National / International News
The number of U.S. troops fighting Ebola in West Africa is set to increase dramatically this month, and the first two field hospitals erected by U.S. troops in Liberia will open in the coming days.
High-tech firms have been offering bounties to security researchers to find holes and bugs in their software, but these reward programs haven't drawn much interest from major banks.
A Supreme Court case argued Wednesday is about obstruction of justice — and fish. The prosecution says the law used to convict its client only bars document destruction. The justices aren't so sure.
A state law now requires insurers to reveal prices of their medical tests, and the variation is amazing, bargain hunters say. An MRI of the back is $614 at one place; $1,800 at another.
We’re doing a series of explainers of economic concepts to mark Marketplace’s 25th anniversary, and today we take a look at the Trade Deficit.
The United States has been running one one every year since oh... 1974. Currently, it’s about $40 billion or so a month, give or take a few billion.
A trade deficit, you've probably heard, is when a country is buying more from the rest of the world than it’s selling to the rest of the world—importing more than it’s exporting. That may sound bad. If I personally ran a trade deficit for forty years like the U.S. has, I would be broke. But I am not a country - and the rules are different for countries.
“There’s actually nothing necessarily wrong about a trade deficit,” says Doug Irwin, professor of economics at Dartmouth. “In fact, here’s where economists always have a definitive answer to the question is a trade deficit good or bad and that definitive answer is, it depends!”
Depends on what, exactly?
Well, before we can answer that we have to explain why it’s so neutral-ish in the first place. The reason is that trade deficits have this whole other side to them that is not obvious at all.
THE DOUBLE LIFE OF A TRADE DEFICIT
Trade deficits actually have as much to do with international investment and debt as they do with importing and exporting. It’s invisible unless you look at the money, so let’s look at the money.
Let’s say the U.S. and Europe have a trade deficit (which they do)—meaning America imports tons of French wine, let’s say, but exports almost nothing to Europe.
Wine stores across the U.S. will place their orders with wineries in Europe for massive quantities of Beaujolais and Chardonnay. And they will, of course, need to pay in Euros. French wineries don’t want a stack of Benjamins any more than you want that damn Turkish lira that somehow always ends up in your bag of change when you are trying to pay a toll on the freeway.
So the wine stores—or the bank or the credit card company the wine stores use—will have to take their U.S. dollars to an international currency market and convert them into Euros to give to the French vineyard to buy the wine. Since the U.S. is buying massive amounts of French wine, that bank is going to have to convert massive amounts of dollars into Euros.
THE PRICE OF REJECTION
Here’s the problem: We have a trade deficit. We aren’t exporting much to Europe—As in, Europe isn’t buying our stuff, which means they don’t need dollars. Why would they need dollars? To use as paper weights?
HOW DO WE DEAL WITH THIS PROBLEM?
Now, you can imagine one way out of this. American banks might have to lower the price of the dollar. They might say ‘Fine, world! What if I give you $110 for $100 euros? $120? $150?,' until finally someone in Europe decided that was a really good deal and they could use some dollars to maybe buy some American goods. It’s a kind of auto correct feature that trade deficits can have.
“When the dollar falls, that stimulates U.S. exports, it discourages U.S. imports, and that fall in the value of the dollar will naturally begin to close the trade deficit,” says Irwin.
This can happen with trade deficits—they can push down a currency’s value.
THE MONEY HAS TO COME FROM SOMEWHERE
But that’s not happening with the U.S., nor is it happening with a lot of countries. The dollar is doing great. And yet we continue to import much more than they export. Somehow we are finding another way to deal with the problem that we can’t get Europeans to exchange our dollars so we can buy European wine.
The fact is, there ARE people abroad who want to give us Euros in exchange for dollars. These are not people who want to buy our stuff, though. These are people who need dollars...because....drum roll.... they want to INVEST in America. They’re investors.
Investors need U.S. dollars to buy U.S. assets: treasury bills, real estate, stocks, bonds, etc. After all, the NASDAQ doesn’t take Euros, so foreign investors need dollars to park their money in the U.S. and make a profit just like we need euros to buy wine.
That’s how the U.S. economy finds the euros go import crazy. So if we are having a trade deficit, it is a sign that someone abroad is investing in some part of our economy. A trade deficit and investment are like two sides of a strange coin. We buy goods from the world, the world invests in us.
This invisible connection between trade deficits and foreign investments is why a trade deficit can be good or bad—all it means for sure is that other countries are coming to you to invest their money. That can be great if it’s growing your economy or it can be bad if it’s not—you can’t tell what’s going on just from having a trade deficit.
An example of a trade deficit that was happening for good reasons was the U.S. during the 19th century, says Robert Lawrence, who teaches international trade at Harvard’s Kennedy School. The U.S. had increasing trade deficits, which were made possible by investors pouring in money from abroad. “The United States used the money to build rail roads and build the U.S. economy—so you can look in retrospect and say that was a pretty healthy deficit.”
An example of a trade deficit that was happening for less good reasons is Greece, he says. During the financial crisis, Greece was running a trade deficit made possible by investors who were pouring money in to purchase government debt. “During the global financial crisis, in Greece the government accumulated large debts—so large, in fact, that they couldn’t repay them.”
Sometimes it can be ok to finance government debt, but if something scares investors and they all take their money out at once (like happened in Southeast Asia in the late 90s) that can spark a crisis. In cases like those, a trade deficit can be a sign of vulnerability.
So a trade deficit strictly speaking means investors are parking their money with you. Whether it’s good or bad depends on what you (or they) are doing with the money.
The U.S. is lucky because investors keep coming back. As long as they do, we can import more than we export.
It is officially holiday shopping season, and though some of us want to invest in covering an entire wall in our house with an interactive video screen, we aren't quite to that point just yet.
Marketplace Tech host Ben Johnson isn't thrilled about that, and he says to blame technology and cost.
Building digital video screens is not easy. Our screens use a layer of glass over these tiny transistors that convert code into images. And to make big versions of these screens is entirely too difficult.
"If you get one little tiny transistor wrong, after you've manufactured this you actually have to throw the whole thing out," says Johnson.
Manufacturers that want to make these screens have to build vacuum chambers into the factory, but that costs a pretty penny.
"It costs like $100 million just to make the factory that makes these things," says Johnson.
If you talk to people outside the Washington Beltway, the view of life and the economy is pretty starkly different.
Where economic messages were largely left out of midterm campaigns, the idea that we're growing our way into recovery doesn't resonate with a lot of Americans.
"That's all on Wall Street. If you've got lots of money, you're doing fine. It's just us who are not," said Don Holzshuh. He drives a truck in the upper Midwest, delivering to hardware stories in Iowa and Minnesota.
And, he says, the folks in the hardware stores agree. Things feel "pretty much the same" as they did 18 months ago.
For Holzschuh personally, business is a little worse. What he used to earn in four-and-a-half days now takes six. He's added another run in his truck, bringing him to 60 hours a week on the road. Lower gas prices help with costs, but Holzschuh says the price of diesel along his route in Iowa is higher by about a dollar more a gallon compared with unleaded. He doesn't benefit much from the savings.
"I'll probably be working til I'm 68... another 10 years, another million miles."
It's hard to imagine him continuing at 60 hours per week after 36 years on the road. Holzschuh has already clocked 4.5 million miles accident-free, but he doesn't see many alternatives.
"Am I going to work at a gas station? Work three jobs in a gas station to get by?"
The extra years of work will go toward paying off the mortgage on his house. And if that doesn't work?
"I'll be over at your house," he joked to Marketplace host Kai Ryssdal.
California's high-security Corcoran prison is home to a dairy that provides milk to almost every prison in the state system. For inmates who staff it, it's more than a job: It's a refuge and a future.
Both comedy shows aired live, election-themed episodes Tuesday. NPR TV critic Eric Deggans says the broadcasts showed the limits of news-tinged satire on the political scene.
Denton, Texas, a growing, middle-class college town in the heart of fracking country, voted Tuesday to ban fracking. The vote was 59 to 41 percent. Denton is the first city in Texas to ban fracking, and the conflict there has drawn attention from fracking supporters and opponents all over the country.
Here's the story on how the Denton fracking ban came about.
On Wednesday morning the Texas Oil and Gas Association filed a lawsuit against the ban, and more suits are expected. Thomas Phillips, a former Texas Supreme Court justice, represents the association. He argues fracking regulation is the state's jurisdiction. "No city can just take it upon itself to say not in my backyard," he says. Other legal scholars say state law is not that clear on the matter, and that the Denton case represents new legal territory for the Lone Star State.
Local fracking bans have been upheld in New York state but in Colorado, at least so far, they're encountering trouble in the courts.
At his post-election press conference today, President Obama said a whole bunch of nice things about incoming Senate majority leader Mitch McConnell. He talked about how he's looking forward to working with him, including a comment about how he would enjoy a Kentucky bourbon with McConnell.
Funny, but much funnier were the president's comments last year at the White House Correspondents Association Dinner about how he ought to make nice with the GOP.
Take this as a comment on how those who don't remember history can be condemned to repeat it.
Emoji*** are about to get a lot more colorful.
The governing body for those graphics - yes, there is such a thing - says it’ll update its code so that those smiley faces can have various human skin tones.The Unicode Consortium
While the Unicode Consortium is in charge of the graphical text messages between cellphones, the market for emoticons on messaging apps - which rely on your mobile phone's data plan - has been growing for several years.
"Why punch out five characters to express yourself, when you can punch one character and say it all?” says Ram Menon, whose company Avaamo provides a secure messaging app for businesses. The app includes workplace-centric emoticons.
"There’s a lot of things we try to express at work, we translated that into emojis, like 'anybody ready for lunch?,’ 'kill me now,’” which is just a guy with a gun to his head, Menon says.
“The emoticon market is a super high-growth market right now,” says Evan Ray, CEO of Swift media, which sells packs of emoticons and digital stickers to a younger audience, most of whom are in their teens.
"We work with a lot of major movie studios and we’re seeing a lot of success from entertainment brands,” says Ray. "Actually, surprisingly, one of your really big packs is actually Betty Boop."
The growth in the emoticon market has added up to measurable revenue. The Japanese messaging app Line said last year that it was making about $10 million a month just from digital sticker sales.
“It’s a place that brands really need to be for engaging new, young brand advocates," says Ray. "And it’s a place that they really need to look into… because it’s the new social network. It’s where people are going to be.”
Ray says his company works with some 250 brands, including Disney. “Our most popular pack with Disney is definitely 'Frozen.'”
And, Ray adds, all of this growth in a nascent emoji market has happened in a mere three years.
“It’s been a crazy phenomenon… On the sticker side, the bigger emoticons, there’s about 6 billion sent every single day,” says Ray. He adds that the stickers are also a powerful marketing tool, for when new films, looking to drum up interest, sponsor packs of emoticons that can be spread around by messaging app users.
If you’re alive in 2014 and you’re not sure what emoji are, it’s ok—but it’s high time you learned.
This is an emoji:
So is this:
Emoji are little pictures or smileys you can incorporate into text. They can be faces, buildings, food, weather, dancing ladies or poop and they represent feelings, emotions and activities. And food. And more.
Some people use emoji to replace words. For example, if I’m out for dinner and my friend texts me to ask what I’m doing, instead of typing “I’m getting dinner,” I can just text a emoji of what I'm eating....
...and my friend will understand and probably want to join, because...= "Fun."
Emoji started in Japan, but have spread to the U.S., thanks to something called the Unicode Consortium.
What is the Unicode Consortium?
Unicode sets the industry standard of code, which means it regulates the presentation of text across different platforms and languages - including the emoji language. The emoji you find on your iPhone use Unicode. They were developed in Japan.
How are emoji and emoticons different?
Emoticons are smiley symbols. :-)
Emoji are only the standardized set of Unicode icons and include smileys, but also a broader collection of icons. Like poop.
What are the other picture things I see the kids sending?
A lot of messaging apps like WhatsApp and Line have developed stickers. While emoji are directly incorporated into your phone’s texting keyboard, stickers are exclusively for the app in which they live.
However, several apps are creating hybrids that can function as stickers within the app, but can also be incorporated into text.
For example, Bitstrip recently rolled out an app called Bitmoji where you can turn your face into a sticker and put that sticker into a text message. Or comic strip.
Line has done something similar with their set of stickers called Sticons.
What else is new in emoji-land?
The announcement prompted a yearning for the days when the only animated face was on a Microsoft Word paper clip.Microsoft Office
Why should I care about emoji ?
If anyone under the age of 40 was at your Halloween party this year, you probably saw someone with an emoji-themed costume.
People use them all the time. This website tracks which emoji are getting the most usage on Twitter.
This is a Tumblr where someone re-created emoji in real life (IRL, as the kids say).
That's all for now!
and Bitstrip Seth