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Survey suggests more economic growth ahead for Midwest
 Marc Wehrs
 10.02.17

OMAHA, Neb. (AP) — A monthly survey of business leaders released Monday suggests that economic conditions are still improving for nine states in the Midwest or Plains.

The Mid-America Business Conditions Index rose to 58.2 in September, from 57.5 in August, the report said. The July figure was 56.1.

“The overall index over the past several months indicates a healthy regional manufacturing economy” and points to solid growth for manufacturing and nonmanufacturing for the rest of the year, said Creighton University economist Ernie Goss, who oversees the survey.

The survey results are compiled into a collection of indexes ranging from zero to 100. Survey organizers say any score above 50 suggests growth in that factor. A score below that suggests decline. The survey covers Arkansas, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, Oklahoma and South Dakota.

Economic optimism also rose last month, hitting 63.6, compared with 62.5 in August and 60.2 in July.

“Strong profit growth, still low interest rates, and international sales boosted the economic outlook among supply managers in the nine-state region,” Goss said.

The regional new export orders index climbed to 54.3 in September from 52.8 in August, and the import index jumped to 53.8 from August’s 50.0.

“Expanding regional growth spurred purchases of inputs from abroad, while growth among important trading partners pushed export orders higher for the month,” he said.

After falling for two months, the regional wholesale inflation gauge skyrocketed to 79.6, its highest level since April 2011, and up from 65.5 in August.

“Given advancing inflationary readings from our surveys and government surveys over the past several months, I expect the Federal Reserve to raise short-term interest rates one more time before the end of 2017,” Goss said. Just 16 percent of the businesses in the survey such a rate hike to harm their business activity, he said.


Senate confirms Trump choice to head FCC
 10.02.17

WASHINGTON (AP) — The Senate has confirmed President Donald Trump’s nominee to serve as chairman of the Federal Communications Commission despite Democratic complaints that Ajit Pai will undermine net neutrality.

The vote was 52-41 on Monday for Pai, who has served as a commissioner at the FCC since 2012.

The nomination turned into a proxy fight over Obama-era net neutrality rules established in 2015. Those rules mean service providers such as Verizon, AT&T and Comcast must treat all content the same and not favor their own websites and apps over others, such as a movie streaming service. Pai has tried to roll the rules back, drawing more than 22 million comments and ire from Democrats.

Sen. Ron Wyden, D-Ore., warned that Pai “will do an enormous amount of damage to one of the foundational principles of the internet — net neutrality.”

“’Net neutrality’ means that after you have paid your internet access fee, you get to go where you want, when you want, and how you want,” Wyden said. “We are not going to have some kind of information aristocracy in our society whereby the affluent have access to some kind of technological treasure trove, and folks who do not have much are kind of stuck with what almost resembles dial-up.”

The rules, opposed by Republicans and telecom companies and supported by left-leaning consumer advocacy groups in Washington and internet companies, were upheld by a federal appeals court in 2016.

In defense of Pai, Republican Sen. Roger Wicker of Mississippi said he is “working to establish the light-touch regulatory framework that allowed the internet to become the marvel of the modern age, keeping it free and open for consumers, innovators and providers. Internet technology will continue to thrive if we keep the heavy hand of government away from the controls.”

Democrats also are wary of Pai loosening media regulations that cap how many TV stations one company can own, especially as the agency evaluates conservative-leaning broadcaster Sinclair’s proposed takeover of Tribune Media.

Sen. Shelley Moore Capito, R-W.Va., praised Pai as an “important partner in my quest to bring rural America in much of my state online.”

Net Neutrality rules mean service providers such as Verizon, AT&T and Comcast must treat all content the same and not favor their own websites and apps over others, such as a movie streaming service. Pai has tried to roll the rules back, drawing more than 22 million comments and ire from Democrats.

Uber investors threaten to sue over Tuesday board vote
 
 10.02.17

SAN FRANCISCO (TNS) — Adding a new twist to ongoing drama at Uber, a group of prominent investors in the ride-hailing startup is threatening to sue if a contentious board vote Tuesday doesn’t go its way.

The deeply fractured board was gearing up to vote on a handful of measures that would, among other changes, further reduce ousted CEO Travis Kalanick’s power as a shareholder and make it harder for him to return as chief executive, according to multiple media reports. On Monday, a collection of shareholders upped the stakes by threatening to embroil the San Francisco company, worth nearly $70 billion, in yet another legal battle.

The board has proposed re-tooling Uber’s governance structure to diminish the power of some shareholders — Class B shareholders currently have 10-to-1 voting power, but that would change to one vote per share, said Los Angeles-based attorney Mark Geragos, who represents the group of shareholders, which includes outspoken investor Shervin Pishevar.

The board also has proposed other changes, including some designed to rein in Kalanick. The proposal would make it harder for Kalanick to return to the company’s helm, impose a 2019 deadline for an Uber IPO, and make it harder for one person to take over the board, according to The New York Times.

“We are writing in advance of Tuesday’s ill-advised vote to avoid irreversible and cataclysmic damage to the company which would result from your agreement, tacit or otherwise to the proposal,” Geragos wrote in a letter sent Monday to Kalanick, early employee Ryan Graves and co-founder Garrett Camp.

Uber declined to comment on the letter Monday.

This latest wave of drama started late Friday, when Kalanick — kicked out by investors in June — made a surprise announcement. The ousted executive said he had appointed two new members to Uber’s board: former Xerox CEO Ursula Burns and former Merrill Lynch CEO John Thain. The move was seen as a slap in the face to the rest of the ride-hailing company’s executives and board, who apparently weren’t consulted before the decision was made.

“The appointments of Ms. Burns and Mr. Thain to Uber’s Board of Directors came as a complete surprise to Uber and its Board,” a company spokesman wrote in an emailed statement. “That is precisely why we are working to put in place world-class governance to ensure that we are building a company every employee and shareholder can be proud of.”

It also was a blow to Uber’s new chief executive, Dara Khosrowshahi.

The new CEO called the move by his predecessor “disappointing” in an internal email to employees, Bloomberg reported. He wrote: “Travis appointed two new members to Uber’s Board without discussing it with me or the Board of Directors more broadly. Anyone would tell you that this is highly unusual.”

In a statement emailed to The Mercury News organization by his spokesman, Kalanick wrote it was important to appoint the new board members when he did.

“I am appointing these seats now in light of a recent Board proposal to dramatically restructure the Board and significantly alter the company’s voting rights,” he wrote. “It is therefore essential that the full Board be in place for proper deliberation to occur, especially with such experienced board members as Ursula and John.”

“I am confident that, with their additions and Dara’s appointment,” he continued, “Uber will be well situated to focus on the future and continue to revolutionize how cities move.”

Burns was CEO of Xerox from 2009 to 2016, and now serves on the board of American Express, Exxon Mobile, Nestle and Datto. Former President Barack Obama appointed her to help lead the White House’s science, technology, engineering and math (STEM) program from 2009 through 2016.

Thain was CEO of Merrill Lynch until its $50 billion sale to Bank of America in 2008. After that, he served as CEO of CIT Group from 2010 to 2016.

Meanwhile, Kalanick is fighting a lawsuit brought by his high-profile investors at Benchmark, who are attempting to kick him off the board. That suit is proceeding in private arbitration after a judge removed it from open court.

Another group of investors sued the company last month, claiming a series of scandals that have beset the company — including sexual harassment allegations, federal probes and a legal battle with rival Waymo — have lowered Uber’s value and harmed investors.


GOP panel chief not saying yet if tax cuts retroactive
 
 10.02.17

WASHINGTON — One of the chief architects of the sweeping tax revamp proposed by President Donald Trump and congressional Republicans isn’t yet saying whether promised cuts under the plan would be retroactive to the start of the year.

“To be determined” was the response Monday from Rep. Kevin Brady of Texas, head of the tax-writing House Ways and Means Committee. There has been speculation the plan, which would deeply reduce levies for corporations, simplify everyone’s taxes and nearly double the standard deduction used by most Americans, would be applied retroactively to the beginning of 2017.

Trump and top administration officials are insisting that the plan would provide badly needed tax relief for the middle class—and wouldn’t benefit the wealthy.

The tax rate for Americans making a half-million dollars or more would drop by almost 5 percentage points as the wealthiest sliver of the nation would reap tremendous benefits. And the plan calls for eliminating the estate tax — paid by those with multimillion-inheritances, a boon for wealthy individuals who inherit businesses, investments and real estate. Also slated for elimination is the alternative minimum tax, a supplemental tax for certain individuals, corporations and estates that enjoy exemptions that lower their income tax bills.

The plan, the first major overhaul of the tax code in three decades, would shrink the number of tax brackets from seven to three. But it’s not known how it actually would affect individual taxpayers and families because the income levels corresponding to the three brackets haven’t yet been specified. It will be up to Congress to fill in many details.

Another unknown is how much the plan might add to the ballooning $20 trillion national debt.

The tax legislation can advance only after House and Senate passage of a blueprint for the federal budget. The Senate Budget Committee intends to vote on its plan this week, and a companion measure is headed for a House vote this week as well.

The new budget plan would permit the upcoming tax measure to add $1.5 trillion over the coming decade to the national debt.

Brady said he was hopeful that final budget legislation could be enacted this month, calling it the necessary “runway to land tax reform on.”