And what really their priority or mission is. Megan this piece, we strive to be controversial and this piece is rocket of it is provocative in the sense that theyve talked about being that only instrumental in the way you conduct yourself online and your everyday tasks, but also reinforces for good in the long term evolution of humanity. What ashlee vance, who has written this piece really talks about is can you make that a legitimate claim when you have become the biggest single driving of advertising dollars and trying to get people to click on ads known to humanity. Oliver the thing interesting about this is is not necessarily new for a company to try to have some sort of Philanthropic Mission. Megan our own company has a Philanthropic Mission. Oliver its very different because of facebooks nature. We talked with sarah frier about Sheryl Sandberg and her role of bringing emotion to the company. People came to work for this, but they are try to give you look like ads. Megan you have to look at what google was when it started. It made it more efficient to find the things you wanted on the internet. Facebook was a way to find girls at the beginning for mark zuckerberg. [laughter] and it morphed over the years into as ashley calls it, a giant public scrapbook of peoples lives. In part, theres an argument on the side of the industry that are they responsible as platforms for being transformative receptacles of this kind of Philanthropic Mission . Or have they just morphed so far beyond their original starting mission that now they encompass so much of how we actually live our lives daily basis. There is an argument to made that facebook through ai Artificial Intelligence and Virtual Reality will take the place of so many other Disruptive Technologies in our life. The range of everything they are involved in from Driverless Cars and transit and how that will develop in the future. Thats a huge part of it as well, if we do imbue these titans to say you are just Advertising Companies and you need to take responsibility for that, that would undersell them. At the same time, they do take such a huge share of that market and thats 90 of the growth. I think they are grappling with it just as much as everyone elses. Oliver lets talk about the cover story in the future section, its very interesting. This is a battle going on between amazon and walmart, perhaps online and perhaps also in store with amazon branching out a little bit. Megan its a long battle between amazon and walmart which is made these noted missteps in trying to transform its online presence. This is a beast that was equipped to sell things in giant store boxes and is never been good with competing with nimbler small competitors. They acquired companies and reconfigure the strategy many times. They have the head of jet. Com thats heading that strategy right now. Oliver theres a lot of moving parts to have to come into place and get those details. We talked to reporter and author brad stone. Brad ecommerce is a huge market, and it is still early. Its about 10 maybe, or early double digits of all of retail. You see big retailers flailing and mall operators all around the country. Amazon is the leader, we all know mighty amazon, but the story is about walmart, the biggest retailer in the world with a lot of assets, all those physical stores and warehouses and distribution centers. Over the years, it never really deployed them successfully to kind of make headway online. The story is really about the investment, the best that Current Walmart ceo has made on the internet. I think they can be a serious contender, and they are doing some interesting things, particularly in these new developing areas like groceries. Carol they picked up jet. Com and they also got their chief executive. And now hes in charge with everything, were a lot of things that walmart in terms of ecommerce. Brad right, mark lori is ironically enough a former amazon executive. Its the kind of back story that makes this so interesting. He started a company that a lot of people might know, not by its official name, but by some of its brands like wagged. Com or particularly diapers. Com. Walmart try to buy this company in 2009 and amazon swooped in and grabbed it. Mark lori worked at amazon for about a year and a half, left, and started jet. Com. Some people may know jet. Com from its profligate advertising, it was tapering ads all over buses and subways. Oliver what did jet. Com do before they came in with walmart . Brad they raised and spent a lot of money. And a lot of people thought they were going to leave a crater in the ground, this was a company that was kind of representative of Silicon Valley profligacy, but with the website it was first of all, he created a very distinct brand, head of herbal thing going on. It sold almost everything, it was somewhat amazon like, but had this idea that it could be a kind of discounter in a creative way. The prices might seems or standard for ecommerce, but then you could do a couple of things with what they call the smart card. You say i dont eat it tomorrow or the next day, i can wait a week i dont need it tomorrow or the next day, i can wait a week. Or pile a lot of things into a box and they would pass the savings on to you. This is a very walmart like idea. Lets use backend distribution to create savings for the customer. It wasnt really working, they were spending a lot of money and they raised may be almost 500 million in Venture Capital and the return customer numbers werent great. But they had created a brand and the key thing here is that walmart, which had been searching for an online strategy at a differentiator for years saw in mark lori and what he created in jet. Com a way to signal to the world that walmart was serious about the internet. Carol turning walmarts amazon ambitions it into a cover story was a work of the creative director. We had a great shoot of mark lori and his partner at walmart. We were sort of concerned that people wouldnt necessarily recognize who they are. We have the smiley guy, not sure if walmart uses him. Oliver i think they do, whenever theres a special. Eservice really well. He appeared on most of the covers weve done about walmart. We brought them back except now he is sort of creeping up behind jeff bezos. Carol i initially saw it like trying to come up against amazon, which is really what the story is about. Whether or not amazon is the big one in the ecommerce space and try to make some inroads. The idea of trying to beat them seems like a really tall order. We played it as if jeff was sort of the cover star. But walmart is maybe catching up to him. Carol up next, the long road china still faces in the race to catch up with other developed nations. Oliver and why vote for a tax cut today could mean a vote for a tax hike down the road. This is Bloomberg Businessweek. Carol welcome back to Bloomberg Businessweek. Im carol massar. Oliver im oliver renick. Record numbers of chinese graduates are having a hard time finding the job they want. We were looking to bring to life this great transition thats been taking place in china for more than one administration now. The goal has been to shift the economy away from export led growth to an economy that howard more my domestic demand, and therefore, more insulated from international shocks. We looked at the service sector, which is now 43 of the economy in china. Its growing, like eight points from 2012. Some of these policies are working. It still has a long way to go, because in developed economies, services are between 70 and 80 unemployment. Oliver that is the sign of an economy in a country that is transitioning and moving from the sort of smokestack type jobs and industrial jobs to these services roles. What you point out in the story is that theres a bit of a hiccup now happening because the Services Jobs are not necessarily the ones that are going to be able to sustain the kind of highend type of workers. Chinese policymakers are trying to absorb different type of workers. Some of them are new entrance into the labor force and china will graduate a record 8 Million Students this year from universities. You have people who are being shipped by the Smokestack Industries and then you are having farm laborers who are migrating to the cities. We are seeing a lot of lowend, lowpaid, low skill jobs being created and those people are vulnerable and they dont have contracts a lot of these folks who are running restaurants. One of the fastestgrowing categories is people who distribute flyers for new real estate development. You can see those people are not are well protected. Leaves people vulnerable. Oliver does this factor into economists and investors who worry about an economic slowdown, or does this apply to a certain part of the demographic community necessarily happy and the role they are doing . What is the larger impact on gdp growth . The initial reaction has been that people have been pleased to see the Services Sector has absorbed a lot of the layoff resulted in recent years, and we had one economist say its actually performed better than in the previous round of mass layoffs in the 1990s. Unemployment fell to a 14 year low in the First Quarter of this year. So thats an indication that services are helping out. The longer term, if were talking about the idea of creating a middle class and a consumer class, these trends about pay in this sector are not particularly positive. People would like to see more highpaying jobs. Carol treasury secretary Steve Mnuchin insists that president trumps tax plan will play for itself. Oliver we separate tax facts from tax fiction. If you does look at left and right, the independent budget analyst who look at tax plans, its pretty wide agreement that the cuts are so extreme, if they are passed as trump wants, that they would blow a hole in the budget and possibly cause trillions of dollars in extra deficits over the coming years. Carol budget busters. Oliver was the gap between what the budget could be and versus what the Economic Projections for what growth could be . Are they offer little or a lot . What do they need to get this in the black . Different people have different numbers. The committee for responsible federal budget that it could take 4. 5 annual growth to get to revenue neutral, to make the plan revenue neutral. Longterm is actually less than 2 , in the 1. 8 range. The Trump Administration will say it doesnt take 4. 5 , it takes closer to 3 , low 3 . But even that could be out of reach. There is a positive effect on that Economic Growth from tax cuts in the shortterm medium term. You induce more economic activity, that the typical projections or more in the tenths of a percentage point. There are some forecasts that build in the idea that were going to have to pay this deficit back someday anyways, so actually, it could compete away by driving up Interest Rates and actually crowd out private investment, which could potentially make Economic Growth weaker in some scenarios. Carol you really need tax cuts and to raise revenues, right . You need to cut taxes and simultaneously cut spending would be the way to make it revenue neutral. With that part is not very popular. Certainly not with trump, hes not a natural small government kind of guy, as some republicans are. Oliver his first couple of efforts have not panned out. Health care fell through, they couldve found some cuts there but they didnt. It doesnt seem like theyre going to get through anything easily at this point that doesnt have to do with cuts or budget. We end up with nothing on the spending cut side and big cuts on the revenue side, and thats how you get used trillion dollar excess deficit. What does trump do at this stage . One possibility would be to find spending cuts. I dont really see that happening. Another would be there some talk of possibly Congress Might change the budget rules to create a longer window and a little more leeway for congress to be able to act. Oliver right now if its a deficit for taxes, its going to get killed. The way it works is if you want to pass in the senate with a simple majority is 50 votes, you need to show that it will not create deficits past the 10 year window starting from today. It looks as though if you dont do that, he will be 60 votes, which trump doesnt have. Theres only 52 republicans in the senate and i love them or budget hogs who wouldnt go along with Something Like that. Carol if you do raise deficits, down the road, you have to raise taxes. Is kind of reality that hits. Oliver up next, new jerseys plan to tackle hurricanes and rising seas with firewalls. Carol in coal country, signing bonuses are the new thing. Oliver welcome back to Bloomberg Businessweek. Im oliver renick. Carol im carol massar. You can also listen to us on radio. Oliver on london and in asia. Carol in the politics and policy section, its been more than four years since Superstorm Sandy battered the eastern united states. Oliver towns along the coastline are looking to build walls rather than relocate. After sandy, towns and coastal new jersey said how do we prevent this from happening again . Their answer mostly as bill firewalls. Its a good approach and the shortterm, but the short fuse moving in and the water keeps rising. We have to look at whether people have to move. Oliver lets talk about the numbers and rates. Thats obviously going to be an important element. We heard about sandy being the storm of the century. But apparently it seems like theyre going to try and prevent themselves and protect themselves from something that could happen within the century. One is shortterm events and storms and hurricanes and flooding. We know those will happen more often and be more intense. The second thing is Sea Level Rise will be ongoing. We dont know the speed, some estimates say by 2030 we do have another foot of speed level of sea level. By the end of the century, you could have 2, 3, 4, 5 feet. The uncertainty makes it hard to plan. Please towns use federal and state money and basically build walls of sand and steel or berms as high as they can afford, and they hope for the best. It only lasts so long and the money that spent on infrastructure is money you cant spend on helping people move. Oliver it seems like a reactionary thing, shortterm. Where exactly are they . The fees and costs to do this pretty fast. We are thinking bags of sand and stuff, but he gets pretty expensive. There are 214 mile stretches where the army corps of engineers are building june and berm systems to block the incoming waves from hurricanes. Each of those 40 mile sections cost about . 5 billion, in some cases, mostly funded by the feds. Also smaller walls with steel built by the state for 25 million. Theres a berm system that the mayor stafford township says he wants to build and could cost as much as 100 million to protect just five homes. People are still struggling with this question of what is the right amount and how do you decide which areas are too expensive . In theory people get the idea thats possible, no one wants to be the first one to say this area is too expensive. They prefer to keep fighting. Oliver rising prices are fueling optimism in coal country. Carol heres editor matt phillips. Matt coal prices used to make metallurgical steel have tripled. Thats good news for areas that have been devastated by following coal prices. There is optimism in certain counties and southern parts of West Virginia that havent had a lot of reason to be happy recently. The gossip these days is about signing bonuses and health care as opposed to layoffs. The question is whats behind the rise in these prices trump or Market Forces . We found its predominantly Market Forces, if not entirely. Theres been production cuts in thailand, theres a cyclone that cut the Global Supply to meet u. S. Coal more valuable. Weve seen some ipos with Coal Companies which havent happened in years. Oliver companies entirely based on coal. Matt thats right. Coal mines a reopening in certain parts of West Virginia. Trump is certainly taking credit for this, but it doesnt look like his policies and rhetoric are really what is fueling the price increase recently. Oliver its interesting, because commodities generally are free pretty supply and demand. And you point out the supply is disruptive, which means higher prices. At the same time, i wonder would be in ministries and trump talking about bringing this back. Pretty much everybody said this industry is dead. Maybe its not because of trump, but were people wrong in terms of their trajectory for this industry . Matt longterm, this is something you dont want to own, especially in the united states. The goes down to National Natural gas prices. The challenge as the leading source of power and Electricity Generation in the u. S. , thats not going away. Crackers have figured out how to make profits off of lower prices, and as long as natural gas stays cheap, it makes sense to build a natural gas powered fire power plants. We dont know how long trump is going to be in office, and even if it is to terms, thats only eight years. Big picture, this recent optimism seems like a dead cat bounce. Natural gas isnt going away, and thats really the threat to its used for power. Two coal and its use for power. Oliver they are selling shares of the company, its hard to sell a discount bounce. Once the longerterm picture they met argue might happen . Matt there are a kind of bankruptcies, they reorganized and when you saw cold prices start to pop up, technology has made the cost of operating in certain parts of the u. S. More efficient, so they figure they can tak