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Updated: 55 min 56 sec ago

On-the-ground coverage from protests in Ferguson

Tue, 2014-11-25 10:54

Marketplace's Adam Allington is in Ferguson, Missouri reporting on the grand jury decision Monday not to charge officer Darren Wilson in the death of teenager Michael Brown. Here is his live coverage of the protests that followed.

[<a href="//storify.com/Marketplace/on-the-ground-coverage-in-ferguson" target="_blank">View the story "On-the-ground coverage in Ferguson" on Storify</a>]

China's smoking ban distracts from a larger issue

Tue, 2014-11-25 10:45

There are approximately 300 million smokers in China, roughly the population of the United States. Smoking also kills about a million Chinese each year. Now Beijing is considering a ban on smoking in public places and tobacco advertising. 

On the face of it, the ban is an effort by the government to control healthcare costs. But Stanford University anthropologist Matthew Kohrman, who has written extensively about smoking in China, sees the ban as a distraction from a bigger issue.

"It's a sideshow," Kohrman says.

This ban would target consumers, like advocacy efforts by other governments and the World Health Organization do. Kohrman is more concerned about the supply and production of tobacco. 

"Most people would think that cigarette production has gone down worldwide over the last two or three decades. In fact, cigarette production has tripled since the 1960s," he says. "China has become the world's cigarette superpower." 

The places a Westerner might be surprised to find smoking today? Taxis, schools and even hospitals. Even so, consumer habits are changing. Public buses and high-end department stores are smoke-free. Airplanes, too, for the most part. 

"For years now I've been flying on Chinese airlines," Kohrman says. "Shortly after the flight takes off, I've almost on every flight smelled cigarette smoke. I always figured someone in the back has a fierce nicotine habit."

Turns out, the passengers obeyed the signs and flight attendants' instructions. The smoke was coming from the cockpit. 

 

Making it a meatless Thanksgiving with Tofurky

Tue, 2014-11-25 08:48

Thanksgiving is right around the corner, so throw on your stretchy pants.It’s time for mashed potatoes, green beans, cranberry sauce, gravy, ham and of course a giant turkey right in the middle of the table. Many will deep-fry their turkey, others will stick it in the oven and baste it. But there are those who will eat tofu, or Tofurky to be exact.

"Tofurky is a meat alternative that is the original and number one selling meat alternative turkey in America," says Seth Tibbott, founder and president of the Tofurky Company.

Soybean-rich Tofurky has been a reliable vegan and vegetarian go-to at Thanksgiving gatherings for the past 20 years.

"We first sold 500 tofurky roasts in Portland, Oregon, in 1995," Tibbott says.

The company remains a family-owned and independent enterprise.

"We never sold equity to any outside investors or venture capitalists," says Tibbott. "I wish I had Kickstarter around when I started it."

Quiz: How to start college with good habits

Tue, 2014-11-25 03:45

Students who meet with their advisors are more likely to enjoy college, according to the National Survey of Student Engagement.

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Grand juries usually decide to pursue charges

Tue, 2014-11-25 03:00
11 in 162,000

The number of cases in which federal grand juries declined to issue an indictment in 2010, FiveThirtyEight reported. The federal investigation into Michael Brown's death is ongoing, but it's clear the county grand jury's decision not to pursue charges is very rare. The site's research showed one exception to the trend: when the cases involve law enforcement.

8 years

After eight years of sponsorship, Sony Corp announced it would not renew its contract with FIFA, the organization behind world soccer. As Reuters reports, Sony says the move is the result of a restructuring of divisions and a concerted effort to grow its electronic devices division.

80 percent

The portion of cities with populations between 25,000 and 50,000 nationwide that have SWAT teams at their disposal, up from 13 percent since the early 1980s. In light of this summer's protests in Ferguson the New York Times' Retro Report looked back at the proliferation of SWAT teams in the U.S. The squads have their roots in late 1960s shootouts with the Black Panthers but are now commonly implemented in drug raids.

30 percent

Americans spend about half their food dollars outside the home and consume around 30 percent of their calories outside. Strikingly, when children eat out their calorie consumption doubles. On Tuesday, the Food and Drug Administration announced rules requiring an additional set of food merchants to disclose caloric content: theaters, amusement parks, convenience stores, pizza chains, and the prepared food sections of grocery stores. It's significant, especially when you consider that a study found purchased calories fell an average 6 percent in Starbucks with calorie signage.

28

The number of cabinet members President Barack Obama has had so far, Quartz reported. Even with four secretaries of defense, including Chuck Hagel's successor, the Obama administration is in the middle of the pack. Cabinets are rife with turnover. George W. Bush and Harry S. Truman each had 35 cabinet members.

PODCAST: Counting calories

Tue, 2014-11-25 03:00

First up: the government's calculation of economic growth July through September. It was revised upward beyond what most forecasters were expecting. Couple that to new signs of strength in the housing market. More on that. And the Food and Drug Administration will come out with new rules requiring restaurants with more than 20 locations to list the calories of the food that's on the menu. So how will this change what we see? Plus, a famous venture capitalist who says monopoly, not competition is the way to go. Peter Thiel was a co-founder of the electronic payments system Paypal and was the first outsider to put money into a little social networking site called the Facebook. As part of our ongoing discussions on this program about the innovation economy, Thiel's advice to entrepreneurs is to find a niche and dominate the heck out it. Actually, he put it more strongly than that.

The decision not to pursue charges is a rare one

Tue, 2014-11-25 03:00
11 in 162,000

The number of cases in which federal grand juries declined to issue an indictment in 2010, FiveThirtyEight reported. The federal investigation into Michael Brown's death is ongoing, but it's clear the county grand juries decision not to pursue charges is very rare. The site's research showed there was one exception to the trend: when those cases involve law enforcement.

8 years

After 8 years of sponsorship, Sony Corp announced it would not renew its contract with FIFA, the organization behind world soccer. As Reuters reports, Sony says the move is the result of a restructuring of divisions, and a concerted effort to grow its electronic devices division.

80 percent

The portion of cities with populations between 25,000 and 50,000 nationwide that have SWAT teams at their disposal, up from 13 percent since the early 1980s. In light of this summer's protests in Ferguson the New York Times' Retro Report looked back at the proliferation of SWAT teams in the U.S. The squads have their roots in late 1960s shootouts with the Black Panthers, but are now commonly implemented in drug raids.

30 percent

Americans spend about half their food dollars outside the home, and consume around 30 percent of their calories outside. Strikingly, when children eat out, their calorie consumption doubles. On Tuesday, the Food and Drug Administration announced rules requiring an additional set of food merchants to disclose caloric content: theaters, amusement parks, convenience stores, pizza chains, and grocery store prepared food sections. It's significant, especially when you consider that a study found purchased calories fell an average 6 percent in Starbucks with calorie signage.

28

The number of cabinet members President Barack Obama has had so far, Quartz reported. Even with four secretaries of defense, including Chuck Hagel's successor, the Obama administration is in the middle of the pack. Cabinets are rife with turnover; George W. Bush and Harry Truman each at 35 cabinet members.

Does caloric transparency really change behavior?

Tue, 2014-11-25 03:00

On Tuesday, the Food and Drug Administration releases rules requiring an additional set of food merchants to disclose caloric content: theaters, amusement parks, convenience stores, pizza chains, and grocery store prepared food sections.

Today, Americans spend half their food dollars outside the home, and consume around 30 percent of their calories outside. Strikingly, when children eat out, their calorie consumption doubles.

Does transparency change behavior? One of the largest studies on this followed Starbucks users, at stores with calorie signs and without.

“People were systematically underestimating their calories in food items,” says study co-author Bryan Bollinger, who teaches marketing at Duke University. “So when they saw the information on the board, they were surprised and then reacted accordingly. Consumers can and will use this information if it’s useful to them.”

Listen here for more from Bollinger's interview:

The study found purchased calories fell an average 6 percent, and that changes in behavior stuck with Starbucks consumers, even when they visited outlets without calorie signage.

There’s also evidence that merchants required to post calorie counts start to offer more low-fat choices.

These finalized FDA arise from the Affordable Care Act and are scheduled to take effect in one year.

Peter Thiel on keeping salaries low at the top

Tue, 2014-11-25 02:00

Now, a moment of reflection about America's innovation economy. We know that in technology hubs like Silicon Valley, it's cool to fail. That's the mark of a seasoned, risk taking entrepreneur: having tried, failed, and tried again. It may also be cool to draw a mediocre salary.

That's the argument of  one of America's leading technology venture capitalist, who says he looks for low salaries at the top of start ups when he's thinking about investing. Peter Thiel was a co-founder of Paypal and the first outside investor in Facebook. He's also the author of a new book, "Zero to One: Notes on Startups, or How to Build the Future."

Thiel also says monopoly, not competition, is the way to go. His advice to entrepreneurs is to find a niche and dominate it. Actually, he put it more strongly than that.

Click the media player above to hear Peter Thiel in conversation with Marketplace Morning Report host David Brancaccio.

What do foreign investors see in U.S. housing stock?

Tue, 2014-11-25 02:00

The housing sector continues to dig out of the deep, deep hole we call "the Recession."

Some markets are seeing particularly strong growth thanks to foreign investors.

So, what do foreign investors see when they check out U.S. housing stock?

“Affordability, straight up. With multiple exclamation points,” says Stan Humphries, Chief Economist with online real estate firm Zillow.

A report from the National Association of Realtors earlier this year found international investors spent more than $92 billion on U.S. homes, a 35 percent increase over last year.

Humphries says some of the hottest markets in the country are Miami, New York, and Orange County.

He says they can thank their housing recoveries, in part, on this foreign cash.

“We’ve got a lot more international buyers in the U.S. right now than we did eight years ago. And that’s been increasing since 2011,” he says.

Still, all that Chinese and Russian money has a downside, says USC’s Richard Green — Like how it can make it harder on first-time home buyers.

“They are pushing up the price of housing and making less housing available to others,” he says.

Prices are so high in some places — hello, San Francisco — it's forcing some communities to consider workforce housing, which if the price is right may make a good bet for a Canadian or Chinese investor.

Who gets the money made by dead celebrities?

Mon, 2014-11-24 13:07

The latest entry in our “I've Always Wondered” series involves dead celebrities, mythic mansions and legendary kings: the King of Pop and the King of Rock ‘n Roll.

Listener David Rigby, an actuary in Winston-Salem, North Carolina, asked: “We hear about the vast amounts made by the estates of deceased celebrities like Michael Jackson and Elvis Presley. Who enjoys the benefit of all this income, and does the government get any tax revenue from it?”

I started with the king of dead-celebrity lawyers, Mark Roesler of CMG Worldwide. He’s got offices in Indianapolis and, of course, Los Angeles. His client list reads like a "Who’s Who" of Hollywood's departed: James Dean, Ella Fitzgerald, John Belushi, Telly Savalas, Bettie Page, The Andrews Sisters.

When one of these stars checks out, Roesler checks in. He values what’s left and figures out how to make money on it, for the both heirs and his firm. “They have two types of assets," Roesler says of the typical dead celebrity. "Tangible assets — cars, bank accounts, homes; and intangible assets — copyrights, trademarks [and] the right of publicity, which is the right to your name and likeness.”

Roesler says for the heirs of music stars, this is where the big money usually is. It’s the songs: sold on iTunes, played in bars and used in ads. Plus, the celebrity’s name and image, put on products or even back 0n stage in holographic form.

And who gets the profits? The estate lawyers’ cut is typically 10 percent or more. Record labels and marketers also get a slice of the revenue stream. Income tax can grab as much as 40 percent of the profits, and the IRS also takes a one-time Estate Tax payment on the estimated value of the assets at the time of death.

Roesler says that for a complicated estate — when he’s doing licensing deals and he’s in court suing bootleggers using the artist’s image or music in ads or t-shirts — his cut can be 30 percent or more.

Now let’s see what the King of Pop and the King of Rock ‘n' Roll left to their heirs.

Michael Jackson

When Jackson died from a drug overdose in 2009, he didn't have much value to marketers. Numerous scandals had eroded his reputation and value as a product endorser, and he faced massive debts from his lavish lifestyle and the upkeep of Neverland Ranch. He was planning a major comeback and arena residency in London.

Jackson has topped Forbes’ annual dead-celebrities list for five years, bringing in $140 million this year alone. The Forbes list, released in the fall, estimates revenue from all sources from the past 12 months before taxes and management fees. As Beverly Hills entertainment lawyer Joseph Schleimer explains, death often brings a change in a star’s financial fortunes.

“The mansions, yachts, luxury cars, private jets and parasitic entourages are dispensed with,” Schleimer says. “Death ushers in lawyers, accountants and executors, and they usually bring a cold eye for maximizing revenue.”

Jackson’s will was clear: he left the bulk of his estate to his mother, Katherine, and his three children, Prince, Paris and ‘Blanket.’ His father, Joseph, and his siblings inherited nothing.

In the six years since Jackson’s death, the executors designated in his will given Jackson's legacy a complete turnaround, generating more than $600 million in earnings. They've raked in profits from several song catalogs Jackson acquired during his life, Cirque du Soleil shows in Las Vegas, posthumous albums, a documentary, plus numerous marketing and endorsement deals.

Jackson’s estate, meanwhile, is in tax court, fighting a $730 million IRS demand for back-estate taxes and penalties. The executors reportedly pegged the value of Jackson's assets at just $7 million when he died in 2009 and they say the half-billion-dollar turnaround they've engineered came after he died and couldn't have been anticipated. The IRS says the estate was worth at least $1 billion when he passed it on to his heirs, and that’s how much they should have paid taxes on.

AFP/Getty Images

Elvis Presley

When Elvis Presley died of a heart attack in August 1977, his finances were a wreck. His personal life, his music and his movie career had been in decline for years. Graceland was expensive to keep up.

Today, Elvis Presley is the second highest-earning dead celebrity, according to Forbes, with his estate pulling in about $55 million each year.

Presley’s longtime manager, Colonel Tom Parker, let Presley into several ill-advised business deals. In 1973, they sold off Elvis’s rights to all future royalties from songs he had recorded up to that date. RCA Records paid the pair $5.4 million, which they split 50-50. After multiple lawsuits over Parker’s handling of Presley’s finances before and after his death, Parker was removed from involvement in the estate altogether.

Elvis never sold off control of his hundreds of published songs, and they continued to generate revenue for him and for the estate after his death.

Presley’s will left his estate to his father, Vernon, his grandmother, Minnie Mae, and his nine-year-old daughter, Lisa Marie. Mounting debts led to a recommendation that the estate sell Graceland, but the heirs decided to keep the mansion, eventually opening it to the public in 1982. It is now listed on the National Register of Historic Places and receives 600,000 visitors per year. The estate has also since opened the Heartbreak Hotel and operates a Memphis shopping mall selling Elvis memorabilia.

Today, the Elvis Presley Estate owns a vast collection of photos, album covers, movie posters, archive video footage, as well as the Presley's catalog. It protects and markets Presley's name and image.

But the estate isn’t controlled by Presleys anymore. In 2005, Lisa Marie Presley sold an 85 percent stake to Robert Sillerman’s CKX media company. The estate was sold to Authentic Brands in 2013. The company also manages the Marilyn Monroe and Juicy Couture brands. Lisa Marie Presley retains a 15 percent stake in the estate, as well as owning Graceland and her father’s personal effects, which she manages with her mother, Priscilla Presley.

Immigration policy could change the education equation

Mon, 2014-11-24 11:00

We're only beginning to grasp the implications of President Obama's executive action on immigration, announced last week. With millions of undocumented immigrants free to work legally, and deportation no longer a risk (at least for a few years), there will be better-paying jobs for many – and a lot less stress.

For some, there may be another opportunity: education.

In some states, undocumented workers who qualify for deportation relief will become eligible for in-state tuition. They'll be able to get driver's licenses, making it easier to get to school. They also may be eligible for work-study jobs and internships.

Some may enroll in professional programs to become lawyers, teachers and pharmacists, says Michael Olivas, who teaches immigration law at the University of Houston, "because many of them just hadn't been able to afford it before."

Under the new policy, as many as 3.7 million parents of children who were born in the U.S. — or are legal residents — will become eligible for temporary relief from deportation, according to the nonpartisan Migration Policy Institute. Another 290,000 undocumented immigrants whose parents brought them here illegally could also qualify. The action lifts the age requirement for the 2012 Deferred Action for Childhood Arrivals program, which applied only to people 30 and under.

The new policy won't mean a flood of new college students, says Michael Fix, president of the Migration Policy Institute.

That's partly because most who qualify are older than the traditional college-going age. Also, undocumented students still won't qualify for federal financial aid. Most of those who are eligible live in states that already offer in-state tuition to undocumented students, Fix says.

But the new policy will help the school-age children of many who qualify, he says.

"What you could see among some of the U.S. citizen children is more persistence in school, better attendance, you could see maybe better grades, and you might well see better health," he says.

A recent study from the nonprofit group Human Impact Partners found that children in families under the threat of detention or deportation end up with less education than children of citizens.

"Undocumented parents are really struggling with poor job conditions, with economic hardship and stress, and it can limit their participation in learning activities," says Lili Farhang, one of the study's authors.

Undocumented parents who have shied away from institutions, for fear of being found out, might now be more involved in their children's schools, Farhang says.

An immigrant from Peru, Lorella Praeli didn't discover that she was undocumented until her senior year in high school, but her sister found out at a much younger age.

"I could see how it affected her so much in both how she performed in school and how she related to others," says Praeli, director of advocacy with the United We Dream network, which advocates for immigrant youth and families. 

Two years ago, Praeli's sister qualified for the Deferred Action for Childhood Arrivals program and has blossomed in college, Praeli says.

"I was able to see it firsthand in my family, how this piece of paper this identification card and a nine-digit Social Security number – just changed who Maria was," she says.

Praeli now has her green card. And under the new policy, their mom will qualify for one, too.

Help wanted: Versatile executive to lead Department of Defense

Mon, 2014-11-24 11:00

When Chuck Hagel was appointed secretary of defense in early 2013, the military was winding down from the wars in Afghanistan and Iraq. But new overseas conflicts have changed the job's requirements.

Today's secretary of defense needs to possess management experience, the ability to oversee shrinking budgets and be skilled at dealing with conflict at home and abroad. Military experience is a plus but not required. Must be a strong policy adviser.

 

Clydesdales go missing from Budweiser's holiday ads

Mon, 2014-11-24 11:00

Budweiser has been using Clydesdales in its holiday advertisements since 1987. But this year the brewing company is saying goodbye to the horses and hello to Jay-Z.

With the help of Jay-Z, the brewing company hopes to appeal to untapped potential customers. According to the Wall Street Journal, 44 percent of 21 to 27-year-old beer drinkers have never tried Budweiser.  

To add some context, Jay-Z has appeared in a few Budweiser advertisements in the past, like this one from 2012:

And in case you are a huge Budweiser Clydesdale fan, give thanks for the Internet. You can watch this Budweiser holiday commercial from the 1980s here:

Or the 2014 Super Bowl commercial here:

 

 

The hidden dangers of low oil prices

Mon, 2014-11-24 11:00

If OPEC doesn't decide to cut oil production when it meets in Vienna this week, some say oil could fall to $60 a barrel. Lower costs sound like bad news for the oil industry and good news for the rest of us.

But it's not that simple. There are other losers – and a chance that $60 oil could end up being bad news for all of us down the line.

Other losers

The oil boom has produced one big set of winners outside of the traditional oil business: the whole economies of oil-producer states like North Dakota and Texas. 

"The places where the booms have been occurring have largely benefited from increases in land and housing prices," says economist Michael Greenstone, director of the University of Chicago's Energy Policy Institute. "They’re now going to give some of that back."

Broader risks

When oil prices collapsed all of a sudden in the late 1980s, it blew back on the rest of us, says Michael Webber, deputy director of the Energy Institute at the University of Texas at Austin.

First, he says, oil producers in Texas and Oklahoma went bankrupt, "which caused a lot of land deals to go bad— because the land had been overvalued, which caused tens of thousands of savings and loans to go bankrupt and belly up, which caused a nationwide S&L scandal, which eventually led to recession."

That particular set of dominoes isn’t likely to fall this time, Webber says. But it’s an example of what can happen.

Wild cards

Nobody knows for sure whether we’re looking at a long stretch of low oil prices. Maybe we’re looking at a stretch of volatility – prices that go up and down.

That can slow down the economy, says economist Christopher Knittel, director of the Center for Energy and Environmental Policy Research at MIT.

He starts with household example:  Gas prices are high, so a family buys a Prius instead of an SUV. "Now, if oil prices fall, then they wish they had bought the more-powerful car instead of the more fuel-efficient car," he says.  

But it’s too late, the money’s been sunk. Companies can also get caught with the wrong big-ticket items. Airlines, railroads, shippers. "When they bet wrong, then their prices have to increase," says Knittel. "And we pay those prices."

The really big picture

Lower gas prices could have another cost: More driving, which leads to more carbon emissions and more global warming. Economists are still struggling to calculate the price, but they expect it to be high.

The problem with fracking

Mon, 2014-11-24 05:31

Slumping oil prices are wrecking life for drillers around the world, particularly high-cost producers now struggling to make a profit ... like the U.S.

American oil from shale, which comes out of the ground through fracking, is pricey to extract. On top of that, sources of oil become mere trickles within a year or two.

The notion of oil wells tailing off and aging isn’t new. In the late 50s, a Hollywood celebrity famously joked that actors are, “about as short-lived as an oil well and twice as pretty.”

The issue is, for the new so-called shale wells, production falls like a stone in the first year.

“Let’s say you produce 500 barrels in the first month of production,” says James Burkhard, head of oil market research for IHS Energy. “Twelve months later you could be producing around 250 barrels. So a decline rate of about 50 percent. In a conventional well, the decline rate is much less steep.”

Oil from shale is not a pool of liquid, but rather small amounts trapped in tight rock. That requires drillers to fracture, or frac, the shale rock to release the oil. Quickly, though, output slows and pressure falls. And the driller has to drill and frac again, in a new spot. That’s expensive — in many places, each well costs $8 million.

“I’ve seen it personally firsthand,” says Ed Hirs, managing director of the Houston-based oil and gas firm Hillhouse Resources. He also teaches economics at the University of Houston. “We’ve had wells on production since 2009, 2010 that have been plugged and abandoned here in 2014, because they are not producing enough to cover their cost.”

Hirs says his firm barely profited in shale. So it returned to drilling old-school conventional oil, where a good well returns five, even 10 dollars for each one invested.

Fracking for shale oil, he says, is a fad, like that scene where the cruise ship tilts to one side.

“They all ran to the shale side of the boat,” Hirs says. “That was the fashion of the day. We see this in other industries as well.”  

Fast-declining wells also require continuous drilling and investing to increase production. Before one tails off, you have to drill the second. And then before that tails off, you drill the third. It’s a treadmill, which may be speeding up as the most productive drilling spots are taken.

Some call this the 'Red Queen' race. Remember Alice, from the Wonderland books? In one scene, she runs and runs and gets nowhere, at which point the Red Queen chimes in.

“Now here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!”  

Constant drilling means constant spending, and according to the U.S. Department of Energy, production revenues are not keeping up with expenditures. Some shale investors are edgy, analysts say.

“If you’re giving money to somebody, you eventually want to get something back,” says Virendra Chauhan of Energy Aspects in London. “If that’s not happening, then there seems to be something wrong with the business model.”

To which shale optimists shake their collective heads. Looking back more than a century, drilling technology has repeatedly proven skeptics wrong. “Until we hit peak knowledge, until the human race hits peak knowledge, we won’t hit peak oil supply,” Burkhard of IHS Energy says.

Companies now drill and frack wells deeper, closer together and more efficiently. So, can technology improve faster than shale wells fall off? “If today the wells you’re drilling are twice as good as the wells you drilled two years ago, then that goes a long way toward addressing that decline,” says geologist Allen Gilmer, CEO of oil and gas database firm Drillinginfo.

Today, the U.S. produces more than 3 million barrels a day, from shale alone. That’s more than the total output of Iran, or Iraq, or Venezuela. “I think it’s very unlikely to ramp down,” Gilmer says, “unless operators really start pulling back on drilling. And as long as a well is economic, I don’t see that happening.”       

Ed Hirs at Hillhouse Resources does see that happening. With oil prices low, and investors antsy, exuberance could go bust. “The challenge with these fast-declining wells is this pace of drilling needs to continue,” Hirs says. “Without the pace of drilling continuing, that three and a half million barrels a day will peter out to zero in the next three to five years.”

That’s the debate: whether shale oil production declines the way its wells do, the way movie stars come and go. Bullish types will note the actor who compared short careers to oil wells decades ago. That actor's name? Ronald Reagan

Quiz: The best-connected state in the nation

Mon, 2014-11-24 04:43

More than 70 percent of American households have a high-speed internet connection, according to a Census Bureau report.

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PODCAST: Saying "I do" to a bigger income

Mon, 2014-11-24 03:00

First up, there's news the World Bank is moving away from funding coal projects, according to the bank's president. There will be exceptions made in the poorest places, but observers say the banks' rhetoric is becoming increasingly clear about climate change. More on that. Plus, the rise of single-parent households is a social, cultural, and economic phenomenon. This is at the center of a new study put out by the conservative-leaning American Enterprise Institute, which argues that stronger marriages could help bridge the widening wealth and poverty divide. We look into the challenge of pinning down causes of America's wealth gap. And imagine a country being able to double the size of its economy, using swipes of a tablet or clicks of a mouse. The small Baltic state of Estonia aims to do just that.  

Where in the world are the important financial centers?

Mon, 2014-11-24 03:00
$64

That’s how much the tiny Baltic state of Estonia will charge foreigners to become an “e-resident” of the country. E-residents will be able to open up an Estonian bank account, and even start and run a company in the country. They just won’t be able to live there.

32 percent

A new study by the conservative-leaning American Enterprise Institute says that the rise of single-parent households accounts for a 32 percent growth in family-income inequality between 1979 and 2012. Others point towards the growth in incomes of the “one percent” as a more likely cause for the widening gap.

400 feet

Commercial drone regulations are taking off. As reported by the Wall Street Journal, new federal regulations will require operators to have a license, and will limit commercial drone flights to daylight hours, and below 400 feet.

53 percent

That’s the percentage of respondents who named Shanghai as the leading global financial center by 2019 in a survey conducted by Kinetic Partners. Bloomberg News also reports that among the some 300 finance professionals surveyed, New York was named the world’s most important financial center, overtaking London for the second year in a row.

300 sellers

That’s how many legal marijuana sellers currently exist in Colorado. And just like every other retailer, they’re gearing up for Black Friday, with deals on joints, vape-pen cartridges, and plain old ounces of marijuana. Some have even nicknamed the event “Green Friday.”

Doubling a country's economy with the click of a mouse

Mon, 2014-11-24 02:00

Imagine a country being able to double the size of its economy, almost at the touch of a button, or the click of a mouse. The tiny Baltic state of Estonia aims to do just that. Next month, Estonia will become the first country in the world to offer foreigners so-called “ e-residency,” which could hugely expand its customer base without increasing the size of its physical population of 1.3 million people.  

Estonia is trying to cash in on what it calls its digital infrastructure. It’s one of the most e-connected places on the planet with almost every home, office, factory and classroom hooked up to the internet, and most government business conducted online; Estonia even uses e-voting in its general elections. 

Now, foreigners will be invited to sign up, pay $64, and become an e-resident of Estonia.

“E-residency is basically a government-guaranteed digital identity,” explains Siret Schutting, Estonia’s e-ambassador. “We are allowing foreigners to acquire what every Estonian already has: a digital signature. This means they can securely sign documents online. It’s legally the same as a handwritten signature.”

You “sign” by using a unique code along with your own smartcard and reader. E-residency won’t give you right to live in Estonia or even to visit the country, but Taavi Kotka of the Ministry for Economic Affairs in the capital Tallinn says it will let you do business there. 

“You can open up a bank account, start a company, run a company, all that stuff," he says. "We’re aiming to sign up 10 million e-residents. That would give a big boost to the Estonian economy. More customers for our banks, for telecom companies ... for everybody.”

Kotka claims e-residency will be totally secure. To qualify, you must supply biometric data — like finger prints — and be vetted. However, Ian Bond, a former British ambassador to neighboring Latvia, is not entirely reassured.

“I would have some concerns about who exactly would be getting e-residency. With Russia on its doorstep, there is a risk of money laundering. There is a risk of exploitation by organized crime. $64 won’t pay for much in-depth vetting,” he says.

Estonia knows all about cyber problems from its mighty neighbor; the country suffered a massive attack from Russian hackers in 2007, apparently because it planned to relocate a Soviet-era war memorial. Estonian government, bank, police and other emergency websites crashed under a bombardment of service denial messages. But the Baltic state weathered the storm and it is now host to NATO’s cyber security headquarters. Estonia reckons that although it is small, it can defend itself — and its residents — in cyberspace.   

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