US Business

A US-backed campaign is giving Russians access to anti-censor software to dodge Moscow’s crackdown on dissent against its invasion of Ukraine, involved groups told AFP.

Russia has intensified its restrictions on independent media since attacking its neighbor in February, with journalists under threat of prosecution for criticizing the invasion or for even referring to it as a war.

The US government-backed Open Technology Fund is paying out money to a handful of American firms providing virtual private networks (VPNs) free of charge to millions of Russians, who can then use them to visit websites blocked by censors. 

Traditional VPN software creates what is effectively a private tunnel on the internet for data, typically encrypted, to flow safeguarded from snooping — and their use has boomed in Russia since the invasion.

“Our tool is primarily used by people trying to access independent media, so that funding by the OTF has been absolutely critical,” said a spokesman for Lantern, one of the involved companies.

Tech firms Psiphon and nthLink have also been providing sophisticated anti-censorship applications to people in Russia, with OTF estimating that some four million users in Russia have received VPNs from the firms.

Psiphon saw a massive surge in Russian users, with the number soaring from about 48,000 a day prior to the February 24 invasion to more than a million a day by mid-March, said a company senior advisor Dirk Rodenburg.

The firm’s tools in Russian now average nearly 1.5 million users daily, he added.

While some, like Ukraine’s leadership, have called for Russia to be cut off from the internet, others have noted access is key for opposition groups. 

“It’s so very important for Russians to be connected to the whole world wide web, to keep resistance going,” said Natalia Krapiva, tech legal counsel at rights group Access Now, which is not involved in the OTF effort.

“All kinds of initiatives are happening and to keep them alive you need the internet because you can’t gather in person, or because activists are scattered around the world,” she added.

Keeping VPNs running and accessible was relatively straightforward in the early days of the war, said Lucas, the spokesman for Lantern, who spoke on condition that only his first name be used.

“They weren’t ready to block anything,” Lucas said. “Over time, Russia learned how to block the easy stuff but Lantern and Psiphon are still up and running.”

– Lesson from China, Myanmar –

Censors try to cut VPN software off from servers they rely on to function or stop people from getting to websites where the tools can be downloaded.

As a result, crackdowns on internet freedom typically result in people sharing VPNs through guerrilla tactics such as word-of-mouth.

However, groups like Lantern have adopted methods like hiding VPN installers in online platforms too vital for the government to block, and building a network so users can share the technology with others, Lucas said.

“Lantern and Psiphon are different in that we do all sorts of much more sophisticated stuff to hide our traffic and get around our servers being detected,” he said.

People in Russia are benefitting from the VPN makers honing their tools while battling censorship in countries such as China and Myanmar.

“There was a moment about two years ago when China really upped the level of their game, when it came to the lengths they were going to block stuff,” Lucas said. 

“We raised the level of our game a whole lot,” he added.

US government funding provided through OTF has been important to the operations since costs jumped and revenue vanished for VPN makers in Russia, as sanctions kicked in and companies pulled out of the country.

OTF said it typically spends $3-4 million annually funding VPNs, but that figure was ramped up due to censorship in Russia.

Psiphon has been receiving US government funding for more than 14 years, with the money generally going to improve tools to counter new tactics used by authoritarian regimes, the company told AFP.

Despite the efforts to get VPN technology to those who want it, many people still don’t have access.

“The use of virtual private networks and other methods have increased significantly in Russia, but it still only represents a small percentage of the population,” Krapiva, from Access Now, told AFP.

The rapid rise of the US dollar since the start of the year is a double-edged sword for American multinational companies, pushing some of them to decide whether to hedge or reposition their activities abroad to avoid fallout.

For an importer, the surge in the greenback against the euro, yen or British pound is a plus, because it makes the products they buy cheaper.

But for a US export company, products sold in dollars have become more expensive, which increases the risk of losing clients and seeing sales decline. 

And they also lose money when converting foreign revenue back into to dollars.

Many firms already revised their earnings forecasts for the year to account for the changing exchange rate, including computing giant Microsoft, which warned its quarterly sales will fall by $460 million and its net profit by $250 million due to the currency hit.

Adobe, Salesforce, Biogen and Pfizer have all warned that the dollar’s rapid rise will have a greater impact on their accounts than expected.

– $40 billion hit –

Companies that generate most of their revenue outside of the United States are the most exposed, starting with tech giants, medical equipment makers and service companies, according to Kyriba, a corporate cash management platform.

Kyriba estimates the currency effects could mean a $40 billion hit to earnings of S&P 500 firms in the first half of the year.

The Federal Reserve’s decision to aggressively hike interest rates to combat rampant inflation, combined with an influx of funds into the country from investors looking for a safe haven in uncertain times, have combined to boost the US dollar.

The greenback has risen 13 percent compared to the euro over the last 12 months, approaching parity, and gained 22 percent against the yen.

“Short term, that’s a good thing for the United States because it means all the imports are cheaper and it puts downward pressure on inflation,” said Desmond Lachman of the American Enterprise Institute think tank.

But further out, the effect on the US economy is more nuanced, because if exports fall, “the United States trade deficit widens and then we get more external debt.”

But multinationals “don’t have control over these big items,” he explained.

They can, however, mitigate the effect of fluctuations in foreign currencies in which they price and invoice goods by adopting hedging strategies — using financial instruments that provide a kind of insurance against losses caused by the changing exchange rate.

Most corporations already have hedging programs in place, and they change their plans on a quarterly or even monthly basis, sometimes trying to predict currency movements, Kyriba’s Bob Stark said.

But it’s not an exact science, he noted, especially in a time of great uncertainty about the direction of inflation, interest rates and the possibility of a recession.

– Changing countries to cut costs –

But “since the start of the pandemic, CFOs have gotten very good at looking at multiple scenarios and building on them,” Stark said.

Sporting goods giant Nike, for instance, warned Monday that currency effects would cut annual revenue by several percentage points. But the profit hit is much lower because of the hedging.

The current high volatility in foreign exchange markets also means it costs more to hedge, so some firms are choosing not to use those instruments.

Among the other tools at their disposal, multinationals can reduce their exposure with other techniques, such as by paying their Japanese suppliers in dollars, by renegotiating prices, or even by buying their supplies from different countries.

Or they can simply wait for the US currency to weaken before repatriating their profits.

However, once the exchange rate has strengthened, there is limited room to maneuver, according to Nikolai Roussanov, a finance professor at the University of Pennsylvania — especially when prices are also rising because of supply chain issues and energy costs.

“If you try to react to something already happening, it might come to bite you later because some of these movements are quite transitory,” he told AFP.

Two years after President Donald Trump filled its ranks with conservatives, the US Supreme Court has engineered a sharp turn in US constitutional law that could have a profound effect on American life for decades.

Key decisions that rescinded abortion rights, permit Americans to tote their guns freely in public, expand religion in schools, remove voting rights protections, and impede the government’s ability to set controls on greenhouse gases, have turned long-accepted rules of justice on their heads.

With a 6-3 majority on the bench, the conservatives led by Chief Justice John Roberts represent a mighty swing of the judicial pendulum from decades of a modestly progressive course.

Politically, the Roberts court is effectively payback by the Republican right, which has since the 1970s endeavored to claim control of the high court to reverse key decisions they view as excessive.

But analysts say the just-closed annual court season has revealed a set of judges more hard-line than anyone anticipated.

They have brashly tossed out the decisions of their respected predecessors, including, as with abortion, rights that previous courts said were guaranteed by the constitution.

“It’s not unusual to see the pendulum swinging, and to have what might be considered course-corrections,” said American University constitutional law professor Stephen Wermiel.

But in the term just ended, he said, the court took “a dramatic and sudden shift in a far more conservative direction.”

“Two generations of Americans, maybe more, have grown up knowing certain sets of rights,” Wermiel said.

“This is the rare instance in which the Supreme Court has dramatically taken back constitutional rights,” he said.

– Political alignment –

“The last time there was an ideologically cohesive court was the Warren court, and that court pursued liberal objectives” said Neal Devins, a Supreme Court expert at the William & Mary University law school.

Led by Chief Justice Earl Warren,  over 16 years from 1953 to 1969 that court made transformative decisions that expanded civil rights and civil liberties.

It effectively ended segregation of whites and Blacks, increased the power of the federal government, curtailed official Christian prayer sessions in public schools, and laid the ground for the 1973 decision that made abortion a constitutional right.

Warren’s team overturned plenty of precedents, and was viewed with as much outrage by conservatives as liberals see the Roberts court.

But Devins points to stark differences. Four of the Warren court’s conservative members were appointed by a Democratic president, and two liberal justices were chosen by a Republican.

On many crucial decisions, justices from both sides were in the majority and the dissenting minority. Their decisions did not cleanly align with the political divide between Republicans and Democrats.

Indeed, five of the seven justices who backed the 1973 abortion decision were appointed by Republicans.

In the current court, the conservatives were all appointed by Republican presidents — three by Trump — and there is far less crossover between the two sides, said Devins. 

While the justices might not be consciously thinking in terms of Republican or Democratic politics, “This court is divided not just along ideological but along political party lines,” said Devins.

Moreover, the decisions of the conservative six hew farther to the right than many Republicans appear to support. 

“This court is willing to go further doctrinally than other courts,” Devins said.

– Not our job –

Noteworthy about the Roberts court is its deep belief that the Supreme Courts of the past, like Warren’s, took on issues that they had no business deciding.

For example, they said abortion is not a right in the constitution but a moral issue to be decided by the voters of each state. 

And only Congress, not an independent government agency, has the broad power to establish things like regulatory caps for greenhouse gases, they said.

The current way government functions, Justice Neil Gorsuch wrote critically, reflects “the explosive growth of the administrative state since 1970.” 

However, critics say that ignores the reality that the states themselves are deeply divided over abortion, creating a deeply unequal environment for women. 

And they say that government cannot function if regulatory agencies cannot implement policy.

“The court knows that Congress is effectively dysfunctional,” said Harvard University law professor Richard Lazarus.

Yet it “threatens to upend the national government’s ability to safeguard the public health and welfare at the very moment when the United States, and all nations, are facing our greatest environmental challenge of all.”

– Just getting going –

There is little sign that the conservative bloc will slow down. They have accepted more potentially landmark cases for the next term beginning in September, on affirmative action, election laws, and more on regulation of business.

“This court is just getting going. What they accomplish remains to be seen,” said Devins.

Conservatives “now have an opportunity for the direction, after 50 years, to dramatically change,” noted Wermiel. “And their view is they’re not going to blow that opportunity.”

In the 15 years since Adam Dailey began boating on Lake Mead, the shoreline has receded hundreds of meters, the result of more than two decades of punishing drought that is drying out the western United States.

Launch spots that lined the edge of the lake, located outside Las Vegas, have been abandoned, and a single ramp is now the only way to get a boat in the water.

“We used to have more. So everyone’s fighting to use one ramp… and still trying to figure out how to get along,” said Dailey.

“It’s kind of sad, what’s going on. But we still come out and try to enjoy it when we can.”

Lake Mead is the largest reservoir in the United States, a huge man-made body of water formed by the construction of the Hoover Dam in the early 1930s.

Its 247-square-mile (640-square-kilometer) surface area stores water for tens of millions of people and countless acres of farmland in the southwest.

But it’s shrinking at a terrifying rate and now stands at just one-quarter full.

The National Park Service (NPS), which manages access to the lake, has spent more than $40 million since 2010 trying to keep the water open to boaters.

It costs them $2-3 million dollars to reconfigure the boat launch ramp every time the water levels fall another four feet (120 centimeters).

“Declining water levels due to climate change and 20 years of ongoing drought have reshaped the park’s shorelines,” the NPS says on its website. 

“As Lake Mead continues to recede, extending launch ramps becomes more difficult and more expensive due to the topography and projected decline in water levels.” 

– Bathtub ring –

A series of NPS signs show the shoreline at various points since 2001. The sign marking the level in 2021 is 300 paces from the water.

In the mud, the receding waters leave behind bottles, cans, fire extinguishers and other detritus that somehow made its way overboard in years gone by.

The rocks that form the hard edges of the reservoir offer a stark illustration of just how far water levels have fallen.

A white band of mineral deposits stains the mountainsides like the ring on a bathtub, showing where the water was at its high point after a flood in 1983.

“We used to water ski race here,” Jaxkxon Zacher told AFP.

“And the island — only the tip… was out 25 years ago. So now we can’t even race here anymore. It’s dropping drastically.”

The growing islands in the middle of the lake point to the uneven topography of the valley that was flooded — and the hazards that await.

“Every day someone’s ripping a drive off, because last week, where there was no rock, it’s now a foot down or two feet down so things are exposed,” boatseller Jason Davis said.

“You’ve got houseboats getting beached and stuck, and people are ripping their lower units off.”

And with vessels that can retail at hundreds of thousands of dollars, a weekend outing can turn into a costly mistake.

– A new job –

For some people, the risk of an accident and the sheer hassle of having to wait so long to get a boat into the water and then out again at the end of the day means Lake Mead is no longer a viable recreation option.

Below the Hoover Dam, stretches of river remain relatively unscathed by the dropping water levels.

At Willow Beach, across the state line in Arizona, kayakers frolic in the shallows, unloading water pistols on each other as 104 Fahrenheit (40 Celsius) sunshine beats down.

A small marina there offers Steve McMasters a place to stage his pontoon, just a short distance from his home in Boulder City.

“It can be a four-to-five-hour wait on weekends to get your boat out of the water (at Lake Mead), so this is big to have,” he said.

“I waited like four months on a waiting list to get it. I got lucky here.”

Climatologists say two decades of drought is not unheard of in the western United States, but combined with human-caused global warming, it is transforming the region.

Higher temperatures mean less moisture falls as snow on the Rocky Mountains, and what snowpack does form melts more quickly.

This leaves the Colorado River without the slow and steady feed that supplied it year-round in the centuries and millennia before the region was settled.

In climatic terms, Lake Mead is a baby; in existence for less than 90 years.

But in human terms, it is vanishing at a startling pace.

Jason Davis, the boatseller, says more people need to witness the stark changes for themselves. 

“If you haven’t come to see these rings, you know, you don’t quite comprehend,” he said. 

And if the water keeps dropping?

“I’ll need a new job.”

Airlines struggling to staff their planes cancelled hundreds of US flights Saturday at the start of a long and almost certainly messy holiday travel weekend.

As of mid-afternoon, with Americans gearing up for July 4 Independence Day celebrations, more than 600 flights within, into, or out of the United States had been cancelled, and more than 3,300 were delayed, according to flight tracking service flightaware.com.

The numbers on Friday were grim as well, with 587 US flights scrapped among a global total of 3,061 cancellations, the site said. Sunday was also looking problematic, with more than 100 flights already cancelled.

The airport chaos is prompting a record level of road travel by Americans seeking to dodge flight trouble, a travel industry group said. 

For days, amid a surge in travel as summer rolls in, horror stories have abounded as travelers were stranded at airports, enduring odysseys to reach their destinations.

The airline industry was devastated in the early stages of the Covid-19 pandemic as people stayed close to home, but air travel has rebounded as health measures were eased.

And although federal Covid-19 relief spared airlines from laying off staff, tens of thousands of workers left the industry after carriers urged early retirement.

Today’s industry has about 15 percent less staff compared with the pre-pandemic period to handle around 90 percent of pre-2020 passenger volume, analysts at Third Bridge consultancy estimated.

– ‘Pilots are getting fatigued’ –

The travel chaos has drawn scrutiny from Transportation Secretary Pete Buttigieg and others in Washington.

On Saturday, Buttigieg tweeted a series of tips on what to do if one’s flight is cancelled, such as whether to accept travel points or miles as compensation, or demand a cash refund.

“You can often negotiate on this. That’s between you and the airline,” Buttigieg wrote.

The travel season is at full speed, with 2,490,490 people screened at airport checkpoints nationwide on Friday, the most since February 2020 right before the Covid shutdown in the US, the Transportation Security Administration said.

“We are back to pre-pandemic checkpoint volume,” the TSA tweeted.

Delta pilots walked informational picket lines at several airports Thursday to demand a new contract and complain of overwork, among other issues.

“Quite frankly, it’s irresponsible scheduling, over scheduling. Coming out of the pandemic, we’re scheduling more flights than we have people to fly them,” Delta pilots association union leader Jason Ambrosi told CNN on Saturday.

“The pilots are getting fatigued, quite honestly,” Ambrosi said. 

They do not want to strand travelers or crew members, he added, “but it’s a safety issue.”

Lack of pilots is the most acute problem in a broad airline industry labor crunch, said Third Bridge analyst Peter McNally.

“There’s no short-term fix,” McNally told AFP. “The issue becomes most pronounced during these seasonal peaks.”

Airlines say they’re working to address the situation, recruiting pilots and other staff and trimming summer seat capacity by 15 percent.

While acknowledging the pilot shortage, airline industry officials point to other exacerbating factors, including turbulent weather, increased staff absences due to Covid and insufficient flight traffic control personnel at some sites.

For the long Independence Day weekend, a record 42 million Americans will also travel by road at least 50 miles (80 kilometers) from home, despite soaring gasoline prices, the American Automobile Association said.

The travel hassles affecting the airline industry may be fueling the heavy road traffic, it noted.

“Traveling by car does provide a level of comfort and flexibility that people may be looking for given the recent challenges with flying,” said AAA Travel senior vice president Paula Twidale.