The ‘Amazon tax’, a panicky pound and a cotton catastrophe

Planet Business: Subprime lending to family members; and Uber’s new CEO

A tree is covered in cotton after Hurricane Harvey damaged several cotton bales near Bayside, Texas. Photograph: Gabe Hernandez/Corpus Christi Caller-Times via AP

A tree is covered in cotton after Hurricane Harvey damaged several cotton bales near Bayside, Texas. Photograph: Gabe Hernandez/Corpus Christi Caller-Times via AP

 

Image of the week: Cotton catastrophe

This tree near Bayside, Texas, looks like it’s growing in a nuclear winter, but it’s actually covered in cotton following damage to nearby cotton bales – just the beginning of the devastation caused by Hurricane Harvey with at least 18 people dead and a major dam near Houston overflowing. The cotton damage is not insignificant, however, as Hurricane Harvey hit at the worst possible time, obliterating the excess supplies from the recent harvest that were sitting in fields. Although the estimated loss of 300,000 bales is a fraction of the 20 million bales in the annual US cotton crop, it will have been devastating for individual farmers and left agricultural land looking like it has been wrapped in toilet paper.

The lexicon: Amazon tax

The “Amazon tax” is a $100-per-employee tax on companies with 50 or more workers proposed by Mike McGinn, a candidate in the mayoral race in Seattle, Washington, where Amazon is headquartered and where the expansion of the Jeff Bezos-founded retailer is blamed for soaring housing costs, traffic congestion and other urban nightmares. The rules in the state of Washington are that cities and counties can’t impose local income taxes, but if they do want more money to pay for schools, hospitals, roads, facilities and emergency services, something like a “head tax” might do the trick. Calling it an “Amazon tax” won’t do any harm, as many Seattleites believe Amazon gets a better deal out of the city than the city gets out of Amazon.

Getting to know: Dara Khosrowshahi

Expedia boss Dara Khosrowshahi has been selected as the new chief executive of Uber and designated safe pair of hands to steer the troubled ride-sharing company back to a smoother road. He’s the chosen replacement for co-founder Travis Kalanick, whose management style drove Uber down some uncomfortable, scandal-ridden alleys. Khosrowshahi, who has headed up travel company Expedia since 2005, is Iranian-American, emigrating with his family to New York state from Iran as a child in 1978. It is safe to say he is no fan of Trump. Indeed, his Twitter feed spells this out clearly. And in February, he wrapped up a conference call with Wall Street analysts with the line, “Hopefully we will all be alive to see the end of next year.” Yes, hopefully.

The list: Panicky pound

Sterling was so weak on currency markets this week it was said to be “nursing” its losses, which is something Irish exporters and tourism businesses will be doing before long if this continues. But what has the pound in intensive care? Here’s a long-winded way of saying the word “Brexit”.

1. Brexit self-sabotage: Sterling’s journey south began in the wake of the shock referendum result as investors sold liquid UK financial assets. Outside the EU, the UK economy is simply less robust.

2. Political mess: Brexit, part two. You can’t always get what you want, but if you could decide what it is you actually want, that might help.

3. Policy debates: Expectations of higher interest rates tend to strengthen currencies, but the Bank of England hasn’t exactly been rushing to put up interest rates because of aforementioned economic wobbliness.

4. It was too high before: Sometime before the referendum, the IMF was among those suggesting that sterling was “overvalued”.

5. Euro strength: Confidence in the euro zone is the highest it has been in a decade, which wouldn’t be hard, in fairness.

In numbers: Subprime lending

€47 Average sum that people need to be owed by friends or family before they will ask for it back, according to a survey commissioned by social payments app Circle.

51 Percentage of respondents who said they felt uncomfortable and awkward asking for less than €20 back.

€108 Average sum that the 1,000 respondents claimed to have lost to family, friends and colleagues over the past six months in “bad debts” on drinks, tickets, bills, taxi fares, small cash loans…

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