Science has determined that people need to know 7.5 things per day, on average, about the world of business. You can't argue with science. Lucky for you, The Huffington Post has an email newsletter, delivered first thing every weekday morning, boiling down the day's biggest business news into the 7.5 things you absolutely need to know. And we're giving it away free, because we love you, and also science. Here you go:
Mark Gongloff is off the newsletter this morning, so today's 7.5 Things are brought to you by Jillian Berman.
Thing One: Sequester Scare Tactics: In typical fashion, political posturing and indecision in Washington will have the biggest real-world impact on ordinary Americans. The White House aimed to drive that point home Sunday as state governors met for an annual meeting in Washington. The Obama administration released a report explaining how the across-the-board spending cuts slated to take effect on March 1 would affect programs at the state level. The report included things like estimates that Ohio would lose $25.1 million for education or that Pennsylvania could lose $271,000 to fight domestic violence, according to The New York Times. Other victims of the cuts include the long-term unemployed, who could lose a little less than $30 per week in benefits if the sequester takes place, according to the Financial Times.
The NYT writes that it’s been a tactic of presidential administrations for 20 years to illustrate the impact of policies on individual states in order to sway public opinion, and Obama is in a rush to do so. He’s urged Congress to accept his plan to avoid the sequester, but his proposal involves raising taxes -- which in case you forgot, Republicans are refusing to do.
Meanwhile, Republicans are focused on finding a way to kick the next budget disaster down the road. If we all make it past the sequester, the federal government is slated to run out of money on March 27, and House Republicans are looking for a way to extend that funding until September, according to the Wall Street Journal. Of course it may prove politically difficult for them to get their plan through.
Thing Two: BP Faces A Renewed PR Disaster Starting Today: BP is slated to go to trial today over its 2010 spill in the Gulf of Mexico, but the oil giant may soon be given the opportunity to settle. Federal and state officials may offer BP a $16 billion deal, which would allow BP to limit its tax burden by only paying $6 billion in fines under the Clean Water Act, according to The New York Times. The company would also pay $9 billion to cover damages to natural resources, as well as a separate $1 billion fund that officials could tap if there are unanticipated environmental damages from the spill.
As the Financial Times notes, the spill has been a major disaster for BP, and the civil trial will only be a reminder of all the madness -- increasing the incentives for BP to settle. In addition to the obvious PR blowup in the wake of the spill, BP has also faced a lack of growth in its business and slowing profitability. The result: BP is no longer considered in the big leagues of monstrous oil companies, which it probably shouldn't be, given that it was responsible for a giant disaster.
Thing Three: Bank Business Shady As Usual: Another day, another way big banks are squeezing their customers for more money. This time, they’re doing it by helping payday lenders who have gone online after they were banned in various states, but allowing them to tap the accounts of some of the most vulnerable customers turning to payday lenders, The New York Times reports. If the banks didn’t allow the online payday lenders to directly take money out of customers’ accounts, they wouldn’t be able to operate, according to the NYT, and in some cases the banks still allow the lenders to pull the money even after customers ask them to stop.
Thing Four: No One Knows Where Our Food Comes From: If the horsemeat scandal didn’t make it obvious enough, there’s now a report out to confirm that major food companies aren’t paying close attention to their supply chain. Less than half of the 68 companies reviewed for the Business Benchmark on Farm Animal Welfare have policies in place to ensure the farm animals where they get their meat are treated ethically, according to the Financial Times. Walmart was one of the worst offenders, while Nestle and Starbucks also didn’t perform particularly well. Meanwhile Yum Brands, the owner of KFC, Taco Bell and Pizza Hut, is taking steps to control its supply chain in China after chemical residue was found in some of its chicken supply in the country, according to Reuters. What ultimately motivated the company to take action? The fact that diners were avoiding its restaurants.
Thing Five: Super-Rich vs. Super-Rich: A member of the super-rich club is speaking out against her own. Lynn Forester De Rothschild, the CEO of E.L. Rothschild, as well as wife to a member of the notoriously wealthy Rothschild family, writes that the tax break for carried interest “violates basic standards of fairness and common sense,” in a New York Times op-ed. The loophole allows private equity and hedge fund managers to avoid paying taxes on their profits. It was also a major issue in last year’s presidential election because the perk allowed Mitt Romney to not pay a high tax rate on a lot of the profits he generated during his career. President Obama has proposed closing the loophole, but as Rothschild notes, it could be a hard sell to Congress thanks to their close connection with the financial industry lobby. “Shame on both parties for giving us another reason to distrust our democracy and our capitalist system,” she writes.
Thing Six: Bernanke Heads To Congress: Federal Reserve chairman Ben Bernanke will presumably face a light grilling when he appears before Congress later this week, but at least he can take credit for boosting the economy in a few ways. Bloomberg reports that the Fed’s aggressive easy-money policies have allowed for a boost in the housing and auto industries leading to job growth in construction and vehicle manufacturing. And the situation is only likely to improve, according to one economist who told Bloomberg that much of the job increases in 2014 and 2015 will come from more housing construction and rising auto production.
Thing Seven: S&P Employees Shamed: The Justice Department is hoping that shaming S&P’s employees will help the agency win its $5 billion case against the company. In its lawsuit, the DOJ calls out some S&P executives by name and includes details about more than 25 S&P staffers, who the agency claims put top ratings on shoddy mortgages bonds even though they knew they were subpar, according to the Wall Street Journal. The name of one of S&P’s managing directors appears nearly 60 times in the 128-page lawsuit. Another staffer mentioned by name is accused of sending an instant message, claiming that S&P would rate a package of bonds “structured by cows.”
Thing Seven And A Half: Best Dressed Animals: Last night’s Oscars featured some of Hollywood’s finest dressed to the nines to celebrate themselves. To help your water cooler talk, BuzzFeed has conveniently provided a guide to the Best and Worst dressed in animal form.
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