National News

You think clovers and hearts are impressive? Wait till you get a load of these Japanese latte drawings. A culture that values the beauty of the ephemeral has brought us a new level of art in foam.

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Along with immigration, another issue Washington will be taking up soon is the federal budget. Republicans want to reduce the deficit by cutting spending, and they want to shrink the government by cutting tax rates. But it doesn't always work out that way, as the thirtieth President, Calvin Coolidge found out.

No politician ever wanted to shrink government more than Calvin Coolidge. Silent Cal, the quiet Vermonter, was so parsimonious he even saved syllables by using short words. When Coolidge became vice president in 1921, he was appalled to find tax rates as high as 58 percent. "Legalized Larceny," he crowed. And federal debt after World War I was so large it made Coolidge cringe. So when Coolidge became president following the death of Warren Harding in 1923, he decided to curb these excesses.
    
Coolidge and his Treasury Secretary, Andrew Mellon, studied the tax code and found the government wasn't getting the revenue it was expecting -- even with such high tax rates.

Maybe there were lessons for taxes in railroads. Railroad men set their freight rates to charge "what the traffic would bear." The thinking was if you cut the freight rate, you get more traffic, and more revenue. Coolidge persuaded Congress to lower the top tax rate to 25 percent. And congratulated himself that he was on track to pay down the national debt. Debt obsessed, Coolidge was the president who fired the White House housekeeper because she spent too much on pork -- literally.

 The tax experiment worked. In fact, too well. With lower tax rates, more money than expected flowed in. But to Coolidge's horror Congress didn't want to use the cash to reduce the debt. The other politicians of his day just wanted to spend. On farm supports. On veterans. On disaster infrastructure.

Coolidge worried that later presidents and lawmakers might also manipulate tax rates to get extra money.
 He left office in a dark mood. He guessed what would come. The legacy of the ultimate small-government president was a tax tool so powerful that it made big government inevitable.

Six in 10 Americans say they fear tumbling from the middle class in the next few years, according to a newly released poll.

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After large cracks were discovered on Tuesday at the Rana Plaza factory complex in Sava, Bangladesh, managers at a bank on the first floor kept their employees out.

Managers in the garment factories on the upper floors ordered their employees to stay. The building collapsed the next day, killing at least 230 people.

“It’s worth thinking about the psychology that would cause factory managers and owners to send workers back into a building that has developed an obvious structural flaw,” says Scott Nova with the Workers Rights Consortium, a labor rights monitoring organization.

He says large apparel companies have multiple contractors in a place like Bangladesh. Each of those contractors hires sub contractors, and then sometimes sub-sub-contractors -- all of them competing against one another. Nova argues apparel retailers use this structure to lower both price, and accountability.

“That inevitably results in an impossible squeeze on the factories actually producing the products,” Nova says, “that guarantees factories will cut costs by operating unsafely, but without Walmart’s or Gap’s or H&M’s finger prints actually having to be on it.”

Jan Hammond, professor of manufacturing at Harvard Business School, says retailers must contract with many different factories in a place like Bangladesh in order to meet demand.

And that distance may offer smaller, private label retailers a place to hide from the responsibility of knowing exactly what’s going on on the factory floor of a subcontractor several levels down the supply chain.

“Its not as clear to me whether its intentional or not, to not know,” says Hammond of such companies.

“I’ll never forget the time a retail CEO said to me that he didn’t allow a certain plant to subcontract,” recalls Hammond. She asked how much of his garments he sourced from that plant, and when Hammond had the opportunity to visit that location, she says “it was clear to me that this plant could never create the volume that this particular individual said was being produced there.”

Larger companies like Walmart are more brand sensitive, says John Roberts, professor emeritus of economics, strategic management, and international business at Stanford’s Graduate School of Business.

“I see no proof,” he says, that these companies are willfully turning a blind eye to poor management practices at the bottom. “The big labels based in the U.S. are in fact very concerned about the situation,” he says, because of negative publicity.

Walmart has started auditing factories that produce for them. After a deadly factory fire in November of last year -- also in Bangladesh -- Walmart announced it would permanently ban any supplier found to be subcontracting to unauthorized factories.

Bill Chandler, vice president of global corporate affairs with Gap Inc., says his company has programs in place to help improve factory working conditions, including a fire and building safety action plan for factories where the Gap does business.

Companies differ in the extent to which they audit factories, and it takes vigilance to have well trained auditors make their presence felt over time. As the most recent building collapse shows, there continue to be tragic outcomes.

“Truly I don’t think this is rocket science,” says Harvard Business School’s Hammond, “you just have to say what your standards are.”

There need to be clear policies on when you can subcontract, when you can’t, and what vendor qualifications should be when you do subcontract, she says.

Hammond points out the garment industry has helped develop many countries, including Britain and the United States, but “there’s a little too much pressure” on the system in developing countries right now. Wringing every last cent out of suppliers has a price, she says.

Ultimately, the pressure driving the cut throat competition for cheaper clothing comes from one place.

“American consumers want to buy clothes for low cost,” says Nicholas Bloom, professor of economics at Stanford University, Companies -- even big ones like Walmart or Target “are just rats in a maze. We are the maze.”

Consumer loans fuel sales of everything from homes to autos to appliances. Then, there are guns.

Many gun buyers prefer to pay cash. But for those who can’t, there’s a finance industry to help out. Some of the big names have pulled out of the politically sensitive market, most recently General Electric’s finance arm. Yes, if you couldn’t afford the gun you wanted, GE might have loaned you the money.

So how easy is it to get a gun loan, and who uses them?

Say you’re in the market for a gun. First of all, how much does the typical handgun or rifle cost? Larry Hyatt is owner of the Hyatt gun shop in Charlotte, N.C.

“There’s some a lot less and some a lot more but I would say the average (firearm) is $500,” he says.

Hyatt sells guns, and a lot of Americans are buying. Last year, $6 billion of firearms and ammunition were sold at retail -- up almost $2 billion from the year before.

Like a lot of gun shops, Hyatt’s store offered credit for customers that needed it. But when the financial crisis hit, credit quickly disappeared.

“The company that was doing ours quit doing it. They would not do guns any more,” explains Hyatt.

He says his loan company was owned by AIG. Now, Hyatt offers layaway for his customers instead. But he says most opt to use cash or plastic, and he’s grateful to the credit card industry for filling the credit gap.

“Thank goodness the credit card industry came to the rescue. That’s gun financing. It’s just through the normal credit cards not a separate company.”

But when it comes to guns, even consumers who can’t qualify for a credit card can still get credit. Randy Frazier, owner of gunfinancing.com, offers loans to consumers whose scores aren’t perfect and don’t have $2,000 in cash for a rifle.

“What we’re after is the guy who’s trying to buy a gun that he can’t afford to pay cash for,” he says. Frazier notes his website’s customers are typically between 21 and 32 years old. “They’re not perfect credit, but they’re not poor credit, they’re right in the middle.”

Frazier says if you are going to finance your gun, expect to pay about 18 percent in interest.

The NFL draft starts tonight and will last for the next three days. Only a small number of players will be drafted and the ones that are picked will be the ones on stage, grinning ear to ear, wearing their new team hat.

It’s a process that pales in comparison to what it took to get that moment. Before his gig at ESPN, Andrew Brandt was an agent. He says the months leading up to it are filled with “painstaking work with thousands of man hours and thousands of dollars going into that process." Players hoping to be drafted pick an agent “within days if not hours from their last football game.” And after that, the agents take a big gamble on the right player, “they're right to pre-combine training and agents now pick up all those costs."

The paycheck at the end of that journey isn’t guaranteed.

"There's 250 players that are getting picked and if you're drafted, the lowest seventh round pick is probably getting about a $45- to $50,000 bonus so the maximum an agent can charge is 3 percent so now you're talking about $150 or something like that." And he says that’s "after putting in maybe $5-, $10-, maybe $20,000 of training expenses into these guys."

This year, one draft-hopeful, Matt Elam from Florida, is going without an agent. Brandt says there are pros and cons.

"For the actual negotiation, there's very little an agent can do now for rookie contracts. What the agent will say is that the pre-combine training, the after-combine training, the run up to the draft, the intel, the experience, the clout, the names, the connections with general managers, owners, personnel scouts -- all those things are part of a fee even though the actual fee is based on a negotiation."

He says a player would definitely need an agent for a second contract, which is usually complex.

During his time as an agent, Brandt had his ups and downs. He remembers losing Ricky Williams, "he wanted something a football agent couldn't give him -- access to the entertainment industry."

But also the glory of giving Matthew Hasselbeck his shot. Hasselbeck wasn’t invited to the combine -- so Brandt set one up for him.

"And he went on to be one of the better quarter backs in the league and he still is."So that's one of the things you love as an agent. To see a guy come out of nowhere and really blossom."

Problems at a Canadian factory have caused a shortage of tuberculosis tests in the U.S. Some hospitals and health departments around the country are deferring routing TB testing as a result.

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Sunil Tripathi had nothing to with the Boston bombings. He'd actually been missing for a month. But a New York Post front page led to wild speculation on the Web, and for a day or so, he was being called a suspect by some on social media.

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Aaron Kleinhandler was at his 20th high school reunion recently, and inevitably he had to answer the same question over and over. "People ask me what I do, and I say' have you ever been put on hold?' And the answer is yes and I say, I have company that provides music for business across the country," says Kleinhandler, whose company, Spectrio, makes $17 million a year selling on-hold music.

Spectrio acts as an intermediary between the business that put you on hold and the licensing companies like ASCAP and BMI that pay musicians to write the music.

Christopher Ho is one of those musicians. I visited Ho at his home in California, where he records his compositions on a grand piano in his garage. "I probably made over $2 million off my own compositions, but that spans about a 25-year period," Ho says.

He made most of that money selling his songs to Muzak. He also spent those years touring and recording with the Motown legend Smokey Robinson, who was a big influence on Ho's music, even on the pieces he wrote for on hold. Ho thinks of all his compositions as being equal.

"It's better that way," says Ho. "Because then I'm not trying to limit the music in any way technically or musically."

But the days of hiring professional studio musicians for on-hold music are pretty much over. Ho's income has dropped dramatically. He had to move to a smaller house and now he sleeps in his living room so his kids can have a bedroom.

Most on-hold music today is made on a computer. Julie Cook is the CEO of Easy On Hold, which has a library of digitally recorded music.

"This isn't your mom and dad's on-hold music. It's a world class library of music," says Cook.

She says matching the right business with the right on-hold track is more art than science.

"An example of really good on-hold music might be a nonprofit that maybe works on world hunger. They may want a more world beat where there's an African flavor," Cook says.

But does music actually make the experience of being on hold any less frustrating? Scott Broetzmann is the president of Customer Care Measurement and Consulting, which asked 702 households to rate their on-hold experiences on a scale of zero to ten. Zero being deeply unsatisfying.

"And on that zero to ten scale, playing music while you are on hold averages a score of 5.37 -- in effect a neutral score. Iit doesn't really have any impact on satisfaction of consumers while they are waiting on hold," says Broetzmann.

Silence had a negative impact on customer satisfaction. Having an operator say how long you will be on hold, says Broetzmann, is the most positive thing a company can do. "A recording that tells you how long you will have to wait before you can talk to a person averaged a 7.3 rating."

So why then do companies do things that have either no impact or a negative impact on customer satisfaction? Emily Yellin spent years trying to answer that question. She's the author of "Your Call is Not That Important to Us."

"There are ways that companies could do a much better job but it costs too much" says Yellin.

Where companies go wrong, according to Yellin, is spending huge amounts of money on things like surveys and focus groups to find out what customers want. "Meanwhile, they have this department called customer service where customers are calling and trying to tell the company what they think of them and they are being put on hold, they are treated poorly and then customers walk away frustrated," Yellin says.

Yellin looked at how companies calculate the cost per call of each customer service call they field. Businesses use this number to find the right balance between keeping costs low and not angering customers with long wait times. Yellin says the companies that really get it right never put you on hold for more than one minute. We asked you on Twitter what songs you would choose for your hold music. Here's what you picked:



For the record, David chose Philip Glass' "Koyaanisqatsi," which wasn't on Spotify (and also over an hour long...). Add your own in the comments below or tweet us @MarketplaceAPM.

As George W. Bush's presidential library opens, supporters of the 43rd president are convinced his reputation will improve. For that to happen, historians say, they need to get a look at the documents that the library houses — and that won't happen anytime soon.

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The administration has warned Syria against using chemical weapons but does not say how this might change U.S. policy toward the Syrian regime.

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The ceremony brought together five presidents — four former and the current occupant of the White House. George W. Bush's love of country and efforts to help some of the world's poorest people won him high praise.

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About a century ago, a beautiful tradition emerged in the Italian city of Naples: Cafe-goers would buy a cup of coffee anonymously and in advance for a less-fortunate stranger. With much of Europe now in tight financial times, the custom is spreading across the continent.

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The U.S. Geological Survey is putting remotely piloted former military planes to work in the areas of environmental and wildlife management. Earlier this month, researchers spent three days counting sage grouse in rural Colorado. Next up: a survey of pygmy rabbit habitat in Idaho.

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The brutal rape of a five-year-old girl in India has caused public outcry there, and led to the arrest of two men. Host Michel Martin explores what the case says about how India handles sexual assault cases. She speaks with Anand Giridharadas, a columnist at The New York Times.

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Today's young people might aim for the sky, but they might not envision a visit to the White House. Host Michel Martin talks with two students, Darius Hooker and Isabella Leighton, about their interest in rocket science and the White House Science Fair.

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A huge plastic foam head floated up to a startled Marist College crew team practicing on the Hudson River this week. No one has come forward to claim it.

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At Massachusetts General Hospital, Dr. Leana Wen cared for people hurt by the bomb blasts at the Boston Marathon finish line. She worried that the next patient she treated would turn out to be her husband. Ten days later, the sounds of sirens still shake her.

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Among other things, the tech giant says it will more clearly label results from its own services and more prominently display competitors' results.

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A "blame game," is how Laura Gutierrez, a Fulbright fellow researching Bangladesh's garment industry, describes the process of trying to assign responsibility for factory disasters.

Gutierrez, who spoke to Marketplace from the site of a massive building collapse in Dhaka that has killed at least 194 people, said finger-pointing is rife following such tragedies. 

Some items of clothing found inside the collapsed building, which housed a number of factories, reportedly bear the labels of American and European companies. 

"Assuming that American and European or other western brands were present here in the factory, it is their responsibility to pay compensation," Gutierrez said.  

However, compensation is often voluntary rather than mandatory, as companies, governments and factory owners point fingers over who bears ultimate responsibility.

After a fire tore through the Tazreen factory in Bangladesh late last year, killing at least 112, Walmart and Sears declined to compensate victims' families. Each company said it was unaware its goods were being made in Tazreen. Walmart donated $1.6 million to launch the Environmental Health and Safety Academy in Bangladesh. 

Burt Flickinger, managing director of the Strategic Resource Group, says it is worth keeping an eye on whether the fire has an impact on Walmart's bottom line. He predicts a slight drop in sales of the company's clothing. 

"Consumers have a conscience and they support the stores much less where there have been tragic factory disasters and deaths and massive amounts of injuries," Flickinger said.