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In its statement, the Fed pointed to the strength of job growth and to increases in household and business spending. It noted that inflation has weakened in recent months, but predicted a rebound.

The official optimism went only so far, however. The pace of growth remains weak by historical standards, and the Fed indicated that it sees no evidence of a turn toward stronger growth.

Officials once again reduced their expectations for future rate hikes. The median prediction is now that the benchmark rate will stabilize at 2.8 percent, down from a median estimate of 3 percent in June.

Fed officials also expect both low unemployment and low inflation to persist over the next several years, a curious combination that economists are struggling to understand.

Fed officials predicted that inflation would rebound modestly next year, approaching the Fed’s target of a 2 percent annual pace. But they predicted that inflation would not rise above that 2 percent target, even though they expect unemployment to remain well below the level that would usually result in inflation.

Officials predicted unemployment will stay near 4 percent for the next three years.

The Fed must decide how soon to resume interest rate hikes. The central bank has raised its benchmark rate twice this year, in March and June, and markets were expecting at least one more increase this year. The rate now sits in a range between 1 percent and 1.25 percent, a level most Fed officials regard as providing modest encouragement for increased borrowing and risk-taking.

Some economic indicators suggest higher rates are warranted: The unemployment rate, at 4.4 percent in August, is below the level most officials regard as sustainable, which the Fed historically has treated as a signal for higher rates.

But other economic measures paint a contrasting picture of economic health. While job growth remains strong, wage growth is modest and inflation weakened in recent months.

The Fed’s preferred measure of price inflation increased by just 1.4 percent during the 12 months ending in July, the most recent available data. The Fed is likely to undershoot its target of 2 percent annual inflation for the sixth consecutive year. That has caused consternation among some economists and Fed officials, who are wary of raising rates given the Fed’s inability to so far achieve its inflation objectives.

In a speech this month, Fed Governor Lael Brainard cited a “notable disconnect between signs that the economy is in the neighborhood of full employment and a string of lower-than-projected inflation readings, especially since inflation has come in stubbornly below target for five years.”

The Fed’s next meeting is scheduled for October 31 and November 1, but the Fed is unlikely to raise rates any sooner than its final meeting of the year, in mid-December.

The Fed’s plan to shrink its $4 trillion portfolio has been well choreographed for months, with the central bank outlining in June its plans to slowly reduce its balance sheet by decreasing reinvestment of the principal payments it receives on its bond holdings. To avoid surprising markets or injecting volatility, the Fed plans to gradually reduce its holdings by $10 billion a month.

The central bank, which began its bond-buying program to drive down borrowing costs in the wake of the financial crisis, is now convinced that the economy is strong enough to operate without that level of government support

The retreat will put modest upward pressure on borrowing costs, but businesses and consumers are unlikely to see much difference in the near term. “You will see a gradual tightening of financial conditions that will come from the Fed shrinking its balance sheet,” said Lewis Alexander, chief United States economist at Nomura Securities.

Still, questions remain, both about how markets react and where the Fed will decide where to stop. Before the crisis, the Fed held less than $900 billion in assets, and most analysts expect the Fed to maintain a significantly larger balance sheet going forward — both because the financial system has grown and because the Fed has expanded its role in maintaining the system.


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The Fed responded to the crisis that began a decade ago by cutting its benchmark interest rate nearly to zero, and by vacuuming up huge quantities of bonds. Both measures were designed to revive economic activity by reducing borrowing costs for everything from mortgages to car loans.

The first round of bond-buying, often called “quantitative easing,” or QE, began during the crisis and there is broad agreement that it helped to bolster financial markets.

The second and third rounds, which came after the crisis, remain controversial.

Buying a bond is the same thing has lending money to the seller. Buyers compete by offering to accept lower rates. The Fed’s massive purchases increased competition for available Treasuries and thus drove down interest rates.

In an April analysis, Fed economists reported that the purchases reduced the yield of the benchmark 10-year Treasury by 1 percentage point.

The Fed’s purchases of mortgage bonds had a similar effect.

Fed officials, and a wide range of independent economists, argue that the downward pressure on Treasury rates rippled outward to other kinds of borrowing costs, as private investors moved into other markets in search of better returns.

These impacts, however, are difficult to measure, and some independent economists argue that any broad economic benefits were modest, at best.

“There has been an explosion of research, dozens and dozens of papers, and almost all of them agree that QE lowered bond yields,” said Joseph Gagnon, a senior fellow at the Peterson Institute for International Economics. “The financial market effects are very clear. Did that stimulate growth? Did that stimulate inflation? It’s always impossible to prove, but all the models we have imply it should have helped.”

Critics foresaw negative consequences. A group of prominent conservatives warned in an open letter in 2010 that the Fed’s purchases “risk currency debasement and inflation.” Four years later, some signatories doubled down on those warnings. But there has been no resurgence of inflation. Indeed, the Fed is struggling with the opposite problem: Inflation has remained persistently below its 2 percent annual target.

The Fed’s program was intended to encourage risk-taking by investors, but some critics warned it would create new asset bubbles. Those warnings have not yet been borne out.

The Fed’s retreat began two years ago, when the central bank raised its benchmark interest rate for the first time since the crisis. It now sits between 1 percent and 1.25 percent. The Fed is not expected to raise rates on Wednesday. Job growth has remained strong this year, but some officials are worried about the persistent weakness of inflation.

The Fed plans to reduce its bond holdings with similar care. It plans to cut $10 billion a month for the first three months, divided 60-40 between Treasuries and mortgage bonds. It will then raise the pace by $10 billion every three months.

Mr. Alexander, and other analysts, see a number of factors likely to limit the impact on interest rates, at least in the short term. Both the European Central Bank and the Bank of Japan continue to buy bonds, putting downward pressure on rates. And the Treasury is issuing less long-term debt at the moment, reducing the volume of new securities that markets must absorb.

It is also not clear how much shrinking the Fed plans to do. It needs to hold about $1.5 trillion in bonds to meet demand for currency, which it puts into circulation by purchasing bonds. That number is projected to nearly double over the next decade.

The Fed also needs to hold hundreds of billions of dollars in bonds to maintain its current system for controlling interest rates, which it adopted after the crisis.

Jerome H. Powell, a Fed governor, said earlier this year that the new system is working well and the balance sheet is unlikely to shrink much below $3 trillion.

But maintaining a large balance sheet also means the Fed would remain a more prominent presence in short-term funding markets, where it has displaced some private activity. William Nelson, chief economist at The Clearing House, a trade group representing large banks, said the Fed should return to its pre-crisis operating procedures, which required a much smaller balance sheet.

“The pre-crisis framework worked very well. The Fed had very good control of rates and economic activity,” Mr. Nelson said. “Nobody was complaining that the Fed’s control of interest rates pre-crisis was not precise enough.”

Another open question is whether the Fed would buy bonds in responding to a future downturn. Fed officials predict the benchmark rate will not rise much above 3 percent. That’s a problem because during the past nine recessions, the Fed has cut the rate by an average of 5.5 percentage points to stimulate the economy.

In a speech last year at the Fed’s summer conference at Jackson Hole, Wyo., Ms. Yellen pointed to asset purchases and forward guidance as the Fed’s fallback plan. Those tools, she said, “will remain important components of the Fed’s policy tool kit.”

But Mr. Trump could choose a Fed chairman who disagrees. Kevin Warsh, an adviser to Mr. Trump who is among the possible candidates, resigned as a Fed governor in 2011 in part because he opposed the Fed’s second round of asset purchases.


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In Brazil, Foxconn’s plans unraveled quickly. The administration that had wooed the company was soon swept from power amid corruption allegations and an impeachment vote. Some of the tax breaks that had been promised were reduced or abandoned, as economic growth and consumer spending slumped.

Today, Foxconn employs only about 2,800 workers in Brazil.

Foxconn does the “big song and dance, bringing out the Chinese dragon dancers, ribbon cuttings, toasts and signature of the usual boilerplate agreements,” said Alberto Moel, an investor and adviser to early-stage tech companies who until recently was a technology analyst at the research firm Sanford C. Bernstein. “Then, when it gets down to brass tacks, something way smaller materializes.”

Foxconn said in a statement that it was committed to investing billions of dollars in building facilities outside China. But the company also said it had been forced to adapt to changing conditions in markets like Brazil, where the economy had stagnated.

“This and the changing needs of our customers that our proposed investments were designed to serve have resulted in scaled down operations in the country at this time,” the company said in its statement.

With regard to the Wisconsin project, Foxconn has said it plans to build one of the world’s largest manufacturing campuses in the southeastern part of the state. The company expects the buildings that will make up the campus to total 20 million square feet — about three times the size of the Pentagon — and to help transform the region into a major production center for flat-panel display screens.

Speaker Paul D. Ryan, Republican of Wisconsin, called the Foxconn deal a “game changer” that could help spur a manufacturing revival in the Midwest. At the White House in July, President Trump hailed the agreement as a great one for American manufacturing, American workers and “everybody who believes in the concept, in the label, Made in the U.S.A.” Gov. Scott Walker of Wisconsin officially approved the deal on Monday.

Foxconn has good reason to diversify its manufacturing operations. About 95 percent of the company’s 1.1 million employees work in China. Building a large work force elsewhere could reduce the company’s reliance on a single locale, lowering its risk if countries imposed tariffs or other trade barriers on Chinese exports.

Photo

Applicants for jobs at Foxconn lined up outside a training center in Zhengzhou, China, in 2015. The Chinese government provides significant subsidies to the company.

Credit
Gilles Sabrié for The New York Times

“The closer they get to big markets like the U.S. or Brazil, the less they have to worry about import taxes or other barriers,” said Gary Gereffi, director of the Center on Globalization, Governance, & Competitiveness at Duke University. “Getting outside of China to supply these markets is like jumping over any potential tariff wall.”

But exporting Foxconn’s Chinese strategy is virtually impossible.

The global supply chain for electronics remains firmly rooted in Asia, where advantages like low-cost labor and an abundance of skilled engineers have been crucial to the region’s development as a manufacturing base.

What makes Foxconn’s Chinese operations really hum are the extraordinary level of government subsidies and support, and the sheer scale of those operations. Local governments often finance and build the company’s factories, manage its dormitories and recruit tens of thousands of workers. Some government officials have gone door to door in small counties to recruit workers.

The government aid can reach into the billions of dollars.

Foxconn began to shift large-scale production operations beyond China in about 2009, when it opened plants elsewhere in Asia, including Vietnam and India. The company now has factories in the Czech Republic, Hungary and Slovakia, and a large plant in Mexico that employs 18,000 workers.

When several countries began to require that some components be made locally as a way of encouraging production at home, Foxconn stepped up its efforts to build outside China. And company executives essentially followed the same playbook they had used inside China.

Foxconn’s chairman, Terry Gou, met with high-ranking leaders, including Brazil’s president at the time, Dilma Rousseff, and Prime Minister Narendra Modi of India. Mr. Gou made pledges; won tax breaks and government concessions; and announced plans to spend billions of dollars to create tens of thousands of jobs in multiple countries. Brazil called one of the planned Foxconn sites the “City of the Future.”

Then reality set in.

Labor strikes in India and Vietnam prompted Foxconn’s operations in those countries to be shut down temporarily. Political and economic turmoil in Brazil led the authorities there to scale back some of tax breaks it had offered the company. A plan to invest $1 billion in the construction of a plant in Jakarta, Indonesia, collapsed, partly because Foxconn could not develop the supply chain it had hoped to, according to analysts and government officials.

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Mark Zandi, the chief economist at Moody’s Analytics, concurs. “Our problem going forward isn’t going to be unemployment,” he told me. “Over the next 20 to 25 years, a labor shortage is going to put a binding constraint on growth.”

Converging factors are at play, Mr. Zandi contended. The Federal Reserve is likely to allow the economy to run “on the hot side.” Years of exceptionally low inflation have finally convinced the Fed to drop its overriding anti-inflationary bias, forged in the high-inflation era of President Jimmy Carter, and to put more weight on the impact that high interest rates have on employment.

Manufacturing workers have probably already lost all the jobs to globalization that they were going to lose, Mr. Zandi said. Rather than “take” more American jobs, hundreds of millions of Chinese workers who have joined the global middle class over the last two decades will instead “create” jobs in the United States by buying American-made goods and services.

And even as demand for workers accelerates across the United States, employers must contend with the unflinching force of demography: a work force that is growing at its slowest pace in over a half-century, as baby boomers who joined the labor force from the 1960s to the 1980s now gradually age out of it.

More than seven years after the recession ended and the job market began to bounce back, only 60 percent of Americans over the age of 16 are working, about 2.5 percentage points fewer than just before the economy took a dive.

On average, Mr. Zandi pointed out, aging will slice about a quarter of a percentage point from the labor-force participation rate — the share of Americans either employed or looking for a job — over the next 10 years. By the end of that period, the labor force may even be shrinking.

A Shrinking Labor Force, Despite Rising Wages

Wages are rising in the United States at the most sustained pace since the dot-com boom in the second half of the 1990s. The question is whether rising wages can revive the labor-force participation rate of prime-age Americans, which has shrunk to among the lowest levels in the industrialized world.






Median weekly U.S. earnings, among

full-time workers 16 and over

In 2017 dollars, seasonally adjusted

$875

QUARTERLY

850

825

800

775

750

725

’80

’85

’90

’95

’00

’05

’10

’15

Labor-force participation rate

Seasonally adjusted rate among

men age 25-54; data as of July 1

of each year

SELECTED

O.E.C.D.

COUNTRIES

%

98

97

96

Japan

95

94

France

93

Britain

92

Germany

Canada

91

Denmark

90

89

United

States

88

87

’80

’85

’90

’95

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’05

’10

’15






Policy makers who spent their careers pondering the lackluster demand for workers will have to turn their attention to a problem they have not had to fret about much in at least a generation: how to pull more able-bodied people into the work force to offset a wave of retirements.

“We have had real wage growth, but the labor supply has been flat for the last two years,” Professor Krueger said. “We get a very small number of workers back with higher wages, just enough to offset the people leaving the labor force because they are older.” The critical question for policy is what other tools are available to draw them back.

And the answer requires removing a roadblock standing in the way of this potential golden age: Even if demand for workers is rising, it may not be for the kind of workers on offer, those sitting on the sidelines of the labor force. “The jobs in demand are more skilled than the workers we have,” Professor Krueger told me.

The share of men in their prime working years — 25 to 54 — who are in the labor force has declined steadily since the end of World War II. Workers without a college degree have clocked out at increasing rates, as imports and automation undercut their wages.

For years, the economy hardly noticed because women were rushing to work in droves, offsetting the retreat among men. But that trend faded around the turn of the century. Since then, the labor-force participation rate of prime-age Americans has shrunk to nearly the lowest in the industrialized world.

And, as Professor Krueger noted, once workers stop looking for a job, it is tough to draw them back in. “After they leave the labor market,” he said, “people reorganize their lives.”

Indeed. A third of the prime-age workers who have left the labor force are now receiving disability benefits, meaning they are out for good, Professor Krueger estimated. Another 20 percent are in the process of applying for such benefits. In a recently released study, he estimated that about a third of prime-age men not in the labor force use prescription painkillers, namely opiates, suggesting that they will not be returning to work soon. Professor Krueger suggests that the increase in opioid prescriptions could account for about 20 percent of the decline in men’s labor-force participation from 1999 to 2015, and 25 percent of the observed decline in women’s labor-force participation.

How to get them back? In a coming study, Melissa Kearney and Katharine Abraham of the University of Maryland identify forces that have pushed workers out of the labor force before the retirement age of 65. Trade is at the top of the list, followed by technology — be it robots or other forms of automation — and disability insurance, which offers people some income in the absence of a job. Supply-side factors — incarceration, or the effect of the minimum wage on labor costs — are next.

Professor Kearney and Professor Abraham also identify policies that might draw more workers back into jobs: Improving access to high-quality education, an elusive goal despite recent gains, is critical to equip students to navigate a changing workplace. So is access to child care, to lower barriers to women’s participation in the work force. Expanding wage supports like the earned-income tax credit will be important to make work worthwhile for workers of lesser skills. On the supply side, Professor Kearney and Professor Abraham suggest that being cautious about raising the minimum wage, which could price some workers out of jobs, and reforming disability insurance to encourage recipients to seek jobs.

There is more. Discouraging the overprescription of painkillers seems like an obvious choice, given Professor Krueger’s findings. There is also a clear list of things not to be done.

For instance, restricting immigration is not the smartest policy when workers are scarce. Raising barriers to imports — inviting retaliation from trading partners — is exactly the wrong approach, especially now that the workers in cheap labor markets that put such pressure on American jobs promise to become big consumers of things made in America.

If the goal is to protect economic growth and to give American workers a shot at a new golden age of employment, closing the door on the world economy is not the solution.


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But perhaps no previous chief executive has upended the endowment to the degree that Mr. Narvekar is attempting. Mr. Narvekar, who took office in late 2016, is making broad changes in how Harvard invests and in the management that oversees those investments. Already, a greater share of the endowment’s investments is being handled by outside managers, as is more typical of university endowments.

For years, Harvard differentiated itself from other schools with an extensive internal team. But as managers became more successful, they often left to start their own funds where they could make more money and where their pay would not be subject to criticism from the university community.

Additionally, the endowment’s staff will no longer specialize in asset classes but will be responsible for the overall portfolio. Moreover, managers’ compensation will be determined by the overall performance of the portfolio rather than the specific asset class the individual oversees.

Perhaps out of an awareness that the returns this year were disappointing, Mr. Narvekar pointed out in his statement that he had run another “successful” endowment for 14 years. He was alluding to his tenure as head of Columbia University’s endowment. He wrote that he was convinced that at Harvard, a talented and successful team would overcome “legacy issues” as it shifted gears.

Since he arrived, Mr. Narvekar has been aggressively selling off holdings in private equity and real estate. Since those transactions were executed in the fiscal year ended in June, the endowment may have taken some losses and written down other assets that would potentially let its future returns look better in comparison.

“He took the year to do a deep dive in the portfolio and recognize some of the holdings that could not be justified,” said D. Ellen Shuman, who is a co-chief of Edgehill Endowment Partners, which manages $650 million for nonprofits. “In terms of sales, the interesting question is whether he got the full value for those assets since he sold as quickly as he did.”

Perhaps because there has been so much turnover at the endowment and the recent performance has been so disappointing, a note was attached to the release from Paul J. Finnegan, chairman of the Harvard Management Company board, which oversees the endowment, who said that the board was patient and was backing Mr. Narvekar’s efforts.

The board, he said, “is fully supportive of these efforts, and the time required to reposition” the endowment “so that it can perform up to our collective expectations.”


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The goal is to give companies a better understanding of what they may face and how they should respond. Even if, like me, you mismanage the situation so badly that it ends with a video of a masked hacker growling out his plans to destroy your company.

The Situation Starts

I sat with my editor and a photographer in a small, glass-walled conference room. For this exercise, we were pretending that we worked on the business side of The New York Times.

In less than five minutes on the job, things went seriously awry. One of the newspaper’s biggest institutional investors had become the largest shareholder in a company that was the world’s biggest polluter, and the connection was drawing attention. A prominent blog proclaimed that The Times was “exchanging blood money for ink,” and a video from a major environmental group called on our organization to cut ties with the investor.

Photo

For the exercise, the reporter, Sapna Maheshwari, and her editor, Connor Ennis, pretended they worked for the business side of The New York Times.

Credit
Sam Hodgson for The New York Times

Now, the three crisis consultants across the table told us, we had to figure out what to do.

While crisis simulations have long been used by the P.R. industry, those from CommCore and its competitors, including a tool from Weber Shandwick called Firebell, are examples of a newer breed. They home in on the speed and cacophony of today’s media environment, tossing participants into a virtual pressure cooker of online outrage and escalating press attention. The point is to compress a monthslong disaster into a few stressful hours — and see how teams respond.

“The whole goal is faster reaction time, faster recognition of the issues and hopefully faster getting the issues off the front page or out of social media,” said Andrew D. Gilman, CommCore’s chief executive, who has consulted with the likes of Johnson & Johnson and General Motors during crises.

At the same time, creating a realistic P.R. issue for a company to navigate — or, in our case, hobble through — is its own challenge. After all, clients weren’t concerned about being mentioned in a tweet from the president a year ago, Mr. Gilman said. And last month, the consulting group added the possibility of being tied to white supremacists to its list of risks.

Photo

Ms. Cope and Mr. Weiss posed as reporters asking how the crisis was being handled.

Credit
Sam Hodgson for The New York Times

The Media Starts Calling

On a whiteboard, we had scrawled out the key issues at stake and a list of employees we needed to loop in about the burgeoning situation. It’s trickier than it appears: Too many people can complicate decisions about who’s doing what; too few and you risk not being able to adequately respond to issues as they appear.

The story had been picked up by financial news sites like The Motley Fool and environmental groups that were angrily posting to their Facebook and Twitter pages. There was even a nascent petition on Change.org.

Just as that was sinking in, two reporters from national outlets called. How was The Times going to respond to this outcry? I fended them off in a panic, saying that we didn’t have a comment yet. I couldn’t consult with my editor, who was on the phone with a member of the investor’s P.R. staff.

The simulation blended fact and fiction to make it feel more realistic. The materials included articles and social media posts, complete with pre-filmed videos, designed to look as if they had come from real publications and environmental groups. Two of the consultants had left the room to make the reporter calls to our cellphones, timing them so that we had trouble coordinating our responses.

Often, the companies doing these drills involve a variety of departments, such as legal, information technology and investor relations, in hopes that they know how to work together if a crisis does hit.

The crisis was designed by Dale Weiss, whom Mr. Gilman referred to as something of a “mad scientist” when devising each round of facts. Mr. Weiss likened the pace to cooking a frog.

“If you put them in a hot pot, they’re going to jump right out, but if you take a frog and slowly create a nice little hot tub environment, he’ll stay in and finally boil,” Mr. Weiss explained, a little too gleefully. We were the frogs.

Photo

Mr. Gilman laying out some of the issues that arise in a crisis, such as who should be told and what matters need immediate attention.

Credit
Sam Hodgson for The New York Times

Deciding on a Response

By now, we had issued a brief statement and linked to it on Twitter. But then, a huge poison gas leak hit one of the polluting company’s major factories, forcing thousands of people to evacuate and injuring many others. A video news report about the disaster included coverage of our newspaper’s ties to the polluter through our institutional investor, and noted the growing controversy.

Our newsroom was covering the disaster aggressively, activists were planning to picket outside our annual shareholder meeting and, somehow, the polluter claimed we were blocking its requests to run a full-page ad in the paper. This was all playing out on social media, and people were calling for boycotts of The Times.

There were so many outlets, advocacy groups and internal stakeholders to respond to that it was hard to keep them straight — and the list of options we could use to respond was similarly lengthy. Post a statement through a series of tweets? Put screenshots of a longer statement on social media? Film a YouTube video? Arrange an interview of our top executives with a journalist we trust? With each question, the room seemed to get a little hotter.

Ideally, a company would have different contingency plans set up for various possibilities, along with a set list of employees who would handle them.

“There might be holding statements about your investments, your manufacturing facilities, about your people, that you can pull from and take pieces so you’re not having to create it at the very last minute,” Mr. Weiss said.

Mr. Gilman added, “Several of our clients have war rooms where they want to be ready just in case there’s a Trump tweet, and in the same kind of way, if it’s an agency or a company that’s advertising a ton or any other business, they want to be prepared.”

That sort of thinking could have helped United Airlines respond more quickly to the video of the passenger’s removal. “They’ve got a lot of crisis plans,” Mr. Gilman said, “but mostly about aircraft crashing, not a customer issue like that.”

Nobody cared that our company wasn’t responsible for the actions of an investor, but it turned out that was part of the training as well.

“You’re a public company. People buy your stock,” Mr. Weiss said. “Stuff happens. Companies don’t do anything wrong — they do what they’re supposed to do — and yet you get hit by this firestorm of stuff.”

A Hacker Appears

As the crisis worsened, three prominent reporters and columnists quit the newspaper, citing its ties to the problematic investor. A major environmental group sold its shares in The Times and urged other groups to follow, saying the impartiality of our reporting couldn’t be guaranteed. The Change.org petition had amassed thousands of signatures, and the boycott was expanding.

And just as we were reeling from all of this, here came the grand finale: a video from a masked hacker speaking in a low, distorted voice. He praised the boycott efforts by environmental groups and delivered a grim message. Based on the investment connection, we were told, a group of concerned hackers planned to use a virus to wreak havoc on our facilities so long as The Times kept exchanging “blood money for ink.” He proclaimed the group would keep fighting for the environment, ending with: “We’re also doing this because we can.”

Stunned silence followed. Then our photographer, Sam, piped up. “Do we bring the F.B.I. in?”

Indeed, Mr. Gilman said, we had “progressed, unfortunately, in the world of crisis communications” to criminal behavior and had become something of a victim ourselves. Still, he added, that didn’t mean public opinion would swing in our favor, pointing to the fallout from Target’s enormous data breach in 2013.

Despite any pressure we may have felt during the simulation, we had the luxury of going back to our actual jobs when it was over. But the quick escalation of the disaster and criticism from all sides made it clear why companies are paranoid about ending up in that kind of situation — even without an ominous video from a hacker — and why they feel the need to plan.

“You can’t prevent any crisis from happening,” Mr. Gilman said. “But you can shorten the duration, you can lessen the impact and do better preparation.”


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But it is a calm environment compared to the marketplaces where individuals shop for coverage under the Affordable Care Act. While fewer than 20 million Americans buy their own insurance, the tribulations of the individual market have captured most of the public’s attention. The average cost of a benchmark plan in the individual market rose 20 percent this year, according to Kaiser, as insurers tried to stem their losses.

The combination of political uncertainty over the future of the health law and insurer unrest may result in a similar jump in individual premiums for 2018. Insurers must make their final decisions where to sell and what to charge in the Affordable Care Act marketplaces by the end of the month.

Early results from another employer survey, conducted by Mercer, a benefits consultant, indicate that businesses expected to see health benefit costs increase 4.3 percent for 2018 after making changes like switching insurers or raising plan deductibles. “Our take away from this is that the trend for employers remains stable, and it remains low,” said Tracy Watts, a senior partner at Mercer.

As a result, employers may not feel the need to make any drastic changes. “What I see in our renewals is very predictable and very steady,” said Lisa Trombley, benefits manager for Kelly Services, the Troy, Mich., staffing company.

Overall, health care costs have increased at historically low rates in recent years, said Matthew Fiedler, a health economist at the Brookings Institution. “We’ve got lots of indicators, across a constellation, that the health care trend is pretty low,” he said.

While employers credit their efforts to slow down costs, others, including Mr. Fiedler, say some of the changes enacted under the Affordable Care Act have also contributed. The federal law reduced what Medicare pays for care, which allows private payers to strike better bargains, he said, and the government has been encouraging experiments in how to pay doctors and hospitals in new ways that may reduce spending.

Even the deductibles people pay toward their own medical bills, which have gone up steadily in recent years, seem to be holding steady. Deductibles rose only slightly this year, averaging $1,505 for a single person, according to Kaiser.

While employers have relied on steeper deductibles to lower their own costs, companies are recognizing that they have reached the limits of what they can ask their workers to pay, said Michael Thompson, the chief executive of the National Alliance of Healthcare Purchaser Coalitions, which represents employers. “We’re running out of runway to keep cost-shifting to employees,” he said.

But people remain confused about how the turmoil in the individual market affects them, even when they get their coverage through an employer, Mr. Altman said. In a recent Kaiser poll, six out of 10 Americans worried that the higher rates being charged in the A.C.A. markets would negatively affect them, he said.

The two markets are distinct, and the groups of people being covered are “like night and day,” Mr. Altman said. The individual market has a large portion of people who need expensive medical care, which has led to sharply higher prices some areas. The large employer market can spread the costs of expensive care more easily over the greater numbers of people that work for large companies.

Small businesses, however, can’t spread their medical costs over a large work force. Premiums “have gone up double digits up here,” said Martin Dole, the controller for Gateway Motors, a car dealership in White River Junction, Vt., which covers 28 people.

The family plan Gateway offers costs more than $700 a month and comes with a deductible of $9,500, which workers “hate,” he said. Health care is one of the dealership’s largest expenses, Mr. Dole said, and he is concerned that the dealership may not be able to afford to offer coverage in coming years.

Larger companies tend to view health benefits as a key component of compensation and essential to attracting employees. Companies and their workers also enjoy a generous tax subsidy for employer-sponsored coverage. While there has been some discussion about reducing or eliminating that subsidy, including as part of the push for a single-payer Medicare-for-all plan that would replace the current system with the one now providing coverage to people 65 and older, there seems to be significant support for maintaining the current system.

“It’s pretty much business as usual,” said Larry Boress, the chief executive of the Midwest Business Group on Health, a regional group of employers. Companies are holding down costs through a variety of efforts, like offering workplace clinics or more telehealth services so employees do not have to go to the doctor or show up in the emergency room.

Employers will continue to look for ways to reduce what they pay toward their workers’ health care costs, he said. “Whether the A.C.A. exists or not, they will clearly do that,” he said.


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A generational baton-passing this is not. Mr. Clinton is 71. Mr. Bloomberg is 75. But the event will still represent a marked shift. The festivities around the Clinton Global Initiative, which ran from 2005 through 2016, were fueled by the star power of one past president and a potential future one. The Clintons raised millions to underwrite the event, sometimes stirring accusations of pay-to-play along the way. Mr. Bloomberg is paying for the forum himself through his philanthropy.

There will still be some star power — the Cleveland Cavaliers’ LeBron James has recorded a video introducing the event — but it is expected to have a different feel. The 2017 version is slimmed down from a three-day affair to a day of speakers, panelists and meetings.

Under the Clintons, billions of dollars were pledged year after year by attendees for charitable commitments worldwide, from AIDS relief to global poverty. That is not a part of the initial Bloomberg forum.

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Michael R. Bloomberg, the former mayor of New York, is paying for the Bloomberg Global Business Forum himself through his philanthropy.

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Benjamin Norman for The New York Times

The speaker and panelist list is impressive and wide-ranging: Prime Minister Justin Trudeau of Canada; President Recep Tayyip Erdogan of Turkey; Lloyd Blankfein, the chief executive of Goldman Sachs; Bill Gates, the co-founder of Microsoft; Jack Ma, the executive chairman of Alibaba Group; and Christine Lagarde, the managing director of the International Monetary Fund.

“Bill Clinton and his team figured out something fundamental,” Mr. Sheekey said. That the United Nations annual meeting — a week when the leaders of 193 countries all descend on Manhattan — is “the time and place in which more powerful people get together than any place in the world.”

The Bloomberg-sponsored 2017 forum comes during the first year of President Trump’s tenure, as he has promised a pullback under the banner of “America First” from engagement abroad and international trade deals.

Mr. Bloomberg has been an outspoken critic of the president, and parts of the day’s agenda can be read as a counterweight to the White House. One panel is on “the prospects for expanding trade,” and will feature Mr. Trudeau. Mr. Trump has threatened to pull out of the North American Free Trade Agreement, which includes the United States and Canada.

Even though Mr. Trump’s presidency is expected to be a dominant topic at the Bloomberg forum, only one administration official is participating in a panel: Wilbur Ross, the secretary of commerce.

Mr. Bloomberg and Mr. Clinton have undertaken shared philanthropic endeavors in the past. Mr. Bloomberg pledged $24 million at the 2009 Clinton Global Initiative gathering for women’s empowerment, and made more charitable promises the next year.

“There is a close working relationship that he and the former president have had,” Mr. Sheekey said of Mr. Bloomberg, “and he is very respectful of what the former president was able to do.”

Mr. Sheekey first reached out to Doug Band, a Clinton adviser who helped start the Clinton Global Initiative in 2005, about a year ago to discuss the possibility of hosting the event after the Clintons announced 2016 would be their last.

Angel Urena, a spokesman for Mr. Clinton, said the former president’s “hope when he started the Clinton Global Initiative is that it would show by example that partnership and innovation can make a measurable difference — and he is glad to see those ideas being carried forward.”


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Toys “R” Us said it would continue to operate its stores “as usual” during bankruptcy proceedings.

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Adam Hunger/Reuters

Toys “R” Us, one of the world’s largest toy store chains, has filed for bankruptcy protection, becoming the latest casualty of the pressures facing brick-and-mortar retailers.

The company made the Chapter 11 bankruptcy filing late Monday night in federal court in Richmond, Va., acknowledging that it needed to revamp its long-term debt totaling more than $5 billion.

The retailer, which also owns Babies “R” Us, has struggled to compete with Amazon and stores like Walmart.

But the financial plight of Toys “R” Us was exacerbated by a heavy debt load that has weighed on the company for years. The private equity firms Kohlberg Kravis Roberts and Bain Capital, as well as the real estate firm Vornado Realty Trust, purchased the company in a leveraged buyout for about $6 billion in 2005.

The company faced $400 million in debt payment coming due in 2018 and was burning through its cash. It hired advisers, including the law firm Kirkland & Ellis, to help come up with a plan.

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When his former co-star on “Mad Men,” Elisabeth Moss, was asked if she had seen an Emmys quite this political, she was emphatic.

“Absolutely not,” she said, holding an Emmy in each hand, including the one she won for best actress for “Handmaid’s.” “But I’ve also never seen anything like where our country is right now.”

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The Emmy winner Elisabeth Moss said she had never seen an Emmys quite this political. “But I’ve also never seen anything like where our country is right now,” she added.

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George Kraychyk/Hulu

All year, late night shows with an anti-Trump bent and left-leaning cable news shows like Rachel Maddow’s on MSNBC have seen their ratings soar, and now that political posture has received the seal of approval from Emmys voters.

But it also means that the Emmys, and all awards shows, for that matter, are part of a broader cultural divide. And to its critics, Hollywood may be proving yet again that it lives in an elite, self-congratulatory bubble, showering awards on shows that reflect its worldview while ignoring the millions of people who prefer “NCIS” and “The Walking Dead.”

“Remember, it’s California,” said Margaret Atwood, the author of the novel “The Handmaid’s Tale” on which the Hulu show was based, as she glided into her first Emmys party at age 77. “This would not happen in a lot of other states. This would, in fact, be a lot different. This is its own world here.”

The show did not draw a big audience. The ceremony, hosted by Stephen Colbert, attracted just 11.38 million viewers, Nielsen said, in line with last year’s total, which was a record low.

On Fox News on Monday morning, the White House adviser Kellyanne Conway said viewers were “tuning out” because of how politicized the Emmys have become, and suggested that Hollywood’s anti-Trump posturing had become tiresome.

“They got plucked and polished and waxed, and some of them didn’t eat for two months, and all for what?” she said. “To sound the same?”

Still, the heated political climate produced some startling changes for the Emmys.

“Saturday Night Live” has never appealed much to Emmy voters, and they had not given it a top show award in more than two decades. But just two years removed from inviting Mr. Trump to host “S.N.L.,” the NBC late night show excoriated him this past season, and reaped the rewards: Mr. Baldwin won an Emmy for his portrayal of Mr. Trump, and Kate McKinnon, who portrayed both Ms. Conway and Hillary Clinton, won an Emmy as well.

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Alec Baldwin won an Emmy for his portrayal of President Trump on “Saturday Night Live,” and then mocked him on Sunday.

“‘S.N.L.’ had a career year,” said Warren Littlefield, a longtime Emmy voter who is a former NBC executive and a producer of “Handmaid’s.” “You had to watch ‘S.N.L.’ to get an appreciation of the world we’re living in, and it helped us endure what we’re all living with.”

Other shows benefited as well, including Mr. Oliver’s “Last Week Tonight,” which won the prize for best variety talk show for the second consecutive year. Mr. Oliver delights in using Mr. Trump as a punching bag on his show.

Mr. Glover of “Atlanta” and Julia Louis-Dreyfus of “Veep” were among the many winners who mocked President Trump on stage. And after Mr. Baldwin won, he alluded to the fact that Mr. Trump had long coveted an Emmy but never won one. “I suppose I should say, at long last, Mr. President, here is your Emmy,” Mr. Baldwin quipped.

What benefited those shows, however, appeared to have hurt dramas like “Stranger Things” and “This Is Us,” both of which were decidedly retro and unpolitical.

“Stranger Things” was a sci-fi homage to movies like “Stand by Me” and “E.T.” NBC’s “This Is Us” was a heart-on-your-sleeve family drama that took inspiration from the 1983 tear-jerker “Terms of Endearment.”

Still, Hulu’s success was a shock in its own right. Hulu, which is co-owned by Disney, Comcast, Time Warner and 21st Century Fox, has a smaller programming budget compared with those of streaming rivals like Netflix and Amazon.

But “Handmaid’s,” which was in development long before the Trump administration, struck a chord with viewers concerned about women’s rights, and its creators proudly embraced the fact that some regarded their show as eerily timely.

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John Oliver’s “Last Week Tonight” won the prize for best variety talk show. Mr. Oliver delights in making fun of Mr. Trump on his show.

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Eric Liebowitz/HBO

“Politics is at the front of everybody’s head, not in the back of everybody’s mind,” said Bruce Miller, an executive producer for “Handmaid’s.” “I think all of the media, including the fictional and nonfictional media, are benefiting from taking that head-on. I have been told that you don’t talk about religion and politics in kind company. Well, there’s no company now where you don’t talk about politics these days.”

“People are talking about and thinking about some serious things and things that are uncomfortable,” he added. “Shows that directly address difficult topics are having their day in the sun.”

Early reviews for the series, which had its premiere three months after the inauguration, were positive, and it has been the show of the year for many TV critics.

Hulu’s marketing department took no chances. The streaming service bought its first-ever Super Bowl ad for an original series, even though the event was months before the premiere. And throughout the year, Hulu hired actresses to don red capes like characters in the show, and circulate in cities like Austin (during the South by Southwest Festival), New York, Los Angeles and Washington to create word-of-mouth buzz.

And as Hulu increases the size of its budget — it will be about $2.5 billion for content this year — a basketful of Emmys is the kind of payoff that may generate even more spending, especially as digital titans like Facebook, Google and Apple enter the scripted television market.

Because Hulu does not release viewership data, it is impossible to know how popular “Handmaid’s” was, but it was far more successful than its previous iteration. In 1990, the novel was adapted into a feature film that was a flop at the box office and did not receive warm reviews.

“We got a Trump bump!” said Daniel Wilson, a producer behind both the movie and the TV show. “Timing is everything. If we didn’t have the president we have now, I don’t know if it would have been this successful.”

Ms. Atwood underscored that point as well.

“I wrote it in 1985,” she said. “There was some incredulity then: ‘Margaret, you’re way over the top! it could never happen here.’”

“And now?” she continued. “I don’t hear any of that.”


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