Opinion | Elizabeth Warren: We Can Prevent More Bank Failures – The New York Times

“No one should be mistaken about what unfolded over the past few days in the U.S. banking system: These recent bank failures are the direct result of leaders in Washington weakening the financial rules.

In the aftermath of the 2008 financial crisis, Congress passed the Dodd-Frank Act to protect consumers and ensure that big banks could never again take down the economy and destroy millions of lives. Wall Street chief executives and their armies of lawyers and lobbyists hated this law. They spent millions trying to defeat it, and, when they lost, spent millions more trying to weaken it.

Greg Becker, the chief executive of Silicon Valley Bank, was one of the ‌many high-powered executives who lobbied Congress to weaken the law. In 2018, the big banks won. With support from both parties, President Donald Trump signed a law to roll back critical parts of Dodd-Frank. Regulators, including the Federal Reserve chair Jerome Powell, then made a bad situation worse, ‌‌letting financial institutions load up on risk.

Banks like S.V.B. ‌— which had become the 16th largest bank in the country before regulators shut it down on Friday ‌—‌ got relief from stringent requirements, basing their claim on the laughable assertion that banks like them weren’t actually “big” ‌and therefore didn’t need strong oversight.”

You’re Now a ‘Manager.’ Forget About Overtime Pay. – The New York Times

By Noam ScheiberMarch 6, 2023, 3:00 a.m. ET6 MIN READ

“For four years beginning in 2014, Tiffany Palliser worked at Panera Bread in South Florida, making salads and operating the register for shifts that began at 5 a.m. and often ran late into the afternoon.Ms. Palliser estimates that she worked at least 50 hours a week on average. But she says she did not receive overtime pay.The reason? Panera officially considered her a manager and paid her an annual salary rather than on an hourly basis. Ms. Palliser said she was often told that “this is what you signed up for” by becoming an assistant manager.”

“. . . . . Some lawyers said only an increase in the limit below which workers automatically receive overtime pay is likely to meaningfully rein in misclassification. With a higher cutoff, simply paying workers overtime is often cheaper than avoiding overtime costs by substantially increasing their pay and labeling them managers.

“That’s why companies fought it so hard under Obama,” said Ms. Aaron, a partner at Winebrake & Santillo, alluding to a 2016 Labor Department rule raising the overtime limit to about $47,500 from about $23,500. A federal judge suspended the rule, arguing that the Obama administration lacked the authority to raise the salary limit by such a large amount.

The Trump administration later adopted the current cutoff of about $35,500, and the Biden administration has indicated that it will propose raising the cutoff substantially this year. Business groups say such a change will not help many workers because employers are likely to lower base wages to offset overtime pay.”  30

Chenzi Xu and Jeffrey Reppucci | Credit Card Points Are Being Paid For by the Poor – The New York Times

By Chenzi Xu and Jeffrey Reppucci

Ms. Xu is a finance professor at the Stanford Graduate School of Business. Mr. Reppucci is a candidate for a Master of Business Administration and Master of Public Policy at Stanford.

There’s an undeniable feeling of excitement when you turn your daily credit card swipes at Starbucks into first-class airfare or a weekend jaunt to Costa Rica. Thanks to mobile banking and the ease of autopay, you can scrupulously avoid any additional costs by paying your monthly bill in full. Free flights and exclusive discounts abound.

Something for nothing, right?

Not exactly nothing. Credit card perks for educated, usually urban professionals are being subsidized by people who have less. In other words, when you book a hotel room or enjoy entry to an airport lounge at no cost, poor consumers are ultimately footing the bill.

Demand for rewards is only going up. In 2016, Chase launched its Sapphire Reserve card. The card comes with perks, bonuses and points multipliers that for big-spending travelers and diners are worth far more than its steep $550 annual fee. There was so much initial demand that Chase ran out of the metal slabs it prints the cards on. Sapphire’s enormous success set off a credit card perks war, with numerous banks flooding the market with sign-on bonuses worth thousands of dollars.

In 2022, the Federal Reserve published data showing that the cost of rewards, as a share of total transaction volume on credit cards, increased 25 percent from 2015 through 2021. This bonanza has helped affluent professionals flood Instagram with envy-inducing shots of white sand beaches, hotel suites and plush airport lounges.

Ezra Dyer | Ford Is Leaving Tesla in the Dust – The New York Times

By Ezra Dyer

Mr. Dyer is a columnist for Car and Driver magazine.

“Tesla had me convinced, for a while, that it was a cool company.

It made cars that performed animatronic holiday shows using their lights and power-operated doors. It came up with dog mode (a climate control system that stays running for dogs in a parked car), a GPS-linked air suspension that remembers where the speed bumps are and raises the car automatically, and “fart mode” (where the car makes fart sounds).

And, fundamentally, its cars had no competition. If you wanted an electric car that could go more than 250 miles between charges, Tesla was your only choice for the better part of a decade. The company’s C.E.O., Elon Musk, came across as goofy and eccentric: You could build great cars and name each model such that the lineup spells “SEXY.”

Inside Taiwanese Chip Giant, a U.S. Expansion Stokes Tensions – The New York Times

By John Liu and Paul Mozur

John Liu and Paul Mozur, who are based in Seoul, interviewed dozens of semiconductor experts on the geopolitics of Taiwan’s chip making.

Feb. 22, 2023Updated 8:18 a.m. ET

5 MIN READ

“Taiwan Semiconductor Manufacturing Company, the world’s biggest maker of advanced computer chips, is upgrading and expanding a new factory in Arizona that promises to help move the United States toward a more self-reliant technological future.

But to some at the company, the $40 billion project is something else: a bad business decision.

Internal doubts are mounting at the Taiwanese chip maker over its U.S. factory, according to interviews with 11 TSMC employees, who declined to be identified because they were not authorized to speak publicly. Many of the workers said the project could distract from the research and development focus that had long helped TSMC outmaneuver rivals. Some added that they were hesitant to move to the United States because of potential culture clashes.”

Tesla Cuts Prices Sharply as It Moves to Bolster Demand – The New York Times

By Neal E. Boudette

Jan. 13, 2023

4 MIN READ

“Tesla has cut prices on most of its electric cars in the United States and Europe by as much as 20 percent in a bid to spur slackening demand.

The automaker faces increasingly stiff competition in the global market for electric vehicles. It also must contend with rising interest rates in the United States, which have increased the cost of financing vehicle purchases.

“I think Tesla recognizes they are not the only game in town and the Detroit companies are jumping into the deep end with E.V.s,” said Dan Ives, a Wedbush analyst. “I think the price cuts mean Tesla is going to rip the Band-Aid off and try to go on the offensive.”

Tesla stock fell sharply in early trading Friday after the price cuts were reported, but ended the day less than 1 percent lower. The share price has fallen roughly 70 percent since November 2021.”

Peter Coy | Worker Overtime Pay Is Dying. It Shouldn’t Be. – The New York Times

By Peter Coy

Opinion Writer

“Time and a half for overtime is one of the best-known and most important protections for workers in the United States. Yet many employers routinely undermine the protection by misclassifying workers as managers and thereby making them ineligible for overtime pay.

The extent to which employers game the overtime system was made starkly clear in January in a working paper published by the National Bureau of Economic Research. The title says it all: “Too Many Managers: The Strategic Use of Titles to Avoid Overtime Payments.” “Food cart manager,” “price scanning coordinator,” “carpet shampoo manager,” “lead shower door installer,” “grooming manager” and “director of first impressions” (for a front desk clerk) are some of the “fake-sounding” titles uncovered by the authors, Lauren Cohen of Harvard Business School and Umit Gurun and N. Bugra Ozel of the University of Texas at Dallas School of Management.

I talked to three people who want to make it harder for employers to misclassify workers: Nick Hanauer, a wealthy entrepreneur who founded Civic Ventures, a public policy incubator in Seattle; Heidi Shierholz, the president of the Economic Policy Institute, a think tank focused on low- and middle-income workers; and David Weil, who ran the wage and hour division of the Department of Labor during the Obama administration but was rejected by the Senate for the same job in the Biden administration.”

How a Drug Company AbbVie Made $114 Billion by Gaming the U.S. Patent System – The New York Times

By Rebecca Robbins

• • Jan. 28, 2023

7 MIN READ

In 2016, a blockbuster drug called Humira was poised to become a lot less valuable.

“The key patent on the best-selling anti-inflammatory medication, used to treat conditions like arthritis, was expiring at the end of the year. Regulators had blessed a rival version of the drug, and more copycats were close behind. The onset of competition seemed likely to push down the medication’s $50,000-a-year list price.

Instead, the opposite happened.

Through its savvy but legal exploitation of the U.S. patent system, Humira’s manufacturer, AbbVie, blocked competitors from entering the market. For the next six years, the drug’s price kept rising. Today, Humira is the most lucrative franchise in pharmaceutical history.

Next week, the curtain is expected to come down on a monopoly that has generated $114 billion in revenue for AbbVie just since the end of 2016. The knockoff drug that regulators authorized more than six years ago, Amgen’s Amjevita, will come to market in the United States, and as many as nine more Humira competitors will follow this year from pharmaceutical giants including Pfizer. Prices are likely to tumble.

The reason that it has taken so long to get to this point is a case study in how drug companies artificially prop up prices on their best-selling drugs.”

David Lindsay: Excellenet article, but upsetting. It appears that there are many solutions, such as passing a law that says all additional patents to a new drug have to use the same start date as the original patent.

Peter Coy | Making Farms Organic Is Paying Off – The New York Times

By Peter Coy

Opinion Writer

“I talked by phone on Thursday with Garrett Mussi as he was driving around 1,000 acres in California’s San Joaquin Valley where he grows organic corn, squash, tomatoes, cucumbers, garlic and almonds using environmentally friendly methods. He spoke about being a good steward of the rich soil. He described using drip irrigation to conserve water and cover crops to add nitrogen to the soil and compost to enrich it.

Learning to farm in an organic way “has been a good experience,” he told me. “It definitely has its challenges, but farming overall is a challenge. I enjoy it. Always learning something new.”

Mussi doesn’t own any of the acres he tends so carefully. He is a tenant farmer. The owner of the land is Farmland L.P., an investment fund that buys farmland and readies it for certification as organic by the U.S. Department of Agriculture: using pesticides sparingly, and only the least harmful kinds; minimizing erosion; sequestering carbon in the soil; rotating crops regularly and providing habitats for butterflies, bees and other pollinators. Some organic farmers use lady bugs to eat aphids and owls to eat rodents.

What we have here is finance meeting farming and doing good, not evil.”

Steven Rattner | Biden’s Big, and Risky, Semiconductor Push – The New York Times

By Steven Rattner

Mr. Rattner was a counselor to the Treasury secretary in the Obama administration.

“Intent on reversing America’s decline in the world’s production of cutting-edge semiconductors, the federal government has begun what is arguably the government’s largest foray into the private sector since World War II.

That’s just one piece of a larger, more muscular approach to industrial policy. It’s a road filled with hope but also pockmarked with risks. On balance, the record of government trying to improve the functioning of the private sector is poor, and particularly in complex sectors like semiconductors, the challenges are great.”