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Updated: 27 min 53 sec ago

How Ford is competing with Google

Wed, 2015-06-24 10:14

Update: Ford is stepping into the sharing economy. The company announced a new partnership with car-sharing start-up Getaround that will allow Ford owners to rent their cars to qualified drivers when they aren't using them. According to the Christian Science Monitor, "only customers who have financed their vehicles through Ford Credit, and not customers who own their vehicles outright, are eligible to participate in the car sharing program."

Our conversation with Ford CEO Mark Fields and why Ford looks at tech as its competition:

“Overall, when we step back, we are in a growth industry.”

That’s what Ford Motor Company CEO Mark Fields has to say about the car and truck business. He points to the fact that, globally, an increasing number of mega-cities are home to 10 million or more people, some of them in the middle class — and he says when people reach the middle class, they want to buy a car. 

Fields agrees it’s true that, in many urban areas, car ownership will decline as people decide to use alternate modes of transportation. But he sees Ford as more than just a car and truck company. According to Fields, as a "mobility company," Ford is experimenting with projects outside of the traditional powertrain. What are some of these experiments?

“It runs the gamut from ride sharing in London, to car-swapping in the U.S. to parking identification,” Fields says.  

Fields knows Ford will have competition as it continues to experiment with wrapping more and more technology into its business model. While he sees traditional car manufacturers as competition, Google, Uber and Apple are creeping onto the rivals list.

“The addressable market on the car business dwarfs smartphones, dwarfs wearables, you name it,” Fields says. “And there’s a lot of folks looking at the auto industry and that gives us a lot of motivation.”

Sysco-US Foods merger stopped over anti-trust concern

Wed, 2015-06-24 03:00

A federal judge has halted a proposed merger between Sysco and US Foods.

The deal is being held up for antitrust review under the concern that a merger between the country’s two largest food distribution companies might lead to higher prices.

Sysco and US Foods aren’t exactly household names, yet they are responsible for a good deal of the food we eat; distributing food products to restaurants, schools, hospitals and hotels across the country.

The Federal Trade Commission alleged the merger would create a near monopoly in the food distribution industry.

Bob Goldin is the executive vice president with the food industry researcher Technomic. Its clients include Sysco. Goldin says there are still plenty of alternatives restaurants could use besides Sysco and US Foods in virtually every market. "By our count, there is (sic) about 1,500 distributors," he says.

Sysco had sought to appease the court's anti-trust concerns by selling off assets to another competitor, Performance Food Group.

“That divestiture wasn't sufficient to restore the competition that would be lost by the acquisition,” says anti-trust attorney Andre Barlow, of the firm Doyle, Barlow and Mazard. He says this ruling is just the latest in a string of cases that prove that the FTC and DOJ will step in to break up mergers they feel are anti-competitive.

“This is another indication that the Federal Trade Commission has the capability to litigate and win at trial," he says.

Barlow says this case may still move forward, but that he would bet against the chances the merger would be approved in a higher court.

PODCAST: Putting money in the luxury car

Wed, 2015-06-24 03:00

Greece and its endless troubles are on investors' minds today as EU leaders meet in hopes of finding a way out of the Greek debt crisis. There's also fresh data today that gives us a look into the U.S. economy. We'll look at what it all adds up to. And speaking of Greece, we'll be taking a look at how the country’s economic woes affect the lives of ordinary Greeks in a special series called “Greeks in Crisis." Today, our Europe Correspondent Stephen Beard reports from Athens where a car dealer tells of surging car sales as Greeks bet that money spend on a car will hold its value better than cash left in the bank. Plus, as members of the House consider a way to prop up the Highway Trust Fund, which runs out of money this summer, we take stock of the options on the table, including a plan to tax corporate profits that have been stored overseas.

Greece's car dealers prosper amid widespread hardship

Wed, 2015-06-24 02:10

For car dealer Andreas Basilopoulos, there have been some unexpected signs of life at his used luxury car showroom in Athens.

“The last three years we were selling 10 to 15 cars a month. Now it’s double,” he says.

Andreas Basilopoulos says \"selling luxury cars has been easier this year.\"Stephen Beard 

Sales have picked up for cars like a 20-year-old Porsche 911 priced at $60,000 and a four-year-old BMW at $30,000.

Basilopoulos has not been the only beneficiary of a curious — even bizarre — twist in economic behavior. In a country threatened with financial collapse and penury, sales of new and used luxury cars have jumped by 20 percent since the spring.

“We’ve had a lot of customers who are afraid of losing money if Greece is forced out of the eurozone and the country converts overnight to the drachma,” Basilopoulos says. “So they’ve been taking money out of the bank and buying luxury cars with it. Just to protect their wealth.”

Nikos Mertekis, editor of the Greek edition of Car and Driver Magazine, argues that it doesn’t make sense, since the cars in question are not collectors’ items. Some car experts have questioned the wisdom of this maneuver.

“I don’t think this is an investment,” he says. “A car is a depreciating asset.”

But many Greeks apparently believe that a car will depreciate less than any new currency the country may be forced to launch if Greece is booted out of the eurozone.

Car dealer Andreas Basilopoulos insists that his used BMWs, Mercedes and Porsches will hold their value, especially since customers will be able to sell them easily in Germany.

He claims it’s now much cheaper for Germans to buy a used German car in recession-hit Greece than in Germany. Oh, the topsy-turvy world of Greekonomics.

After TPP vote, what's next for unions?

Wed, 2015-06-24 02:00

The Senate today is expected to give final approval for a bill that gives the president fast-track authority to negotiate the Trans-Pacific Partnership trade agreement.

If the measure passes, it will be a defeat for labor unions which have been trying to scuttle the trade deal. They built a large coalition to oppose it; from firefighters, to environmental and non-profit groups, to tech companies.

Their argument has been, among other things, that other trade policies have cost jobs and contributed to stagnating wages.

"The American labor movement has had a very blunt and unsophisticated argument against global trade," says Gary Chaison, professor of labor relations at Clark University. "I don't think it's a question anymore of whether or not there will be global trade. It's just a question of who the winners and the losers are."

Chaison says the labor unions' expected legislative defeat is an indication of their diminished power, although they may still attempt to exert influence when it comes time to vote the trade deal up or down, without amendments (that's fast-track authority).

"The game is not over," says Robert Blecker, an economics professor at American University, because Congress still has a voice with final approval of the deal.

Labor unions could continue to oppose the deal, Blecker says, "Labor could also negotiate for add-ons or side agreements, or increased trade adjustment assistance, or some other considerations."

Kicking the Highway Trust Fund can

Wed, 2015-06-24 02:00

The House of Representatives will hold a hearing Wednesday on a proposed a corporate tax holiday on money kept overseas as a way of refilling the drained coffers of the Highway Trust Fund. The plan would temporarily reduce the tax rate to get the money back to the U.S., then stash it away to pay for roads and bridges. 

The idea has support on both sides of the aisle. But that won’t fix the fund’s solvency problem. The reason for that is the 18 cents you pay the fund for every gallon you put into your car is the exact same amount you paid back in 1993, the last year it was raised. And 18 cents buys a lot less today than it did back then.

“For some reason, the gas tax is politically toxic in Washington,” says Rob Puentes, senior fellow at the Brookings Metropolitan Policy Program. Puentes says that might be because states have their own gas taxes — and a bunch of those were hiked just in the past year.

“In some ways, perhaps this whole idea of repatriation is easier than trying to define what the transportation program should be for the future,” Puentes says.

James Burnley, transportation secretary under Ronald Reagan, says the repatriation idea is also “a temporary fix.”

Burnley says two federal commissions tasked with fixing the fund’s broken revenue stream have proposed the same permanent fix: a vehicle miles traveled tax.

“You tax based on how many miles a vehicle is driven each year. And you do that regardless the mode of power of the vehicle,” he says.

That, he says, is a good fix in a time of increasingly fuel efficient cars — if they use fuel at all. And it's also a fix, he says, that isn’t being entertained by Congress.

Connecting inmates with their children through books

Wed, 2015-06-24 02:00

As part of our series about technology in prisons called "Jailbreak," we paid a visit to a new program that uses technology to fill an important role in the development of the children of those who are incarcerated.

Organizers say the TeleStory program the first of its kind in the country. At the main branch of the Brooklyn Public Library in New York, families of inmates bring their children to a special room filled with toys and books. Even more unique: the room is virtually connected to a prison on Rikers Island.

As part of the program, an inmate who has had training gets a rare opportunity: they get to read a book to their child. 

We paid a visit to the Brooklyn Public Library's main branch, where we got to chat with a family taking part in the program.

Click the media player above to hear more.


Personalizing medicine with tailored social services

Wed, 2015-06-24 02:00

Evelyn Powell is 68 years old and extraordinarily sick.

“I have emphysema. I’ve got arrhythmic heart failure; got asthma,” says Powell, who runs a rooming house in Portland, Oregon. “I was in and out of the hospital all the time — it would be a month, a whole month, I’d be in the hospital three or four times.”

She’s the kind of patient who gets labeled a “frequent flier” by healthcare providers. It’s a pejorative label, but it’s certainly easy to judge Powell.

She struggled to keep track of her medication. She ate lousy food. She kept smoking.

Physician assistant Cassie Ryan-Mapolski sees plenty of patients like Powell at her Portland clinic. Sooner or later, she says, you just get stuck.

“There can be those moments where you’re like, ‘I don’t know what else to do for you. Why are you here? What do you want? What do you want me to do? I have no way to help you, I have no way to help you help yourself,’” she says.

In virtually every city and town in America there are men and women who can’t keep up with chronic illnesses like diabetes and congestive heart failure. In virtually every city and town in America there are also doctors and nurses who believe poverty, mental illness and addiction are at the root of the problem.

These are among the most expensive patients in the healthcare system, and their ranks are growing. Under the Affordable Care Act, more people at the margins are getting insurance through Medicaid.

“If you were homeless and had a lot of healthcare needs, in the past you often couldn’t access healthcare, you would get sicker and you would often die,” says Harvard’s Dr. Ashish Jha. “Today we have a lot more people coming into the healthcare system, insurance expansion has meant a lot of these people thankfully can get healthcare.”

And that means the cost to taxpayers for prescriptions, ambulance rides and week-long hospital stays just keep climbing.

But unlike costs for people at the end of life, or even for those battling cancer, these costs – at least on paper – could be reduced or avoided if people get better care.

The consulting firm Oliver Wyman says delivering proper care to these patients nationwide could save $300 billion dollars a year.   

The question, of course, is what proper care looks like.

What’s happening on a recent afternoon at the Dishman Community Center in Portland may be part of the answer.

Social worker Lisa Pearlstein leads her patient-client Tony Horst toward the pool. He’s a little nervous. He hasn’t been swimming in 15 years.

“It might be hard on me, it might be not hard,” he says. “Hope I don’t have chest pains in the swimming pool.”

Horst has heart problem. He’s got to lug around an oxygen tank. He also has a lot of anxiety.

The fact that he showed up at all – after getting lost on his way here – is because of the relationship he’s built with Pearlstein.

Pretty soon the two are tossing around a striped beach ball.

Horst is part of the Health Resilience Program run by Care CareOregon, an insurance company covering Medicaid patients. Under the program people like Pearlstein seek out the whole picture of a person.

She asks about their priorities, their worries and their pain. As that relationship develops, it helps her more clearly see the medical and the social roadblocks.

That’s crucial to building the kind of trust she’s built with Horst.

“This population of people has been affected by so much hell,” she says. “It’s overwhelming sometimes.”

It may be overwhelming, and time consuming, but CareOregon believes getting to know patients so intimately lets them do a better job. The company also collects a lot of data, which has helped it realize that not all poor patients with chronic illnesses are the same.

Some are able to manage their disease and don’t cycle in and out of the hospital. Those who do find themselves at the hospital so frequently are often socially isolated. 

They’re patients like Joanie McVeigh. She’s married, but her husband is gone a lot, and she’s really sick. She has diabetes, OCD, PTSD, panic and anxiety attacks, asthma, sleep apnea, and plantar fasciitis.

McVeigh is asking for help from two people who are visiting her recently in her studio apartment at the Sandy Motel. This is her care team. CareOregon tackles social isolation by pairing patients with a social worker and a peer who has similar lived experiences.

McVeigh’s become fast friends with social worker Quinne Salemeh and with peer Sam Osborne, who also has bipolar disorder. McVeigh tells me about one day earlier this year when her feet and knee were driving her nuts.

“I was really frustrated,” she says, “and I was really in pain.” She couldn’t make headway with the doctor, and she felt her anxiety spooling up inside.

“I was emotionally feeling like I wanted to get to the hospital. I wanted to take pills. I was crying. It set my bipolar in. I wanted to throw things,” she says.

She was close to calling the ambulance, but instead she started scrolling through her phone, eventually texting Osborne.

“I remember she came and sat on my couch,” McVeigh says. “And we just had this amazing, connecting talk.”

Catastrophe averted. No 911 call, no ambulance, no ER admission.

CareOregon knows it still needs better data to prove the concept works, but this approach – with its focus on relationships and reaching the socially isolated – seems to be paying off.

Two-and-a-half years since the program launched, the company says it’s cut hospital and emergency room admissions by 35 percent

Part of that is because people like Joanie – and like Evelyn Powell, the “frequent flier” from earlier in our story, have never wanted to spend so much time in the hospital or ER. And now they don’t have to.

In Powell’s case, CareOregon has helped her avoid trips to the ER for the last year, and she’s only had one hospitalization of any kind in 2015.

Doctors love the program. They says it’s easier to work with these patients. Even the bean counters seem happy; CareOregon estimates that next year it will save at least double what it costs to run the program. 

Improving health and saving money is the only measure of success for many in the industry. Some like CareOregon’s Lisa Pearlstein wonder if that bar is too high.

“We could do everything and still people are going to struggle,” she says. “It’s just poverty is so profound. Trauma is so profound.”

Pearlstein tells me about Bop, a 50-something woman addicted to heroin for more than 30 years, in and out of an abusive relationship, in chronic pain.

“We had a standing appointment,” Pearlstein says. “She would show up on Monday morning at 9:30. I could see her get off the bus, and I could be able to tell if she was high or not.”

Pearlstein says while they worked together for a couple of years, Bop kept going to the hospital and the ER about the same as always.

She was on the street until Pearlstein got her into hospice.

“She died in her sister’s home, in a bed, with treatment,” she says. “She wasn’t in pain. She died with dignity."

“She didn’t just fall down, face down, in the street in the gutter and get picked up and taken to the emergency room where nobody knew her,” Pearlstein says.

No one ever saved any money on Bop, but she died the way she wanted, and for Pearlstein, maybe that was enough.

President Obama, the gun salesman

Wed, 2015-06-24 01:59
60 percent

That's how much demand for guns rose, year over year, immediately after Barack Obama was elected president in 2008, according to U.S. News and World Report. What's interesting is that the demand was tied specifically to Obama, surging as Hillary Clinton, who had similar policies on gun control, dropped out of the race.

40 percent

That's the percentage of people who say they don't know their partner's income. That's according to a new study from Fidelity investments, which also says about a third of couples had differing answers about their investable assets. Also worth noting: most couples in the study said they had great communication.

$41 million

That's how much candidates reported refunding in campaign contributions in the last election cycle, for public relations reasons, because the donor had been involved in criminal activity, or any number of other reasons. The New York Times' Upshot notes that campaigns don't give back money often — the refunds made up just 1.4 percent of contributions — but they don't often vet donors either.

20 percent

That's how much the luxury car market in Greece has jumped since the spring. Something like a $60,000 Porsche 911 is not an item you'd expect folks suffering a financial crisis to purchase. But in Greece, some citizens feel their money is safer in luxury cars than in the bank. 


That's about how much an iPhone 6 costs in Venezuela as a result of a lack of supply, and skyrocketing inflation. Bloomberg takes a look at the causes behind the country's unreasonable smartphone market, which prices the latest iPhone at about 41 times the monthly minimum wage.

The challenge in pairing the sick with social services

Tue, 2015-06-23 13:13

Indiana Jones, he’s not.


I’m a 5’7” guy from Portland, Oregon, raised in a Jewish family,” says Dr. David Labby, making him perhaps more Woody Allen than Harrison Ford.


But like the daring archaeologist from the movies, Labby is after a rare and elusive prize: He wants to keep chronically ill and poor patients in Portland from landing in the hospital again and again.


“These are people who have lived in some form of constant crisis, so they know how to survive in crisis,” he says. “They don’t know how to take care of a chronic disease. And so they come to us for help. What we think is help to them is not helpful. It doesn’t work for them. It doesn’t work for us. We just have to start over.”


What doesn’t work is prescribing medications that must be kept cool for someone who doesn’t have a refrigerator. What doesn’t work is pressing patients to eat better when they don’t know where their next meal is coming from.


But Labby thinks he’s finally found a way to get that fresh start — to work with these super-sick, super-expensive patients.


What I’ve learned is if I’m going to help somebody, I really need to know about their life,” he says, “what it’s like for them on a day-to-day basis. And that takes a lot of work to really understand.”


There’s plenty of incentive to do just that. The sickest and most expensive 5 percent of patients use about half of the healthcare dollars.


Many wind up in the emergency room or the hospital again and again, because they can’t manage their chronic illnesses. Combine that with an environment where there are new financial incentives for doctors to find better outcomes, not simply provide service after service, and the landscape is ripe for this kind of innovation.


In Portland, Labby and others at the insurance company CareOregon have created the Health Resilience Program.


The idea is that healthcare providers leave the exam room and spend more time developing relationships with patients in their kitchens and living rooms.


Now "health resilience specialists" — effectively social workers — spend a chunk of their time dropping in on patients like Scott Freeland.


Freeland, 52, was paired with specialist Marika Shimkus in 2013. They’ve become close enough that finishing each other’s sentences comes easy for these two. 


“Without you, I’d be lost almost sometimes,” Freeland says. “She is really good at her job. She’ll even let me use her phone to call and make appointments right at the doctor’s office or something.”


Shimkus demurs. “I want to be sure that it’s clear the credit is really you,” she says. “You’ve let me pester you.”


Shimkus’ job is to pester Freeland — and her 20 other clients — to help them figure out what they need to take care of themselves and to hook them up to services like housing, food, help applying for an ID or maybe make an appointment with a specialist.


The Portland program serves about 600 of the sickest and most expensive Medicaid patients in the city. For Freeland, it’s made a difference. He says before he met Shimkus, he was living hard.


I think that year I was in the hospital 17 times or something,” he says. “I was doing crystal meth, the devil’s dandruff. Every time I did it I’d start throwing up blood. I’ve had to have a transfusion before. My throat has been so raw. It’s messed my eyes up too, my diabetes has. It’s a crazy life I used to lead. But I’m actually doing pretty good now.”


Matched with Shimkus, Freeland was in the hospital once in their first year together.


The Health Resilience Program cranks out these sorts of stories.


In two and a half years, this program has put up some gaudy numbers, cutting emergency room and hospital visits by 35 percent.


Labby and the team are now household names in this little corner of the healthcare world, where doctors try to administer social services to solve medical problems.


The consulting firm Oliver Wyman says there are $300 billion in potential savings every year, if this type of work lowered costs for all of us.


This is what healthcare’s city of gold looks like, where money is saved and health is better.


Harvard health economist Amitabh Chandra says it’s a nice theory.


There’s so many things we do in American health care because we think that they must work,” he says. “We have incredibly powerful narratives that each one of these things is going to generate billions and billions in savings.


“But every time we looked, we’ve found the answer has been a big giant zero,” he says.


We asked Chandra to look over data from the Health Resilience Program, and he says while the program may improve health, it’s impossible to say whether it’s saving money long term.


Odds are these sorts of programs are unlikely to save any real money, says Dr. Ashish Jha.


“There are almost no interventions that we know of that improve health and save money,” says Jha, who is also at Harvard. “There are a couple of things that we do know. Vaccinations are probably the No. 1 thing. Once you get beyond that, it starts to get pretty tough.”


Jha says what makes this work tough is that patients each have their own costly web of issues and illnesses that can’t be resolved with a one-size-fits-all solution like a vaccine.


Pinpointing the underlying social challenges can be a guessing game for doctors, where they try to tackle very deep, persistent problems — like addiction, mental illness and obesity — with treatments that often don’t work.


These obstacles, not to mention limited evidence, help explain why there’s no line of healthcare chief financial officers outside Labby’s door.


Until we have a business case for healthcare providers, for large organizations to really take this on, I think it’s going to be a series of pet projects,” Jha says.


Since his great run that first year working with health specialist Shimkus, Freeland’s life has become complicated again. A few months back he got beat up trying to protect his cousin from her husband.


He broke my jaw and a couple of ribs, and I was in the hospital for 10 days,” Freeland says.


Additional health complications  and drinking have led to an uptick in trips to the emergency room. Freeland says he’s trying to keep things under control, and as he does, his cell phone rings. It’s his cousin, telling him he’s bought him some beer.


The cousin and Freeland’s uncle live next door.


They’re my closest friends that I have, and I hang out with them quite a bit, watch TV. And they drink every day — like a lot.”


The hard reality of this work is that healthcare providers are trying to help fix someone’s life, a process is full of half steps, missteps and backslides.


“They first tell me you can’t have sugar, and then tell me I can’t have salt. Now it’s like you guys want me to stop drinking, too,” Freeland says.


“I will probably never ever stop drinking. Just trying to be realistic. And sometimes you almost have to drink just to get through all your problems and stuff,” he says.


Is this what success looks like — progress and then relapse? How much time and money do you invest in trying to help someone like Freeland? Is his setback just temporary?


Important questions, says Labby, that he admits are hard to answer.


“Our experience has been people we are dealing with have had really rough lives,” he says. “They are not going to recover from those lives in one moment.”


The program’s goal is to build stable lives. That takes time, which takes money. 


It’s a tough enough road that it’s fair to wonder if the Labbys of the world see something in this healthcare jungle that most of us can’t — or if he’s a do-gooder, lost on a never-ending hunt.


Click the media player below to hear reporter Dan Gorenstein speak with Marketplace Morning Report host David Brancaccio about social issues and healthcare.  




This story was reported with the support of the Dennis A. Hunt Fund for Health Journalism and the National Health Journalism Fellowship, programs of the USC Annenberg School of Journalism’s California Endowment Health Journalism Fellowships.

Bridging a political divide, hoping to make a profit

Tue, 2015-06-23 13:08

A Supreme Court decision is expected by the end of the month in King v. Burwell, a challenge to the Affordable Care Act that argues subsidies for health insurance should only be available in states that set up their own insurance marketplaces, or exchanges.

If the court rules against the Obama administration, millions of people in states using the federal exchange could lose their subsidies.  

Enter entrepreneurs, who think they’ve found a way to help states set up exchanges almost immediately. Sanjay Singh is one of them. He's CEO and co-founder of hCentive, a tech start-up that supplies the software for state health care exchanges. hCentive helped Kentucky and New York set up their exchanges. They're two of the more glitch-free state marketplaces.

Singh is a political junkie and a techie. He got immersed in hearings on the Affordable Care Act, and read through the nearly 1,000-page bill.  It was the first bill he ever read. And then Singh made a bet – he established hCentive before the Affordable Care Act even became law. Now he’s making another bet. If the Supreme Court rules that people in states using the federal exchange to buy their insurance aren’t eligible for subsidies, he’ll be ready with what he’s calling an "exchange-in-a-box" — a ready-made answer for states that suddenly need to build their own marketplaces.

“You can take what has been already built, package it in a way that a state can use it, almost out of the box,” Singh says.

He says hCentive's exchanges-in-a-box can be up and running in under six months. Singh says there wouldn’t be any big, up front down payment. States could pay hCentive a percentage of the fee they charge to insurers.  But there is one giant unknown for Singh: politics. Twenty-six state legislatures won’t even be in session this summer. 

"How will a state even decide it wants to do an exchange-in-a-box?," says David K. Jones, an assistant professor at the Boston University School of Public Health. "How will they get the legislation passed?  Will it require a governor being brave enough to do an executive order?”

It’s hard to tell how Republican governors who've opposed the law would react. Some campaigned hard against the Affordable Care Act, and government involvement in healthcare. But Singh thinks they may be more open to a private-sector solution, like his exchange-in-a-box. And some observers say Singh may be onto something. 

“If I’m a governor in one of the red states, I’m going to be concerned about making some kind of arrangement with the federal government to basically run my exchange," says Joel Ario, the first director of the federal exchange, now managing director at Manatt Health Solutions. "But I’m going to be more open to a private company.”

So Sanjay Singh, the political junkie, could bridge a political divide — and make a profit in the process.

Darden's real estate play

Tue, 2015-06-23 13:00

Eaten at the Olive Garden lately? You probably thought more about the bread sticks than who owns the building — fair enough. However, Darden Restaurants, which owns the Olive Garden, Long Horn Steakhouse and some other chains, announced Tuesday that it’s going to spin off its real estate into something called a REIT — a real estate investment trust — and then lease the properties back.

REITs are everywhere, says Michael Grupe, with the National Association of Real Estate Investment Trusts. “If you work in an office building, for example, there’s a good chance that that property is owned by a REIT. If you live an apartment building, it may very well be owned by a REIT.”

Spinning off the properties only to lease them back may sound like a strange, circular kind of logic, but it’s actually a smart move, says Susan Wachter, a professor at the University of Pennsylvania’s Wharton School.

She says investors tend to like REITS because they have a steady source of income — typically rents — and they pay lots of that income back to investors.

“Investors are not willing to pay much for the volatile restaurant business,” she says. “But the real estate is far more predictable, and therefore Darden is able to raise more capital this way.”

Wachter says it makes sense for Darden to take the money it raises from the REIT, pay down some debt and then focus on its restaurant business, while letting people who know real estate focus on the properties.

“It’s the old Adam Smith, specialize, specialize and specialize,” she says. “Not location, location, location.”

Companies like McDonald's and Macy's are under pressure to do something similar, while Sears is also pursuing a similar strategy.

John Glascock, at the University of Connecticut, thinks Sears should have done it years ago.

“Probably over half the Sears out there would already be shut down,” he says. "Those [properties] would probably be something else much more productive, but when they kept them together, it’s tempting to say, ‘Well, I own the land, it’s only costing me opportunity cost. It’s not costing me real cash, let me try one more quarter.’ ”

Glascock says real estate can wind up subsidizing the bad decisions of the company it’s tied to, but separate, each side has to stand on its own. 

Good Humor rolling out ice cream trucks for tour

Tue, 2015-06-23 13:00

Summertime is officially going all digital and social media.

Ad Age reports that Good Humor is bringing back its ice cream trucks.

I know — awesome, right?

Except, well, instead of that classic jingling of ice cream truck bells, you're going to have to follow the truck on Twitter to figure out where it's going to be.

Which just makes me sad, somehow.

To measure poverty, states look beyond free lunch

Tue, 2015-06-23 13:00

For years, the federal school meals program has been one of the most powerful forces in education. Not just because it feeds kids, but because the percentage of students who qualify for free and reduced-price meals has been the main way schools measure poverty. That number, in turn, can impact everything from school funding levels to accountability programs. 

But that’s changing. Massachusetts has introduced a new way of measuring poverty in its schools. Starting next school year, students will be considered “economically disadvantaged,” not according to their school lunch status, but if their families participate in programs like food stamps, welfare and Medicaid. According to the new data released today, schools look a lot less poor.

“It’s about two-thirds of the number of students that we had before,” says Jeff Wulfson, deputy commissioner of the Massachusetts Department of Elementary and Secondary Education.

Wulfson says Massachusetts had to come up with a different way of measuring poverty. It’s one of 49 states that now let high-poverty districts feed all students at no charge, rather than collecting applications for the school meals program.

Massachusetts' new measurement could more be more accurate, says Zoe Neuberger, senior policy analyst at the Center on Budget and Policy Priorities, in that it no longer requires schools to collect income data from families. That can be a challenge, "particularly with middle or high school students, because the children are embarrassed about receiving the meals," she says.

Federal poverty programs are also better-equipped to collect and audit income information, she says. "They have offices full of caseworkers whose job it is to assess family income and household composition," she says. "Schools are not set up to do that. Nor should they be." 

Other states are adopting similar ways of measuring poverty, says Michael Griffith, a senior policy analyst with the Education Commission of the States. He worries the new standards could miss the working poor — families who earn too much to qualify for food stamps, but not enough to pay full price in the cafeteria.

“They are not poor by the definition of some of these programs, but they are clearly low-income and they are struggling,” he says.

Wulfson says Massachusetts plans to create new funding formulas so that high-poverty schools aren’t short-changed.

Facial Recognition: An Eventuality

Tue, 2015-06-23 12:29

Targeted advertising is everywhere these day. Be it your Facebook profile, your browser history or anything else online, all of your data is being collected for one purpose: to sell you more stuff.

Now there’s a new frontier in tracking technology: Facial recognition software. Companies want to be able to track your identity and keep note of the things you regularly consumer a near-constant basis.

“Connecting a person’s past behavior and data to their current location is kind of a holy grail for companies when it comes to marketing,” says Ben Johnson, host of Marketplace Tech. “Imagine you go into a store and there’s a camera on the shelf of items that you’re looking at, and that camera records the emotional reaction you have to the items you’re looking at.”

Facial recognition could make its way into many public spaces.  However, privacy advocates are hoping that it will be opt-in only so that those who do not wish to make their identity open to the public have those wishes respected. “A lot of companies don’t want this,” Johnson says. “This is where these two kinds of organizations really part ways and are really having problems coming to an agreement on some sort of rules of the road.”

Still, most experts agree that this is an eventuality. “We have to think about the fact that no matter what, technology companies are going to build this stuff, they’re going to start using this stuff,” Johnson says. “They’re going to ask for forgiveness, not permission."

To hear the whole conversation, click the audio player above.

Rewriting the recipe for healthy fast food

Tue, 2015-06-23 12:23

Fast food restaurants see the writing on the wall. The U.S. consumer is obsessed with food. Local. All-natural. Organic. Think of all that food porn on Instagram. Or all those food documentaries on Netflix. So Taco Bell, Pizza Hut, Subway and others have been changing up their menus. They're removing artificial ingredients. Chipotle Mexican Grill just completed the process of getting rid of most genetically engineered ingredients, or GMOs.

But are these moves making the food any more, you know, better for you?

“Let’s see how this liquid gold tastes,” says nutritionist Terry Perry, looking down at the cheese on a 760-calorie Nachos BellGrande from Taco Bell.

Perry works with food stamp recipients on making good food choices in Spokane County, Washington. We've taken her out to lunch to get a nutritionist's take on some of these strategic moves.

Perry bites into a chip. “It's not bad – I mean it's not terrible. It's very salty.”

By this time next year, the cheese on the Nachos BellGrande might be a little less yellow. But that doesn't address what Perry sees as the real problems: the high sodium, saturated fat or extra carbs.

“So you have to look at it for over all,” Perry says. “One of the biggest concerns about fast food is that it's highly processed and that it's usually too big of a serving,” says Perry.

At Chipotle, she's much more impressed. But the salad she orders is approximately 630 calories — with the help of a large dollop of guacamole. That's about twice the calorie count of her usual lunch.

Nutritionist Terry Perry eats a bowl from Chipotle. 

Jessica Robinson

“[Removing GMOs] doesn’t really change the calorie level,” says Perry. “It doesn’t change the nutrient level, how many vitamins, minerals, proteins, carbohydrate, how much fat is in it.”

And restaurant consultant Aaron Allen says health isn't the point. “Fresh” is, or the appearance of it.

" 'Fresh' has become the most bankable word in food service," Allen says. “And 'processed' has become a four letter word."

Allen says Chipotle is the “fresh” poster child, helped out by the move to take out GMOs. It's part of a category of so-called “fast casual” restaurants that are taking a cause-conscious approach to food. Starbucks and Panera Bread are others. Their image as the anti-McDonald's has attracted the young dining public, and it's paying off in their stock prices.

Now enter brands like Taco Bell and Subway, who don't want to be left in the artificially colored cornchip dust. They can only do so much — quick and cheap depends on processed foods.

“So, they found some quick wins they can gain in terms of public perception by making some very easy steps, like using real pepper instead of an artificial flavor that tastes like pepper,” says Allen.

So, to answer the question: As you might have guessed, no, many of these changes don't make the food any better for you. But even Chipotle acknowledges this.

“If you’re looking at our decision to move to non-GMO ingredients through the lens of being a nutritionist — and as to whether that change makes food any healthier or more nutritious in any way — then skepticism is probably warranted,” says Chipotle spokesman Chris Arnold. “But that's not why we made the change.”

Arnold cites potential environmental impacts from cultivation of genetically engineered crops.

“While there's no science to show that GMO ingredients are more or less healthful, there are other implications associated with GMOs," he says.

Many researchers dispute those environmental impacts as well. But here's one more implication that's hard to ignore: more and more, consumers just don't like GMOs.

My First Job: Animal Chef

Tue, 2015-06-23 11:10

At the zoo, pandas typically don’t go on juice cleanses, and hippopotamuses don’t adhere to a GMO-free diet. But they do need someone to prepare food for them. That’s where Hannah Hayes stepped in. Her first job was a zoo chef.

Hayes recalls walking into the zoo kitchen every morning and reading the recipes listed on a whiteboard that wrapped around the room. Each animal has its own specific diet to follow.

"I’d make fruit salad for parrots, I would create pine cones covered in peanut butter with chocolate chips or whatever the bears wanted to eat. I often would go into the freezer to get out dead baby mice for the snakes," Hayes says.

Being a chef for a variety of animals can be a pretty daunting task, but she also found it very rewarding.

"By the end of it, I think I felt pretty empowered about what I could accomplish. It made me feel empowered in the kitchen essentially, that I could create things," Hayes says.

PODCAST: Fees, glorious fees

Tue, 2015-06-23 03:01

2015 is the year bonds have been convulsing around the world. More on that. Plus, Fees to check bags, change tickets, cancel flights – airlines now charge their customers a raft of fees for all sorts of things. We take a closer look at the exponential growth of airline fees. Plus, if there is one (unqualified) success story from the Empowerment Zone in Baltimore, it might be a small but vigorous job-training program started by the Chesapeake Biological Laboratory in conjunction with Johns Hopkins. At present, it has sent nearly 400 men and women into middle-skill, often middle-class lab jobs – and it stands as one of the few lasting programs to survive the end of the federal funding period. 

Those sky high fees for flying

Tue, 2015-06-23 02:00

Airline fees are scheduled to be a key topic at a Department of Transportation meeting Tuesday. Flyer aggravation about the fees is growing as they increase. Carriers now make billions in fees, more than ever before.

When it comes to fees, there are two extremes among U.S. carriers: the bold and the old. The bold includes airlines like Spirit, which piles on charges, even for carry-on bags. The old are legacy carriers like United, American and Delta, which have historically been less aggressive. But these days, the older are getting bolder.

“They’re charging for damn near everything that they can think of,” says Richard Gritta, professor of finance and transportation at University of Portland.

Transportation Department stats show revenue from baggage and change fees alone up 372 percent between 2007 and 2014. And that doesn’t even include money made on seat selection and food sales.

These fees are part of why airline stocks are doing better lately. Despite passenger protests, they are here to stay. And with all the airline mergers of recent years, there are fewer places to shop around.




Mark Garrison: When it comes to fees, there are two extremes among U.S. carriers: the bold and the old. The bold includes airlines like Spirit, which piles on charges, even for carry-on bags. The old are legacy carriers like United, American and Delta, historically less aggressive. But these days, aviation analyst Michael Boyd says the older are getting bolder.

Michael Boyd: If they can get away with it, yes. Back in 2008, when American started charging for luggage, I thought, ‘They’re dead, no one’s gonna match them.’ What did I know?

Transportation Department stats show revenue from baggage and change fees alone up nearly 400 percent since 2007. That’s not to mention money made on seat selection and food sales. Richard Gritta is professor of finance and transportation at University of Portland.

Richard Gritta: They’re charging for damn near everything that they can think of.

These fees are part of why airline stocks are doing better lately. Some carriers get close to 40 percent of revenues from fees. Like it or not, the charges are here to stay. And with all the airline mergers, there are fewer places to shop around. I'm Mark Garrison, for Marketplace.

Proposed House bill slashes education funding

Tue, 2015-06-23 02:00

The House Appropriations Committee released its draft spending bill for Labor, Health and Human Services, and Education departments, and budget watchers noted deep cuts to federal education funding.

It cuts nearly $3.8 billion from mostly education and healthcare. The National Institutes of Health is one area that gets more money.

You might think the GOP-controlled committee is responsible for these proposed cuts, but it’s really the fault of the Budget Control Act, also known as the sequester, which requires that Congress not increase the deficit.

"There is no good way to allocate this," says David Reich, a senior policy consultant with the Center on Budget and Policy Priorities. The Veterans Affairs scandal means veterans' medical care will get more money. "There’s a pretty strong consensus that there is a need for a several-billion-dollar increase" at the VA, says Reich. But that means there's less to go around for everyone else.

The cuts would hit school improvement grants, literacy programs, magnet schools, teen pregnancy reduction programs and more.

Joel Packer from the Raben Group says the deficit has shrunk, so both Democrats and Republicans could work to raise the budget caps.

"Something has to happen by midnight Sept. 30 this year, or the whole federal government shuts down," Packer says. 

But don’t worry too much about this bill becoming law. It also blocks all Affordable Care Act funding, so there's little to no chance it will be signed into law by President Barack Obama.

The final bill is due for a markup by the full committee on Wednesday.