Good morning. Banning political conversations at work might sound appealing right now to some corporate managers — we dig into whether it’s feasible. Plus, we look at takes on the presidential debate from the Bridgewater founder Ray Dalio and the Greylock partner Reid Hoffman, and talk with Ruchir Sharma, the chair of Rockefeller International, about his new book on what’s ailing capitalism. (Was this newsletter forwarded to you? Sign up here.)
Office politicsOffices across the nation — and Slack channels, the modern water cooler — were abuzz Friday morning with voluble opinions about the presidential debate from the night before. How bad was Biden’s performance? Should Biden step aside? Who should replace him? Can that even happen? Are voters more focused on performance than substance? How many times did Trump lie? Did Biden lie, too? For most chief executives, presidential elections are a nightmare — they create division inside teams, take up valuable time and can turn into a big distraction. Kim Scott, a former Google executive and the author of “Radical Candor,” described the sentiment of human resources executives who were at a recent gathering: “They are dreading this election because it’s going to kill productivity for months.” So what’s the solution? The C-suite may want to just hit the off button. But that may be easier said than done. Around the time of the 2020 election, a couple of small companies, Coinbase and Basecamp, made big news when they introduced policies that banned political conversations at work, prompting dozens of employees resign. But much bigger firms have since introduced similar policies without inciting the same mass departure or public backlash. In 2022, Meta asked employees not to discuss the Supreme Court ruling on the constitutional right to abortion, and shortly after that added other topics, including elections. Google’s chief executive, Sundar Pichai, followed protests by employees over the company’s cloud computing contract with the Israeli government with an announcement that noted, “This is a business, and not a place to act in a way that disrupts co-workers or makes them feel unsafe, to attempt to use the company as a personal platform or to fight over disruptive issues or debate politics.” Executives are feeling anxious about employee discourse. In a survey by the law firm Littler this year, about half of the 400 C-suite executives, in-house lawyers and human resource professionals polled said they were either moderately or very concerned about managing divisive political beliefs among employees. “I think that’s a natural reaction given the divisiveness,” said William Minor, DLA Piper’s Washington managing partner. Will a ban get you sued? Probably not. Political activities at work generally have little legal protection, according to Littler. But there are still some circumstances under which a ban could get legally perilous, such as when it affects a certain protected class of people, or if a company is operating in any of at least 11 states with laws that prohibit employers from punishing employees for expressing political views. Is it practical? Also probably not, say some management experts. Scott said managers didn’t know and couldn’t control what their employees talked about. “It’s delusional,” she said of bans, adding, “When you say you can’t talk about something, disagreements and assumptions pile up, and then they finally explode in a way that’s way more dangerous and counterproductive.” She recommends focusing on building a culture of respect instead. There are other ways to rein in the water cooler. If an office political debate is becoming a big distraction from work, address the subpar performance, not the political conversation, said Johnathan Nightingale, a co-founder of Raw Signal Group, a management training firm. “It’s a much more direct approach than saying, ‘The following topics are off limits because they might cause you to be distracted from your work,’” he said. Other policies may already address political debates that get out of hand. “I think companies are smart to sort of look at all of their policies,” Minor said. Social media or harassment rules may already cover big disruptions that stem from divisive politics, and most corporate policies prohibit the use of company resources for personal political activity, he noted. “Often I think that’s a better way to go,” he said. But that doesn’t mean a ban can’t work for anyone. Basecamp’s chief executive, Jason Fried, recently told the BBC that since the big departure of employees who disagreed with the no-politics policy, there hadn’t been any situations in which he had needed to enforce it. He called introducing the policy “probably one of the best decisions we’ve ever made.” — Sarah Kessler
President Biden’s poor debate performance sent panic through the Democratic Party. Biden’s faltering display in his first debate this year with former President Donald Trump renewed concerns about his age and ability to serve a second term, prompting some donors and Democratic strategists to discuss replacing him as the party’s presidential candidate. The Supreme Court made a series of decisions that limited the power of executive agencies. The justices on Friday overturned the Chevron doctrine, a Reagan-era precedent that allows government agencies leeway to interpret laws. The court released the ruling a day after it rejected the S.E.C.’s use of in-house administrative tribunals in fraud cases, threatening a process used by other agencies including the F.T.C. and I.R.S. The Fed’s preferred inflation measure cooled last month. The Personal Consumption Expenditures index climbed 2.6 percent from the previous May, down from 2.8 percent in April. The inflation rate remained above the Fed’s 2 percent target, however, as investors bet on at least one rate cut this year. Warren Buffett revealed details about his will and how his wealth will be distributed. The famed investor told The Wall Street Journal that almost all of his billions would be bequeathed to a charitable foundation run by his three children. He also disclosed that the Gates Foundation wouldn’t receive any more money after his death. How business leaders are thinking about the debateNot all C-suite leaders are trying to stay out of the political fray. Among the most substantial responses to the jarring presidential debate this week were letters that Ray Dalio, the Bridgewater founder, and Reid Hoffman, the LinkedIn co-founder and Greylock partner, sent to their contacts via email. In his email, Hoffman said he had been inundated with questions about whether there should be a public campaign to pressure Biden to step aside. In Hoffman’s view, the answer is no. “When he does poorly, he tends to bounce back — and then win,” he wrote. Hoffman encouraged his contacts to consider how Trump’s supporters reacted when he was convicted of 34 felonies: “They ruthlessly and immediately closed ranks, because they understand that at this stage of the race, they must spend every minute and dime either boosting their old man, or tearing down ours. If we’re musing on Biden’s flaws, we’re not organizing around Trump’s flaws. That’s bad for us and good for them.” He also argued that Biden had the right team; the right “values, instincts, patriotism and courage”; and still a chance at winning the race: “The fundamentals matter vastly more than a single debate. Perhaps the best historical analogy is from 1984, when Ronald Reagan’s first debate performance raised concerns about his age. He turned things around in the next debate, and won the election in a landslide.” Dalio, by contrast, focused on who might replace Biden as a candidate, suggesting that the choice could shape the next era of politics. The Republican side will consist of “players from the hard right,” he wrote, and Biden’s replacement would determine whether the Democratic side would “be from the soft left (socialists with liberal values) or hard left (closer to communists).” He explained: “We should be thinking about 1) the choice being between the right or left and how far right or left they are, and the facts that 2) the Republicans will field a leader and team that is from the hard right (strongly capitalist, nationalist, isolationist with deeply conservative values), 3) over the next few months, we will learn how far left the leader and players on the Democratic team will be, 4) the markets will prefer those on the right over those on the left, and 5) unfortunately, those of the bipartisan middle (i.e. those who respect civil rules of engagement and cooperate to create bipartisan leadership, which would be best) are pretty much out of the picture. Of course, personalities and competencies also matter some — unfortunately, personality will matter much more than competence.” There wasn’t much optimism in Dalio’s email, which ended with his conclusion that the election is likely to come down to a choice between two extremists. “This leaves us with a pretty disturbing domestic picture in a world in which the other four big forces (debt/money/economics, international great power conflict, acts of nature/climate, and new technologies) will likely also be disruptive to the existing world order,” he wrote. On our radar: ‘What Went Wrong With Capitalism?’Ruchir Sharma is worried about America. The chair of Rockefeller International and a frequent business and markets commentator, he left his native India for the United States, partly inspired by Ronald Reagan’s promise of greater economic freedoms. Now, he warns that capitalism needs a reset. DealBook talked to him about his new book, “What Went Wrong With Capitalism?” The conversation has been edited and condensed for clarity. Why did you write this book? I’m all for the government playing a constructive role in the economy, but was aghast at its excesses during and since the pandemic. Just like the “revolution in pain management” addicted America to opiates, our economic managers addicted the nation to state relief by rolling out bigger bailouts in every crisis. Having grown up with socialism and its ill effects in India, I was also stunned by polls showing many young Americans prefer socialism to capitalism. They see big corporations and billionaires as products of excessively free markets, rather than the beneficiaries of big government. You say that Republicans and Democrats are equally to blame. How? Presidents of both parties have been building a suite of habits — spending, borrowing, stimulating, rescuing, regulating — for decades. Bailouts were considered heretical before the 1980s, yet by the time of the pandemic even firms tied to Berkshire Hathaway were getting offers of relief. Capitalism requires churn and competition, not aid for Warren Buffett. The stimulus was too big, and lasted too long after the pandemic was over. State relief supports the rich, and creates deadwood companies. Zombies — firms that don’t earn enough to cover interest payments — were 2 percent of all public companies in 1990. Now they are around 20 percent. Bipartisan devotion to big government is zombifying capitalism. Also since the 1990s, presidents of both parties have been adding 3,000 new regulations a year — while withdrawing a total of 20. The retreat of the state is a myth, and many regulations favor businesses large enough to afford the high costs, which prevents start-ups from emerging. What aspects of government are good for capitalism? I am sympathetic to strong antitrust, possibly banning big companies from buying start-ups, and to welfare built on respect for individual freedom — child-care tax breaks, for example. But the relentless boom in regulation needs to slow. As for the Fed, its mandate needs to go beyond consumer prices and include prices for assets — stocks, bonds — when those prices are surging. Booming asset prices fuel inequality and frustration with capitalism. It sounds like you are arguing for a reboot of state institutions. We have socialized risk — a system of state guarantees against economic pain for anyone, in which the rich and powerful do benefit most. So yes, I advocate a more modern state, which would be a smaller one. Thanks for reading! We’ll see you Monday. We’d like your feedback. Please email thoughts and suggestions to dealbook@nytimes.com.
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