Marketplace - American Public Media

America's love affair with cars, driving may be over

Fri, 2014-12-19 11:00

Just when you thought the guzzlers and Hummers were gone for good, gas prices fell again. The numbers show we’re tilting toward bigger cars and away from fuel-sippers. But not driving more.

(Edmunds.com)

In 2007, Americans collectively drove enough to circle the planet 120,000 times. Our total vehicle miles driven tallied 3 trillion miles.

We haven’t hit that number since. Many think North American society, and perhaps advanced economies in general, have passed an inflection point. Call it Peak Car, or Peak Driving.

“What we’ve seen over the past decade has been a decline in per capita driving,” says Tony Dutzik of the Frontier Group, a self-described public-interest think tank based in Boston. Society has moved past a postwar era of more car and more driving, he says.

Vehicle miles traveled.

(State Smart Transportation Initiative)

“We were suburbanizing, women were entering the workforce,” Dutzik says. “Cars went from being a luxury to being a near necessity in most of the country. And all of those changes were leading people to drive more.”

All that has largely played out. Cheaper gasoline will spur some increased demand, but Dutzik argues it will be outweighed by longer-term structural factors. Insurance is soaring, fewer young adults are applying for driver licenses, they drive less, owning a car costs too much and alternatives exist. 

Millenials drive less, walk & bike more

(Frontier Group)

There’s even evidence some would rather be online than on the road.

I'd rather be online

(Frontier Group)

And one more thing: Most of us are moving back to cities, where it can be easier to get around without a car.

“So popularity of cities and the more livable nature of them in terms of crime and other factors, too, have led to folks being able to lead a car-light lifestyle, which was really hard before,” says Eric Sundquist at the University of Wisconsin’s State Smart Transportation Initiative.

Many economists suggest it’s not just driving, but that overall U.S. oil demand has peaked, forever. Which brings up a familiar, haunting question: Is it really different this time?

“Whenever I hear ‘We’re absolutely never going to see these gas prices again, we’re never going to see these annual sales again, we’re never going to see more miles per person being driven again,’ I always say ‘Yeah, uh-huh,’”  says Kelley Blue Book analyst Karl Brauer.

Brauer says you never know what a prolonged stretch of cheap oil and economic boom can bring. As it turns out, more than one set of prognosticators has projected out three scenarios: driving goes back up, or sideways, or down. It's a nice guarantee they'll be right.

Where do we go from here?

(Frontier Group)

(International Transport Forum)

These 6 charts show we may have hit peak driving

Fri, 2014-12-19 11:00

Just when you thought the guzzlers and Hummers were gone for good, gas prices fell again. Already, numbers show we’re tilting toward bigger cars and away from fuel-sippers. But not driving more.

(Edmunds.com)

In 2007, Americans collectively drove enough to circle the planet 120,000 times. Our total vehicle miles driven tallied 3 trillion miles.

We haven’t hit that number since. Many think North American society, and perhaps advanced economies in general, have passed an inflection point. Call it Peak Car, or Peak Driving.

“What we’ve seen over the past decade has been a decline in per capita driving,” says Tony Dutzik of the Frontier Group, a self-described public-interest think tank based in Boston. Society has moved past a postwar era of more car and more driving, he says.

Vehicle miles traveled.

(State Smart Transportation Initiative)

“We were suburbanizing, women were entering the workforce,” Dutzik says. “Cars went from being a luxury to being a near necessity in most of the country. And all of those changes were leading people to drive more.”

All that has largely played out. Cheaper gasoline will spur some increased demand, but Dutzik argues it will be outweighed by longer-term structural factors. Insurance is soaring, fewer young adults are applying for driver licenses, they drive less, owning a car costs too much and alternatives exist. 

Millenials drive less, walk & bike more

(Frontier Group)

There’s even evidence some would rather be online than on the road.

I'd rather be online

(Frontier Group)

And one more thing: Most of us are moving back to cities, where it can be easier to get around without a car.

“So popularity of cities and the more livable nature of them in terms of crime and other factors, too, have led to folks being able to lead a car-light lifestyle, which was really hard before,” says Eric Sundquist at the University of Wisconsin’s State Smart Transportation Initiative.

Many economists suggest it’s not just driving, but that overall U.S. oil demand has peaked, forever. Which brings up a familiar, haunting question: Is it really different this time?

“Whenever I hear ‘We’re absolutely never going to see these gas prices again, we’re never going to see these annual sales again, we’re never going to see more miles per person being driven again,’ I always say ‘Yeah, uh-huh,’”  says Kelley Blue Book analyst Karl Brauer.

Brauer says you never know what a prolonged stretch of cheap oil and economic boom can bring. As it turns out, more than one set of prognosticators has projected out three scenarios: driving goes back up, or sideways, or down. It's a nice guarantee they'll be right.

Where do we go from here?

(Frontier Group)

(International Transport Forum)

What's a proportional response to a cyberattack?

Fri, 2014-12-19 11:00

The conventional wisdom says that there isn't much left that the U.S. can do to punish North Korea for its alleged cyber attack on Sony Pictures.

A cyber attack doesn't immediately seem like a matter of national security. It's not like an attack on the banking system or on a defense contractor. 

But it's the principle of the thing. Companies are already self-censoring, like Paramount canceling rereleases of its 2004 film "Team America." Michael Auslin, a scholar in residence at the American Enterprise Institute, says "many companies that would not want to self censor, or not want to cave in to these types of threats are nonetheless looking at their cyber vulnerabilities and having to make to be quite honest a cost-benefit analysis."

But there are some national security concerns, according to Stephen Bosworth, a fellow at Harvard's Belfer Center.

"The problem, of course, is if they can do it with this case, there's every reason to fear they can do it in an area that would be much more sensitivity," Bosworth says.

North Korea doesn't have much of an economy to sanction, but Sung Yoon Lee, professor of Korean Studies at the Fletcher School at Tufts University, says there are some things America can do. The U.S. could place North Korea on the State Department's sponsor of terrorism list, or blacklist North Koreans responsible for censorship or Human Rights Abuses. There's also the North Korea Sanctions Enforcement Act, which could result in boycotts of North Korea's trading partners.

That bill passed the house in July of this year but wasn't taken up by the Senate.

'The Interview' posters are on eBay ... for hundreds

Fri, 2014-12-19 11:00

Sure, Sony canceled 'The Interview," but this is capitalism, people.

While you can't buy a ticket to see the movie, you can buy advertising posters for the movie on eBay ... for hundreds of dollars.

One seller is trying to turn a tidy profit on a 5-by-8 foot vinyl poster, listing it for $1,000. That's with three zeroes. Last we looked, there were no bids (shocking) but a seller can dream.

PODCAST: All eyes (still) on the Fed

Fri, 2014-12-19 09:52

The Federal Reserve seems to be in no rush to raise interest rates, and they're watching oil just as much as the rest of us. Also, how do we frame the cyberattack on Sony? Is it the theft of information, like the attacks Home Depot and Target saw earlier this year, or is it a national security threat? As the FBI points to North Korea, we look at how hackers interpret the goings-on at Sony. Finally, there's no way Russia's oil-dependent economy could have predicted the dropping price of oil, but the country has built in some reserves to tide it over. We take look at that idea.

Shop at your favorite federal agency's gift shop

Fri, 2014-12-19 09:43

You don't have to go to Nordstrom, Target or Macy's to get your holiday shopping done this season. If you live in or near Washington D.C. there's a whole other retail world out there for you to explore: the world of federal agency gift shops. The FBI, CIA, and all the rest have their very own outlets. And they're definitely not your ordinary souvenir shops.

"The FBI had a pair of glow in the dark boxers that were really popular for a while," says Emily Wax-Thibodeaux from the Washington Post. "But they stopped making them, probably not for political reasons, but because of production."

But don’t worry, your tax dollars are not paying for this.

"Proceeds often go to employee associations, gyms, or for outings, morale boosters or they go to charities," says Wax-Thibodeaux.

How to parent in the digital age

Fri, 2014-12-19 09:34

Lizzie O'Leary spoke with famed voice over actor Bill Ratner about his new book "Parenting for the Digital Age."

If you grew up watching "GI Joe" cartoons Ratner voiced "Flint." For years, his voice on television helped market and sell toys to kids. He then created a program called TV Cartoon Scandals--Media Awareness for Children. This brought media awareness to kids in the Los Angeles Unified School District.

In "Parenting for the Digital Age" Ratner shares his own story of controlling media in his house. When his young daughter was glued to the television he decided to take action. He rewired his entertainment system and created a kill switch. This allowed him to turn off the television when he saw fit. Ratner also bans cells phones in his home at certain hours of the day.

When interviewing parents for the book Ratner came across two major concerns. The first issue was time, do kids have enough time to veg out and do other things? The second issue was who are these people creating the programming for children? They are strangers and have no idea what their values are.

Quiz: Hiding that standardized test behind a cute acronym

Fri, 2014-12-19 08:44
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Algorithms: the language of love?

Fri, 2014-12-19 08:35

On Marketplace Weekend this week, we looked at algorithms in business, tech, and all areas of our life.

The internet's most intimate algorithms may be found in online dating sites and apps. Sites like OkCupid, Match, eHarmony, Hinge, and Tindr all use different algorithms -- with varying degrees of complications -- to pair users. Match pairs matches by gauging how interested users are in similar people. OkCupid users weight questions that they consider to be most important to them in order to find others that they have a lot in common with. A elaborate series of set questions on eHarmony pairs couples. On Tindr, things are simple...just a picture, and an answer from potential daters: yes, or no? 

Online dating has become much more common and widely accepted in recent years. Attitudes are shifting, and something that was once a secret for many people has become a social activity -- it's not unheard of now to see someone using a dating app in public, at a bar, with friends, to find someone nearby that they may want to go out with. 

Christian Rudder, one of the founders of OkCupid and the author of Dataclysm: Who We Are (When We Think No One's Looking) joined Marketplace Weekend to explain the algorithms on his site, what happens when you tell an algorithm a lie, and how dating algorithms mimic pain old un-technical dating. 

Your Wallet: Indulgence

Fri, 2014-12-19 06:23

Around the holidays you indulge, or try not to indulge, in many things.

We want to hear your story. How does it affect you financially, or what do you try to keep from yourself?

Send us an email, or reach us on Twitter, @MarketplaceWKND

Hackers aim to learn from Sony attack

Fri, 2014-12-19 02:00

As U.S. officials accused North Korea of the unprecedented cyber attack on Sony Pictures today, hackers hoping to learn from the attack — either to prevent or to commit future ones — continued to pour over the digital trail of the incident.

The FBI says it has gathered evidence which links the incident to the regime of North Korea's Kim Jong-un. The agency today cited technical similarities between the Sony hacking and past "malicious cyber activity" linked directly to North Korea.

"North Korea's actions were intended to inflict significant harm on a U.S. business and suppress the right of American citizens to express themselves. Such acts of intimidation fall outside the bounds of acceptable state behavior," the FBI said in a statement.

While government investigators are examining the cyber attack, which stole a trove of emails and corporate secrets such as financial data from Sony's film studio, to figure out who's to blame, hackers are looking to see what can be learned, according to Chris Wysopal of the security firm Veracode, who has been monitoring hacker chatter.

Wysopal says hackers are trying to answer a number of questions: "What worked? How did you get in? How did you move around? How did you exfiltrate data? What had value?"

Hackers want to know which digital tools were used so they can adopt those tools, says Wysopal, adding that he's been hearing from worried chief information security officers.

"They're definitely concerned. This shows that there's attackers out there, and that they are ready to go out there for blood," Wysopal says.

"The hacker mindset is often to outdo others," and the Sony hack set a new standard, says Gabriella Coleman of McGill University who has written a book on hackers. "In this case, I do think it will compel some hackers to do something similar and perhaps even more audacious," Coleman says.

She expects there'll be more hacks aimed at sabotage, not just the leaking of information.

Super-fast delivery is the new game in town

Fri, 2014-12-19 02:00

For about $8 in Manhattan, Amazon will have a bike courier deliver your groceries, toys, and toilet paper in under an hour.

John Morgan, who teaches at UC Berkeley's Haas School of Business, says Amazon can pull this off because of its sheer scale. Other companies tried and failed during the dot-com boom for this kind of instantaneous delivery, and a host of start-ups are now trying to get into the game—companies like Instacart and Uber.

But John Deighton, professor at Harvard Business School, says they are making a mistake by focusing on delivery, not product.

In the end, says Josh Bivens from the Economic Policy Institute, the success of super-fast delivery rides on an army of cheap contract workers. Bivens says a healthy labor market would make instantaneous delivery more expensive and a harder business model. 

Chicken of the sea is nothing to squawk at

Fri, 2014-12-19 02:00
34 percent

That's how much profits fell for BlackBerry Ltd., as shown in their third-quarter revenue report. As reported by Bloomberg, the $793 million in revenue is well below analysts' expectations. 

58 percent

That's how much value Bitcoin lost in 2014. The online currency has somehow tanked even harder than the ruble, Quartz reported, which is down 47 percent this year.

1 in 5

1 in 5 Europeans ages 16 to 74 has never used the internet. But you already knew that, didn't you? So test your knowledge of tech news over at Silicon Tally, Marketplace Tech's Friday round-up quiz.

2

That's how many minutes of film "The Hobbit: Battle of the Five Armies" gets from each page of its slim source material. That's very high when compared to other blockbuster adaptations, FiveThirtyEight reported, and it's even more mind-boggling to consider its just one of three movies adapted from a 293-page book.

300 men

That's how many men have signed up as test subjects for a childbirth simulator since the trial began in November. The Jinan Aima Maternity Hospital in Jinan, China, offers expectant fathers the chance to sympathize — and we mean really sympathize — with their spouses in what it calls the "Pain Experience Camp." Four electrodes are attached to the subject's stomach, sending electric shocks that simulate labor contractions. Head over to the WSJ to read more.

$1.5 billion

That's how much Thai Union Frozen Products PCL will pay for Bumble Bee Seafoods (think Tuna). They are effectively purchasing the big tuna of seafood in the U.S., as Bumble Bee is the number one producer of canned tuna and sardines in North America, as reported by Reuters

Silicon Tally: Our romance is off the Hinges

Fri, 2014-12-19 02:00

It's time for Silicon Tally! How well have you kept up with the week in tech news?

This week, we're joined by digital dating consultant Laurie Davis. She's the founder of eFlirt, a service that helps clients polish their online dating profiles, decode text messages from dates, and improve their online chatting.

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An oilman bets prices will rise, and loses big

Fri, 2014-12-19 02:00

The oil price bust has left lots of people licking their financial wounds. Perhaps the biggest one-way bet in the wrong direction came from the oilpatch itself, by a company and its founder at the center of the U.S. oil revolution. Harold Hamm is the $8 billion dollar oilman; the man behind the biggest drilling company in North Dakota, Continental Resources.

In an earnings call five weeks ago, he said, "We're at the bottom rung here on prices and we'll see them recover pretty drastically pretty quick. Given our belief the recent pullback in oil prices will be short-lived, we made changes to our existing hedge book by monetizing practically all of our oil contracts."

That's oilspeak for: we're betting on prices to rise. Continental had locked in nice, high-selling prices by what's called hedging. Until it stopped doing that. The company has lost half its value in four months.

To Gregory Zuckerman, author of "The Frackers: The Outrageous Inside Story of The New Billionaire Wildcatters," this bet goes hand-in-hand with Hamm's astonishing success story. The son of Oklahoma sharecroppers, Hamm started with nothing and made an early, crazy bet on North Dakota oil. He was stubborn.

"You need that self-confidence," Zuckerman says. "But it can bite you on the way down by making you a little too sure of yourself. And I would argue that when he took off those hedges, he showed signs of that."

In a recent interview, Hamm says he still thinks oil prices could rise. He may well be right. But his timing was off.

How an oil rush made LA the city it is today

Thu, 2014-12-18 14:25

Marketplace host Kai Ryssdal talks to oil historian Char Miller about Los Angeles' role in greasing America's economy with oil.

In 1892, the first oil well in Los Angeles was drilled and started an oil rush that first launched the city.

“I think the oil industry has really faded in Los Angeles in terms of its presence. You look up at old photos of Huntington and Seal Beach, up Santa Monica beaches until the '50s… they were littered with oil derricks," Miller says. "It was the symbol of the city and that’s all disappeared.”

Oil drilling is still going on though. About 3,000 densely placed pumps are still working underground, but the landscape of the city makes the oil industry invisible.

“The culture of the United States is driven by oil. The built landscape is created because of petroleum," Miller says. "And so Los Angeles, at once in its sprawl and its density is the perfect example of the petrol economy.”  

How an oil rush made LA

Thu, 2014-12-18 14:25

Marketplace host Kai Ryssdal talks to oil historian Char Miller about Los Angeles' role in greasing America's economy with oil.

In 1892, the first oil well in Los Angeles was drilled and started an oil rush which launched the beginnings of the city.

“I think the oil industry has really faded in Los Angeles in terms of its presence. You look up at old photos of Huntington and Seal Beach, up Santa Monica beaches until the 50s… they were littered with oil derricks," Miller says. "It was the symbol of the city and that’s all disappeared.”

Oil drilling is still going on though. There are 3,000 densely placed pumps still working underground, but the landscape of the city makes the oil industry invisible.

“The culture of the United States is driven by oil. The built landscape is created because of petroleum," Miller says. "And so Los Angeles, at once in its sprawl and its density is the perfect example of the petrol economy.”  

Lower gas prices, but spending stuck in neutral

Thu, 2014-12-18 12:28

The average two-car household is saving about $50 a month on gasoline, according to Bankrate.com. So where is that extra money going? Not as much is flowing into malls and restaurants as you might think.

“Consumers are very quick to pull back on spending when gas prices rise, but very slow to ramp up spending when they fall,” says Greg McBride, chief financial analyst with Bankrate.

At an Oceanic gas station in Baltimore, Maryland, cab driver Waylen Hawkes estimates he’s pocketing an extra $1,000 a month, thanks to lower prices. He’s saving it, he says, “because it’s not going to stay this way.”

“I do worry about them going back up,” says Margurite Copper, a human resource manager with a security company. “I wish that I could take some gas and just store it somewhere in my house, but it would be unethical.”

Still, Copper was on her way to the mall after filling up, where she planned to spend a little extra on Christmas presents. 

Where your extra gas money goes

Thu, 2014-12-18 12:28

The average two-car household is saving about $50 a month on gasoline, according to Bankrate.com. So where is that extra money going? Not as much is flowing into malls and restaurants as you might think.

“Consumers are very quick to pull back on spending when gas prices rise, but very slow to ramp up spending when they fall,” says Greg McBride, chief financial analyst with Bankrate.

At an Oceanic gas station in Baltimore, Maryland, cab driver Waylen Hawkes guesses he’s pocketing an extra $1,000 a month, thanks to lower prices. He’s saving it, he says, “because it’s not going to stay this way.”

“I do worry about them going back up,” says Margurite Copper, a human resource manager with a security company. “I wish that I could take some gas and just store it somewhere in my house, but it would be unethical.”

Still, Copper was on her way to the mall after filling up, where she planned to spend a little extra on Christmas presents. 

The future of oil and gas after the boom

Thu, 2014-12-18 12:20

What effects will oil have on the global economy?

“If there’s too much oil in the world, we can have low prices for a while. That could be the problem," Marketplace Sustainability Correspondent Scott Tong says. "There’s a lag in the effect in the oil patch, but each day already brings another announcement of a company cutting back on their drilling because prices are too low.”

If prices stay below $60 a barrel, Goldman Sachs estimates producers could lose a trillion dollars. But Janet Yellen, chair of the Federal Reserve Board, says she thinks low oil prices are a net good for the global economy.

The contrast reflects what a lot of people think – in the short term, it is an absolute economic stimulus. Longer term, there are a lot of questions. If you’re an investor, the financial market is taking a big hit, particularly stocks that are exposed to energy and the bond market. Different parts of the economy could end up feeling the pain.

And, if we look farther into the future, the question of climate change comes up.  There have been demands for a carbon tax, but Tong says: “Cheap oil is basically a carbon subsidy.”

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