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Nobody includes Richard Nixon on their list of the country’s best presidents, but Nixon had a lasting impact both politically and economically. Author Evan Thomas looks at the psyche of this anxious introvert and takes readers deep into Nixon’s mind in his latest book "Being Nixon: A Man Divided."
“Nixon's become kind of a cartoon to us. We think he's wicked and evil. I just didn't believe that,” says Thomas. “He wanted to be a good person. Late at night, he would take his yellow pad — his aides called his yellow pad his best friend, because he liked being alone with his yellow pad — and he would write notes to himself about who he wanted to be.”
Nixon aimed to be compassionate, joyful, generous … all of which he was not, or at least not often.
“Nixon was an intellectual, he really was. He read deeply and widely, but mostly about international affairs," he says. “For some reason, he neglected economics to his grief, and actually to the grief of all of us, because the stupidest thing he did was wage and price controls, which had a real cost.”
Nixon may have failed as a president in many ways, especially for breaking the Constitution, Thomas says, but he did make a lasting impact in other regards, such as opening up China, expanding Social Security benefits for the disabled, the Clean Air Act, arms control of the Soviets. Nixon was an activist … clever and Machiavellian.
“Machiavelli wanted to be a good prince. Nixon wanted to be a good prince. He wasn’t always a good prince, but he wanted to be.”
Read an excerpt from "Being Nixon":
Just three years ago, Chicago had four black-owned banks. Now there are two, and regulators have told one of them — Illinois Service Federal Savings and Loan— to raise more capital or risk a shutdown. The decline is part of a national trend. Unlike the more-segregated days when these banks were founded, African-American customers can now take their business elsewhere.
However, black-owned banks provide a link to a proud history— and, research says, they may do something a lot more important.
At its height, in the 1920s, '30s and '40s, the South Side’s Bronzeville neighborhood was Chicago’s version of Harlem.
“Bronzeville used to be known as the Black Metropolis,” says chef and entrepreneur Clifford Rome at his new restaurant, Peach’s, across the street from Illinois Service.
“You had all these pioneers who put their businesses on the South Side of Chicago. So you could go to the butcher, the baker, the candlestick-maker, right?” he says. “You had these great banks, you had all these entertainers.”
For example, pianist Earl Hines — who started playing in Bronzeville with Louis Armstrong in the 1920s — spent the '30s playing national broadcasts from 39th Street. By the middle of that decade, a local teenager named Nat Cole — later nicknamed “King” — started getting some notice.
“Having all that meant you didn’t have to go anywhere else,” Rome says.
Nor did Bronzeville residents have the opportunity to go anywhere else. Segregation was in full force, and white-owned banks did not cross the color line to make loans.
That’s where Illinois Service Federal came in. As the bank’s CEO, Norman Williams, tells the story: “We were started in 1934 by 13 African-American men with $7,000.”
One of those 13 founders was his father.
“The bank grew very slowly,” Williams says. “Its mission was simply to provide home loans and help people open savings accounts.”
Today, with around $110 million in assets, the bank still has deeply loyal customers— like Clifford Rome. In addition to Peach’s, he runs a catering business, an art gallery and another restaurant on King Drive — and Rome says he has kept multiple accounts with Illinois Service for years.
He recalls his first visit to the bank. “Once I walked in the doors, it’s like a throwback,” he says, laughing. The bank’s current headquarters looked ultra-modern when it was built almost 50 years ago. “But it has this unique quality. It feels community.”
Rome says he banks with Illinois Service for the same reason he uses the dry cleaner next door and the bakery down the street: to support neighborhood institutions.
“You need a community bank — you do,” he says. “Even if that community bank doesn’t have the bandwidth to do everything larger banks do. It’s here.”
However, the financial crisis and the recession hit banks like Illinois Service especially hard. African-Americans, like Norman Williams’s borrowers, were more likely than others to lose their jobs. And miss mortgage payments.
“People didn’t abandon their home — they just got behind,” he says. “Good, decent people, but…” thanks in part to new banking regulations, their problems became Illinois Service’s problems. And that’s why regulators have the bank in their sights.
John Taylor, who runs the Community Reinvestment Coalition, sees community banks like Illinois Service disappearing all over the country.
“That’s really the challenge,” he says. “Disappearing with them is the personal commitment of boards of directors to make sure that those communities, those neighborhoods, prosper."
Taylor believes the issue here is not losing black banks but losing community banks. “The local is more key than the race of the bank president,” he says.
However, research shows that race plays a role too.
For a study published last year in a journal from Oxford University Press, a team of researchers from Rutgers, Brigham Young and Utah State universities sent “mystery shoppers” into about 80 banks. They posed as small business owners looking for a loan. They all had the same story and the same outfit — and were even selected to be equally tall and good looking — but some were black, some were white and some were Latino.
As one of the researchers, Rutgers business professor Jerome Williams, puts it: “We found significant differences.”
The study found bank officers asked tougher questions of minority applicants. For instance, they wanted to see more years of financial records.
The mystery shoppers also used hidden cameras. According to the study, everybody who saw the tapes agreed: bank officers were just nicer to white applicants.
With white applicants, Williams says, “There was a lot of bantering, interaction, jokes — being very, very friendly.”
With the black and Latino mystery shoppers, not so much.
It led to a simple conclusion. For black and Latino entrepreneurs looking for a bank loan, “The playing field is not level,” Williams says. “There’s already a mark against you in terms of your background in applying for a loan.”
In that context, banks like Illinois Service seem even more important.
CEO Norman Williams says he is looking for community-minded investors, and thinks he’ll make it. “But it’s certainly something that does keep me up at night,” he says. “I do think how much good we could do, how much work needs to be done on the South Side of Chicago.”
Right now, he needs about $7 million in new capital to keep Illinois Service doing that work.
We direct your attention now to Securities and Exchange Commission form S-1, officially titled a Registration Statement Under the Securities Act of 1933, filed today by Univision Holdings. The country's biggest Spanish-language broadcaster is going public. No word yet on how many shares it'll offer or what those shares might cost.
But experts say Univision is at the top of its game. It's often beating the big networks during prime time among the coveted 18- to 34-year-old demographic. It's got local television stations at the top of their markets.
"Their numbers are up, their advertising rates are up, they're just doing a great job with the Latino community," says Alex Nogales, CEO of the National Hispanic Media Coalition.
And the Latino community is a community that advertisers want. Moody's analyst Carl Salas says Univision viewers are in "the perfect demographic." It's a demographic that's growing, that's young. And, Salas says, "the consumer spending represented by Hispanics is only increasing over time."
By some estimates, the spending power of the Latino community in the United States is around $1.5 trillion.
Angeline Close Scheinbaum, at marketing professor at the University of Texas at Austin, thinks the very public fight between Donald Trump and Univision could be an important part of the IPO story.
The decision by Univision to sever ties with Trump after he insulted Mexican immigrants, Scheinbaum says, allowed Univision to show potential investors its values. "From a consumer psychology lens, I think this couldn't have been better."
It's the sort of brand awareness that would be tough to buy.
The economy added a couple hundred thousand jobs in June — 223,000 if you’re counting — and the employment rate dropped slightly, to 5.3 percent, according to the Bureau of Labor Statistics.
Even so, “disappointing” was the word of the day, in part because the labor force participation rate, or the share of working-age people who have a job or are looking for one, fell to its lowest level since the late 1970s.
Teens looking for a summer job may have a slightly better outlook than last year, but there are a lot of “missing workers” in prime-age range of 25 to 54, says Elise Gould, senior economist at the Economic Policy Institute. She says these are potential workers who, because of weak job opportunities, are neither employed nor seeking a job.
Gould believes the fact that over two-thirds of missing workers are prime age is a “sign that economy is not that strong, and they don’t see a place for themselves in it right now.”
Turning to baby boomers: even though it’s well documented that many older workers are staying on the job longer than before, Gary Burtless, a labor economist at the Brookings Institution, says it’s not enough to make up for the large number of boomers who are retiring.
“At age 65, more and more people are participants, and more and more of them are employed," he says. "Well, that might be a surprise, but nonetheless, it’s a small offset.”
Moving from age to gender: men left the labor force in June in big numbers, the continuation of a multidecade trend.
But after steady increases in the participation rate of women toward the end of the last century, they’ve also fallen off in recent years, says John Silvia, the chief economist at Wells Fargo.
"It may be that oftentimes the female is the second bread winner,” he says. “And the cost of her going to work, taking care of the kids, the marginal tax rates just don’t provide the incentives for the second bread winner, whether male or female, to go out there and get the job.”
Take a moment to mourn the simplest of childhood pleasures: popping bubble wrap.
The Wall Street Journal reports that there's a new version set to hit the market.
It's called — for some completely indecipherable reason — iBubble Wrap.
And sadly, it won't pop.
The final tab for BP — five years after the worst offshore oil spill in U.S. history — just got a whole lot more clear. The company settled with the federal government and five Gulf Coast states for $18.7 billion dollars on Thursday. That money will go towards environmental damage, legal penalties and state economic claims.
In all, BP’s total liability will exceed $40 billion dollars. So the question is, is the oil industry safer today?
"In a lot of ways, yes," says Marketplace’s Scott Tong. "The rules have changed. There are more audits of safety protocols than existed before. There is now a federal agency that exclusively does offshore oil safety, which did not exist before."
Click on the media player above to hear more.
Coding boot camp students may want to get in the financial aid line. The Department of Education is considering making Pell Grants available to them.
The experimental program, which is still in the planning stages, would enable accredited colleges to “contract out entire programs” to coding boot camps that teach programming skills, allowing their students to receive the need-based grants.
Ben Miller, a senior director at the Center for American Progress, says he thinks the Department of Education’s plans stems from frustration about the cost of higher education.
“This is a chance to test out whether new actors can do as well or better than established colleges for potentially less money,” he says.
How funds will be doled out, along with other details, have yet to be announced.
Accredited universities and colleges must adhere to Title IV requirements for their students to receive federal funding, Miller says. If a student drops out early in a program, the money must be returned.
“The thing that complicates it a little bit is this experiment authority they have allows them to waive some of those [stipulations],” Miller says. “So we just don’t know ... they might not have to deal with it.”
The Pell Grants could help coding programs attract a broader audience, he says.
Miller also says that the funding experiment should proceed carefully.
“It’s important to conduct this as a true experiment, to measure quality and make sure it makes sense, and expand cautiously,” Miller says. “[It’s] making sure that you ... don’t expand eligibility so far that you’re letting in a bunch of providers who just aren’t as good."
We're smack in the middle of summer movie season. Superheroes, dinosaurs and potty-mouthed teddy bears are duking it out at the box office, while rock monsters, secret agents and a vogue-ing Channing Tatum wait in the wings.
Heading into the holiday weekend, listener Erich Arabejo wrote in with this question:
"I've always wondered why movie studios release their movies on Fridays but start them on Thursdays or Wednesdays if it's a potential blockbuster hit."
Those types of debuts, at midnight or earlier, ahead of wide release, are usually geared toward the most dedicated fans.
"When I get into a movie, I want to find the way to see it as soon as I can," says Austin, Texas filmmaker Lex Lybrand. He and his wife regularly go to early screenings and midnight premieres. "If that's the soonest we can see it, that's what we're buying a ticket for."
In 2008, they didn't just buy tickets for the midnight premiere of "The Dark Knight," they went to two shows in a row and then saw the Batman movie twice more over opening weekend.
Letting those types of super-fans see the movie first is key, film analyst Vincent Bruzzese says. They don't add much to the opening gross — they'd have likely gone opening weekend no matter what — but they help market the movie.
"The theory is if you get the diehard fans out first to see the movie on a Wednesday or Thursday, they're also the ones who are going to be most likely to spread positive word-of-mouth," Bruzzese says.
Plus, the novelty of these special screenings — staying up all night or sitting through a huge marathon to be the first at a big blockbuster — generates a lot of coverage like this:
"If you're the film that gets in before the weekend, you begin to build buzz," says New York University professor Al Lieberman, a former film and television marketer. "It's out in the press immediately and on social media right away."
The "Harry Potter" movies hit a sweet spot, Lieberman says. They were popular with a broad audience, and many of those fans had the time over summer vacation to stay out late. The enthusiasm compounded over eight movies, and the series had some of the biggest midnight openings ever.
That's part of the reason the early release is a de-facto requirement for summer tentpoles. It's also why those debuts are happening earlier, sometimes starting at 7 p.m. on a Wednesday or earlier. A super-early opening is usually reserved for the biggest of the big blockbusters, Bruzzese says, or an extremely competitive weekend.
The fervor around opening weekend dates back decades, Bruzzese says, to deals struck between film studios and movie theaters.
"[Studios] decided ... 'Since we get more of the box office receipts earlier in the run of the movie than later, we're going to try and front-load it,' " he says. "And that's sort of where opening weekend was born."
This arrangement is worth it for theaters if they know they can sell out the early shows, Bruzzese says, because that means by adding just a few more staff, they can move way more high-margin concessions than they normally would on a Thursday night. Opening early gives people more opportunities to get to the theater, and maybe even see a movies multiple times, like Lybrand and his wife did.
There are some risks of opening early. People are even more likely to spread the word about a movie they didn't like, Lieberman says, especially if they're a diehard fan who has stayed up until the wee hours to see it. Sometimes early word-of-mouth is exactly what studios don't want Bruzzese says, and they'll skip the early openings to avoid more bad buzz.
"When you're front-loaded so heavily with the super-fans and it doesn't knock it out of the park, I think you definitely do see a big falloff," Lybrand says. "You've got the guy who you know it going to love it in the office, and you ask him what he thought, and he says, 'Meh, it was OK.' "
We asked people on the streets of downtown Los Angeles about the last anniversaries they celebrated. What do you buy for an anniversary? Who's influencing that? And who is making money off our emotions? We asked Cassie Mogilner, an Associate Professor of Marketing at the Wharton School at the University of Pennsylvania to find out about the business behind anniversaries.
At the end of his life, Michael Jackson was asset rich, but cash poor. The King of Pop was nearly $500 million in debt. Today, his estate has grown by nearly $1 billion, as MJ mania reaches a younger generation. Six years on, the moonwalker continues to release hits and perform from beyond the grave:
To understand how this happened, we spoke with Zack O'Malley Greenburg, senior editor for Forbes and author of "Michael Jackson Inc."
Next week, we're talking about legacies on the show. We want to hear your stories of financial legacies: what's your legacy? How will you be remebered? Maybe you have a legacy without an heir, maybe you're building something for your future....
We want to know. Tell us about the economic legacies in your life.
In a hotel in suburban Baltimore, kids file into a conference room wearing Army-issued white lab coats and safety goggles. The middle schoolers are among the finalists in the U.S. Army’s annual eCYBERMISSION STEM fair—20 teams selected from more than 7,000 around the country for their problem-solving projects.
Before the big competition, they break into small groups for some training.
“We’re actually going to have you guys do some inventing,” instructor Ralph Tillinghast tells his group, passing out packs of colored clay. He asks the kids to spend a few minutes designing a product to make their daily lives better. Twelve-year-old Kaleb Ruthardt gets to work sculpting a tiny robot.
“At our school, we aren't allowed to carry around backpacks, so we have to carry about five or six binders,” he says. “My ideas is to make a binder carrier.”
Kaleb is from a small town in West Texas, near Lubbock. School officials are not concerned about what kids might keep in their backpacks, he says.
“The teachers have tripped on the backpacks before, because our classrooms are kind of small,” Kaleb explains.
Asked if the teachers might also trip over a robot, he pauses.
“Well, maybe we could leave it outside,” he says. “I don't know.”
He’s still working it out, and that’s part of the innovation process. The workshop is designed to teach kids how to take an idea, test it, patent it and bring it to market.
Yes, these are 12- and 13-year-olds.
“There's no royalties to the Army,” Tillinghast says. “It’s really to help them, just inspire them to know they can take their idea and bring it to the world.”
Tilllinghast directs the Collaboration Innovation Lab at the U.S. Army Armament Research, Development and Engineering Center — where the guns and bullets are designed. The Army has a big stake in inspiring the next generation of innovators, he says. The competition is one of several Army initiatives to promote science, technology, engineering and math, or STEM, education.
“We can only hire U.S. citizens, so we need a pool in America of students who are competent in the STEM areas,” Tillinghast says.
To inspire those students, he shows them how to make a prototype using a 3-D printer and how to write a pitch sheet.
Shri Chander’s son Rushil is part of team from the Dallas area that developed an app to help first responders communicate in emergencies. She says it’s no wonder kids are motivated by the idea of commercial success.
“I think it’s all around them,” she says. “What they are watching on the news is ‘Oh, here’s a 12-year-old who showed up at the Apple developer conference because his app was rated No. 1 in the app store.’”
Chander herself is a scientist who now works on projects like the internet-connected car at AT&T.
“Pure science is sometimes so abstract that it's hard for 12-, 13-year-olds to kind of visualize it in their head,” she says. Apps and products they can touch and play with, Chander says, “that, I think, to them I think is more concrete.”
Several of the teams are already on their way to marketing their ideas.
Conglomerates DuPont and 3M have expressed interest in a more comfortable hazmat suit one team developed. Another team has filed a provisional patent application for its device to prevent drowsy driving. Kaleb Ruthardt’s group from West Texas designed a system for reclaiming wastewater from the fracking process. A Texas business has asked to check it out.
“It feels amazing, but we're doing this mostly for the environment,” says 11-year-old team member Dwayne Scott.
And for the thrill of making it to the finals, says his mom, Sharon Scott, who advised the team. They ended up beating out the hazmat suit to take home the top sixth-grade prize: $5,000 in savings bonds for each kid on the team.
“The importance was the idea, she says. “Bringing it to market, that's just the gravy.”
It would appear people are dropping out of the American labor force in spite of new jobs created. More on that. Plus, as the U.S. announces plans to open a full embassy in Cuba, we look at the American rice industry, which is poised to benefit from more normalized relations, and ask how they’re preparing for changes ahead between the two countries. And with the Greek economy nearly immobilized by its debt, and Puerto Rico close to default, does the U.S. have lessons to learn from these situations? Marketplace's senior economics correspondent Chris Farrell weighs in.
At 31, Elizabeth Holmes is the youngest female, self-made, multi-billionaire in America, according to Forbes. The company Holmes created, Theranos, developed a home blood testing kit that could challenge the business model of medical labs.
This spring, she was invited by the White House to be a Presidential Ambassador for Global Entrepreneurship, where she’ll focus on attracting women to science, tech, engineering and math fields, as well as improving global public health.
Click the media player above to hear Elizabeth Holmes in conversation with Marketplace Morning Report host David Brancaccio.
In the midst of the current Greek financial crisis, some cryptocurrency enthusiasts have pointed to Bitcoin as the panacea for the country's financial woes. The price of the cryptocurrency has steadily risen as the Greek financial crisis has intensified. However, the question remains: can digital money give Greece an out? Spoiler alert: no.
Nathaniel Popper, author of the book, "Digital Gold: Bitcoin and the Inside Story of the Misfits and Millionaires trying to Reinvent Money," maintains Bitcoin will not save Greece because “at this point, I think Greek citizens are locked into their own system and the bad decisions people have made. I don't think there is an easy way out.”
In theory, Bitcoin seems like just that. However, the logistics of buying bitcoin requires you to move money from your bank account to the bank account of a Bitcoin service. Not so easy when Greeks are unable to withdraw money from the ATM. Sure, you can buy bitcoins from someone in a café with cash from under your bed, but to pull a country out of a financial crisis? Unlikely.
Popper points to Argentina as an example where some “real experimentation is going on” with Bitcoin, but he reminds us that the Bitcoin story “is a very young technology. It’s not ready for the prime time. It’s like expecting to run Netflix on the Internet of 1995.”
As Popper explains it, Bitcoin hopefuls may be expecting too much from the cryptocurrency: “Throughout the Bitcoin story, it's been offered as a utopian solution. But these utopian solutions always need to find some way to get from the current system to the utopian future.”
Ideas anyone? We’re still buffering our 1995 dial-up Netflix.
New York mayor Bill de Blasio has banned "poor doors," or separate entrances to be used by lower-income residents of mixed-income buildings.
De Blasio inserted language into a tax program signed into law by New York Governor Andrew Cuomo.
Housing analysts say real estate developers are likely to look for other ways of appealing to market-rate tenants, like the addition of luxury features inside their apartments.
Those who study mixed-income housing say New York's leaders would do best to determine if they simply wants to build more affordable housing, or, additionally, attempt to integrate New Yorkers along income lines. If it's the latter, the wealthy and the not-so-wealthy should probably learn to share buildings.
Click the media player above to hear more.
The U.S. will open an embassy in Havana, Cuba — so said President Barack Obama Tuesday, a significant step showing that efforts to normalize relations with Cuba are ticking along. However, the embargo still stands and only Congress can lift it. Should that happen, many U.S. exporters will stand to benefit, including American rice farmers.
Ray Stoesser grows about 4,000 to 5,000 acres of rice on his Texas farm and would very much like to see some of it head to Cuba.
“We as farmers, we analyze what the market is, what people want to buy and we grow it,” he says. “Right now, we don’t have enough buyers and that’s why the rice price slipped so much.”
Rice prices have dropped significantly this year, but Stoesser thinks if the U.S. could sell to Cuba, the increased demand would help prices recover. Cuba was a major importer of rice before the embargo.
But Louisiana grower Fred Zaunbrecher says margins are so slim right now, growers aren’t investing in new equipment or planning for new potential customers.
“We really can’t bank on it or grow a crop on it or make financial decisions on it until it’s actually opened and our markets are responding to that demand,” says Zaunbrecher.
However, should Congress decide to lift the embargo, the rice industry will be ready, says Terry Harris with Riceland Foods, a large rice miller and marketer.
“We have the abilities, we have the infrastructure,” he says. “We could ship rice to [Cuba] starting next week.”
That's how many U.S. jobs were added in June, with the unemployment rate declining to 5.3 percent, as reported by the Bureau of Labor Statistics. But as the New York Times reports, economists have pointed out that the unemployment rate fell for the wrong reason: people exiting the workforce.$1.9 billion
That's how much Puerto Rico paid back Wednesday of its $72 billion in debts, narrowly avoiding default. Puerto Rico makes up a small part of the bond market but it's an attractive place for investors, and some are getting worried that the market as a whole could take a hit if the country becomes "America's Greece" and fails to pay back what it owes.$20 billion
That's the sales taken in for ... wait for it ... bubble wrap in 2013. But Sealed Air Corp., the original seller of the packing material, has lately seen its sales deflate (pun-intended). That's why it's starting to sell a revamped version of the product that comes in flat rolls and is inflated by the buyer with a specialized pump. But we'll let the Wall Street Journal burst your bubble on this one: the new wrap doesn't pop like it used to.$2
That's what a monthly subscription to Apple Music costs in India, a fifth of the U.S. price, and it's not the only country where subscriptions are slashed. Quartz points out other local and international music services already enjoy a foothold in these emerging markets. For example Rdio costs a mere $0.60 in India. Apple is uncharacteristically bringing prices down to stay competitive, betraying its latecomer status in the streaming business.$45 million
That's how much Hillary Clinton has raised in her first quarter as an official presidential candidate, breaking the fundraising record sent by President Barack Obama last cycle. Bloomberg notes her dominance could be short lived, as other campaigns and super PACs haven't disclosed their donations yet.
Over the last two decades, Donna Karan International has been one of the biggest brands in the fashion industry. Founder and chief designer Donna Karan announced on Tuesday that she was leaving her namesake company to focus on other projects.
Fashion journalist Kate Betts says that Karan has left a clear impact in the world of fashion.
“She designed for women in a way that was very sensuous and much more feminine than previous looks for women,” Betts says. “It was a revelation for many professional women.”
Karan was later able to spin off this success into DKNY, which Betts says was the first line in what’s come to be known as the contemporary market.
“She covered a lot of different areas of the fashion market with that one line, and it was a huge hit,” Betts says.
The fact that she was such a trailblazer in this field may have played into her desire to step down when her company was at its peak.
“I think it’s kind of ironic that she created that contemporary market, and now that’s the market that’s taking over for the higher end. And you could argue that that’s one of the reasons that she’s kind of leaving her brand,” Betts says.
Karan will still remain as an adviser to her company.
It’s been almost a week since the Supreme Court’s momentous ruling that further cements the Affordable Care Act as the law of the land, and Wednesday President Barack Obama flew to Nashville, Tennessee, to talk about health care.
While some consider this a bit of a victory lap, the president’s choice of Tennessee suggests it’s much more of an overture.
For those of you not keeping score at home, just 29 states and the District of Columbia have expanded Medicaid, the healthcare program primarily for low-income and disabled people.
The president wants that list to grow.
So how do you convince GOP governors and conservative lawmakers in the wake of the King vs. Burwell decision to do something they’ve sworn to oppose? For years, the Obama administration has made a financial argument.
“When I worked on the Council of Economic Advisers, we did a report and basically demonstrated again and again and again that states would win economically,” says Mark Duggan, now an economist at Stanford University.
That report is from 2009. Since then, study after study has echoed similar themes that go something like this: if Washington picks up nearly the entire tab for expansion, states will see new jobs, budget savings and economic prosperity. With many states still holding out, that argument hasn’t worked on everyone, obviously.
(Courtesy Kaiser Family Foundation)
But until recently those reports have been a bunch of words. Now, the Urban Institute’s Stan Dorn says there are actual results that may grab the budget hawks’ attention.
“Every state that has looked comprehensively at both costs and benefits has found that the state budget is better off than it would have been without expansion,” he says.
Take Arkansas and Kentucky, says Dorn. They’ve expanded Medicaid and stopped spending money elsewhere.
“On mental health programs, Kentucky is saving $21 million this year; Arkansas is saving $7 million this year. On uncompensated care to hospitals. Kentucky is saving $12 million; Arkansas is saving $17 million,” says Dorn.
This is more than pointy heads in Washington running numbers. Even GOP presidential candidate and New Jersey Gov. Chris Christie says “expanding Medicaid was the right decision for New Jersey.”
While the math may be convincing to some, Stanford’s Lanhee Chen doubts it moves many conservative statehouse types who think Medicaid is a broken program.
“The difficulty is Medicaid expenses continue to increase. So some state lawmakers have a legitimate concern around maybe not what the next five years look like, but what the next 10 or 15 years look like,” he says.
Chen believes the path to expand Medicaid is more about politics than economics. His advice to the president: give states more flexibility in designing their own programs and you’ll see states bite.