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[Ed note: In honor of Etsy's IPO, our December 2013 interview with Etsy CEO Chad Dickerson]
When you think about the really big names in online retailing just a couple of companies probably come to mind: Amazon, eBay, maybe Apple. But there's another name that can arguably be added to that list. Just 8 years after it started, Etsy does almost a billion dollars a year in annual transactions. Chad Dickerson is the guy who's been running Etsy for the past five years, and we popped into the company's corporate headquarters in Brooklyn to pay him a visit. Etsy's business has doubled under Dickerson's lead, and he says as Etsy grows, so goes its sellers.
"One of our sellers who was doing Etsy as an escape from nursing school, she started to achieve success and some exposure. Fast-forwarding she was noticed buy Nordstrom and did a deal with Nordstrom and now not only has she quit her job but her husband quit his finance job to help her. In this particular case this is literally a mom and pop. Etsy is really about making a life not just a living so we're just giving them the ability to grow and really change their lives."
Dickerson says the growth is just the start of the mark Etsy strives to make. He says the company hopes it won't just give other online retailers a run for the money, they'll change the whole marketplace.
"What I see Etsy doing is changing the way things are made. I think the ethos of Etsy, this idea that buying and selling should be all about people will start extending into areas like manufacturing and distribution and all of these things. When I think about what Etsy can do over the next 10 or 20 years it's really humanizing the whole supply chain."
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Whether it's going from the proverbial rags to the proverbial riches, or just doing a little better than your parents, stories of upward mobility have long been a part of how we define the American dream. But how possible is that dream today? A group of economists at Harvard and UC Berkeley have been looking in to that question recently. It turns out the answer varies widely depending on geography.
Part of the researchers’ theory is that by looking at places with especially bad rates of upward mobility, to see what those places have in common and what they’re missing, we can learn something about how to optimize chances for upward mobility everywhere.
Which is what brought me to Dayton, Ohio, recently. The Dayton metro area has one of the worst rates of economic mobility in the country. Other areas with poor rates include Atlanta and Charlotte, North Carolina.
In Dayton, 40 percent of children born poor, stay poor. Just five percent make it to the top fifth of earners by the time they're adults. Before we get to some of the things that may drive those statistics, it's worth pointing out that Dayton used to have a very different reputation.
For much of the early 20th century, Dayton was known for innovation, opportunity and upward mobility. The area was full of people from humble backgrounds who “made it.” The story of the Wright Brothers and their airplane is one of the best known. But there is also the story of their high school classmate, the poet Paul Laurence Dunbar.
Dunbar was born in Dayton, in 1872, to parents who'd been born in to slavery. After graduating high school, he was too poor to afford college. He worked as an elevator operator. To support his writing, he sold copies of his poems for a dollar to people who rode on his elevator.
A decade later, Dunbar had catapulted himself in to a different life. He was the first African American poet to become internationally famous. He met the Queen of England and Teddy Roosevelt. He was a major inspiration for poets in the Harlem Renaissance and throughout the twentieth century, including Maya Angelou. Her poem "Caged Bird" is a direct reference to Dunbar’s poem "Sympathy.”
I know why the caged bird sings, ah me,
When his wing is bruised and his bosom sore,—
When he beats his bars and he would be free;
It is not a carol of joy or glee,
But a prayer that he sends from his heart’s deep core,
But a plea, that upward to Heaven he flings—
I know why the caged bird sings!
In early twentieth century Dayton, Dunbar could turn his literary success in to economic success. That fact is still evident today on what is now called Paul Laurence Dunbar Street, where a stately Italianate-style two-story home stands. Dunbar bought the building in 1904 at the height of his fame.
“He really wanted to purchase the finest home that he could afford,” says Alex Heckman, who gives tours of the home for the group Dayton History. “It was a lovely middle class neighborhood when he was living here.”
But the neighborhood has changed since Dunbar's time. Dilapidated and boarded up homes now surround the Dunbar House. Heckman says he worries about bringing visitors here. In just the last few years, three violent felonies have taken place on the property, or right next to it.
“There was a homicide victim whose body was dumped and set on fire literally feet from the visitor's center entrance. There was a prostitute shot in the alley behind this historic barn. And a few doors down, a young man was shot,” Heckman says. “The last half century of disinvestment in neighborhoods like this one... it’s tragic.”
The Paul Laurence Dunbar Home is now a stately historic landmark, in the middle of an impoverished neighborhood.Krissy Clark/Marketplace
How does a place that celebrates a man who so famously achieved the proverbial American dream become a place full of such nightmares?
That is of course not something the handful of paragraphs that make up this article can fully answer. But the fact that Dunbar’s former neighborhood and many others like it in cities across the country, have become so disinvested and so economically isolated — that fact in itself has become a key focal point of economic research on upward mobility.
“Areas where there's more concentrated poverty — more economic segregation — tend to have lower rates of upward mobility,” says Harvard economist Nathan Hendren.
Hendren is part of a team of researchers at Harvard and UC Berkeley who have combed through decades of Internal Revenue Service data to track the earnings of children born into poor families as they reach adulthood. The team wanted to figure out which places have the best rates of upward mobility, which have the worst, and why.
They have looked at all kinds of possible factors that might be at play: the health of a region’s overall labor market, its median income, tax policies, percentage of immigrants, even the number of bowling alleys per capita (the theory is bowling alleys might be a sign of broader community engagement).
Among all the factors the team analyzed, a few patterns rose to the top. Areas with the worst rates of economic mobility tend to have worse schools and less stable families, which isn’t all that surprising. Perhaps less obvious was the fact that areas with poor economic mobility also tended to have more income inequality and economic segregation.
A map of Dayton, Ohio census data from 2010 color-coded by race. Blue dots represent white residents, green dots represent black residents. Click for a zoom-able, interactive version.
A map of Dayton, Ohio census data from 2010 color-coded by race. Blue dots represent white residents, green dots represent black residents. Click for a zoom-able, interactive version.Courtesy: Weldon Cooper Center for Public Service
“It’s really about the extent to which the poor at the bottom of the income distribution are geographically segregated from the middle class and the upper class,” Hendren says. “Are people from disadvantaged backgrounds economically integrated in to the local area?”
In other words, a crucial part of economic mobility seems to be whether rich and poor and middle class people are bumping in to each other, and interacting on a daily basis.
For Kathleen Somerset-Fields, who grew up in Dayton in the 1990s and 2000s, the answer to that question was a distinct “No.”
As a child, Somerset-Fields lived in a public housing project not far from Paul Laurence Dunbar's home, but long after he died, once the area was known for concentrated poverty and extreme racial segregation. It’s a part of Dayton known the "West Side.” Somerset-Fields says stereotypes about West Dayton are so ingrained that she tries to avoid saying that's where she grew up during job interviews.
“When you put that down in your resume, it's like ‘Oh, the West Side of Dayton, here we go,’” she says. “I don't want to be looked at like that. I'm not the West.”
Growing up, Somerset-Fields faced an overwhelming tangle of struggles. Her mom and step-father battled with drug addiction. Somerset-Fields and her siblings were moved in to foster care for a time. At 13, she had her first child and was basically the mother to her six younger siblings—paying bills, and managing the food stamps and government assistance they survived on.
“It was hard — but I'm grateful for it,” she says, her voice getting lower. “I would say it empowered me. It really did. To strive for better. To want better. To do better.”
And somehow, Somerset-Fields seems to be beating the odds working against those born in to poor families in Dayton and places like it. Today, she is the assistant manager of a youth program at a community center in Dayton. She says she is definitely not rich, but she is not poor either.
“I consider myself surviving. Is that a category?” she laughs. “Surviving on the good end.”
Of course, it's impossible to say exactly why Somerset-Fields found a way to climb out of poverty when forty percent of her peers in Dayton have not. But when I ask her what she thinks, she immediately points to one relationship in her life, with a teacher she met in a GED class when she was 16 named Diane Brogan-Adams.
On Friday, we look at the two women's relationship and the support it provided, which researchers think may be a key ingredient for economic mobility.
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First Lady, Senator from New York, presidential candidate, Secretary of State. Hillary Clinton has a long history in politics, which Marco Rubio was quick to use against her as he launched a bid for the Republican nomination earlier this week.
“Now just yesterday, a leader from yesterday began a campaign for president by promising to take us back to yesterday,” he said.
How does Clinton avoid this “yesterday” role with voters? How does she get people to listen again and listen anew, perhaps even change their minds? Getting voters or consumers to take a second look at a candidate, a company, a product — something they already think they know — is tough work, says Scott Davis, the chief growth officer at Prophet, a brand strategy firm.
“One of the most important things in this campaign process is that there’s a lot that people think they know, and a lot they don’t know, about Hillary Clinton," says Karen Finney, a Clinton campaign spokesperson. That’s why Clinton is starting small and slow, touring in a van she calls "Scooby," having one-on-one conversations with potential voters.
It’s important Clinton be authentic and very clear about her purpose, Davis says. It helps if she can give other people the tools to advocate on her behalf. She may also need to plan something big, bold or innovative to shake people from their preconceived ideas.
Howard Belk, co-CEO and chief creative officer at Siegel+Gale, says Clinton might reference something about her history in a way that won’t alienate her supporters, but with fresh ideas and programs. After her supporters, Belk says the second group Clinton should be targeting is the "switchers." In brand terms, they're the people who may open the product, even if they don’t use it. But he advises against trying to pander to a third category, detractors. They’re a lost cause.
The New York Times recently reported that the Clinton campaign has hired Kristina Schake, former communications chief to Michelle Obama, who was in charge of the current First Lady's image and appearances on"Late Night with Jimmy Fallon" and the Oscars.
But Clinton is only one of many prominent politicians who have undergone a rebranding. We called up a couple of political scientists to ask them about other notable political reinventions, and how successful they were.
Like Clinton, Nixon was very much a known commodity when he ran for president in 1968. He was a congressman and a vice president before famously losing to John F. Kennedy in the 1960 presidential election, and he went on to lose the California gubernatorial race in 1962.
Generally, in today's political environment, "if you lose a presidential general election you're done, you don't get a chance to reinvent yourself," says Vincent Hutchings, a professor of political science at the University of Michigan.
Nixon worked on several other campaigns, taking some cues from Barry Goldwater and George Wallace and earning favors, Hutchings says. By the late 1960s Nixon reemerged as a "law and order" candidate. He also made a bid for likability by hiring a joke writer and appearing on "Laugh-In," notes UCLA political science assistant professor Chris Tausanovitch. He finally won the presidency in 1968.
"He wasn't ever going to pull off the same kind of persona as a Kennedy, be that Robert or John F. Kennedy," Hutchings says. "But he seized upon this growing unease in some sectors of the American electorate regarding the progress of the civil rights movement, urban unrest, [and so on]."
Specter changed parties at the beginning and end of his political career — two reinventions in two very different political climates with two very different results.
"Voters don't like it when people appear to be switching their views," UCLA's Tausanovitch says. "In fact, voters like it so little that they would prefer a candidate who sticks to their guns, rather than a candidate who switches their views in a way that [the voter] might even favor."
Specter pulled of a party switch in 1965 and went on to enjoy a 30-year career in the Senate as a moderate Republican. When he ran as a Democrat in 2009, Specter lost in the primary, in part because partisan lines were far more rigid, Tausanovitch says.
"These days the legislative parties are incredibly sorted out. Liberal Republicans are still a lot more conservative than conservative Democrats, which in the '60s was not true," Tausanovitch says. "There were Rockefeller Republicans and Blue Dog Democrats and boll weevils and all of these moderates ... that could fit in either party."
Gore's problem was similar to Hillary Clinton's, Tausanovitch says: he came off as arrogant, stilted, and his plain blue suits were bland.
"[The blue suit] conveys dullness, convention, safety and, ultimately, boredom," the Washington Post wrote in May 1999. "In other words, the Blue Suit-ness of the suit underlines the Al Gore-ness of Al Gore."
Gore was told to loosen up by none other than embattled departing President Bill Clinton. Gore tried brown suits and polo shirts, but just got made fun of.
Instead Gore came into his own after losing to George W. Bush in 2000. Gore became an environmental advocate and appears far more at ease in public, Tausanovitch says, though it doesn't appear his politics have changed much. Instead, it seems getting out of politics gave Gore the re-brand he needed during his campaign.
"It looks like he has come into his own as an authentic and better public speaker, but his problem to begin with was not that he was hiding something," Tausanovitch says. "That's not an experiment that we don't get to run with Hillary Clinton, but it's certainly something that people will speculate about."
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