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Quiz: Reading, writing and citizenship

Fri, 2015-01-30 07:44

A new state law requires high school students to pass the U.S. citizenship test in order to graduate.

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PODCAST: You've got mail

Fri, 2015-01-30 03:00

Low oil prices just sucked some life out of GDP. More on that. Plus, with gas prices nearing $2 a gallon, mass transit authorities are worried about ridership dropping. But gas might not be the deciding factor when it comes to choosing bus or train. And a new postmaster general takes over the U.S.P.S. We look at the challenges ahead of her.

I submit before the court: Exhibit Smiley Face

Fri, 2015-01-30 02:30

Ross Ulbricht is currently on trial for allegedly running the underground marketplace Silk Road. Thus far, there's been a lot of intrigue about who exactly was involved in running the site, and it hasn't been all smiley faces. Well, sort of.

Recently, the prosecutor read a text that ended with a smiley face in court. How would you say that? Well, the prosecutor didn't. Ulbricht's lawyers objected, and the judge agreed that the emoticon was important. 

So should emojis be factored into understanding the intent of communication? Anne Curzan, English Professor at the University of Michigan, certainly thinks so.

Click the media player above to hear more.

New USPS boss faces old problems

Fri, 2015-01-30 02:00

The United States Postal Services prides itself on its ability to handle snow and rain and heat – and also “gloom of night,” but it’s had a tougher time with employee pensions and health benefits.

Saturday is Patrick Donahoe’s last day as postmaster general. He has spent his entire career – almost 40 years – with the U.S.P.S., and his successor, Megan Brennan, is likely to push for many of the reforms Donahoe has.

The postmaster general makes about $275,000 a year, but earns it, say people who follow the agency.

“It should come with free therapy sessions,” jokes David Hendel, an attorney with Husch Blackwell, who specializes in Postal Service contracting. “It’s a huge enterprise.  If it was a corporation, it would probably be a top-25 company.”

Bureaucracy may be one of the biggest problems that besets the agency, and presumably the incoming postmaster general knows that. Brennan started out as a letter carrier in Lancaster, Pa.  According to Hendel, the head of the Postal Service has a lot of people to please.

“You have got so many different constituencies, it is just so hard to gather up,” he says. “And couple that with limited powers.”

There are very few decisions you can make without approval, says Gene Del Polito, who heads a trade group called the Association for Postal Commerce. “When you are postmaster general, you really have 535 members of your board of governors – they are all members of the U.S. Congress, and they all think they know your job better than you do.”

In a farewell speech a few weeks ago, Donahue said lawmakers need to find new ways to build consensus. “The narrow interests can’t continue to get in the way of the broader national interest,” he said.

Donahoe singled out retiree healthcare benefits. The Postal Service is required to pre-fund them – something it has not been able to do for years now. And according to Hendel, pensions are a growing problem. “People are living longer and longer lives, and therefore, you can’t really put enough away today for the liability later, or they haven't," he says.

On the one hand, there is this expectation the U.S.P.S. should be run like a business, but Rick Geddes, who teaches policy analysis and management at Cornell University, says the postmaster general’s lack of autonomy has kept the organization from being as nimble as it has needed to be.

“We need to have fundamental postal reform at the legislative level that allows the Postal Service to adapt better to the realities of the communications marketplace,” he argues, predicting that will be something the new postmaster general will push for, just as her predecessor had.

New brands take a chance with Super Bowl ads

Fri, 2015-01-30 02:00

More than a dozen brands will run Super Bowl ads for the first time this Sunday. Look for brands like Skittles, Weight Watchers, and Always, maker of feminine hygiene products, to make their game-day debut. That’s the most newcomers in about 15 years.

NBC finally sold out of Super Bowl ads four days before the game. In 2014, Fox sold out two months before kickoff.

“Due to some of the controversy over the past year with the NFL, there were probably some brands that have traditionally been Super Bowl advertisers that decided maybe this was a good year to not get involved,” says David Griner, digital managing editor at Adweek.com.

Watch the Always commercial here:

Silicon Tally: Earthquakes, Made in the U.S.A.

Fri, 2015-01-30 02:00

It's time for Silicon Tally! How well have you kept up with the week in tech news.

This week, we're joined by Kyle Wagner, a sports stats fan and a writer at Deadspin.

The online version of this week's Silicon Tally quiz is forthcoming.

Cheap gas could cut into transit ridership

Fri, 2015-01-30 02:00

With gas prices as low as $2 in some parts of the country, mass transit providers are starting to worry that their ridership numbers will also dip.  

Use of public transit in the U.S. is at levels not seen since the 1950’s — That’s according to the American Public Transportation Association.

High gas prices are a part of that growth, and now that costs are falling some cities fear a drop-off in ridership.

So far that has not been the case in Chicago, at least.

"In the two months that fuel prices have been well below $3 we have not seen any significant shifts on either the rail side or the bus side," says Brian Steele, a spokesman for the Chicago Transit Authority.

Steele points out that gas is just one cost associated with driving a car, in addition to parking costs, insurance costs, maintenance costs. 

But others question whether public transit use has really gone up as a percentage of population growth.

"Think of it in terms of inflation: has mass transit ridership, in terms of a percentage increased each year, kept up with inflation? No, it hasn't come close to it," says Ray Mundy, Director of the Center for Transportation Studies at the University of Missouri—St. Louis.  Despite increases in ridership, Mundy says transit still only accounts 5 percent of trips in metro areas.

Super Bowl Sunday's MVC: Most Valuable Commercial

Fri, 2015-01-30 01:30
2.6 percent

Gross Domestic Product expanded at a rate of 2.6 percent in the fourth quarter, as reported by the WSJ. That puts GDP growth for 2014 at 2.4 percent, a below average rate compared to previous growth periods.

9 percent

That's how far Alibaba's stock tanked Tuesday following a solid, if slightly underwhelming, quarterly earnings report. The fall has much more to do with a government report leaked Tuesday accusing Alibaba of being lax on illegal practices from vendors. Quartz has the full story.

15 years

More than a dozen brands will air their first Super Bowl ads this Sunday, the highest number of newcomers in almost 15 years. Look for brands like Skittles, Weight Watchers, and Always, maker of feminine hygiene products, to make their game-day debut. 

70

Speaking of Super Bowl commercials, 70 is how many ad slots NBC had to sell for this year's game. The ads — which cost about $4.5 million for a 30-second spot — finally sold out this week, AdAge reported. Post-game and digital slots are all filled too, but there's still a little time to buy to a pre-game spot if you have the cash to spare. Here's a roundup of the all the ads confirmed so far.

$37,500

That's what an ad in the first Super Bowl cost in 1967, $266,000 adjusted for inflation. Slate has a retrospective of the most iconic ads over the game's last 48 years.

4,500

The number of users currently on This., a new social network that is, based on its coverage in the New York Times, the new Ello. The invite-only site promises a pared-down social media experience wherein users may only share one link a day and nothing more.

4 purchases

That's how many purchases are needed to ID you, despite anonymous credit card data. As reported by Reuters, scientists at MIT worked with metadata (data that only identifies time and place of purchases), and then looked at public information like non-anonymous purchases and social media to try and match people with their credit card activity. In some cases, it took as little as two purchases by a person to positively ID them.

Guess everything costs more in New York City

Thu, 2015-01-29 15:03

We are, as you know, a show about business and economics, so we try to find the money in everything we do. But occasionally we struggle to find an angle.

Take, just for instance, the blizzard earlier this week. I mean ... can you really do a "what's the cost of snow" story?

Turns out, you can.

Over the past 12 years in New York City, snow and ice removal costs have averaged about $1.8 million per inch.

This according to a recent post-storm report from the City Comptroller.

Value of a dollar in Indiana's Medicaid expansion

Thu, 2015-01-29 09:54

A deal between Indiana and the federal government to expand Medicaid provides a telling glimpse into how flexible the Obama Administration is willing to be to get more people on the healthcare insurance rolls. Under the agreement reached this week – which could serve as a model for other states – monthly premiums will be at least $1.

Doesn’t sound like much, right? But that dollar is enormous to people who are philosophically opposed to the Medicaid expansion. It’s also huge to those whose incomes are staggeringly low.

Penalties on the way for the uninsured under Obamacare

Thu, 2015-01-29 09:53

According to the new numbers from the Department of Treasury, 2 to 4 percent of taxpayers will owe a penalty for not having health insurance last year. That's approximately 3 million to 6 million households. But who has to pay — and what happens if they don't?

The penalty this tax season is $95 per adult — about half that per child — or 1 percent of household income, whichever amount is  higher. The fines will also keep going up. Not having insurance in 2015 will cost $325 per adult or 2.5 percent of household income. In 2016? 2.5 percent or $695 per person and tied to inflation in the years that follow. 

It's unclear how many will actually have to pay up, however. Many groups are exempt from the penalty and the IRS' ability to enforce could be limited, especially after recent budget cuts.

For more, listen to the story in the audio player above.

McDonald's orders a fast-food quick-fix

Thu, 2015-01-29 09:51

McDonald's Don Thompson announced this week he'll resign after two years as CEO — two years that were not very successful for the company. Sales at McDonald's roughly 14,000 U.S. restaurants have slumped.

Raghu Manavalan/Marketplace

Sara Senatore, a research analyst with research firm Sanford C. Bernstein, says part of the problem is competition from more "wholesome" competitors, so-called fast-casual chains like Chipotle. “The food is better quality and tends to be higher priced as a result. There's a real emphasis on provenance, sourcing, local farms,” she says.

McDonald's also faces image problems with customers who just want a good deal on lunch. Carla Norfleet Taylor at Fitch Ratings says that's another area where competitors are winning. “Whether it’s Burger King with '2 for $5,' 'mix and match,' 'choose what you want,' [they’re] just being a lot more creative than what we're seeing with McDonald’s, I think, on the promotional front,” she says.

Incoming CEO Steve Easterbrook is currently McDonald's chief brand officer. He's spearheaded efforts to boost marketing and allow diners to more easily customize their orders. He previously led a successful turnaround in McDonald's United Kingdom business. He helped dispel worries about food quality, and even took part in a televised debate about the fast-food industry.

Still, Sara Senatore wonders why the chief brand officer will face a brand crisis when he takes over the corner office. "He should've had some imprint when there does seem to be an issue with brand resonance,” she says.

Easterbrook takes over on March 1, 2015.

What the U.S. has gained from sequestration

Thu, 2015-01-29 09:45

Since the automatic spending cuts known as sequestration started in 2013, the budget deficit has gotten smaller. But it’s still hundreds of billions of dollars. Sequestration just nibbled at it.

“Sequestration has been saving us between $60 [billion] and $90 billion per year,” says Marc Goldwein, senior policy director of the Committee for a Responsible Federal Budget. “Now, that’s not enough to solve our debt problems. But it’s not nothing, either.”

Congress eased some of sequestration’s sting during the past two budget years. But it still bit hard enough for people like Emily Holubowich of the Coalition for Health Funding to notice. Under sequestration, she says, Congress sacrificed planning for medical emergencies like Ebola.

“They look and say, 'Well, where can we cut?'  We don’t need to invest in planning and preparedness. And it’s when you let your guard down that we see something else happen, like Ebola,” she says.

At the Pentagon, sequestration forced cuts in training. It meant deferred maintenance, and it limited pay increases.  Jim Savage, who teaches politics and public policy at the University of Virginia, doesn’t think much of sequestration.

“When you rely upon across-the-board measures, it’s usually the sign of weak management," he says. "It’s also another way of sort of avoiding political accountability – to make the hard choices.” 

But, Savage says, sequestration will force some hard choices on Congress this year. Lawmakers have already cut the low-hanging fruit.  There aren’t many spending cuts left that everyone can agree on. And remember, sequestration is scheduled to last until 2021. 

Fake snow is a genuine business plan for ski resorts

Thu, 2015-01-29 09:23

Across the West, skiers and winter resort operators pine for a blizzard like the one that blanketed the Northeast this week. A number of resorts in California, Oregon and Washington have had to temporarily or permanently suspend operations this season due to low snowpack. Things are so topsy-turvy, trail groomers in Anchorage, Alaska, had to resort to snowmaking to be able to open in time for the winter holidays.

"They don't need it in Cape Cod. They need it here in Washington," Kevin McCarthy, general manager of White Pass Ski Area,  says with a chuckle.

The snowpack at his resort in Washington State's Cascade Mountain Range is about 25 percent of normal, McCarthy says, a common predicament this winter up and down the West Coast. For some resorts, this is the second or third tough year in a row. Unreliable winter weather is increasingly forcing ski areas to rely on expensive snowmaking machines to remain viable.

"For three weeks we made snow, and it has been a lifesaver, tying the lower area to the upper mountain, which has enough natural snow to operate," McCarthy says.

A stretch of unusually balmy weather caused headline writers and outdoor enthusiasts in the Pacific Northwest to nickname the normally snowy month of January  "Juneuary." Skiers at White Pass, where the terrain ranges from 4,500 to 6,500 feet elevation, had to look out for rocks, ice sheets and brown patches as they navigated the lower slopes.

But snowmaking machines aren't a cure-all. The White Pass Ski Area machines were shut down this week because it was too warm for them to work.

Still, McCarthy credits his small collection of "snow guns" for his ability to open on time and stay open. "Every time we go by these, we want to give them a hug," McCarthy says.

Snowmaking systems are not new in the ski industry. Resorts in the Midwest and East have relied on snowmaking for decades. Farther West there are more holdouts.

"The challenges of the weather, particularly in the Pacific Northwest, are causing the resorts to rethink their reliance only on natural snow," says Joe VanderKelen, president of SMI Snowmakers. The Michigan-based company is one of the biggest purveyors of snowmaking equipment and services.

"A lot of folks that said, 'Hey Joe, you're a nice guy, but jeez, we'll never have snowmaking at our mountain because you know we actually have too much snow' are now circling back," VanderKelen says.

Resort owners recognize the threat of climate change, because they're seeing it, VanderKelen says. Spring now arrives more than two weeks earlier in the Lake Tahoe resort region than it did 50 years ago, according to a NASA study cited by the industry group Protect Our Winters.

 VanderKelen says he tells resort operators that snowmaking gives them a chance to weatherproof their businesses. "There are literally over 100 resorts in North America that would have gone out of business without snowmaking, maybe 200," he says.

Customers may spend from $50,000 for a single snow gun and pumping station to $50 million to bring snow to an international resort such as Whistler in British Columbia, according to VanderKelen. And the expenses are ongoing. Ski industry consultant Dave Belin of RRC Associates in Boulder, Colorado, says the cost of water, energy use and labor make snowmaking a pricey proposition.

 "It really comes down to: Can you operate without it?" Belin says. "Most ski areas have decided they need it to maintain their operations from the beginning of the season all the way through to the end of the season."

Water availability and scarcity present additional challenges, especially for ski areas in drought-stricken parts of the West. In southern Oregon, Mount Ashland Ski Area management say they have looked into snowmaking systems to augment the snowpack at their oft-closed slopes. But they found the equipment too costly and say the ski area lacks an adequate water source to create manmade snow.

 "There are some big hurdles," says John Gifford, president of the Pacific Northwest Ski Areas Association. "Not only do you have to have water, you have to have low temps and low humidity" to make snow.

 

Change comes to Facebook one hire at a time

Thu, 2015-01-29 08:53

Before new Facebook employees get their computers, they go see Maxine Williams, global director of diversity at Facebook. Facebook says 85 percent of the tech employees at the company are male, and 53 percent are white. Williams has been charged with changing that, since she was hired a year and a half ago.

One of Williams' jobs is finding new talent for Facebook. “We have people now whose whole job is to think about how we can contribute to developing the pool for the future."

There are practical reasons behind Facebook's diversity mission, the value proposition isn't hard.

“We want to have as many different ways of seeing things,” Williams says, “and that’s what you miss when you don’t have enough diversity.”

And that can help Facebooks’ bottom line. “It will improve not just what we build but then how we serve people. Because we will understand people better," she says.

If Facebook can do that, Williams is convinced that the company will be more successful and create better products.

"There's a ridiculous amount of value in having more people that look like you, because now this place starts to belong to you," she says. "You see yourself in the fabric of it. You are now a protagonist in this story, and we all want to be protagonists in our story ... So it becomes our story when there are more of us."

 And that’s something Williams "likes."

Quiz: Women win the diploma race

Thu, 2015-01-29 07:19

Women earn more degrees than men at most levels of education, according to the Census Bureau.

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The fight over 529s is more important than you think

Thu, 2015-01-29 07:01

After a confident and sweeping State of the Union address focused on "middle-class economics," President Barack Obama found himself pivoting away from part of it Tuesday.

After an uproar over Obama's proposal to dismantle the college savings plan known as the 529, the President walked it back and abandoned the plan

How did one little program suddenly become so important? Here's what you need to know:

What's a 529 anyway?

Named for the relevant section in the tax code, a 529 college savings plan is similar to a 401k or IRA. It's a  a state-offered investment plan, often a mutual fund, set aside to cover college expenses for a set beneficiary.

The account grows tax-deferred, and 529 funds used for tuition, fees, books, supplies and in some cases room and board are tax-free. Some states also let the account holder write off contributions to 529s, so there are tax breaks going in both directions. Nearly every state offers them.

Who uses 529s?

The Obamas, for one, but they're part of a small group. A 2012 Government Accountability Office study found less than 3 percent of families have 529s. Even among households expecting education expenses or prioritizing college saving, 529s were rare. As of last summer, there were fewer than 12 million accounts nationwide, according to the College Savings Plans Network.

The families who use the plan are wealthier than those who don't. The GAO study found median income among families with 529s or the similar Coverdell plan had a median annual income of $142,400, and nearly half of them made more than $150,000 per year. That group was likely to see a median tax savings of $3,132, while families making less than $100,000 saved $561.

Why did Obama want to get rid of it?

It's part of his broader tax proposal laid out in the days leading up to the State of the Union and focused on the middle class. Obama's 2016 budget would get rid of the tax breaks from 529s and use the money to expand the American Opportunity Tax Credit.

That program applies only to households making less than $180,000 per year, and it can cut taxes by up to $2,500 per year or give households that don't make enough to owe taxes up to $1,000 in refunds. Obama's plan would up the refund and make the credit available to part-time and fifth-year college students. 

So what's the problem?

Prominent lawmakers on both sides of the aisle spoke out against the change in public and private. Speaker of the House John Boehner said the president was scuttling a plan that already helped middle-class families, and a Republican representative reintroduced bipartisan legislation to expand 529s.

House Minority Leader Nancy Pelosi also urged the White House to drop the 529 proposal, which it did Tuesday, calling the furor a "distraction." An administration official told the New York Times other changes to the tax code would be able to fund the plan instead.

Why does it matter?

The proposal's undoing was, in part, that the definition of "middle class" is fluid. Any benefits to consolidating 529s into other tax credits aren't nearly as clear-cut as, say, as raising taxes on the super-rich and giving everyone else a break.

"The soaring cost of a college education makes even a six-figure income seem small," Russell Berman wrote in the Atlantic, adding that the small group benefiting from 529s might be doing well financially, but they're not all 1-percenters.

That's true for a lot of the little breaks in our complicated tax code, and cutting any of them can easily feel like a blow to the middle class — whoever that is.

None of this bodes well for  bipartisan tax reform. Writing for the Brookings Institution, David Wessel said it best: "It turns out that a lot of people prefer complexity to simplicity if simplicity means doing away with a tax break they get."

PODCAST: How do you solve a problem like Amazon?

Thu, 2015-01-29 03:00

Over the the last week, 43,000 fewer people had to file for unemployment benefits, which is a good sign. More on that. Plus, the first of the big oil companies to report their latest round of results is Shell. The Anglo-Dutch company managed to increase its profits even with the price of gasoline we've all been seeing. CEO Ben Van Beurden says he's cutting spending by $15 billion dollars over the next three years to adjust. But, in a controversial move, Shell will keep expanding off Alaska. Also later today, Amazon will report its sales and profits. The internet giant's stock has taken a beating from investors frustrated with the company's heavy spending and not so heavy profits. 

NASA's new satellite attracts data hungry businesses

Thu, 2015-01-29 03:00

SMAP stands for Soil Moisture Active Passive – a reference to the sensors on board. The satellite will scan the Earth’s soil for moisture down to about 5cm of depth ... once it gets aloft. Thursday's launch was scrubbed because of poor wind conditions; NASA will try again on Friday.

Bradley Doorn, program manager of NASA’s Water Resources Applied Research Program, says the mission has several primary purposes: “One largely is drought, and understanding drought better but also things like flood forecasting and weather forecasting. The information is unprecedented.”

The $916 million, three year mission has attracted the interest of hundreds of government agencies, private sector companies, environmental groups, and universities — 45 so-called “early adopters” have already started working with NASA to prepare to use the satellite’s data. 

The City University of New York and the New York City Department of Environmental Protection want the data for management of the city’s drinking water supply. The World Food Program plans on using the data for flood forecasting. Doorn says John Deere, Environment Canada, and Willis Re, a reinsurance company, are also preparing to use the soil moisture data.

Doorn says it isn’t unusual for NASA to partner with other groups, but NASA has been trying to get organizations involved earlier on in the process. “Soil moisture is such a critical measurement that many users readily see as needed, so they immediately are drawn to it. There are a lot of people hungry for data, and hungry for this type of information,” he says.

SMAP scans the Earth’s surface with microwaves, which can slightly penetrate soil, and interprets the reflected waves for signs of moisture. The observatory also scans the Earth’s natural microwave emissions. 

And if you're curious about what SMAP will hear while it's out in the atmosphere, NASA's soundcloud account has you covered:

Post-bankruptcy Detroit's a bargain for corporations

Thu, 2015-01-29 02:00

2014 was a big year for Detroit. It was the year the city emerged from bankruptcy, shed a crippling load of debt and saw a renewal of interest from outside investors.

Despite the positive buzz, 2015 will be another year of challenges for the motor city, as it seeks to continue creating jobs, while also slowly starting the process of rebuilding neighborhoods.

But, if you’re looking for proof that the “Detroit brand” still sells, take a look at Shinola. The epitome of hipster chic, the company makes thousand-dollar watches and high end leather goods.

Shinola moved to Detroit in 2013 with the idea of tapping into a kind of collective pining for America’s blue collar manufacturing past. Its big idea was that “Made in Detroit” would sell better than “Made in America,” and it was right.

"Often it is positioned that Shinola has done something wonderful for Detroit,” says Shinola CEO Steve Bock. “The reality of the situation is that Detroit has done a wonderful job of helping Shinola get off the ground; we are very, very happy with our decision to come here."

Shinola employs 350 people, with 260 actually based in Detroit. The company has plans to add 5 to 6 new stores in 2015. Following the resolution of the city’s Chapter 9 bankruptcy, many investors and corporations now see Detroit as a bargain.

Despite all the positive trends, Detroit’s unemployment rate still is still hovering around 14 percent—roughly twice the state average.

"There's no magic jobs fairy and so someone's got to be able to create jobs and to create jobs you need capital,” says Crain’s Detroit Business Editor Amy Haimerl. Unlike previous “Come to Jesus” moments for the city, this time she says Detroit can’t ignore the need for investment in small and medium-sized businesses.

"In the past, it was always about tax breaks and get the big company to come in from somewhere else,” she says. “That's wonderful, but we're also focusing on the other end of jobs creation which are neighborhood businesses, small businesses which may only hire 3 or 4 people at a time."

Job growth is one thing, but for many Detroiters the first step forward is as simple as streetlights — close to half of which haven’t worked in years. This has been a particular problem for restaurants and shops.

“So a lot of businesses had to cut down their hours, because after a certain time there was no business,” says Esteban Perez. Perez is manager of La Terezza Mexican restaurant in Southwest Detroit.

Detroit is now turning on some 500 new LED streetlights per week. And Perez says other, small but big things are happening, too. Trash is getting picked up, police response times are decreasing, and things he says, just seem better.

“You know we're all coming together as a city,” he says. “So right now, Detroit is the place to be, whether you want to open up a business, whether you want to buy a house."

In terms of housing, blight remains a huge challenge for Detroit. As many as 40,000 properties are slated for demolition. The city’s land bank is auctioning the few that remain salvageable, and it just announced a new program to sell vacant homes to city employees and retirees at half price.

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