41 Joe's on a roll, the end of conglomerates
well readers, we’re back after a whirlwind of travel last week spanning washington, new york, north carolina, and michigan. we’re also sick as dogs, from something other than COVID, so please excuse the raspier voice than normal, and we hope the fog in our brains didn’t result in an overly muddled issue. in any case, it’s great to be back, and an early happy thanksgiving to all our non-canadian readers.
big idea: Joe’s on a roll
- Joe had his first good week in a while, kicking things off on monday by signing the trillion dollar bipartisan infrastructure bill, then holding a relatively successful virtual summit with china’s president later in the week, and capping things off watching his signature climate and social policy bill get passed through the House last night. not everything is happy go lucky, of course - inflation is still breaking records, and his approval ratings are in the dumps - but Joe is probably hoping to have turned a corner this week.
- we talked thru the infrastructure bill in issue 39, so we’ll focus on the other two news items. first, Joe and china’s president Xi managed to significantly de-escalate tensions between the two countries during a virtual meeting - the first time a Zoom call has ever been productive. we’ve extensively covered the issues dividing china and the US in previous issues, and no huge breakthroughs occurred this week. but, the consensus is that it’s fantastic news that the world’s two superpowers can talk without hurling insults at each other like schoolyard children.
- however, most americans probably care much more about the $2 trillion climate and social policy bill which the house passed friday. now that Joe’s got some momentum, he’ll probably push conservative dems in the senate to negotiate quickly and approve an amended version of the bill sooner rather than later. the current draft includes half a trillion to address climate change, paid parental leave, universal preK, and Medicare drug reforms. we’ll have to cross our fingers and hope the Grinch doesn’t steal christmas...
story to watch: the end of conglomerates
- corporate conglomerates have taken a beating in the past week, with GE, Toshiba, and Johnson & Johnson announcing plans to split their companies up. is this finally the end of the 1990’s wall street darling - the corporate conglomerate?
- for years, manufacturing, retail, and tech companies have pursued scale by competing in multiple industries at once. GE famously used to have business units covering everything from broadcast TV to mortgages to jet engines to MRI machines. it seems like shareholders finally understand that bigger isn’t inherently better.
- while it may make sense for a company like Amazon to be vertically integrated and own everything in their supply chain, it makes little sense for a company like Toshiba to build everything from trains to hard drives. in short, companies perform better when their leadership can focus on delivering a few core competencies.
- while three companies announcing their breakups in such quick succession is unusual, it’s part of a much longer trend. over the past few years, companies like AT&T, GSK, DuPont, and Siemens have spun off various units, and companies like CVS have significantly downsized some operations. the few conglomerates still left in today’s market - from Alphabet to Berkshire Hathaway (Warren Buffet’s company) - typically allow their different divisions to operate independently from each other, perhaps the only way a conglomerate can still survive.
this week’s image: a horse library
- (The Atlantic) the horse library (yes, it’s exactly what it sounds like) makes a stop at a school in indonesia. who knew all of a sudden we could get over our fear of horses...
this week’s number: earth will warm by at least 2.5 degrees
- the big UN climate change conference wrapped up last week, and the commitments collected by our little blue marble’s nations will result in that marble heating up by 2.5 degrees celsius, well above the 1.5 degree target agreed to in paris in 2015. if substantially more progress is made between now and 2030, we could warm the planet by as little as 1.5 degrees, but that is now an unrealistic goal.
- the talks in glasgow also failed to establish a fund to help developing nations cope with climate change but at least finally set the baseline expectation that all countries need to move away from fossil fuel consumption
and, in case you missed it:
- Steve Bannon, the human equivalent of romaine lettuce which needs to be recalled due to a listeria outbreak, was arraigned for contempt of congress
- india’s prime minister finally gave into year-long protests (which we covered back in issue 4) and promised to repeal hugely unpopular agriculture reform laws
- for years, israel has been building a vast facial recognition database of palestinians
- if we needed more proof that university of michigan students are dirty hipsters, the flu has spread so quickly and virulently across campus, the CDC has flown into ann arbor to investigate
the weekly rundown is produced by Yunus, Faisal, and Ahmed. learn more about us and email us your comments and feedback!
