Newsletter: California Inc.: Who needs insurance in the age of self-driving cars?
Welcome to California Inc., the weekly newsletter of the L.A. Times Business Section.
I’m Business columnist David Lazarus, and here’s a rundown of upcoming stories this week and the highlights of last week.
Remember Jeffrey Skilling? He’s the former Enron chief executive whose scheming helped bankrupt PG&E during the California energy crisis. On Friday, Skilling was released from federal custody after serving 12 years in prison for multiple counts of securities fraud, conspiracy and other crimes. PG&E is bankrupt again.
Home prices: The latest Case-Shiller home price index comes out Tuesday. In November, seasonally adjusted home prices for the benchmark 20-city index were up 0.3% month over month. The seasonally adjusted national index year-over-year change has hovered between 4.2% and 6.7% for more than two years.
Fourth-quarter slowdown: The Commerce Department on Thursday will release economic growth data from the fourth quarter of last year. The report, delayed by the partial government shutdown, is expected to show the annual growth rate declined to about 2.6% from 3.4% in the third quarter.
Consumer spending: GDP goes hand in hand with consumer spending, and Friday we’ll get the latest stats — after the shutdown delay — on what accounts for about two-thirds of total U.S. economic activity. Consumer spending rose 0.4% in November.
At the movies: President Trump repeatedly has warned about the perils of the MS-13 gang. On Friday, someone will finally do something about the problem. Jean-Claude Van Damme (yes, Jean-Claude Van Damme!) plays a troubled veteran who helps two brothers go straight in “We Die Young.” If that’s not your idea of fun, there’s always “Tyler Perry’s A Madea Family Funeral,” in which the writer-director-producer-star once again dresses up as an elderly woman. Hilarity ensues.
Monday’s Business section looks at the impact of self-driving cars on the insurance industry. The transition points to an existential crisis for insurers: If nobody’s driving, why do we need auto insurance? Premiums — and company revenues — are based on a driver’s likelihood of being in an accident and actual crash rates. With more than 90% of accidents caused by human error, taking the driver out of the equation is going to mean big changes for insurers.
Here are some of the other stories that ran in the Times Business section in recent days that we’re continuing to follow:
Facebook Nazis: Despite promises of greater oversight, a Times review shows that Facebook has allowed advertisers to target users curious about topics such as “Heinrich Himmler,” the neo-Nazi punk band Skrewdriver and Benito Mussolini’s long-defunct National Fascist Party. After being contacted by The Times, Facebook said it would remove many of the audience groupings from its ad platform.
Labor tumult: A sweeping California Supreme Court decision last April is making it harder to classify workers as independent contractors. A broad swath of California employees are affected, including construction workers, warehouse workers, music teachers, software coders and even strippers. In the Legislature, the issue is shaping up as one of the most divisive of the year.
Trade progress: President Trump again backed away from a self-imposed deadline for raising tariffs on Chinese imported goods, saying negotiators for the United States and China made “substantial progress” in trade talks over the weekend. Trump tweeted that he had extended the deadline but wasn’t specific.
Revolving door: The miscues that made 2018 an agonizing year for Elon Musk are back. Tesla announced its general counsel, Dane Butswinkas, is leaving, two months after hiring him in the wake of Musk’s run-in with U.S. securities regulators. Hours before that news, the company’s billionaire founder and chief executive was sending tweets reminiscent of those that put him and the company in legal jeopardy last year.
Twice the price: Samsung Electronics debuted its most extensive new lineup of smartphones, including a $1,980 model that opens up into a tablet. The Fold device has a 4.6-inch screen when used as a phone and can open into a tablet with a 7.3-inch screen. The South Korean electronics giant debuted four other models as it ramps up competition with rival Apple.
WHAT WE’RE READING
And some recent stories from other publications that caught our eye:
This is us: The Atlantic explores that strange moment when contemporary youngsters discover that their whole lives are online, thanks to years of social-media posts by their parents and others. “The shock of realizing that details about your life — or, in some cases, an entire narrative of it — have been shared online without your consent or knowledge has become a pivotal experience in the lives of many young teens and tweens.”
A better way? Newsweek asks if blockchain can give us the digital privacy we deserve. “They don’t need to know your address or your birthday, your organ donor status and everything else that is currently on your driver’s license,” one expert says. “Using blockchain and a digital wallet, you could prove your age or identity without revealing all that other personal information on your driver’s license.”
Games people play: A cool story from the New York Times about how newfangled controllers are opening up video games to people with disabilities — and creating a level playing field. “If you’re on the streets, everyone knows you’re a profoundly disabled individual,” one developer says. “You can’t hide this fact. But in a video game, you’re a player.”
Pricey healthcare: Growth in healthcare spending is expected to accelerate over the coming eight years as baby boomers age and the prices for medical services grow, the Wall Street Journal reports. “Healthcare’s share of the economy is projected to climb to 19.4% by 2027 from 17.9% in 2017, assuming no legislative changes to the U.S. health system.”
Casino empire: Bloomberg visits with Stanley Ho, patriarch of one of Macau’s most powerful families. The 97-year-old has fathered 17 children with four women he calls his wives. “Now, one branch of that sprawling family is consolidating control just as its SJM Holdings Ltd. prepares to rebid for its casino license and faces a serious challenge from Las Vegas rivals.”
Why is a Tesla so darn expensive? This video from the Journal gets to the heart of the matter and — spoiler alert — it’s all about the battery. One expert says that when he looks at a Tesla, he doesn’t see a car. He sees a battery pack disguised as a car. And cheaper batteries aren’t easy to come by.
For the latest money news, go to www.latimes.com/business. Mad props to Laurence Darmiento for helping put this thing together.
Until next time, I’ll see you in the Business section.
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