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Sebelius resigns after Obamacare woes

Thu, 2014-04-10 12:43

Kathleen Sebelius, the secretary of Health and Human Services, says the government is making "tremendous progress" toward fixing what she called a broken health system. 
Sebelius commented Friday after President Barack Obama announced her resignation and says he will nominate Sylvia Mathews Burwell, the director of the Office of Management and Budget, to replace her.

Sebelius's departure comes as the Obama administration seeks to move past the woes of the initial rollout of Obamacare, which included a website launch marred by glitches, an unexpected cancellation of some Americans' individual health insurance policies and seemingly endless delays of key deadlines and requirements.

Sebelius faced a high-profile grilling in front of a Congressional panel over the botched rollout of Healthcare.gov, and mentions of her all but disappeared from the President's public comments and addresses regarding the ACA. Most notably, Sebelius did not even appear at President Obama's triumphant announcement of 7 million Obamacare enrollees in the White House Rose Garden last week.

According to The New York Times, Sebelius approached the president last month about the decision. Sebelius was previously the governor of Kansas, until she was nominated for the cabinet position in 2009.

Sebelius will resign after Obamacare woes

Thu, 2014-04-10 12:43

Kathleen Sebelius, the secretary of Health and Human Services, will resign after serving five years in the position and presiding over the rollout of the Affordable Care Act.

President Obama accepted Sebelius's resignation earlier in the week, and on Friday will nominate Sylvia Mathews Burwell, the director of the Office of Management and Budget, to replace her, according to White House officials.

Sebelius's departure comes as the Obama administration seeks to move past the woes of the initial rollout of Obamacare, which included a website launch marred by glitches, an unexpected cancellation of some Americans' individual health insurance policies and seemingly endless delays of key deadlines and requirements.

Sebelius faced a high-profile grilling in front of a Congressional panel over the botched rollout of Healthcare.gov, and mentions of her all but disappeared from the President's public comments and addresses regarding the ACA. Most notably, Sebelius did not even appear at President Obama's triumphant announcement of 7 million Obamacare enrollees in the White House Rose Garden last week.

According to The New York Times, Sebelius approached the president last month about the decision. Sebelius was previously the governor of Kansas, until she was nominated for the cabinet position in 2009.

The GPS trade-off: Get lost less often, but lose privacy

Thu, 2014-04-10 12:34

In the age of Google Maps, Siri, and GPS, it is hard to get lost.

"You can if you really, really work at it,” says Hiawatha Bray, technology reporter at the Boston Globe and author of “You are Here: From the Compass to GPS, the History and Future of How We Find Ourselves.”

“The whole idea of being able to navigate through the world with a higher degree of reliability is one of the most challenging technical problems the human race has ever faced, and it’s taken us centuries to beat it.”

But this technological achievement has come at a price, says Bray: Privacy.

Bray says many technologies weren’t designed to track people, but some companies -- and governments -- are using it to do just that. Cell phones and license plate scanners have new, unforseen second purposes. Many cities regularly scan the license plates of vehicles driving their streets.

"There’s no limit right now, under law, [on] how long you can keep those records," Bray says. “I don’t want to get lost, I just don’t want others to constantly track my location.”

Look out, Human Resources departments

Thu, 2014-04-10 11:59

The Wall Street Journal says there's anecdotal evidence that some companies are choosing to get rid of their Human Resources department. Employers are asking managers to pick up all that interpoersonal stuff, with computer software picking up the payroll and benefits paperwork.

"There's something seductive about the logic of it." says Nancy Koehn, historian at the Harvard Business school.

But she's not convinced it's a good idea. "There's a reason that early twenty-first century companies of any size end up having...a human resource department."

Koehn says it's vital to have someone to settle workplace disputes, manage pay, and to make sure the employees and the company are compliant with state and federal laws.

She also points to companies known for their happy workforce, like Southwest Airlines, Coca-Cola, who invest in huge amounts of human resource management: "It's no surprise -- but an engaged, satisfied, non-bickering workforce that's legally compliant is critically important to the ka-ching, ka-ching of winning in the marketplace."

Can fast fashion compete with Prada?

Thu, 2014-04-10 11:56

The fast-fashion retailer H&M is debuting its high-end spin-off brand, "Collection of Style," in pop-up stores in the U.S. next week. The brand, COS for short, is an upscale line that aims to mimic the look of popular fashion brands, such as Prada or Jil Sander, while keeping costs down. The company is scheduled to open full stores in the U.S. later this year.

"It's much less expensive, and it's hip in a way that I don't think fast fashion has had this hip kind of attitude before," says fashion journalist Kate Betts, author of the book, "Everyday Icon: Michelle Obama and the power of style."

COS has stores in Europe, Asia and the Middle East. It's only now starting to venture into the American market, with plans to open stores in New York and Los Angeles.

Betts points out that COS has a viable market in the U.S.: "The retailers, the department stores have given women the habit of buying everything on sale, so they're not going to pay full-price for anything anymore."

Last week may have been Gouda, but this week is Feta

Thu, 2014-04-10 11:23

From the Marketplace Datebook, here's what's coming up April 11:

  • In Washington, the Labor Department issues its Producer Price Index for March.
  • The International Energy Agency releases its monthly oil market report on supply and demand around the globe.
  • The University of Michigan releases its preliminary April consumer sentiment survey.
  • "Houston, we've had a problem here." That was communication from the aborted Apollo 13 mission that launched on April 11, 1970. The crew didn't land on the Moon as planned, but they did eventually splash down safely on Earth. You probably saw the movie.
  • Iowans were the first to pay a state tax on cigarettes. A 2 cent per pack tax was imposed on April 11, 1921.
  • And foodies probably already know that it's National Cheese Fondue Day. What beats things dipped in cheese? Help me. I'm drawing a blank.

Last week may have been Goulda, but this week is Feta

Thu, 2014-04-10 11:23

From the Marketplace Datebook, here's what's coming up April 11:

  • In Washington, the Labor Department issues its Producer Price Index for March.
  • The International Energy Agency releases its monthly oil market report on supply and demand around the globe.
  • The University of Michigan releases its preliminary April consumer sentiment survey.
  • "Houston, we've had a problem here." That was communication from the aborted Apollo 13 mission that launched on April 11, 1970. The crew didn't land on the Moon as planned, but they did eventually splash down safely on Earth. You probably saw the movie.
  • Iowans were the first to pay a state tax on cigarettes. A 2 cent per pack tax was imposed on April 11, 1921.
  • And foodies probably already know that it's National Cheese Fondue Day. What beats things dipped in cheese? Help me. I'm drawing a blank.

When rural hospitals close, towns struggle to stay open

Thu, 2014-04-10 11:15

There’s a healthcare crisis in America that you might not have heard about: Rural hospitals are closing at a rate that’s starting to get some politicians’ attention. Republicans blame Obamacare, while Democrats blame some states’ refusal to expand Medicaid. In reality, the problem started years before all that.

What's clear is that rural hospitals and the rural economy rise and fall together.

Hancock Memorial Hospital in the tiny town of Sparta, Georgia was among the first of nine rural hospitals that have closed across Georgia since 2000. Today, it’s overgrown with weeds and vines, while the roof caves on the gurneys and computers still inside.

“I mean, it was just not economically feasible to maintain the staff and the equipment,” says Robert Moore, whose family has lived in Hancock County since they were emancipated.

Sparta was once a fancy town with lots of antebellum mansions. But Moore says things really started going south in the 1990s.

“Rural Georgia was based on the textile industry, and when NAFTA was signed, all that moved to Mexico, and… sent everything into a downspin,” Moore says.

Hancock County Commission Chair Sistie Hudson says it’s not surprising that a population so small and so poor can't support a whole hospital. “There’s about 2,600 people [in Hancock County] that still work, out of the little more than 8,000 that we have,” she says.

But with Hancock Memorial boarded up, the prospects for future growth are even worse. When Hudson tries to recruit a new industrial employer, one of the first things they ask is: “Do you have a hospital?”

“You just really need a local facility just in case somebody gets hurt in these factories, you know? It’s something that they like to see,” Hudson says.

Just imagine what having no emergency room nearby would do to a company’s workers comp and other insurance costs. It’s a non-starter for most businesses. 

University of North Carolina professor Mark Holmes studied the economic impact of 140 rural hospital closures nationwide.  He found that three years out, losing a hospital costs a community, on average, “about 1.6 percentage points in unemployment, about $700 in per capita income, and that was in [year] 2000 dollars so that’d be probably about $1,000 currently."

And that’s only the effect on economic health. What about health?

Speaking on the subject a few weeks ago, Georgia state Senator David Lucas paused several times to weep as he addressed his colleagues this spring: “[It] ends up with rural communities, such as Hancock County, where 39 percent of the folks who have a stroke or have a heart attack die." That’s a lot higher than in counties with hospitals close by.

Georgia officials are exploring solutions to this problem that could become a national model – basically, a medical facility that does more than an urgent care clinic, but isn’t as big a whole hospital. But Georgia’s Community Health Commissioner Clyde Reese says America’s healthcare system doesn’t provide enough ways for the operator of that kind of place to get paid.

“They’re not going to be hospitals, they won’t be reimbursed as hospitals, they won’t be able to charge a facility fee, they won’t get the Medicaid add-on rate, etc.,” Reese says.

Reese is working on ways to fix that. Because without reimbursements, there will be no emergency care. And with no emergency care, there probably will be no new jobs in Hancock County.

Why low inflation can be dangerous

Thu, 2014-04-10 10:51
Friday, April 11, 2014 - 06:36 JOHANNES EISELE/AFP/Getty Images

Euro cents are seen on a chessboard and the word 'inflation' as a part of a advertisement on October 12, 2010 in Berlin.

Right now our inflation rate is around 1 percent. But some at the Fed say that's way too low.

The hope is to see inflation go up. But why on earth would we want to increase inflation?  

"A little bit is good, but not too much. It's like a lot of things in life -- good in moderation," says Jeremy Siegel, a professor of finance at Wharton. "Higher inflation is a bad thing, but mild inflation, statistically has been associated with very good economic times."

Siegel says during times of inflation, the dollar decreases in value. So the $100 you borrowed back in the day was worth more then, than your $100 payment today -- which means less financial burdens for consumers and more cash to spend.

And that's one reason the Fed wants to see inflation go up -- just a little bit. 

"It's not so high as to be hurting a lot of people, but it's at a level which would probably create a lot of jobs," says Gary Thayer, chief macro strategist at Wells Fargo Advisers. Thayer says the benefit of job creation would probably outweigh a slightly higher inflation rate.

Marketplace Morning Report for Friday, April 11, 2014by Sally HershipsPodcast Title Why low inflation can be dangerousStory Type News StorySyndication SlackerSoundcloudStitcherSwellPMPApp Respond No

Ukraine not on the agenda as IMF gathers

Thu, 2014-04-10 10:46
Friday, April 11, 2014 - 06:20 Mark Wilson/Getty Images

IMF Managing Director Christine Lagarde speaks during a media briefing at the IMF Headquarters, on April 10, 2014 in Washington, DC. Director Lagarde spoke about their agenda for the 2014 Spring Meetings that are taking place now and will end on Sunday.

The International Monetary Fund and the World Bank are set to open their annual spring meetings. It will be a busy weekend for finance ministers and economists who are visiting Washington from all over the world. Dozens of panels and speeches are on the agenda, but none are about Ukraine, a country the IMF has offered billions of dollars.

According to Ken Rogoff, former IMF chief economist, right now, “the geopolitics overrides what the finance ministers and the central bankers think.”

But at a gathering of policymakers from close to 200 countries, it is bound to come up.

“I think it’s going to be talked about behind closed doors,” says Barry Eichengreen, an economics professor at the University of California, Berkeley.  

Marketplace Morning Report for Friday, April 11, 2014by David GuraPodcast Title Ukraine not on the agenda as IMF gathersStory Type News StorySyndication SlackerSoundcloudStitcherSwellPMPApp Respond No

What Family Dollar says about the economy

Thu, 2014-04-10 10:10
Thursday, April 10, 2014 - 16:47 Ryotaro takao/ Flikr

Family Dollar exterior in Honeoye Falls, NY.

The retail chain Family Dollar said Thursday it's going to close more than 300 stores. Shrinking sales and falling profits are the proximate causes. There is a line of thinking that says, "If a discount store like Family Dollar is reporting bad news like this, maybe that's good news for the broader economy."  

Discount stores tend to do well during a downturn, when once higher-income consumers “trade down” for cheaper options, the argument goes, so perhaps the fact that discount stores are showing signs of struggle means those customers are trading back up, in response to a recovering economy.  

And it is true that Family Dollar has thrived during many economic shocks.  In fact, there’s a chart Family Dollar management recently trotted out at a retail industry conference that highlights this phenomenon -- a timeline of shocks to the American economy, events like the 9/11 terror attacks and the housing meltdown. After each of these events, you see a  steep incline on the graph, denoting earnings increases for Family Dollar. 

Family Dollar

But just because Family Dollar is floundering now doesn’t mean the larger economy is thriving. Higher-income customers may be leaving family dollar now that their economic fortunes seem to be brightening in the economic recovery.  But the story is complicated by the fact that low-income households still face high unemployment rates, and less money to spend in the wake of recent cuts to government assistance programs like food stamps and unemployment insurance.

Family Dollar

Marketplace for Thursday April 10, 2014by Krissy ClarkPodcast Title What Family Dollar says about the economyStory Type News StorySyndication SlackerSoundcloudStitcherSwellPMPApp Respond No

Don't mess with French workers' 35 hour work week

Thu, 2014-04-10 09:57

From France, home of the 35 hour work week, this item: French tech sector employees  have just struck a new collective bargaining agreement, under the terms of which they are guaranteed that after-hours emails -- as in the kind we all check on our phones while at a soccer game -- will not impinge on that aforesaid 35 hour week.

Workers now have the unimpeded right to unplug at quitting time.

To this story, one can only say, zut alors, sacre bleu and 'How do I get me some of that action'?

PODCAST: From bailout to IPO

Thu, 2014-04-10 07:16

Ally Financial is trading on the New York Stock Exchange on Thursday, under the ticker symbol ALLY. The company, you might remember, had to be bailed out by the government in 2008, as part of the Troubled Asset Relief Program or TARP, to the tune of $17.2 billion. The stock sale puts the government a step closer to sloughing off what remains of the financial crisis bailouts.

With Ukraine refusing to pay its gas bills to Russia's Gazprom and Europe looking for alternative energy sources, Russia -- it seems -- is on the outs. But now Putin is turning his attention eastward, towards China, and may be finding a friend. Ian Bremmer, president of the Eurasia Group, joins Marketplace Morning Report host David Brancaccio to discuss Russia's balancing act and why the country might try to disrupt Ukraine's upcoming elections.

Teenagers are now spending as much, if not more, on food as on clothing, according to Piper Jaffray’s semi-annual report on teen spending, out this week. And teenager's new favorite place to spend money? Starbucks.

 

 

In U.K., a case for re-opening coal mines?

Thu, 2014-04-10 02:59

Thirty years ago, the country that started the Industrial Revolution - and fueled it with coal - scaled back its coal mining industry. The UK announced  it was closing many of its deep mines. Today only three remain, and two of those are facing closure.

But have the Brits blundered? Is there a case for  the UK re-opening its deep coal mines… and digging a little deeper?

Bob Fitzpatrick  certainly believes so. But then, he would. He’s one of  the UK’s  few remaining deep pit coal miners. 

“The coal’s here and you can get it,” says Fitzpatrick, who works at the Hatfield coal mine in Yorkshire, in the north of England. “If the mines are mined properly and managed properly they are viable.”

Then there’s the issue of energy security. The UK may have shut down most of its mines, but it still  generates 40 percent of its electricity from coal, importing the bulk of it from the U.S., Colombia and Russia.

The Russians supply the largest amount of that imported coal, and after the annexation of Crimea, that  has got some people worried. “The gas supplies and the coal supplies from Russia are now pretty doubtful,” says local Yorkshire politician Jane Hamilton. “President Putin has got his own agenda. I think we should be very careful and look to re-opening mines, because we don’t know where our energy is going to come from.”  

The case for UK coal  began to look even better last week. Geologists revealed that the country could have vast reserves of the fuel, as much as 20 trillion tons of it, lying under the sea bed off its eastern coast -- enough to keep the lights on in the UK for centuries. But the  problem with deep pit mining, let alone with burrowing under the sea for coal, is that it is horrendously expensive. And, says importer Nigel Yaxley, it’s now much cheaper for the Brits to bring in foreign coal. “At the moment prices are depressed, partly because of surplus coal in the U.S. thrown up by the shale gas revolution," he says, "and partly because of the slowdown in growth in China.”

The future of British coal seems to depend on much higher world prices and much improved technology  making it easier to mine, and cleaner to burn. The case for UK coal? Not yet proven.   

Why the Ally IPO is good news for taxpayers

Thu, 2014-04-10 02:57

Ally Financial is trading on the New York Stock Exchange on Thursday, under the ticker symbol ALLY. The company, you might remember, had to be bailed out by the government in 2008, as part of the Troubled Asset Relief Program or TARP, to the tune of $17.2 billion.

The government sold 95 million shares in the company through the initial public offering, raising about $2.4 billion dollars.  Add that to the $15.3 billion Ally had already paid back, and U.S. taxpayers have made about half a billion dollars more than they invested in the company.

The stock sale puts the government a step closer to sloughing off what remains of the financial crisis bailouts.

According to the New York Times:

The firm, once General Motors’ financing arm, is the government’s last remaining holding from its enormous bailouts of the financial and auto industries.

The U.S. Department of Treasury said the Ally stock sale brings its total returns on TARP investments to $438.3 billion.  The government has handed out about $423.4 billion.  With a little math, we’re talking taxpayer profit from TARP in the neighborhood of $15 billion.

 

 

But, we're not in the clear yet.  TARP will likely still cost taxpayers. This, from the U.S. Treasury:

"Treasury's latest quarterly estimate of TARP's lifetime cost as reflected in the February 2014 Monthly Report to Congress, developed in consultation with the Office of Management and Budget, is $39.02 billion, which is largely attributable to our efforts to help struggling homeowners deal with the housing crisis. Unlike TARP's investment programs, the funds committed for TARP's housing programs were not intended to be recovered." 

 

Teens now spending as much on food as clothes

Thu, 2014-04-10 02:46

Teenagers are now spending as much, if not more, on food as on clothing, according to Piper Jaffray’s semi-annual report on teen spending, out this week. And teenage's new favorite place to spend money? Starbucks

“Food of course is the one category that isn’t e-commerce-able,” says senior research analyst Stephanie Wissink of Piper Jaffray. “When they indicate they’re spending more on food that most likely means they’re also frequenting food locations more regularly.”

Wissink says it’s a misconception that teens want to be alone with their phones. Looks like they want to be together – with their phones – in places like Starbucks.

"Starbucks probably has the most widely-used app at the point of sale system," says Morningstar analyst RJ Hottovy. "So when people are making purchases, their app is used for one in every five purchases at this point."

Why automakers are getting into healthcare

Thu, 2014-04-10 02:44

A new report from PricewaterhouseCoopers highlights growing opportunity in the healthcare sector. 

In fact, the report lays out that almost half of the Fortune 50 companies – firms that previously did not have anything to do with healthcare – are getting into the game.

“The money is starting to move differently,” says the report’s author, Ceci Connolly, the head of the Health Research Institute at PricewaterhouseCoopers. "More and more of us are having to spend our own dollars, and make our own health care decisions."

Because of the Affordable Care Act, millions more Americans have health insurance, technology is changing, and we have seen “the rise of the consumer.”

The report highlight's Ford's work on a system that would help drivers with chronic conditions.

"These sorts of pushes toward more consumer-directed health care might be a good thing," says Zack Cooper, a health policy professor at Yale. He says access to data and access to information means we're not as reliant on experts.

Can Russia be isolated? Not if China has anything to do with it.

Thu, 2014-04-10 02:16

With Ukraine refusing to pay its gas bills to Russia's Gazprom and Europe looking for alternative energy sources, Russia -- it seems -- is on the outs. But now Putin is turning his attention eastward, towards China, and may be finding a friend. 

Ian Bremmer, president of the Eurasia Group, joins Marketplace Morning Report host David Brancaccio to discuss Russia's balancing act and why the country might try to disrupt Ukraine's upcoming elections.

Click on the audio player above to hear the full interview. 

Sharp decline in Chinese trade surprise economists

Thu, 2014-04-10 01:12

Speaking at the Bo’ao forum for Asia, Chinese Premier Li Keqiang reassured attendees that China’s economy “has had a smooth start this year, and our overall performance is good.”

 As Li said this, key economic data was released from China showing exports from the world’s second biggest economy had slipped 6.6% in March from a year ago. Imports were down more than 11%.

Both numbers were worse than forecasters predicted. Part of the reason is that a year ago, many Chinese exporters were overstating the value of their shipments in order to bypass China’s strict currency controls. That allowed them to bring more dollars into China with the hopes that the Yuan would appreciate. This year, China’s central bank has pushed down the value of the Yuan, so there’s no longer an incentive for exporters to fake the numbers.

The 11% decline in imports, however, surprised a lot of economists. The month of March is always an important one for China, because it’s the first month after the Chinese New Year, which tends to skew numbers a bit because of the inactivity of the markets.

A decline in imports is a sign that China’s economy is still in slowdown mode. Premier Li acknowledged as much during his speech today. “These problems are not only the result of a complex international environment, but also objective reflections of prominent conflicts that lie deep inside China’s economy, as well as the fact that China’s growth rate is shifting gear,” said Li.

 

 

The U.S. needs more energy grids

Thu, 2014-04-10 01:00

The U.S. Senate Energy Committee is meeting to consider the reliability and security of the U.S. electric grid. It's a question that bears asking, considering the entire U.S. runs on just three, large-scale power grids (East coast, West coast and Texas. Go figure). As the saying goes, the bigger they are, the harder they fall. 

At least David Newman, a physics professor at the University of Alaska, thinks so. His research explores how smaller power grids could help avoid massive outages like the 2003 Northeast blackout. Though, he certainly understands the appeal of having a larger grid:

"As you increase the size of the network, you’re increasing the number of places that you can be getting the energy to, and so you make it -- in a sense -- more efficient. But our work showed that it’s actually also potentially a bad thing because what it does is that it allows larger and larger failures of the system."

Newman acknowledges that there's no way to get rid of system failures completely, but with massive outages potentially costing billions of dollars, it's at least worth exploring what size network optimally combines efficiency and security.

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