Progressive Bills and Policies Threaten the Economy

Grind for January 2nd
FIRST SIP:
“The Supreme Court has ruled that they cannot have a nativity scene in Washington, DC. This wasn’t for any religious reasons. They couldn’t find three wise men and a virgin.”

– Jay Leno



Trending

The Headline

California’s data privacy law poised to disrupt online economy

The Grind

Starting in 2020, California’s Consumer Privacy Act (CCPA) will require businesses to tell consumers what data has been collected about them and, if requested, to delete that data.

Businesses that do work in California must provide consumers with two ways to ask about data collection – an effort that could cost businesses between $55,000 and $2 million.

Businesses must create a simple way for consumers to opt out of having their data sold and will be allowed to charge you more for their services if you opt out.

Businesses must comply with the law if they meet one of the following qualifications:

— They have at least $25 million in annual revenue

— They obtain at least 50% of their revenue from selling user data

— They have access to personal information about more than 50,000 people

The CCPA allows consumers to make requests about data twice per year and to sue companies if their personal data is accessed or stolen during a data breach.

The Details

The law, which is being copied in nearly half of states, could permanently change the online economy by decreasing the value of targeted ads.

Millions of companies rely on targeted ads, which require personal information. If users ask companies to delete that information, the ads will be less effective. Big companies like Google could lose massive amounts of revenue if forced to rely on generic ads (which command far lower prices than targeted ads).

Ultimately, the effect of the law will depend on whether people assert the rights provided by it.

“Is this a big deal for thousands or hundreds of thousands or millions of people?” asks Chris May, a risk consultant for Deloitte. “We don’t know yet.”

Analysts predict small and midsize companies will risk the penalty of noncompliance rather than expend the resources required by the law.

“Large businesses have the capacity to figure this out, but it’s an extreme burden for small ones, which are the backbone of this nation’s economy,” says Tim Day, a senior vice president at the US Chamber of Commerce.

California’s Justice Department has until July 1st to figure out how to enforce the law. In the meantime, California’s Chamber of Commerce is lobbying Congress to pass a similar law to preempt the CCPA.

“It’s going to be unworkable to have a balkanized approach to data privacy,” says Dan Jaffe, an executive with the Association of National Advertisers. “But what a national law will look like is up in the air.”



Victory Achieved

The Headline

Labor unions, Democrats, and automakers endorse USMCA

The Grind

Some of the nation’s largest labor unions are celebrating the United States-Mexico-Canada Agreement (USMCA) as a major win for the working class.

“Because of our patience and perseverance, the USMCA now includes strong labor rights and a viable mechanism to enforce them,” said AFL-CIO President Richard Trumka.

“We also secured a separate enforcement mechanism that allows for inspections of factories and facilities that don’t live up to their obligations. This was an important priority for the labor movement because it ensures that working people in all three countries have greater protections under this new agreement.”

The Details

The USMCA will replace NAFTA, a trade deal said to be responsible for the loss of nearly 1 million American jobs. House lawmakers approved the latest version of the USCMA earlier this month, meaning the deal is almost certain to be ratified and signed into law soon.

The compromise includes provisions to protect American workers from lower-paid Mexican nationals, but won’t stop American companies from outsourcing, says United Steelworkers President Thomas Conway.

Among the USMCA’s most-touted provisions are its rules for the auto industry. To avoid tariffs, 75% of the parts used to build a vehicle must be produced in North America and 40% of those parts must be made by workers earning at least $16 per hour.

The Trump Administration claims the USMCA will bring 76,000 jobs back to the auto industry, but critics worry the deal will drive up the price of vehicles (leading to decreased demand and fewer jobs).

“Based on our previous analysis, [the] USMCA is a solution searching for a problem in regard to auto trade,” wrote Brian Reinbold, a research associate at the Federal Reserve Bank of St. Louis. “It also could make North American automakers less competitive in a global marketplace.”

Other provisions include:

— Expanded access for US dairy and poultry producers

— Removal of protections for foreign investors

— New rules to prevent currency manipulation

Requirements forcing Canada to grade US wheat like it grades domestic product and preventing Canada from creating barriers to trade for alcohol

— Rules allowing the free flow of data across borders

— Removal of patent protections for biological drugs (making it easier for competitors to produce cheaper, generic options)

The USMCA also blocks all three countries from taxing digital products (a major win for Netflix) and prevents them from asking companies to store data locally. The deal includes environmental rules, but does not address climate change.




GOOD TO THE LAST DROP:
Did you know… Instead of a birthday cake, many children in Russia are given a birthday pie.