Member Briefing January 16,2024
Top Story
Iowa Caucus: Trump Wins, DeSantis Finishes Distant Second With Haley Close Behind
Donald Trump secured a resounding win in the first 2024 Republican presidential contest in Iowa on Monday, asserting his command over the party despite facing scores of criminal charges as he seeks an election rematch with President Joe Biden. Trump took over half the votes, propelling him towards what looks set to be a close and deeply acrimonious election campaign against Biden, a Democrat, in November.
Trump garnered 51%, DeSantis 21% and Haley 19%, with 99% of the expected vote tallied, according to Edison Research. That victory margin far surpassed the previous record of 12.8 percentage points for Bob Dole in 1988.
2024 Edelman Trust Barometer – Trust in Business Rises as Innovation Threatens Disruption
Richard Edelman released his annual Edelman Trust Barometer, based on an online survey of 32,000 people around the world. CEO Daily got an early look and found it shows once again that business is more trusted than governments, NGOs or media. Survey respondents in every country except Saudi Arabia and Singapore said that business was both more competent and more ethical than government and media. Trust in business in the 21 countries monitored has risen from 48% in 2012 to 61% today.
Among the findings: Trust is based first on economic prosperity, evidenced by the fact that developing countries have higher trust levels than developed countries. Innovation can drive growth for all levels of society, resulting in higher trust in institutions. A majority of respondents who believe that innovation is poorly managed think that society is changing too quickly and not in ways that benefit people like me. Seventy-four percent say they trust scientists and peers, equally, for the truth about innovations; however, peers are more trusted than scientists among those who think innovation is poorly managed.
Global Headlines
Gaza
- Israel and Hamas: The Latest News – The Guardian
- Israel Pounds Targets Across Gaza, Awaits Hamas Word on Three Hostages - Reuters
- Hamas Appears to Show Dead Bodies of Two Hostages After Warning Israel – Reuters
- A Unit of Young Female Soldiers Warned of a Big Attack. They Were Among the First Hamas Killed on 7 October - BBC
- White House Says it’s ‘Right Time’ for Israel to Scale Back Gaza War – The Hill
- Two Palestinians Kill Woman, Injure 12 in Israel Car-Rammings, Police Say – Reuters
- Israeli Footballer Detained in Turkey Over Gaza War Message – Politico
- Interactive Map- Israel’s Operation in Gaza – Institute for the Study of War
- Map – Tracking Hamas’ Attack on Israel – Live Universal Awareness Map
Ukraine
- Ukraine and Russia: The Latest News – The Guardian
- Zelenskyy Heads to Davos to Regain the Spotlight for Ukraine – Politico
- Ukraine and Russia Say They Want the War to End. But Experts Say They’re Nowhere Near Peace Talks - CNBC
- Ukraine Attacked by 40 Russian Missiles, Drones, Air Force Says
- Ukraine Ground Commander Says his Troops, Now on 'Active Defence', Can Still Surprise - Reuters
- He Warned of Nuclear Disaster in Ukraine. Then He Was Thrown in a Russian Jail and Tortured - WSJ
- Ukraine Says it Shot Down Russian A-50 Spy Plane - BBC
- Interactive Map: Assessed Control of Terrain in Ukraine – Institute for the Study of War
- Map – Tracking Russia’s Invasion of Ukraine – Live Universal Awareness Map
Other Headlines
- Taiwan’s New President: 5 Things You Need to Know About William Lai – Politico
- North Korea Says it Tested New Solid-Fuel Missile Timed With Hypersonic Warhead – The Hill
- A Big Chinese Delegation Unnerves U.S. Diplomats in Davos – Politico
- Inflation Risk from Red Sea Disruption, Warns Economist - BBC
- U.S. and Iran Wage a Proxy War - NYT
- Why ISIS Has Unleashed its Suicide Bombers Against Iran – Insider
- Pro-Palestinian Protesters Arrested Before Planned London Stock Exchange ‘Disruption - Forbes
- U.S. Intercepts Cruise Missile Attack on Its Warship in Red Sea - WSJ
Policy and Politics
U.S. Deficit Tops Half a Trillion Dollars in the First Quarter of Fiscal Year
The U.S. government ran up another half a trillion dollars in red ink in the first quarter of its fiscal year, the Treasury Department reported Thursday. For the period from October 2023 through December 2023, the budget deficit totaled just shy of $510 billion, following a shortfall of $129.4 billion in just December alone, which was 52% higher than a year ago. The jump in the deficit pushed total government debt past $34 trillion for the first time.
Compared to last year, which saw a final deficit of $1.7 trillion, 2024 is running even hotter. In the first quarter of fiscal 2023, for example, the difference between spending and receipts totaled $421.4 billion. On an unadjusted basis, that’s an increase of $89 billion between fiscal 2024 and last year. Adjusted for calendar factors, the Treasury Department said the change between the two years is actually $97 billion. December’s shortfall was higher by more than $34 billion compared to the previous year, driven by higher Social Security payments and interest costs. If the current pace continues, 2024 would end with a deficit of just more than $2 trillion.
Conflict, Climate Change and AI Get Top Billing as Leaders Converge for Davos
The 2024 World Economic Forum has kicked off in Davos, the popular ski resort in the Swiss Alps, attracting public and private sector leaders from across the globe. This year, the week-long annual summit is focusing on geopolitics, the future of AI, and climate change. Its motto is 'rebuilding trust,' as Mirek Dušek, Managing Director of the World Economic Forum, explains: "Some would link the erosion of trust to the deep transformations that we are seeing all around us, be they technological, political, societal or those related to climate and nature. Some would also say that all these transformations taken together have ushered in, if not a completely new era, at least a stark new reality."
Over 60 heads of state and government will be taking centre stage this week in Davos, including US Secretary of State, Antony Blinken, the Secretary General of NATO, Jens Stoltenberg, the EU Commission President, Ursula von der Leyen and Ukraine's President Zelenskyy. They'll hold both public appearances and closed-door talks. They'll be among more than 2800 attendees, including academics, artists and international organization leaders.
Health and Wellness
As New the Covid Variant Surges, What to Know About Testing and Accuracy
The U.S. is currently in the midst of a Covid wave, fueled by the JN.1 variant that’s driving up hospitalizations and deaths across the country. For most people, however, the new variant doesn’t seem to be causing worse symptoms. That’s left many wondering whether we need to keep swabbing our nasal passages with Covid tests at the first sign of congestion or achiness? How well do at-home rapid tests work against the new variant?
Influenza and some cold viruses are circulating along with Covid. So there are good reasons to know which virus you’ve got, particularly if you are at higher risk of getting really sick. For a healthy 25-year-old, there is still some utility in getting tested. If somebody in the home has a weak immune system or is fighting cancer, for example, it’s important to isolate if it’s Covid. There is no data that the JN.1 variant should have any effect on the results of an at-home rapid test, experts say. “I have not seen anything to suggest that the newer variants have evaded detection on tests,” said Dr. Abraar Karan, an infectious disease physician at Stanford Medicine.
Workplace Wellness Programs Have Little Benefit, Study Finds
Workplace wellness offerings such as apps, coaching and courses in time management or financial well-being did not have any positive effect, according to the study, while resilience and stress management trainings seemed to have a negative effect. Employee mental health services have become a billion-dollar industry. New hires, once they have found the restrooms and enrolled in 401(k) plans, are presented with a panoply of digital wellness solutions, mindfulness seminars, massage classes, resilience workshops, coaching sessions and sleep apps.
These programs are a point of pride for forward-thinking human resource departments, evidence that employers care about their workers. But a British researcher who analyzed survey responses from 46,336 workers at companies that offered such programs found that people who participated in them were no better off than colleagues who did not. The study, published this month in Industrial Relations Journal, considered the outcomes of 90 different interventions and found a single notable exception: Workers who were given the opportunity to do charity or volunteer work did seem to have improved well-being.
Election 2024
Nikki Haley Gets Boost From Chris Christie Exit, but Odds Against Trump Still Steep - WSJ
Five Republican Storylines to Watch for at Iowa Caucuses - BBC
Biden Raises Nearly $100 Million At End Of 2023—With Record Amount Of Cash To Spend - Forbes
Real Clear Politics Latest GOP Primary Polls – Real Clear Politics
Real Clear Politics Latest General Election Polls – Real Clear Politics
Latest Polls - FiveThirtyEight
Industry News
Germany’s Economy Contracted in 2023, as Economic Model Faltered
Germany’s economy contracted in 2023, hit by high inflation that squeezed consumer spending, with the country’s creaking industrial model also suffering from weak global demand. Price adjusted gross domestic product declined 0.3% compared with the previous year, according to preliminary data published Monday by Germany’s statistics office Destatis. In preliminary data also released Monday, German GDP fell by 0.3% in the fourth quarter of 2023 compared with the previous three months, after stagnating in the third quarter.
Output in industry, long a successful component of Germany’s economic model, contracted 2.0%, primarily from lower production in the energy sector, as the industry learned to deal with higher prices after Russia’s invasion of Ukraine. However, the key auto industry still managed to be a positive contributor to GDP, Destatis said. Tightening financing conditions—mainly driven by higher European Central Bank interest rates—slowed the construction sector, which saw modest growth of 0.2%. The services sector helped the overall economy, albeit at a weaker pace than the prior two years, with output in business services growing 0.3%. Employment in 2023 remained robust, with employment growth almost entirely attributable to the services sector, according to Destatis.
NAM: New Labor Rule Will Cost Employers, Restrict Worker Freedoms
A new Biden administration rule will force companies to reclassify potentially millions of workers, creating difficulties for manufacturing employers and employees alike, the NAM says. In a move that “is widely expected to increase labor costs for industries that rely on contract labor or freelancers, such as trucking, manufacturing, health care and app-based ‘gig’ services,” the Department of Labor “will require that workers be considered employees rather than contractors when they are ‘economically dependent’ on a company,” Reuters (subscription) reports.
The new rule—which is set to take effect March 11—replaces one established by the previous administration, which had a much broader definition of what constituted contract labor. Employee or contractor? In determining a worker’s status, the department will weigh six factors, including “a worker’s opportunity for profit or loss, the degree of control wielded by a company over a worker and whether the work is an integral part of the company’s business,” according to Reuters.
IMF Warns AI to Hit Almost 40% of Jobs Worldwide and Worsen Overall Inequality
The International Monetary Fund warned that nearly 40% of jobs across the globe could be affected by the rise of artificial intelligence, with high-income economies facing greater risks than emerging markets and low-income countries. The Washington, D.C.-based institution on Sunday assessed the potential impact of AI on the global labor market and found that, in most cases, the technology is likely to worsen overall inequality.
The IMF noted that about 60% of jobs could be impacted by AI in high-income nations, and roughly half of these may benefit from AI integration to boost productivity. Comparatively, AI exposure was estimated to come in at 40% in emerging markets and at 26% in low-income countries, respectively. The IMF also flagged that AI could affect income and wealth inequality within countries, warning of “polarization within income brackets.” It said workers who are able to access the benefits of AI could increase their productivity and salary, while those who cannot are at risk of falling further behind.
New York’s Fracking Ban Threatened by CO2 ‘Loophole,’ Environmentalists Say
In 2014, New York became the first state in the country with known gas reserves to prohibit the extraction of natural gas using a technique known as hydraulic fracturing, or fracking, after a state-wide health investigation concluded it releases toxic pollutants into the air and drinking water. Then-Gov. Andrew Cuomo first put the ban in effect through executive order. In 2021, the New York State legislature permanently banned fracking in its Fiscal Year 2021 Budget.
But a company launched last year called Southern Tier Solutions is introducing a new fracking technique that uses carbon dioxide (CO2) instead of water to extract gas from underground—and it hopes to do business in New York. Environmental advocates see the company’s plans as an attempt to circumvent the state’s prohibition. Southern Tier Solutions says on its website that it is putting out “an immediate and tangible proposition to tap” into deep natural gas reserves running under parts of New York known as the Marcellus and Utica shales. Families who have land on top of such reserves are usually asked to lease their property to fracking companies, which then drill deep underground to extract gas. Supporters of the practice have promoted it as a source of potential income for financially depressed communities in New York.
Cybersecurity Concerns for Manufacturers in 2024
The more networked and data-centric manufacturing becomes, the more manufacturing leaders ought not consider cybersecurity as something that only concerns the IT department. New SEC reporting rules and high-profile hacks against manufacturers with multimillion-dollar price tags last year curtly demonstrate the point. Org-wide planning provides the best defense against cyberattack. Knowing what to expect in 2024 and taking proactive steps against threat actors may make the difference between publicly admitting your company wasn’t prepared and accordingly losing money and prestige, or not.
In addition to the best practice, general cybersecurity hygiene pertinent to any business, manufacturers must contend with the vulnerability of their operational technology (OT). Every networked machine on the floor provides a possible avenue for intrusion into your larger IT system. “Lack of segmentation between IT and OT environments and lack of awareness into these systems provide key avenues for threat actors to cause impacts and outages. Organizations need to mitigate as much risk as possible by focusing on quality backups of not just corporate data, but OT configurations and data needed to restore systems, all with secure encryption,” says Tom Marsland, VP of technology at Cloud Range.
Tesla Price Cuts, Used Cars Flood Market With Affordable Model 3, Model Y
As Tesla cuts prices and used Teslas from Hertz pour into the market, EVs are getting more affordable for the average car buyer. With the new 2024 Model 3 Highland now available in the U.S. that means plenty of prior-generation 2023 Model 3 are available on Tesla’s inventory page. Add Hertz and Tesla’s own used car sales to the mix and pricing gets even more interesting.
Hertz pricing: Hundreds of Model 3 and Model Y vehicles are now available on Hertz Car Sales website with pricing for a Model 3 — albeit with lots of miles — starting at about $20,ooo. Prices for the Model Y are higher, starting at about $33,000. Other EVs, such as the Chevy Bolt EUV, are also for sale on the Hertz website starting at around $22,500. The used Bolt EUVs — which are base LT models — tend to have lower miles than the many of the Teslas. While Hertz’s actions mean more used Model Ys and Model 3s, Tesla sells lots of used cars too. For example, a used 2021 Model Y with 44,791 miles lists for $31,900 on the Tesla used car website. On Hertz, a used 2022 Model Y with 67,983 miles lists for $34,900 by comparison.
China Delays Restart of 737 Max Deliveries Amid Safety Checks
Concerns around the Boeing 737 Max are obstructing the resumption of its deliveries to China, The Wall Street Journal reported. China Southern Airlines has been preparing to receive 737 Max jets as early as this month — but is now planning additional safety inspections, according to the Journal. People briefed on the matter also told the WSJ that China's aviation regulator has instructed airlines to conduct precautionary safety checks on their Boeing 737 Max fleets.
No Chinese airline currently operates a 737 Max 9, and the Journal reports China Southern Airlines' awaited delivery isn't the same variant as Alaska's Max 9 — which features a plug door covering a deactivated emergency exit. Boeing predicts that China will account for 20% of the world's plane deliveries over the next 20 years, so resuming business is pivotal.China froze deliveries of most Boeing aircraft in 2019 after the 737 Max was grounded worldwide following two crashes in which 346 people were killed.
Boeing to Add Further Quality Inspections for 737 MAX
Boeing will add further quality inspections for the 737 MAX after an accident earlier this month where a fuselage panel was blown off an airplane, the head of its commercial airplanes division said Monday. The planemaker will also deploy a team to supplier Spirit AeroSystems - which makes and installs the plug door involved in the incident - to check and approve Spirit's work on the plugs before fuselages are sent to Boeing's production facilities in Washington state, Stan Deal, president of Boeing Commercial Airplanes, said in a letter to Boeing employees.
In addition to the door plug inspections, Boeing teams will conduct checks at 50 other points in Spirit's production process, Deal said. Meanwhile, both Boeing and Spirit will open its 737 production facilities to airline customers for carriers to provide their own inspections. Boeing will also hold sessions for employees on quality management, and bring in an outside party to conduct an independent assessment of its production process, Deal said.