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Black-owned funeral homes face existential challenge

Tue, 2014-11-04 02:00

The funeral, or “death-care” industry, brings in an estimated $20 billion a year in the U.S., but the industry is changing. There’s been a shift towards chain funeral homes, and more people are choosing cremation. In some U.S. cities, that has black-owned funeral homes particularly worried about staying above ground.

Bowman and Young Funeral Home on the west side of Dayton is straight out of the year it was built, 1963: low ceilings, retro colors. Dwayne Bickham has been working here since he was 17 years old in 1979. He says the area was thriving when he was a kid.

“People in this community had jobs, we had Frigidaire, we had Inland,” he says. Now those factories are long-gone, and a lot of people have left the neighborhood, too.

“The children and grandchildren don’t live in Dayton,” says funeral director Keith Young.

Lewis Wallace/WYSO

These days, the people shopping for a funeral service could live hundreds of miles away; they’re literally phoning it in from California or Florida or just the suburbs. Or, they’re going online instead of calling the local funeral home they grew up with.

Enter the competition: funeral home chains, which went through a big boom and a spate of buy-outs in the 1990's, and now seem to be resurgent. They’ve got the internet on lock, and TV ads in prime spots. One chain runs ads in Ohio depicting it as family-owned despite the fact that the owners live in Kansas and have chains across Ohio, including several in Dayton.

Meanwhile, black undertakers are in decline: in one survey of mortician schools, the percentage of black students went from 27 percent seven years ago to just 15 percent in 2014. As the demographics and populations of black neighborhoods have changed, funeral directors have been struggling to adapt.

“They have had to either relocate their business to where some of their clientele has moved, or re-market their business to immigrant families,” says Suzanne Smith, a professor at George Mason University and author of “To Serve the Living: Funeral Directors and the African American Way of Death.”

Young says he’s cut prices and tried to have more of a web presence in response to the competition. And he and some local ministers are trying to convince people to stick with the neighborhood undertaker on principle. He says some of his clients have been surprised by the final price tag at the chains across town.

“People get over there and find out that it’s not what they said it was gonna be. And they come back to the west side of Dayton,” he says. “They come back home.”

African-American funerals are often called homegoings, and Young says he hopes the next generation will keep coming back home for their funerals.

 

 

 

 

Low-wage workers stuck with non-compete agreements

Tue, 2014-11-04 02:00

If you’re a CEO or a senior manager, you may have signed a non-compete agreement, which would limit or restrict your ability to work at a competing company for a pre-determined period of time after leaving your job. 

But in the last couple of decades, an increasing number of American workers are being asked to sign such deals, including service-sector and low-wage employees.

“We’ve seen them expand to jobs like yoga instructors and camp counselors,” says Orly Lobel, a professor at the University of San Diego School of Law and author of the book “Talent Wants To Be Free,” which addresses the subject.

Take the case of Danny Davies, who worked at a Jimmy John’s sandwich shop. He says when he got hired, he was required to sign a non-compete agreement that limited his ability to work at any other sandwich restaurant.

“They ask everyone to sign it when you get hired,” says Davies, who hasn’t worked at Jimmy Johns since February 2014. And while neither Davies nor his colleagues initially took the agreements seriously, Davies says their views changed once they considered leaving the sandwich shop and finding a job elsewhere.

"I’ve known people that have done this: they start working somewhere…And keep this job secret, just in case,” says Davies, alluding to the concern that the franchise owner of the sandwich shop might pursue legal action against them.

There have been several stories of employees who have been restricted from taking other jobs because of non-compete agreements—from a children’s camp counselor to a physicist. Jimmy John’s is currently facing a class-action lawsuit over its non-compete agreements.

One of the rationales for requiring the non-competes from lower-wage workers is that they may have received a lot of training in their jobs, and if they leave to work at a competing company, that may be an unfair advantage. But Lobel says non-compete agreements have spread beyond even that thinking.

"I teach cases about welders who receive so little training, but they still can’t move to a competitor,” says Lobel.

Lobel says part of the reason for the expansion of these agreements is a shift in business culture. “Today, it’s really human capital that is what creates value," Lobel says. "And companies have this impulse that the way they’re going to keep people is by cutting off their outside opportunities.”

“Non-compete law is essentially state law, and it varies somewhat significantly among states,” says Michael Rosen, a partner at the Boston law firm Foley Hoag LLP. 

Rosen specializes in non-compete agreements in Massachusetts, which has a relatively permissive non-compete law. Meanwhile, California is one of the most restrictive states. It does not recognize the agreements except for owners of businesses. In the summer of 2014, Massachusetts’ state legislature considered amending non-compete rules, but the initiative failed.

Rosen says there is a place for non-compete agreements in business even for low-level workers, such as those at a high-tech firm with access to confidential code.

“Generally, the legitimate interests that would justify enforcement are…protection of trade secrets or confidential information, and protection of good will,” Rosen says. “But in terms of low-skill areas where confidential information and good will are really not in jeopardy, I think it’s difficult to justify asking folks to sign a non-compete."

Dell reboots as a private company

Tue, 2014-11-04 02:00

A year ago, tech CEO Michael Dell paid almost $25 billion for a computer maker … called Dell. He bought enough shares to take the company he founded private, meaning no quarterly earnings reports. At the Dell World conference in Austin, he’ll show off a reboot-in-progress. 

One area where Dell wants to grow is data services: Helping corporate clients manage “the cloud.”

There are pitfalls to a cloud strategy, says James Kelleher, an analyst with Argus Research. "Number one, it’s not enough to announce that you’re a cloud company," he says.

Simply providing software tools isn't enough either, he says. As companies like IBM have learned, "you need to actually provide the cloud facility." Competitors like Amazon have had early success with that strategy. 

Meanwhile, Dell can finance its transition by selling more computers. Tablets have eaten into traditional PC sales, but for now, Dell’s are strong

"That’s really the million-dollar question here, for every technology company," says Matt Eastwood, an analyst with the tech consultancy IDC. "How quickly will that traditional profit pool begin to dry up, and how quickly will those new profit pools develop and emerge?"

As a private company, Dell won’t have to worry about the stock market freaking out if it doesn’t show results every quarter.

Priceline's mission: Be bold

Tue, 2014-11-04 02:00

William Shatner has been Priceline’s spokesman for years, but the company is not following the script of Shatner’s Star Trek days. 

“It’s not just William Shatner, but the whole company has to boldly go where no travel company has gone before," says Gary Leff, who writes the viewfromthewing.com blog. "They haven’t quite figured out how to teleport themselves into the future of online travel."

Leff says Priceline's third quarter earnings report will give a glimpse of the success of the company's strategy of growth through the acquisition of other companies.  

Priceline seeks out new companies to buy, like the dinner reservation website Open Table.

Basically, Priceline is trying to be your one stop shop for everything; your plane ticket, hotel and restaurant reservation. 

“Priceline’s really trying to expand how much of the wallet it can capture from the consumers and keep them on a Priceline-branded website," says Adam Fleck, director of consumer equity research at Morningstar.

Perhaps not a bold strategy, but enterprising. 

 

The unexpected budget lines

Mon, 2014-11-03 11:45
To mark the turn of this millennium, developers in Britain once spent something close to $1 billion to create a huge dome outside London. When the dome’s business model crumbled, about $160 million in government money had to be put into the bubble-shaped venue to keep it solvent. That is a lot of money to spend on infrastructure for a New Year’s Eve party, and many Britons thought it was a boondoggle.    That said, at least it was money spent for something that was supposed to be fun.   The federal government in the U.S. is about to spend extra money next year, but the word “fun” has absolutely nothing to do with it. Experts say the federal budget is likely to be punctuated with new, previously unexpected spending to stop the terrible Ebola virus.   With these mid-term elections, the expectation is that Republicans will emerge with more sway in Congress. Following conservative principles, this might suggest that that government budgets would be in for some new trimming.    The threat of Ebola could push things the other way. Stan Collender watches the federal budget with the practiced eye that some handicappers train on horses. Collender is now a senior VP at Qorvis MSLGroup, but in another life he was a staffer on both the House and Senate budget committees.   He points out that after cuts in recent years for public health programs - including new vaccines for infectious diseases - the National Institutes of Health will get more money. So will the Centers for Disease Control. But it won’t stop there. “Transportation, Homeland Security, Education, Health and Human Services are all going to find some way of being involved in the Ebola fight,” Collender said. And don’t forget the Department of Defense, which has already deployed soldiers in West Africa to help fight the disease closer to the outbreak. “I expect there will be pockets of Ebola money all over the domestic side of the budget just to deal with it in every way possible.”   In a perverse way, this extra spending could produce a boost to the U.S. economy. First, there is the new spending itself. Gross Domestic Product counts money that changes hands and money will change hands, from taxpayer to the anti-Ebola fight. And if the spending actually works, there will also be an incalculable multiplier effect. Imagine the human and economic benefits if these augmented government programs keep people from getting sick.   It pains me to have to type the word “if” in the middle of that sentence.

Why Taylor Swift broke up with Spotify

Mon, 2014-11-03 11:00

Music superstar Taylor Swift and her label Big Machine Music have pulled her catalog of songs from the music streaming service Spotify.

Swift’s single “Shake It Off” is currently the most played song on the radio, according to Billboard. And Spotify says Swift’s music was being streamed by 16 million of its users in the past month. The service has 10 million subscribers and and 40 million active users globally, according to Spotify.

Spotify made the announcement on its blog, in a cheeky note that asked Swift to come back. 

Earlier this year, Swift wrote an op-ed in the Wall Street Journal, saying in part that artists should have more control over the price value of their albums. Rolling Stone reported Monday that the label and the artist did not negotiate with Spotify prior to pulling the songs off the service, and that the move may be tied to the label trying to increase its value ahead of a possible sale. 

The clout that Taylor Swift and her label have over Spotify is a sign of an ever-shifting music industry landscape. Downloads have flatlined, album sales are down and streaming is up. But streaming services are dependent on big-name acts, says Karen Allen, a digital music consultant. 

“The problem is that if you don’t have popular music on a streaming service that you’re asking people to pay for, then they don’t want to use it,” Allen says. “Because the promise of a streaming service is… it’s unlimited access to everything. When you don’t have a huge artist, it’s less attractive.” 

On mobile phones, streaming audio is the second most popular thing to do, after streaming videos, says Roger Entner, a telecom analyst and founder of Recon Analytics. But streaming services, such as Spotify and Pandora, face a paradoxical problem. 

“Consumers aren’t willing to pay that much for songs any more,” says Entner. “They’re not willing to pay say more than $10 a month, if even that.”

There’s an expectation for online songs to be free, says Allen. “That has been a challenge for all streaming services, to find that magic offering for users, where it’s worth paying for and they’re also getting value.”

Spotify charges $5 or $10 a month. Or, it's free if you don’t mind ads. But the company pays artists, on average, just $.007 per stream. That’s despite the fact that the music industry has huge leverage over Spotify.

“There’s only three major labels left on the planet. They have tremendous leverage," says Casey Rae, vice president of policy and education at the Future of Music Coalition, which represents the interests of musical artists. 

“So, I think that in some instances you’ll see these superstars using their clout as leverage, and sometimes that might mean taking your toys and going home,” says Rae. But smaller artists don’t have that luxury and have to go where the fans are, Rae says, which increasingly is on online streaming music services. 

French ad giant Publicis to buy digital firm Sapient

Mon, 2014-11-03 11:00

As long as there have been ad agencies, there have been ad agency acquisitions — like the attempt to buy Don Draper’s firm on "Mad Men." Here's how the scene went:

"PPL is being sold and us along with it," Don Draper told partner Bert Cooper. "Oh," Cooper replied. 

"So you knew about this," said Draper. "No," said Cooper. "But it makes sense." 

Agency acquisitions make sense in part because they let companies buy expertise.

"When I was working in the industry, what we saw was advertising agencies buying smaller companies like direct marketing companies," says Kim Sheehan, a communications professor at the University of Oregon who worked in advertising in the 1980s. "What I think we're seeing with the Sapient purchase is kind of the same thing."

As one of the largest stand-alone digital agencies in the United States, Sapient has expertise in the digital realm, where it makes websites, iPad apps and viral online campaigns.  Its location in the United States is also a selling point. 

North America is the biggest single advertising market, according to Noah Elkin, executive editor at market research company eMarketer. "And within that market the fastest growing segment is digital," he says.

Publicis is also increasing its own size for its own sake. "The name of the game in the ad business is scale," says Elkin. 

Publicis has acquired a number of other agencies recently, and earlier this year attempted a merger with Omnicom, the second-largest advertising holding company. 

Sheer size helps when you are, for example, negotiating ad rates with Google or Facebook. "Because you’re buying in such a larger bulk, that enables you to get better terms," says Elkin. 

But does it justify the $3.7 billion price tag? 

"[The] Skepticism that I have around the deal is not just the price paid, which is incredibly high, but the issue of opportunity cost," says Brian Wieser, senior analyst at Pivotal Research.

Wieser thinks instead of buying yet another agency, Publicis should have considered investing in the digital properties it already owns.

CORRECTION: A previous version of this story misspelled Sapient's name in the headline. The text has been corrected.

French ad giant Publicis to buy digital firm Sapiant

Mon, 2014-11-03 11:00

As long as there have been ad agencies, there have been ad agency acquisitions — like the attempt to buy Don Draper’s firm on "Mad Men." Here's how the scene went:

"PPL is being sold and us along with it," Don Draper told partner Bert Cooper. "Oh," Cooper replied. 

"So you knew about this," said Draper. "No," said Cooper. "But it makes sense." 

Agency acquisitions make sense in part because they let companies buy expertise.

"When I was working in the industry, what we saw was advertising agencies buying smaller companies like direct marketing companies," says Kim Sheehan, a communications professor at the University of Oregon who worked in advertising in the 1980s. "What I think we're seeing with the Sapient purchase is kind of the same thing."

As one of the largest stand-alone digital agencies in the United States, Sapient has expertise in the digital realm, where it makes websites, iPad apps and viral online campaigns.  Its location in the United States is also a selling point. 

North America is the biggest single advertising market, according to Noah Elkin, executive editor at market research company eMarketer. "And within that market the fastest growing segment is digital," he says.

Publicis is also increasing its own size for its own sake. "The name of the game in the ad business is scale," says Elkin. 

Publicis has acquired a number of other agencies recently, and earlier this year attempted a merger with Omnicom, the second-largest advertising holding company. 

Sheer size helps when you are, for example, negotiating ad rates with Google or Facebook. "Because you’re buying in such a larger bulk, that enables you to get better terms," says Elkin. 

But does it justify the $3.7 billion price tag? 

"[The] Skepticism that I have around the deal is not just the price paid, which is incredibly high, but the issue of opportunity cost," says Brian Wieser, senior analyst at Pivotal Research.

Wieser thinks instead of buying yet another agency, Publicis should have considered investing in the digital properties it already owns.

National parks consider adding Wi-Fi

Mon, 2014-11-03 11:00

We've all been there – you're at the national park and want to take a selfie with your favorite sulfur cauldron. But tragedy strikes when you can't upload it to your Instagram, because you don't have Wi-Fi. 

Parks service officials are currently asking the question, "do national parks need Wi-Fi?"

They are considering a $34 million plan to run fiber optic cable through Grand Teton National Park into Yellowstone.

If ever there was a time to embrace your inner-Luddite, now might be that time.

Cruise ship comeback still tied up in port

Mon, 2014-11-03 11:00

It’s been a pretty rough couple of years for the cruise industry.

First, there was the global recession. As if that wasn't enough, the Costa Concordia ran aground off the coast of Italy. And finally, let’s not forget the handful of other high profile disasters and the image of cruise ships stranded at sea plastered all over cable news.

Yet, despite all this, the cruise industry is as hopeful as ever.  Bob Sharak is president of his eponymous travel consulting company.

“The cruise industry has proven to be continually popular and resilient after a little bit of a tough period in the last few years," says Sharak, who also spent 20 years with the Cruise Lines International Association. “You’re seeing full ships, high occupancies. But you’re also seeing customers coming from not just North America, but from Europe, Asia and a lot of other emerging markets.”

Technically he’s right about the industry's growth.

In 2012, 10.6 million Americans took a cruise, a number that inched up to 10.9 million last year. And, yes, as Sharak points out, cruising is becoming more popular in other parts of the world.

But others say that growth is too slow.

“There’s an expectation that it’s gotta, gotta get better and since that didn’t happen this year, it should happen next year," says Maggie Rauch, an analyst with PhoCusWight, the travel industry research group behind those numbers. “Some of the optimism that you might be hearing is optimism that always exists this time of year for the coming year. Things are going to improve next year. Kind of like when your team doesn’t make the playoffs.”

Rauch said the cruise industry is having a hard time increasing its customer base.

Even more than hotels or airlines, cruising relies heavily on repeat business, she said.

“There’s a group of people that just take cruises ever year, do it again and again," Rauch said. "And while obviously the cruise lines welcome their business, in order to grow they're always looking at 'how can we get people who haven’t taken a cruise before to do so for the first time?'”

So far this year’s been without major incidents meaning in the industry might be able to get more folks on board.

Whatever happens election day, it's Yellen's economy

Mon, 2014-11-03 11:00

The midterm elections are Tuesday, and come Wednesday morning President Obama could wake up to a vastly different political landscape. One thing that will not change is the face of the Federal Reserve, Janet Yellen. She has been running the Fed for nine months to the day.

Monday also happened to be the day she sat down with President Obama for their first face to face meeting since she took over the nation’s money supply.

Historically, these face to face meetings happen for one of two reasons; either the Fed chairman wants to brief the president on a big change in policy or — and this is the more likely scenario for today’s meeting — Yellen will update the president on the state of the U.S. economy.

“She’s going over to the president to give her assessment of the economy,” says  NYU professor of economics Mark Gertler. “I doubt she’s going over to talk about what she would like Obama to do.”

So what does the economy look like according to Janet Yellen? Based on her comments and Fed policy under her tenure, you could say she sees an economy that’s improving but still struggling to lower unemployment and stimulate wage growth.

“I think the key thing is her signaling of concern for workers, wages and inequality,” says Gerald Epstein, chairman of the economics department at the University of Massachusetts Amherst.

Yellen’s recent speech on income inequality could be a sign that as Fed chairman, she will be looking especially closely at unemployment numbers when making monetary policy decisions.  

“Now we normally think of the Fed as being the institutional shadow of the Fed chair,” says Stanford financial historian Peter Conti-Brown. Think about the way people refer to the “Volcker Fed” or the “Greenspan Fed,” or they might say things like, “Bernanke bailed out the banks.”

But in reality, the Fed is more like the Supreme Court. Its legal authority rests not in a single chairman but in the board of governors and the presidents of the reserve banks. Together they vote on policy. “Fed chairs, depending on their leadership style, either run roughshod over that committee structure, or they embrace that committee structure,” says Conti-Brown.

Yellen, who unlike any previous Fed chairman, has served three terms on those committees, has embraced the committee structure. And while she has been more outspoken than former chairmen on issues like income inequality, her actions have not deviated drastically from her predecessors.  

Martha Stewart on life, 'lifestyle culture' and her brand

Mon, 2014-11-03 10:20

Martha Stewart does not mince words when it comes to the size of her business:

"I think you can fairly say, I spawned or laid an egg that has turned into a lifestyle industry," Stewart said in an interview with Marketplace's Kai Ryssdal.

Since "Entertaining," her first book, came out in 1982, Stewart's brand have swelled into a catch-all for planning parties, getting married, serving tofu french fries, and drawing fizzy baths. There's Martha Stewart Living, Martha Stewart Weddings, Martha Stewart's Cooking School on PBS, Martha Live, a collection at Macy's, a collection at Petsmart, a Martha Stewart at Home depot and more. There's a Martha Stewart competition for start-up "American Made" products.

  Congratulations to the 2014 American Made Award Winners! http://t.co/ibSw685ikz #americanmadeawards #marthastewart pic.twitter.com/rBUiaURY7p — American Made (@AmericanMadeMSL) October 17, 2014

There is, in fact, Martha Stewart for just about everything:

Here are some highlights from the conversation, which will air later this afternoon on Marketplace:

On godmother-ing a culture

Ryssdal: If I called you, maybe not the grandmother, but maybe the godmother of the lifestyle culture in this country, would you be offended?

Stewart: Absolutely not. I would be thrilled! I think godmother is good because it can be of any age.

Ryssdal: Yeah, it’s age neutral, right?

Stewart: Yes, it is. It really is.

On the marketing of "lifestyle" products

Stewart: There are two kinds of people... There are the dreamers who go and buy, and there are the doers who go and make. And I’ve always recognized that. So the dreamers are what support our company, because they will buy the product that they could make if they wanted to, had time to, or were so inclined to. Or, they can dream about it and figure out how to make it themselves... If you look back at our first presentations to investors, it was about dreamers and doers and guess what? It’s turned out to be exactly that.

Martha Stewart (R), the doyenne of modern living through her Martha Stewart Living empire, serves brioche with scrambled eggs, along with New York Stock Exchange President William Johnson, to celebrate her listing on the NYSE 19 October 1999.Henny Ray Abrams/AFP/Getty Images

On “American Made”

For the past three years, Stewart has headed up an annual contest called “American Made.” This year, more than 3,259 makers and entrepreneurs applied to win seed money and promotion to start their own business in the categories of Food, Crafts, Style and Design. The winners will meet in New York later this week, where they will be presented to attendees at the “American Made Summit.” Stewart says she is hoping to bring manufacturing back to the U.S., even in small ways. One of her favorite projects this year was led by “American Made” finalist Pashon Murray who started a composting collective in Detroit called fittingly “Detroit Dirt.”

“Compost is a national trend right now,” Stewart said. “If we could put it on a Twitter meter right now composting would be pretty high up there.”

On prison and her company

Ryssdal: There is a question to be asked about you and the company and the brand that is you - and it has to do with your conviction for filing false statements in an insider trading case. About ten years ago you went to prison, you were barred from a role in your company for five years. You have since obviously returned. 

Stewart: Only barred from an executive role in the company.

Ryssdal: Yes, an executive role, that is true. And you have returned now as non-executive chairman, or chairwoman I suppose. The question is: What does it feel like for a person and a company that is so wrapped up in each other, what does it feel like for you to have that taken away?

Stewart: Well, it was never really taken away. It was delayed for a period of time. So it was never… You can’t really separate the person from the brand. 

Martha Stewart made headlines for insider trading in 2004. Her name still spikes on Google every holiday season.

On Steven Spielberg, her next door neighbor

Stewart: [Steven Spielberg] actually lives across the street from me so I bump into them sometimes. But he said to me, “Martha, I just want you to know what I think. I think that you have elevated the job of the homemaker, the homeowner, the homemaker. You’ve elevated that job from something that we all thought was drudge, drudgery to something much more of an art form.”

That was, to me, the highest compliment that anybody has paid me. Because it is, it should be. You should feel good about making your home nicer for your family and your friends.  You should feel great about cooking a good dinner and making a dress for a granddaughter, creating a beautiful birthday party. It’s all part of life.

Outside groups are moving onto political parties' turf

Mon, 2014-11-03 09:44

The midterm election is Tuesday, and big money, in the form super PACs and political nonprofits, has fully moved onto the turf that used to be the sole purview of political parties — not just advertising, but organizing and messaging, too.  

A super PAC called NextGen Climate Action is bankrolled by billionaire Tom Steyer, and it has spent more than $5 million in Iowa alone. Some of that money has paid for, but Josh Fryday, the group's chief operating officer, says most it has gone toward "field efforts."

“We really made a big effort to focus our resources into building a grassroots infrastructure on the ground,” he says.

According to Steve Grubbs, a Republican political consultant based in Iowa, other outside groups have been doing the same thing.

“The job of campaigns and candidates has largely been outsourced,” he concludes. “When I was state party chairman of the Republican Party of Iowa, all of the vote-by-mail or absentee-ballot programs, and get-out-the-vote, were generated through the state parties, maybe some of the candidate committees or local parties.”

These days, super PACs and nonprofits do that kind of work, and some of them take the lead. Outside groups are building huge databases, and they are developing new tools to target voters. “I do think, if I were chair of a party, I would have some significant concerns about it,” Grubbs says.

What's caused this, he argues, is candidates and state parties can't compete. There are restrictions on how much they can raise and how much they can spend. That is not the case for groups like Americans for Prosperity, a conservative nonprofit that has spent half a million in Iowa.

But Scott Brennan, the chair of the Iowa Democratic Party, says he has never run into anyone from any of the big outside groups, including Americans for Prosperity.

“I'm sure AFP is not targeting the same people that the Iowa Democratic Party is targeting,” he says. “But the bottom line is they are not an enormous presence here.”

Tim Hagle, a political science professor at the University of Iowa, is on a lot of mailing lists, including the Americans for Prosperity list. He said a recent message from Mark Lucas, the group's state director, bragged about AFP’s ground game, 35 paid staff, five field offices, and so on.

Hagle wonders what the growth of super PACs and nonprofits portends for parties.

“You do have to be careful of the downside of relying on some outside group,” he says. Parties could get rusty, he says. They could find themselves outmatched.

Jim Nicholson used to chair the Republican National Committee, and he says what worries him is parties have lost control of the message: “They – whoever they are – can do and say, you know, whatever that want.”

Nicholson is from Colorado, where $67 million dollars worth of outside money has flowed into the state’s U.S. Senate race. Seth Masket, who chairs the political science department at the University of Denver, says "the ads are pretty constant."

“My impression is that most voters can't necessarily distinguish between an ad run by a candidate and one run by some unaffiliated interest group,” Masket notes.

The race for governor in Colorado is also tight, and it illustrates Masket's point beautifully. The two candidates agreed not to go negative, but that doesn't mean voters aren't inundated with attack ads.

According to Masket, we are witnessing politics evolve. “All of these groups are essentially part of a larger party network, or an informal party,” he says. Even if they can't coordinate, parties and sympathetic outside groups are on the same page. And there may be an upside to all this money, being spent on getting out the vote: More Americans may vote.

The numbers for November 3, 2014

Mon, 2014-11-03 09:24

Tomorrow is election Tuesday, and a bunch of super PACs, nonprofits and outside groups have sprouted up to give last-ditch, six-figure cash injections to key campaigns.

The New York Times found at least 90 groups that hadn't spend anything before October. Eighteen of them didn't even exist before September, and have now spent $9 million all together. Many of these groups have vague names and some are spending far more than they had on October 15, the last day before the election to disclose contributions. This flurry of activity means voters won't know who's buying up ad space and deploying automated calls until after the election.

After a weekend stumping in Connecticut and Pennsylvania, President Barack Obama will return to Washington and meet with Fed Chair Janet Yellen for the first time one-on-one. Here are some other stories we're reading — and numbers we're watching — Monday:

340,000

That's how many more people may have gone to the polls in 2010 thanks to Facebook's "I voted" button the appeared on users' News Feeds. It turns out the tool has been used to experiment on users' voting patterns for the past several elections, Mother Jones reported, and a paper in Nature by Facebook data scientists and others posits that the site is actively stoking civic engagement. Additionally, the site reportedly ran experiments to test whether users with more news stories in their feed were more likely to say they had voted.

26 percent

The average profit margin for BP, Exxon Mobil, Shell and Chevron over the past year, down nine points from a decade ago, when crude was about half the price, the Wall Street Journal reported. Prices sunk to $70 a barrel last quarter, and the big oil companies are scaling back projects and selling assets.

1.3 million

The number of copies Taylor Swift's "1989" is projected to sell in its first week, with the final tally out Wednesday. Passing that mark would give "1989" the best first-week sales of any album since 2002, breaking Britney Spears' record for first-week sales by a female artist and giving this year its very first platinum album, Billboard reported.

To further capitalize on these big sales, Swift's back catalog has been pulled off Spotify, and the company isn't breaking up gracefully. They've made two playlists, one called "Come Back, Taylor!" and noted that 16 million users have played her songs in the past month.

PODCAST: The energy of the midterm elections

Mon, 2014-11-03 08:33

On the subject of tomorrow's elections here: energy companies--from the oil industry to companies that focus on renewables will be watching the results very carefully. We reached out to David Konisky, a public policy professor at Georgetown who focuses on energy, to discuss. And amid lackluster sales, McDonalds is acknowledging that it has to do a better job accounting for regional tastes.

Quiz: Counting students and teachers

Mon, 2014-11-03 04:38

Statewide student-teacher ratios range from 10 students-per-teacher in Vermont to 23 in California, according to the Department of Education.

What was the student-teacher ratio for United States public schools during the 2012-2013 school year?

Is it a news article or malware?

Mon, 2014-11-03 02:00

Back in 2007, the FBI bugged the computer of a 15-year-old student who was suspected to be behind a number of bomb threats that hit Washington State High School.

So how did they do it? The FBI buried malware into a link that resembled a news report. 

"It's not that difficult anymore," says Jonathan Zittrain, Professor of Law at Harvard University.

All you needed to have was an article persuasive enough for the suspect to click on and you're well on your way to delivering a package of tracking malware.

Now, the question is: Where should the government should draw the line? 

Click the media player above to hear Jonathan Zittrain in conversation with Marketplace Tech host Ben Johnson.

Starbucks CEO co-authors book on valuing veterans

Mon, 2014-11-03 02:00

Howard Schultz, CEO of Starbucks, has a new book entitled "For Love of Country: What Our Veterans Can Teach Us About Citizenship, Heroism, and Sacrifice." He and his co-author, Rajiv Chandrasekaran, a Washington Post reporter who covered the wars in Iraq and Afghanistan, stopped by to discuss the book, as well as Starbucks' pledge to hire 10,000 veterans and their spouses within five years.

Schultz says his father's military service was one of the catalysts for this project, as well as getting to know former defense secretary Robert Gates, who is on the Starbucks board.

Says Schultz: "There would be a significant loss if we don't recognize the value that the military can bring to the business community and the American society at large. And this is just good business. This is not charity, this is not pity. This is the right thing to do for them and for us."

Audio from this interview is forthcoming.

McDonald's seeks to tailor menu to regional tastes

Mon, 2014-11-03 02:00

McDonald’s hasn’t been doing so hot lately. Same-store sales dropped in the third quarter of this year, which helped drag profits down 30 percent. Its CEO said the company’s facing “formidable” headwinds.

Large ships don’t turn easily, but one of the changes the company’s announced is a more regional focus, breaking the country into four zones (instead of its old three) to better respond to the individual tastes of customers in different parts of the country.

But for years, McDonald’s succeeded with a "one size fits all" approach.

“When we look at what has made McDonalds a strong brand, it's consistency, convenience, affordability and strong fast service,” says Darren Tristano, with food-research firm Technomic.

However, he says diners today are more interested customization, like choosing what goes in their burrito at Chipotle.  

This is especially important to millennials, says Andy Brennan, a food analyst at IBIS World.

“Millennials want something different,” he says. “They want to feel like things are customized toward them, they want the ability to choose, and they want high quality things, so unfortunately, McDonald’s doesn’t fit the bill for any of these requirements.”

“The marketplace today is increasingly dynamic and diverse,” Mike Andres, McDonald’s USA President said in a statement. “These changes will enable us to better leverage and support our local market management structure so that we are more nimble in response to and anticipation of the local customer needs and market conditions in a relevant and timely way.”

“The same things that worked nationally, don’t work nationally now,” agrees John Gordon, a food industry analyst with Pacific Management Consulting Group. He says a menu item like spicy chicken wings may play well with customers in Detroit, but miss with customers in Salt Lake City.

Gordon says this regional push is a small step for McDonald’s, but symbolic of the way it needs to decentralize—and a sign that bigger changes may be coming.

Obamacare in the Supreme Court (again)

Mon, 2014-11-03 02:00

The Supreme Court is expected to announce this week whether or not it will hear the latest challenge to the Affordable Care Act—the King versus Burwell case. That case asks whether the Affordable Care Act should be taken literally. UPDATE: The court decided against hearing the challenge.

The ACA specifically grants insurance subsidies for policies bought on state exchanges. Now the question is: “Can the Internal Revenue Service say, 'All right, even for people who’ve purchased insurance through the federal exchange, they can also get the tax credit,'” says Miller Baker, a partner at McDermott, Will and Emery.

Another big ACA case involves something called the Origination Clause, which requires all tax bills have to start in the House of Representatives. This case could face long odds.

“I believe that there has only been one successful Origination Clause case in history, and that was over a century ago,” says Timothy Jost, a professor at Washington and Lee University Law School. Jost says opponents of the healthcare law will have to prove it’s a tax bill. And he says it did originate in the House, but was overhauled in the Senate. 

There are other lawsuits that challenge specific aspects of the healthcare law—from contraception to the delay of the mandate for employers to insure their workers—but these aren't likely to overturn it, experts say.

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