Marketplace - American Public Media

Tesla is disrupting more than just the car business

Sat, 2016-02-06 16:01

Tesla Motors is building the world's biggest battery factory just outside of Reno, Nevada. The company is calling it the “gigafactory,” and when it’s up and running in 2016 it’s expected to make Tesla’s electric cars much more affordable. 

“In a single factory we're doubling the worldwide capacity to manufacture lithium-ion batteries,” says J.B. Straubel, Tesla's chief technology officer. 

That's significant enough. But the company also plans to develop batteries for use with solar-power generation – giving Tesla a shot at challenging public utilities as an energy source, Straubel says.

“At the price points that we're expecting to achieve with the gigafactory ... we see a market that is well in excess of the production capability of the factory,” says Straubel.

The market for batteries is an offshoot of the booming business for solar panels, particularly in states such as California, where solar is becoming commonplace.

“We sign up approximately one new customer every minute of the workday," says Will Craven, director of public affairs at California-based SolarCity.

Much of the excess energy harnessed by solar panels is returned to the power grid, Cravens says. This means homeowners and businesses may earn a credit from their power companies, but have no say over when and how that energy is used.

The partnership with SolarCity will use rooftop solar panels fitted with Tesla’s battery packs to allow customers to keep that energy in-house. That means they can use it however, and whenever, they want. The concept puts Tesla in direct competition with utility companies.

“Stationary storage, or backup storage, is really being considered the ‘Holy Grail’ of renewable electricity generation,” says Ben Kallo, an analyst with the Robert W. Baird financial services firm.

Kallo points out that the intermittent nature of renewable energy sources makes them less reliable because the wind doesn’t always blow and the sun doesn’t always shine.  But with the ability to store that energy, renewable energy sources can compete head-to-head with utility companies for customers.

“There are still many utilities out there who kind of have their head stuck in the sand and just hope that this goes away. What we're seeing is really building momentum,” Kallo says.

Forward-minded utilities might look at Tesla’s business model as an opportunity, he says.  Energy-storage technology could be used to build capacity in their existing grids, and also build new infrastructure for battery-powered cars and homes.

 

When disaster strikes, FEMA turns to Waffle House

1 hour 43 min ago

When a big storm or tornado devastates a community, the Federal Emergency Management Agency (FEMA) usually steps in to help state and local officials. But in recent years, FEMA has been getting some help of its own from an unexpected source – one you see on almost every highway throughout the Southeast: Waffle House.

During a busy lunch hour at a Waffle House in Norcross, Ga., manager William Palmer grills up a Texas Lover’s BLT for one of his customers on the high counter.

But there were a couple of days last January where this Waffle House was packed to the brim. It was during the ice storm that paralyzed the metro Atlanta area, and Palmer says people took refuge here.

“A lot of people were stranded on the highway with cars and they couldn’t get to their cars,” Palmer said. “But since we’re a staple in the community, they always knew they can come here and get great service and great food.”

Palmer and his employees worked shifts around-the-clock as the city thawed – the company put him and other employees up in hotel rooms nearby.

The 24-hour restaurant chain prides itself on serving its customers at all hours of the day, seven days a week. And FEMA caught on to this. They discovered that if a Waffle House was closed after a storm, then that meant things were really bad.

“It just doesn’t happen where Waffle House is normally shut down,” said Philip Strouse, FEMA’s private sector liaison for the Southeast.

Strouse said Waffle Houses are able to bounce back relatively quickly after a natural disaster, and have a good sense of what their statuses are in a community.

“They’re the canary in the coalmine, if you will,” Strouse said.

In 2011, the current head of FEMA, administrator Craig Fugate, was said to have coined what’s called the Waffle House Index. There are three measures in the index: green, yellow and red.

Green means the restaurant is open as usual, yellow means it’s on a limited menu, and red means the restaurant’s closed.

The index isn’t necessarily scientific, Strouse said, but it allows FEMA to know quickly about how things are on the ground.

“It gives us a pretty good feel right away of what’s going on at what time,” he said.

Because Waffle Houses restaurants are in areas prone to hurricanes and tornadoes, the company has made it part of their business plan to be prepared, said Pat Warner, the vice president of culture at Waffle House.

“We all have, what I call, ‘day jobs’ and then when the crisis comes, we all kind of stop,” said Warner, who’s also part of the company’s disaster management team.

For example, the man who handles restaurant operations also monitors the weather during hurricane season. The company starts tracking storms when they're still a tropical depression, Warner said.

Every employee also has a copy of the company’s hurricane playbook, which has instructions on how to respond during a crisis. If a storm’s on its way, Warner said the company will rent generators and start sending teams to the area.  

Waffle House even has an emergency menu, pared down for quick production and efficiency.

“Unfortunately for bacon folks, bacon takes up too much grill so we do sausage instead of bacon,” Warner said.

Waffles are not on the menu either, because they take too much electricity to make.  

Back at the Waffle House outside Atlanta, manager William Palmer focuses on serving his customers for now. But he said if the next disaster strikes, he’s not worried.

“We’re ready for it,” Palmer said.

And FEMA will be watching.

 

 

 

 

Ukraine raises interest rate to 30 percent

1 hour 43 min ago

It’s tough to be a Ukrainian right now. In addition to Ukraine’s ongoing conflict with Russia—and partially because of it—the country’s currency is collapsing and inflation rates are soaring. As a result, Ukraine’s central bank has raised its benchmark interest rate to 30 percent, up from just over 19 percent.

How did Ukraine get here?

“Ukraine is fighting a war that it cannot pay for [and] it has a budget that isn’t balanced,” says Keith Darden, a professor at the School of International Service at American University. He adds it also has long history of government corruption and it’s running out of money. As a result, Ukrainians are moving to more stable currencies or rushing to purchase staples like sugar and flour in bulk.  

Steve Hanke, a professor of applied economics at Johns Hopkins University and the director of the Troubled Currency Project at the Cato Institute, estimates Ukraine’s real annual inflation rate is now around 270 percent. Theoretically, raising interest rates could draw investors and convince people into leave their money in the bank, but Hanke says it also kills demand for loans and that without credit, Ukraine's economy will sink further into a "death spiral." He says to reverse it Ukraine must tackle the structural problems that got it here in the first place. 

The buying power of the Chinese middle class

Tue, 2015-03-03 10:37

It's dinnertime in Shanghai, China, and Ji Shengxian and some friends are eating at Pizza Express.

“It is probably one of the most tasty pizza restaurants I have tried in China,” Ji says. “It instantly surpasses pizzas from Pizza Hut and Papa John’s.”

Ji says she is a big fan of the carpaccio.

“Their raw ingredients are very fresh, and they have pizzas with Chinese elements, such as the roasted Peking duck pizza." she says.

Pizza Express is a chain, and it does what is called “premium casual” dining. Each restaurant looks modern and airy, and there is an open kitchen. It was founded in London, England, about 50 years ago, and today, there are around 500 restaurants worldwide, including 22 in China.

The plan is for that number to grow — a few months ago, a Beijing-based private equity firm bought the chain for $1.5 billion.

“The private equity industry in China has come of age over the last 20 years, and is now a very substantial component of the economy,” says Tom Manning. For two decades, he did business in Asia; now, he teaches at the University of Chicago.

Last year, private equity deals in China totaled $70 billion -- up more than 100 percent from 2013, and a lot of that investment was in consumer products. And now there are big firms financed and run by Chinese executives that are based there, and with that, the focus of private equity investment has started to shift.  

For years, Chinese private equity firms invested millions in mining and manufacturing. For the most part, they weren’t interested in restaurants and retail, but that has started to change. According to Manning, “The consumer products area is a great example, because in many cases, the market is just being built out.”

That is thanks to the size of China’s middle class – how much it has grown recently, and how much it is expected to grow.

“China’s middle-class growth even at a less-than-expected rate on an absolute scale is going to be huge,” says Paul Swinand, a retail analyst at Morningstar. He is talking about half a billion middle-class consumers in China in five years’ time. Just think about that purchasing power. What we are seeing, he says, is a shift. For a long time, the focus was on Ferraris and Fendis.

“Now, other aspirational luxury brands, like Coach, have gotten a lot stronger relative to their, quote, higher-end competitors,” says Swinand. These are brands that are expensive, but not as expensive, that still say something about the person who has bought them.

“Aspirational luxury” is the sweet spot Chinese investors are trying to target, and they are scouring Europe and the United States to identify brands that could appeal to a new class of consumers.

“The people with purchasing power just love to have Western brands,” says Z. John Zhang, a professor of marketing at the University of Pennsylvania’s Wharton School. There are companies that make good money off of cache, licensing Western brands – what he calls “defunct” Western brands – to Chinese manufacturers.

“So, you don’t really see London Fog very much here,” he says. London Fog has been around for almost a century, and a company bought it out of bankruptcy almost a decade ago. “But you go to China, and some manufacturer will buy the particular brand and use the particular brand to sell the product inside of China.”

According to Swinand, sometimes the closer you are to a brand, the more familiar you are with its history and how it is perceived, the uglier it looks. “A brand that maybe needs a little sprucing up or dusting off or repositioning could be really big in China,” he says.

A Chinese conglomerate just bought the American clothing company St. John. It also bought Club Med. The thinking is there will be many millions of middle-class Chinese eager and now able to travel.

The data-driven workplace of the future

Tue, 2015-03-03 10:04

The next craze in big data has to do with where you work.

“When employers have the capacity to monitor you, they will,” says Esther Kaplan. She took a look at how various industries, from shipping and transportation to retail to freelance work, has changed since the introduction of big data tracking to the workplace.

Her piece, “The Spy Who Fired Me” appears in the March edition of Harper’s Magazine.

Specifically, Kaplan wrote about telematics, a combination of information that could include everything from GPS data to sales information. Employers use telematics software to decide how to schedule, hire or even fire workers.

But measuring workers based on specific metrics can have some unintended consequences, says Kaplan. For example, she followed UPS drivers who have gotten into the habit of buckling their seat belts behind them when they drive. The vehicle logs that the seat belt has been buckled, but the drivers are able to sprint in and out of the trucks faster to meet their delivery quotas.

“So you’re maximizing certain metrics, but all kinds of incidental side effects are not being measured, not being captured, and may be getting worse,” Kaplan says.

Read an excerpt from Kaplan’s report in Harper's Magazine below:

Whenever you drive up to a McDonald’s window, or push your grocery cart to a Stop & Shop checkout line, or head to the register at Uniqlo with a blue lambswool sweater in hand, you, too, are about to be swept up into a detailed system of metrics. A point-of-sale (P.O.S.) system connected to the cash register captures the length of time between the end of the last customer’s transaction and the beginning of yours, how quickly the cashier rings up your order, and whether she has sold you on the new Jalapeño Double. It records how quickly a cashier scans each carton of milk and box of cereal, how many times she has to rescan an item, and how long it takes her to initiate the next sale. This data is being tracked at the employee level: some chains even post scan rates like scorecards in the break room; others have a cap on how many mistakes an employee can make before he or she is put on probation.

Until recently, most retail and fast-food schedules were handmade by managers who were familiar with the strengths of their staff and their scheduling needs. Now an algorithm takes the P.O.S. data and spits out schedules that are typically programmed to fit store traffic, not employees’ lives. Scheduling software systems, some built in-house, some by third-party firms, analyze historical data (how many sales there were on this day last year, how rain or a Yankees game affects revenue) as well as moment-by-moment updates on the number of customers in the store or the number of sweaters sold in the past hour or the pay rate of each employee on the clock — what Kronos, one of the leading suppliers of these systems, calls “oceans of valuable workforce data.” In the world of retail, all of this information points toward one killer K.P.I.: labor cost as a percentage of revenue.

In postwar America, many retailers sought to increase profits by maximizing sales, a strategy that pushed stores to overstaff so that every customer received assistance, and by offering generous bonuses to star salespeople with strong customer relationships. Now the trend is to keep staffing as lean as possible, to treat employees as temporary and replaceable, and to schedule them exactly and only when needed. Charles DeWitt, a vice president at Kronos, calls it “the era of cost.”

Workforce-management technologies make productivity visible and measurable, allowing employers to distinguish between labor time that generates profits and labor time — down to the minute — that does not.

 

 

 

The DHS gets funded ... for now

Tue, 2015-03-03 09:28

Two updates from Washington, DC:

Update one, on the sidelines of the Netanyahu speech today, the House passed a bill funding the Department of Homeland Security for the rest of the fiscal year, which means we're not gonna have more Friday night silliness this week.

Update two, the Congressional Budget Office reminded us today that the debt-limit extension expires on March 15th, which means we're gonna have a whole lot of that silliness when the Treasury exhausts what the CBO calls, its well-established toolbox of so-called extraordinary measures, come October or November.

Tinder gets serious about dating

Tue, 2015-03-03 09:28

I’ve really enjoyed spending time with you. And I kinda wanna take things to the next level. You know, get serious.

That’s what Tinder is saying to users with its new service Tinder Plus. Until now, Tinder has been free, and the number of potential dates you could swipe through — right to say I like you, left to pass — have been unlimited. But now, endless romantic options will only be guaranteed if you upgrade to Tinder Plus, which costs up to $19.99 a month. Prices are different for users under and over 30.

The company says the formula for setting swipe limits is based on an algorithm and that most users will never encounter a cap.

Rita McGrath, a professor of strategy at Columbia business school, says by making its service free, Tinder was able to attract the users it needed to run a dating site, but now the company is looking to monetize.

There's one problem: Some users see Tinder as a game. “Once the game starts to cost you, it starts to be more like a serious dating site and less like something you do for fun,” McGrath says.

Tinder is hoping to increase your fun by offering new features, like Passport, which lets paying users swipe through possible dates anywhere in the world.

But for some, says Helen Fisher, a biological anthropologist at the Kinsey Institute, dating apps like Tinder can already feel like they offer too many choices. “And that’s the big problem in all of the dating sites, it’s called cognitive overload," she said. "When you think you’ve got dozens, if not hundreds of different alternatives and possibilities, you end up taking none."

Full disclosure, I'm single and I use Tinder. And I know that when you swipe through seemingly endless options, it can be a little too easy to make people feel disposable. Unfortunately, Stephanie Amada, a researcher of hookup culture at Michigan State University, and fellow Tinder user, says it's not likely that putting a cap on the number of swipes will make users any more thoughtful than they already are.

"I'm so sorry if that feels depressing for you," she says.

But Amada notes there is the potential for dating app schadenfreude here, there are a lot of options for apps out there and if users don't like the changes to Tinder, the app may learn what's it like to be passed over.

In the meantime, if you’re looking at a Tinder profile, maybe mine, please think before you swipe.

After a controversy in politics, money follows

Tue, 2015-03-03 09:28

Israeli Prime Minister Benjamin Netanyahu began his address to Congress Tuesday by bemoaning the speech's politicization. But some groups and politicians saw the speech as the ultimate political opportunity: a chance to fundraise. 

Quiz: What's the core of the Common Core?

Tue, 2015-03-03 08:23

The controversial Common Core standards only cover math reading, but two-thirds of adults surveyed by Farleigh Dickinson University believe there are other topics.

var _polldaddy = [] || _polldaddy; _polldaddy.push( { type: "iframe", auto: "1", domain: "marketplaceapm.polldaddy.com/s/", id: "what-s-core-of-common-core", placeholder: "pd_1425403306" } ); (function(d,c,j){if(!document.getElementById(j)){var pd=d.createElement(c),s;pd.id=j;pd.src=('https:'==document.location.protocol)?'https://polldaddy.com/survey.js':'http://i0.poll.fm/survey.js';s=document.getElementsByTagName(c)[0];s.parentNode.insertBefore(pd,s);}}(document,'script','pd-embed'));

Tracing the Obamacare subsidy

Tue, 2015-03-03 07:07

On Wednesday, the Affordable Care Act faces its next test in front of the Supreme Court. This time, the justices will consider who is eligible to receive subsidies to help cover the cost of health insurance.

That may sound technical, maybe even minor, but it’s high stakes — because the subsidies are at the heart of the law.

To help understand why this case matters, it helps to understand the role subsidies play in the Affordable Care Act. Think of the subsidy as a passenger on a cruise — with apologies to The Love Boat. The journey begins at what we’ll call Consumer’s Cove, which in this case is Thomas Choinacky's computer.

“I put in how much money I’m going to make in the coming year and it literally shoots out how much you would be paying in a given month,” Choinacky says.

Choinacky, a performance artist in Philadelphia, will earn about $30,000 this year. He liked a plan on healthcare.gov, running $300 in monthly premiums — but it only costs the 30-year old half that, thanks to a $150 subsidy.

As soon as Choinacky chooses his plan, our subsidy ships off towards its second port, Insurance Island. And remember in the 34 states that rely on healthcare.gov, 87 percent of consumers get some financial help.

“The bottom line is that the subsidy is Thomas’s ticket to the health insurance world,” says Dr. Peter Beilenson, CEO of health insurer Evergreen Health Cooperative.

On average, these subsidies make up about three-quarters of a person’s monthly premium. It’s a big reason why 7.5 million in the federal exchange states signed up for the ACA this year.

But, Larry Levitt with the Kaiser Family Foundation warns subsidies shouldn’t get too comfortable out on Insurance Island.

“Most of the dollars an insurance company takes in don’t stick around for very long,” he says.

Levitt explains insurers are packing up the subsidies fairly quickly for their final stretch, a visit to Provider Paradise – where they go to pay for doctors, hospitals and pharmacists.

“They are really important to health providers. We are talking about roughly $2 billion a year going through insurance companies to doctors and hospitals in these states,” he says.

So ultimately, if the Court decides to cancel this subsidy voyage - for everybody from Consumer Cover to Insurance Island to Provider Paradise today’s Love Boat will start to feel a lot more like the SS Minnow, that stranded ship from that other TV classic, Gilligan’s Island.

Tracing the Obamacare subsidy

Tue, 2015-03-03 07:07

On Wednesday, the Affordable Care Act faces its next test in front of the Supreme Court. This time, the justices will consider who is eligible to receive subsidies to help cover the cost of health insurance.

That may sound technical, maybe even minor, but it’s high stakes — because the subsidies are at the heart of the law.

To help understand why this case matters, it helps to understand the role subsidies play in the Affordable Care Act. Think of the subsidy as a passenger on a cruise — with apologies to The Love Boat. The journey begins at what we’ll call Consumer’s Cove, which in this case is Thomas Choinacky's computer.

“I put in how much money I’m going to make in the coming year and it literally shoots out how much you would be paying in a given month,” Choinacky says.

Choinacky, a performance artist in Philadelphia, will earn about $30,000 this year. He liked a plan on healthcare.gov, running $300 in monthly premiums — but it only costs the 30-year old half that, thanks to a $150 subsidy.

As soon as Choinacky chooses his plan, our subsidy ships off towards its second port, Insurance Island. And remember in the 34 states that rely on healthcare.gov, 87 percent of consumers get some financial help.

“The bottom line is that the subsidy is Thomas’s ticket to the health insurance world,” says Dr. Peter Beilenson, CEO of health insurer Evergreen Health Cooperative.

On average, these subsidies make up about three-quarters of a person’s monthly premium. It’s a big reason why 7.5 million in the federal exchange states signed up for the ACA this year.

But, Larry Levitt with the Kaiser Family Foundation warns subsidies shouldn’t get too comfortable out on Insurance Island.

“Most of the dollars an insurance company takes in don’t stick around for very long,” he says.

Levitt explains insurers are packing up the subsidies fairly quickly for their final stretch, a visit to Provider Paradise – where they go to pay for doctors, hospitals and pharmacists.

“They are really important to health providers. We are talking about roughly $2 billion a year going through insurance companies to doctors and hospitals in these states,” he says.

So ultimately, if the Court decides to cancel this subsidy voyage - for everybody from Consumer Cover to Insurance Island to Provider Paradise today’s Love Boat will start to feel a lot more like the SS Minnow, that stranded ship from that other TV classic, Gilligan’s Island.

Hillary Clinton's email isn't necessarily insecure

Tue, 2015-03-03 03:00

In the controversies over Hillary Clinton's decision to use a private email address for official correspondence as U.S. Secretary of State, one theme has been the question of whether, in doing so, she created a security risk. 

As important as records maintenance is, the possible lack of proper security/encryption is most troubling http://t.co/lJXUr3sRU8

— Nolan McCarty (@Nolan_Mc) March 3, 2015

However, Hillary Clinton wasn’t a typical worker using gmail to avoid a little hassle. She had her own email system. And unofficial doesn’t have to mean unsafe.

"Just the fact it’s not part of the government’s email system doesn’t mean its insecure," says Larry Ponemon, chairman of the Ponemon Institute, which studies cyber-security.

Big institutions, with robust security budgets — think Target or Sony — haven't been immune from cyber-attacks.

Poneman says someone with enough money and motivation could create a good system. And smaller systems have advantages: Fewer users means fewer people who could slip up and compromise security.

"It could be very secure and make it harder for the bad guy to actually find it," says Poneman. "Because it's small, it becomes — not invisible, but it's not as easy to find it and basically do bad things."

PODCAST: The placebo (and price) effect

Tue, 2015-03-03 03:00

Yesterday, for the first time in 15 years, the NASDAQ composite closed above 5000. So what? Plus, the battle to be the smartest smart phone in the smart pay world. Apple is there. Now comes Samsung with its new GalaxyS6 with Samsung Pay. And, it could have an edge. Game on. And the placebo effect has always been a bit of a mystery to science. Give patients a pill filled with sugar or in this case -an injection of saline- but tell them it's medicine and a percentage of them will report feeling better. Now, a recent study in a handful of Parkinson's patients suggests you can boost the effects of the placebo even further by telling patients the drug costs a lot of money. 

Samsung steps up the battle to be your "pay phone"

Tue, 2015-03-03 02:00

Samsung is hoping to take a bite out of Apple, and cash in on a share of the more-than-$30 billion in swipe fees collected by credit card companies every year.

How? By removing one of the main stumbling blocks to expanding mobile-payments among consumers. Namely, too many retailers don't have the devices needed to process the payments. 

So far, only about 200,000 of the 12 million checkout points in the U.S., have the machines to process payments from apps like Apple pay.  

Samsung's new Galaxy 6 smartphones use a technology that radiates magnetic energy from your phone directly into traditional credit-card readers, essentially turning your phone into a credit card.  

Click the media player above to hear more.

Developing the ideal prosthetic arm

Tue, 2015-03-03 02:00

Miles O’Brien, a science correspondent for PBS Newshour, had his arm amputated after he suffered an injury while he was on assignment last year.  

“It was quite a fluke,” said O’Brien. “I had been on a reporting trip and a case fell on my arm. A bruise turned into something potentially life threatening.”

By the time he got to a doctor it was too late to save his arm. He now uses a prosthesis. But not all the time.

“There’s one that I use for bicycling, one that I use when I am driving,” said O’Brien. As for the day to day, he added, he’s learn to live with one arm.

That’s largely because the current technology hasn’t produced the ideal replacement yet.

“When you think about what your hand does for you, that’s a huge engineering challenge,” said O’Brien. “The challenge of replacing the human arm, and in particular the human hand, is  tremendous.

But he’s optimistic because there’s been a lot of progress in related technologies, from batteries to sensors to computers that recognize patterns. The last, especially, has him most excited.

Computers, he explained, can now identify patterns in the remaining muscles in his stump. That means they know the patterns which signal that he wants to move his wrist or finger.

“And something that’s made of silicon, metal and and plastic would do my bidding,” said O’Brien.      

How the cost of a drug impacts the placebo effect

Tue, 2015-03-03 02:00

The placebo effect has always been a bit of a mystery to science. Give patients a pill filled with sugar or in an injection of saline but tell them it's medicine, and a percentage of them will report feeling better.

A recent study in a handful of Parkinson's patients suggests you can boost the effects of the placebo even further by telling patients the drug costs a lot of money.

In the experiment by Alberto Espay and his colleagues at the University of Cincinnati, the patients received saline but were told they were testing the efficacy of two real drugs – one that cost $100, and another that cost 15 times as much.

“When they received the cheap formulation, they got better, but nowhere near those who received the expensive medication,” Espay says.

In fact, the people who thought they were getting the expensive drug did almost as well as when they were on a real drug. What the patients experienced was real, but it was entirely due to the placebo effect.  

Espay believes that cost affects the placebo because so many of us believe that expensive things are better.

“We feel the more be pay, perhaps the more value we're getting,” he says. “And of course that isn't true.”

It isn’t true, unless we believe it is, explains George Newman, a professor of psychology at Yale School of Management whose research has demonstrated that the pleasure we get from objects is determined by what we believe about them. 

For, example, if we believe we are drinking a $200 bottle of wine, it tastes better, and the regions of the brain devoted to pleasure light up more brightly than if we think it's a bottle of Two-Buck Chuck.

“What we're believing about the world, what we're imagining about the word directly effects how we experience things even very tangible things like the effectiveness of medication,” Newman says.

In this case, cost creates a bias in patient's expectations, says Ted Kaptchuk, director of the placebo studies program at Beth Israel Deaconess Medical Center. And that's not necessarily a bad thing.

“But it's a bias we want to utilize, we want to maximize,” Kaptchuk says. “We want to optimize in clinical practice.”

But before drug manufactures start raising prices in the name of science, Kaptchuk says there are plenty of ethical ways to raise patient expectations. And most of them, like improvements in listening and attentiveness by physicians, are free.

Taking stock of U.S. aid to Israel

Tue, 2015-03-03 02:00

Political tensions are high around Israeli Prime Minister Benjamin Netanyahu's address to Congress Tuesday, but that shows no sign of impacting aid agreements between the U.S. and Israel.  

In 2007, the Bush administration agreed to give Israel $30 billion in military aid over ten years. 75 percent of that money comes back to the U.S.—Israel uses it to buy weapons systems from American defense contractors.

“So it’s everything from Hellfire missiles to airplanes," says Haim Malka, a senior fellow at the Center for Strategic and International Studies. “U.S. aid to Israel accounts for about 20 percent of Israel’s total defense budget.”

The U.S. also gives Israel supplemental aid for things like its Iron Dome anti rocket system. And the U.S. allows tax breaks for donations and investment in Israel. 

“U.S. funds invest in Israel, annually, roughly $1.5 billion,” says Avner Cohen, a professor of nonproliferation studies at the Middlebury Institute of International Studies at Monterey. 

The U.S. mainly gives Israel military aid. Non-military economic aid dried up as Israel’s economy grew.

Quit your job, become a longshoreman

Tue, 2015-03-03 01:30
55,000 pages

That's how many pages of emails were turned over to the State Department by Hillary Clinton's aides in order to comply with new federal requirements. As the WSJ reports, Clinton's extensive use of a private email account goes against current rules that emails be archived on department servers as part of the Federal Records Act.

-130.05 points

The Dow was down by triple digits at noon eastern time Tuesday. GM, Ford, Chrysler and Nissan all missed sales expectations, CNBC reported, driving the drop.

$1,500

In a recent study on the efficiency of two drugs, patients were told the two cost $100 and $1500 respectively. The group treated with the more expensive drug saw much more improvement. The catch? Both medicines were placebos, with the only difference being the perceived price. In fact, the people who thought they were getting the expensive drug did almost as well as when they were on a real drug. What the patients experienced was real, but it was entirely due to the placebo effect.  

$100,000 per year

About half of West Coast union longshoremen make at least that much, and some make more than three times that. The International Longshore and Warehouse Union's power and influence was felt last month when a labor dispute that nearly shut down ports along the coast, and this week the LA Times is looking into how dockworker wages have remained so high.

130,000

In 2008, the number of "non-domiciled" residents in the UK — that's citizens who can show their fathers were not born in the UK, or that they have a home elsewhere they plan to return to — surged to 130,000. That's because non-dom status also comes with an Edwardian-era tax break on foreign income, which has attracted the uber wealthy of Britain. As reported by the NY Times, the wake of the HSBC scandal in Switzerland has called the antiquated tax loophole into question.

50 percent

The portion of Americans who think it's important the U.S. be number one economically, up from 39 percent in 2007. That's according to a new Gallup poll, which also showed that priority was slightly split along party lines. Republicans were more likely than Democrats to think economic supremacy was important. 

Google's wireless gamble

Mon, 2015-03-02 14:23

It's official. In a speech Monday at the Mobile World Congress, Sundar Pichai, a Google senior vice president, confirmed the months-old rumors: The Internet giant is getting into the wireless network business. But only in what he called a "very small-scale" way. 

"They don’t plan on really setting up  a service that will go directly head-to-head with the two that dominate the market, AT&T and Verizon," says Gartner analyst Bill Menezes. Instead of building its own cell-phone towers, Google plans to choose certain locations to set up a "mobile virtual network operator (MVNO)"—a kind of middleman that buys and repackages access to data, texting and phone calls from the big wireless-network providers.

There are many MVNOs already in the market. Scott Allan, director of Ting — an MVNO that works with Sprint — says his company's innovation is flexible billing. Ting charges less when customers use less data. 

It remains to be seen what Google's product will look like, but Ben Schachter, Internet analyst at Macquarie, believes the company will focus on pushing more people online.

"At the end of the day, who benefits from that? Google," says Gartner's Menezes. "Because all those people are using search, accessing YouTube, using Google docs, and so on."

Commercial bees, the unsung heroes of the nut business

Mon, 2015-03-02 14:15

Bill Lewis is waiting for the sun to set, the time of day when his bees crawl back inside the short white boxes that house their colonies. As the sky turns pink behind the San Gabriel mountains, on the outskirts of Los Angeles, Lewis climbs into the seat of a forklift and starts moving the hives onto the back of a flatbed truck. These bees are on the move.

“As soon as you get on the freeway and there’s air flowing past the entrances, all the bees run back inside,” says Lewis, of any stragglers.

Lewis, who runs Bill’s Bees, is taking about 700 of his hives on a road trip to the California’s Central Valley, where he’ll unload them across acres of almond orchards, working until 1 or 2 a.m. under the light of full moon.

All across the country, more than a million-and-a-half colonies are making a similar journey – traveling hundreds or even thousands of miles to pollinate California’s almonds. Farmers rent hives for few weeks because in order for almond trees to produce nuts, bees need to move pollen from one tree to another.

No bees, no almonds.

“This pollination season there will be [some] 800,000 acres of almonds that need to be pollinated,” says Eric Mussen, a honey bee specialist at the University of California Davis. He says more than 100 different kinds of crops need these rent-a-bees, but almonds are significant for the number of acres that require pollination all at the same time. About 85 percent of the commercial bees in United States – which Mussen calls “bees on wheels” – travel to California for almonds.

The state supplies roughly 80 percent of the world’s almonds, worth $6.4 billion during the 2013-2014 season, according to the Almond Board of California.

“It’s a matter of numbers,” he says. “You’re trying to provide enough bees to be moving the pollen around between the varieties and whatnot. It’s just a huge, huge number of bees. The only way we can get a huge number of bees in one place at one time is to bring them in on trucks.”

In fact, bees are such an important part of the almond business that Paramount Farms, one of the biggest almond growers in the world, has decided they need to be in the bee business, too. The company just bought one of the largest beekeepers in the United States, based in Florida.

“Bees are so essential for the process of growing almonds,” says Joe Joe MacIlvane, Paramount’s president. “If we don’t have a reliable supply of good strong colonies, we simply won’t be a viable almond grower, so that’s our primary motivation for getting into the business.”

Renting bees is about 10 to 15 percent of Paramount’s production costs, but the motivation to keep their own bees isn’t simply economic.

“Many bee keepers are individual or family business and many people are getting on in years and we don’t see a lot of young people coming into the business,” says MacIlvane.

Additionally, bee populations are struggling. A significant number having been dying each year for the past decade or so, thanks to a mix of factors, from pesticides to lost habitat for feeding. Sometimes it’s difficult to know exactly what’s killing them.

“We had a large problem last year with bees dying in the orchard because of something that was going on during bloom,” says Bill Lewis. He thinks a pesticide or fungicide may have been to blame.

This year, Lewis and his bee broker are being pickier about the farms they’re working with, vetting them more carefully because those lost bees had big economic consequences – about $300,000 in lost income for Lewis.

Pages