First, economic growth in America. GDP was quite solid as the summer wore on. More on that. And one of the most influential business tycoons in the world has come out publicly as gay: Tim Cook, the CEO of Apple. We spoke with actor and social justice advocate George Takei about the importance of Cook's Op-ed. Plus, passengers increasingly bring their own entertainment with them aboard flights...on their mobile devices. Now, airlines are responding, possibly with a policy of BYOD: bring your own device.
In five days, the polls will be open. And with gains for Republicans predicted but not assured, we turn to a person who tracks the future of the federal budget like a gearhead follows cars.
Stan Collender contributes to Forbes, and once upon a time was a staffer for both the House and Senate Budget Committees. He joined host David Brancaccio to discuss what a Republican majority would mean for budget cuts in Washington.
Click the media player above to hear Stan Collender in conversation with Marketplace Morning Report host David Brancaccio.
Signing bonuses for new college grads nearly disappeared after the recession but are slowly becoming more common, according to a Michigan State University survey of employers.What percentage of employers offer signing bonuses to new college graduates?
Airlines have noticed that people increasingly bring their own entertainment with them onboard, on their mobile devices. That means the nature of in-flight entertainment is changing, too.
In fact, the future of in-flight entertainment could be BYOD: bring your own device.
Airline consultant Jay Sorensen sees a lot of people doing that already.
“Before they get on the airplane, they’re gonna load up their device,” says Sorensen, president of IdeaWorks Company. “They’ll get caught up on all the past episodes of House of Cards onboard the airplane.”
That’s why airlines like Delta and United have invested in systems that stream in-flight entertainment straight to your mobile device. They see economy class passengers bypassing their seat-back screens. And they’re not alone.
Doing away with seat-back screens altogether would be lighter and cheaper for airlines, which Henry Harteveldt of Atmosphere Research Group says already pay a lot for content.
“The movies and TV shows and music that we watch and listen to aren’t provided free,” he says. “Airlines license that. And it can cost them several millions of dollars a year, per airline.”
If all this TV-watching threatens to drain your battery, don’t worry. Harteveldt says airlines are also installing more plugs.
Heather Wolpert-Gawron has been teaching for eleven years at Jefferson Middle School in San Gabriel, Calif. During that time, she says, the school has had about ten principals.
“We had many years where the morale was low,” she says. “We just kind of felt abandoned.”
Some of those principals left on their own. Some were removed. According to a new report from the nonprofit School Leaders Network, half of new principals quit in their third year on the job.
The group, which provides training and support to principals, says the job has become too complex and isolating. Principals put in long hours overseeing teachers, meeting with parents and implementing one reform after another.
“It’s very demanding and you’re being pulled in different directions, so it really makes it difficult for you to focus on being an instructional leader,” says Connie Rodriguez, who left her position as a junior high school principal in San Antonio, Texas, after three years.
It costs about $75,000 to recruit and train each replacement, says Mariah Cone, vice president of knowledge with the School Leaders Network. The cost to student achievement is higher, she says, with studies showing that both math and English test scores drop when a principal leaves.
“It takes up to three to five years for the next principal to really be able to show gains,” Cone says.
If the next principal lasts that long. Cone says ongoing mentoring and training might help more of them stay longer.
It's college-tour season, and everyone is a reviewer on Twitter:
— Hayden T. Balduf (@HBalduf) October 15, 2014
Just witnessed the worst guided tour of Messiah College, all that was said in a few minute time span was "that is our green house"
— William Wical (@willwical) October 13, 2014
k so my college tour guide for UCSB was kind of like....the biggest babe ever to exist pic.twitter.com/quXGFrmxbR
— abbey (@AbbeyxBlanford) June 24, 2014
Be it bad or babealicious, college admissions officers are paying attention to all that sharing.
"Institutions of higher education are most definitely reviewing that to find out how they are being evaluated," says Jeff Fuller, director of student recruitment for the University of Houston and President of the National Association for College Admission Counseling.
Fuller says if a kid has a bad experience on campus, an engaged admissions officer can respond fast; before a nasty tweet dings a school’s reputation.
"More and more colleges are hiring folks to manage their social media to make sure they remain current in what’s being discussed," Fuller says.
The University of North Carolina at Chapel Hill’s admissions office has a small army working on social media.
"We have two blogs, we have multiple Facebook accounts, we have a Twitter account, we have an Instagram account," says Ashley Memory, an assistant director of admissions.
There are three admissions officers and as many as four paid interns managing and creating content for those accounts.
Memory says there is a little risk involved in having all these open forums—There will always be disappointed applicants.
More often than not, she says, negative comments are neutralized by the broader community of current UNC students or alumni.
The main job of college admissions officers on social media is to communicate with potential students. First, they try to convince them to apply to their school. Then, if they are accepted, they convince them to attend.
Part of that job involves answering a lot of basic questions.
"Before they may have just picked up the phone and called our office, or may have sent our office an email, or they may have sought out the answer for themselves online," says Gabe Santi, from the admission office at Michigan State University. "Now, they may just post the question on Facebook or tweet at us."
Can Michigan State tell me if I got accepted or not already #impatient
— sophia. (@samm_jamm) October 20, 2014
@samm_jamm Thanks for your patience!
— MSU Admissions (@msu_admissions) October 20, 2014
Former tennis star Andre Agassi has spent the last few years building schools. Recently, he has stopped doing it out of pure generosity. After years of raising money for charter schools, Agassi has had a conversion. He teamed up with investors and joined the growing ranks of education capitalists.
Agassi has been touring some of his schools this fall, including a recent in Nashville.
The second graders in this Rocketship classroom were barely born when Agassi hung up his tennis racket. So they don’t really know much about the guy with the shaved head touring their new school, other than they should be grateful to him.
“What made you want to play tennis?” one student asks. “I never really wanted to,” Agassi says, explaining that his dad made him.
But turns out, he was pretty good.
“And then all of the sudden when I won, I had the chance to build my own school,” he says.
The irony is not lost on him, since Agassi dropped out of school himself. He has since raised $100 million to supplement public funding for a charter school in his hometown of Las Vegas.
But in the last few years, he teamed up with investors to start a hedge fund. They don’t run schools. They just buy the land, finance construction, then rent the school back to a charter, typically part of a national chain like KIPP Academy or Rocketship.
Critics of the charter movement have charged investors with lining their pockets on the backs of public education, and Agassi says he had his own hesitance before switching gears into profit-mode.
“I thought about it a thousand times going into this adventure,” Agassi says.
But given the struggle to finance his own charter school, Agassi says he’s decided charity has limitations.
“I don’t believe – personally – that philanthropy is scalable,” he says.
Agassi’s charter school real estate venture certainly satisfies a need. School founders almost universally struggle to find adequate facilities. Often school districts are reluctant to rent out vacant school buildings to charters, who are sometimes seen as competitors. They occasionally have to locate in less-than-ideal learning environments, like a renovated strip mall.
The pitch from Agassi’s investors is something like this: “Let us build you a school. You focus on teaching. And if you want to buy the building from us in a few years, great.”
Santa Monica-based investor Bobby Turner helped get Agassi on board.
“If you want to treat a problem in society, philanthropy is fine,” Turner says. “But if you want to cure – really cure – you need to harness market forces to create a sustainable solution. That means making money, because only then is it scalable. And by the way, there’s no rulebook that says you can’t make money and societal change at the same time. They’re symbiotic.”
But some parents don’t buy the sales pitch.
“It kind of makes my stomach turn,” says Brett Bymaster, a parent in San Jose where the Agassi-Turner fund has been active.
He’s taken it upon himself to dig into their business model, though one can only dig so far. While they’re building public charter schools, there’s very little disclosure, including what they charge tenants.
“We need to partner with people outside, but I don’t think the solutions to problems in my community are one-percenters getting filthy rich,” he says.
Bymaster wonders what happens to one of these buildings if the charter has to shut down, and many do. So far, all 39 schools built by the fund are still up and running. A spokesman says if one closed, the building could be rented to another charter operator.
Even among charter school advocates, there is some quiet suspicion of partnering with hedge funds. First, there’s cost. One charter founder said a deal with Agassi was 25 percent above any other option.
Jessica Johnson leads the Colorado-based Charter Schools Facilities Initiative and doesn’t take a position on for-profit investors.
“I mean, I know of many instances where it’s worked out really well. I know of others where there have been challenges,” Johnson says.
Johnson says plenty of charter schools have had trouble working with non-profits too. That’s why she cautions everyone to read the fine print, no matter who is helping build their school.
It’s doing better by lots of measurements — but people don’t feel it. Which is part of what Obama is out stumping for through November.
The data says the economy’s doing better — much better. But does it feel better? How’s your economy doing?
Tell us your story above, and we might include it in the show.
Seems like every election, some political analyst says the end is near for political ads on TV – that TV is dead. Well not this year. Candidates in the midterm elections are blasting voters with TV commercials.
Evan Tracey is on the front lines of the political ad wars. He's senior vice president at National Media Research, Planning and Placement, a Republican consulting firm, which offers candidates advice, makes TV ads and places them. What does he tell campaigns? Buy as much TV advertising time as you can.
“If the predictions of TV being dead are true then it’s being buried in money,” he says.
Tracey says, sure TV audiences are aging, but older people vote. And TV ads can work with online ads to catch younger voters, who watch TV with smartphones in hand.
“So if I can have my voice and pictures on your TV screen and have my digital ad on your smartphone, I’ve gotten you two ways now,” he says.
Plus TV can be targeted more than ever now. Cable set top boxes tell campaigns exactly what you’re watching. They figure out what your favorite shows are, and advertise on them. But Tracey says it’s still best to use TV as an old fashioned megaphone -- blanketing the airwaves, till there’s no escape.
“Some of these states right now – you know - they’re seeing thousands of ads a day,” he says.
States like Iowa.
“It’s been really hard to watch TV without being bombarded with advertisements,” says Barbara Trish, professor of political science at Grinnell College in Iowa.
But Trish doesn’t mind the ads. She loves them, even studies them at Grinnell. One of her favorites features a candidate who compares castrating hogs to cutting pork in Washington.
Trish agrees that TV is still king of campaign ads, but for a different reason. Candidates, parties and outside groups are pouring cash into the midterm election, and it needs a home.
“It’s just that there’s so much money out there," she says. "It seems like, they feel like it has to be spent on something. You’ve got to put it to use.”
There’s a lot of money sloshing around Colorado, too, where there are close Senate and gubernatorial races. And lots of ads, focused on women’s issues and big government.
Floyd Ciruli is a pollster in Denver and the head of Ciruli Associates. He’s getting sick of all the ads; in fact, he’s been predicting the dethroning of TV since the early 2000s. Banging the drum about how candidates will go digital, and look for other ways to reach voters.
But even he admits, when it comes to TV, "It’s still the king.”
Ciruli says blanket TV advertising can gain a campaign a few points in the polls. That could push a candidate over the top in Colorado.
“It’s going to be close," he says. "So a couple of percentage points can make the difference.”
Ciruli says TV’s crown will start to slip, eventually. But it’s firmly in place, for the foreseeable future.
Yancey Strickler was eating at a restaurant in Brooklyn where he had been a regular for many years. His waiter was Perry Chen.
"Perry was an artist and someone who had a lot of interesting ideas," says Strickler. "He had this thought about creating a system where he could propose an idea to the world, and people would support it if they wanted to, but no one would be charged unless everyone thought it was a good idea."
Thus, Kickstarter was born, Strickler is CEO and Chen is Chairman. But it didn’t happen overnight. They went around pitching the idea to big investors for four years, facing rejection after rejection.
"It was terrible," Strickler says. "One guy said, 'There’s already enough art in the world why does there need to be more?'"
Listen to the full conversation from Marketplace's live show in New York by clicking on the audio player above.
Facebook announced earnings on Tuesday, and the key word was "billion."
$3.2 billion: Revenue for this quarter.
One billion views: A new milestone for videos.
And, perhaps most importantly, 1 billion users.
It's a number Facebook itself has already exceeded, and it's also the number that Facebook CEO Mark Zuckerberg set as a goal for Facebook-owned products like Instagram, WhatsApp and Messenger before Facebook attempts to "aggressively" monetize them and turn them into "meaningful businesses in their own right."
"This may sound a little ridiculous to say, but for us products don’t really get that interesting to turn into business until they have about a billion people using them," said Zuckerberg.
"It sounds a little ridiculous to me as well," says Nate Elliott, analyst at Forrester Research.
"The reality is Facebook didn't turn its primary property - the Facebook business - until it had about a billion users," says Elliott. "And I wonder if they're not using that as the benchmark for everything else they do."
But to understand just how "ridiculous" that benchmark is, you have to appreciate the sheer size of one billion. To do that, I called up my high school math teacher, Don Smith.
"It’s an incomprehensible number, Stan, it really is," says Smith.
The only way to comprehend it is to use a device to shrink it to something more manageable. For instance, consider an inch.
"A billion inches is over 15,000 miles," says Smith. Or about five trips from New York City to Los Angeles.
A billion users--that’s 120 times the population of New York City. To get that many users, you usually have to look at whole industries, not individual companies.
"For example, the toilet paper market is pretty universal, but nonetheless, it’s not a single supplier," says Roger Kay at Endpoint Technologies Associates.
There are a handful of businesses that sell physical products to a billion people - Proctor & Gamble, Unilever, and so on. But Facebook has the advantage of a product it gives away for free, which it can do because its digital. "So how many accounts do you want to set up? As many as you want," says Kay.
The disadvantage of a free product is that you don't make money selling it--instead, you typically have to sell ads. This quarter, Facebook made about $2.37 in revenue for each of its 1.35 billion users.
So which companies would interest Mark Zuckerberg?
How many products actually have a billion users? It depends on how you measure.
- Facebook didn't pass the billion-user mark that long ago, and its biggest acquisitions, WhatsApp and Instagram, have a ways to go at 600 million and 200 million active users, respectively.
- PayPal claims to process 10 million transactions a day, or a billion every two years. But they only have 157 million active accounts. Snore.
- Amazon has inconceivably huge sales, but a piddly 244 million user accounts. Forget it.
- As mentioned above, there are several huge conglomerates that reach billions of consumers - Procter & Gamble claims to serve nearly 5 billion people - but it's unlikely that they produce a single product that serves a billion people.
- Google, one of Facebook's biggest rivals, is a contender. It was one of the first sites to reach a billion monthly unique visitors, and YouTube is there too, but it's not clear how many individual products would interest Zuckerberg. For example: Gmail had only 416 million users the last time Google reported those numbers, in 2012. Google Drive only has 240 million users.
- Apple is close too. There are 800 million iTunes accounts, a decent measure of unique Apple users across their product line. The app store alone has clocked 75 billion downloads, and Apple just sold their 500 millionth iPhone.
There's one company we're fairly certain meets Zuckerberg's billion-user requirement by any measure: Coca-Cola. The company moves up to 1.9 billion servings a day, and its namesake beverage has been around for 128 years.
At press time, it wasn't clear if Zuckerberg would be interested in turning Coca-Cola into a meaningful business in its own right just yet.
The American fossil-fuel boom has spawned debates on what to do with this wealth. Ohio finds itself in the middle of one right now. The state’s Republican governor, John Kasich, is proposing to raise oil and gas taxes, to ensure the riches don’t all go to workers and companies based out of state.
“His view is, this is some sort of a rip-off,” says Ohio State economist Mark Partridge. “That these energy resources are transported out of the state of Ohio, used and refined in other places. And all the profit and wealth goes to these other places and it leaves Ohio.”
By most measures, Ohio’s taxes on energy production are low. They’re less than 1 percent, compared to 7 percent in Texas, 11 percent in Wyoming, and 25 percent in Alaska.
Kasich wants to raise state taxes to 2.75 percent or even higher. Drilling companies threaten to leave and go to low-tax states. But that hasn’t happened historically. A study by Headwaters Economics notes “the academic literature generally disagrees that tax competition is important to oil production.”
“The decisions on where to drill are not going to be determined by comparing different states,” says Michael Levi of the Council on Foreign Relations and author of "The Power Surge: Energy, Opportunity, and the Battle for America's Future." “They’re going to be determined on a location-by-location basis, on whether a profit can be made."
Governments that tax oil and gas taxes use the money in different ways. Some, like Norway, store it away for future generations in sovereign wealth funds. Other spend it on roads damaged by drilling, or invest in education.
Governor Kasich of Ohio wants to cut taxes, which spreads the energy wealth. But Mark Haggerty at Headwaters Economics worries that makes the state budget more dependent on taxes from fossil fuels – a boom and bust sector.
“In fact, what you’re doing is actually creating a less stable tax base for the state going forward into the future,” Haggerty says.
And the future is the whole question: how to take today’s riches and plant them in the right place.
An unmanned rocket that was supposed to ferry supplies to the International Space Station exploded just after liftoff Tuesday. That has drawn attention to NASA’s growing reliance on private space companies to do its legwork.
In 2008, NASA was preparing to retire the space shuttle. So it hired two private companies to resupply the space station: Orbital Sciences Corp., whose rocket just exploded, and Space Exploration Technologies (also known as SpaceX).
The initial price tag was $3.5 billion. The idea was to both to achieve the space agency’s goals at a lower cost to taxpayers, and to help foster the growth of the commercial space industry.
To do that, NASA wasn’t buying a new space shuttle.
“What they actually bought was cargo delivery services, just like you would buy services on Fed Ex or something like that,” says Frank Slazer, vice president for space systems at the Aerospace Industries Association.
Tuesday’s explosion may prompt concern over the increasing privatization of space. But industry watchers are quick to remind that NASA has always relied on the private sector.
“NASA’s never built a rocket,” says John Logsdon, who founded the Space Policy Institute at the George Washington University. “Rockets that NASA and the Air Force use have always been built by private companies.”
He doesn’t think the explosion says anything profound about this model of business.
“What it says is launching things into space is hard. And there will be unfortunately failures along the way,” he says.
The stakes are going to rise, though.
NASA recently hired Boeing and SpaceX to ferry astronauts to the space station in a few years. (Of course Boeing, and its heritage units, played an integral role in building the Apollo spacecraft.)
Meanwhile, the commercial space industry has grown globally. It’s now worth about $225 billion, according to Carissa Christensen, managing partner of the Tauri Group. That figure includes commercial satellite launches and operation.
“Putting that in context,” she says, “the total amount that governments spend globally is about $75 billion.”
NASA is getting ready to spend more. It’s now in the process of awarding the next round of cargo contracts.
The Fed stopped buying bonds to help the economy recover from its worst disaster since the Great Depression. So we're taking this opportunity to remember what happened 85 years ago today.
October 29, 1929, or Black Tuesday, was the most devastating crash in the United States stock market history.
The number of shares trading hands on the New York Stock Exchange that day set a record not broken for 40 years. And they were trading by hand!
The Red Cross claimed to deliver 17 million meals and stacks, 74,000 shelter stays and 7 million blankets and flashlights to victims of Hurricane Sandy. But a joint investigation from ProPublica and NPR not only casts doubt on the organization's own tracking, but shows a pattern of prioritizing public relations over aid after hurricanes Sandy and Issac.
The investigation found the Red Cross was unprepared for the disasters and botched the delivery of meals, supplies and other aid. Response was slow and meals were wasted, and in one case an official reportedly ordered volunteers to drive around empty trucks to give the appearance of relief.
In other news: More earnings are on the way today and there will be an official announcement from the Fed on quantitative easing. For now, here's what we're reading - and the numbers we're watching - Wednesday.$1.7 trillion
That's what the Fed has spent on bonds in just the third round of quantitative easing, or QE3. That's according to the New York Time's Upshot, which has seven charts laying out the program's history and future.74,829
As of Wednesday morning, that's how many people follow SugarString on Twitter. The site posits itself as a slick tech/lifestyle news site "presented" by Verizon, but the Daily Dot reported that corporate "presenters" have handed down a big restriction: no writing about domestic surveillance or net neutrality, two topics Verizon is very involved in.4
The number of meals in a day, according to Taco Bell. The restaurant is the first fast-food joint to offer nationwide mobile ordering via a new app launched today. Taco Bell made the announcement through a bit of social media jujitsu, the Verge reported, seemingly erasing its popular Twitter account to push users toward the app. In reality, the restaurant's tweets and 1.4 million followers are hiding the protected account @totallynothere.
Opponents of the Federal Reserves policy of buying bonds to stimulate the economy always worried about the end game: what happens to markets when the stimulus ends. With that time now upon us, it appears the turmoil has come and gone. So as central bank stimulus draws to a close, when will the economy be healthy enough for higher interest rates? Plus, good news for college seniors and their parents: The job market for 2015 graduates looks like the strongest in many years, with employers looking to make significantly more hires than last year, many of them at higher starting salaries. Those early findings are from Michigan State University's annual survey of employers. How ever, economists say the good news doesn't trickle backwards to people who graduated during the down years. More on that. And surveys show that many people choose a new car based on how connected the vehicle is to the internet (forget about zero-to-sixty, or initial quality or EPA mileage). We take a test drive to see how manufacturers are taking this information on board.
New college grads will find jobs more easily, according to a Michigan State survey of 5,700 companies.How much is hiring of new grads with bachelor’s degrees expected to rise in 2015?
One of China's largest electronics companies, Xiaomi, has a plan. They want to sell 100,000 phones in India every week. But there's a problem. A privacy problem.
Chinese smartphones have notoriously been banned or even put on a trade restriction lists because people are concerned that they might be carrying spyware installed by the Chinese government.
To combat this stigma, Xiaomi announced that they will be building a data center in India to ensure customers that they will not be storing their data on Chinese servers.
Molly Wood, Technology columnist at the New York Times, brought up an interesting point in this regard. She wonders if at some point, some country will declare themselves as the "Switzerland of data storage," in that this country will not honor requests from anyone to sift through your data.
However, there's only one slight problem with that, she says. What if we don't trust the manufacturers of the product either? What then?
Click on the media player above to hear Molly Wood in conversation with Marketplace Tech host Ben Johnson.
Car companies have been slow to adapt to a connected world. But they're starting to catch up, putting out cars that increasingly work like huge smartphones on wheels.
Qualcomm is a company built on smartphone chips. But lately, they've also been trying to get their chips inside cars.
"Fundamentally, the car is turning into a smartphone," says Qualcomm's senior vice president of business development Kanwalinder Singh. He's speaking from the passenger seat of an Audi A3, the first car with its own 4G connection.
With the help of Qualcomm chips, the A3 features more detailed Google maps, internet radio, and Netflix streaming for the kids in the backseat. Drivers can dictate Tweets using voice command, and the car reads incoming text messages out loud.
Singh says Qualcomm is giving drivers the features they want, and they're doing it in a safe way.
"We believe that driver distraction would actually be alleviated by providing these services," he says. "When all of this is embedded, like it is in this Audi, phone calls destined to you and your smartphone would actually come through the car's antenna, and play through the car's audio-visual system. You would interact through the car."
But some driving safety researchers say moving these features from the phone to the car won't make drivers any safer.
"I think they're really ignoring the powerful effect of cognitive distractions," says Linda Hill, who leads a team of driving safety researchers at the UC San Diego School of Medicine.
Hill admits voice command might cut down on visual distraction, preventing phone-handling drivers from staring down into their laps. But eye-tracking studies have shown that even when drivers have their hands free and their eyes on the road, their minds can still be elsewhere.
"A recent study looking at that found that voice-to-text increased driving errors more on a closed driving course than text-to-text did, shockingly," Hill says.
Hill does like the idea of building one bit of technology into cars, though: An app that disables phones in moving vehicles.
Good news for college seniors (and their parents): The job market for 2015 graduates looks like the strongest in many years, with employers looking to make significantly more hires than last year, many of them at higher starting salaries. Those early findings from Michigan State University’s annual survey of employers are in accord with other statistics showing that the job market has gotten stronger since the recession.
However, economists say the good news doesn’t trickle backwards to people who graduated during the down years. For instance, the Michigan State numbers show salaries for new engineers will be about $6,000 higher than they were for 2009 graduates.
"There is no way that those people who came in at 2009 are going to be at that salary," says Michigan State’s Philip Gardner, who conducted the survey. "It would take some pretty nice wage increases."
The Michigan State findings echo other recent data, says Brookings Institution economist Gary Burtless. So does the bad news for earlier graduates.
"There’s no doubt that entering the job market—either as a new college graduate or a new high-school graduate—at a time of high unemployment is not the best career move," says Burtless.
Those workers can see their wages stay relatively low for 10 years or more.
Shu Lin Wee, an economist at Carnegie Mellon University, has studied the process by which recession-era grads lose out, in a paper titled "Born Under a Bad Sign: The Cost of Entering the Job Market During a Recession."
Her numbers show that when jobs are scarce, young people don’t get to hop around from career to career as much. Finding the first job is enough challenge.
"Even if you manage to find a job," she says, "and you realize that you’re not very good at that particular career, now you have problems switching jobs.
So you develop fewer skills and don’t get experience with other fields that might be a better fit.