the top five priorities for their global strategy.
Nearly 70% of respondents expressed optimism about the five-year business outlook in China, and 87% said they have no plans to shift production out of the country. However, in the short-to-medium-term, U.S.-China tensions are leading some to reduce or stop planned investment in China.
“U.S.-China trade and investment supports about 2.6 million American jobs,” said Mr. Allen of the U.S.-China Business Council. “We need to sustain and grow those jobs in future years, while finding ways to reduce conflict in other areas of the relationship.”
WSJ NEWS EXCLUSIVE
BUSINESS
Corporate America Worries WeChat Ban Could Be Bad for Business
Companies including Apple, Disney and Walmart participate in call with White House over action against China’s most important app.
By John D. McKinnon and Lingling Wei
August 13, 2020
U.S. companies whose fortunes are linked to China are pushing back against the Trump administration’s plans to restrict business transactions involving the WeChat TCEHY -0.20% app from Tencent Holdings Ltd., TCEHY -0.20% saying it could undermine their competitiveness in the world’s second-biggest economy.
More than a dozen major U.S. multinational companies raised concerns in a call with White House officials Tuesday about the potentially broad scope and impact of Mr. Trump’s executive order targeting WeChat, set to take effect late next month.
Apple Inc., Ford Motor Co., Walmart Inc. and Walt Disney Co. were among those participating in the call, according to people familiar with the situation.
“For those who don’t live in China, they don’t understand how vast the implications are if American companies aren’t allowed to use it,” said Craig Allen, president of the U.S.-China Business Council. “They are going to be held at a severe disadvantage to every competitor,” he added.
Other participants in the call Tuesday included Procter & Gamble Co., Intel Corp., MetLife Inc., Goldman Sachs Group Inc., Morgan Stanley, United Parcel Service Inc., Merck & Co. Inc. and Cargill Inc., according to the people.
The companies either declined to comment or didn’t respond to requests for comment. Their participation in the call with the White House is another sign that deteriorating relations between Washington and Beijing poses a threat to commercial relations between the two nations.
The call between the companies and the White House was organized by the U.S.-China Business Council, the U.S. Chamber of Commerce and the Business Roundtable, the people said.
Organizers started the call by introducing participating executives from the companies, which included those who deal with international relations and trade.
A number of participants raised concern that the order’s language suggests it could be applied to U.S. businesses all over the world, including in China, where WeChat TCEHY -0.20% is a dominant commercial platform.
Some participants also raised concerns about lack of clarity over whether the order applies to Tencent and its other platforms, pointing to the potential problems the National Basketball Association faces in its marketing deals with Tencent, which streams NBA games in China.
NBA spokesman Mike Bass said the league is “awaiting further clarity on the executive order.”
Some participants questioned whether those deals could continue in China under the order, the people said.
The WeChat app is used by more than 1.2 billion people globally and is ubiquitous in China, where consumers, businesses and government alike use it for mobile payments, messaging, e-commerce, official communications and other functions. For anyone doing business in China, including U.S. companies, it is also a vital marketing hub to connect with consumers.
One aim of the call was to seek clarity on the precise meaning of the executive order signed by Mr. Trump last week, according to the people familiar with the matter. That order barred “any transaction that is related to WeChat” by Americans but left details of what is actually banned to the Commerce Department to be worked out.
Companies are hoping the administration will narrow the order as it is implemented over the coming weeks, according to the people familiar.
Asked about Tuesday’s conference call, a White House spokesman issued a statement saying the administration “is committed to protecting the American people from all cyber-related threats to critical infrastructure, public health and safety, and our economic and national security.”
In announcing the action against Tencent, the Trump administration said that WeChat captures “vast swaths of information from its users,” potentially exposing the personal information of Americans and Chinese nationals living in the U.S. to exploitation by China’s ruling Communist Party.
The Trump administration announced a similar action against the TikTok video-sharing app. TikTok’s owner, Beijing-based ByteDance Ltd., is in negotiations to sell its U.S. operations.
Both companies have said they protect the privacy of their users. On an earnings call Wednesday, Tencent Chief Financial Officer John Lo said the company believes Mr. Trump’s order applies only to the international version of WeChat and not its domestic Chinese market.
“We are in the process of seeking further clarification from relevant parties in the U.S.,” Mr. Lo said.
Even so, U.S. companies are concerned the administration’s action could effectively cut them off from access to the lucrative China market, for example by ending their ability to accept payments or advertise on WeChat.
Apple is among the U.S. companies with the most at stake. Being forced to remove the app from its devices could be devastating. Analyst Ming-Chi Kuo at TF International Securities projected that global iPhone shipments could fall by as much as 30%, if such a ban goes into effect. Apple declined to comment.
Some U.S. entertainment and sports concerns, meanwhile, are worried they could be cut off from Tencent’s other digital services.
Chinese Vice Premier Liu He, President Xi Jinping’s chief trade negotiator with Washington, is expected to bring up concerns over the executive orders against WeChat and TikTok during talks with U.S. Trade Representative Robert Lighthizer’s team in the coming days, according to people familiar with the matter.
The main thrust of the discussion is aimed at evaluating China’s compliance with a bilateral trade agreement signed in January. But Mr. Liu, who has direct oversight over China’s technology industry, is planning to seek a “wish list” of sorts from the U.S. side to try to address concerns over the Chinese companies, one of the people said.
So far, Beijing has largely refrained from retaliating against the U.S. sanctions. Still, China’s Foreign Ministry has reacted angrily to the U.S. restrictions on the use of WeChat and TikTok, saying Washington is “carrying out political manipulation and suppression.”
The restraint partly reflects the limited presence of comparable U.S. firms in China, making it hard for Beijing to hit back against Washington eye for eye. Facebook Inc. for instance, has been blocked by the Great Firewall since 2009. Alphabet Inc.’s Google unit pulled its popular search engine out of the country a year later.
Analysts say Beijing could bar Chinese companies from placing ads on Facebook or Google, but such action would hurt these companies’ ability to expand overseas.
What’s more, big U.S. corporations traditionally have been Beijing’s strongest supporters in Washington—as the lobbying against the WeChat ban demonstrates—though their influence has ebbed under the Trump administration. Previous lobbying by U.S. chip makers led the administration to roll back or delay harsh sanctions against Chinese telecom giant Huawei Technologies Co.
But navigating the political waters is particularly difficult right now, given the looming U.S. presidential election Nov. 3.
“I think companies are worried about offending either Washington or Beijing and to the extent possible want to keep out of the crossfire,” said Scott Kennedy, a China business expert at the Center for Strategic and International Studies. “Also no one wants to be seen as defending China’s system of surveillance or censorship or lack of reciprocity. So it is very difficult for companies to come out and say the U.S. is in the wrong and China is in the right.”
As tensions between the two world powers intensify, many more companies also find themselves caught up in the firefight. According to a survey released Tuesday by the U.S.-China Business Council, 86% of more than 100 member companies report that the bilateral tensions have caused lost sales or otherwise impacted their businesses in China. “We have been cut out of some bids because we are a U.S. company,” the report quotes one company as saying.
At the same time, according to the survey, conducted in May and June, 83% of the council’s members counted China as either the top or among the top five priorities for their global strategy.
Nearly 70% of respondents expressed optimism about the five-year business outlook in China, and 87% said they have no plans to shift production out of the country. However, in the short-to-medium-term, U.S.-China tensions are leading some to reduce or stop planned investment in China.
“U.S.-China trade and investment supports about 2.6 million American jobs,” said Mr. Allen of the U.S.-China Business Council. “We need to sustain and grow those jobs in future years, while finding ways to reduce conflict in other areas of the relationship.”
Wednesday, August 19, 2020
If I had bought shares of Apple a long time ago I would have several million dollars I don't need.
| BREAKING NEWS |
Apple is now worth $2 trillion. It doubled its value since the pandemic-induced recession, cementing its dominance in the global economy. |
| Wednesday, August 19, 2020 11:02 AM EST |
On Wednesday Apple became the first U.S. company to hit a $2 trillion valuation when its shares climbed 1.2 percent in morning trading. It was another milestone for the maker of iPhones, Mac computers and Apple Watches.
|
| Read the latest |
Friday, July 31, 2020
The politicians who attack Amazon, Google, and Apple are stupid fucking assholes.
Wall Street Journal
OPINION
REVIEW & OUTLOOK
Big Tech’s Antitrust Paradox
The legal test for antitrust is consumer benefit, not size.
By the Editorial Board
July 29, 2020
Everyone seems to hate America’s giant tech companies these days—except the hundreds of millions of people who use their products. Amid the new political and antitrust scrutiny of Big Tech, this not-so-small matter of consumer benefit should be the legal and policy watchword.
Wednesday’s House hearing with the CEOs of Amazon, Apple, Facebook and Google showed the bipartisan hostility to America’s most successful companies. Democrats say they’re too big, powerful and examples of non-union capitalist success. Republicans dislike them because the companies and their employees lean left politically and in some cases (Google, Twitter ) are thought to use algorithms to punish conservative content.
“Our founders would not bow before a king,” declared Rhode Island Democrat David Cicilline, setting the tone for the afternoon inquisition. “Nor should we bow before the emperors of the online economy.” He added that the Big Four’s dominance is “killing the small businesses, manufacturing and overall dynamism that are the engines of the American economy.”
His evidence is weaker than his rhetoric. There may be specific cases in which a giant abuses market power, such as Google in online advertising. The Justice Department and Federal Trade Commission are investigating the giants and may bring cases this year. But as the hearing showed, the companies have plenty of evidence to use in their defense.
Start with the reality that all four face ferocious competition, often from each other. Amazon is supposedly an unbeatable leviathan in retail. But the company has only about a 1% share of the overall global retail business and less than 4% in the U.S. Walmart is bigger and its online business is growing fast. In cloud computing services, Amazon faces competition from Microsoft, Google, Alibaba and more. Apple’s iTunes must contend with Spotify and Amazon Prime.
Progressive groups such as the NAACP and Common Sense Media claim that the failure of the current advertising boycott to change Facebook’s speech policies shows that the social-media site is a monopoly. But it proves the opposite. Businesses can avoid Facebook because they have other online places to reach consumers—including Amazon and Google.
Facebook is losing users to Snap and TikTok, especially among the young. Facebook tried to introduce a TikTok-like feature in 2018, known as Lasso, but it didn’t rope enough users. Facebook is attacked for buying Instagram but it invested heavily to make the photo-sharing site easy-to-use. There’s no way to know if Instagram could have become a competitor to Facebook had it remained independent. It might have become the Yahoo of search—an also-ran.
Amazon has prospered in part by becoming a marketplace for small business, not by excluding it. Some 1.7 million small and medium-sized businesses sell via Amazon, and the company says more than 200,000 had more than $100,000 in sales in 2019. Amazon eclipsed eBay as a leading small-business web venue because entrepreneurs thought it served them better. Amazon was also a lifeline for many businesses that were forced to shut their storefronts in the pandemic.
The American giants also operate in a global economy with emerging competitors, especially from China. Breaking up U.S. tech companies would be a gift to ByteDance, Alibaba, Baidu and Tencent, among others. Alibaba wants to elbow into Amazon’s data cloud business in Europe. Politicians who are fretting about China’s drive for global economic dominance should think twice before dismantling the U.S. firms that invest heavily in artificial intelligence and can compete world-wide.
Politicians talk about antitrust law as if it’s a finely tuned instrument, but it can easily backfire. A classic example is the way Amazon cajoled Barack Obama’s antitrust officials to bring a case against Apple for trying to compete in e-books. Justice won its case after the Supreme Court declined to take Apple’s appeal, but the result has been to make Amazon’s e-book dominance more secure.
Trust-busters target a market at a particular moment in time, though the digital marketplace is ever-changing. They targeted IBM’s mainframe dominance even as desktop PCs were on the verge of putting more computer power in the hands of individuals. They targeted Microsoft’s browser advantage on the desktop even as Google was creating new competition in search and Apple in devices.
In a democracy, any accumulation of wealth and power will get political scrutiny, and the tech giants are taking their turn in the dock. There are genuine concerns about political bias, the harm to journalism and democracy by Google’s use of content without compensation, and perhaps barriers to entry.
But the market usually does the best job of countering monopolies. Too often government intervention reinforces monopolies. Antitrust law since the work of Robert Bork and Yale Brozen in the 1970s has rightly focused not on size but consumer harm. The burden is on the critics of Big Tech to prove genuine damage, and then propose solutions that don’t do more harm than good.
OPINION
REVIEW & OUTLOOK
Big Tech’s Antitrust Paradox
The legal test for antitrust is consumer benefit, not size.
By the Editorial Board
July 29, 2020
Everyone seems to hate America’s giant tech companies these days—except the hundreds of millions of people who use their products. Amid the new political and antitrust scrutiny of Big Tech, this not-so-small matter of consumer benefit should be the legal and policy watchword.
Wednesday’s House hearing with the CEOs of Amazon, Apple, Facebook and Google showed the bipartisan hostility to America’s most successful companies. Democrats say they’re too big, powerful and examples of non-union capitalist success. Republicans dislike them because the companies and their employees lean left politically and in some cases (Google, Twitter ) are thought to use algorithms to punish conservative content.
“Our founders would not bow before a king,” declared Rhode Island Democrat David Cicilline, setting the tone for the afternoon inquisition. “Nor should we bow before the emperors of the online economy.” He added that the Big Four’s dominance is “killing the small businesses, manufacturing and overall dynamism that are the engines of the American economy.”
His evidence is weaker than his rhetoric. There may be specific cases in which a giant abuses market power, such as Google in online advertising. The Justice Department and Federal Trade Commission are investigating the giants and may bring cases this year. But as the hearing showed, the companies have plenty of evidence to use in their defense.
Start with the reality that all four face ferocious competition, often from each other. Amazon is supposedly an unbeatable leviathan in retail. But the company has only about a 1% share of the overall global retail business and less than 4% in the U.S. Walmart is bigger and its online business is growing fast. In cloud computing services, Amazon faces competition from Microsoft, Google, Alibaba and more. Apple’s iTunes must contend with Spotify and Amazon Prime.
Progressive groups such as the NAACP and Common Sense Media claim that the failure of the current advertising boycott to change Facebook’s speech policies shows that the social-media site is a monopoly. But it proves the opposite. Businesses can avoid Facebook because they have other online places to reach consumers—including Amazon and Google.
Facebook is losing users to Snap and TikTok, especially among the young. Facebook tried to introduce a TikTok-like feature in 2018, known as Lasso, but it didn’t rope enough users. Facebook is attacked for buying Instagram but it invested heavily to make the photo-sharing site easy-to-use. There’s no way to know if Instagram could have become a competitor to Facebook had it remained independent. It might have become the Yahoo of search—an also-ran.
Amazon has prospered in part by becoming a marketplace for small business, not by excluding it. Some 1.7 million small and medium-sized businesses sell via Amazon, and the company says more than 200,000 had more than $100,000 in sales in 2019. Amazon eclipsed eBay as a leading small-business web venue because entrepreneurs thought it served them better. Amazon was also a lifeline for many businesses that were forced to shut their storefronts in the pandemic.
The American giants also operate in a global economy with emerging competitors, especially from China. Breaking up U.S. tech companies would be a gift to ByteDance, Alibaba, Baidu and Tencent, among others. Alibaba wants to elbow into Amazon’s data cloud business in Europe. Politicians who are fretting about China’s drive for global economic dominance should think twice before dismantling the U.S. firms that invest heavily in artificial intelligence and can compete world-wide.
Politicians talk about antitrust law as if it’s a finely tuned instrument, but it can easily backfire. A classic example is the way Amazon cajoled Barack Obama’s antitrust officials to bring a case against Apple for trying to compete in e-books. Justice won its case after the Supreme Court declined to take Apple’s appeal, but the result has been to make Amazon’s e-book dominance more secure.
Trust-busters target a market at a particular moment in time, though the digital marketplace is ever-changing. They targeted IBM’s mainframe dominance even as desktop PCs were on the verge of putting more computer power in the hands of individuals. They targeted Microsoft’s browser advantage on the desktop even as Google was creating new competition in search and Apple in devices.
In a democracy, any accumulation of wealth and power will get political scrutiny, and the tech giants are taking their turn in the dock. There are genuine concerns about political bias, the harm to journalism and democracy by Google’s use of content without compensation, and perhaps barriers to entry.
But the market usually does the best job of countering monopolies. Too often government intervention reinforces monopolies. Antitrust law since the work of Robert Bork and Yale Brozen in the 1970s has rightly focused not on size but consumer harm. The burden is on the critics of Big Tech to prove genuine damage, and then propose solutions that don’t do more harm than good.
Monday, July 27, 2020
Only stupid assholes attack Amazon and Google and Apple.
Wall Street Journal
OPINION
INSIDE VIEW
Tech CEOs Deserve an Apology
Legislators cry antitrust, but the facts show blessings, not harm, for consumers.
By Andy Kessler
July 26, 2020
It’s summer—must be time to grill a few CEOs. Amazon’s Jeff Bezos, Apple’s Tim Cook, Facebook’s Mark Zuckerberg and Google’s Sundar Pichai will appear Wednesday (virtually, how fitting!) before the House Judiciary Antitrust Subcommittee. It’s tech success vs. lawyers and career politicians who probably have an aide print out their emails. Broadway is closed, so this will be must-see theater.
The CEOs’ task is to disarm, dissuade and dissipate. No need to upstage congressmen, who are playing a weak hand. Antitrust is driven by consumer harm. Sure, there are screw-ups: Amazon favors its own products, Apple its own apps, Google its own YouTube videos; Facebook collects too much personal data. Yet none of these habits necessarily harm consumers and all could be easily fixed without decadeslong antitrust inquisitions. Lawyers are taught: “If you have facts on your side, hammer the facts. If you don’t, hammer the table.” Expect loud table banging.
Mr. Zuckerberg should play up consumer benefit: “Chairman [David] Cicilline, 85.7% of registered voters in your Rhode Island district use Facebook for over an hour every day.” Get him thinking: Would they vote for Facebook over me? Questions will fly about an advertiser boycott over “hate speech and divisive content”— Disney recently joined Starbucks, Ford, Unilever and Verizon. But branded advertising doesn’t really work on Facebook, hence brands are saving money by boycotting. Zuck must think: We don’t need these Mickey Mouse outfits.
Facebook is a small-business platform, and a critical one. Millions of companies rely on it to sell products locally and often nationally. Mr. Zuckerberg should ask: “Are you against small businesses? Is this an indictment of our entire American society? Well, you can do whatever you want to us, but I for one am not going to stand here and listen to you bad mouth the United States of America. Gentlemen!” That last part was Otter in “Animal House,” but you get the point.
On the other hand, Amazon should demand praise—like when you ask the annoying Parisian waiter, “Do you speak German?” and as he sputters “Non” you say, “You’re welcome.” Mr. Bezos’ job is simple: “Congressman, have you watched ‘House of Cards’?” (They all have.) “You’re welcome. Netflix uses Amazon servers. So does Zoom. Did you get your next-day delivery of that 6-quart Instant Pot? You’re welcome.” Lockdowns would have been undoable without Amazon Prime.
Google and Apple can talk about similar mobile lifelines to consumers, anonymized data tracking movement trends, and their work on contact tracing through smartphones. Google has heat maps for searches for “fever.”
Again, stick with facts. Don’t be Jack Dorsey. During 2018 testimony, the Twitter CEO swore up and down that the site didn’t “shadow ban,” or stop certain users, mainly on the political right, from trending or showing up in searches. Twitter’s algorithms, he claimed, were merely tracking “behavioral signals.”
Then—whoops—hackers last week accessed the accounts of Joe Biden, Elon Musk, Barack Obama and others, and released screenshots showing a “secret admin panel.” Twitter hasn’t denied the images were real and quickly took them down. The panel has buttons for “Trends Blacklist” and “Search Blacklist”—the definition of shadow banning. It makes Mr. Dorsey’s denials sound fact-challenged at best. Maybe that’s why he said he plans to work from Africa. So his fellow CEOs should stick with facts. Heck, plead the Fifth—that would at least make the hearing memorable!
Disarm. Check. Dissuade. Check. But how do you dissipate? Easy—when asked about hate speech, just challenge Congress to define it and say you’d be happy to get rid of it. Maybe Congress will rise to the challenge, but the Supreme Court would inevitably rule whatever they came up with violates the First Amendment.
Tech companies are being beaten up for their size and success. That’s just envy. Eventually competition—especially from each other—and the next wave of cool technology will topple them.
Listen closely and you may hear rumblings of the antitrust “theory of competitive harm.” That theory abandons any hard proof of consumer harm and holds, for example, that Facebook can be broken up merely because its purchase of Instagram prevented a competitor from emerging. Even squishier is the “New Brandeis School” and, get this, “Hipster Antitrust,” which say the purpose of antitrust is to help solve inequality and other social ills. That sounds like hammering the table, not facts. Meanwhile, I for one am not going to stand here . .
OPINION
INSIDE VIEW
Tech CEOs Deserve an Apology
Legislators cry antitrust, but the facts show blessings, not harm, for consumers.
By Andy Kessler
July 26, 2020
It’s summer—must be time to grill a few CEOs. Amazon’s Jeff Bezos, Apple’s Tim Cook, Facebook’s Mark Zuckerberg and Google’s Sundar Pichai will appear Wednesday (virtually, how fitting!) before the House Judiciary Antitrust Subcommittee. It’s tech success vs. lawyers and career politicians who probably have an aide print out their emails. Broadway is closed, so this will be must-see theater.
The CEOs’ task is to disarm, dissuade and dissipate. No need to upstage congressmen, who are playing a weak hand. Antitrust is driven by consumer harm. Sure, there are screw-ups: Amazon favors its own products, Apple its own apps, Google its own YouTube videos; Facebook collects too much personal data. Yet none of these habits necessarily harm consumers and all could be easily fixed without decadeslong antitrust inquisitions. Lawyers are taught: “If you have facts on your side, hammer the facts. If you don’t, hammer the table.” Expect loud table banging.
Mr. Zuckerberg should play up consumer benefit: “Chairman [David] Cicilline, 85.7% of registered voters in your Rhode Island district use Facebook for over an hour every day.” Get him thinking: Would they vote for Facebook over me? Questions will fly about an advertiser boycott over “hate speech and divisive content”— Disney recently joined Starbucks, Ford, Unilever and Verizon. But branded advertising doesn’t really work on Facebook, hence brands are saving money by boycotting. Zuck must think: We don’t need these Mickey Mouse outfits.
Facebook is a small-business platform, and a critical one. Millions of companies rely on it to sell products locally and often nationally. Mr. Zuckerberg should ask: “Are you against small businesses? Is this an indictment of our entire American society? Well, you can do whatever you want to us, but I for one am not going to stand here and listen to you bad mouth the United States of America. Gentlemen!” That last part was Otter in “Animal House,” but you get the point.
On the other hand, Amazon should demand praise—like when you ask the annoying Parisian waiter, “Do you speak German?” and as he sputters “Non” you say, “You’re welcome.” Mr. Bezos’ job is simple: “Congressman, have you watched ‘House of Cards’?” (They all have.) “You’re welcome. Netflix uses Amazon servers. So does Zoom. Did you get your next-day delivery of that 6-quart Instant Pot? You’re welcome.” Lockdowns would have been undoable without Amazon Prime.
Google and Apple can talk about similar mobile lifelines to consumers, anonymized data tracking movement trends, and their work on contact tracing through smartphones. Google has heat maps for searches for “fever.”
Again, stick with facts. Don’t be Jack Dorsey. During 2018 testimony, the Twitter CEO swore up and down that the site didn’t “shadow ban,” or stop certain users, mainly on the political right, from trending or showing up in searches. Twitter’s algorithms, he claimed, were merely tracking “behavioral signals.”
Then—whoops—hackers last week accessed the accounts of Joe Biden, Elon Musk, Barack Obama and others, and released screenshots showing a “secret admin panel.” Twitter hasn’t denied the images were real and quickly took them down. The panel has buttons for “Trends Blacklist” and “Search Blacklist”—the definition of shadow banning. It makes Mr. Dorsey’s denials sound fact-challenged at best. Maybe that’s why he said he plans to work from Africa. So his fellow CEOs should stick with facts. Heck, plead the Fifth—that would at least make the hearing memorable!
Disarm. Check. Dissuade. Check. But how do you dissipate? Easy—when asked about hate speech, just challenge Congress to define it and say you’d be happy to get rid of it. Maybe Congress will rise to the challenge, but the Supreme Court would inevitably rule whatever they came up with violates the First Amendment.
Tech companies are being beaten up for their size and success. That’s just envy. Eventually competition—especially from each other—and the next wave of cool technology will topple them.
Listen closely and you may hear rumblings of the antitrust “theory of competitive harm.” That theory abandons any hard proof of consumer harm and holds, for example, that Facebook can be broken up merely because its purchase of Instagram prevented a competitor from emerging. Even squishier is the “New Brandeis School” and, get this, “Hipster Antitrust,” which say the purpose of antitrust is to help solve inequality and other social ills. That sounds like hammering the table, not facts. Meanwhile, I for one am not going to stand here . .
Sunday, February 2, 2020
Trump is a fucking moron. Trump’s top trade negotiator, Robert Lighthizer, is fucking moron.
Wall Street Journal
IDEAS
ESSAY
The iPhone Isn’t Made in China—It’s Made Everywhere
The global supply chains behind Apple’s smartphone show why trade deficits are so pointless as a measure of economic strength.
By Fred P. Hochberg
January 31, 2020
At the Jan. 15 White House signing ceremony for an initial trade deal with China, President Trump’s top trade negotiator, Robert Lighthizer, noted that his boss “has, for years, complained about our enormous trade deficit with China.” Indeed, Mr. Trump and others have long considered that gap a reflection of American economic weakness. The premise seems to be that a $420 billion trade deficit with China is akin to Washington just forking over $420 billion to Beijing each year. In 2012, Mr. Trump tweeted that “every year… China is making almost $300 billion off the United States.” This is the equivalent of saying that your local gas station “made $20 off you” when you put $20 worth of gas in your car.
In fact, bilateral trade deficits are about as useful for determining the health of trade relationships as they are for determining the weather. A trade balance between two countries simply measures the value of goods and services sold from country A to country B versus the value of goods and services moving in the other direction. The country that buys more than it sells is running a bilateral trade deficit with the country that sells more than it buys.
I run this kind of trade deficit with my barber because I repeatedly purchase the service of a haircut from him, even though he never purchases anything from me. That deficit doesn’t tell you much, of course, about the state of either of our finances. By the same token, the nearly $420 billion trade deficit that the U.S. ran with China in 2018 doesn’t offer us much information about the strength or weakness of the U.S. economy.
One object in many of our daily lives, the iPhone, renders trade deficits especially laughable as a talking point. The iPhone was invented and designed in America, is powered by Central African minerals and is brought to life by European and Asian technologies, but both the World Trade Organization and the U.S. nevertheless classify it as a 100% Chinese export.
For the purposes of calculating the U.S. trade deficit, it wouldn’t matter if 99 out of every 100 iPhone suppliers were located in downtown St. Louis. The country “where the last substantial transformation” of a product occurs gets credit for it. Because the overwhelming majority of iPhones have their final assembly done in China, the value of their Swiss gyroscopes, Dutch motion chips, Japanese retina displays and American glassware gets assigned to the Chinese economy. The iPhone’s assembly is largely handled by the Taiwanese company Foxconn Technology Group, the world’s largest contract manufacturer of electronics. According to Reuters, that final assembly is estimated to represent just 3-6% of the cost of building each phone, or about $10 to $20 for every iPhone X.
The price of iPhones varies considerably by model and features, but let’s say that a typical one retails for about $999. Business Insider and the data portal Statista have estimated that, in 2017, just over 69 million iPhones were sold in America. Because the trade deficit is calculated using factory costs—an estimated $230 per iPhone—rather than retail prices, iPhones would contribute about $16 billion to the U.S. trade deficit with China. Only Apple knows the exact number of iPhones sold in the U.S. each year, so the actual value of these imports could be somewhat lower or higher, but the figure is certainly in the tens of billions, which gets factored straight into our $420 billion trade deficit with China.
Yet every time a $999 iPhone gets sold to a U.S. customer, that money doesn’t get wired directly to Beijing. The global information provider IHS Markit estimates that for every iPhone X that gets sold, $110 is sent to Samsung, the South Korean conglomerate that makes iPhone displays. (Samsung also produces the Galaxy series of phones, making them Apple’s chief rival in the smartphone market.) Another $44.45 finds its way to the iPhone’s memory chip suppliers: Toshiba Corp. of Japan and SK Hynix Inc. of South Korea. A little money goes to Singapore; a little goes to Brazil; a little goes to Italy; and a little goes to Corning, N.Y. The vast majority of those dollars go to Apple Park in Cupertino, Calif., while China earns only an estimated $8.46 for the labor and parts that it supplies.
The iPhone may be calculated as a Chinese import, but most of the money that Americans spend on them doesn’t travel far from home. And this is just one of many possible examples showing how America’s trade deficit with China is artificially and substantially inflated, simply because China often happens to be the last stop in a given product’s long global supply chain.
Trade deficits are also unreliable measures of economic health for several other reasons. For one, they can be easily distorted by factors that go beyond a tally of imports and exports. When the U.S. dollar rises or falls in value, for example, our trade balances fluctuate. A high dollar renders American exports more expensive and imports cheaper. So even if the number of products that the U.S. has imported from overseas hasn’t changed, when the dollar becomes more valuable, American shoppers will probably buy more imports and sell fewer exports—making the U.S. trade deficit “worse.” But is that a bad thing? Any change in exchange rates, inflation or how much people in a country save or invest has an effect on trade surpluses and deficits.
Global trade has made many products cheaper, stronger, more innovative or more accessible by influencing supply and demand. It lowers the price tag on our clothing, allows for more durable car parts and provides us with blueberries in the wintertime.
But its impact on smartphones and other gadgets has been far more profound than that: By weaving together the technologies and resources of many countries, trade has made extraordinary products possible. American audio chips, Korean batteries, Congolese minerals, Japanese cameras, German accelerometers: The iPhone may well be the most truly global product yet.
The oft-touted $420 billion trade deficit with China isn’t just a poor metric for determining the strength of the U.S. economy. It is also an imprecise number that can lead to bad policy choices. China isn’t the enemy here. In fact, the Chinese make products like the iPhone possible without reaping much of the benefits.
The lesson of the iPhone is clear: If Americans were left to our own devices, we’d be left without many devices of our own.
—Mr. Hochberg was chairman and president of the U.S. Export-Import Bank in 2009-17. This essay is adapted from his new book, “Trade Is Not a Four-Letter Word: How Six Everyday Products Make the Case for Trade,” recently published by Avid Reader Press.
IDEAS
ESSAY
The iPhone Isn’t Made in China—It’s Made Everywhere
The global supply chains behind Apple’s smartphone show why trade deficits are so pointless as a measure of economic strength.
By Fred P. Hochberg
January 31, 2020
At the Jan. 15 White House signing ceremony for an initial trade deal with China, President Trump’s top trade negotiator, Robert Lighthizer, noted that his boss “has, for years, complained about our enormous trade deficit with China.” Indeed, Mr. Trump and others have long considered that gap a reflection of American economic weakness. The premise seems to be that a $420 billion trade deficit with China is akin to Washington just forking over $420 billion to Beijing each year. In 2012, Mr. Trump tweeted that “every year… China is making almost $300 billion off the United States.” This is the equivalent of saying that your local gas station “made $20 off you” when you put $20 worth of gas in your car.
In fact, bilateral trade deficits are about as useful for determining the health of trade relationships as they are for determining the weather. A trade balance between two countries simply measures the value of goods and services sold from country A to country B versus the value of goods and services moving in the other direction. The country that buys more than it sells is running a bilateral trade deficit with the country that sells more than it buys.
I run this kind of trade deficit with my barber because I repeatedly purchase the service of a haircut from him, even though he never purchases anything from me. That deficit doesn’t tell you much, of course, about the state of either of our finances. By the same token, the nearly $420 billion trade deficit that the U.S. ran with China in 2018 doesn’t offer us much information about the strength or weakness of the U.S. economy.
One object in many of our daily lives, the iPhone, renders trade deficits especially laughable as a talking point. The iPhone was invented and designed in America, is powered by Central African minerals and is brought to life by European and Asian technologies, but both the World Trade Organization and the U.S. nevertheless classify it as a 100% Chinese export.
For the purposes of calculating the U.S. trade deficit, it wouldn’t matter if 99 out of every 100 iPhone suppliers were located in downtown St. Louis. The country “where the last substantial transformation” of a product occurs gets credit for it. Because the overwhelming majority of iPhones have their final assembly done in China, the value of their Swiss gyroscopes, Dutch motion chips, Japanese retina displays and American glassware gets assigned to the Chinese economy. The iPhone’s assembly is largely handled by the Taiwanese company Foxconn Technology Group, the world’s largest contract manufacturer of electronics. According to Reuters, that final assembly is estimated to represent just 3-6% of the cost of building each phone, or about $10 to $20 for every iPhone X.
The price of iPhones varies considerably by model and features, but let’s say that a typical one retails for about $999. Business Insider and the data portal Statista have estimated that, in 2017, just over 69 million iPhones were sold in America. Because the trade deficit is calculated using factory costs—an estimated $230 per iPhone—rather than retail prices, iPhones would contribute about $16 billion to the U.S. trade deficit with China. Only Apple knows the exact number of iPhones sold in the U.S. each year, so the actual value of these imports could be somewhat lower or higher, but the figure is certainly in the tens of billions, which gets factored straight into our $420 billion trade deficit with China.
Yet every time a $999 iPhone gets sold to a U.S. customer, that money doesn’t get wired directly to Beijing. The global information provider IHS Markit estimates that for every iPhone X that gets sold, $110 is sent to Samsung, the South Korean conglomerate that makes iPhone displays. (Samsung also produces the Galaxy series of phones, making them Apple’s chief rival in the smartphone market.) Another $44.45 finds its way to the iPhone’s memory chip suppliers: Toshiba Corp. of Japan and SK Hynix Inc. of South Korea. A little money goes to Singapore; a little goes to Brazil; a little goes to Italy; and a little goes to Corning, N.Y. The vast majority of those dollars go to Apple Park in Cupertino, Calif., while China earns only an estimated $8.46 for the labor and parts that it supplies.
The iPhone may be calculated as a Chinese import, but most of the money that Americans spend on them doesn’t travel far from home. And this is just one of many possible examples showing how America’s trade deficit with China is artificially and substantially inflated, simply because China often happens to be the last stop in a given product’s long global supply chain.
Trade deficits are also unreliable measures of economic health for several other reasons. For one, they can be easily distorted by factors that go beyond a tally of imports and exports. When the U.S. dollar rises or falls in value, for example, our trade balances fluctuate. A high dollar renders American exports more expensive and imports cheaper. So even if the number of products that the U.S. has imported from overseas hasn’t changed, when the dollar becomes more valuable, American shoppers will probably buy more imports and sell fewer exports—making the U.S. trade deficit “worse.” But is that a bad thing? Any change in exchange rates, inflation or how much people in a country save or invest has an effect on trade surpluses and deficits.
Global trade has made many products cheaper, stronger, more innovative or more accessible by influencing supply and demand. It lowers the price tag on our clothing, allows for more durable car parts and provides us with blueberries in the wintertime.
But its impact on smartphones and other gadgets has been far more profound than that: By weaving together the technologies and resources of many countries, trade has made extraordinary products possible. American audio chips, Korean batteries, Congolese minerals, Japanese cameras, German accelerometers: The iPhone may well be the most truly global product yet.
The oft-touted $420 billion trade deficit with China isn’t just a poor metric for determining the strength of the U.S. economy. It is also an imprecise number that can lead to bad policy choices. China isn’t the enemy here. In fact, the Chinese make products like the iPhone possible without reaping much of the benefits.
The lesson of the iPhone is clear: If Americans were left to our own devices, we’d be left without many devices of our own.
—Mr. Hochberg was chairman and president of the U.S. Export-Import Bank in 2009-17. This essay is adapted from his new book, “Trade Is Not a Four-Letter Word: How Six Everyday Products Make the Case for Trade,” recently published by Avid Reader Press.
Friday, October 11, 2019
I love the 21st century.
I wanted to know what day is 120 days from now. From my Apple desktop computer, I clicked Google Search by Voice and I said: "What day is 120 days from now?" In less than one second I got my answer: Saturday, February 8, 2020
About a year ago I was at a grocery store and I heard a song I liked. I asked somebody who worked there what is the name of the song. He got out his cell phone and let the phone listen to the music. The phone was able to tell us what the name of the song was. I was impressed.
When I got home I asked "Search by Voice" "youtube (name of the song)" and one second later there it was for me to listen to it for free.
I love the 21st century.
I used to live in the 20th century, also known as the Dark Ages.
About a year ago I was at a grocery store and I heard a song I liked. I asked somebody who worked there what is the name of the song. He got out his cell phone and let the phone listen to the music. The phone was able to tell us what the name of the song was. I was impressed.
When I got home I asked "Search by Voice" "youtube (name of the song)" and one second later there it was for me to listen to it for free.
I love the 21st century.
I used to live in the 20th century, also known as the Dark Ages.
Saturday, January 5, 2019
The Wall Street Journal which has mostly Republican ideas, wrote an article about Trump's breathtaking stupidity.
Wall Street Journal - The iPhone Canary
Apple’s sales plunge shows the need for a U.S.-China trade deal.
The Editorial Board
January 3, 2019
Investors have been searching for signs of how President Trump’s trade standoff with China is affecting the U.S. economy. Judging by the market reaction to slumping iPhone sales in China, many fear Apple is the canary in the global economy. This may be an overreaction, but the Apple warning does underscore the interdependence of the U.S. and Chinese economies and their joint stake in a trade deal.
CEO Tim Cook told investors late Wednesday that Apple is cutting its quarterly revenue forecast for the first time in 15 or so years amid falling iPhone sales in China, its third-largest market after the U.S. and Europe. “Over 100 percent of our year-over-year worldwide revenue decline, occurred in Greater China across iPhone, Mac and iPad,” Mr. Cook wrote.
He added: “While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China.” Nor did investors, as Apple’s stock fell nearly 10%, leading a broader stock selloff. The 10-year Treasury yield also fell amid concerns of slowing U.S. growth and investor flight to safety.
Mr. Cook is an engineer by training, though he diagnosed the problem like an economist when he said, “We believe the economic environment in China has been further impacted by rising trade tensions with the United States. As the climate of mounting uncertainty weighed on financial markets, the effects appeared to reach consumers as well.”
Note that word “uncertainty.” These columns used that word often to describe the impact of Barack Obama’s regulatory war on business. When CEOs don’t know when government might harass them next, they postpone or cancel investment and hiring decisions. That explained much of the capital strike and slow growth in the Obama era.
Trade uncertainty has a similar secondary economic impact beyond the immediate higher costs of tariffs. If CEOs aren’t sure of their supply chains, or whether tariffs will raise their costs and limit their markets, they also postpone or reduce capital spending. This explains a large part of the investment slowdown in the last half of 2018.
China’s growth rate was slowing before Donald Trump was elected, but trade tensions with the U.S. have further depressed business investment and put a dent in worker incomes, which has reduced consumer spending. Retail sales growth in China hit a 15-year low in November, and the government estimated third-quarter growth clocked in at 6.5%, which would be the lowest in a decade and is likely overstated. Prominent economist Xiang Songzuo shocked some China-watchers in December when he said China’s real growth rate may be only 1.67%.
U.S. businesses across sundry industries have been complaining about the costs and supply-chain complications of the Trump tariffs. In its third-quarter earnings report, Tesla flogged “increased import duties on components sourced from China” that are used to make its Model S and Model X in Fremont, California.
As Chinese consumers tighten their belts, iPhones have been losing market share to less expensive domestic rivals like Huawei and Vivo. Overall Chinese smartphone sales have also been falling, which has knock-on effects on U.S. businesses and workers. China is the second-biggest buyer of U.S. semiconductor exports, and its telecom firms rely on components from U.S. businesses including Qualcomm, Broadcom, Intel and Micron Technology.
American car makers have also reported falling sales in China. General Motors sales fell nearly 15% during the third quarter while Ford’s dropped 43% from the prior September. Lower foreign profits could reduce U.S. investment and returns for American shareholders and workers. Weakening growth in China has also put downward pressure on oil prices, which could prompt U.S. shale producers to reduce drilling.
The point is that President Trump can’t shield U.S. businesses from the collateral damage of his trade brawl with China even if he tried. The two countries’ economies are entwined for better or worse, which is why there’s a political and economic incentive for both sides to cut a trade deal that protects intellectual property, lowers tariffs, and above all reduces uncertainty.
The President seems to think his negotiating leverage increases as the Chinese economy suffers, and the temptation in some U.S. quarters is to see a Chinese recession as just deserts for Bejing’s policy of condoning intellectual property theft and other depredations against U.S. business.
But as Apple’s Mr. Cook made clear in his letter, a Chinese downturn will hurt U.S. businesses and economy as well. Hear that iPhone warble, Mr. Trump?
Appeared in the January 4, 2019, print edition.
Apple’s sales plunge shows the need for a U.S.-China trade deal.
The Editorial Board
January 3, 2019
Investors have been searching for signs of how President Trump’s trade standoff with China is affecting the U.S. economy. Judging by the market reaction to slumping iPhone sales in China, many fear Apple is the canary in the global economy. This may be an overreaction, but the Apple warning does underscore the interdependence of the U.S. and Chinese economies and their joint stake in a trade deal.
CEO Tim Cook told investors late Wednesday that Apple is cutting its quarterly revenue forecast for the first time in 15 or so years amid falling iPhone sales in China, its third-largest market after the U.S. and Europe. “Over 100 percent of our year-over-year worldwide revenue decline, occurred in Greater China across iPhone, Mac and iPad,” Mr. Cook wrote.
He added: “While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China.” Nor did investors, as Apple’s stock fell nearly 10%, leading a broader stock selloff. The 10-year Treasury yield also fell amid concerns of slowing U.S. growth and investor flight to safety.
Mr. Cook is an engineer by training, though he diagnosed the problem like an economist when he said, “We believe the economic environment in China has been further impacted by rising trade tensions with the United States. As the climate of mounting uncertainty weighed on financial markets, the effects appeared to reach consumers as well.”
Note that word “uncertainty.” These columns used that word often to describe the impact of Barack Obama’s regulatory war on business. When CEOs don’t know when government might harass them next, they postpone or cancel investment and hiring decisions. That explained much of the capital strike and slow growth in the Obama era.
Trade uncertainty has a similar secondary economic impact beyond the immediate higher costs of tariffs. If CEOs aren’t sure of their supply chains, or whether tariffs will raise their costs and limit their markets, they also postpone or reduce capital spending. This explains a large part of the investment slowdown in the last half of 2018.
China’s growth rate was slowing before Donald Trump was elected, but trade tensions with the U.S. have further depressed business investment and put a dent in worker incomes, which has reduced consumer spending. Retail sales growth in China hit a 15-year low in November, and the government estimated third-quarter growth clocked in at 6.5%, which would be the lowest in a decade and is likely overstated. Prominent economist Xiang Songzuo shocked some China-watchers in December when he said China’s real growth rate may be only 1.67%.
U.S. businesses across sundry industries have been complaining about the costs and supply-chain complications of the Trump tariffs. In its third-quarter earnings report, Tesla flogged “increased import duties on components sourced from China” that are used to make its Model S and Model X in Fremont, California.
As Chinese consumers tighten their belts, iPhones have been losing market share to less expensive domestic rivals like Huawei and Vivo. Overall Chinese smartphone sales have also been falling, which has knock-on effects on U.S. businesses and workers. China is the second-biggest buyer of U.S. semiconductor exports, and its telecom firms rely on components from U.S. businesses including Qualcomm, Broadcom, Intel and Micron Technology.
American car makers have also reported falling sales in China. General Motors sales fell nearly 15% during the third quarter while Ford’s dropped 43% from the prior September. Lower foreign profits could reduce U.S. investment and returns for American shareholders and workers. Weakening growth in China has also put downward pressure on oil prices, which could prompt U.S. shale producers to reduce drilling.
The point is that President Trump can’t shield U.S. businesses from the collateral damage of his trade brawl with China even if he tried. The two countries’ economies are entwined for better or worse, which is why there’s a political and economic incentive for both sides to cut a trade deal that protects intellectual property, lowers tariffs, and above all reduces uncertainty.
The President seems to think his negotiating leverage increases as the Chinese economy suffers, and the temptation in some U.S. quarters is to see a Chinese recession as just deserts for Bejing’s policy of condoning intellectual property theft and other depredations against U.S. business.
But as Apple’s Mr. Cook made clear in his letter, a Chinese downturn will hurt U.S. businesses and economy as well. Hear that iPhone warble, Mr. Trump?
Appeared in the January 4, 2019, print edition.
Thursday, February 1, 2018
Thursday, January 18, 2018
Amazon.com is a wonderful place. I love Amazon. I also love Google and Apple.
Cities Amazon Is Considering for a Second Headquarters
- Atlanta
- Austin, Texas
- Boston
- Chicago
- Columbus, Ohio
- Dallas
- Denver
- Indianapolis
- Los Angeles
- Miami
- Montgomery County, Md.
- Nashville
- Newark, N.J.
- New York City
- Northern Virginia
- Philadelphia
- Pittsburgh
- Raleigh, N.C.
- Toronto
- Washington D.C.
Monday, April 13, 2015
Here are the links to the awesome Apple resources I mentioned above: Mac 101 (Introduction to Mac, OS X, Basics):
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Sunday, April 12, 2015
How do I completely remove Google Internet Account from my Mac Mini?
"Internet Accounts sets up your accounts to use with Mail, Contacts, Calendar, Messages, and other apps."
How do I completely remove Google Internet Account from my Mac Mini?
I use Google for a lot of things including Search and Spreadsheets and Blogs, but I want to completely remove Google from my Mac Mini. On my list of Internet Accounts I do not want to see Google on that list. How do I get rid of it?
How do I completely remove Google Internet Account from my Mac Mini?
I use Google for a lot of things including Search and Spreadsheets and Blogs, but I want to completely remove Google from my Mac Mini. On my list of Internet Accounts I do not want to see Google on that list. How do I get rid of it?
Thanks for contacting AppleCare chat support. My name is Bernie. Please give me a moment to look over your information.
Before we dive in, the case number for our chat session today will be 779250654 and we can be reached any time at GetSupport.apple.com.
"Internet Accounts sets up your accounts to use with Mail, Contacts, Calendar, Messages, and other apps." How do I completely remove Google Internet Account from my Mac Mini? I use Google for a lot of things including Search and Spreadsheets and Blogs, but I want to completely remove Google from my Mac Mini. On my list of Internet Accounts I do not want to see Google on that list. How do I get rid of it?
Hi Bob. How are you doing today?
ok
Great! I see you would like to remove Google from your Mac Mini listed under the Internet Accounts is that correct?
yes
I will make sure to do all I can to help with your Google Internet Account issue.
ok
Now to better assist you, are you chatting from your Mac Mini?
yes
Great! I have this great tool to share your screen. Do you mind of we installed it so I can see your issue?
Ok go ahead
Awesome! Screen sharing is completely secure and you can end the session at any time. Interested? This page explains how to set it up:
https://ara.apple.com/GetRemoteAdvisor.action?session_key=0225824&locale=en_US
https://ara.apple.com/GetRemoteAdvisor.action?session_key=0225824&locale=en_US
After you download the application, I'll be able to see your screen, but I can't access your files or control your computer. If there's anything that you don't want me to see on your screen, remove it from view before your session begins. Your session will be recorded for quality purposes.
hello Bernie
Okay I can see you screen! Now you can show me which account you would like to remove.
Gotcha!
You will have to just click the Minus Button and it removes the account for you!
I think my problem is solved
Awesome! I love screen sharing it make troubleshooting a breeze.
Ok we are done here, thanks for your help.
Your so very welcome.
Are you comfortable with the outcome for the chat today on your Google account issue.
yes
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