With a thirty-year bond yield, Apple enters corporate adulthood

Take off the pullover and put on a suit and tie – you aren't a tech stock anymore.

Last week saw Apple turning a final corner in its long development as a company. It is no longer just a tech stock – it's now a boring old blue-chip.

During its quarterly earning earnings call, the company increased its dividend by 15 per cent (it will now pay $3.05 a share every quarter), boosted the size of its share buyback plan sixfold, to $60bn, and, most interestingly, announced a bond issue to pay for it all. The company now intends to return $100bn in total to its shareholders by the end of 2015.

Today, Apple filed its draft prospectus for the bond issue with the SEC, confirming the durations it will be borrowing for and the banks in charge. Goldman Sachs and Deutsche Bank will be jointly overseeing the issue, which is of sets of two floating rate notes, due in three and five years, and four fixed-rate notes, in durations of up to thirty years. That's barely shorter than the entire lifespan of the company to date, making the investment a real punt in the dark for anyone buying into it.

We don't yet know how much of each duration Apple is planning to borrow, nor – crucially – the rates they are offering. But the plan looks likely to have very little to do with the typical reasons for corporate borrowing: Apple still has an enormous pile of cash, which means that investment isn't the name of the game.

Instead, the company appears to be using its extraordinary creditworthiness – as well as the ultra-low bond yields which are a sign of our times – to overcome an issue it has with that cash pile: most of it is kept overseas.

The US only charges tax on cash which has been "repatriated", so while Apple leaves money from overseas operations overseas, it doesn't have to pay any tax on it. It's waiting – as it has been for years, now – for a "repatriation holiday", when it hopes a future government will temporarily lift that tax to encourage the companies to bring cash home. Until then, if it needs money domestically, borrowing is as good as any other method. And if its rates are low enough, it might even make a bit of money on the deal.

But with dividends, bond yields, and share buybacks, Apple has entered a new – and dull – stage in its corporate progression. These aren't the actions of a high-growth tech stock; they're those of a company bedding in for the long-haul. Apple expects to be here in thirty years, and still be largely the same when it is, and its asking investors to bank on that. Fun for them, but the white-knuckle days are over for us.

Apple CEO Tim Cook at a presentation for the company. Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Donald Trump ushers in a new era of kakistocracy: government by the worst people

Trump will lead the whitest, most male cabinet in memory – a bizarre melange of the unqualified and the unhinged.

“What fills me with doubt and dismay is the degradation of the moral tone,” wrote the American poet James Russell Lowell in 1876, in a letter to his fellow poet Joel Benton. “Is it or is it not a result of democracy? Is ours a ‘government of the people by the people for the people’, or a kakistocracy rather, for the benefit of knaves at the cost of fools?”

Is there a better, more apt description of the incoming Trump administration than “kakistocracy”, which translates from the Greek literally as government by the worst people? The new US president, as Barack Obama remarked on the campaign trail, is “uniquely unqualified” to be commander-in-chief. There is no historical analogy for a President Trump. He combines in a single person some of the worst qualities of some of the worst US presidents: the Donald makes Nixon look honest, Clinton look chaste, Bush look smart.

Trump began his tenure as president-elect in November by agreeing to pay out $25m to settle fraud claims brought against the now defunct Trump University by dozens of former students; he began the new year being deposed as part of his lawsuit against a celebrity chef. On 10 January, the Federal Election Commission sent the Trump campaign a 250-page letter outlining a series of potentially illegal campaign contributions. A day later, the head of the non-partisan US Office of Government Ethics slammed Trump’s plan to step back from running his businesses as “meaningless from a conflict-of-interest perspective”.

It cannot be repeated often enough: none of this is normal. There is no precedent for such behaviour, and while kakistocracy may be a term unfamiliar to most of us, this is what it looks like. Forget 1876: be prepared for four years of epic misgovernance and brazen corruption. Despite claiming in his convention speech, “I alone can fix it,” the former reality TV star won’t be governing on his own. He will be in charge of the richest, whitest, most male cabinet in living memory; a bizarre melange of the unqualified and the unhinged.

There has been much discussion about the lack of experience of many of Trump’s appointees (think of the incoming secretary of state, Rex Tillerson, who has no background in diplomacy or foreign affairs) and their alleged bigotry (the Alabama senator Jeff Sessions, denied a role as a federal judge in the 1980s following claims of racial discrimination, is on course to be confirmed as attorney general). Yet what should equally worry the average American is that Trump has picked people who, in the words of the historian Meg Jacobs, “are downright hostile to the mission of the agency they are appointed to run”. With their new Republican president’s blessing, they want to roll back support for the poorest, most vulnerable members of society and don’t give a damn how much damage they do in the process.

Take Scott Pruitt, the Oklahoma attorney general selected to head the Environmental Protection Agency (EPA). Pruitt describes himself on his LinkedIn page as “a leading advocate against the EPA’s activist agenda” and has claimed that the debate over climate change is “far from settled”.

The former neurosurgeon Ben Carson is Trump’s pick for housing and urban development, a department with a $49bn budget that helps low-income families own homes and pay the rent. Carson has no background in housing policy, is an anti-welfare ideologue and ruled himself out of a cabinet job shortly after the election. “Dr Carson feels he has no government experience,” his spokesman said at the time. “He’s never run a federal agency. The last thing he would want to do was take a position that could cripple the presidency.”

The fast-food mogul Andrew Puzder, who was tapped to run the department of labour, doesn’t like . . . well . . . labour. He prefers robots, telling Business Insider in March 2016: “They’re always polite . . . They never take a vacation, they never show up late, there’s never a slip-and-fall, or an age, sex or race discrimination case.”

The billionaire Republican donor Betsy DeVos, nominated to run the department of education, did not attend state school and neither did any of her four children. She has never been a teacher, has no background in education and is a champion of school vouchers and privatisation. To quote the education historian Diane Ravitch: “If confirmed, DeVos will be the first education secretary who is actively hostile to public education.”

The former Texas governor Rick Perry, nominated for the role of energy secretary by Trump, promised to abolish the department that he has been asked to run while trying to secure his party’s presidential nomination in 2011. Compare and contrast Perry, who has an undergraduate degree in animal science but failed a chemistry course in college, with his two predecessors under President Obama: Dr Ernest Moniz, the former head of MIT’s physics department, and Dr Steven Chu, a Nobel Prize-winning physicist from Berkeley. In many ways, Perry, who spent the latter half of 2016 as a contestant on Dancing with the Stars, is the ultimate kakistocratic appointment.

“Do Trump’s cabinet picks want to run the government – or dismantle it?” asked a headline in the Chicago Tribune in December. That’s one rather polite way of putting it. Another would be to note, as the Online Etymology Dictionary does, that kakistocracy comes from kakistos, the Greek word for “worst”, which is a superlative of kakos, or “bad”, which “is related to the general Indo-European word for ‘defecate’”.

Mehdi Hasan has rejoined the New Statesman as a contributing editor and will write a fortnightly column on US politics

Mehdi Hasan is a contributing writer for the New Statesman and the co-author of Ed: The Milibands and the Making of a Labour Leader. He was the New Statesman's senior editor (politics) from 2009-12.

This article first appeared in the 19 January 2016 issue of the New Statesman, The Trump era