Trump says a face mask makes him look like the Lone Ranger. One problem with that…


Under growing pressure from health officials and lawmakers from both parties, President Donald Trump on Wednesday finally endorsed wearing face masks. Kind of.

“I’m all for masks,” Trump said during an interview with Fox Business, despite last month telling the Wall Street Journal that some people wear masks just to show their disapproval of him, adding that masks are ineffective because people fidget with them too much.

Trump has reportedly refused to be seen wearing a face mask in public, saying he’s tested regularly enough to negate the need for a mask.

But Trump said Wednesday he has nothing against mask-wearing, though he said there is no need for a national mandate despite a sharp rise in coronavirus cases.

“Actually, I had a mask on. I sort of liked the way I looked, OK? I thought it was OK,” Trump told Fox Business. “It was a dark, black mask, and I thought it looked OK. Looked like the Lone Ranger. But, no, I have no problem with that. I think — and if people feel good about it, they should do it.”

That raised the hackles of many, many people online, who pointed out that a face mask worn to prevent the spread of the coronavirus covers one’s mouth and nose, while the Lone Ranger’s mask covered his upper face.

While some noted the similarity of what Trump described to a recent viral photo:

A number of Republican lawmakers have been calling on Trump to endorse mask-wearing for the sake of public health. Sen. Lamar Alexander, R-Tenn., on Tuesday said Trump needs to set a good example for others.

“Unfortunately, this simple, lifesaving practice has become part of a political debate that says: If you’re for Trump, you don’t wear a mask. If you’re against Trump, you do,” Alexander said, according to the Associated Press.

Public health officials have stated repeatedly in recent months that wearing a face mask is among the simplest and most effective ways to slow the spread of COVID-19, which has infected more than 10 million people worldwide and killed more than 500,000, including nearly 130,000 in the U.S., according to data from Johns Hopkins University.

A recent Goldman Sachs study has also found that a national mask mandate would give a big boost to the economy by saving it from taking a 5% GDP hit.



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U.K. government ditches its trace-and-test app after a problem with Apple – now it’s forced to use a rival app made by… Apple


The U.K. will use Apple
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and Google’s
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technology for its coronavirus track-and-trace app because Apple won’t to change its system to allow the U.K.’s app to work effectively on iPhones.

“As it stands, our app won’t work, because Apple won’t change the system,” U.K. health secretary Matt Hancock said on Thursday.

Apple does not allow the app to use bluetooth while it is closed, which is needed to track contact between users.

“So we’ve agreed to join forces with Google and Apple to bring the best bits of both systems together,” Hancock said at the government’s daily coronavirus press conference.

The U.K.’s app calculates the distance between contacts, which the Apple and Google option does not, Hancock said. So the U.K. will ‘join forces’ with Apple and Google, sharing its progress so far, and adopting the companies’ platform.

Read:This contact tracing app could become the model to save the world from the spread of coronavirus

A contact tracing app uses location data or Bluetooth technology to keep track of contacts between people. If somebody tests positive for coronavirus or reports symptoms, the app will tell their contacts to self-isolate and get tested.

Apple and Google’s decentralized data storage is thought to improve privacy, but offers the government less data to study the spread of the virus.

“We will now be taking forward a solution that brings together the work on our app and the Google/Apple solution,” the department for health and social care said in a statement on Thursday.

Only three U.S. states will adopt Apple and Google’s model, 16 states won’t use contact-tracing apps at all, 19 said they were considering an app but had not decided and 11 were unclear, according to a June survey by Business Insider, suggesting a lack of enthusiasm for the technology.

Apple and Alphabet-owned Google’s app framework stores users’ data on their phones, while the U.K.’s app, which had been developed by the technology arm of the country’s health service, would have kept data in a central database.

Read:How a controversial test on this island could help battle one of Europe’s biggest outbreaks of coronavirus

The U.K. had been testing its app on an island off its south coast, the Isle of Wight, since May and it was expected to rollout across the country in June as part of what ministers called a ‘world-beating’ test and trace program.

Meanwhile, the government has been manually tracing the contacts of people with coronavirus and between June 4 and June 10, it said 40,690 people were contacted by the health service and asked to self-isolate.

The health secretary did not say when the new app would be ready, saying: “We’re not going to put a date on the time frame. Because I’m absolutely determined that whilst this technology can help, it’s got to be working effectively.”

Google and the NHS were contacted for comment.



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The only way to truly solve the race problem in America is to narrow the wealth gap, black economists say


The unrest in cities across the U.S. this week is just the latest manifestation of a struggle that will continue until the wealth gap between white people and black people is addressed, black economists said.

What is the wealth gap? It is the stark divide between how much capital white people and black people control.

By one estimate, the typical white family has wealth of $171,000. This is nearly ten times greater than the $17,150 for an average black family.

Put another way, the typical black household remains poorer than 80% of white households.

This stunning wealth gap between the races has persisted, in good times and bad, for the past 70 years. It did not get better after the civil rights era legislation was passed in the 1960s or during the Obama administration.

And it will continue to fuel unrest, economists said.

“As long as we have racial wealth gap, we’re going to have a problems with race,” said Patrick Mason, an economics professor at Florida State University.

“The wealth gap is one of the reasons there are protests today,” said Linwood Tauheed, a professor of economics at The University of Missouri-Kansas City and the president of the National Economics Association.

“I don’t necessarily want to use the phase it was the straw that broke the camels back…but we have lots of evidence that this economic system is not benefitting the majority of the population,“ he said.

“African Americans are dissatisfied with the way things are — that’s not new for us— but now you find young college students dissatisfied with their future.”

See: Protesters support Floyd, Black Lives Matter on 3 continents

The COVID-19 pandemic has highlighted the fact that African-Americans have a lack of income to buy necessary health care, food and medicine and are suffering in greater numbers than white Americans.

Since the 1960s, the wealth gap has been largely ignored by the economics profession, black economists say.

For years, black economists struggled in the American Economics Association to even study the subject of wealth disparity between the races, black economists said. Universities and think tanks also didn’t support the work.

Black economists formed their own association, the National Economics Association, in 1969 to study the economic situation of black Americans.

“It was very difficult for a black economist to present a paper at an AEA conference that was questioning whether mainstream economists were understanding the economic disparity between the white and black community,” Tauheed said.

So called “mainstream” economists were really interested in more efficiency. “The wage gap is a question of equity or how to expand the pie,” said Karl Boulware, an economics professor at Wesleyan University. “The best way to think of wealth is to think of it as power,” he said.

In a statement to her membership Friday, former Federal Reserve chairman Janet Yellen, who is the president of the AEA, said her organization has “only begun to understand racism and its impact on our profession and our discipline.”

The wealth gap since 1989

The causes

Black economists say one historical cause of the wage gap is slavery.

“I don’t want to offend anybody, and don’t want to be labeled a radical but the wealth gap has its roots in the starting of America,” said Samuel Myers, an economist at the University of Minnesota.

JIm Crow laws put in place shortly after the Civil War also kept black people impoverished.

A more recent and complex cause was the systemic exclusion of black people from the U.S. housing market beginning in the 1920. Housing is one of the main engines of accumulating wealth in America.

Restrictive covenants were put on houses that limited where black people could live, said Tauheed. These covenants, combined with discriminatory credit policies, kept black people from building wealth.

At the same time, government policies were put in place to assist whites to build wealth through housing.

For instance, in Minneapolis, where the current protests began after the death of George Floyd while being detained by police, white Americans first benefitted from the Homestead Act.

Then white soldiers coming home from World War II were given cheap loans to buy homes in the surrounding suburbs. These neighborhoods were off limits to black people, said Myers.

And the only prosperous black community in the city was razed to the ground to build a highway to St. Paul, he added.

“My feeling is until and unless white people acknowledge that their wealth holdings and therefore the wealth gap is attributable to unearned entitlements from public policy, then we’re not going to even have a conversation” about solutions to the wealth gap, Professor Myers said.

The solutions

Black economists think that reparations — the direct payment to descendents of former slaves — would narrow the wealth gap.

But they are under no illusion that this policy could be easily become law as blacks make up 12% of the population.

Reparations “run into conflict with the American mythology of how you get ahead, which says that it’s all individual effort,” said Professor Mason from Florida State.

Sen. Cory Booker, the black U.S. Senator from New Jersey, pushed for “baby bonds” during his brief run for the presidency last year. The accounts, presented at birth, would be seeded with $1,000 and receive up to $2,000 extra every year depending on family income. They could only be used once the child reached the age of 18, with the funds limited for paying college, a home, or to start a business.

This idea is race-neutral and poor whites would benefit the most from such a program, Professor Myers noted.

“I don’t really think in the final analysis baby bonds are going to dramatically narrow the wealth gap but I’d be really happy if I’m wrong,” Myers said.

See also: Black Americans, their lives and livelihoods on the line, suffer most from the pandemic



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Uber plus Grubhub called ‘a new low in pandemic profiteering,’ and that’s not the only problem


Uber Technologies Inc.’s merger talks with Grubhub Inc. were called a “new low in pandemic profiteering” by a member of Congress on Tuesday, and that’s just one issue that could thwart a potential combination of the food-delivery companies.

The Wall Street Journal reported that Uber
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was in talks to acquire Grubhub
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in a deal that would trade 2.15 Uber shares for each Grubhub share, fueling a 29% jump in Grubhub’s shares. But the Journal and CNBC reported later that the two companies remain far apart on price, with Uber balking at the exchange rate.

The deal has strong support on Wall Street, with many noting that consolidation in the crowded, low-margin food-delivery space seems inevitable. However, beyond the price argument, Uber and Grubhub could find a lot of resistance from Capitol Hill.

“Uber is a notoriously predatory company that has long denied its drivers a living wage. Its attempt to acquire Grubhub — which has a history of exploiting local restaurants through deceptive tactics and extortionate fees — marks a new low in pandemic profiteering,” Rep. David Cicilline, D-R.I., said in a statement.

Cicilline, who is also the House antitrust subcommittee chairman, asked lawmakers just last week to include language in the next relief package that would ban mergers that do not involve companies that are severely distressed. Neither Uber nor Grubhub, with their cash reserves and hefty market valuations, could be seen as severely distressed.

More from Therese: Uber admits that ride-hailing is worth less because of COVID-19, but investors still think Uber is worth more

In addition to pressure from Congress, such a deal between the two of the top three players in food delivery would be expected to get a review by U.S. antitrust regulators. According to Wedbush Securities, a combination of Uber Eats and Grubhub would represent about 55% market share in the U.S. food-delivery market. Currently, Wedbush estimates Grubhub has 24%, Uber Eats 32%, and Doordash at 35%, with the remaining share held by Postmates, Caviar — which DoorDash acquired from Square Inc.
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last year — and other smaller players.

“That would be within the danger zone, it means that the government would generally look at it fairly closely to see what exactly is going on,” said Herbert Hovenkamp, a professor with the University of Pennsylvania Law School and the Wharton School.

He also said that regulators would look at each major city where the companies operate for further market-share data.

“Uber itself is not equally successful in every city, some cities have been harsher on them than others. When you have two companies that operate nationally, you need to look at what’s going on in each geographic area. That’s fairly common in cases like this,” Hovenkamp said.

See also: Luckin Coffee shows how risky Chinese IPOs can be, but investors are just not listening

Indeed, Wedbush analyst Ygal Arounian noted that any acquirer of Grubhub would ultimately be buying market strength in cities like New York City, Boston and Chicago “at a premium, in order to speed up rationalization through market-share dominance.” Raymond James analyst Aaron Kessler said that Uber covets Grubhub’s dominance in New York City, where it has a 62% share.

On top of that, regulators and Congress are keen to the current woes in the restaurant industry, which already gets a bum deal from food-delivery companies, as was seen in a recent Grubhub invoice shared on social media.

The status of Doordash is another thing that could derail an Uber/Grubhub marriage. A couple of analysts have predicted that Grubhub, which has a history of making its own acquisitions, could go after Doordash, which had been set to go public before COVID-19 roiled the market for initial public offerings.

“I think a deal on some level is inevitable,” Wedbush’s Arounian said in an email, adding that he does not think antitrust will be a problem. “But the deal will certainly get political attention. Especially today, when delivery companies’ fees are seen as putting more pressure on restaurants in this environment.”

Whatever happens next, it’s pretty clear that this deal would undergo serious scrutiny on many different levels. The optics, as PR people like to say, are not good for any kind of deal that stinks of “pandemic profiteering.”



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This European company isn’t sugarcoating its coronavirus problem


Pernod Ricard, the maker of Jameson whiskey and Absolut vodka, cut its annual profit growth outlook for 2019-2020 on Thursday, as it said China’s coronavirus epidemic was likely to have a “severe” impact on its third-quarter performance.

The French spirits maker, which generates 10% of its global sales in China, said it couldn’t predict the “duration and extent of the impact,” but stressed it remained confident on overall strategy.

“In our view Pernod Ricard deserves credit for attempting to quantify the impact, which few other companies we follow have done,” said James Edwardes Jones, analyst at RBC Capital Markets.

He added: “We don’t believe that this should weigh heavily on the shares, albeit China is an important market for Pernod Ricard (we estimate 14% of sales and 20% of EBIT [earnings before interest and taxes]) if the lack of reaction for others in the sector is any guide.”

Shares in Pernod

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 closed up 3.8% on Thursday.

Pernod’s warning came as the European Union cautioned on Thursday that the coronavirus outbreak had emerged as a “new downside risk” for the eurozone’s growth prospects.

In its winter 2019 economic forecast, the European Commission said: “The longer it lasts, however, the higher the likelihood of knock-on effects on economic sentiment and global financing conditions.”

Paolo Gentiloni, European Commissioner for the Economy, added: “We still face significant policy uncertainty, which casts a shadow over manufacturing. As for the coronavirus, it is too soon to evaluate the extent of its negative economic impact.”

Pernod, the world’s second-biggest spirits group after the U.K.’s Diageo

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said operating profit from recurring operations would grow between 2% to 4% this year, down from the 5% to 7% it previously predicted, because of the impact of the coronavirus outbreak.

The French spirits maker reported a net profit of €1.03 billion ($1.12 billion), up 1% from a year earlier, while profit from recurring operations was €1.78 billion, up 4.3% on an organic basis. Sales reached €5.47 billion in the six months to Dec. 31, a 5.6% gain on the year earlier, and 2.7% higher on an organic basis.

The company came under pressure to boost its margins and improve its corporate governance in December 2018, after U.S. activist investor Elliot Management built a 2.5% stake in the company.



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