Marketplace - American Public Media

There’s more to energy policy than fracking or oil or wind and solar. There’s also what happens out in the real world. Michael Levi at the Council on Foreign Relations takes the broad view in his new book, “The Power Surge: Energy, Opportunity, and the Battle for America’s Future.”

The theoretical debates we have about the energy of the future -- and what we’re willing to risk to make a new industry work -- are very real in the heartland.

“It’s extraordinary how tough a lot of folks have it,” says Levi. “You look for example at Ohio where people are dairy farmers. That is not a thriving industry right now. People are struggling, people have debts and they’re looking for a way out.”

In Ohio, some families have looked to fracking as that way out -- albeit tentatively.

“I spent time with couples that were in disagreement over what they should do with their own property, whether they should lease it to natural gas companies,” he says.

The U.S. has made great strides in diversifying its energy use away from foreign oil.

“I think there’s a reasonable chance we’ll see a day when American presidents don’t say ‘we need to end our dependence on foreign oil’,” says Levi.

But he says that's no panacea.

“What we’ll find out at that point is, the things we thought that would deliver, cheap gas for our cars and trucks, protection from events in the Middle East -- none of that would have happened."

President Barack Obama is in Mexico today, meeting with that country’s leader Enrique Peña Nieto. They’ll be talking immigration, border security and trade. But analysts say their conversation will likely turn to one touchy topic: Oil and gas reserves in Mexico. Twenty years after the North American Free Trade Agreement, Mexico’s oil reserves have remained closed to U.S. investment, but that may soon be changing.

There’s pretty much one brand of gasoline you’ll see in Mexico: Pemex, the state fuel monopoly. But Pemex is in trouble. Mexico’s oil production has been dropping, and in less than 10 years, the country could be importing more oil than it exports.

Analysts say the fossil fuel reserves are there. Mexico remains one of the world’s top 10 oil producers. There could also be tens of billions of barrels in untapped deep-sea oil reservoirs.

The country has, ”The proven fourth largest shale gas reserves in the world,” said Michael Shifter is president of Inter-American Dialogue.

Shifter said Pemex lacks the technology to tap those reserves. International companies have the expertise, but Mexico’s constitution prohibits joint ventures in the sector. Shifter said reforms maybe on the way.

”I think if there are joint ventures, U.S. companies would be very attracted to the opportunities in Mexico,” he said.

Arturo Sarukhán, who was Mexican ambassador to the U.S. until January, said he expects Mexico to introduce oil and gas reforms in July or August this year.

”This is a big strategic game changer,” said Sarukhán, who is now the chairman of Global Solutions, a consultancy within the Podesta Company.

He said those joint ventures could change the oil and gas game globally.

”By bringing Mexico’s energy assets to the table, overnight Canada, Mexico and the United States become the largest producer of oil on the face of the earth, far outstripping Saudi Arabia,” he said.

That should ensure that oil and gas keep flowing for years to come.

Among the 7.5 percent or so of the American workforce that's out of a job is a man named Richard Crowe.

He was laid off from a steel plant in Eastern Ohio last May, after 30 years on the job. Since then, he's relied on unemployment benefits to get by. Now, since the sequester cut his unemployment checks, it's a tighter squeeze. 

"It just pounds you," he said. "Any little bit hurts. The longer you're on this, the further back you fall. We don't do hardly anything we used to do when I was working."

Like many families on a reduced budget, the Crowes have stopped dining out, dropped cable TV, and cut out day trips. "My wife likes to go to Amish country, it's about an hour away. We'd go out there and spend the day," Crowe says. "You cut a lot of things out of your life --  spend a lot of time at home."

Crowe is still unemployed, but that could change in about two weeks. He's slated to start work at a plant that makes coke, a fuel used in steel production. He'll have to pass a physical exam. And the plant is an hour's drive from Crowe's home. But the income and ability to qualify for the company's medical insurance would make a big difference.

The pay is "not as much as I made before," Crowe says. "But it's comparable. It's worth going the 55 minutes."

Some big brands are getting a reminder of how thin the line is between edgy, buzzy ads and deeply offensive marketing. General Motors had to scrub a Chevy ad soundtrack of 1930s song lyrics loaded with Asian stereotypes. And an online Mountain Dew spot ignited a firestorm of criticism after it ran an ad suggesting black men are violent thugs. Parent company PepsiCo apologized and took it down. [View the story "Controversial ads and the apologies for them" on Storify] The neon green drink walks a tightrope trying to make ads that will break through the clutter to get young caffeine hounds guzzling. It’s a long way down when an ad misses and offends the masses, even for a brand that aims to be provocative.

“Mountain Dew is not the Gap. They’re not Ford. They’re not a sort of traditional mainstream brand,” says Wharton School marketing professor Jonah Berger, who is skeptical of Mountain Dew’s apology and ad removal, since it’s still widely available elsewhere online. “They get credit for it among the segment that they want to appeal to, while also telling other segments, oh, well, we have nothing to do with this.”

Even when advertisers aren’t intentionally trying to offend, it’s easy to go too far in the effort to stand out online.

“Sometimes people sort of try to extend the risk factor in order to get as many impressions on their message as possible,” says Geoffrey Colon, vice president of digital strategy at ad agency Ogilvy & Mather.

Agencies have to turn out web ads much faster to keep up with online trends.

“Digital agencies create content under much tighter deadlines,” explains Advertising Age reporter John McDermott.

There’s another potential risk with online video. Compared to television ads, fewer people may screen it before it goes out into the world.

“The TV station tends to screen television ads,” points out Avi Goldfarb, marketing professor at the University of Toronto.

But online videos go straight to the public via the company’s website, YouTube page and social media.

Growing ranks of Americans are quitting their jobs. But the economy needs even more quitters.

Paul Swoish was working for daily-deal company LivingSocial last year when he found out his sales job was going get eliminated in a few months. But rather than wait things out, he just quit -- and started looking for a new job.

“I didn’t want to sit in a job that didn’t have faith in what our department could do,” he says. “I’m going to get a jump start on my career search. My managers were very supportive.”

Swoish says he was confident he could find something else, though he wouldn’t have dared make such a move during the recession.

“But now I do see the economy getting better. Definitely not as worried as I would’ve been a few years ago,” he says.

Quitting can be good. Guy Podgornik, an economist at the Bureau of Labor Statistics, keeps track of how often people like Paul Swoish quit their jobs. It’s called the "quits rate."

“When do people quit their jobs? They quit their jobs when they’re moving to another job or they think another job is out there and available for them,” he says. “It’s a good indicator of where the economy is and what people’s perceptions are.”

In February, the latest month for which data are available, the "quits rate" was 1.7 percent.  That means 1.7 out of every 100 employees quit. That’s up from 1.2 percent 2009, but it’s still shy of where it was before the recession: 2.1 percent.

“The 'quits rate' is still very low,” says Chris Low, chief economist with FTN Financial. “It has risen since the Great Recession but it hasn’t risen as quickly as it has in the past.”

He says the Federal Reserve is closely watching the "quits rate" as it monitors the health of the labor market. Unfortunately, Low adds, the current rate “is entirely consistent with a job market that’s steadily getting better but still has a long way to go and isn’t getting better as rapidly as anyone wants.”

Paul Swoish, formerly with Living Social, can attest to that. Four months after he quit, he is still looking for a new job.

The above chart shows the quit rate for the past decade. Click through to view a breakdown by industry.

A few weeks ago, career guidance website CareerCast.com revealed its list of the worst jobs of 2013, based on pay, outlook, work environment and stress. At the top: newspaper reporter -- thanks to shrinking newsrooms and budget cutbacks. It was closely followed by lumberjacks and enlisted military personnel.

But those professions will simply join a long list of lousy jobs people have endured over history. Lapham's Quarterly put out this handy chart for what they consider the worst jobs in the world:

Wool fuller? Leech gatherer? Now reporting doesn't seem so bad, does it?

Got any more to add? Comment below or tweet us @MarketplaceAPM.

ESPN and the SEC are announcing the SEC Network, a lucrative TV deal for college sports. What’s so valuable about the SEC? And what’s in the deal for the schools

President Obama heads to Mexico today to meet with the country's new President Enrique Peña Nieto. The two leaders will discuss immigration reform, trade, and economics. Enrique Acevedo of Univision News joins Marketplace Morning Report host Jeremy Hobson with the details.

Facebook is making more money, but it's spending more, too. Facebook’s revenues only grew 38 percent in the first quarter. While its costs were up 60 percent.

This final note falls firmly in the category of things not to do at work, no matter how much money they offer you.

From CBS in New York: Rapid Realty, a real estate brokerage firm in the city, is offering employees a raise if they get a tattoo with the company logo.

No matter how many times you see these kinds of stories, it never ceases to amaze me how many people: A) do it and B) fail to realize that it's not going to end well.

President Obama heads to Mexico today to meet with the country's new President Enrique Peña Nieto. The two leaders will discuss immigration reform, trade, and economics.

Enrique Acevedo of Univision News joins Marketplace Morning Report host Jeremy Hobson with the details.

There’s good news and bad news from Facebook. Yesterday it reported net income for the first quarter of $219 million.  

A year ago, you wouldn’t see any ads if you logged onto Facebook on your phone. But now, Facebook says 30 percent of its ad revenue comes from ads on mobile devices.

Michael Pachter, an analyst at Wedbush Securities, says Facebook is keeping up with consumers’ move from PC's to mobile devices -- and mobile ads can be targeted. So, if you’re driving past a Starbucks, a coupon might pop up on your phone.

“They can deliver a '50 cents off any latte, only good for next hour' kind of coupon, if you happen to be out in your car between 7 and 10 in the morning," says Pachter.

But Facebook’s revenues only grew 38 percent in the first quarter. While its costs were up 60 percent.

Carl Howe, with the Yankee Group, says Facebook is investing in lots of new projects.

“We get a sense sometimes that they’re just throwing products out the door and seeing what sticks to the wall," Howe says.

Howe adds Facebook founder and CEO Mark Zuckerberg has a soft spot for developers who do cool stuff. Unfortunately, that’s not always profitable. 

Both Penny Pritzker and Michael Froman have close ties to President Obama. Pritzker was national finance chair for the president's first presidential campaign. She broke fundraising records then -- raising almost $750 million for the president. She was co-chair for his 2012 campaign. Pritzker is also an heir to the Hyatt Hotel fortune, and she also runs her own real estate and investment companies. 

Michael Froman is currently the White House’s chief international economic affairs adviser. He went to Harvard Law School with the president. They’ve known each other since their days at the Harvard Law Review. He’s also raised some money for President Obama. He was a bundler in the 2008 campaign , raising at least $200,000.

Both of these nominees would have to be confirmed by the Senate, and could face some challenges in their confirmation hearings.  Pritzker is on the board of the Hyatt Hotel Corp. The Unite Here labor union is upset about Hyatt’s failure to reach a new contract with its workers. Michael Froman is a former executive at Citibank, which got a government bailout during the financial crisis. 

There's been a lot of talk online about Jason Collins, the NBA player from the Celtics and the Wizards who came out as gay this week -- and some of that talk is offensive.

What is appropriate language to use online and in everyday life? Janell Burley Hofmann, a mother of five who helps us figure out how to behave with technology, shares her advice and recommends ThinkB4YouSpeak, a website which tracks anti-gay slurs on Twitter.

The Federal Communications Commission has a new chairman, Tom Wheeler. If confirmed by the Senate, he'll replace Julius Genachowski, who resigned in March. Wheeler is a venture capitalist and with a tech-startup background -- and he also has a few other unique credentials:

"Tom is the only member of both the cable television and the wireless industry hall[s] of fame, so he's like the Jim Brown of telecom," said President Obama on Wednesday.

Wheeler is also a former lobbyist for the telecommunications industry. Some consumer groups worry he would steer the FCC toward more large mergers and less regulation of wireless and cable providers. They're also concerned he he won't push back on the use of data caps.

The European Central Bank (ECB) has cut interest rates for the first time in 10 months. The bank -- which serves the 17 countries that use the euro -- has cut its key rate by 0.25 perecent  to a record low of 0.5 percent.

Calls for a cut had been growing, with the latest manufacturing survey piling on the pressure. The Purchase Managers Index showed further falls in France, Italy, and  Spain. Even Germany -- Europe’s most powerful economy  --  is suffering a decline in its manufacturing activity.

But it’s not entirely clear how much stimulus the ECB can provide. The Bank has much less leverage than the U.S. Federal Reserve. It can’t print money because of German objections, and there are real doubts that today’s interest rate cut will help the euro zone countries that need it most.

“It’s very hard to make an interest rate cut, at the ECB level, effective at the level of, say, Greece, Cyprus or Spain,” says Andrew Hilton, head of the CSFI think tank. “It’s very hard because you have to get the banks in those countries to lend more money at the lower rates, but many of those banks are in trouble and are reducing their loans.”

Cutting interest rates in these circumstances has been called as futile as “pushing on a string”.

Ants may seem like just an annoyance, but they’re actually very sophisticated workers. A new study out of Switzerland finds carpenter ant colonies have some startling similarities with the structure of our own corporate ladder.

"Ants are interesting in that they divide labor according to age. The very youngest ants for the most part tend to take care of the queen and the young," says May Berenbaum, who heads the department of entomology at the University of Illinois. "Then they move into the role of custodians and cleaners. And the oldest most experienced individuals go out into the world and forage for resources."

Berenbaum notes that some ants can even skip rungs on the ladder, moving directly from nurse to forager.

"But the thing about this that may be different from human corporations is you can’t blame nepotism, because they’re all related to each other," Berenbaum says.

To hear more about how ants communicate, ant retirement, and which ant is CEO, click on the audio player above.

Updated (8:00 am EST): Former CIA director David Petraeus is reportedly close to a gig with private-equity firm KKR. It’s likely the former Army general will soon be making a lot more money than he made during his decorated public service career, which came to an early end because of an extramarital affair. If he joins KKR, he’ll juggle that with teaching positions at University of Southern California and the City University of New York.

Those are just two possible paths that retired generals and admirals can take after active duty. Top officers do CEO-size jobs, although the military pays them like junior execs. But their experience and contacts can earn them far more in civilian life. Petraeus may take on several of the jobs that have provided lucrative second acts for generals before him. Here are four possibilities:

Government Contracting

Companies that thrive on multi-billion dollar government contracts covet top officers for their connections to decision makers and their insight into what bids win, for products as glamorous as fighter aircraft to those as boring as backpacks. Even in the age of shrinking budgets and sequestration, the military is still a huge customer, and winning a big contract can make a company’s year. Retired officers who help bring them in can share in the profits.

Leadership Consulting

Companies pay good money to former flag officers for advice on management and organization. Retired generals can start their own boutique consultancies or sign on with existing management consulting firms. They can also pad their income on the corporate motivational speaking circuit.

Writing

Four-star generals Norman Schwarzkopf and Colin Powell both wrote best-selling autobiographies. Petraeus could do the same, and he is getting advice from Washington super-lawyer Robert Barnett, a specialist in landing book deals for the political elite. (His long client list includes various Clintons and Bushes.) A Petraeus memoir that goes into detail about the scandal could fetch a nice advance, but the former general -- and his family -- may decide not to relive his downfall.

TV Military Analysis

During the Afghanistan and Iraq conflicts, retired generals put in long hours and earned decent money breaking down the battles for viewers. Network military analyst gigs don’t all pay well and are less frequent in peacetime. But they provide valuable exposure and credibility, which can lead to new consulting opportunities, higher speaking fees and increased book sales.

You've probably heard of the fisheye camera lens, but how about a bug-eyed one? Researchers at the University of Illinois and Northwestern University have developed a unique hemispherical digital camera based on the eye of a fly. It takes photos with nearly 200 tiny lenses to put together one giant wide-angle almost three-dimensional image that is in focus at all depths of field.

Professor Yonggang Huang, a researcher at Northwestern, joins Marketplace's Ben Johnson to discuss how this type of camera could be used for surveillance, particularly in major cities. In the meantime, you can bug out with the pictures above.

David Gura has a report on Marketplace today making the case for inflation -- a little bit of it, anyhow. Economists generally agree that a touch of inflation can have a positive effect. They point out that inflation can erode the cost of debt over time. More importantly, perhaps, it can boost wages and growth. Here's an example from my book of how this can work.

Imagine a man with 10 children. He moves to a small town in the country that has just one store, which sells stuff that people in the country need, like hammers and tarps and animal feed. The McGivens store has some candy, but not much, because there aren't that many kids in the town.

The newcomers kids love candy, however, and the first thing they do when they arrive is go exploring the town, to see what they can buy with their pocket money. Rose, the eldest, leads the procession, and it doesn't take them long to find the McGivens store.

 Children (in unison): Hello Mister!

 Mr. McGivens: Good heavens! Where did you lot spring from?

 Rose: We've come from Chicago.

 Mr. McGivens: Well, that's a long way away.

 Rose: Yes it is, and we're hungry.

 Children: We want candy!

 Mr. McGivens: Well, I don't have much in the way of candy here. I have some Red Strings and some lemon chews, and a big jar of hard candies. What would you like?

 Rose: We've each got two dollars in pocket money, so that's $20 altogether. How much are the hard candies?

 Mr McGivens thinks for a moment. Usually he charges five cents a candy, because so few people want to buy them. But today the situation has changed. Now there is suddenly a lot more candy money in the town, and only one place to spend it: his shop. An opportunity has presented itself.

 Mr. McGivens: The hard candies are eight cents each. The lemon chews are ten cents.

 Rose: Okay. We'll take a hundred lemon drops and … 125 hard candies, please. Here's $20.

 Mr. McGivens: Here's your candy

 Children (in unison): Thank you!

 They march out of the ship, just as Henry Tomkins enters.

 Henry Tomkins: Afternoon, John.

 Mr. McGivens: Afternoon, Henry.

 Henry Tomkins: I need a new shovel and a bag of fertilizer, please. And I'll take a dozen of those lemon drops.

 Mr. McGivens: That's $30 for the shovel, $25 for the fertilizer, and a dollar twenty for the candy.

 Henry Tomkins: A dollar twenty? They were sixty cents yesterday!

 Mr. McGivens: Sorry Henry. Inflation.

 The problem with inflation is that it makes your money worth less. Mr. McGivens store is a micro economy that has been flooded by the children’s candy money. The introduction of their $20 has doubled the price of the candy that Henry Tomkins likes to buy, or in other words his dollar can only buy half the candy it was able to buy the previous day. His dollar, then, has been devalued by 50 percent.

 But inflation isn't all bad. In fact, governments quite like inflation – in moderation. Inflation may devalue existing currencies a little bit, but that can be offset by the fact that there’s a lot more money coming into the system: money to spend, or invest, or build, or even hire more staff. So, in moderation, inflation can help keep people employed.

Take Mr. McGivens. Now that’s he’s making a bit more money from his candy, he has to think about how to use those profits. He could spend the money. Or he could plow it back into his business. Either way, that keeps the money in the system. Say he spends the money on a new tie for himself. That helps the retailer who sells him the tie, plus the tie-makers, and the silk growers: there's a whole chain reaction through the tie business that can help keep people employed. In plowing the money back into his business, Mr. McGivens could refurbish his store, which would help local lumber suppliers and building workers. Or he could hire someone one day a week, to help him with a stock count. That would give that employee an income, some of which she would likely spend, again sending positive, job-sustaining ripples through Mr. McGivens’ hometown.

Excerpt taken from my book, Man vs Markets, Economics Explained, Plain and Simple. Available most everywhere books are sold.

An auto company that thinks we should drive less? That could be the future strategy for Ford Motor Company, according to Bill Ford, executive chairman of the company.

“The car for most of its history has helped people live better lives,” he says. “As the world has gotten more affluent, the infrastructure, particularly in urban areas hasn’t developed to a point where this great new volume of new vehicles will fit comfortably into those cities."

“I could not reconcile the traffic jams that I was seeing [in global cities] with the fantastic projections that some in our industry were putting out there for future sales in some of these markets.” Ford says an emphasis on public transportation is still in keeping with the greater goals of the Ford Motor Company. “What I’m talking about is providing mobility to the people who live in those mega cities in a way that might be slightly different than the way we have today.”

He hopes shareholders will bet on his long term vision for the company. “The world changes whether you change or not. So we are entering into an era where if we are open enough to embrace new business models and new technologies, then this actually will enhance the core business of the Ford Motor Company.”

Ford says, “technology is what’s going to ultimately set us free.” And in some ways, it’s here now -- in the guise of self-driving cars. Vehicle-to-vehicle communication (cars that talk to each other) and vehicle to infrastructure communication (cars that pull data from their environment) are all bringing us closer to Ford’s vision.

But the future isn’t here yet and there are some roadblocks. “I’ve often advocated a gas tax,” says Ford, “but there really is no political will for that.” He says the U.S. needs a consistent energy policy. “Until our country really decides which fuel it wants to get behind and then builds out the infrastructure behind it, we are not going to have quick enough adoption to really help solve the issue."

It’s estimated that each of us generates thousands of tidbits of data every day, and companies pay big money to collect that data. 

Let’s say you’re a big fan of the old TV show, "The Beverly Hillbillies." You might go online and buy a Jed Clampett Millionaire T-shirt. That purchase creates a little bit of data for marketers.

But many companies don’t know what to do with that information, says Andreas Weigend, director of the Social Data Lab at Stanford and Berkeley.

"Social data is the new oil," he says. "But in order for oil to be actually useful, we need refineries.  Who is extracting stuff out of these raw data that allows us to get value out of it?"

A lot of companies, actually. The data analytics industry is currently worth at least $5 billion and is growing at a rate of nearly 60 percent a year. That has attracted big companies like IBM, Dell and Hewlett-Packard to the business. And there are a growing number of players that do only data analysis, like 1010data. It analyzes data for The New York Stock Exchange, Coca-Cola, PepsiCo, Sonic, Vitamin Shoppe, among others, using everything from sales receipts to social media to help clients boost profits.

Discount retailer Dollar General came to 1010data in 2008, hoping to make sense of the data from its more than 10,000 stores.

1010data CEO Sandy Steier says his company was able to draw several conclusions from Dollar General's data. The first?

"They realized that their stores were not open the right hours," he says. The data showed some Dollar General outlets saw heavy sales right up to closing, meaning they should extend their hours. 1010data also showed Dollar General what products customers purchased together, like certain brands of soda and chips.

Dollar General wasn’t the only one interested in that information; the retailer saw a little black gold in them thar data. Dollar General started selling the analyzed data to its vendors, like Pepsi and Unilever. Those companies can see how their stuff is selling and, if they pay Dollar General a little more, they can even see how their competitors’ stuff is selling.

"This data is so valuable that companies are willing to pay Dollar General," says Steier, "which means that their data infrastructure becomes a profit center rather than a cost center."

Dollar General declined to discuss its burgeoning data business.

Soon many companies will realize the data they collect is a tradable commodity like oil, says Ben Woo, managing director of consulting firm Neuralytix.

"We’re going to see a lot more companies sell their data in different ways and we’re also going to see a lot more proessed data being sold as a service as well," he says. "The economics and the trade and the value of data is going to change dramatically over the next 10 years."

So the Jed Clampett T-shirt maker will sell data indicating your love of Jed Clampett to a company that sells DVD box sets. That company might show you an ad for the "Beverly Hillbillies" DVD box set the next time you check your email and, suddenly, that piece raw data has been refined into marketing gold.