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Democrats Prepare to ‘Fundamentally Reform’ Capitalism

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A statement of intent

Just days before Election Day, four Democratic senators — Tammy Baldwin, Tom Carper, Mark Warner and Elizabeth Warren — are banding together to “fundamentally reform” capitalism. DealBook’s Lauren Hirsch got a first look at their working group, which will be announced today. Above all, it suggests growing Democratic unity around pushing corporate America to focus less on shareholders and short-term profits. And it signals an early priority for lawmakers if their party performs as well as the polls imply.

Why this matters: Attention is growing on who would have Joe Biden’s ear about steering the economy (again, if the election goes his way). Although the Democratic Party’s left and center wings are jostling for position in many ways, the new Senate group suggests that this is an issue that both can agree on.

Ms. Warren and Ms. Baldwin are among the most prominent progressives in the Senate, with track records of aggressively trying to rein in Wall Street. In particular, Ms. Warren (who may reportedly push to become Mr. Biden’s Treasury secretary) has introduced the Accountable Capitalism Act to push big companies to consider all stakeholders, not just investors.

Mr. Carper, who comes from the corporate hub of Delaware, and Mr. Warner, a former businessman who often bridges the left and center, could help sell corporate America on new rules addressing issues like climate change and worker protections.

“Short-term financial pressure often pushes corporations to forgo necessary long-term investments, ignore the threat of climate change and concentrate opportunity in ways that exclude too many of our communities,” the senators said in a statement. “We will work together on ways we can fundamentally reform corporate governance in America.”

They may be pushing on an open door. Mr. Biden has publicly criticized President Trump for focusing too much on the stock market, and big companies for prioritizing shareholders above all. And many corporate leaders have embraced a shift away from traditional free-market principles outlined by the likes of Milton Friedman, who wrote an influential essay 50 years ago arguing that “the social responsibility of business is to increase its profits.”

HERE’S WHAT’S HAPPENING

America hits nine million coronavirus cases. The U.S. recorded more than 89,000 new cases yesterday, a new high. Virus fears are dragging markets down in early trading, with global stocks on track to record their worst week since March.

The bad news in the big G.D.P. report. As expected, third-quarter U.S. economic growth set a record — 7.4 percent versus the previous quarter, or 33 percent on an annualized basis — as businesses reopened after pandemic lockdowns. (The Upshot’s Neil Irwin likens it to recovering from getting hit by a bus.) But the economy is still smaller than it was last year, and economists don’t have high hopes for the fourth quarter.

Walmart takes guns and ammunition displays off its sales floors. The retailer said the temporary move was prompted by “isolated civil unrest” in Philadelphia, after protests over the police killing of Walter Wallace Jr. Customers can still buy firearms, but have to request them.

Black franchisees sue McDonald’s over accusations of racial discrimination. The proposed class-action lawsuit accuses the fast-food chain of giving them undesirable locations with below-average sales and failing to provide support. The plaintiffs are seeking damages that could exceed $3 billion.

Comcast now has more streaming subscribers than cable ones. Highlighting a shift happening across the media industry, Comcast — America’s biggest cable company and the owner of NBCUniversal — said it now had 22 million customers for its Peacock service, compared with 19 million cable-TV subscribers.

Big Tech by the numbers

Four tech companies with a combined market value of $5 trillion reported their latest earnings after the market closed yesterday. Together, they took in $38 billion in profit for the third quarter, showing that economic malaise, upstart competitors and feisty antitrust regulators have had little impact on their bottom line. Some other big numbers:

$64.7 billion: Apple’s revenue rose just 1 percent, but that beat expectations as analysts were anticipating a decline because of the delayed release of the new iPhone. Sales of services, like the App Store and Apple Music, helped cover the shortfall.

197 percent: Amazon’s quarterly profit nearly tripled, to $6.3 billion. The company also added almost 250,000 employees in the period, surpassing more than a million workers for the first time.

2.54 billion: The number of people using one or more apps in Facebook’s family — Instagram, WhatsApp, Messenger and its core app — rose 15 percent. The company’s revenue and profit both surpassed expectations, despite a wide-ranging boycott by advertisers this summer.

$5 billion: Advertising revenue at YouTube unit set a record, rising 30 percent, bolstered by stay-at-home viewing. It was just one aspect of Alphabet’s bumper earnings, as the Google parent prepares its defense in a federal antitrust lawsuit.

“Like many other people I respected, I decided to give Epstein a second chance. This was a terrible mistake.”

— Leon Black, the C.E.O. of Apollo, addressing his association with Jeffrey Epstein on an earnings call with investors

Last-minute Halloween costume ideas

Still need something to wear for a virtual cocktail party or socially distanced trick-or-treating? We’ve got you covered:

C.E.O.: Crisply pressed shirt half-tucked into unwashed sweatpants. Slippers. AirPods.

Apolitical C.E.O.: Same as above, but refuse to talk about anything other than Halloween.

SPAC: Fleece vest stuffed with cash and blank checks. Talk confidently but vaguely about a bigger, better party you plan to host in the near future.

Section 230: Bring a megaphone and a group of your most outspoken friends. If anything they say causes a stir, respond: “It’s just a platform.”

Second round of stimulus: No props required. Simply promise to arrive at a certain time, then don’t. When asked where you are, say you’re “just about there.” (Also works for Coronavirus vaccine.)

ELECTION 2020

This week, DealBook is highlighting how corporate America is preparing for a momentous election. Today, the C.E.O. of a small business in Syracuse, N.Y., tells Lauren Hirsch what it’s like for a company to find its political voice.

Finding a voice

Chedy Hampson usually deals in the world of fantasy. He’s the C.E.O. of TCGplayer, an online marketplace that sells trading cards for “Magic: The Gathering,” “Pokémon” and the like. But this year, challenges in the real world have been his main concern.

As protests broke out after George Floyd’s killing this spring, “I didn’t know what to say or what to do,” he recounted. “That’s when I confessed my concerns openly to my executive team.”

The conversations that followed were frank. “We looked at ourselves and said, ‘You know, there’s no representative on this executive team that can speak to this,’” he said, noting that the executive team had no Black members. “So we shouldn’t even be coming up with this idea. Let’s go talk to our co-workers.”

The company, which employs about 250 people, held a series of calls with employees who wanted to help steer its corporate response. The actions of big companies addressing social issues have attracted the most attention, but the debates at many smaller businesses have been no less profound.

“I think a lot of people are still learning what it means to support these movements,” Mr. Hampson said. The discussions with employees led the company to take a more active role in the 2020 election. It is partnering with Power the Polls, a program aimed at enlisting poll workers, and giving all of its employees the day off on Election Day and encouraging them to volunteer.

Mr. Hampson said that after the election he would continue to listen, engage and make equality, justice and representation a core part of the company’s mission.

THE SPEED READ

Deals

Retail investor orders for the Shanghai portion of Ant Group’s I.P.O. exceeded available shares by over 870 times. That amounts to $2.8 trillion, roughly Britain’s G.D.P. last year. (FT)

Juul told employees that its valuation had dropped to $10 billion, down from the $38 billion the vaping company was valued at in late 2018. (WSJ)

A U.N.-backed vaccines group raised $500 million in a bond sale to fund immunization efforts in developing countries. (FT)

Politics and policy

House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin admitted that stimulus talks are over. (WaPo)

Senator Susan Collins, Republican of Maine, dropped her criticism of private equity. The industry is now financing her re-election campaign. (Politico)

Tech

The conservative commentator Dan Bongino has become a media star, thanks to Facebook — and he says he has no idea why. (NYT)

Researchers are worried about an onslaught of Twitter bots spreading disinformation about Joe Biden before Election Day. (NYT)

Best of the rest

Women have accused the Americas chapter of the Court of Master Sommeliers of widespread sexual harassment. (NYT)

The slump in air travel has made it harder for meteorologists to forecast the weather. (NYT)

“The strange tale of a Chris Christie video, the Montana governor’s race and a cured meat product.” (WaPo)

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