EMPOWERED AMERICA. Why the Age of Disruption May Usher in an Era of Reform. Bruce April 12, 2018

Transcription

1 Bruce April 12, 2018 Q2 18 Washington Update EMPOWERED AMERICA Photo by Ted Eytan, Wikimedia Commons Photo by Mark Dixon, Wikimedia Commons Why the Age of Disruption May Usher in an Era of Reform

2 CONTENTS Q THESIS & CONTENTS: Reform movements succeed when the methods, motivation & moment converge. We are reaching such a time. THE METHODS Slides 3-6 Revolutionary Tools Enable Revolutionary Times THE MOTIVATION Slides 7-13 Why Citizens Increasingly Demand Change THE MOMENT... Slides New Leaders Emerging to Challenge Washington / Fill the Vacuum WHAT S NEXT Slides Where We Go From Here

3 THE METHODS Revolutionary Tools Enable Revolutionary Times 1517 Protestant Reformation Printing Press 1963 Civil Rights Movement Television 2017 #MeToo Movement Social Media / Smart Phone Photo by Chris Brown, Creative Commons License

4 Methods: icensed from AP EMPOWERMENT, 2018 Everyone s a Witness

5 Methods: Source: Statista, 2018 EMPOWERMENT, 2018 Everyone s a Publisher 2167 (Total Global Users, Millions)

6 Methods: EMPOWERMENT, 2018 Everyone s an Activist

7 THE MOTIVATION Why Citizens Increasingly Demand Change CHANGE

8 Motivation: Source: Pew (2017) WE DON T TRUST OUR GOVERNMENT % Who Trust Government Most of the Time

9 Motivation: Source: Gallup; Media (1976) OUR INSTITUTIONS LET US DOWN MEDICAL ESTABLISHMENT THE CHURCH WALL STREET HOLLYWOOD POLICE CONGRESS Licensed from AP Licensed from AP % Great Deal / Fair Amount of Trust In Medical System Mass Media Church Banks Public Schools Congress % 72% 64% 60% 53% 40% % 41% 41% 32% 36% 12%

10 Motivation: WE BELIEVE WE RE ON THE WRONG TRACK It s Not Unique to America WRONG TRACK & RIGHT TRACK And Keep Voting for Change (5 of the last 6 elections)

11 Motivation: CHANGES COMING TOO QUICKLY FOR SOME AVs Blockchain AI Gene Editing 3D Printing PREVIOUS ECONOMIC DISRUPTIONS How long for wages to return? th Century: 6 decades 20 th C: 4 decades VR Robots

12 Motivation: Source: Wikipedia based on Financial Times Global 500 THE PACE OF CHANGE IS ACCELERATING 2003 MARKETS: Data is the New Oil (Largest Global Companies by Market Cap) GE Exxon Mobil Apple Apple Microsoft PetroChina Exxon Mobil Amazon Exxon Mobil Wal-Mart Microsoft Google Pfizer China Mobile Google Microsoft Citigroup Procter & Gamble Berkshire Hathaway Facebook Wal-Mart I&C Bank of China GE Tencent

13 Motivation: THE PACE OF CHANGE IS ACCELERATING Sources: GDP, Internet, Internet, Defense, Supercomputers (2017), Supercomputers (2000) GEOPOLITICS: China Rising (Rising Share of Global Totals) USA CHINA 50.0% 45.0% 40.0% 35.0% 30.0% GDP (PPP) 50.0% 45.0% 40.0% 35.0% 30.0% Internet Users 29.4% Top Supercomputers GDP (PPP) 50.0% 51% 45.0% 40.4% 40.0% 35.0% 30.0% 28.6% 50.0% 45.0% 40.0% 35.0% 30.0% Defense Spend 39.0% 36.1% 25.0% 20.0% 15.0% 20.6% 18.3% 15.3% 25.0% 20.0% 15.0% 21.1% 25.0% 20.0% 15.0% 25.0% 20.0% 15.0% 12.7% 10.0% 5.0% 0.0% 7.4% % 5.0% 0.0% 8.4% 5.4% % 5.0% 0.0% 0.6% % 5.0% 0.0% 4.0%

14 THE MOMENT New Leaders Emerging to Challenge Washington / Fill the Vacuum

15 Moment: NEW LEADERS ARE SEIZING THE INITIATIVE Challenging Washington / Filling the Vacuum CEOs STATE LEADERS FOREIGN LEADERS INNOVATORS NGOS

16 Moment: FOREIGN GOVERNMENTS OUT IN FRONT REGULATING THE INTERNET FINANCING EMERGING MARKETS EXERTING GLOBAL INFLUENCE EXPANDING GLOBAL TRADE

17 Moment: STATE LEADERS FIGHTING WASHINGTON NET NEUTRALITY (36 states attempting to thwart FCC action via state laws, executive orders or lawsuits) SANCTUARY CITIES (~500 jurisdictions decline to help Feds ascertain residents immigration status) Source (& color key): Source: CIS 34 AG s BRINGING MULTISTATE LAWSUITS (Dem AGs going to courts to stop Trump Admin efforts just as GOP AGs did vs Obama Admin)

18 Moment: INNOVATORS OFFERING ALTERNATIVE SOLUTIONS Innovators Now Leading in Historically-Government Roles

19 NGOs ON THE MARCH Philanthropy is set to surpass government in its ability to shape society s agenda. David Callahan, The Givers SAVE THE WORLD IMPROVE OUR NATION REMAKE OUR POLITICS There are more than 90,000 private foundations in the US with assets over $700B. 30,000 new Foundations established in past 15 years

20 Moment: CEOs INCREASINGLY ENGAGING ON SOCIAL ISSUES Society is demanding that companies, both public & private, serve a social purpose. Larry Fink, Blackrock, $6T under management LITIGATE ADVOCATE 76% of Americans say that CEOs have a responsibility to bring about social change on issues facing society. MARKET POWER PERSONAL ENGAGEMENT

21 NEW C-SUITE IMPERATIVE: WHEN TO ENGAGE? SUCCESSFUL NOT SUCCESSFUL RELEVANCE: Is the issue central to our business, customers or employees? COST / BENEFIT: Will we boost our brand or generate backlash among stake holders & policy makers we most care about? NONPARTISAN: Can we stick to policy and avoid partisan politics? Does our engagement clearly reinforce our values?

22 WHAT S NEXT? Where We Go From Here

23 DISRUPTORS ARE FIRMLY IN CHARGE We re Only 30% Through Trump s First Term 1015 Days 446 Remaining

24 Sources: Partnership for Public Service (confirmations thru 4/5); K.D. Tenpas, Brookings (WH turnover) TRUMP TEAM REMAINS FLUID Staffing the Disruptor-in-Chief SLOWER-ARRIVING ***Confirmations*** PRESIDENT FASTER-DEPARTING ***Turnover (change jobs or leave)*** # Confirmed (15 mo) Avg. Days Cabinet (15 mo) WH Sr. Staff (Yr 1) WH Sr. Staff (Yr 2) TRUMP 6 34% 15%* OBAMA 0 9% 15% GW BUSH 0 6% 27% CLINTON 1 11% 27% GHW BUSH 0 7% 18% Data unavailable REAGAN 1 17% 40% * Thru 4/12 of 2 nd year vs. full-year for others.

25 CHANGE IS COMING TO CONGRESS Record # of House Chairmen Leaving, 2 nd Most Overall Retirements House Retirements GOP DEM DEPARTING COMMITTEE CHAIRS

26 WAVE ELECTION INCREASINGLY POSSIBLE Senate GOP Everyone s a Publisher DEM WAVE Dems Defending 26 States (10 Trump states) GOP Defending 9 States (1 Clinton state) Generic Ballot (D+7.5) Trump Net Approval (-13) Enthusiasm Gap (D+18) Recruiting (52% more candidates) House GOP (Competitive Seats Defended: 51 GOP, 5 DEM)

27 Source: S&P 500, calculations by Annaliese Yukawa, MCR&T, thru 4/9/18 TRADE WAR TALK RATTLING INVESTORS % Days With Intraday Trading Swings of at Least 2% in the S&P 500 GREAT RECESSION 52.6% 50.0% 9/11 & 2 ND GULF WAR 45.2% 40.0% 40.1% 30.0% TECH BUBBLE 32.5% 29.7% 26.2% 20.0% 12.6% 14.2% 14.3% 22.2% 21.0% TRADE WAR? 1 st GULF WAR 15.9% 12.4% 16.7% 30-year avg = 13.7% 19.7% 10.0% 0.0% 7.5% 7.5% 6.7% 4.3% 4.4% 4.8% 3.6% 0.8% 1.6% 1.6% 2.5% 0.8% 1.2% 0.8% 0.8% 0.0%

28 IN THE MONTHS AHEAD Congress Will Do What It Must in 2018 MUST ADDRESS VERY LIKELY POSSIBLE LONGER-TERM FAA (9/30 deadline) Farm Bill (9/30 deadline) FY19 Spending (9/30 deadline) National Defense Authorization (12/31 deadline) Flood Insurance (7/31 deadline) Animal Drug User Fees (9/30 deadline) Intelligence Reauthorization Judges & Nominations (watch State Dept., CIA, VA) Opioid Bill VA Choice Dodd-Frank Reform Tax Extenders / Technical Bill Corrections Balanced Budget Amdmt / Appropriations Recission (both unlikely to pass) Oversight (Trade, Facebook, Cyber, election security, Mueller report, China, Iran deal, Russia, Tax implementation) CFIUS Reform DACA - Border Security Showdown / Deal Honest Ads / Autonomous Vehicles Bills Water Resources Development Act (WRDA) Data Breach Notification Cosmetics Modernization Infrastructure Data Privacy / Online Bill of Rights Welfare Reform Comprehensive Immigration Reform Ethics Reform (Post-Manafort foreign lobbying, sexual harassment in Congress, zombie campaign accounts) ACA Stabilization Drug Pricing & 340B

29 IN THE YEAR(S) AHEAD Will the Tools Suffer When Disruptors Are Disrupted? GOP (Conservative Voices) EU (Privacy & Antitrust) DEMS (Fake News, Antitrust) STATE AGs (Data Protection) VICTIMS (Bullying, etc.) AUTOCRATS (Too much free speech) MEDIA (Copyright, ad competition) TECH COs (Competition)

30 IN THE DECADE(S) AHEAD 1 ST GILDED AGE MODERN REFORM ERA POLITICAL REFORMS Banned corporate political $$ Clean up $$$ in Politics Limit outside group $$$? Enfranchised Women Expand the Franchise Redistricting reform? Direct election of Senators / Weakened power of Speaker More Direct Democracy ECONOMIC REFORMS Filibuster reform? Trust Busting; RR regulation More Competitive Markets 21 st Century Antitrust? Food safety laws Consumer Protection Online rights & responsibilities? Rights to Unionize & Worker safety / Child labor laws Worker Empowerment SOCIAL REFORMS Health / pensions for gig workers? Affordable child care? High school for all More Universal Education Lifelong Learning? Prohibition; National Parks Healthier Communities Opioid limits? Gun controls? Media (Muckrakers) Government (professionalized) More Trusted Institutions Better news accreditation? Institutional reforms?

31 To be added to future distribution: is one of the nation s most innovative government relations firms, offering strategic solutions to companies, trade associations, non-profits, and entrepreneurs that help them succeed in Washington.