Monday, February 22, 2021

POLITICO's Global Translations: Exceptionalism is dead: for tech, Texas and America

A newsletter from POLITICO that unpacks essential global news, trends, and decisions.
Feb 22, 2021 View in browser
 
POLITICO Global Translations

By Ryan Heath

Please send your tips and thoughts to rheath@politico.com and follow me on Twitter

JOIN GLOBAL TRANSLATIONS THIS WEEK: Ryan is co-hosting the Denver Democracy Summit Feb. 25 and 26: Register here | Program

TURNING HEADS: Democracy is a "common value of humanity," China is a "whole process democracy," and the country's Communist leadership is "organic," per Hua Chunying, spokesperson of China's Foreign Ministry.

NO EXCEPTIONS

Take a step back from the major political disruptions of the first two months of 2020, and a connection emerges between the Jan. 6 attempted insurrection, the continued global pandemic, the power and water outages of Texas, and the backlash to Facebook shutting off news across an entire continent.

Individually they each showcase bitter political divisions, but together they show that in today's global systems — economic, political, informational, ecological — the arguments for Texas exceptionalism, for tech exceptionalism (against regulation), and American exceptionalism no longer hold. Our interconnection forms a new type of political gravity that we're only beginning to understand.

WHAT HAPPENS DOWN UNDER DOESN'T STAY DOWN UNDER

Less than one out of every 100 Facebook users lives in Australia (actually, only eight percent live in the U.S.), but that isn't stopping the consequences of the company's local decisions slamming back into D.C. and Menlo Park. In fact, that's now guaranteed given Facebook's global reach. It's no surprise, but still a shock for Facebook — the youngest of the tech giants — which hasn't been through the antitrust and privacy wringer as much as Microsoft, Intel, Google and Apple.

Facebook backlash hits Washington and Europe: House antitrust subcommittee Chair David Cicilline (D-R.I.) tweeted "Facebook is not compatible with democracy" and his counterpart Rep. Ken Buck (R - Colo.), the top Republican on the committee, said a bipartisan bill will be introduced in coming weeks allowing small news organizations an antitrust exemption, so they may negotiate collectively with Facebook and Google to share in the profits of their content circulating on the platforms. British ministers agree that Facebook and Google should pay publishers, meanwhile European publishers and Microsoft today called for an Australian-style arbitration mechanism to be included in EU or national European laws.

EU seeks to connect bipartisan Facebook anger to Biden's "democracy must prevail" message: European Commission President Ursula von der Leyen went beyond bromides in her Munich Security Conference speech Friday, hammering internet platforms. "The storming on the U.S. Capitol was a turning point for our discussions on the impact social media have on our democracies," she said, adding Facebook's action in Australia to her charge sheet. The country that appointed the world's first tech ambassador — Denmark — this morning published a new tech diplomacy strategy framed around advancing tech responsibility and democracy . The upshot: European capitals are joining Von der Leyen urging the Biden administration and U.S. Congress "impose democratic limits on the uncontrolled power of the big tech companies."

FACEBOOK BLOCKING PRO-VACCINE MESSAGES: Two POLITICO reviews have found Facebook has blocked paid messages from at least 110 groups, making them collateral damage in efforts to police vaccine misinformation. Events hosted by organizations ranging from Orland Township, Illinois, to the California Medical Association have had their event ads blocked, while Facebook also mislabeled ads from European Union institutions and European governments as political messages.

Reality check — every Facebook content block is a choice: Facebook long resisted pressure to restrict political advertising, and senior executives have been directly involved in its choices dealing with misinformation. As with its decision to deliver a broad block on Australian news, Facebook's ability to deliver a targeted anti-vax ban comes down to how it tweaks its algorithm and how many staff it employs to quality check those algorithmic decisions.

When Simon Milner, Facebook's Asia Pacific vice president of public policy tells the Sydney Morning Herald that the company's news bank "is a really hard thing to do" and asks for forgiveness on the basis that "we've never done it before," those claims must be weighed against the company's Australian managing director, Will Easton, who confidently asserted that the Australian government's News Media Bargaining Code "misunderstands the dynamics of the internet." Facebook can't have it both ways: claiming to provide the smartest people in the room when it butts heads with regulators, while begging for sympathy when it messes up the systems politicians have flagged as problematic.

BIG TECH NEVER ❤️ THE REGULATION ON THE TABLE: Silicon Valley for decades rejected most forms of regulation as a dangerous impediment to innovation, but shifted political tactics over the last decade. First, Europe's antitrust and privacy enforcement scared (or forced) some companies into political engagement and commercial restraint. After the 2016 U.S. election campaign, many tech companies conceded that light regulation of the digital world would be good for all. But few have made the leap to embrace real regulatory solutions.

(Your author has been on the receiving end of the "tech knows best" attitude working for digital regulators in London and Brussels, has delivered the tech message as a consultant, and even been screamed at by Apple executives as a journalist.)

The instinct to dismiss regulators as people who aren't smart enough to work for tech companies runs deep, whether it's a consumer rip-off, a data breach, election campaign, tax evasion, or a genocide that brings executives before officials. Sen. Mark Warner (D-Va.) sums it up this way: "It's worrisome that large tech companies — which routinely tell policy makers they acknowledge the need for regulation — continually resort to using their large scale and dominance to undermine democratically adopted laws."

Next stop for Facebook — Continued scrutiny over its ad and data practices. The company's data-practice legal problems date back to 2011 and include a $5 billion settlement over the Cambridge Analytica scandal, but it's now being hounded by New York authorities over medical data collection . Separately, a new class action lawsuit alleges that Facebook has for years known that the metrics it creates to guide potential advertisers are both "inflated and misleading."

Next stop for Big Tech globally is digital tax: All eyes this week will be on Treasury Secretary Janet Yellen, who meets her G-20 counterparts Feb. 26, where a better sense of the Biden administration's approach to the global digital tax should become known. The Trump administration withdrew from a 137-country tax negotiation being managed by the OECD. Several European countries and Canada are pushing ahead with national taxes in the absence of a global deal.

Maryland passed a digital ad revenue tax this month, and could be followed by New York.

GLOBAL RISKS AND TRENDS

BIDEN MEETS WORLD

CANADA CALLING: President Joe Biden and Vice President Kamala Harris meet Prime Minister Justin Trudeau of Canada on Tuesday, with the respective Cabinets meeting "on a range of bilateral and global issues," according to the White House.

RUSSIA SANCTIONS COMING … FROM EU: Antony Blinken meets EU foreign ministers today, but it's the Europeans who are set to impose new sanctions (over Alexei Navalny rather than the Nordstream II gas pipeline). The sanctions will likely be "highly targeted" against a handful of Russian officials, according to one EU diplomat. Ambassador and ministers were briefed Sunday by Leonid Volkov, Navalny's chief of staff, after a Moscow court rejected his appeal to be released from prison.

CLIMATE — AMERICA TRIES ON HUMILITY FOR SIZE: Rejoining Paris was the easy bit. The hard stuff is a 2030 emissions reduction target and choosing between buying Chinese equipment and building up America's green energy manufacturing strength, even if that means a slower emissions reductions. U.S. international climate envoy John Kerry set the bar high on Friday in a head-spinning set of four speeches. "We can't talk our way back into legitimacy. We have to earn our way back," Kerry said. "There is simply no faking it. It's not acceptable for countries to go to Glasgow [the 2021 U.N. climate conference] and simply put out big numbers for decades into the future. It's the next 10 years that matter." Kerry dodged on whether he has upcoming meetings with Chinese officials.

April 22 climate summit: "We're not going to run a mini-Glasgow," Kerry said, but the event will include the biggest emitters and the most vulnerable island states.

BIDEN PUTS MIDDLE EAST ON BACK-BURNER: You're tired of Middle East politics and so is President Biden. "Not in the top three" regions of concern," said a close Biden adviser. Speaking of Iran: the U.N. nuclear chief said Sunday that Iran will reduce inspector access to its program, starting Feb. 23.

MYANMAR PROTESTS GROW: The protestors are undeterred by fatal shootings and backed by State department spokesperson Ned Price: "We continue to stand with the people of Burma … We call on the military to stop violence."

TOWARDS A DUAL MONETARY SYSTEM

EU finance ministers are on track to urge G-20 countries to block global digital currencies that fall short of strict regulatory and supervisory standards, according to a draft memo seen by POLITICO. The initiative in the ministerial firing line is Diem, formerly known as Libra, a proposed payment system from Facebook and 26 other companies. The ministers fear Facebook's scale could undermine the sovereignty of their euro currency. The European Central Bank will decide this summer whether to proceed with designing its own digital euro.

A new blog by the IMF's Tobias Adrian and Tommaso Mancini-Griffoli argues that private currencies could successfully coexist with central bank-backed public currencies, but warns that "it would require a licensing arrangement" and "partnering with central banks requires a high degree of regulatory compliance."

A SPY IN EVERY WALLET: China, meanwhile, is forging ahead with a national digital currency, which could be in full circulation by the Beijing Winter Olympics, a year from now. The innovation could allow precision targeting of monetary policy via a digital yuan in bank accounts, rather than blunt and slow instruments like lowering interest rates. It would also allow the Chinese state to track how its 1.4 billion people spend their money.

Why it matters outside China: a functioning Chinese digital currency would boost Chinese efforts to elevate the yuan to the global status of the euro, and the reserve currency status of the US dollar.

COVID — UNION LEADERS REQUEST MANDATORY, FREE N95 MASKS: Global Translations asked the leaders of three of America's biggest unions if it's time for the federal government to mandate N95 masks, and make them available free to educators, nurses and retail workers. Randi Weingarten, Bonnie Castillo and Marc Perrone all said "yes". "I think it ought to be mandated. But quite honestly, I wonder whether or not my employers would provide them (to employees), when they won't mandate masks to the customers that are coming in," said Perrone, president of the 1.3 million member United Food & Commercial Workers International Union. ICYMI: Watch the panel discussion.

JOBS RECOVERY SPOTLIGHT

MICRO MENTORS ARE HERE: "You can create your own boardroom," Anita Ramachandran told Global Translations, explaining the social enterprise she runs within Mercy Corps, called Micromentor . Billing itself as the world's largest mentorship platform, the organization is pledging to support 100,000 entrepreneurs affected by Covid-19 in 2021, by "creating a global network effect" for people who wouldn't otherwise be able to tap those networks.

What does it mean in practice? Small business owners are connected — at no cost to them — with a mentor of their choosing. "Mentors can be subject experts, or business coaches for overall strategy. There's some life coaching," Ramachandran said. Companies such as Verizon, Tripadvisor and S&P Global are funding Micromentor, and encouraging their staff to sign-up. "It's powered by altruism, there's never money exchanged," Ramachandran said, though she was quick to point out she's still looking for funders.

How did the Covid recession affect mentoring? "We had to make ourselves more known," said Ramachandran, because of exploding demand not finding mentoring supply. In-demand advice includes "helping entrepreneurs access funding and pivoting to online ways to sell. What's most important is having the networks, the social capital when it gets tough."

What's the Micromentor demographic: Mentors span 50 economic sectors and for mentees "we've seen a huge appetite among women — well beyond their business ownership rates. About 40 percent of the entrepreneurs are women," Ramachandran said. She aims to support 18,000 Black, Indigenous, and People of Color (BIPOC)-owned businesses in the U.S. in 2021.

Lebanon shining light: Marie Elia used three separate micro mentors in 2020, in the face of Lebanon's 2020 triple crisis: global pandemic, national bailout and the massive Beirut port explosion.

GLOBETROTTERS

OECD — TOP JOB RACE WILL NARROW TO TWO CANDIDATES : Former Australian finance minister Mathias Cormann and the EU's former trade commissioner Cecilia Malmstrom from Sweden, are the candidates favored to push Philipp Hildebrand from Switzerland and Anna Diamantopoulou from Greece out of the race this week. They're competing for the votes of the OECD's 37 members. Cormann is a favorite of China hawks, and Malmstrom a favorite of those pushing strong climate action. The case for Diamantopoulou according to a senior Greek government official: "She's a woman from the South: that means no northern European snobbery, no Anglo imperialism. She can achieve consensus from within, and acceptance from external partners." Europeans hold 25 of the 37 votes.

UN — ATTACKED: Italy's ambassador to the Democratic Republic of Congo, Luca Attanasio, and two other people have been killed in an attack on a United Nations convoy in eastern DRC.

TURNING HEADS: Former British Prime Minister Gordon Brown's review of Bill Gates' new climate book. It reminds us how far global climate talks have come since 2009, but how easily they may crash again this year. The divisions between the Europeans, Americans, the rest of the West and developing economies are real, Brown writes — at one point the Australian prime minister Kevin Rudd "had to be physically restrained from punching the Chinese negotiator."

BRAIN FOOD

Black historical figures who shook the world | Heather McGhee's "The Sum of Us: What Racism Costs Everyone"

Thanks to editor Ben Pauker

 

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