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For-profit colleges and concerns over 'gainful employment'

Fri, 2014-03-14 13:38

The Obama Administration has unveiled proposed new regulations on for-profit colleges and vocational programs. They're known as the "gainful employment" rules because career colleges are supposed to prepare their students for gainful employment.

That means jobs that pay enough to pay off those sizeable loans so many students take on. This isn't the first time the administration has tried to crack down on the multi-billion dollar for-profit college business.

Here's a look at some of the numbers involved in the rulemaking:

841 Pages

The number of pages in the U.S. Department of Education’s new Notice of Proposed Rulemaking, which spells out new guidelines on for-profit colleges and vocational programs. A previous version of the so-called "gainful employment" rule was tossed out by a federal judge, so the latest draft is an attempt to be "as legally bullet-proof as possible," says New America Foundation policy analyst Ben Miller. 

$150 Billion

The approximate size of the federal student aid program. Career programs that don’t meet the proposed new guidelines could lose access to this huge source of revenue. 

30%

The maximum default rate for career programs eligible for federal student aid. Under the proposed rules, programs risk losing eligibility for federal student aid if more than 30 percent of their former students are in default after three years of leaving school, or if graduates have to spend more than 8 percent of their earnings (or more than 20 percent of their discretionary income) on student loan payments.

16%

The estimated percentage of programs that would fail under the new guidelines. Most of them are at for-profit colleges. Programs would have time to improve before becoming ineligible for aid.

60 days

The number of days the public has to comment on the draft regulations before they're finalized.

The 5 second rule actually works

Fri, 2014-03-14 13:34

The five second rule: The idea that if you drop food on the floor you can still eat it, provided you pick it up fast enough.   There's a study out of Birmingham, England on the topic. They tested toast, pasta, biscuits (the British kind), ham, dried fruit, and a sticky dessert, dropped on both smooth tiles and on carpeting for anywhere from 3 to 30 seconds.   The upshot?   Carpets leave less bacteria than tiles...and five seconds is basically alright.        Also, they found 87 percent said they would eat food that had fallen on the floor, with more than half of them women.

That extra hour of daylight finally comes in handy

Fri, 2014-03-14 12:21

Here’s an extended look at what’s coming up next week:

  • The Federal Reserve releases its Industrial Production report for February.
  • You attend a parade and drink green beer. You wonder, what did people do to celebrate St. Patrick's Day during prohibition? (You don’t think about this for too long.)
  • On Tuesday, the Federal Reserve begins a two-day meeting on interest rates and the Labor Department issues its Consumer Price Index for February.
  • Engineer Rudolf Diesel was born on March 18, 1858. He invented the Diesel engine (duh).
  • Here's something to get you cooking: Wednesday is National Poultry Day.
  • On Thursday we get a glimpse at the housing market. The National Association of Realtors reports on sales of existing homes for February.
  • And it's the first day of spring. Time to clean, like, seriously. Did it occur to you that we gained an extra hour of daylight just to help us get that done? Because it just occurred to me.

How many stars? Affordable Care Act user reviews

Fri, 2014-03-14 12:04

The deadline to enroll for Affordable Care Act health benefits is fast approaching. To get covered through state or federal health exchanges starting this year, most will need to enroll by March 31, 2014.

Maybe you’re on the fence about signing up for ACA insurance. Is it worth it? Will you be able to get the kind of coverage you need? Do medical offices know how to deal with ACA billing? Is HealthCare.gov a glitchy nightmare?

Smart consumers know to read up on any big purchase before buying, so we asked Marketplace listeners to give us their “user reviews” of being insured under the Affordable Care Act. Here’s what some of them had to say:

Jan in El Cajon, CA says she’s been pretty disappointed with what the Affordable Care Act has had to offer her 27-year-old daughter:



Jen in Collingswood, NJ says she’s generally satisfied with the affordability of the ACA plans, and hasn’t run into much trouble using her benefits:



And Cameron in Seattle, WA wishes the ACA offered drastically different coverage options than traditional plans, but she does appreciate how affordable it’s made her medications:



We also asked people to write their ACA user reviews on Facebook:

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If you have a review of what it’s like to be insured by the Affordable Care Act, please leave a comment below, join the conversation on Facebook or tweet us @LiveMoney. And for more information about the Affordable Care Act’s enrollment deadline and other important dates, visit https://www.healthcare.gov/what-key-dates-do-i-need-to-know/

A raft of weak economic data out of China

Fri, 2014-03-14 11:05

For three years in a row, there’s been weak economic data out of China at the beginning of the year. And each year, the best economic forecasters failed to predict how weak the numbers would be.

“This is the third year in a row this has happened. So why are we still being surprised by it?” says Andrew Batson, lead China analyst at Gavekal Dragonomics in Beijing.

He says part of the reason for the weak numbers is seasonal – the first few months of the year mark the end of the Christmas season, and China shuts down for Chinese New Year. But there’s a bigger, more important reason: “The momentum of the Chinese economy is much slower now than it used to be,” says Batson. “The second thing that’s happening is, essentially, the Chinese corporate sector is in a lot more financial stress than it used to be. Debt levels have shot up.”

Some blame China’s government for tightening up credit. But Anne Stevenson-Yang, director at J Capital Research, thinks it’s simpler than that. She says China’s economy is on life support.

“When you put more credit in, there’s a heart beat. When you don’t, there isn’t,” says Stevenson-Yang.  “So all those numbers are trending negative, and the question is: Is anyone willing to pump the machine again?”

So far, it’s not clear whether China’s central bank will loosen up credit. Economists say China needs to stop setting GDP targets – they put pressure on local governments to meet them by spending more. And one more thing, says Stevenson-Yang: China needs to accept it’s having a recession, and move on.

Middle class families fight over East Baton Rouge schools

Fri, 2014-03-14 11:01

Melissa O’Reilly is a bubbly mother of three who describes herself as a “stay-at-home mom, for now.”  

She’s a product of the East Baton Rouge Parish School System (EBRPSS.) She enjoyed it there. She was lucky enough to find spots in the system’s magnet and gifted and talented programs. So even though O’Reilly and her husband had heard about declining standards in the district, they took a chance, and sent their two kids to the neighborhood public school.

“We hoped for the best. We figured: We’re involved parents, we’re going to continue to be involved and hopefully that will carry them through," O’Reilly said. “We were really wrong. Fantastically wrong.”

O’Reilly says the schools were plagued by a lack of discipline, though she diplomatically declines to place blame on either teachers or students. Then one day, her daughter came home from the third grade.

“She was really upset,” O’Reilly said. “The kids were throwing desks. They were a lot bigger than she was. She was hit by one of the desks. It was a mess. The teacher had completely lost control.”

This year, O’Reilly sent her kids to private school.

East Baton Rouge Parish is shaped a bit like an anvil, with the Mississippi River snaking along the western side. At the top of the anvil are a handful of small cities. In the center, the city of Baton Rouge. And at the bottom, an unincorporated area known as “southeast.”

Baton Rouge and the unincorporated areas of the southeast share a number of things: most notably, a government and a public school system. Now, some residents of the unincorporated area want to leave that consolidated government and form their own town, St. George, with its own school districtThe movement to incorporate St. George has set up a battle over shared resources, race, socioeconomics -- and the parish's tax base. 

The St. George movement began as an attempt to carve out a pie-shaped slice of the EBRPSS and create a new, smaller district that supporters said would offer more local control and improve the lives of parents, teachers and students. O’Reilly says she felt torn when she first heard of the proposal.

“I’m not going to lie, I supported it,” O’Reilly said. “It was a devil’s bargain. Looking at it, I knew what would happen to East Baton Rouge Parish, and the negative consequences for them. But my kids are only going to be little once. They’re only going to get one education. And at the end of the day, you have to do what’s best for your kids.”

When the movement to create the school district ran into opposition in the Louisiana House of Representatives, a new movement was born -  an attempt to first incorporate the city of St. George, and then push for a St. George school system.

Trey Cook, Patty Cook and Christina Loewer at a meeting for volunteers who support the incorporation of St. George. They are trying to collect enough signatures locally to trigger a ballot initiative on the issue. (Photo: Noel King/Marketplace)

It didn’t take O’Reilly long to realize that her house is in Baton Rouge proper. The proposed new city, and its promise of a better school system, doesn’t apply to her family.

“Part of me feels left out,” she said, “like we’re standing on the beach while the boats are pulling away. And we’re like, please, take us with you.”

Dustin Yates is one of a core group of St. George supporters.  His group is trying to collect the 18,000 signatures needed to trigger a vote on the incorporation.  He says he thinks about people like Melissa O’Reilly “every single day.”

Yates is a father of two who works for the fire department.  He decided private school was the only option for his two children after spending a year teaching and coaching football at Woodlawn High School, in the district. He says he was troubled by the lack of discipline.

“I witnessed quite a bit of violence,” Yates said. “I always kind of felt safe because I have a physical presence and I’m just not going to be intimidated by a 17 year-old kid, but my heart did go out to certain teachers that did feel bound by the lack of discipline regulations in that school system.”

Yates just received next year’s tuition bill for his daughter, who is entering the first grade. He says private school runs him between $6,500 and $7,000 per year.

Private and parochial schools are popular options for East Baton Rouge Parish parents who can afford the tuition. At the heart of the current debate are middle class families. 

 Joshua Hoffpauir, another St. George supporter, owns a small architectural practice. He says the nature of his work means he can’t predict what his salary will be, year to year. Hoffpauir and his wife live next door to a public school, but Hoffpauir says according to the state’s grading system, it has always been ranked “D” or “F.”

“There’s only one family in our neighborhood that sends their kids to school there,” Hoffpauir said. “There’s 650 houses.”

Pro-St. George parents frequently use the term “local control.” For them, it means a smaller system where parents and teachers can hold children accountable more easily. At present, going to public school in East Baton Rouge Parish doesn't necessarily mean going to school close to home. Competitive magnet programs draw children from all over the parish. And in some areas, failing public schools have been taken over by the state. In those areas, parents have the choice of sending their kids to school elsewhere in the district. Frustrated parents say their children can spend hours on buses, and in some cases, must leave the house before 6 a.m.

“We need the support of parents,” Kathrin McGregor said.  She teaches fourth and fifth grade at Shenandoah elementary school. “How can you have that when they are 30 or 40 minutes from the school? How can you bus children around the town and expect parents to come to the school when their child is exhibiting inappropriate behavior? Kids know they can get away with it.”

EBRPSS Superintendent Bernard Taylor counters that argument with one of his own: The sheer size of the school district is what allows it to offer magnet and gifted and talented programs, as well as programs for children with special needs.

“The benefits that their children receive, these magnet and gifted and talented programs, are because we’re a district of this size,” Taylor said. “With 42,000 students, every dime that we get for every student, accrues a benefit to another student.”

If there is a bright spot in the public school system, it is the well-regarded magnet and gifted and talented programs scattered throughout the district. Parents and students on both sides of the debate speak highly of arts, science, math, language and engineering programs. Students must test into gifted programs; spots in magnet programs are chosen by lottery. If St. George incorporates, EBRPSS will be a significantly smaller district, and magnet programs will be harder to fund, a fact that has made a lot of students and parents, including many who live in the unincorporated area, nervous.

Madeleine Juneau is a sophomore at Baton Rouge Magnet High School.  During a tour of her school’s new radio studios, she spoke glowingly of her teachers, her advanced science classes, and, perhaps her favorite part, the school’s classical ballet instruction.

“If you have less students, they won’t have as much funding for all the programs they have that make [the school] as well-known,” Juneau said. “So, yes, I do think Baton Rouge High will definitely go downhill.”

Those fears are shared by some parents whose children have special needs. Pediatrician Jennifer Hogan’s two young sons are on the autism spectrum. Hogan lives in the unincorporated area. She started her sons in private school, but found the level of attention, teacher expertise, and diversity of the student population in the public schools suited her sons better. She admits she’s afraid of the unknown.

“Some neighbors and friends say the schools can be so much better, but I don’t know who is going to be running the school system,” Hogan said. “I’m pretty happy with the way things are right now, with where my kids are in the public school. I don’t need it to change.”

Some are troubled by the demographics of the proposed new city.

Belinda Davis is a member of “One Community, One School District.”  That’s an advocacy group that opposes the St. George movement.  She has three sons in magnet programs and she points out that St. George would be wealthier and whiter than the city of Baton Rouge. Davis says she’s troubled by the implications, not just for East Baton Rouge Parish, but for other areas around the country that are grappling with how best to educate children from differing socioeconomic environments.

Belinda Davis is with One Community, One School District, a local advocacy group that opposes the movement to incorporate St. George. (Photo: Noel King/Marketplace)

“Our state’s accountability system makes it so that it is easier for us to draw lines, isolate kids in poverty from other kids, so we can have successful school districts,” Davis said. “Even if this is not motivated by race, and not motivated by income, it has consequences for both of those things that cannot be denied. Even if residents in the southeast are not being motivated by a desire to get poor black children out of their schools, that is exactly what’s going to happen.”

Proponents of the incorporation are sensitive to those charges, which they call a desperate attempt to distract from the real issues.

“Just because I was raised in the southern part of the United States, doesn’t mean I’m a racist because I want something better for the middle class,” Dustin Yates said. “It just means I want something better for my family. Color does not interject itself into my thought process whatsoever.”

Here, as in much of the country, race is a delicate issue. For years, the state resisted orders to desegregate the public schools. These days, in many quarters, there’s great sensitivity to anything that might suggest racial discrimination. There’s also clear discomfort about the kinds of kids who are perceived to be at the center of behavioral problems in school. Parents here speak of “children who aren’t getting enough support at home.” Some say that’s coded language, which refers to a small percentage of African-American children from troubled homes in poor areas.

Clay Young owns a local marketing and PR firm. He lives in the unincorporated area, but doesn’t want to take a position on the incorporation. Young is African-American and describes himself as “upper middle class, but not rich.” He sends his two children to private school and volunteers with less fortunate children in the community.

“Any child in the right environment can learn,” Young said. “No matter where he or she comes from. But children who come out of households where there is not structure, don’t know structure. And they tend to go into environments and cause chaos. And so you’ve got parents who are both white and black, who are nervous about putting their kids in environments where there will be chaos. People don’t really want to say that because it’s not PC, and you sound like a racist or an elitist.”

Young says until parents in the area can speak honestly about the kinds of environments their kids are growing up in, finding common ground will be difficult. He also sees the push for St. George as, for the moment, largely theoretical.

Clay Young lives and works in the unincorporated area of East Baton Rouge Parish that would become the city of St. George. (Photo: Noel King/Marketplace) 

“So much of what we’ve talked about is in theory,” Young said. “You still have to build school buildings. That’s going to take some time. You have to build a city on paper, and then you have to really build a city.”

The implications of the incorporation go beyond demographics and hurt feelings. Baton Rouge and the unincorporated area share a tax base and are on the hook together for a thicket of other costs. There are economic implications if the wealthier area leaves the consolidated government.

A 2013 study from economists Jim Richardson, Jared Lorenz and Roy Heidelberg of Louisiana State University’s E.J. Ourso College of Business estimated that if St. George incorporates, spending per pupil in EBRPSS would fall. Much of the money that funds public works and city-parish maintenance comes from retail sales taxes, and many of the large retail centers, including the massive Mall of Louisiana, are in the unincorporated area. The two areas also share legacy costs like post-employment health benefits for city-parish employees, and the cost of a billion-plus dollar overhaul of the parish sewage system.

The study found St. George’s incorporation could result in a $53 million shortfall for the city-parish budget.

Lionel Rainey III, a spokesman for the committee to incorporate the city of St. George argues the fears have been overstated.  

“St. George is not leaving, they are not building a wall,” Rainey said. “They gain nothing from having Baton Rouge go down. They will operate as sister cities.”

Rainey says the St. George movement is following the lead of cities like Sandy Springs, Georgia, which incorporated in 2005, and set about privatizing many government jobs.

“This is a more responsible form of government, a more modern form of government,” Rainey said. “It’s a smaller form of government that is not going to be a hiring agency. The goal for the city of St. George is to have less than twenty employees and not to be saddled with millions and millions of dollars of pension and retirement benefits that you have to pay.”

Others worry that, after so many years as one community, St. George will simply be viewed as a more desirable place to live. Some Baton Rouge residents, including Melissa O’Reilly, are concerned the value of their homes might drop.

“If the St. George community goes through, we expect to see our property value drop pretty severely,” O’Reilly said. “It may not happen overnight, but once that community is established, why would somebody want to buy my house in a failing school district when they can go two neighborhoods over and be in a great school system?”

For many people, the worry is far from immediate. For O’Reilly, it’s real. With their third child about to enter kindergarten, private school could run her family up to $30,000 a year. She and her husband have decided private schooling is not sustainable. They’re moving seventy miles away, to Mandeville. It’s a pretty town, on the banks of Lake Pontchartrain. And then, there are the public schools.

“They’re fantastic,” O’Reilly said. We’ve already gone on a tour of several of them. And they’re fantastic. They’re great.”

Banning 'bossy' and the language behind leadership

Fri, 2014-03-14 10:33

I’ve definitely been called bossy.

I’m a first child, an older sister to three half-brothers, the kind of sibling who made her brother complete concocted ‘challenges’ to win badges (and my approval). Climb a tree, run around the block under a certain amount of time, etc.

I was definitely a smart-ass. And probably a little bit of a showoff.

Then, like most girls, I entered the confusing world of puberty, intra-girl competition, and the messages society sends your way growing up: Be pretty. Be thin. Get boys to like you. Don’t scare them or you won’t be popular.

But, because of a strong mother and excellent teachers, the messages were also: Get good grades. Be independent. Stay true to yourself. Stand up for what you believe in.

Which brings me to Sheryl Sandberg’s Ban Bossy campaign, which already has celebrity support from people as inspiring as Beyoncé. And if you don’t think girls adore her, watch this video of her surprising kids at a Harlem school:

The idea is that bossy is a dog-whistle word, gendered to imply that women shouldn’t be leaders or people who speak out. That the same thing we value in men is considered irritating from a woman.

Language is vital to who we are, and how we make our way in the workplace and in the world.

But over-focus on language can obscure some of the mechanics of other aspects of prejudice or subtle discrimination. For example, what’s the best way to hire and mentor young women? How do you ask for a raise?

BanBossy.com, to its credit, has tips for employers, parents and teachers. And it’s opening a conversation about how characterizing a girl’s behavior in puberty can affect her development when she becomes part of the workforce.

But by banding together to ban words, do we run the risk of letting language have too much power?

How feeling rich helps the economy: An explainer

Fri, 2014-03-14 10:17

The wealth effect is what happens when we are richer, or we feel richer.

And what happens when you feel (or are) richer: you spend more!

(Or that’s the theory.)

If you get paid more money, or you pocket a windfall, you may well go out and splurge a bit. And that money that you spend will juice the economy: the more stuff you buy from a store, the more money that store makes. Then the store owner goes out and buys more stuff from the manufacturer, or maybe buys another company, or maybe hires some more people, who then feel richer and go out and spend more, and so on.

So clearly there's a wealth effect if we are richer. But what about if we just feel richer?

This happens when asset prices rise. Assets being the stuff we own, like our stock investments or our property. Say the value of your portfolio goes up, or Redfin tells you your house is worth $200,000 more than last month. You haven't actually made any money at this point, but you are richer on paper. Which means you might feel richer. Which means you might go out for a steak dinner instead of a Chipotle burrito, or you might buy a new Mercedes, instead of a second-hand Corolla.

I say might, but this kind of thing happens all the time: the stock market goes up, or the home market booms; people look at their investments, see they're worth more and then they go out and spend a bunch of money. That is the wealth effect in action.

It's great for the economy, but it can be really bad for the spender. Why? Because asset prices move both ways, and the price of your shares or your home can fall just as far and as fast as it rose. And if you haven't realized the gain, by cashing in your stocks or refinancing or selling your home, any purchases you made when you were feeling rich were made with money that you didn't really have.

And when that sinks in, you'll be left badly needing a drink.

Problem is, you may not be able to afford it.

Voices: How much data sharing is too much?

Fri, 2014-03-14 09:00

One of the ongoing conversations at the 2014 SXSW Interactive Festival involves questions and concerns around data and data collection.

How are we trying to use data to live a better life with the help of wearable devices?

How is the government is collecting data and what does that mean about our privacy?

The topic even manifested itself in real-time data from Twitter input into a machine that made custom Oreo cookies. SXSW attendees may be more savvy than the average social media-ite, but they still ask themselves the same questions of when to share data on their activities, and when it's best to keep it to themselves.

VJ Tucker, from a startup called Curious Science, thinks very carefully about what content he adds to the Facebook universe:

"I have a group of friends that can't go to SXSW Interactive and enjoy seeing the panels that I see, so I usually aggregate together all my quotes from the day and put them up... I only try to only put content out there that I feel is compelling to other people. So I don't live tweet everywhere I'm at or anything like that just because it feels like noise in the world instead of anything that's concentrated and compelling."

Southby volunteer Leslie Hales says she uses the typical social media platforms -- Instagram, Facebook, and Twitter -- but she deliberately avoids tagging her location:

"I'm not really on the location grid just because I feel like it's just too much...I don't know if I want everyone knowing where I am every second of the day."

In fact, location sharing came up with visitors and locals alike, as evidenced by SXSW volunteer and Austin-ite Alan Navarro, who says he does not see the benefits of tagging where you are on social media:

"I just don't see that there's a reason for me to put out where my location is online. There's not a real insentive to do that, so I just leave it alone."

Luciana Caletti of the Brazilian startup Love Mondays does not mind adding her location to tweets, as it makes sense to her to highlight the fact that she is at SXSW. She adds, however, that attending Edward Snowden's skyped-in appearance is giving her second thoughts on where her data is going:

"All this data being collected...so far it's fine, but if it falls into the wrong hands in the future, you never know who is going to be in charge of the country. So I am starting to be a bit more concerned."

'Big Men' filmmaker chronicles oil boom in Ghana

Fri, 2014-03-14 08:54

In 2007, oil was discovered off the coast of Ghana.

The follow up questions -- what happens next to the Ghanaians who live there, and the Texas oil company that first put a drill in the ground --  is the subject of a new documentary from Rachel Boynton called “Big Men.”


Filmmaker Rachel Boynton.

Courtesy of Rachel Boynton

Ghana had never had oil before. Kosmos Energy, the oil company that made the discovery, was a start-up – this was their first well.

"It was this crazy important moment for the company and also for the country as a whole," says Boynton.

She documents the scramble for all parties involved to make a profit from the oil. She has an amazing amount of access to the oil company’s CEO and Ghanaian government officials. 

“The thing that’s holding it together is really this idea of everyone out for himself,” Boynton says.

Boynton also films in Nigeria where oil has been a part of the economy for decades.

“When you’re telling a story about new oil in a country, a lot of people are going to want to know well, what happens to the country?”

She talks to Nigerian rebels who intentionally damage the pipelines to protest misappropriation of oil profits. 

“I was really fascinated by how freely people would talk about ‘wanting to be big’” she says, about the title of the documentary. “They were giving voice to something that I see all the time in America, but that people don’t talk really talk about quite so freely.”

The negative side effects of an oil boom are easy to see in Nigeria. Boynton recounts wading through burning oil sludge there. The fires are sent intentionally by two men who were paid to do it – Boynton finds them and speaks to them.  

“I realize over the course of this interview that they live in this town, where they’ve set these fires. And you gotta understand, this town has been destroyed by these fires. There’s smoke everywhere, it’s absolutely toxic to live there. The land is destroyed. And I say to these guys you know, you live here, did it ever occur to you that you might be shooting yourselves in the foot?”

One of the men answers,

“I don’t really think I’m shooting myself in the foot because, you know, if I shot myself in the foot and somebody paid me money for it, and I didn’t die, that’s alright with me."

BP signs deal to get back in the game

Fri, 2014-03-14 07:34

BP has inked a big deal with the Environmental Protection Agency. Beginning next week, the global energy company will be allowed to bid on leases to drill for oil on territory controlled by the U.S. government, including the Gulf of Mexico. 

In 2012, on the heels of the Deepwater Horizon spill, BP was barred from doing business with the federal agencies. Since then, it has continued to operate ten rigs in the gulf.

“The region is extremely important,” says Matthew Jurecky, the head of oil and gas research for a consulting firm called Global Data, noting he wasn’t surprised the BP ban was lifted, because he always assumed it was “temporary and conditional.”

“They’ve been one of the top producers, responsible for many of the largest projects in the gulf,” he says.

In 2010, four billion barrels of oil poured from one of BP’s deepwater wells into the gulf. Since then, the company has paid more than $3 billion in fines and penalties.

“After the oil disaster, BP’s bottom line was hit quite hard,” says Christopher Knittel, the William Barton Rogers Professor of Energy Economics at MIT’s Sloan School of Management.

According to Knittel, the timing of this announcement isn’t coincidental.  In New Orleans next week, at an event in the Mercedes-Benz Superdome, the U.S. Department of the Interior’s Bureau of Ocean Energy Management is scheduled to auction off lease rights to millions of acres off the gulf coast.

“I imagine BP will use this as an opportunity to expand operations,” Knittel says. The company has committed to spending $40 billion in the region over the next decade.

In the administration agreement BP signed with the EPA, it has agreed to more monitoring. Among other things, it will have to hire independent auditors to oversee its operations. 

BP can now bid on leases to drill for oil on government land

Fri, 2014-03-14 07:34

BP has inked a big deal with the Environmental Protection Agency. Beginning next week, the global energy company will be allowed to bid on leases to drill for oil on territory controlled by the U.S. government, including the Gulf of Mexico. 

In 2012, on the heels of the Deepwater Horizon spill, BP was barred from doing business with the federal agencies. Since then, it has continued to operate ten rigs in the gulf.

“The region is extremely important,” says Matthew Jurecky, the head of oil and gas research for a consulting firm called Global Data, noting he wasn’t surprised the BP ban was lifted, because he always assumed it was “temporary and conditional.”

“They’ve been one of the top producers, responsible for many of the largest projects in the gulf,” he says.

In 2010, four billion barrels of oil poured from one of BP’s deepwater wells into the gulf. Since then, the company has paid more than $3 billion in fines and penalties.

“After the oil disaster, BP’s bottom line was hit quite hard,” says Christopher Knittel, the William Barton Rogers Professor of Energy Economics at MIT’s Sloan School of Management.

According to Knittel, the timing of this announcement isn’t coincidental.  In New Orleans next week, at an event in the Mercedes-Benz Superdome, the U.S. Department of the Interior’s Bureau of Ocean Energy Management is scheduled to auction off lease rights to millions of acres off the gulf coast.

“I imagine BP will use this as an opportunity to expand operations,” Knittel says. The company has committed to spending $40 billion in the region over the next decade.

In the administration agreement BP signed with the EPA, it has agreed to more monitoring. Among other things, it will have to hire independent auditors to oversee its operations. 

The Corcoran Gallery is philanthropy's latest failure

Fri, 2014-03-14 04:29

The Corcoran Gallery of Art, a non-profit and financially-troubled institution, is being absorbed by both the federally-funded National Gallery of Art  and George Washington University, a private school, after years of budget and building-related challenges. The National Gallery will manage the Corcoran's vast art and media collections; GWU will take over the Corcoran's building and its art school.

Art Critic Blake Gopnik joined Marketplace Morning Report host David Brancaccio to explain the value of the Corcoran as a cultural asset and why it fell victim to a failure of philanthropy. Click on the above audio player to hear the full interview. 

VIDEO: watch a summary video about the Cocoran Gallery before it changes ownership: 

 

CORRECTION: An earlier audio version of this interview misstated the National Gallery's plans for the Corcoran collection.  There are no plans to sell any works. The audio has been corrected.

 

Four ways to make money in space

Fri, 2014-03-14 02:32

NASA is increasingly reliant on private contractors to get goods to and from space. Here are four ways the rich are trying to get richer in the final frontier:

1. Transportation: SpaceX has a launch set for March 16 to supply the International Space Station. NASA now depends on private firms to ferry stuff up to the astronauts on the station.

2. Space Tourism: Virgin Galactic says it may be able to launch its suborbital space tourism operation later this year. Tickets for a flight aboard Virgin's SpaceShipTwo cost hundreds of thousands of dollars. Still, Virgin Galactic is already booked up for years.

3. Asteroid Mining: Some investors want to get into the mining of asteroids. It hasn't been done, but it would involve building some sort of platform on an asteroid, then scooping out valuable platinum, iron and cobalt.

4. Garbage Collection: There's a lot of space junk out there. It's moving fast, and it can do some serious damage to a passing spacecraft. Now there's research on Pacman-like space vehicles that could "eat" the space garbage.

 

PODCAST: Is BP back?

Fri, 2014-03-14 01:42

BP has inked a big deal with the Environmental Protection Agency. Beginning next week, the global energy company will be allowed to bid on leases to drill for oil on territory controlled by the U.S. government, including the Gulf of Mexico. In 2012, on the heels of the Deepwater Horizon spill, BP was barred from doing business with the federal agencies. Since then, it has continued to operate ten rigs in the gulf. "The region is extremely important," says Matthew Jurecky, the head of oil and gas research for a consulting firm called Global Data, noting he wasn’t surprised the BP ban was lifted, because he always assumed it was "temporary and conditional."

Plus, NASA is increasingly reliant on private contractors to get goods to and from space. The recent tensions with Russia, and our use of their space technology, has advocates looking towards the private sector for the future of space flight.

Objects in space: This week's Silicon Tally

Fri, 2014-03-14 01:00
It's time for Silicon Tally. How well have you kept up with the week in tech news? var _polldaddy = [] || _polldaddy; _polldaddy.push( { type: "iframe", auto: "1", domain: "marketplaceapm.polldaddy.com/s/", id: "silicon-tally-march-14", placeholder: "pd_1394746766" } ); (function(d,c,j){if(!document.getElementById(j)){var pd=d.createElement(c),s;pd.id=j;pd.src=('https:'==document.location.protocol)?'https://polldaddy.com/survey.js':'http://i0.poll.fm/survey.js';s=document.getElementsByTagName(c)[0];s.parentNode.insertBefore(pd,s);}}(document,'script','pd-embed'));

Biz Stone takes it one tweet at a time

Fri, 2014-03-14 01:00

Biz Stone is one of the busiest tech innovators in the industry. Aside from co-founding the 140 character social network known as Twitter, he recently started a new project called Jelly, which aims to create connections via crowd sourced questions and answers. When asked about whether or not he hopes the venture will become as big as the blue bird, Stone says that like any new project, he's more preoccupied with the day to day process.

"When you get started, you have to make a ton of assumptions, and most of them are bound to be wrong. So then you just start replacing them and seeing what's what."

The process of taking a project from idea to product is familiar to Stone, and one he writes about in his forthcoming book, Things a Little Bird Told Me. If you're looking for advice in advance of the book's release, Stone had the following tidbit to offer on the difficulties of working with friends:

"The only advice I can offer there is to separate the emotional investment from the financial investment. Then oney isn't money anymore, it's simply a resource like computing time. You think of it in a very abstract way...If you can think of it as a resource like anything else, it's much easier to not fight over it that way."

Common Core tests get a trial run

Fri, 2014-03-14 00:16

Over the next several weeks millions of school children will be testing out new tests.

Most states have adopted new education standards known as the Common Core. Now they’re trying to figure out how to measure what kids learn.

Beginning March 24, the Partnership for Assessment of Readiness for College and Careers—known as PARCC—plans to field test nearly 10,000 questions to look for glitches or bias.

Another group, the Smarter Balanced Assessment Consortium, originally scheduled to launch its own field testing next Tuesday, will now begin March 25*. Students won’t be scored, but that hasn’t stopped a great deal of text anxiety on the part of teachers, parents and students.

Want to know what the tests look like? Take a practice test.


Common core standards followed around the country

Raghu Manavalan/Marketplace

UPDATE: This story has been updated to reflect a change in the test date. 

Family finance lessons: Actor and contortionist Doug Jones

Thu, 2014-03-13 18:10

The most important lessons and habits we learn about money aren't from our accountants or our radios, they come from our family. Actor Doug Jones tells us about the money tips he inherited from the people he grew up with.

Doug Jones is a very tall, very thin actor who's appeared in "Pan's Labryinth," "Hellboy," "Batman Returns" and even "Hook." Currently, he plays an alien on the science-fiction show "Falling Skies."

But you might not recognize him on the street, he's often covered up in either makeup or prosthetics.

"I'm shaped weird, which makes me an ideal pallette to build things on," Jones says.

The actor was born in 1960 and raised in the Midwest. "My household was very conservative — not only politically but also their relationship with money. They instilled in me the value of spending less than you make," says the actor.

Jones says his career choice makes that strategy difficult proposition.

"Acting is the most stupid profession to get into if you want something safe and solid. Every job I get is going to come to an end. And will I ever get another one? I don't know."

The actor and his wife live in a modest house in Santa Clarita, Calif. Prior to that, they lived in a condo that he paid off in one big lump after Jones landed a movie gig. "I got advice from [all] kinds of people, 'Do not pay your house off!'" he says, but he decided that rather than investing the extra money, he wanted the piece of mind knowing that no one could ever take his house away.

"People tend to spend based on what they think they're be making in the next year, and I've done the opposite. Wealth is not measured by how much money you earn but by how much you actually hang onto."

How an HBCU with 35 students keeps its doors open

Thu, 2014-03-13 15:34

If historically black colleges and universities (HBCUs) are an endangered species, Morris Brown College could be closest to extinction.

Most buildings on this silent campus are boarded up and abandoned.

Before the school lost accreditation in 2003, a few thousand students were enrolled at Morris Brown. Almost overnight, most fled out of fear their degree would carry no weight. Today, there are just 35 students.

Joquala Walker is one of those students. The 26 year-old aspiring singer is the only student in a class called “Promotions in Recorded Music.”

I ask her, “Why Morris Brown?”

“Why not Morris Brown?” she responds. “It deserves a chance just like everybody else does. They want to help.”

Jaquala’s instructor is Makisha Funderburke, who wants to help so badly, she teaches without pay.

“I just think Morris Brown should be given a chance,” says Funderburke. “And it’s been done pretty well surviving 10years. A lot of people are wondering ‘Why and how’?”

The “why” is easier to answer than the “how.”

Morris Brown has to survive. 

If the school closes its doors, even for a short time, its land could go to nearby Clark-Atlanta University. That’s the school that originally donated the land.

“We are upholding a great tradition of former slaves, of people in the early 1900s [who] struggled to make sure this institution will remain open,” says Stanley Pritchett, Morris Brown’s president. 

Pritchett says Morris Brown survives because its entire history is one of hardship and triumph.  He says the college has always been resourceful.

“A church member down in South Georgia told me they used to have a campaign called ‘Dollar Money.’ Everybody who came to the meeting brought a dollar for Morris Brown.”

But Morris Brown College needs $30 million to get out of debt. That’s about a million dollars for every current student.

Most would say it’s time to turn out the lights and let nearby HBCUs step in. Not alumnus Charles Barlow. When he started at Morris Brown, he brought with him a 550 on the SAT and read at a tenth grade level.

“But Morris Brown accepted me in, took me through a remedial reading program to teach me how to read—because if you can’t read, you can’t do college work—and I finished in four years in the top 10 percent of my class,” he says.

Barlow went on to become a top executive at Xerox for nearly two decades.

He says his story explains why Morris Brown must exit bankruptcy and rebuild.

But how?

“The biggest strength they have is their property,” says Mary Beth Gasman, a professor at the University of Pennsylvania. She led a graduate class that looked into options for saving the school. “And so the property is really the key to their livelihood and their success.”  

Lots of folks have eyed the school’s land, which sits adjacent to the planned site of Atlanta’s new NFL stadium.

A bankruptcy judge has given the green light to sell off about 85 percent of the school’s property, despite past protests from students and alumni.

President Stanley Pritchett says with the debt gone, Morris Brown can focus on building back its academics, and hopefully bring in as many students as there used to be.

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