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Business February 11, 2018

Trump To Unveil Long-Awaited $1.5 Trillion Infrastructure Plan

President Donald Trump.

Evan Vucci/AP

President Trump will finally be unveiling his long-awaited $1.5 trillion plan to repair and rebuild the nation’s crumbling highways, bridges, railroads, airports, seaports and water systems Monday. But, the proposal will not be one that offers large sums of federal funding to states for infrastructure needs, but it is instead a financing plan that shifts much of the funding burden onto the states and onto local governments.

Critics say that will lead to higher state and local taxes, and an increased reliance on user fees, such as tolls, water and sewer fees, transit fares and airline ticket taxes.

Senior White House officials who briefed reporters over the weekend say the plan is aimed at fixing the current system of funding infrastructure that they say is broken in two ways.

The first is that the country has been under-investing in infrastructure, leading a state of growing disrepair. The American Society of Civil Engineers gives the nation a grade of D+ for the condition of transit, highway, bridge, rail, water and other infrastructure, and says the country is in need of an investment of $2 trillion more than is currently budgeted.

The second way the White House says the system is broken is in the lengthy federal permitting process, which officials say can take five to 10 years or longer, driving up costs.

A program that would flip funding burden

Administration officials say the president’s plan addresses the funding shortfall by committing $200 billion in federal funding over 10 years to stimulate state and local spending and private investment. Half of the funding, $100 billion, will be used as incentives to entice cities, counties and states to raise at least 80 percent of the infrastructure costs themselves.

So, for example, if a state has a project or need identified and can come up with 80 or 90 percent of the funding for it through increased state or local taxes, like the gas tax, or with user fees like tolls, then under this plan, the federal government would kick in the rest.

Critics worry that would lead to only projects that could generate revenue, such as toll roads or bridges, getting funded.

That’s a radical departure from the way many projects are funded now. Funding for federal-aid highways, including interstates, is usually allocated in an 80-20 federal-state split. This program would flip that funding burden. Major mass transit projects are often funded on a 50-50 federal-local basis. Again, this plan puts a much greater burden on local taxpayers and users.

The White House last month at sunset.

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Alex Brandon/AP

To address concerns that projects in rural areas don’t have the ability to generate much in user fees, the White House plan calls for spending $50 billion of the $200 billion on rural infrastructure needs. That funding would go to states in the form of block grants, giving governors and state legislatures the authority to figure out the best way to spend that money.

And $20 billion would go to federal loan programs that are aimed at attracting private investment in infrastructure, and into private activity bonds.

Projects with an eye to the future

The White House also wants to earmark $20 billion in funding for “transformative” projects, which a White House official says “have a vision towards the future.” These would be “projects that can lift the American spirit, that are the next-century-type of infrastructure as opposed to just rebuilding what we have currently.”

The remaining $10 billion would go into a capital financing fund, which the administration says would go toward funding federal government office building infrastructure.

The $200 billion in federal funding would not be new revenue but would come from cuts “in other areas of the federal budget,” some of which will be outlined in the president’s budget plan that will also be released Monday. That includes funding cuts to existing federal transit programs, the TIGER grant program “and things where the administration thinks that infrastructure funds haven’t been spent efficaciously,” said a senior administration official.

But the White House officials say this new infrastructure plan “is a program that sits on top of existing programs. So we’re not proposing eliminating the Highway Trust Fund, or changing the state revolving funds. So to the extent that communities are eligible for federal funds already, that eligibility remains.”

Trump wants to streamline federal environmental review

The president’s plan does not address a huge yearly shortfall in the federal Highway Trust Fund, which is funded by the federal gasoline tax. That tax of 18.4 cents a gallon for unleaded, 24.4 cents a gallon for diesel, hasn’t been raised in 25 years and because of improvements in fuel efficiency and inflation, it raises less money now than it did when last raised in 1993. So Congress is already using deficit spending to pay for some transportation infrastructure needs funded by existing programs.

In addition to the financing component of the plan, Trump wants to significantly streamline the federal environmental review and permitting process for infrastructure construction projects, which they say can often involve several different federal agencies that can drag the process out. The president’s plan will call for the creation of “One Agency, One Decision” type of process that would put one lead federal agency in charge of completing an environmental review within 21 months.

President Trump will outline some of these principles in a meeting with mayors and other state and local leaders at the White House Monday. Trump will work with Congress to make changes, if needed. The infrastructure spending plan would need 60 votes to pass in the Senate so it will need democratic support, but the White House officials say this is one issue on which there should be room to compromise, because they say the president’s infrastructure plan is in line with priorities and objectives outlined by members of both parties in Congress, even if not in the way it would be funded.

“This is in no way, shape or form … a take it or leave it proposal,” said one senior administration official. “This is the start of a negotiation.”

“The president has said he is open to new sources of funding,” the White House aide said. “We want it to be bipartisan.”

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Business February 9, 2018

Despite Tumultuous Stock Market, Some Economists Say Inflation Threat Is Exaggerated

The economic expansion has come with high corporate profits, but barely any wage growth. Now, markets are in a tizzy over a a recent bump up in wages. But Germany has an even tighter job market without higher inflation, and one measure of job market tightness — the number of people who quit jobs to take new ones — remains low.

MARY LOUISE KELLY, HOST:

Another tumultuous day in the stock market today – the Dow Jones industrial average shot up and down and up, finally ending 330 points higher. The wild ride began last week with the Dow plunging last Friday after the Labor Department reported a jump in wages in January. That report fueled fears that inflation was rising and that that might cause the Federal Reserve to raise interest rates. Some economists say the inflation threat may be exaggerated, as NPR’s Jim Zarroli reports.

JIM ZARROLI, BYLINE: If you talk to people like Chris Mortensen, you know how hard it can be to find workers these days. Mortensen owns Samaritan Tire outside Minneapolis. And he says he’s looked everywhere to find employees. He runs ads online. He hires recruiters. He even paid for an ad on the radio.

CHRIS MORTENSEN: That didn’t work very well. And if you put help wanted out there or now hiring out there in every area you can, we would get an average of maybe one person a week applying. And a lot of the people would not really necessarily be qualified.

ZARROLI: Mortensen says he pays well above minimum wage, and he’s willing to train people. And he says not having enough workers actually costs him business. He can’t serve as many customers as he’d like. The United States has been in a period of almost historic job growth. The unemployment rate is at a very low 4.1 percent. Economist Dean Baker, of the Center for Economic and Policy Research, says the tightening labor market is beginning to provide real benefits for workers.

DEAN BAKER: We’ve actually seen some wage growth at the middle and the bottom of the income ladder, and that’s a huge, huge deal.

ZARROLI: And Jason Furman, chairman of the Council of Economic Advisers under President Obama, says the U.S. has almost achieved that elusive goal of having a full-employment economy.

JASON FURMAN: If you look at the labor market employment data, it really looks like we’re there.

ZARROLI: But Furman says he is puzzled by the pace of wage growth. Wages spiked up at an annual rate of 2.9 percent last month. But if the job market were really tight, he says, they’d be even higher.

FURMAN: If a shortage is really bad, you’d pay that person something extra. It would be worth it for you. If a shortage is not so bad, you know, it’s a little bit more take it or leave it. And you don’t want to pay them extra to get there.

ZARROLI: Dean Baker adds that the proportion of people in the workforce is still lower than it was before the Great Recession, and it’s a lot lower than it was in the year 2000. And Baker says this is true across all ages and income brackets.

BAKER: It’s even across education levels. So to my view, that’s telling this story that there’s still slack there – people who would be interested in working who are not yet working.

ZARROLI: Why these people haven’t returned to the workforce is unclear. But Baker believes as long as there’s still some slack in the job market, the inflation threat may be less severe than it appears. And he believes it’s important for Fed officials not to overreact by raising interest rates too fast.

BAKER: There’s a lot of room for the labor market still to expand. I just think would be very unfortunate if, say, the Fed would try to counteract that by raising rates aggressively.

ZARROLI: As for this week’s turmoil in the stock market, he says, that may be less about the threat of inflation than a simple correction. Stock prices have been going up so fast for so long, that it’s natural for them to reverse course for a while. Jim Zarroli, NPR News, New York.

(SOUNDBITE OF LEMON JELLY SONG “THE STAUNTON LICK”)

Copyright © 2018 NPR. All rights reserved. Visit our website terms of use and permissions pages at www.npr.org for further information.

NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

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Business February 8, 2018

Maine Dairy Drivers Settle Overtime Case That Hinged On An Absent Comma

Here’s a story that might convince you that paying attention to your grammar lessons might one day put money in your pocket.

Thanks to the absence of the comma in the wording of a state law laying out what activities qualify a worker for overtime pay, more than 120 drivers for the Oakhurst Dairy in Portland, Maine, are eligible to share a $5 million legal settlement announced today.

The case started in 2014 when several drivers for the milk and cream company filed a lawsuit claiming that they never received overtime pay for which they were eligible.

A federal court in Maine ruled that the drivers were not entitled to overtime pay because the pertinent state law exempted those who perform these duties:

“The canning, processing, preserving, freezing, drying, marketing, storing, packing for shipment or distribution of: (1) Agricultural produce; (2) Meat and fish products; and (3) Perishable foods.”

As my colleague Colin Dwyer explained last year:

“The trouble rests with ‘or.’ The presence of that tiny conjunction without a comma as a companion makes for some muddled meanings: Is ‘packing for shipment or distribution’ exempt from overtime regulations? Or are both ‘packing for shipment’ and ‘distribution’ exempt?

“These aren’t idle questions for the five delivery drivers who sued Oakhurst, because as Quartz notes, “the drivers do distribute, but do not pack, the perishable food.” In other words, one interpretation of the law’s list would make the drivers eligible for overtime pay; the other would mean they won’t get those extra dollars for extra time on the job.”

A three-judge appeals panel heard the case. Judge David Barron, of the 1st Circuit, opened his 29-page ruling saying, “For want of a comma, we have this case.” As the Portland Press-Herald puts it:

“Barron said the lack of a comma between “shipment” and “or distribution of” meant both phrases referred back to “packing” and, because the drivers deliver the products, but don’t pack them, they weren’t covered by the Maine exemption to overtime pay.”

A sentence that said “packing for shipment, or distribution of” might have made it clear that employees don’t have to be paid overtime if they either pack the food items or distribute them.

Barron concluded that the lack of a comma made the legal language ambiguous — and that the ambiguity “must be construed liberally.” So the judges were unanimous in taking the side of the drivers, and reversed the lower court ruling.

That ruling sent the case back to a lower court, resulting in a settlement that awards $50,000 each to the five drivers who brought the lawsuit.

“Other drivers will have to file claims to get a share of the fund and will be paid a minimum of $100 or the amount of overtime pay they were owed, based on their work records from May 2008 until August 2012,” the Press-Herald reports.

The paper says that about 127 drivers overall are covered by the settlement.

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Business February 7, 2018

In True Meta Fashion, These Are Shoes For Your Shoes

The Sankuanz shoes for shoes are meant to protect the first pair of sneakers from dirt and damage.


/Courtesy of Sankuanz
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/Courtesy of Sankuanz

After a big fashion show there’s always the question of which trends will make the leap from the runway to real life. And after Paris Men’s Fashion Week, at least one question remains: Do shoes need their own pair of shoes?

Chinese fashion label Sankuanz hopes the answer is absolutely.

Its design team sent male models down the runway wearing high top sneakers — that never actually touched the runway.

“They’re transformable sneakers that have an outer layer of protective sandal that you can enter Velcro into and you can strap them on or off,” is how Sankuanz publicist Courtney Wittich describes the concept.

But ultimately, they look like big-cushioned, rubber and plastic orthopedic Birkenstocks — with Velcro straps — and you strap them on top of your existing shoes.

Or they look like open-concept galoshes. That’s up to you.

Sankuanz showed them on the runway in black and beige.

“I think they’re going to be really popular,” Wittich says. “I mean, you know, the streets are quite dirty and people want to protect their shoes, especially if they’re paying a lot of money for them.”

The shoe sandals will sell for about $355 when they go on the market in August.

“You can walk totally normal in them and it gives you an extra layer of protection and then also height,” Wittich says.

Chinese fashion label Sankuanz debuted its sandals for shoes product at Paris Men’s Fashion Week.

/Courtesy of Sankuanz

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/Courtesy of Sankuanz

That’s an advantage if you want a little more height — but some don’t.

For people who saw the Sankuanz show last month, there’s no question that these things made an impression.

Fashion journalist Lily Templeton, who’s based in Paris, says the double shoe is not out of step with the Chinese company’s brand image.

“It seemed to fit the aesthetic of what Sankuanz was showing — looks kind of dystopian, grow-wherever-you’re-planted-even-if-it’s-a-post-apocalyptic world,” Templeton says.

Templeton says layer-on-layer clothing is a real trend these days — and this just plays off of that.

She says, “a lot of designers want to give you that kind of adaptability where you can transform your clothing, so why not transform your shoes?”

Once you’re adding shoes on top of your shoes, what’s next? Shoes for your shoes … on shoes? Sankuanz’s Wittich does say there’s a limit to this layered look.

“So far we haven’t heard anything about a third layer generation, but if we hear about that we’ll let you know,” Wittich says.

“So far” are the key words there.

The audio for this piece was produced by NPR’s Art Silverman and edited by NPR’s Renita Jablonski.

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Business February 6, 2018

Steve Wynn Resigns As Head Of Wynn Resorts Amid Sexual Misconduct Allegations

Steve Wynn, CEO of Wynn Resorts, attends a news conference held by President Trump in the East Room of the White House in July. The president was touting a decision by Apple supplier Foxconn to invest $10 billion to build a factory in Wisconsin that produces LCD panels.

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Steve Wynn, whose casinos have reshaped skylines as far apart as Las Vegas and Macau, has stepped down as head of Wynn Resorts following accusations of sexual misconduct, that became known last month.

In a statement released by the Las Vegas-based company late Tuesday, Wynn pushed back on the accusations against him, which he alleges are part of a campaign led by his ex-wife.

“In the last couple of weeks, I have found myself the focus of an avalanche of negative publicity,” Wynn said.

“As I have reflected upon the environment this has created — one in which a rush to judgment takes precedence over everything else, including the facts — I have reached the conclusion I cannot continue to be effective in my current roles,” he said. “Therefore, effective immediately, I have decided to step down as CEO and Chairman of the Board of Wynn Resorts, a company I founded and that I love.”

The allegations against Wynn, 76, which he has strongly denied, were outlined last month in a Wall Street Journal article. They include dozens from current and former employees that, if true, would appear to outline a pattern of misconduct that stretches back decades. In one case, Wynn reportedly paid a $7.5 million settlement to a woman who said she had been pressured to have sex with the casino magnate.

Shortly after the Journal story was published, Wynn – who has emerged as a key ally of President Trump despite a long-running business rivalry between the two — stepped down as finance chairman for the Republican National Committee.

The Associated Press writes: “Wynn now faces investigations by gambling regulators in Nevada and Massachusetts, where the company is building a roughly $2.4 billion casino just outside Boston.”

Construction on that project, Wynn Boston Harbor, is well underway and the hotel tower should reach its full height in a few weeks, The Boston Globe reports.

“The Commission and [Massachusetts Gaming Commission] staff will now need to assess the overall impact and implications of this significant development, and the [commission’s enforcement arm] will maintain its focus on the ongoing investigation,” the commission said in a statement Tuesday night.

Meanwhile, regulators in Macau — the Chinese territory that is the world’s most lucrative gambling market, and where Wynn Resorts runs several casinos — have also asked for information on the allegations, the Globe reports.

According to the AP, “… ahead of the announcement, shares of Wynn Resorts’ China arm, Wynn Macau Ltd., were suspended from trading on the Hong Kong stock exchange on Wednesday morning in Asia.”

Wynn is one of a number of high-profile men who have had sexual misconduct and abuse accusations leveled against them in industries ranging from entertainment and media to politics and philanthropy in the wake of allegations against movie producer Harvey Weinstein that first surfaced in October. NPR is among the multiple companies and organizations that have been affected by such charges.

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Business February 3, 2018

Advertisers Say The Influential Male Demographic Is Waning

Men between the ages of 18 and 34 have been a key demographic for marketers for years. That’s starting to change, say some marketing experts, who say the economic fortunes of these men have declined.

MICHEL MARTIN, HOST:

OK, let’s stay on the Super Bowl for a minute. Even with all the recent debate about the sport, tomorrow’s game is certain to have a huge audience, and because of that, so will the ads. That’s why the ads – creating them, watching them, rating them – is almost a sport of its own. And no doubt you will see many aimed at 18-to-34-year-old males. It used to be thought that they have an outsized influence on purchasing decisions but no longer. Charles Lane from member station WSHU reports that many advertisers have been noticing a shift.

CHARLES LANE, BYLINE: Gareth Evans is a market researcher for Flamingo, a London-based company that researches fashion trends. And about a year ago, he was running a focus group.

GARETH EVANS: Quite regular, quite sporty guys – and rather than talking to me about soccer players, basketball players, they were really switched on to a number of kind of female style influences.

LANE: He looked at their Instagram feeds and saw that these guys weren’t influenced by other men but women.

EVANS: When I step back and look at the male 18-to-34 demographic, I see a lessening of their ability to influence.

LANE: He took these findings to his data team. They said what’s really happening is that the power of certain groups, like young men, is being diluted by the proliferation of new age and gender brackets online. Flamingo isn’t the only research group seeing this, major brands are too. Lucas Galan runs data forensics at Flamingo.

LUCAS GALAN: Today, corporations are no longer coming to us and saying, we want to target males 18 to 34. That’s very anachronistic.

LANE: These changes are happening at a time when women are graduating from college at higher rates than men and when traditionally-male jobs, especially those in manufacturing, are harder to find. Scott McDonald heads The Advertising Research Foundation.

SCOTT MCDONALD: You kind of have a shift in the occupational structure of the country that corresponds with some segments of the male population losing their buying power.

LANE: But overall, McDonald is skeptical that men 18 to 34 are less influential in advertising. He says there’s not much research available. Also, he says, the 18 to 34 age group will continue to be important because of its sheer size. Millennials outnumber even baby boomers. Slaine Jenkins is a market researcher for Insight Strategy Group. She says it’s not that males 18 to 34 are less influential, it’s that as advertising dollars shift online, traditional demographics are less important. Advertisers these days are more interested in a consumer’s past behavior and psychological makeup.

SLAINE JENKINS: In market research, we’ve seen a great need to explore influence beyond demographics and really dig into the psychographics to understand audiences and their behaviors.

LANE: Instead of breaking consumers up by age or gender, companies are targeting values and passions. Big data sets of past purchases, Internet searches, GPS locations – these give companies a scalpel instead of a sledgehammer in order to find their customers. But there is a downside to these more highly-targeted advertisements. Chris Jackson is a pollster for the market research company Ipsos.

CHRIS JACKSON: That’s sort of this sort of narrow, this is the view they have of you from your online behavior. But who knows if that’s actually the totality of your life or your experience?

LANE: For example, political junkies who mostly visit news sites might miss out on major cultural trends, while fashionistas on Instagram risk never seeing political ads. For NPR News, I’m Charles Lane.

Copyright © 2018 NPR. All rights reserved. Visit our website terms of use and permissions pages at www.npr.org for further information.

NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

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Business February 2, 2018

Stock Market Sees Its Worst Weekly Performance In 2 Years

The stock market took a big dive on Friday amid growing worries about inflation. The Dow Jones industrial average fell about 666 points, or 2.54 percent. The market saw its worst weekly performance in two years.

ARI SHAPIRO, HOST:

It has been a long time since the stock market has seen a day as bad as this one. The Dow Jones Industrial Average fell 666 points. That is a 2 and a half percent drop. And it caps off a pretty bad week on Wall Street. NPR’s Jim Zarroli is going to explain to us what’s happening. Hi, Jim.

JIM ZARROLI, BYLINE: Hi, Ari.

SHAPIRO: The story all year has been record highs in the stock market. What’s going on?

ZARROLI: Yeah. The stock market has been on a tear. I mean, the Dow is up 25 percent last year. Then it just kept blowing past, you know, 24,000, 25,000, 26,000. President Trump is bragging about how well the stock market has done. And this week, it just seemed like, you know, this giant bucket of cold water was thrown in everybody’s face. And that really intensified today. All these big stocks like ExxonMobil, Goldman Sachs, Apple – they were all down. And it wasn’t just stocks. It was bonds. It was commodities like oil. It was just – you know, it was your basic bloodbath.

SHAPIRO: And one of the things that makes it so weird is that the day started with pretty good economic news – employers adding jobs, average hourly earnings rising. So can you explain what accounts for the steep drop-off?

ZARROLI: Yeah. I think the jobs report was actually part of the problem today, not that it was bad. I mean, it was actually solid. But the wage gains were a problem. They have a lot of investors wondering, you know, are we going too fast? Are we going to see more inflation? You know, the Fed is already raising interest rates. Does that mean it’s going to raise them even faster?

Then you have these big tax cuts taking effect, which means people could be spending more. The government’s going to have to borrow more. What’s that going to mean? So I think there’s just this more cautious outlook at least about inflation and that the jobs report just poured gasoline on the fire.

SHAPIRO: It’s kind of counterintuitive that for a long time people have been saying, yeah, the stock market’s great, but wages aren’t going up. And now wages go up. And the stock market drops.

ZARROLI: Right.

(LAUGHTER)

SHAPIRO: Could political events have any impact on this, be part of the reason behind it? Of course this memo story is just blowing up Washington today. Could that be one of the factors?

ZARROLI: I don’t think so. I mean, the memo was released in the morning. And the real – the drop today in the stocks really intensified later in the day, in the afternoon. So if there’s a connection, it’s hard to see. In fact, you know, you could say the markets have generally been shrugging off this Russia investigation. The markets are supposed to hate instability. You always hear that. And of course this is nothing if not an unpredictable time. But, you know, this investigation has been going on for months, and stock prices have just been going up and up and up almost regardless of that.

SHAPIRO: Put this in perspective for us. We said it was a 666-point drop. That sounds like a lot – 2 and a half percentage points. How bad is this?

ZARROLI: Well, you know, we need to keep it in perspective. This is one bad week. Stocks are still up for the year. The stock market was really due to come down anyway. I mean, we have these corrections. They’re normal. You can’t have stocks rising at these levels all the time. The economy is still growing. We have a very tight job market. Companies are reporting good profits.

But we are – you know, as I said, we’re starting to see the mood shift a little bit. Interest rates have come up. They rose quite a bit today. The yield on the 10-year bond was up a lot. They’re still not high in historic terms, but they are rising, and that does have an effect on the economy. That affects people’s mortgages and auto loans. It affects credit cards. So, you know, people have been feeling really optimistic for a long time about where the economy is going, especially in the past year. But I think days like this are just kind of a reminder, you know, the sky is not the limit.

SHAPIRO: A reality check there from NPR’s Jim Zarroli. Thanks a lot.

ZARROLI: You’re welcome.

Copyright © 2018 NPR. All rights reserved. Visit our website terms of use and permissions pages at www.npr.org for further information.

NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

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Business February 1, 2018

Amazon Reports Biggest Quarterly Profit Of $1.9 Billion

Amazon has been turning a profit since mid-2015 as sales have continued to rise dramatically in recent years.

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In the last three months of 2017, Amazon saw its profit more than double to reach a record of $1.9 billion. The company’s sales continued to soar during the holiday quarter as more people signed up for its fast-delivery Prime program and bought its voice-activated device Echo.

Company executives touted the sales of the devices powered by its voice assistant Alexa. Amazon also said millions of people shopped by using their voice last year. Without disclosing specific numbers, CEO Jeff Bezos said of Alexa sales: “We don’t see positive surprises of this magnitude very often — expect us to double down.”

Amazon said its profits also got a boost from a tax benefit of about $789 million thanks to the new tax law passed in December. And the company noted big contributions from its advertising business and the cloud-computing service known as Amazon Web Services.

Here’s a quick rundown from CNBC:

“Amazon’s revenue, which includes sales from Whole Foods, jumped 38 percent year-over-year. … For the full year, Amazon had $177.9 billion in sales, up 31 percent from the previous year’s $136 billion. Despite the huge growth in revenue, Amazon’s operating profit dropped 2 percent to $4.1 billion.”

Amazon has long had a reputation for being parsimonious, investing its gains in new products and infrastructure rather than disbursing money to shareholders. But now its profits have risen sharply, although not nearly at the rate of the booming sales. This new report marks about 2 1/2 years of profitability.

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For the next year, more of Amazon’s focus is expected to shift to its grocery business as the company tries to expand its delivery service and works to integrate the recently acquired Whole Foods.

In a call with investors, Amazon executives addressed recent reports of empty shelves at Whole Foods locations, saying that the company made no changes that would affect the restocking of items. Instead, they blamed weather-related restocking issues and increased demand in response to lower prices.

Amazon’s Thursday report also showed that some 566,000 people worked for the company at the end of 2017. That number excludes contractors or temporary workers and represents a 66 percent increase from the end of 2016.

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Business January 31, 2018

Appeals Court Backs Key Part Of The Structure Of Consumer Watchdog Agency

Mick Mulvaney, acting director of the Consumer Financial Protection Bureau in November 2017.

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A federal appeals court in Washington, D.C., has ruled that the independent structure of the Consumer Financial Protection Bureau — which forbids the president to remove its director except for certain causes — is constitutional. That’s a setback for the agency’s critics in the financial industry and the Trump administration.

By a vote of 7-3, the U.S. Court of Appeals for the District of Columbia ruled that Congress acted appropriately when it set up the bureau with a single director who could only be removed by the president for inefficiency, malfeasance in office or neglect of duty, and not for political reasons.

The case involves the PHH Corp, a New Jersey mortgages services company that had been fined $109 million in 2015 for alleged mortgage kickbacks. The company responded by challenging the CFPB Director’s protection from removal as unconstitutional.

As NPR’s Chris Arnold reports:

“After the financial crisis a decade ago, Congress created the Consumer Financial Protection Bureau. It’s run by a single director with broad powers to create and enforce regulations that protect Americans from predatory lending and other abuses.

“Critics argue that gives the bureau too much power. They wanted President Trump to be able to fire the director for whatever reason he wanted.

“Now the court has ruled even the president doesn’t have that power.”

In its 250-page ruling, the appeals court said:

“PHH challenges the removal protection of the Consumer Financial Protection Bureau’s Director, arguing that it unconstitutionally upsets the separation of powers. But the CFPB’s structure respects the powers and limits of each branch of government. Congress’s decision to establish an agency led by a Director removable only for cause is a valid exercise of its 18 Article I legislative power.”

But as NPR’s Arnold added, in the short term, the ruling won’t make much difference. The Obama-era director, Richard Cordray stepped down in November 2017. Trump replaced him with an interim chief, White House Budget Director Mick Mulvaney, a longtime agency critic who once dismissed the agency as a “sad, sick joke.” There is an ongoing lawsuit related to Mulvaney’s authority. Upon Cordray’s resignation, he appointed his chief of staff, Leandra English, as acting director of the Bureau. That set up a power struggle over the CFPB’s leadership and so far a federal court judge has sided with the Trump administration, allowing Mulvaney to take charge.

That ruling is under appeal. The decision by the D.C. appeals court does not impact that lawsuit.

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