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Apple is officially in the business of music streaming

Mon, 2015-06-08 11:26

Apple's 2015 Worldwide Developers Conference kicked off Monday in San Francisco. The conference hosts developers for a preview of what's to come in software for Apple products. But it's also, often, a place for Apple to announce new products and initiatives.

Apple CEO Tim Cook gave a keynote address where he announced, among other things, a new music streaming and Internet radio service called Apple Music. The service is coming later this month.

"The company was basically talking about different ways that this service will function," says Marketplace Tech host Ben Johnson. "One is Beats 1, which is this sort of 24/7 streaming radio service that is put together by DJs in LA, New York, and in London."

Apple Music will be available for $9.99 per month, or $14.99 a month for the family plan, which lets users share Apple Music with up to five other people. 

This is your brain on Wi-Fi

Mon, 2015-06-08 08:50

Finish this sentence: "If my brain could connect to my Wi-Fi network, I would feel ______."

In his new book, “Apex,” former Microsoft developer Ramez Naam takes readers 20 years into the future to tell the story of a dystopian world that is (disturbingly) similar to our own. The third book in his “Nexus” trilogy, Naam explores the potential pitfalls of a neurally networked society.

“Everything you can imagine can go wrong,” Naam says. “From software crashes in your brain, to hackers, to the equivalent of the NSA wanting to snoop in on your thoughts.”

Naam was inspired to write the series when, after years as a developer, he began to realize just how advanced brain-implanted technology was becoming. The field is still largely experimental, but many scientists are already exploring the possibility that people could one day control computers and even communicate with one another using only their minds.

A connected world like this raises many ethical questions. But while society may reject technology advances at first, Naam says that, with time, people will come to embrace it.

“When we had in vitro fertilization invented about 30 years ago, the cover of Time Magazine was ‘Test Tube Babies,’ and we thought it was deeply unethical … but 30 years on, no one even talks about test tube babies. Now they just say, ‘Oh, we had some trouble having a baby, and now we have twins.' ”

Naam says that, much like the story told in his trilogy, there will always be a temptation to use advancements improperly, but he contends that that shouldn’t stand in the way of progress.

“Mostly, people choose to do things for their betterment or their kids," he says. "If somebody's trying to do it to really hurt someone else, make that illegal, but let people make smart choices for themselves.”

PODCAST: Calpers could shake up Wall Street

Mon, 2015-06-08 03:09

The biggest of public pension funds could shake up Wall Street today. More on that. Plus, in the weeks before the Supreme Court reveals its opinion about same-sex marriage again, it is not clear what the U.S. Military will enforce on equality for gay members. We take a closer look. And San Francisco’s city attorney has filed a lawsuit against McDonalds stating the local franchise right next to the Golden Gate Park should be controlling the population that congregate around its doors. But is it a local business responsibility to clean up the area?

Calpers' quest to pay lower money management fees

Mon, 2015-06-08 03:00

The California Public Employees’ Retirement System, the nation’s largest public pension fund, is expected to announce Monday that it’s taking a big red marker to the list of firms managing its money, cutting their number by roughly half.

At the heart of this is an attempt to lower the amount of money the pension giant pays to companies that manage its billions, says Kent Smetters, a professor at the University of Pennsylvania’s Wharton School.

Smetters expects other pension funds to follow Calpers’ lead.

Calpers also recently announced they were getting out of hedge funds for a similar reason.

Why this focus on lowering expenses?

“They’re only about 77 percent funded,” says Robert Pozen, who teaches at Harvard Business School. “Unfortunately, like most of these funds, they don’t have enough money now to invest to pay all these benefits over time.”

Pozen says by investing more money with fewer firms, Calpers will have more clout to negotiate lower fees. Cutting those costs now means more money for pensioners in the future. 

Tesla challenge to dealers goes beyond electric cars

Mon, 2015-06-08 02:00

Tesla Motors is in a state by state fight to sell its electric cars directly to consumers. States have strong franchise laws that give only dealers that privilege, and dealers are using their political power to keep it that way. But maybe not all of them. Some on Wall Street think a few dealers might be fine with Tesla getting its way.

The issue is way bigger than Tesla, which sells a relative handful of cars. Franchise laws protect dealers from competition. But they can also make it tricky for certain dealers to get bigger.

“If these laws were amended or liberalized more to open up the opportunities that dealers have to consolidate, that would actually be to their advantage,” says Dan Crane, associate dean at Michigan’s Law School.

Crane and other Tesla supporters say that opening up the system would lower prices for consumers. But it could also set off a wave of mergers. There are thousands of car dealers. Buyouts could shrink that to hundreds, even dozens. Many established dealers don’t want that, so they’re fighting to preserve their franchise laws.

Click the media player above to hear more.

Mark Garrison: If you wanna dig into franchise laws, buckle up, says longtime auto exec Gerry Meyers.

Gerry Meyers: I’m glad you raised the subject, because it’s a can of worms.

And it’s way bigger than Tesla, which only sells a handful of cars in any case. Franchise laws protect dealers from competition. But they can also make it tricky for certain dealers to get bigger, says Dan Crane, associate dean at Michigan’s Law School.

Dan Crane: If these laws were amended or liberalized more to open up the opportunities that dealers have to consolidate, that would actually be to their advantage.

Crane and other Tesla supporters argue opening up the system would lower prices for consumers. But it could also set off a wave of mergers. There are thousands of car dealers. Buyouts could shrink that to hundreds, even dozens. But many established dealers don’t want that, so they’re fighting.

Brian Terr: They’re tremendously strong. VP Brian Terr says dealer political power, built on jobs and money they bring local communities, means franchise laws will be tough to change anytime soon. I'm Mark Garrison, for Marketplace.

Some gay veterans get fewer benefits

Mon, 2015-06-08 02:00

The Senate resumes debate on Monday on the National Defense Authorization Act, after last week failing to pass an amendment that would have changed the law to ensure all married gay veterans receive the same benefits as their straight counterparts.

Currently, the law says the VA can only consider a veteran married if the marriage is legal in the state where that veteran lives. That means in 13 states, where same-sex marriage is not legal, gay vets lose out on some benefits.

Ashley Broadway, who lives in Virginia where same-sex marriage is legal, is the president of The American Military Partner Association, an advocacy group.

"I'm a spouse of an almost 20-year active duty service member," who is planning to retire in a few years, Broadway says. They have two children together. And, Broadway says, they are concerned about where they will live in the future.

Broadway wants a change in the law so that wherever they move in retirement, "we would be able to have the same type of benefits that our straight counterparts [have]."

Those benefits include certain disability benefits, which are increased for married vets with children, and certain medical benefits which are available to their family members.

The amendment that failed last week was offered by New Hampshire Senator Jeanne Shaheen.

"If anybody ought to be treated equally, it ought to be those people who have put their lives on the line for this country," Shaheen says.

The issue could be moot if the Supreme Court rules in favor of same-sex marriage, in a decision that is expected by the end of June. But if the high court's ruling is more nuanced and open to interpretation, Shaheen says a bill may be the way to address the issue.

Some gay veterans get less benefits

Mon, 2015-06-08 02:00

The Senate resumes debate on Monday on the National Defense Authorization Act, after last week failing to pass an amendment that would have changed the law to ensure all married gay veterans receive the same benefits as their straight counterparts.

Currently, the law says the VA can only consider a veteran married if the marriage is legal in the state where that veteran lives. That means in 13 states, where same-sex marriage is not legal, gay vets lose out on some benefits.

Ashley Broadway, who lives in Virginia where same-sex marriage is legal, is the president of The American Military Partner Association, an advocacy group.

"I'm a spouse of an almost 20-year active duty service member," who is planning to retire in a few years, Broadway says. They have two children together. And, Broadway says, they are concerned about where they will live in the future.

Broadway wants a change in the law so that wherever they move in retirement, "we would be able to have the same type of benefits that our straight counterparts [have]."

Those benefits include certain disability benefits, which are increased for married vets with children, and certain medical benefits which are available to their family members.

The amendment that failed last week was offered by New Hampshire Senator Jeanne Shaheen.

"If anybody ought to be treated equally, it ought to be those people who have put their lives on the line for this country," Shaheen says.

The issue could be moot if the Supreme Court rules in favor of same-sex marriage, in a decision that is expected by the end of June. But if the high court's ruling is more nuanced and open to interpretation, Shaheen says a bill may be the way to address the issue.

San Francisco threatens to sue McDonald's over drug dealing

Mon, 2015-06-08 02:00

There's an area right by Golden Gate Park in Haight-Ashbury that's known as a place to buy marijuana and psychedelics. The city has tried for decades to “clean up” the drug dealing. Now, it is putting pressure on one specific business—the local McDonald's.

Drugs are part of Haight-Ashbury's legacy—you know, Summer of Love, Janis Joplin, The Grateful Dead, LSD. That past still draws a certain crowd. Drifters go to play music, panhandle, and smoke pot. Many congregate on the edge of the park around McDonald's and some offer drugs to people passing by.

The city says the situation has gotten out of hand, and that serial drug dealers are doing business on McDonald’s property. It sent a letter to both McDonald’s Corporation and the local franchisee. The gist was that the business had to crack down on the illegal activity or risk a lawsuit.

Megan Cesare-Eastman is an attorney with the city. She says, “All we’re asking them to do is to take reasonable steps to change some of their operating procedures to make their property less attractive for that illegal activity to occur.”

The city is not specifying exactly what the business would have to do, but Cesare-Eastman says it should be something along the lines of adding security or putting up a fence around the back parking lot. 

Now there is a precedent for this kind of lawsuit where businesses are sued for illegal activity on their properties. But local attorney John Kithas says the city would have a tough case here. He says it would have to prove McDonald’s is a substantial part of the problem, which remember has been happening here for decades.

Kithas says, “The bottom line is that it is society's problem and the city is dumping on McDonald's potentially.”

It is no surprise drifters and drug dealers congregate at this McDonald’s. The rest of the neighborhood is pretty gentrified. Exhibit A: the Whole Foods across the street.

Mikias Lenherr is standing outside the McDonald's drinking a McDonald's coffee. He says, “the gentrification of San Francisco has become completely ridiculous.”

Lenherr is homeless. He says McDonald's is one of the last places to use the bathroom and get a cheap meal. He says he can't afford Whole Foods, adding that “those Jalapeno McDoubles are frickin pretty good.”

Some local businesses support pressure on McDonald's. Jerry Johnson sells hippie trinkets, but he says these modern drifters hurt his business. He wants security at McDonald’s. At the same time he says it will not solve the real issues here—poverty and homelessness.

Johnson says, “I've always said this homeless problem isn't a police problem, it's a society problem. We're just shifting the problem around. We're not solving anything.”

The city’s letter has already had an effect. McDonald's has hired some private security. That may stop some of the drug sales, but it probably won’t keep away those hoping to catch a puff of Haight-Ashbury's hippie past.

Does diversity make a difference in policing?

Mon, 2015-06-08 02:00

One solution that’s proposed by civil rights advocates to deal with problems of racial profiling and excessive use of force on minority suspects is to increase police ­force diversity. The idea is that if officers on the beat more closely resemble people on the street, then this will reduce police-community conflict. This is especially relevant in big cities such as Los Angeles, Dallas, Chicago, and Oakland, and smaller cities such as Ferguson, Missouri, where the population is now majority black and Hispanic, but the police force is still majority-white.

But it is not clear—based on anecdotal evidence from police forces around the country, and academic research on policing—whether having more officers of color would actually help protect people of color from racially biased treatment by police.

At a law enforcement expo near Portland, Oregon, recently, vendors were demonstrating police­-training video simulators. The company VirTra, from Tempe, Arizona, offers its V-300 simulator for police and military use-of-force training. It features a 300-degree video-screen array. Armed with laser-equipped Glock service revolvers, the participating police trainee(s) stand on a raised platform and are faced with an evolving scenario to which they decide how to respond in real-time. Possible scenarios range from a drunk driver who refuses to pull over, to active shooters in a school.

Veteran instructor Scott Dilullo of VirTra runs the use-of-force simulations. He says in one scenario an active shooter is in a movie theatre. The cops being trained virtually enter a lobby, where a side door then opens. Dilullo describes what happens next: “We have a black male off­-duty officer come out with a badge in his hand, and a gun. We have officers [in the training] shooting him even though he’s screaming ‘I’m a cop, I’m a cop, I’m a cop.’ They’re not seeing the color of his skin; that’s not coming into play. What it is, is that they see the gun, and they’re reacting to it.”

However, academic research on this shows many police do react to the race of the person they confront. Joshua Correll is a psychologist and neuroscientist at the University of Colorado. In his experiments, Correll puts subjects, including police officers, in front of a screen, and a character pops up: black, or white, holding a gun, or holding a non-threatening object such as a can of Coke or a cellphone.

Correll says police in general react correctly to the threat they face, assuming they are properly trained. “Police officers are pretty good at making the right decision, shooting the guy with the gun and not shooting the guy with the cellphone, and race doesn’t dramatically impact their decisions,” says Correll. “They’re not more likely to shoot a black target than to shoot a white target."

But Correll has also found a difference in police-reaction that is based on race. “When we look at their response times, we do see a pattern of racial bias in police officers. Such that, if it’s a black guy with a gun, they respond really quickly, and if it’s a white guy with a gun, they make the right decision, they shoot him, but it takes them a second. It’s like, they have to override active stereotypes to make the right response.”

Correll says this result mirrors other psychological research on racial bias and stereotyping, which he says are communicated in movies, music, news reports and other media. “When a black target pops up on a screen, participants show this kind-of enhanced attention, similar to what people show when they respond to a threat,” says Correll. “It may not be conscious, it may not be intentional, it may not be something that they are personally comfortable with. But in our society they pick up on the association between race and threat.”

And Correll says the response is essentially the same regardless of the race of the  human subject being tested. “We’ve looked at undergraduates, people in the community, people in law enforcement,” says Correll. “If the participant is black rather than white, are they less likely to associate a black target with danger? The answer is generally no.”

Professor Delores Jones-Brown studies race and policing at John Jay College of Criminal Justice, and based on the academic literature, she believes that “diversifying the identity of the people on the police department is not a panacea to police brutality, misconduct or poor police-community relations.”

Jones-Brown continues: “There is a bit of naivete that if you have an officer of color, that officer can’t engage in racial profiling. And I think all the evidence suggests that’s not the case. We do see black civilians, particularly black men, as potentially more dangerous, potentially more criminal, than others. Even black and other minority police officers engage in that stereotype as well. One explanation is that they may be attempting to prove themselves as worthy of the police culture, or demonstrate to their white counterparts that they’re not being more lenient on their own ethnic group.”

NYPD patrol officer Sean Forbes sees this in his daily work. He works in multiple precincts in Brooklyn, and often responds with his duty officer to crime scenes where suspects, witnesses and other civilians allege police mistreatment or misconduct based on race.

Forbes is black and says he sometimes sees other minority cops treating people of color more harshly than white cops do.

“The reality is, some of the guys that I deal with are worse” than white cops, says Forbes. “I’ve seen officers of color—black and Hispanic—who basically fit into the ‘I’ve got to prove myself, I’ve got to make these guys realize I’m in charge’ kind of attitude.”

Forbes says he does feel more comfortable responding to a disturbance or crime when there are other officers color on the scene. And he believes recruiting more police of color in New York and other cities would help build trust and acceptance for law enforcement in minority communities.

Still, attracting more black and Hispanic recruits continues to be an elusive goal. According to data from the U.S. Bureau of Justice Statistics, as of 2013, the percentage of black police officers nationwide was 12 percent, and had not risen since 1997. Blacks make up 13.2 percent of U.S. population, according to the most recent census data. From 2007 to 2013, the percentage of Hispanic police increased from 10.3 percent to 11.6 percent. Hispanics make up 17.1 percent of U.S. population.

'It's like Uber, but for break-up texts'

Mon, 2015-06-08 01:58

That's about how many messages have been submitted to Textie, a new site that lets users submit tricky, sometimes emotional messages like "Are you in love with me?" or "I need to move out" and crowdsource replies. The Washington Post's Intersect blog dug into some of these messages and why some of our most important conversations happen via SMS.


That's how many states currently ban same-sex marriage. And that can lead to a lot of problems for married gay veterans, as last week the Senate failed to pass an amendment that would ensure they receive the same benefits as their straight counterparts. The Senate resumes debate on Monday.

$440 million

That's how much the nude tourism industry is worth, according to its trade group. And it's not just beaches; there are nude cruises and even clothing-optional towns. Marketplace Weekend took a dive into this growing community with author Mark Haskell Smith, who stripped down himself to study it.

24.04 Mbps

That's the download speed of Helsinki's free public Wi-Fi network. Live since 2006, the hot spots are the result of a decision to concurrently install open networks in addition to the Wi-Fi being put into official buildings at the time. As Quartz reports, part of the city's ability to maintain such a service is the high municipal tax paid by Finnish citizens.

$2 million

That's how much was won by a team from Korea in a DARPA-sponsored robotics competition. Competitors completed a series of challenges based on disaster scenarios. But as reported by the New York Times, these were far from the elaborate droids currently seen in television and movies. It was seven and a half hours before the a robot was able to finish the first obstacle course.


That's how many suppliers Patagonia uses around the world to assemble its clothing and other products, the Atlantic reported. But that's just one part of a longer supply chain, including about 175 mills, farms and other manufacturers. That means it's difficult for even a more labor-conscious brand like Patagonia to ensure illegal or exploitative labor isn't used to create its products. The company is a case study for the clothing industry at large.

The business of being naked

Fri, 2015-06-05 14:14

Nude tourism is an industry worth about $440 million every year, according to the American Association for Nude Recreation. Author Mark Haskell Smith saw — and bared — it all to write his new book, "Naked At Lunch: A Reluctant Nudist's Adventures in the Clothing-Optional World."

Smith did a lot of naked traveling himself for research. He went to a nudist resort in Palm Springs, California, one of 200 in the U.S.

"They're basically hotels with swimming pools, a lot of times with lakes and park spaces," he says.

He also went on a cruise on a chartered Holland America ship that had been "commandeered by nudists." Princess Cruises and other liners do the same thing.

"Basically, you've got a cruise ship that is rented by a nudist cruise company," Smith says. "For them, it's a big business."

In Europe, Smith visited towns where nude beaches drove tourism. In Vera, Spain,"the whole town is clothing optional," Smith says. He interviewed the mayor there and found out the visiting nudists were the prime economic driver for the whole area. 

Smith says it took a while for him to get comfortable in his own (bare) skin, but once he got used to it, he was able to embrace everything from nude hiking to grocery shopping. In a 60,000 person town in France where almost everyone is nude, Smith says, "trying to speak French was way more embarrassing than being naked."

Nude tourism is also expanding. Fifteen years ago, there were only two cruises, up to 45 this year. And the nude neighborhoods aren't just in Europe — in Pasco, Florida, there are housing developments just for nudists. "There's a whole real estate market of people who buy into these areas," Smith says. 

In "Naked at Lunch," Smith speaks to someone who thinks of nudism as a completely anti-capitalist statement. To some extent, Smith agrees, since it's all about being happy with — no pun intended — the bare necessities.

"They're rebels ... they stand up against all the rules of church and society, and even some of our laws, a lot of them risk a stigma that could cost them their jobs," he says. "They do it just because it feels good ... that is a completely anti-capitalist thing: you don't need to purchase anything to be happy."

Economics and the transgender community

Fri, 2015-06-05 13:24

In the past two years, both Laverne Cox and Caitlyn Jenner, transgender women, have been featured in prominent magazine covers. "Orange Is the New Black" and "Transparent" brought significant trans characters to TV. Media coverage is changing too, from the New York Times series "Transgender Today" to Time's 2014 article "The Transgender Tipping Point."

For the trans community at large, it doesn't always feel like popular culture — or nondiscrimination laws — are truly transforming the experience. Most people don't get a magazine cover, a hashtag and a documentary series when they come out.

There are still enormous obstacles to face: transgender people are about twice as likely to be unemployed and have less access to healthcare and housing. Transgender people still face high rates of violence and suicide. There have been some changes that protect trans people at work from discrimination. Fortune 100 and 500 companies are widely adopting policies that prevent against discrimination based on gender identity, but smaller employers are still catching up, often leaving someone in the midst of a transition out of a job. 

Drian Juarez is the program manager of the Los Angeles LGBT Center's Transgender Economic Empowerment Project. Part of her work involves helping trans people navigate the logistics of transitioning at work — finding trans-friendly employers, assisting with name changes, job interview coaching, resume tweaks and help with legal representation. Some of it involves working with employers to develop safe, more diverse work spaces. 

Juarez says the landscape for lesbian, gay, bisexual and transgender rights was different when she transitioned about 20 years ago in her early 20s.

"Up until the point that I transitioned, I hadn't heard of transgender," Juarez says. "For me, the world felt very isolated. I didn't know I had a community. I felt very disempowered. I had no idea what my future was going to look like."

Juarez says many of the people she works with have lost everything during their transitions.

"They've lost their families, they've lost their jobs," she says. "Unfortunately their transition stories are not like what we see in the magazines."

That's why organizations like the Transgender Economic Empowerment Project work with employers to educate them on transgender rights and inclusiveness. Inclusive measures could range from a gender-neutral bathroom or private changing space, to a line in a job listing that makes reference to a company's gender identity nondiscrimination policy. Many businesses train managers and human resource representatives to sensitively handle trans issues to make things easier on an employee who is coming out at work.

Fostering work spaces that are safe and inclusive for people of all gender identities is not just crucial for transgender people, Juarez says, it's part of a company's future economic health.

"Especially when you look at the Fortune 500 and 100 companies, those employers are really investing in diversity," Juarez says. "Diversity is only growing, and employers who see the value of that are starting to make those changes."

When working with companies that are slower to adapt, Juarez gives them her business perspective.

"For employers who want to stay viable in the future, the community is changing, acceptance is growing, and those companies that are embracing diversity, and trans people are seeing greater success," Juarez says. "People want to support those kinds of employers, those kinds of businesses. It's a smart business choice to be inclusive."

Juarez says things are getting better for trans people at work with more nondiscrimination policies and more safe spaces. There's a long way to go, but Juarez says, "it's an amazing time to be trans."

Ferris Bueller's day off was 30 years ago

Fri, 2015-06-05 13:00

This is going to make listeners of a certain age feel, well, older.

A whole lot older.

Remember Ferris Bueller and his day off? Or more to the point, the movie of the same name? Turns out the actual day shown in the film was exactly 30 years ago today.

A couple of years ago the good people at the Baseball Prospectus figured out exactly which game in real life it was that Matthew Broderick and company went to to film those scenes. (A Cubs vs. Giants baseball game.) Thirty years ago today.

Anyone? Bueller. Bueller.


That scene was in an economics class, by the way. 

Weekly Wrap: Jobs report, Federal Reserve and Grexit

Fri, 2015-06-05 13:00

Joining Kai to talk about the week's business and economic news are Leigh Gallagher of Fortune and the Wall Street Journal's John Carney. The big topics this week: May's strong jobs report, the possibility of a raise in rates by the Federal Reserve and Greece's relationship with the eurozone. 

Who we're watching in 'Silicon Valley'

Fri, 2015-06-05 13:00

Lots of people are trying to make it big in Silicon Valley — tech companies, startups, entrepreneurs and venture capitalists. We talk about them quite a bit, but there’s one person in Silicon Valley we’re watching more closely than any other … a guy by the name of Richard Hendricks ... OK, so he’s not real.

Richard Hendricks is the lead character in HBO’s hit series "Silicon Valley," which is near the tail-end of its second season. It’s the story of a group of programmers that seem to be just on the brink of making the big deal. Thomas Middleditch plays Richard Hendricks. 

On his breakout role:

It’s great. It’s all very positive. People seem to be fans of the show, which is nice. There is that sort of feeling, I think, when someone comes into a bigger role, it sort of feels like to other people that you sort of came out of nowhere … like I just decided to start acting the day I got cast. But no, I’ve been at it for a while.

On his character Richard Hendricks:

He’s a very tunnel-vision, focused programmer, as a lot of those guys are. When they get in the zone and they start writing code, they could write for hours and hours and hours, potentially days on end. You know, spending a lot of time in your own world in front of your computer, some things suffer, and for him it’s a bit of social skills. So he’s a little bit of a Nervous Nelly and a little bit of an Awkward Arnold.

On being an actor right now:

There’s just so much opportunity and so much variety going on with a million different networks, and even internet networks. And they’re all trying to do their own thing. They’re all trying to make their own stamp, and a lot of these networks’ mandates are, “We want to be original. We want to move away from network formula.” Yeah, I would say it’s a great time to be an actor on TV.

Listen to Marketplace's previous interview with Middleditch below: 

Sweater snafus unravel J.Crew's quarterly earnings

Fri, 2015-06-05 13:00

The slump isn’t over for fashion retailer J.Crew, which continues to struggle with disappointing sales. The company reported first quarter earnings yesterday. Sales were off by more than 5 percent from the previous period last year.

What's behind the drop in sales? 

Things started unraveling because of a sweater. As in the cardigan that customers complained didn’t fit well. And two other sweaters — one it bought too much of, one it ran out of. Now you might be thinking, “They’re sweaters. What gives?”

“To their customers, it’s a big deal, it’s a staple,” says Ken Morris, founder of Boston Retail Partners. Staples are what J.Crew built its success on, so the sweater fiasco turned into huge losses. 

“I think that J.Crew has had a lot of bad customer moments,” Morris says.

Like when it stopped selling its classic ballet flat, a favorite among shoppers. They’ve since brought it back. But it’s not clear those customers will come back. Dale Achabal, the executive director of the Retail Management Institute at Santa Clara University, says consumers have a lot of choice when it comes to shopping.

“They don’t have long-term loyalty, and that’s a big challenge,” Achabal says.

Another challenge has been some very un-J.Crew-like offerings. Case in point: the leopard print baseball cap. Marshal Cohen, chief retail analyst with the NPD Group, says consumers like change, but not too much, and that’s especially true of J.Crew customers.

“They’ll buy on impulse some of the new things, but they still have to find their tried-and-true product,” Cohen says.

The good news? He says customers will forgive a bad season or two. To get things started, J.Crew stores today offered 40 percent off items already on sale. And to sweeten the deal, they gave out free donuts this morning. It is, after all, National Donut Day.

Accountability at question in private policing

Fri, 2015-06-05 13:00

It was a typical day. Until Peter Dixon, in his late forties, married with two kids, went jogging after work and passed the Acorn housing projects — part of his regular route.

It was December 2011, and Dixon, who works cleaning BART trains, says two unmarked cars cornered him.

“They surrounded me so quickly, I didn’t have nothing to do but stop,” he says.

Four men got out of the cars. Dixon says he thought he was about to be confronted by undercover police. They weren't in uniform and didn't have badges. Dixon says they accused him of having drugs.

"I’m a citizen," he says he told them. "And you got me mistaken with someone else.”

Though they didn't disclose the name of the company they were working for, the four men were private security guards with Personal Protective Services, a company hired to patrol the Acorn Projects. There was an altercation and Dixon says he knew he'd crossed into territory that was "real bad."

"The most thing I was trying to do now, is trying to get the people around me to look and watch."

Dixon was handcuffed, and in the process his wrist was broken. The police were called. Eventually Dixon says the private guards admitted a mistake had been made.

“I was like, 'Yeah, you did mess up. But I’m not leaving till you get the real police to come,' ” he said.  

Dixon ended up suing the Oakland Police and the Personal Protective Services. But it wasn’t like walking into a public police department to file a complaint. His lawyer, Michael Haddad with Haddad & Sherwin, a civil rights law firm in Oakland, says they had to hire an investigator just to find out the name of the company. Neither Personal Protective Services nor the company's law firm responded to a request for comment for this story. The case was settled, and Dixon was awarded $135,000.  

Robert Kane, the head of the Criminology and Justice Studies program at Drexel University, says the issue of public versus private police is a growing problem.

“The private police sector dwarfs the public police sector,” he says. 

Sometime in the last century the private security industry began to grow – fast. Now for every two police officers there’s an estimated three private officers. And, they’re often in places you used to see public cops: courthouses, college campuses, even housing projects like the one Dixon jogged past. Kane notes there’s a simple reason — money.

"Frankly, it’s just the economics of it," he says. “The government entities treat the private police organizations generally as private contractors. So as a result of that, it’s really a lot cheaper."

Most private guards don’t receive anywhere near the training regular police do, and the applicant pools for the two jobs can be very different, Kane says.

A government worker, like a police officer, is likely to receive retirement and health benefits, and often, a pension. But the earnings of private contractors are a lot slimmer. "The quality of employee tends to be less for security officers than for police officers," Kane says. If you want to be a police officer, there are background investigations and medical and psychological exams.

"If you look at the applicant pools for police departments, across the nation, frequently you’ll see 1 in 100 applicants actually gets the job,” he says. “Many people who apply for those police jobs do not get them.”

Kane says a lot of those who don’t make it as a public cop end up working private security. But because they get paid so much less, the turnover rate for the industry is high.

David Sklansky, a professor of criminal law and procedure at Stanford University, says there's another issue. When you try to privatize a responsibility normally shouldered by the government, it can complicate things.

“The police work for everyone," he says. "They don’t work for shop owners or wealthy home owners more than they work for anyone else."

But when an apartment complex hires a private security firm, the formula can change.

"They may be very accountable to the owners of the apartment building or their residents in a gated community, but they’re not as accountable to the people that they accost and ask for identification,” he says.

People like Charles Dixon. Sklansky says this is the crux of the issue. Public agencies are responsible to the public. Private companies are responsible to the people who pay them.

“The mission of a private security agency, like the mission of any private business, is to provide a service for the people who are paying for it in the hope of earning a profit.”

It's within the auspices of private companies that private police have the least regulation of all, says Stephen Rushin, a professor of criminal law at Alabama University School of Law who studies how states regulate the industry. 

“Those officers are the ones that most likely to execute an arrest, most likely to execute a search, most likely to interrogate the employees of a company," he says. "They’re also the ones who are not actually regulated by most states' law, as it currently stands.”

In 2011, Rushin published a study in the West Virginia Law Review identifying what he says is a problem: only six states regulate private police hired to work inside companies.

And even when private police have the best of training — for example, when an off-duty cops takes on extra work as private security — things can get worse quickly.
“Suddenly they’re no longer necessarily working for the public good," says Rushin. "They’re working to protect the economic interests of their now private employer.”
Without regulation by a police department, notes Rushin, cops taking on extra gigs can be a breeding ground for corruption.

Kane says police officers doing double duty can raise questions that seem impossible to answer.

“If they're a full-duty police officer but they're off duty and working for a private security firm, and they have to intervene in a situation, the question is, 'Whom are they working for?' ”
Are they working for the public or the company that hired them? Do they follow company rules or police rules? While moonlighting cops are common, notes Kane, a lot of departments won’t let their officers take outside security work. 

But at the same time, says Rushin, private police can be helpful. It means more individuals working to enforce the law. He says they exist because there’s a need for them in communities with shortages of police, like in Oakland, California.

Mark Lerner, president and CEO of Epic Security, a company offering guards in New York and New Jersey, says demand for private security is growing steadily. But he points out that while private guards are not as well trained as the regular police, "private security guards are not the same occupation as public police."

In New York and New Jersey, Lerner says, armed private officers need to complete about 70 hours of training in the first year. He knows there can be problems, he says, but the vast majority of incidents are handled properly. And he notes, there's no shortage of problems with regular police too. But if someone does have a problem, it’s easier to file a lawsuit against a private security company than against the public police, Lerner says.

“So people have a recourse to the government agencies that regulate private security, and they certainly have recourse to the courts if they feel they’re entitled to damages,” he says.

But for Sklansky, the issue isn’t who’s entitled to damages, it’s that everyone is entitled to a public police force.

At last count, there were about 700,000 public police officers across the country. There are an estimated 1 million private cops.

“When we allow private policing to displace public policing, we are retreating from a broad public commitment to ensure that everybody, no matter how rich or poor, is protected against crime or violence,” says Sklansky.

Data hacks beget more data hacks

Fri, 2015-06-05 13:00

Federal investigators are reporting that the records of more than 4 million people have been hacked at the government’s human resources department, the Office of Personnel Management.

The government suspects Chinese hackers took names, addresses, financial information and possibly Social Security numbers. This latest hack follows a recent trend in cyber crime that targets medical records and personnel files.

“They're incredibly valuable when we want to steal identities or impersonate somebody to steal something else,” says John Kindervag, a security analyst with Forrester Research.

Kindervag says these kinds of personal data, such as a Social Security numbers or a mother’s maiden name, can be used to gain deeper access.

“So if you can take over somebody's identity, you can get unfettered access across big swaths of any network that they might have credentials for.”

The threat these kind of hacks pose is exacerbated by the fact that they expose not just the individual’s network, but those of their coworkers, customers or any company they have contact with, says Steve Manzuik, director of security research at Duo Security.

“If you have additional data, especially personal data on your target, you can now craft a very targeted phishing email that would be very convincing and hard for a regular user to determine if it's real or fake,” Manzuik says.

Even if this stolen data isn’t being used to rip us off now, there is no way of telling how it might be used in the future, says Steve Pao, general manager of security business at Barracuda Networks.

“One of the things we've learned is that these hackers are very patient. And so right now, people are on high alert. It could be five years from now or 10 years from now that the real financial impact could be realized," Pao says.

In addition to stealing things like intellectual property, Pao notes there is also a legitimate security threat of espionage from nation states or putting sensitive information in the hands of terrorists.

The economics of moving for a job

Fri, 2015-06-05 10:36

Next week on Marketplace Weekend, we're talking about migration. We want to know, what would it take for you to leave your current life and move for a job?

Is it money? Cost of living? Tell us your stories of moving for a job, did it work out? Let us know. Reach out on Marketplace's Facebook page, send us an email, or reach us on Twitter, @MarketplaceWKND

Tech IRL: Online Communities

Fri, 2015-06-05 10:07

Ever heard of ASMR? It stands for audio sensory meridian response. First a few and then a lot of "vloggers," or video bloggers, create videos, like this one, to cater to the ASMR community:

Ilse, who goes by the name TheWaterwhispers, has had over 27 million views over the last three years, explains ASMR and her channel are "for people who enjoy calming voices (whispering, soft speaking), different sounds (tapping, scratching, crinkles ext), personal attention role plays (haircut, scalp massage ext), seeing some perform a simple task (doing the laundry cleaning different object ext) and much more!" 

These videos are pretty popular in some groups. How popular? Popular enough to make money doing it? Lizzie O'Leary poses this question to Marketplace Tech host Ben Johnson, who explains the business behind YouTube stars.