Author: Kevin Drum

The Chamber of Commerce barely waited a day to sue the FTC over its recent decision to ban noncompete agreements. The New York Times tells the story:

The lawsuit, filed in a U.S. District Court in Texas....

I am shocked. However, my prediction from yesterday got the compass wrong. I figured the Chamber would sue in the northern district of Texas, but instead they sued in the Tyler division of the eastern district. However, both judges in the Tyler division are Trump appointees, and one of them, Campbell Barker, struck down the federal eviction moratorium in 2021 and an NLRB rule a few weeks ago. The Chamber should be in good hands.

Here's something you might not know. For decades, Black workers have been employed at rates about 8 points less than white workers. Since 2010 that difference has disappeared:

Among all ages, employment of Black workers is now about the same as it is for white workers. Among ages 25-54, Black workers are still employed at about 3 points less than white workers, but that's rapidly changing too.

Bird flu update:

Dairy cows must be tested for bird flu before moving across state lines under a federal order to be issued Wednesday, as evidence mounts the virus is more widespread than feared among cows in the United States.

Biden administration officials said the move is meant to contain transmission of the virus known as H5N1 and to reduce the threat to livestock, but they maintained that the risk to humans remains low.

I wonder if I should be more worried about this than I am? H5N1 is now in cows, chickens, eggs, milk, and one person.

But it's spread to people before—hundreds of them, in fact, over the past couple of decades. So this is nothing new. Still, I wonder how many mutations away it is from learning how to spread via humans?

Let's just get right to it:

This is tentative. We won't know anything for sure until we get the results of the PET scan at the end of next month. But it strongly suggests that my prostate cancer hasn't spread to the lymph nodes.

This is very good news. Once prostate cancer has metastasized to the lymph nodes it becomes very difficult to treat.

We still don't know if the cancer has spread to my bones because the bone scan was inconclusive. The "suspicious" activity it detected might be from the prostate cancer or it might be picking up the bone lesions I already have from multiple myeloma. Or it might be nothing but age-related degeneration. We'll have to wait for the PET scan to know for sure.

The Wall Street Journal tells us about Tesla's first quarter results:

The Texas-based car company reported net income of $1.1 billion for the January-to-March period, down 55% from the year prior. Revenue fell 9% to $21.3 billion, reflecting a decline in both vehicle prices and deliveries.

Tesla’s operating margin narrowed significantly, dropping to 5.5% in the first three months of the year, from 11.4% a year earlier. Adjusted earnings per share of 45 cents missed Wall Street’s expectations.

....Tesla sells five passenger models—fewer than many other automakers—and earlier this month reported an 8.5% decline in first-quarter deliveries.

....Tesla’s free cash flow turned negative in the first quarter, bleeding about $2.5 billion as the company invested in artificial-intelligence infrastructure, and unsold-vehicle inventory climbed to 28 days of supply, from 15 days the year prior.

....Tesla reiterated Tuesday that growth in 2024 might be “notably lower” than it was the previous year.

Naturally Tesla stock was up 10% in after-hours trading.

Here's some good news:

The vote was 3-2 in favor of banning noncompete agreements for new workers and voiding them for all existing workers (except C-suite executives). This will eliminate the ridiculous practice of fast food chains hiring sandwich makers and then prohibiting them from quitting and going to work for a different fast food chain—and giving their valuable, proprietary sandwich making expertise to the competition.

Corporate America has only itself to blame for this. Noncompetes used to be limited to high-end jobs like coders or lawyers. But then, as usual, some bright boys got the idea of expanding the idea to poor shlubs working minimum wage jobs. That was outrageous enough that it finally produced support for killing noncompetes completely.

In any case, it's a good thing. It promotes a more dynamic economy, and companies still have the ability to protect trade secrets. We've banned noncompetes in California for more than a century, and it's helped build the biggest, most innovative economy in the country. According to the Washington Post:

A Labor Department study published in June 2022 estimated that 18 percent of Americans are bound by noncompete agreements, while other research suggests it could be closer to 50 percent. They are used in a wide range of industries, including technology, hairstyling, medicine and even dance instruction, while imposing restrictions on both high- and low-wage earners.

The FTC estimates that banning noncompete agreements could create jobs for 30 million Americans and raise wages by nearly $300 billion per year.

All good free-market capitalists—as opposed to those who are merely shills for big corporations—should be happy about this. The United States will do nothing but benefit from it.¹

¹Assuming, of course, that it holds up against the inevitable Chamber of Commerce court challenge in the northern district of Texas.

Some ferns at the Laguna Coast Wilderness Park. Very soothing, aren't they?

According to the BLS, only 70.2% of college graduates who received bachelor's degrees in the spring of 2023 were employed by October. This is the lowest non-recession number in recent years.

In the Trump hush money trial, David Pecker, publisher of the National Enquirer, testified today about paying off informants to hush up sex scandals:

Before court adjourned for the day, Mr. Pecker testified that Mr. Cohen and Mr. Trump had asked him what he and his magazines could do “to help the campaign,” a crucial statement that supports the prosecution’s argument that the men were not just protecting Mr. Trump’s personal reputation, but aiding his presidential bid.

This is critical. The prosecution is arguing that Trump paid off Stormy Daniels for her silence, but that's not illegal. They're also arguing that the Trump Organization eventually logged the payments as "legal expenses" in the company's books. That's potentially illegal but only barely.

The key to the prosecution is why Trump did all this. They've continued to be a little cagey about their plan, but apparently they intend to argue that it was all done to help Trump's presidential campaign, which would make it an illegal campaign contribution that he then covered up. That's a federal offense and makes the recordkeeping violation a felony.

This is more or less what prosecutors tried to pin on John Edwards a decade ago over payments to keep his affair with Rielle Hunter secret. It was a novel interpretation of the law back then, and the jury didn't buy it. They couldn't reach a verdict and eventually the charges were dropped.

Will it work better this time? Is it even what the prosecutors have in mind? Or are they going to argue something a little different? Stay tuned.

Donald Trump might be stuck in court for the next few weeks, but that doesn't mean there's no good news on the horizon. On Tuesday, after the closing bell on Wall Street, he will qualify to receive another 36 million shares of his social media company. Hooray!

Here's the thing to watch. All those additional shares dilute the stock: there will be 172 million shares outstanding instead of 136 million. Under normal circumstances, this would mechanically reduce the share price by 21%. But will it? Or will the poor suckers who own the stock just merrily ignore this and keep the share price where it is?

Who knows? This whole billion-dollar scam is already so far into bizarro land that it's impossible to know what will happen next. It's unfathomable that somehow the whole thing is legal.