This final note today, which I will preface by observing that nine years ago there were 9,000 Blockbuster retail outlets around the country.
But after an announcement today from Dish Network, which bought Blockbuster out of bankrupty two years ago, we learned there will be just 50 -- all of them franchise operations.
Dish is going to shut down all the stores its still got running over the next couple of months.
I'm gonna date myself here, but you remember when Blockbuster -- and, really, any video rental chain -- was so popular that you used to be able to buy videotape rewinding machines as gifts?
Maybe you've heard this one: Government attempts major upgrades to a service that people depend on -- and everyone's required to join. But the online sign-up process is buggy, and there are other rude surprises.
You haven't heard this particular one, unless you live in Chicago, where a public transportation mess has been on the front page.
About two weeks ago, Bob Fioretti got a "courtesy call" about his payment card for the Chicago Transit Authority's new farebox system. He hadn't activated it -- had he gotten an email with his temporary password?
No, he hadn't.
Fioretti knew his old card was going to expire in a few weeks.
"I said, 'I'd better get this card activated one way or another.'"
But that email never showed up, and the website for the new fare system, which is called "Ventra," was a mess. He called the help line.
"It ring ring rings, and then I was put on hold for about 45 minutes," he says.
Eventually he hung up. He called a couple more times over the next few days. Same result. Here's where some Chicagoans might call their alderman. Except, Fioretti is an alderman.
The Ventra system opened for business in early September, and the old payment system was scheduled to shut down starting in mid-November.
Two months in, the cards don't always work. When they do, riders complain they’re sometimes double-charged. And then there’s the help line.
Last week, the transit union head demanded that the CTA hold off on the transition, until the kinks got worked out. He said his members were already getting cussed out by enough angry riders.
Yesterday, CTA President Forrest Claypool issued a simple apology: "The bottom line is that too many of our customers are confused and frustrated, and that’s our fault."
He also said that, yes, they’ll wait to shut down the old payment system until the new one is fixed. Including the help line. And the contractor behind the system won’t get a nickel till it happens.
Did the city just pick the wrong contractor? Cubic Transportation Systems has some pretty good credits: New York City. Washington D.C. London.
Joseph Schwieterman, who teaches transit and urban policy at DePaul University in Chicago, thinks part of the problem may be Ventra’s all-or-nothing setup.
"In a lot of cities, the stakes are less," he says. "In D.C., you can always buy a paper card and the smart card's a bonus."
The bigger mistake may have been trying to go too fast.
"This could have been a year rollout," Schwieterman says. "'Everybody relax. You got time to hear from your friends how it works.'"
Instead, CTA tried to force everyone to be an early adopter. Which doesn’t describe your average Chicago strap-hanger.
"Their whole rhythm's thrown out of whack and they say "WHY?" Schweiterman says.
Plus, having a smartcard system isn’t new here.
"We’ve had a card for a while. It’s called the Chicago Card."
The new card will offer more features. But the old one actually works today.
Meanwhile, Bob Fioretti says he still hasn’t gotten an email with his password. But in Chicago fashion, he knows a guy: The chairman of the city council’s transportation committee. Fioretti expects to start holding hearings later this month.[&amp;amp;amp;amp;amp;amp;amp;amp;amp;lt;a href="//storify.com/danweissmann/ventra-vents-from-chicago" target="_blank"&amp;amp;amp;amp;amp;amp;amp;amp;amp;gt;View the story "Ventra Vents from Chicago" on Storify&amp;amp;amp;amp;amp;amp;amp;amp;amp;lt;/a&amp;amp;amp;amp;amp;amp;amp;amp;amp;gt;]
Since the exchanges opened on October 1st, Toni Cohen has been in overdrive.
"It has been crazy here," says Cohen. "All the appointments we have. Our days are just packed running here, running there, seeing patients. It’s been nuts."
Cohen -- who works for the community health clinic Project H.O.P.E. -- is one of a handful of navigators in Camden trying to sign up people who are eligible for healthcare.
She has been to churches, farmer’s markets and housing projects. Tomorrow she'll start hitting local businesses and one of Camden’s tent cities of homeless people.
Because healthcare.gov isn’t working well enough to enroll people online, navigators around the country have been forced to switch gears.
In Camden, navigators are resorting to paper applications.
It’s straightforward, says Cohen. But she’s worried.
"The biggest concern I have of the last five weeks, is that the people who have filled out applications have not heard anything back yet," says Cohen.
One reason: paper applications must be run through the same web portal as the online ones.
One month in, less than 7 percent of the city’s residents who are eligible for Obamacare - have begun the enrollment process.
Maura Collinsgru with New Jersey Citizen Action says there’s a workaround.
Navigators are directing people eligible for Medicaid to the state’s Medicaid site, njfamilycare.org.
"Because we discovered it was a way for people to enroll now while we await the glitches being worked out with healthcare.gov," she says.
Collinsgru says more than a third of the state’s 900,000 uninsured citizens qualify for Medicaid now that the program is being expanded.
Whether they know about it is another story.
“America is not fully versed on the Affordable Care Act,” says Karen Pollitz, a health policy analyst with Kaiser Family Foundation.
She says as federal officials scramble to get healthcare.gov off the ground, navigators are doing some good old fashioned education.
"You know a lot of people who are uninsured have had years of really unhappy history and have given up on it. And it doesn’t even occur to them that maybe it will work completely differently now," she says.
Pollitz says all the technical problems with the website have depressed enrollment.
But she points to Kentucky -- whose exchange is working well – as proof that when things work, people are willing to sign up.
The Commodity Futures Trading Commission is one of a cornucopia of financial regulatory agencies in Washington. It's responsible for the safe and orderly operation of the market in derivatives -- bets, essentially, on what will happen in everything from interest rates to pork belly prices.
The CFTC isn't exactly a huge government operation, but it's responsible for an enormous market on the order of trillions of dollars, and its leadership ranks are about to shrink.
At a CFTC meeting yesterday, Commissioner Bart Chilton, a regulator with a penchant for peppering speeches and statements with all kinds of allusions, made an announcement.
"Some of you may recall the old Etta James song, 'At Last,'" he said. "Today, at last, I am pleased to say I will be saying, 'Vaya con Dios, my comrades.'"
The Commission is already down one member, and its chairman’s term is up at the end of the year.
Those challenges come on top of a drastically changed job for the regulator, says Jeffrey Manns, a law professor at George Washington University.
"One could say that the CFTC went from being a minnow into being a whale, in terms of regulation in the wake of the Dodd-Frank Act," he says.
Michael Barr helped write that law; now, he teaches at the University of Michigan. Barr says the CFTC’s new role is key. Derivatives used to be unregulated, and he says that led to the financial crisis -- and the need for the CFTC to step in. "It’s a huge undertaking," he said. "It’s absolutely core to reform. And it’s a fundamental shift, a transformation from the past."
And one that, according to Frank Edwards, a professor at Columbia Business School, is being done on a small budget. I asked him if the CFTC is equipped to handle its new role.
"No," he said, after a long pause. "Not really."
The administration has asked congress to give regulators more money; so far, that hasn’t happened. Now, it will have to do something that may be even harder: get lawmakers to approve three nominees to fill three CFTC vacancies.
Superheroes in comic books know no boundaries. They might fly into space or visit the bottom of the ocean. But one boundary they generally don’t cross is religion. Until now. Marvel Comics is coming out with a very different kind of superhero.
Ms. Marvel will be a rarity -- a female superhero who is Muslim.
The theme of identity is central to her character.
"'Ms. Marvel' is Kamala Khan -- a young, Pakistani-American teenager living in Jersey City, who literally wakes up with superpowers. And then has to figure out why she has them and how that fits in to her day-to-day life," says author G. Willow Wilson, who wrote the comic.
Ms. Marvel’s superpower is the ability to shape-shift -- even taking on different identities.
Marvel editor Sana Amanat didn’t read superhero comics growing up. So she wanted to create something that Muslim girls, like herself, could relate to.
"It’s for the little girls out there who feel like they’re outsiders. And they don’t feel like they fit in," says Amanat.
But the character and her superpowers were designed to appeal to a broader market too.
"All teenagers at some point or another wish that they could be someone else. Even if just for a day, to sort of get out of all of the drama and struggle that goes into being a teenager," says Wilson.
Reaching a broad audience is important for financial success. The industry mostly caters to young white boys. So there is a risk in diversifying.
But Marvel might just boost its audience and profits too.
Albert Ching is senior editor of ComicBookResources.com, which covers the comic book industry. He believes there is a market for Ms. Marvel.
"Already, it’s getting a lot of buzz. I mean, I’ve seen people sharing items about it on Facebook and Twitter who I wouldn’t normally expect to think about comic books at all," says Ching.
A successful comic book will sell between 80,000 and 100,000 copies per month. We’ll have to wait until the Ms. Marvel debut in February to say whether she’s got superpowers at the cash register.
When a company first starts selling stock, figuring out how to get the share price right can be tricky: Set the price too low and demand overheats and supply gets drained; set the price too high and demand falls off.
That’s where the designated market maker comes in.He or she gets busy before the bell, fielding calls from buyers and sellers about what the opening share price should be.
James Angel is a finance professor at Georgetown University, he watched designated market makers in action during the LinkedIn IPO.
"They would be calling out the various prices at which they thought it was going to open," he recalls. "Eventually, they figured out where the price was going to open and then they had the opening trade and then the computers took over."
Computers do largely dominate stock trades, but the role of human judgment is still crucial.
"The human element is there to backstop anything that may happen," says says Matthew Cheslock, a designated market maker for Virtu Financial.
"We trade in milliseconds now and it’s hard to believe that the human can react that fast, but we can do it because of our experiences down here. Most of the people who do it have been down here for many years."
Cheslock’s been on the floor for 20 years. Once the human has handed trading off to the machines, the designated market maker’s role isn’t over. Gary Shilling, an investment economist, compares the market maker to a traffic cop, who keeps trades running smoothly.
"If nobody else wants to buy, they’re supposed to be buying, if nobody else wants to sell, they’re supposed to be selling," says Shilling. "But they also were supposed to be, as they say, the last troops in times of real duress."
Things like buying during a big sell-off to help stabilize the price, or selling during a surge in demand, to make sure shares are available.
This is a headline that's heard a lot: "Good news for the economy, housing prices are up." But think about that for a minute. What other products make the economy better when they get more expensive? Why do we associate more expensive housing with a better economy?
For people who own their home, rising prices means more equity. It's an investment in your future. But there is a down side to rising housing prices, and not just the unsustainable growth that leads to real estate bubbles. Even steadily rising home prices have consequences.
For decades, housing prices have gone up faster than incomes. As a result, there's been a decline in the number of houses that are affordable to the average family, and even families that can afford to buy a house have to pay more. I wanted to visit a city where this is playing out, and San Luis Obispo, Ca., seemed like an ideal place.
San Luis Obispo is on the central coast, about halfway between Los Angeles and San Francisco. The night I was there it was easy to see why people want to live there. One of the downtown streets was closed for a farmer's market. A street band played outside the Victoria's Secret, and everything had a soft glow from lights strung in the trees. The city is bordered by mountains and surrounded by vineyards that provide grapes for the blossoming wine industry.
Not only is it beautiful here, there are good jobs. The median income is about $71,000, well above the national average.
"The largest employer here is the State of California," says Brad Taunt. "That's with employees in two state penitentiaries. We also have Cal Poly, our university. After the government sector, then it's agriculture and tourism, ag being the wine industry."
Taunt is one of the first people I sought out in San Luis. He's been a mortgage lender here for 27 years. I presented him with an imaginary family making the median household income of San Luis Obispo and asked him what kind of loan he could offer that family.
"That particular buyer could find a house for about 356,000," says Taunt.
I then packed my imaginary family into the car, along with the imaginary loan papers, and drove over to real estate agent Monica King. I asked her to show me what that $356,000 would buy in the city.
In her office she pulled up some listings with photographs of single family houses.
"These pictures are wonderful compared to in person," King says, pointing to a ranch style house in one of the least expensive San Luis neighborhoods. "It's older, built in 1963, 1,585 square feet. It does have new carpet but it's pretty funky."
Then came the bad news. This was the cheapest house she had, and it was $475,000. She told me there were no single family houses that didn't need significant repairs, available for $356,000. My imaginary family was crushed.
So if more than half of the population in San Luis couldn't afford the cheapest house, what are their options? Most of them rent, or they buy houses outside of the city, in other parts of the county.
"We never imagined in a million years that we could afford a house," says Risa Brown. She and her husband, Martin, came to Brad Taunt over a year ago to get a mortgage loan. They were about to have a baby and wanted more space than they had in their rented condo. Together they still made below the median income. "I have a handyman business," says Martin, "Risa and her dad run a property management business so I do a lot of work for them, probably 95 percent of my work is through them."
The Browns were able to buy, though. I visited their new home in Atascadero, a town 20 miles north of San Luis Obispo.
"We paid $316,000 for this place. It's over 1,500 square feet, three bedrooms, two-car garage on a quarter-acre lot," says Martin.
Living in Atascadero means a half hour commute into San Luis. And they spend about half of their monthly income on their mortgage payment. Just a generation ago that was unheard of, says Taunt.
"Back then, income-to-debt ratios were 28 and 36 percent, meaning, of your gross income you could have 28 percent of your income going toward your housing expense." And you could spend 36 percent of your gross income on the combination of housing and all other debt, like student loans, cars, credit cards.
Today it's common for families to spend half their income on their mortgage payment. This means, cutting spending on everything from eating out to fewer vacations, or less rainy day and retirement saving.
And as families spend more on housing they are making less.
"Incomes, surprisingly, when you adjust for inflation, have been declining since 1999, which is pretty startling," says Erik Franks, an analyst with John Burns Real Estate consulting. "So purchasing power is slightly less. Actually 10 percent less than it was about 13 years ago,"
The day after I left San Luis Obispo I got a call from Brad Taunt. He wanted to emphasize that even with the challenges facing first-time buyers, this is a great time to buy, if you can afford it. Interest rates are still low. And housing prices are on the rise.
I was asked to blog about Twitter’s IPO. I did not want to blog about Twitter’s IPO.
Why did I want to avoid it?
Because I don’t want to give an IPO like this more press, more buzz, and possibly lead more people to invest in it just because it’s everywhere and we all use it and like it and ... well, yadda yadda.
But, then I reminded myself that all this IPO talk, particularly the talk about ‘cool’ tech companies, still gets regular folks asking the same question I just received from a dear young friend and owner of a local vintage boutique: "Should I buy Twitter?"
My short answer: Nope.
My long answer: Sure, everyone wants to hang out with the prom queen and shake hands with Miss Universe. Twitter stock is this season’s proverbial beauty queen -- albeit a beauty queen at the school for econo-wonks, a la Keynes’s take on investors not buying true value but instead, the most popular, talked-about stocks.
But note, after high school, how much influence does your class’s ‘Most Popular’ student still have on your life? Ten years later? How about twenty years later?
A popularity ‘buy’ is not a long-term buy. Beauty fades. And, to paraphrase my late, wise Dominican-mama Lupe, you may look good now, but in the end “ju get de’ face ju deserve.” It’s fun to hang out with a short-term winner but to invest in ‘buzz’ is to be blind to the machinations behind all that shiny, pretty money -- to be oblivious to potential rot, management issues, other players galloping quickly behind you or, huge shifts in a whole industry. The potential 'ugly' behind all that pretty.
Here’s the advice I gave my inquisitive friend, advice that applies to any-and-all who feel an itch to buy the latest IPO in the headlines:
- Treat individual stock purchases like ‘lotto’ money. For example, once my local lotto gets above $100 million I’ll drop $2 or $4 to play, but just for fun. Stand-alone stock buys are entertainment as well as gambles. The risk is high, so don’t risk too much or at all. Remember, we hear about stock winners because winners make great stories. We rarely hear about all the losers who are much more plentiful in number. Drop no more than 3 percent to 5 percent of your long-term savings into risky ‘fun’ market plays.
- Take advantage of tax-friendly retirement tools first, such as an IRA. Protecting gains from taxes adds nitrogen fuel to compound your earning potential.
- Diversify, diversify, diversify. To sit on a stool with one leg is precarious, if not impossible. The more legs, probably the more stable you will be. Invest in various assets and classes of assets to spread around risk. For example, what you have in low-risk, more steady investments will prevent your whole portfolio from going kah-blooey when higher-risk investments lose and visa versa. Spread your financial ‘weight’ around.
- Keep fees low. Consider this, every dollar you can save on taxes and fees keeps more money in your pocket and that’s more money that can grow long term. Index funds don’t carry management fees for the most part, and look for “no load” funds. Never pay retail.
In less than 24 hours, Twitter will go from the privately held microblogging service-that-could to a publicly traded social media juggernaut. At least, that's what the company's executives are hoping. As Wall Street waits to see if investors will line up for Twitter's initial public offering, the rest of the tech world is watching with anticipation. Many see Twitter's IPO as an important moment for their industry.
Twitter is going public tomorrow, and the microblogging company increased its target range for the new stock to between $23 and $25. Is that a deal or a steal?
Bill de Blasio will be the 109th mayor of the city of New York, becoming the first Democrat to lead the nation's largest metropolis in nearly a quarter century. "A tale of two cities" was the theme of the campaign that carried him to victory. The idea that there are two New York Cities, one for the rich and one for the poor, was attacked as a divisive idea on the campaign trail, but resonated with voters living in an increasingly expensive city with higher income inequality than any other metropolitan area in the U.S.
Twitter is going public tomorrow, and the microblogging company increased its target range for the new stock to between $23 and $25. Is that a deal or a steal? Melody Hobson, president of Ariel Investments in Chicago, tells Marketplace Morning Report host David Brancaccio what she thinks.
During the last few decades the average American has lost and hour and a half of sleep per night. Sleep researchers at Harvard say the workplace is suffering to the tune of $63 billion a year as a result of insomnia, and all the health and productivity problems that go with it.
Gail DeBoer knows something about that. She is the president of a large federal credit union in Omaha. Her restless nights began when she got her first smartphone a few years ago. She’d look at email just before she went to bed. But it didn’t end there.
“I’d wake up at two or three in the morning thinking about work situations,” says DeBoer. “I’d start sending emails because it was on my mind.”
After that, she never really got back to sleep. She began having regular headaches. Still, she told herself she was fine on about five hours a night. Russell Sanna is executive director of the division of sleep medicine at Harvard Medical School. He hears that all the time. “There’s a cultural norm that says sleep is for losers in the United States,” says Sanna.
Harvard is on a mission to change that. It wants companies to take sleep as seriously as they do obesity or smoking. Sanna says sleep deprivation has been shown in clinical settings to have “the equal cognitive impairment as alcohol consumption. Nobody’s particularly interested in having their employees show up intoxicated,” he says. “But unless they’re paying attention to sleep deprivation that’s what’s in fact happening.”
Some businesses are already tackling the issue. Casey Smith is head athletic trainer for NBA team the Dallas Mavericks. The players have just started wearing wristwatches that measure the duration and intensity of their sleep. “It’s a sport but it’s also a business,” says Smith. “Our business is to win games, to win matches, and anything that can make our athletes perform at a higher level, react quicker, recover better, that’s something that we would obviously be interested in.”
In Omaha, Gail DeBoer finally realized she wasn’t performing at her best. Her headaches were getting worse. And she was mortified to discover some of her staff were exhausted too. “Even if I didn’t say it, I think the impression was if I was working they should be working so we had to evaluate -- I had to evaluate -- the message I was sending,” says DeBoer.
She ended up getting rid of smartphones for everyone except her senior team. She also trained herself not to check email before bed. She’s sleeping 8 hours a night -- and she hasn’t had a headache for months.
Ashley Milne-Tyte is the host of a podcast on women in the workplace called The Broad Experience.
Bill de Blasio will be the 109th mayor of the city of New York, becoming the first Democrat to lead the nation's largest metropolis in nearly a quarter century. De Blasio defeated his Republican opponent Joe Lhota, scoring 73.3 percent of the vote.
"A tale of two cities" was the theme of de Blasio's campaign that carried him to victory. The idea that there are two New York Cities, one for the rich and one for the poor, was attacked as a divisive idea on the campaign trail, but resonated with voters living in an increasingly expensive city with higher income inequality than any other metropolitan area in the U.S. Marketplace reporter Sabri Ben-Achour tells MMR host David Brancaccio about the divided city Mayor-elect de Blasio will inherit on January 1.
In the past, TV companies like CBS used to make most of their money from advertising. Now they’re getting a lot of their revenues from content license fees charged to cable companies. That’s what the stand-off with Time Warner was about.
“CBS especially has been a leader in developing this licenses fee -- monthly license fee retransmission consent payment. And it can add up to hundreds of millions of dollars,” says Hal Vogel, who follows the industry for Vogel Capital Management.
Other TV networks see those millions, and want in on the action. But too much of a good thing could backfire for broadcasters.
“Investors shouldn’t necessarily assume that these revenue streams are going to continue forever,” says David McAdams, an economics professor at Duke University.
When networks charge cable companies higher fees, those costs get passed along to consumers. If fees get too high, consumers are more likely to disconnect their cable and use other technology to view TV shows.
“You can actually go to CBS’s website and watch some programs for free,” says McAdams. “More people are likely to do that as cable costs go up.”
For the time being, CBS has the advantage. But it may not last.
“Right now, the networks have the cable companies over their knee. If their channel is blacked-out, the cable company loses subscribers,” says McAdams. “But in the future, if it becomes much easier for consumers to access those network channels even without cable, there will be much less bargaining power [for the networks].”
Inspired by the multi-billion settlements currently being negotiated between federal regulators and JPMorgan Chase, there is a campaign afoot on Capital Hill to block big companies from being able to take a tax deduction when they settle cases with the government. JPMorgan has agreed to pay a $5.1 billion settlement over mortgage securities -- all of which is apparently tax deductible, and could save the country's largest bank an estimated $1.5 billion in taxes.
The U.S. Public Interest Research Group has a petition drive to stop the deductions, and two House Democrats have proposed a law. But Allan Sloan, senior editor-at-large at Fortune Magazine is having none of this. He says in the case of JPMorgan owing $5.1 billion to Fannie Mae and Freddie Mac, there's a big difference between a settlement-tax deduction and a fine, which is something else.
"There was a business dispute between Fannie and Freddie and JP, JP settled the business dispute for $5.1 billion -- it is the classic definition of a business expense," Sloan says.
Sloan points out that the settlement negotiated between Fannie and Freddie and JPMorgan was not punitive in the eyes of the law -- unlike a fine, which is not deductible from taxes.
Sloan says that allowing JPMorgan to take a deduction on the settlement is still a win for American taxpayers because of where the money will end up.
"It's going to end up in the Treasury," Sloan explains. "It's going to taxpayers, because of the way Fannie and Freddie work, every extra $5.1 billion that wanders in the door wanders out the door fairly soon to the Treasury. So, we taxpayers are getting all $5 billion. JPMorgan is getting to deduct $5 billion, but it's still out of pocket 65 percent of $5 billion, and it's a lot worse off than it was, and we taxpayers are better off than we were."
Following other tech giants, Apple, Inc. revealed on Tuesday the number of official data requests it receives from governments around the world. During the first 6 months of 2013, the U.S. alone made 3,500 requests -- and those are just the ones Apple is disclosing.
Many of those requests appear to be related to lost and stolen devices, or to aid in missing persons investigations. While the U.S. has made the largest number of requests, the U.K. was second with just 141.
Apple, and other companies like Google, Yahoo, and Microsoft, are now making the disclosures as part of an effort to rebuild public trust, and repair damage from the perception that they were working with the U.S. government as partners.
In less than 24 hours, Twitter will go from the privately held microblogging service-that-could to a publicly traded social media juggernaut. At least, that's what the company's executives are hoping.
As Wall Street waits to see if investors will line up for Twitter's initial public offering, the rest of the tech world is watching with anticipation. Many see Twitter's IPO as an important moment for their industry.
"Frankly, it's all anyone can talk about" in Silicon Valley, says Zach Seward, senior editor at Quartz. But while Twitter's employees and investors are likely about to become very wealthy, the IPO brings with it a likely sea change for the scores of users who have catapulted Twitter to popularity.
"For the 230 million users of Twitter, it's sort of the end of Twitter's creative phase," Seward says. "Think about Facebook -- went public last year, and since then, I think you'd be hard pressed to say that the service has improved if you're a user. Certainly, if you're a user, you see a lot more ads -- and the stock price is way up as a result -- but, as a service, I think, you have to say it was a much more interesting company pre-IPO."
In the build up to Thursday's IPO, Twitter has been rapidly expanding and attempting to move into new markets. Seward says Twitter thinks a key to future revenue lies in television advertising.
"One big bet that Twitter is making right now is that it can siphon off a large portion from TV advertising," Seward says.
But Twitter isn't the only social media platform competing for those dollars.
"Facebook, for one, is racing to match Twitter's claim that Twitter is where you go to talk about television,” Seward says. “They're like, 'Whoa, whoa, whoa -- wait a minute -- more Americans, more people worldwide are using Facebook.' Twitter's leg up is simply that everything you do on Twitter -- as they endlessly remind us now -- is public."
Eager investors can get their share of Twitter tomorrow. To get ready, the company's made a number of interface changes in recent months. These moves to gather advertising dollars have brought rumors of employee unrest about Twitter going public.
“It's a very common dynamic,” says Susan Etlinger, a tech industry analyst with Altimeter Group in San Mateo. She says that when companies like Twitter go public, some employees "feel that the original mission is shifting, or they used to have a lot more autonomy than they do now.”
But she thinks the hand-wringing has been overblown. “I don't see any indication,” she adds, “that strategy has changed in any meaningful way in the last three months from where it was you know a year ago.”
Jeremy Levine is a partner with Bessemer Venture Partners in New York. He says that as Twitter increases it's focus on revenue, it risks becoming less innovative.
“As you become successful,” he says, “you go from being the attacking disruptor to a target for other disruptors. And that's really nerve-racking for an executive team.”
That could be Twitter's next real challenge -- nurturing new ideas at the same time it nurtures an income stream.
Growing income inequality in the U.S. has become the subject of much debate in the last few years, in the wake of the Great Recession and movements like Occupy Wall Street. Lately, the issue is getting new life at the local level, too. Income inequality has popped up as a major theme in this week’s mayoral elections from New York City to Boston to Seattle.
“We are increasingly a city of the very rich and the very poor,” one of the candidates running for Mayor in Boston said during his campaign. Another called income inequality the “top economic issue” facing the city. Across the country in Seattle, income inequality was also singled out by a mayoral hopeful as one of the most pressing concerns. And in New York City, the “Tale of Two Cities” became a rallying cry for front-runner Bill DeBlasio’s campaign.
But here’s the thing: local income inequality can mean something very different than national income inequality.
That’s at the core of a provocative argument by Harvard Professor Ed Glaeser, who studies the economics of cities. “While we can perhaps all wish for a more equal society as a whole, I don’t necessarily wish for a community that’s completely homogeneous in terms of income,” he says. “I can think of few places more equal than many of our homogenous suburbs, that manage to stay equal by making it impossible for people with less income to move in to the area. That’s not anything that’s particularly good.”
Glaeser contends that measures of income inequality at the national level reflect “great tectonic forces” that determine which jobs earn how much across the global marketplace, and who gets what share of the nation’s economic prosperity.
Measures of local inequality, however, have more to do with how diverse a city is in terms of high and low income residents, Glaeser says. “Local inequality is often driven by far more prosaic factors—like does this particular community offer housing that’s attractive to rich and poor? Does this city provide both a home for the rich, and opportunity for the poor?”
The luxury lofts that attract rich people to a city, and the social services and public transit that attract the poor—Glaeser says cities should embrace all of it, to stay economically diverse.
Not a Statistic, but a Feeling
And yet, in the last few decades, in big cities across America, there is no denying that the gap between the richest residents and everyone else has been growing wider, and it’s changing these places in palpable ways. Take New York City as an example. In 1980, the richest 1 percent of New Yorkers claimed 12 percent of the city's total income. Now, they claim almost 39 percent, according to a report from the Fiscal Policy Institute.
But for the average person living in a city, it's not so much those statistics that they notice. It’s a more of a feeling they get when they walk down the street.
“The other day I happened to be walking by the block in Park Slope where I lived in 1990,” says Kevin Slavin, a professor at MIT who has lived most of his life in New York City. On his walk, Slavin passed by a building that used to be his local corner store -- a place where people from all walks of life stopped in for conversation, cheap groceries, and heroin—if you were so inclined.
Now, that building is home to a “cat clinic,” Slavin realized. “It's now daycare for your kittens. And I felt like that pretty much summed it up.”
Slavin has mixed feelings about the transformation he’s witnessed in his city -- where kitten day cares have taken over bodega drug fronts and luxury lofts are built on former squats and subways where you once had to guard your wallet are now places where people feel comfortable pulling out their thousand dollar laptops. On the one hand, Slavin -- who is somewhere in between rich and poor -- says these changes in the city have a real upside for him: less crime in many of the areas he frequents, less concern about getting mugged.
“I mean, my life is definitely easier to live without fear than with it. It is better,” he says.
But Slavin says he also feels like something's been lost, as a growing percentage of his city’s residents have more and more wealth. “You start to build out the city for that wealth,” Slavin says. “And there was something that was important and beautiful and worth preserving about living shoulder to shoulder with lots of people who were not at all like you.”
The Price of Prosperity
“There's a price to prosperity that really needs to be grappled with,” says Bruce Katz, who directs the Metropolitan Policy Program at the Brookings Institution. Katz says cities like Boston and New York that were left for dead in the 1970s have “flourished” in the last ten years as crime rates have dropped and city services improved. “There are consequences to that, for people left behind and for neighborhoods left behind,” he says. “In many cities, as they become more prosperous and as housing prices rise, they’re crowding out a portion of their working population.”
And yet ironically, when low-income families have to move out of a city because they can't afford it anymore, that actually reduces income inequality, points out Harvard’s Ed Glaeser.
“The downside really of the extremes of wealth and poverty in cities is: where is the middle?” Glaeser says. The real problem, Glaeser argues, is that cities have “not been particularly hospitable places for middle income Americans, particularly those with families."
Glaeser and Katz both say that is the real challenge for cities where income inequality has become a hot button issue. Not necessarily how to reduce income inequality, but how to create more opportunities for working families to survive and thrive.
Lately we've been asking our listeners to send us their stories about their very first jobs.
Author Jess Walter has been on the show a couple of times for his books The Financial Lives of Poets and The Beautiful Ruins, among others. He actually started working on his family's cattle ranch when he was six.
But it was a very different job that he says really put him into the working world.
"When I was 15 I got a job as a dishwasher in an Italian restaurant. One of those classic restaurants with checkered tablecloths and the Chianti bottles with was melting down the sides of them."
The experience gave him inspiration for his later career as a writer, including a particular old chef named Giuseppe with a penchant for old steak bones.
"When I was writing Beautiful Ruins, which is partly set in Italy, I kept trying to find a place to have a chef who coveted half eaten steak bones for his soup and it never found a place."
Click the audio player above to hear Walter's full commentary.
This final note today: For those of you into settling bets the old fashioned way, Japanese scientists have developed a robot so fast it can "win" rock-paper-scissors against a mere human every single time.
But here's the catch: The way it wins...is by cheating. It can react so quickly -- in just 0.001 second -- to what your hand is doing, that it knows what to throw out to beat you.
So, we're sticking with what we know. Paper always wins. Also, cheaters never win.