Opportunity Zones

I was at dinner with my friend Stephen a month or so ago and he was bending my ear about a provision in last year’s tax bill that provides very significant tax incentives to invest in businesses or real estate in certain locations around the US that have been underinvested in.

It all sounded way to good to be true and I kind of ignored him. This sort of thing has been part of so many economic development plans over the years that it sounded like more of the same to me.

We had dinner again last week and he started in again, but this time we were with some other friends and they chimed in.

It turns out the tax incentives are as generous as my friend said and what seemed to me to be too good to be true is in fact true.

These locations are called Opportunity

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a16z Podcast: The Regulatory Landscape for Crypto

What’s going on, regulation-wise, in crypto? How should people who want to join a company or build something new in the space think about the regulatory environment? What to make of all the headlines, or the “alphabet soup” of agencies …

When India Killed Off Cash Overnight

Bhaskar Chakravorti, the dean of global business at The Fletcher School at Tufts University, analyzes the economic impact of India’s unprecedented demonetization move in 2016. With no advance warning, India pulled the two largest banknotes from circulation, notes that accounted for 86% of cash transactions in a country where most payments happen in cash. Chakravorti discusses the impact on consumers, businesses, and digital payment providers, and whether Indian policymakers reached their anti-corruption goals. He’s the author of the article “One Year After India Killed Off Cash, Here’s What Other Countries Should Learn From It.”

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Airbnb and NYC

There is a bill in front of the NYC City Council called Intro 981 that will impose reporting requirements on Airbnb and their hosts in NYC. There will be a public debate on that bill this coming week.

The backdrop here is the growing housing affordability crisis in NYC and the idea that Airbnb is a significant contributor to it.

While I am not an expert in the economics of housing, I have lived in NYC for the past thirty-five years (my entire adult life), and my wife and I are also landlords in several of the neighborhoods in Brooklyn where rents have been rising most quickly. I have a layman’s understanding of the issue and an on the ground feel for it.

It is my view that we have a fundamental supply and demand problem at work in the rapidly gentrifying outer boroughs of NYC (most acutely in Brooklyn,

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When Did the U.S. Stop Seeing Teachers as Professionals?

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J PAT CARTER/Getty Images

Teachers have had enough. Since March, schools in West Virginia, Oklahoma, Kentucky, Arizona, Colorado and North Carolina have either been shut down or turned into sites of resistance. In Kansas, teachers are threatening to strike because their legislature continues to fund schools at a level the state Supreme Court has deemed unconstitutional. One Brookings Institute analysis projected that teacher actions could spread to another 11 states.

Poor pay, increased health care costs, and diminished pension plans are certainly core issues — teachers in Oklahoma haven’t received a pay boost in a decade. But these problems alone aren’t driving the protests. In every state where teachers have recently gone on strike, demands for increase school funding have been made. Disinvestment in schools has also been central to teacher strikes that have occurred since 2011, in Jersey City, Philadelphia, Chicago (twice), Seattle, Portland

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The Parent Child Relationship

It is fathers day today. And I thought I’d write a bit about something that is really bothering me.

I’ve come to terms with a lot of what is going on in the US federal government and our political system. I see it as a natural swinging of the pendulum. Many on the right think we went too far left under Obama. Many on the left think we have gone too far right under Trump. In time, Trump will be history and we will undo all of this nonsense he is putting in place. So is the way of politics and government and every time something happens in DC that bugs me, I think “this too shall pass.”

But, this policy of separating children from their parents at the border really bugs me. The NY Times has a good report up on their homepage right now about how we got

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What Trump’s Trade War Could Mean for the WTO and Global Trade

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frank mckenna/unsplash

U.S. trade policy is roiling markets. At the end of March, the U.S. stock market tumbled 700 points in a single day on news that President Trump would impose tariffs on Chinese exports. A degree of volatility and uncertainty has continued since then as the tariffs continue to make news. Canada, China, Europe, India, and Mexico are all preparing to retaliate.

There are actually two sets of tariffs wreaking havoc at the moment. The first, on steel and aluminum, came under Section 232, a provision under the 1962 Trade Act that allows the president to protect U.S. industry for national security reasons. The second, on Chinese exports, was triggered under Section 301 of the 1974 Trade Act, a “unilateral” measure not used in decades. Taken together, these tariffs have baffled businesses, created uncertainty at home and abroad, and sown doubts about Washington’s commitment to free

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Taxation Of Carried Interest

The issue of how to tax carried interest, the profit sharing interests that VCs, Private Equity firms, and Hedge Funds receive as compensation for generating returns to their investors, is in the news again.

This time it is not a debate at the Federal level, but at the state level. There are carried interest taxation bills under discussion in California, Illinois, Maryland, New Jersey, New York, Rhode Island, and possibly other states that I am not aware of.

My view on this issue is simple and I’ve stated here publicly and regulary since mid 2007.

If you are being paid a fee for managing other people’s money and have no capital at risk on the carried interest, I don’t understand how it can be considered a capital gain.

It may be good economic policy to incentivize people to manage other people’s money and maybe there should

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Workers Shouldn’t Have to Sign Away Their Rights to Class Action Lawsuits

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BRENDAN SMIALOWSKI/Getty Images

In his classic book, Exit, Voice, and Loyalty, the political scientist A.O Hirschman argued that dissatisfaction with a product, service, relationship, or other outcome can give rise to two broad options: one can walk away (exit) or try to change the outcome by engagement (voice). In the labor market, exit and voice takes the form of either quitting a job or using channels — unions, internal dispute resolution, rights granted by government — to seek changes in conditions at work.

There are many benefits if workers have the ability to exercise voice rather than being forced to exit by quitting. From the perspective of businesses, worker voice can identify bad managers or personnel practices, as well as problems in production processes or service delivery that can be improved. Workers themselves can also improve conditions for themselves and for their colleagues by exercising voice. In

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18 of the Top 20 Tech Companies Are in the Western U.S. and Eastern China. Can Anywhere Else Catch Up?

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CliqueImages/Getty Images

Today’s digital world is organized around two centers of gravity: the U.S. West Coast and the east coast of China. These gold coasts are home to nine of the top 10, and 18 of the top 20, internet companies, as measured by market capitalization. The leading companies in online search, social media, and e-commerce are all based in one or the other of these two regions. But as the digital revolution continues to spark widespread disruption in other industries — automotive, financial services, health care, and retail — who will win? As other nations consider their own stakes in the game, and as incumbents engage with digital disruption, will the two centers of gravity hold, or will the gains be more widely distributed?

A Concentration of Wealth, Value, and Power

By default, the two gold coasts have a self-sustaining edge: They have accumulated massive value, wealth, and power through the

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When Innovation and Capital Go Global: On CFIUS & FIRRMA

We’re struggling as a country to maintain our long-standing global leadership in technological innovation. Twenty years ago, the U.S. accounted for 90% of global venture capital; that number has fallen to 53%. Today, the U.S. market cap of publicly traded …

The Element of Surprise Is a Bad Strategy for a Trade War

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anucha sirivisansuwan/Getty Images

On the campaign trail, presidential candidate Donald Trump often slammed American leaders for publicly telegraphing their ISIS strategy. “Whatever happened to the element of surprise, OK? We announce we’re going after Mosul,” he said during the last debate with his opponent. “I have been reading about going after Mosul now for about — how long is it, Hillary, three months? These people have all left. They’ve all left. The element of surprise.”

President Trump is now deploying the “element of surprise” in his trade war strategy – and in particular how he is imposing tariffs on China. There is no question that China poses unique challenges to the trading system that the American government must address. But the problem is with Trump’s approach – it is catching American businesses wrong-footed.

After all, the United States has long pushed the world to accept a system where protection

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Continue reading "The Element of Surprise Is a Bad Strategy for a Trade War"

The Element of Surprise Is a Bad Strategy for a Trade War

apr18-16-867786188-anucha-sirivisansuwan
anucha sirivisansuwan/Getty Images

On the campaign trail, presidential candidate Donald Trump often slammed American leaders for publicly telegraphing their ISIS strategy. “Whatever happened to the element of surprise, OK? We announce we’re going after Mosul,” he said during the last debate with his opponent. “I have been reading about going after Mosul now for about — how long is it, Hillary, three months? These people have all left. They’ve all left. The element of surprise.”

President Trump is now deploying the “element of surprise” in his trade war strategy – and in particular how he is imposing tariffs on China. There is no question that China poses unique challenges to the trading system that the American government must address. But the problem is with Trump’s approach – it is catching American businesses wrong-footed.

After all, the United States has long pushed the world to accept a system where protection

W180413_BOWN_USIMPORTS_v2
Continue reading "The Element of Surprise Is a Bad Strategy for a Trade War"

a16z Podcast: What to Know about GDPR

GDPR (General Data Protection Regulation) is top of mind for many. Given concern around data breaches, this regulation was finally approved two years ago by the EU Parliament after four years of preparation and debate and goes into enforcement …

GDPR and the End of the Internet’s Grand Bargain

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andrew nguyen/hbr staff/dan gold/unsplash

In May the European Union’s General Data Protection Regulation goes into effect, two years after passage by the European Parliament. This radical new privacy law, which covers any business that processes information about EU residents, will dramatically affect the way data is collected, stored, and used, including for U.S. companies doing business abroad.

In the U.S., lawmakers are now circling waters bloodied by revelations regarding potential abuse of Facebook’s social media data, with CEO Mark Zuckerberg scheduled to testify on Capitol Hill this week about the “use and protection of user data.” Facebook’s woes, following continued reports of major data breaches at other leading companies, have amplified calls for GDPR-like legislation in the U.S.

A Refresher on GDPR

For now, GDPR, which replaces previous EU mandates on data collection and use, differs significantly from U.S. law, pushing the two regions further

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