A proposed Nevada
bill “would allow tech
companies to effectively
form separate local
governments,” said
Colton Lochhead in
the Las Vegas Review-
Journal. Under the bill,
“Innovation Zones”
would “carry the same
authority as a county,”
including powers to
“impose taxes, form
school districts and jus-
tice courts, and provide
government services.”
Gov. Steve Sisolak
wants to “jump-start
the state’s economy by
attracting new tech com-
panies.” Applications to
create the zones would
be limited to companies
with at least $250 mil-
lion to invest in “innova-
tive technology,” such
as artificial intelligence
or renewable resources.
Sisolak may already
have one company in
mind. In a speech, he
mentioned Blockchains,
LLC, which purchased
67,000 acres of undevel-
oped land east of Reno
to develop a “smart
city.” Blockchains gave
$50,000 to a political
action committee that
“managed Sisolak’s
transition into office.”Local government
for sale, $250 millionBUSINESS
“The world’s leading electric-car
maker is getting behind the world’s
largest electronic currency,” said
Chester Dawson and Elena Popina
in Bloomberg.com. Tesla disclosed
this week that it had bought
$1.5 billion worth of Bitcoin and
would begin accepting it as pay-
ment. Although the $1.5 billion
is just a fraction of the company’s
cash, it means that “investors in
Tesla now are taking an additional wager on
Bitcoin.” While Tesla CEO Elon Musk has tweeted
approvingly about Bitcoin, his company’s broader
embrace “lends increased legitimacy to electronic
currencies.” Bitcoin has seen rising mainstream
adoption, with payment processors like PayPal and
Square now enabling some Bitcoin transactions.A $1.5 billion investment isn’t
merely symbolic, said Charley
Grant in The Wall Street Journal.
It’s equivalent to Tesla’s full
research and development tab
last year. Tesla just raised $12 bil-
lion selling stock in the market
frenzy, so it has wiggle room on
the balance sheet. But “a tour of
financial history suggests similar
speculative uses of an industrial
company’s funds” have ended badly, as in the
“widespread corporate speculation on Japanese
land prices” in the 1980s. A union of “two of the
most popular investment themes under one roof”
was “undoubtedly a winner” this week, but in the
wake of the GameStop mania, “the capital mar-
kets have now truly reached ludicrous mode.”Bitcoin: Tesla’s big digital currency wager
Jobs: $15 wage could raise unemployment, deficit
The Congressional Budget Office said that raising the minimum wage
to $15 per hour could “lift 900,000 people out of poverty and raise
income for 17 million people,” said Eli Rosenberg in The Washington
Post, but also cost 1.4 million jobs over the next four years. The
nonpartisan CBO’s report this week could “animate the debate over
whether to include raising the federal minimum wage” in the next Covid
relief bill. The study also found that such an increase in the minimum
wage would indirectly raise the deficit by $54 billion over a decade,
making it harder to pass under the Senate’s complex rules.
Autos: Chip shortage keeps plants shut
General Motors had to extend its shutdown of three assembly plants
idled by a global microchip shortage that has snarled the auto industry,
said Michael Wayland in CNBC.com. The plants, in Kansas, Canada,
and Mexico, will be halted until mid-March to conserve resources for
the company’s “most popular products,” pickups and SUVs. The semi-
conductor backlog began last year, driven by overwhelming pandemic
demand for consumer electronics. Ford said the shortage “could lower
its earnings by $1 billion to $2.5 billion this year.”
Airlines: Delta opposes Covid tests for passengers
The chief executive of Delta Airlines called mandatory Covid testing for
domestic flights a “horrible idea,” said Dawn Gilbertson in USA Today.
Ed Bastian this week “joined the chorus of travel-industry executives
coming out strongly against” a proposal being considered by the CDC.
Bastian said that mandatory testing would slow the travel industry’s
recovery and that delays in processing results would create a “logistical
nightmare.” New Transportation Secretary Pete Buttigieg said that pas-
senger testing was still on the table, and that making air travel “safer, in
terms of perception and reality,” would encourage more people to fly.
Reversals: TikTok owner will keep U.S. unit
TikTok has shelved a plan to sell its U.S. operations to Oracle and
Walmart, said John McKinnon and Alex Leary in The Wall Street
Journal. The effort to ban the popular social-media app, owned by
China’s ByteDance, or force its sale to American operators was “driven
by then– President Trump,” who said TikTok was a threat to national
security. But the deal “has languished since last fall in the midst of
successful legal challenges to the U.S. government.” The Biden White
House is “determining its own response to the potential security risk
posed by Chinese tech companies’ collecting of data.”30
The news at a glance
Reuters,^AlamyMusk: Bitcoin fanQIn the past year, rents have
fallen 21.5 percent in San
Francisco, 15.5 percent in
New York, and 8.9 percent in
Boston. The drops in the na-
tion’s most expensive cities,
though, were an exception,
and of 150 large metropolitan
areas in one study, 119 saw
higher rents.
Bloomberg.com
QJob openings rose to
6.65 million in December, a
higher figure compared with
a year earlier. But companies
aren’t rushing to fill them,
and hiring shrank by almost
400,000 in the month, accord-
ing to the U.S. government’s
job openings and labor
turnover survey.
MarketWatch.com
QSince Jeff Bezos took
his company public in
1997, only one stock
has beaten Amazon’s
38.4 percent annual-
ized return: Monster
Beverage, the en-
ergy drink company, at
41.7 percent. A $1,000
investment in Hansen’s
Natural Corp.—what
Monster was called in
1997—would be worth
$3.9 million today.
Qz.com
QAccording to Credit Suisse
study, more than 8 percent of
adults in the U.S.—more than
20 million Americans—have
at least a million dollars in
assets.
CNBC.com
QMore than 2 million firearms
were bought last month in
an 80 percent year-over-year
spike. The surge is in line with
the record pace already set in
2020: Nearly 23 million fire-
arms were bought, a 64 per-
cent jump year over year.
The Washington Post
QEight investment firms have
raised more than $2.5 billion
in funding since 2019 for buy-
ing up-and-coming sellers on
Amazon’s marketplace. These
so-called Amazon aggrega-
tors are looking for the next
Anker Innovations, which
started selling cellphone char-
gers on Amazon and is now
worth $10 billion.
Bloomberg.comThe bottom line