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Does cutting taxes really shrink government?

Thu, 2013-04-25 11:08

Along with immigration, another issue Washington will be taking up soon is the federal budget. Republicans want to reduce the deficit by cutting spending, and they want to shrink the government by cutting tax rates. But it doesn't always work out that way, as the thirtieth President, Calvin Coolidge found out.

No politician ever wanted to shrink government more than Calvin Coolidge. Silent Cal, the quiet Vermonter, was so parsimonious he even saved syllables by using short words. When Coolidge became vice president in 1921, he was appalled to find tax rates as high as 58 percent. "Legalized Larceny," he crowed. And federal debt after World War I was so large it made Coolidge cringe. So when Coolidge became president following the death of Warren Harding in 1923, he decided to curb these excesses.
    
Coolidge and his Treasury Secretary, Andrew Mellon, studied the tax code and found the government wasn't getting the revenue it was expecting -- even with such high tax rates.

Maybe there were lessons for taxes in railroads. Railroad men set their freight rates to charge "what the traffic would bear." The thinking was if you cut the freight rate, you get more traffic, and more revenue. Coolidge persuaded Congress to lower the top tax rate to 25 percent. And congratulated himself that he was on track to pay down the national debt. Debt obsessed, Coolidge was the president who fired the White House housekeeper because she spent too much on pork -- literally.

 The tax experiment worked. In fact, too well. With lower tax rates, more money than expected flowed in. But to Coolidge's horror Congress didn't want to use the cash to reduce the debt. The other politicians of his day just wanted to spend. On farm supports. On veterans. On disaster infrastructure.

Coolidge worried that later presidents and lawmakers might also manipulate tax rates to get extra money.
 He left office in a dark mood. He guessed what would come. The legacy of the ultimate small-government president was a tax tool so powerful that it made big government inevitable.

The business strategy in plausible deniability

Thu, 2013-04-25 10:24

After large cracks were discovered on Tuesday at the Rana Plaza factory complex in Sava, Bangladesh, managers at a bank on the first floor kept their employees out.

Managers in the garment factories on the upper floors ordered their employees to stay. The building collapsed the next day, killing at least 230 people.

“It’s worth thinking about the psychology that would cause factory managers and owners to send workers back into a building that has developed an obvious structural flaw,” says Scott Nova with the Workers Rights Consortium, a labor rights monitoring organization.

He says large apparel companies have multiple contractors in a place like Bangladesh. Each of those contractors hires sub contractors, and then sometimes sub-sub-contractors -- all of them competing against one another. Nova argues apparel retailers use this structure to lower both price, and accountability.

“That inevitably results in an impossible squeeze on the factories actually producing the products,” Nova says, “that guarantees factories will cut costs by operating unsafely, but without Walmart’s or Gap’s or H&M’s finger prints actually having to be on it.”

Jan Hammond, professor of manufacturing at Harvard Business School, says retailers must contract with many different factories in a place like Bangladesh in order to meet demand.

And that distance may offer smaller, private label retailers a place to hide from the responsibility of knowing exactly what’s going on on the factory floor of a subcontractor several levels down the supply chain.

“Its not as clear to me whether its intentional or not, to not know,” says Hammond of such companies.

“I’ll never forget the time a retail CEO said to me that he didn’t allow a certain plant to subcontract,” recalls Hammond. She asked how much of his garments he sourced from that plant, and when Hammond had the opportunity to visit that location, she says “it was clear to me that this plant could never create the volume that this particular individual said was being produced there.”

Larger companies like Walmart are more brand sensitive, says John Roberts, professor emeritus of economics, strategic management, and international business at Stanford’s Graduate School of Business.

“I see no proof,” he says, that these companies are willfully turning a blind eye to poor management practices at the bottom. “The big labels based in the U.S. are in fact very concerned about the situation,” he says, because of negative publicity.

Walmart has started auditing factories that produce for them. After a deadly factory fire in November of last year -- also in Bangladesh -- Walmart announced it would permanently ban any supplier found to be subcontracting to unauthorized factories.

Bill Chandler, vice president of global corporate affairs with Gap Inc., says his company has programs in place to help improve factory working conditions, including a fire and building safety action plan for factories where the Gap does business.

Companies differ in the extent to which they audit factories, and it takes vigilance to have well trained auditors make their presence felt over time. As the most recent building collapse shows, there continue to be tragic outcomes.

“Truly I don’t think this is rocket science,” says Harvard Business School’s Hammond, “you just have to say what your standards are.”

There need to be clear policies on when you can subcontract, when you can’t, and what vendor qualifications should be when you do subcontract, she says.

Hammond points out the garment industry has helped develop many countries, including Britain and the United States, but “there’s a little too much pressure” on the system in developing countries right now. Wringing every last cent out of suppliers has a price, she says.

Ultimately, the pressure driving the cut throat competition for cheaper clothing comes from one place.

“American consumers want to buy clothes for low cost,” says Nicholas Bloom, professor of economics at Stanford University, Companies -- even big ones like Walmart or Target “are just rats in a maze. We are the maze.”

Does the gun you want cost too much? There's a loan for that

Thu, 2013-04-25 10:24

Consumer loans fuel sales of everything from homes to autos to appliances. Then, there are guns.

Many gun buyers prefer to pay cash. But for those who can’t, there’s a finance industry to help out. Some of the big names have pulled out of the politically sensitive market, most recently General Electric’s finance arm. Yes, if you couldn’t afford the gun you wanted, GE might have loaned you the money.

So how easy is it to get a gun loan, and who uses them?

Say you’re in the market for a gun. First of all, how much does the typical handgun or rifle cost? Larry Hyatt is owner of the Hyatt gun shop in Charlotte, N.C.

“There’s some a lot less and some a lot more but I would say the average (firearm) is $500,” he says.

Hyatt sells guns, and a lot of Americans are buying. Last year, $6 billion of firearms and ammunition were sold at retail -- up almost $2 billion from the year before.

Like a lot of gun shops, Hyatt’s store offered credit for customers that needed it. But when the financial crisis hit, credit quickly disappeared.

“The company that was doing ours quit doing it. They would not do guns any more,” explains Hyatt.

He says his loan company was owned by AIG. Now, Hyatt offers layaway for his customers instead. But he says most opt to use cash or plastic, and he’s grateful to the credit card industry for filling the credit gap.

“Thank goodness the credit card industry came to the rescue. That’s gun financing. It’s just through the normal credit cards not a separate company.”

But when it comes to guns, even consumers who can’t qualify for a credit card can still get credit. Randy Frazier, owner of gunfinancing.com, offers loans to consumers whose scores aren’t perfect and don’t have $2,000 in cash for a rifle.

“What we’re after is the guy who’s trying to buy a gun that he can’t afford to pay cash for,” he says. Frazier notes his website’s customers are typically between 21 and 32 years old. “They’re not perfect credit, but they’re not poor credit, they’re right in the middle.”

Frazier says if you are going to finance your gun, expect to pay about 18 percent in interest.

A former agent reflects on the NFL draft

Thu, 2013-04-25 10:08

The NFL draft starts tonight and will last for the next three days. Only a small number of players will be drafted and the ones that are picked will be the ones on stage, grinning ear to ear, wearing their new team hat.

It’s a process that pales in comparison to what it took to get that moment. Before his gig at ESPN, Andrew Brandt was an agent. He says the months leading up to it are filled with “painstaking work with thousands of man hours and thousands of dollars going into that process." Players hoping to be drafted pick an agent “within days if not hours from their last football game.” And after that, the agents take a big gamble on the right player, “they're right to pre-combine training and agents now pick up all those costs."

The paycheck at the end of that journey isn’t guaranteed.

"There's 250 players that are getting picked and if you're drafted, the lowest seventh round pick is probably getting about a $45- to $50,000 bonus so the maximum an agent can charge is 3 percent so now you're talking about $150 or something like that." And he says that’s "after putting in maybe $5-, $10-, maybe $20,000 of training expenses into these guys."

This year, one draft-hopeful, Matt Elam from Florida, is going without an agent. Brandt says there are pros and cons.

"For the actual negotiation, there's very little an agent can do now for rookie contracts. What the agent will say is that the pre-combine training, the after-combine training, the run up to the draft, the intel, the experience, the clout, the names, the connections with general managers, owners, personnel scouts -- all those things are part of a fee even though the actual fee is based on a negotiation."

He says a player would definitely need an agent for a second contract, which is usually complex.

During his time as an agent, Brandt had his ups and downs. He remembers losing Ricky Williams, "he wanted something a football agent couldn't give him -- access to the entertainment industry."

But also the glory of giving Matthew Hasselbeck his shot. Hasselbeck wasn’t invited to the combine -- so Brandt set one up for him.

"And he went on to be one of the better quarter backs in the league and he still is."So that's one of the things you love as an agent. To see a guy come out of nowhere and really blossom."

What makes you happy when your call is put on hold?

Thu, 2013-04-25 09:06

Aaron Kleinhandler was at his 20th high school reunion recently, and inevitably he had to answer the same question over and over. "People ask me what I do, and I say' have you ever been put on hold?' And the answer is yes and I say, I have company that provides music for business across the country," says Kleinhandler, whose company, Spectrio, makes $17 million a year selling on-hold music.

Spectrio acts as an intermediary between the business that put you on hold and the licensing companies like ASCAP and BMI that pay musicians to write the music.

Christopher Ho is one of those musicians. I visited Ho at his home in California, where he records his compositions on a grand piano in his garage. "I probably made over $2 million off my own compositions, but that spans about a 25-year period," Ho says.

He made most of that money selling his songs to Muzak. He also spent those years touring and recording with the Motown legend Smokey Robinson, who was a big influence on Ho's music, even on the pieces he wrote for on hold. Ho thinks of all his compositions as being equal.

"It's better that way," says Ho. "Because then I'm not trying to limit the music in any way technically or musically."

But the days of hiring professional studio musicians for on-hold music are pretty much over. Ho's income has dropped dramatically. He had to move to a smaller house and now he sleeps in his living room so his kids can have a bedroom.

Most on-hold music today is made on a computer. Julie Cook is the CEO of Easy On Hold, which has a library of digitally recorded music.

"This isn't your mom and dad's on-hold music. It's a world class library of music," says Cook.

She says matching the right business with the right on-hold track is more art than science.

"An example of really good on-hold music might be a nonprofit that maybe works on world hunger. They may want a more world beat where there's an African flavor," Cook says.

But does music actually make the experience of being on hold any less frustrating? Scott Broetzmann is the president of Customer Care Measurement and Consulting, which asked 702 households to rate their on-hold experiences on a scale of zero to ten. Zero being deeply unsatisfying.

"And on that zero to ten scale, playing music while you are on hold averages a score of 5.37 -- in effect a neutral score. Iit doesn't really have any impact on satisfaction of consumers while they are waiting on hold," says Broetzmann.

Silence had a negative impact on customer satisfaction. Having an operator say how long you will be on hold, says Broetzmann, is the most positive thing a company can do. "A recording that tells you how long you will have to wait before you can talk to a person averaged a 7.3 rating."

So why then do companies do things that have either no impact or a negative impact on customer satisfaction? Emily Yellin spent years trying to answer that question. She's the author of "Your Call is Not That Important to Us."

"There are ways that companies could do a much better job but it costs too much" says Yellin.

Where companies go wrong, according to Yellin, is spending huge amounts of money on things like surveys and focus groups to find out what customers want. "Meanwhile, they have this department called customer service where customers are calling and trying to tell the company what they think of them and they are being put on hold, they are treated poorly and then customers walk away frustrated," Yellin says.

Yellin looked at how companies calculate the cost per call of each customer service call they field. Businesses use this number to find the right balance between keeping costs low and not angering customers with long wait times. Yellin says the companies that really get it right never put you on hold for more than one minute. We asked you on Twitter what songs you would choose for your hold music. Here's what you picked:



For the record, David chose Philip Glass' "Koyaanisqatsi," which wasn't on Spotify (and also over an hour long...). Add your own in the comments below or tweet us @MarketplaceAPM
.

Plenty of finger-pointing, but little compensation in Bangladesh factory tragedies

Thu, 2013-04-25 06:55

A "blame game," is how Laura Gutierrez, a Fulbright fellow researching Bangladesh's garment industry, describes the process of trying to assign responsibility for factory disasters.

Gutierrez, who spoke to Marketplace from the site of a massive building collapse in Dhaka that has killed at least 194 people, said finger-pointing is rife following such tragedies. 

Some items of clothing found inside the collapsed building, which housed a number of factories, reportedly bear the labels of American and European companies. 

"Assuming that American and European or other western brands were present here in the factory, it is their responsibility to pay compensation," Gutierrez said.  

However, compensation is often voluntary rather than mandatory, as companies, governments and factory owners point fingers over who bears ultimate responsibility.

After a fire tore through the Tazreen factory in Bangladesh late last year, killing at least 112, Walmart and Sears declined to compensate victims' families. Each company said it was unaware its goods were being made in Tazreen. Walmart donated $1.6 million to launch the Environmental Health and Safety Academy in Bangladesh. 

Burt Flickinger, managing director of the Strategic Resource Group, says it is worth keeping an eye on whether the fire has an impact on Walmart's bottom line. He predicts a slight drop in sales of the company's clothing. 

"Consumers have a conscience and they support the stores much less where there have been tragic factory disasters and deaths and massive amounts of injuries," Flickinger said. 

PODCAST: Delays on the horizon, Austerity in the rear-view

Thu, 2013-04-25 04:33

How are airlines managing the flight delays related to sequester furloughs, and their impact on flyer morale and costs?

After two months of  political stalemate, Italy has a new prime minister. Italy's President named Enrico Letta, of the center-left Democratic Party, premier and asked him to form a government. Letta announced that he intends to fight the move towards austerity in Europe -- investors applauded and Italy’s borrowing costs fell.

Who bears responsibility for substandard safety conditions in overseas factories? At least 194 people have died in Bangladesh after the collapse yesterday of a building that housed a number of clothing factories -- factories which were reportedly making products for major brands all around the world.

Government spends $890,000 on fees for empty bank accounts

Thu, 2013-04-25 04:01

This final note, in which we learn that Washington gets hit with annoying banking fees just like the rest of us.

The Washington Post reported that the federal government has 13,712 bank accounts with zero balances. When that happens -- as we all know from possibly personal experience -- you start paying service charges.

In this case, $890,000 worth of service charges this year.

Sequester that, right?

Mitigating the cost and frustration of sequester flight delays

Thu, 2013-04-25 02:56

United Continental, JetBlue, Southwest, and Alaska Airlines are all reporting earnings today. Overall, the industry says profit margins are fragile, and they’re blaming the FAA for the latest threat.

Fewer air traffic controllers are clocked-in nationwide, because of automatic federal spending cuts. That means flight delays and a whole lot of angry customers. So far the delays are not that bad; it’s what’s coming in the next few months that airlines are worried about.

“Especially as we go into the summer peak season, this could most definitely have a negative impact on their bottom line,” says Darin Lee, an airline industry consultant at Compass Lexicon.

Lee says these days airlines are flying fewer planes, so more flights are full.

“If they’re forced to reduce number of flights out of D.C., O’Hare, LaGuardia because of controller cuts, then that does represent lost revenues for those airlines,” he explains.

The airlines say they’re trying to minimize frustration for passengers, but the industry trade group Airlines for America (A4A) says the delays are unpredictable, and unaffordable.

“This is an industry that last year, in a profitable year, our profit amounted to $0.21 a passenger, so you can see that that’s very narrow margins,” says A4A spokeswoman Jean Medina.

Airlines are asking employees and passengers to be patient with the delays, and take their complaints to Congress.

A history of Take our Daughters to Work -- and why it now includes sons

Thu, 2013-04-25 01:56

Today is Take Our Daughters and Sons to Work Day, when parents host their kids at the office to expand their career horizons. Originally called Take Our Daughters to Work Day, the event was founded in 1993 by Gloria Steinem and the Ms. Foundation for Women.

"The effects were explosive," recalls Marie Wilson, who was president of the Ms. Foundation at the time. "First of all, the visibility of girls in the workplace, showed up the invisibility of adult women."

Wilson says countless women have told her that going to work with a parent of other adult shaped their careers. Still, many critics say girls no longer need to be singled out. After all, women now make up half the American workforce.

"It’s becoming a little archaic," says Susan Heathfield, a human resources expert. "My personal preference would be Take Your Child to Work Day."

In fact, the day’s official title was changed in 2003 to Take Our Daughters and Sons to Work Day. Still, Ms. Foundation’s Wilson thinks a day that focuses on women’s role in the workplace is still relevant.

"Women are still far behind in leadership in every area," she says, pointing out that American women hold fewer than 20 percent of leadership jobs and make about 77 cents for every dollar a man makes.                  

New Italy prime minister to move away from austerity

Thu, 2013-04-25 01:50

After two months of  political stalemate, Italy has a new prime minister. Italy's President named Enrico Letta, of the center-left Democratic Party, premier and asked him to form a government. Letta announced that he intends to fight the move towards austerity in Europe -- investors applauded and Italy’s borrowing costs fell.

This reaction underscores an important change in sentiment. At the start of the euro zone debt crisis, investors demanded that heavily indebted countries like Spain, Portugal, Ireland, Italy and Greece get their public finances under control. They punished wayward governments by dumping their bonds and driving up their borrowing costs. Creditor countries -- led by Germany -- demanded deep cuts in public spending and radical economic reform.

But the tide against this austerity has clearly turned. And the reaction to the new Italian prime minister demonstrates this. Investors now see low growth as the primary problem. Simon Tilford of the Centre for European Reform says  investors are more likely to reward a government that stimulates growth and punish one that cuts:

“All investors worry whether they are going to get their money back," says Tilford. "If they think they are not going to get their money back because an economy is performing so poorly that it’s not going to be able to pay its debts, then they are going to charge more to lend to that country."

The pressure to lighten up on the austerity in Europe seems likely to grow, not least in Spain where unemployment has just hit 27.2 percent and -- critics argue -- austerity is largely to blame.

Earnings are up, but hold your applause

Thu, 2013-04-25 01:17

Earnings season continues today, with reports from companies like Exxon Mobil, Amazon and Coca Cola.

So far, the companies have told us mostly good things about their bottom lines. But Allan Sloan, senior editor-at-large for Fortune magazine, isn't buying it. He says so-called "tax games" obscure business performance.

Click on the audio player above to hear Sloan's take on corporate taxes, international business, and Apple's stock moves.

Is Amazon about to do to TVs what it did to bookstores?

Thu, 2013-04-25 00:26

Amazon is coming out with its own media box for TVs, according to Bloomberg Businessweek. The device would compete with Apple TV, Roku, and possibly cable and satellite companies.

"Amazon's been really beefing up their home entertainment offerings," says Marketplace Tech reporter Queena Kim. "That TV set is the last screen that nobody had dominated. Apple is going after it, Google has been going after it."

It's not clear whether an Amazon TV box, potentially due this fall, would include extra apps to watch channels like Major League Baseball or Netflix.

NFL draft is less art, more science: A how-to guide

Wed, 2013-04-24 23:55

This is a big weekend for Jahleel Addae, a former defensive back for the Central Michigan University Chippewas. The NFL Draft starts tonight, and he is hoping to go pro.

Earlier this year, Addae went to what’s called an NFL Pro Day, where scouts, coaches, and general managers got a chance to watch him work out and meet with him.

“Sometimes I feel like they know more about me than I know about myself, you know?” Addae says.

That’s not too far-fetched. The way pro football teams pick players has become increasingly data-driven. They want to feel like they’re making the safest bet possible, particularly when multi-million dollar salaries are stake.

“The data is a very important aspect in evaluating players," says Steve Baker, a San Francisco-based agent who runs Baker Sports Management. "Players have gotten much more sophisticated in the last 20 years of trying to improve that data."

Coaches use to pay a lot of attention to three things, in particular: height, weight and speed -- that was based on how fast players ran the 40-yard dash.

“Now, they’ll look more at their acceleration in the first10-yards,” Baker says. “Or specifics on how that player would perform on the field."

Coaches are trying to quantify as much as they can. How many times a player can bench press 225 lbs., how high he can jump, and how far he can jump. They want to know as much as they can about a player’s agility -- his “lateral quickness.” There are strength tests and IQ tests.

A franchise builds up a big dossier of data on every player, and to make sense of that, many of them turn to scouting consultants, like Eric Galko.

“I know two or three teams that have kind of a decision-making software, where they can kind of plug in their grades and evaluations on players,” he says.

Data can help, but according to Kenneth Shropshire, a sports lawyer who teaches at The Wharton School at the University of Pennsylvania, there’s a risk of information overload.

“The clubs are spending a lot of time figuring out which data is the most valuable,” he says.

Even if you know everything there is to know about a player like Jahleel Addae -- tackles, sacks, kick returns, and interceptions -- what you don’t know, what you can’t know, is how he will fit in with the rest of the team.

How is all this calculated?

1. Look at a player's college career

Teams start with the stats from the player’s college career. If he is a quarterback, teams will look at pass completions, pass attempts, passing yards, touchdown passes, interceptions, and rushing yards. Then, there is his passer rating. If he is a running back, teams will look at rushing yards, rushing yards per game, receptions, receiving yards, and rushing touchdowns.

Steve Baker, a San Francisco-based agent, says “statistics have gotten much, much more sophisticated.” He says a team may be interested in how a quarterback performs under certain circumstances -- say, in the fourth quarter, when the team is down by a field goal.

2: Get the basic information on each player

Franchises collect basic information about players.

“They weigh them, they measure them, and they review their entire medical history," David Berri, who teaches sports economics at Southern Utah University says. If a player has been injured in the past, team doctors will re-examine the injury and, if necessary, run more tests and take more X-rays.

3: Put them all in the Combine

Teams collect a lot of data at the NFL Scouting Combine, which takes place every year in Indianapolis, Ind., and at Pro Days across the country. College football players get the opportunity to work out in front of coaches, scouts, and general managers. There is information, from the NFL, on all the workouts here.

4: Answer specific questions in the Combine

How fast can a player run the 40-yard dash? As Steve Baker, the president of Baker Sports Management, points out, teams are parsing that sprint. “Now, they’ll look more at their acceleration in the first ten yards,” he says.

How many times can a player bench press 225 lbs.?

How high can a player jump?

How far can a player jump?

5: The written exams

In addition to the Combine, there are all sorts of drills. Teams administer the Wonderlic Cognitive Ability Test. They also test a player’s knowledge of the game itself.

They ask questions like:

If the first two statements are true, is the final statement true?
Sandra is responsible for ordering all office supplies.
Notebooks are office supplies.

Sandra is responsible for ordering notebooks.

A) yes B) no C) uncertain

See a host of sample questions here.

6: Just who is this guy, again?

Teams also look at films, and they’ll talk to former coaches to get a sense of a player’s character. Howwill a player behave on the field or in the locker room? The San Francisco 49ers hire Harry Edwards, who used to be a professor of sociology at the University of California, Berkeley, to look at how a player could interact with the team.

I want my iPad! How to handle toddler tech tantrums

Wed, 2013-04-24 23:32

From Britain comes the story of the four-year-old whose parents took her in for therapy when she became "distressed and inconsolable" without her digital tablet. Research about the early childhood effects of tech is ongoing, but it's an issue parents have to deal with here and now.

Janell Burley Hofmann, a Cape Cod mother of five who helps us explore how to behave with tech, joins Marketplace Tech host David Brancaccio to share her tips.

And finally, the Brits call tantrums like these "throwing an iPaddy." That phrasing only works if you know "throwing a wobbly" is a term over there for "completely losing it." Which leaves us with the question: What should we call a toddler tech tantrum here in the U.S.? Let us know in a comment below or on Facebook and Twitter.

Is fight over CFPB undermining its authority?

Wed, 2013-04-24 12:01

Richard Cordray has been the acting director of the Consumer Financial Protection Bureau for the past 15 months. The key word there is "acting." He hasn't been approved by the Senate. That became an issue this week when the head of an influential House committee vowed to block Cordray from appearing before his panel.

House Financial Services Committee Chairman Jeb Hensarling wrote Cordray a letter this week. The Texas Republican says Cordray is barred from addressing his committee until he’s confirmed by the Senate. Cordray’s already testified on the Hill a bunch of times. He appeared before the Senate Banking Committee just yesterday.

People testifying on the Hill often look pained, like it’s about as much fun as a root canal. So maybe Cordray should be happy that he won’t have to go before Hensarling’s committee? Or is this a serious challenge to the CFPB? Deepak Gupta is a former CFPB attorney.

“What you worry about is that there’s a chilling effect,” he says.

Gupta isn't worried about what he calls political posturing on Capitol Hill, but he says a recent court case has cast a cloud of legal uncertainty over the bureau. In January, a federal appeals court said the appointment of another Obama administration official was unconstitutional because it was a recess appointment, made while Congress wasn’t in session. Richard Cordray was appointed the same way. Gupta says now it could be hard for the CFPB to enforce rules intended to protect consumers.

He explains, “Anyone that’s sued by the bureau or threatened with an enforcement action has the option of raising the constitutionality of the director’s appointment.”

Already a Texas bank is suing the CFPB over just that issue, and if a court throws out Cordray’s appointment, there will be even more questions about the bureau’s authority and its rules on everything from prepaid debit cards to foreclosure. Howell Jackson teaches law at Harvard and wonders about the fate of rules the CFPB is now in the process of writing.

“Their rule making authority in certain areas might be constrained,” says Jackson.

All of the political and legal challenges to the CFPB have left consumers confused. John Browne is semi-retired, running a plant nursery part-time in Washington state. He’s checked out the bureau’s website and liked what he saw. He doesn’t like all of the controversy over Richard Cordray’s appointment, which he thinks is mainly political.

“A challenge to an appointment like that should be specificm," he says. "It shouldn’t just be, I don’t like him. I think he’s philosophically in the wrong pew.”

Browne says, regardless of Cordray’s philosophy,  it would be helpful for consumers to have a full-fledged director at the CFPB.

Take Our Daughters and Sons to Work Day is not about showing kids the work

Wed, 2013-04-24 11:49

As a kid, “Take Our Daughters and Sons to Work Day” was always something I looked forward to. It was really because of the day off from school, though, as opposed to diving into the exciting world of learning how to be an English professor.

Being a single father, my dad spent most of his time at work. He would teach extra classes and even worked through summers to make sure my brother and I had everything we wanted and needed. We enjoyed the benefits upper-class kids had (private school, trips across the country, video games, etc.) while having a father who worked a middle-class job.

We asked you on our Facebook page to share some of your most memorable stories about “Take Our Daughters and Sons to Work Day.” Here are the memories you shared:

Mike Verlezza - My dad used to run the Breyer's Ice Cream plant in Philadelphia before they closed it. If I played my cards right, I would get a half gallon of mint chocolate chip "hot" of the presses before it was hard frozen or shipped.

The freshly made ice cream with only pure ingredients (this was before Breyer's made "frozen dairy desserts") is still one of the best things I've ever eaten.

Dawn Sloan Downes - My mom worked for the State of Tennessee's Air Pollution Control division. I often went to work with her and loved it. Because we lived in a small town north of Nasville, my mom's diverse workplace was the first place I met people who were very different from me or anyone I knew...college-educated; from countries around the world including Egypt and India; female engineers and attorneys. Those experiences opened my mind to a host of possibilities I would never have imagined otherwise and taught me that no matter where we're from or what we look like or eat or how we dress, we have the same basic wants and needs.

Cathy Keane - I loved visiting the hospital department where my dad, a doctor, worked. There were certain things that appealed to a kid - besides nice people, that is - I was attracted to plastic and clay models of hearts, and to a small room with huge blackboards and lots of colored chalk (no doubt it had a more serious purpose than what I used it for). Of course it was always sobering and scary to see sick children around when I was there to have a good time (as I saw it). To this day, I have a mixed emotional response to the smell of hospitals - I feel at once cozy and secure, and anxious.

Selina Carreon Rodrigues - My dad was a long distance truck driver. Sometimes he would take me to the yard when he needed items or had work on his truck to get done. I loved it. My dad was gone on the road 4-5 days out of the week and is not what I would call a 'hands on father' but that time I had with him at the yard was always treasured. To this day, everytime I smell diesel gasoline it takes me back to spending time with my father.

Jenni Lawson - My mother and step-father were marine biologists. I spent a good amount of my childhood pushing whales back in the ocean (and swimming with them to keep them there), helping to dissect whales and sharks, going along to investigate shark attacks, caring for ill marine animals such as pelicans and even a baby pygmy sperm whale, and setting/pulling in sample nets. As their kids, we were used as cheap labor, but we loved it!

James Allgood - My dad used to work in the World Trade Center in the early '80s. Before he took me in to work, we hit his gym, where I met Ed Koch. The rest of the day was spent playing space invaders and coloring.

Bonnie Jeanne Tibbetts - My dad took me to work in the late 1960s when I was in junior high and his secretary taught me how to type pictures using characters and spaces on the typewriter. Kept me busy all day and I thought I was so cool using a typewriter.

Mary Fragapane - I'm a professional artist, my nephew, then 13, was a budding artist so I brought him with me for NYC's Art Around the Park festival - they stretch a canvas around Tompkins Square park in the east village and each artist is given an 8x8ft section to paint - hot and sweaty and covered in paint he turned to me and said "this is a lot harder than I thought it would be" - we had a great day, created a great piece of art . He's in college now studying..... philosophy. I think he is probably the only member of my family who truly understands what I do.

John Lyon - Tool & Die

Calipers and micrometers, cradled by the red felt
lining the half opened drawers of the wooden toolbox that belonged to his father,
wait to measure the tolerances of parts that must work together without touching.

And his corrugated space smells of the sweet oil sliding down the bit,
smoking as metal bites into metal,
digging towards the core,
extruding the sharp helix that can tempt blood from my young fingers.

We hide behind masks, he and I,
as he draws a molten bead along the cold unparted edges,
the inscrutable panes protect our dark eyes.
We must not look directly at such couplings.

Even here, among the jagged edges and melting surfaces,
kindness lays down in the teeth.
The blade, oiled to cut softly through the angle iron
eases itself down under his sure fingers , chewing gently
through the 90º angles, 6″ at a time.

And there are no shadows here;
the cold fluorescent lights illuminate every square inch of my father’s workshop.
The only darknessess are the fears
lying beneath his clean work shirt,
beating against the pencils and rulers he carries in his breast pocket.

© 1994, John Lyon

Most days, we would see my father in the morning when he dropped us off at school and at night, when he would be too beat from a long day to really hang out with us. When he did spend time with us, it was usually proofreading (or in my case, re-writing) our essays for class.

My father’s profession, although honest, was for lack of a better word -- boring.

As a kid, hanging out with my father at work didn’t mean mastering the structure of a research paper or learning the ins and outs of grammar. It meant catching the 150th Pokémon, or figuring out how to beat the last battalion on Galaga.

My father’s intentions were pure, but with ill return. He wanted me to get a general sense of the workplace; how you should dress, how you act around your bosses, etc.

While reflecting on this, I realized that this is a confusion a lot of parents may have.

They bring their children with them to work expecting it to be this huge learning experience. They (like my dad) want to show their children what they do for a living with pride, when in reality kids really don’t care.

Hanging out with my dad at work was not about finding out what he did for a living. I already knew, and wasn’t really interested in how he did this boring thing called work he talked about all the time.

It was about getting a chance to spend eight solid hours with a single father who I would literally only see for five hours on a normal day (and playing Gameboy too…that was important). 

Getting the chance to see the hard work he put into making sure that my brother and I lived a comfortable, advantaged life; that was what I really got out of spending all those hours in the library at Delta College, sitting next to my dad while he graded papers and prepared lectures. I knew he worked hard, but following him around his job all day made his hard work resonate with me.

“Take Our Daughters and Sons to Work Day” isn’t about showing your kids how you make money.

It’s about having an excuse to spend extra time with your children. Take it from me: that extra day means a lot to them, even if it does look like all they care about is owning the next level of Halo. (Although that’s very important, too.)

Do you have stories of taking your kids to work, or being taken as a child yourself? Share them on our Facebook page.

Britain celebrates its Huguenot heritage

Wed, 2013-04-24 11:12

Immigration has become a hot political issue in Britain. After a big influx of migrants from Eastern Europe, Asia and Africa over the last decade, public anxiety is rising and hostility towards the incomers is increasing too.

But there is one historical group of immigrants that has always been highly regarded in Britain. They are held in such high esteem that  more than 300 years after they arrived in London, the city has just staged a festival trumpeting their achievements.

These are the Huguenots, or French Protestants. They fled persecution in Catholic France during the 17th century. They came in huge numbers: 50,000 at a time when the total population of England was only five million. And yet they caused little friction; they quickly settled down and prospered.

“They were industrious. They had the Protestant work ethic. They were thrifty, conscientious and family-orientated,” says Charlie de Wett, a Huguenot descendant, and organizer of the Huguenot Festival.  De Wett says many of the refugees were merchants, craftsmen and weavers. And they were enterprising -- in Spitalfields in the east end of London, they created Britain’s highly valuable silk industry.

“Often people say they were the first refugees. Many people say they were the ideal refugees,” says de Wett. “They would work longer, harder, better. The Protestant work ethic is about doing your job 110 percent and more.”

The newcomers integrated well in Protestant England, spreading out across the country and intermarrying with the native English. Today, hundreds of thousands of British people can trace their descent from the Huguenots and many appear to be  proud of the connection.

Stan Rondeau, a retired printer, was delighted when he discovered his Huguenot roots.

“It certainly gave me something to crow about," says Rondeau, speaking at the Huguenot Festival in Spitalfields.

The most popular stand at the festival offered visitors the chance to trace their own family trees. Julie Dyet was eager to check her Huguenot heritage, although she was not sure her father would be thrilled to discover a French family connection.

“I think my dad would be a bit upset because all he keeps saying is ‘I hate garlic!' He doesn’t like the French!” she laughs.

Given the ancient hostility between the English and the French, it seems extraordinary that so many French people could arrive in England in the 17th century, and settle down and do well.

Within a decade of arriving, Huguenots were involved in setting up England’s first central bank, and they swiftly spread into many other businesses, helping to fuel the Industrial Revolution. England benefited enormously from the influx while France was deprived of some of its most energetic and talented citizens.

As so often with immigration, the native country’s loss was the host country’s gain.

JFK air traffic controller on first furlough day: 'Frustrating'

Wed, 2013-04-24 11:06

To the American flying public, our condolences: This is week one of the sequester hitting the not-so-friendly skies.

Air traffic controllers from JFK to LAX have begun their furloughs, making for long and painful delays, especially flying into and out of the big east coast airports around New York City.

Steve Abraham's been an air traffic controller at New York's Kennedy Airport for 23 years. 

"My shift today would have been from 5:30 to 1:3o today," Abraham says, although he wasn't in the tower. Wednesday is his first furlough day.

Abraham was at work Sunday, however, the first day that furloughs for air traffic controllers took effect. 

"We had perfect weather, and ran 2 1/2 to 3 hour delays, which are delays would see on a horrible day," Abraham says. Think snowstorm. "It's no fun being the political football." 

The White House has signaled it would be open to reviewing a standalone bill to restore the FAA's funding, if Congress puts one forward. But for now, controllers like Abraham are getting used to a 10 percent pay cut. 

"It's pretty significant. For me, I guess, the shock is my wife lost her job as of March 15, so it's going to be an interesting summer."

Abraham says the FAA has struggled to keep pace with technological innovation, and it's unlikely that sophisticated systems will replace air traffic controllers in the near future. 

"Trying to separate airplanes in a two-dimensional environment, going from the ramp to a runway, everyone want to be number one," he says by way of example. Then picture jets flying at 500 m.p.h. in all three dimensions. 

Could automated systems handle it? Abraham says, "I don't think we're there yet." 

Building collapse in Bangladesh kills garment factory workers

Wed, 2013-04-24 10:24

A building collapse at a garment factory in Bangladesh has left at least 100 people dead and injured about 1,000 more. It's the second disaster at a Bangladeshi garment factory in less than six months.

Again, it looks as if factory owners could be to blame. There were reports that officials knew the building was structurally unsafe, says the BBC's Anbarasan Ethirajan.

"One of the eyewitnesses also told a local daily that they were reporting cracks near the generator room and also in some of the pillars," Ethirajan says. "One of the Ministers have already said, the building probably violated construction codes and they are looking into this case."

It's not clear yet if the factory was producing clothes for Western companies.

Bangladesh is one of the leading exporters of clothing, right behind China. Most of what they produce is sent to the European Union and the United States. Ethirajan recalls the fire that broke out at the Tazreen factory last November where "a trade union activist found labels of various Western retailers" in the rubble.

It seems likely this second disaster "will put pressure on the Bangladeshi factory owners to improve safety standards," Ethirajan says. The country exports $20 billion worth of garments every year.

The people injured and killed in the building's collapse were mostly low paid factory workers.

The minimum wage for this work is between $37 and $40 a month, but factory owners say wages goes up to $60 to $80 once the worker has been established and learns specific skills.

Still, Bangladeshi unions say their workers make the lowest wages for this type of work in the world.

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