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Goldman to improve its consumer Sachs appeal

Tue, 2015-06-16 13:00

Goldman Sachs is getting into the online- and app-based consumer loan business, according to the New York Times. You might be able to get that loan to build your deck or buy that truck online direct from the megabank.

But it’s hardly blazing a new trail. FinTech, as the startup world has dubbed the arrival of disruption to the financial services industry, has been moving along for years.  Just like Amazon took the store out of bookstores and Netflix busted Blockbuster, a swarm of firms like SoFi, Lending Club, On Deck, Betterment, Motif Investing and Loyal3 has been trying to undermine the business models of traditional banks by offering some kind of marriage between new technology and financial services. 

Larger banks have been slow on the uptake for several reasons.

“They haven’t had huge incentive to come into the market space,” says Mike Cagney, CEO and co-founder of SoFi, a firm that offers algorithm-driven online lending and securitization of high quality loans, and who by his own account wants to make it possible to one day “fire your bank.”

Cagney says large traditional banks have been complacent doing business as usual with baby boomers and have overlooked a major opportunity: underbanked, financial-maturity-delayed millennials. 

“It’s a false premise that when someone’s 45 they want to into a branch with bad hours and crappy product and service. That’s not how it works – 70 percent of millennials would rather go to the dentist than go to the bank,” says Cagney.

Another constraint facing traditional banks: the fact that they’re banks. “If you’re classified as a bank, there’s a whole set of regulatory burdens that fall on your shoulders that make it hard to move fast,” says Rita Gunther McGrath, professor of management at the Columbia Business School. 

The rules on deposits control how banks do all the other things they do from remittances to mortgages. Startups with nifty ideas on how to offer any one of those services without having to carry deposits don’t have to abide by those rules. 

Lastly, banks have been slow to innovate for the same reason that humans have always been slow: inertia.

“It’s true that in more recent times certain types of innovation were allowed to run amok,” McGrath says, but largely in terms of the products offered to consumers, “most are the same as they were 30 years ago.” 

Innovation can attract regulatory attention and doesn’t fit comfortably with financial models. “Breathing in and out and doing your job every day is a safer bet,” McGrath says.

Grant Easterbrook, co-founder of Dream Forward Financial, a disruptive startup in the retirement savings space, says innovation at large institutions with a lot of stakeholders is “just hard to do until it becomes blindingly obvious.”

All the same, banks do have some serious advantages: “Millions of accounts to tap into, lots of money to spend that startups don’t have. They just need to get moving on it.”

U.S. avocado consumption is ripe

Tue, 2015-06-16 12:47

There is no crop that has had a trajectory as steep as the avocado. Since 2010, consumption has gone up between 10 and 30 percent every year, which is one reason why avocado prices are increasing. Dan Stone recently wrote a piece called "Thanks to America, We’ve Reached Peak Avocado" for National Geographic.

Facts about avocados:

  • Mexico produces 10 times more avocados than the U.S. and Indonesia combined.
  • The rise of avocado’s popularity is unsustainable. Avocados have been grown for thousands of years in South America, but as demand increases, the farmers can’t afford to eat their own crop anymore.
  • It takes about 100 gallons of water to produce a pound of avocados … that’s about an entire bathtub of water for one avocado.
  • Almost three-fourths of Mexico’s crop comes from the state of Michoacan, where avocados are becoming currency in the drug war. The fruit is referred to as "oro verde," or green gold, and has replaced hard drugs like cocaine and heroin as the currency of the cartel.

To read Dan’s story on avocados and see more food coverage, visit  

Greek debt crisis is feeling like Groundhog Day

Tue, 2015-06-16 12:42

You’re forgiven if you’ve not been paying attention to the daily back and forth of negotiations between Greece and its European creditors to release a bucket of bailout money Greece needs to pay its bills, avoid default and stay in the eurozone.

“It’s complete Groundhog Day,” says Mujtaba Rahman with the Eurasia Group. 

The situation looks very similar today as it did months ago — Greece and its creditors are in a standoff. The creditors want big economic reforms, like pension cuts. Greece’s prime minister was voted into office on a promise to fight those measures.

The difference now is the timing and the level of tension. Greece is running out of soft deadlines it can blow past and facing real do-or-die funding crises with payments due at the end of June and in July.

“Essentially, over several days or so, we’ve seen the creditors snap,” says Nicholas Spiro, of Spiro Sovereign Strategy. “Whilst there was very little trust between both sides to begin with, we’re pretty much seeing the end of negotiations.”

Greece’s Prime Minister Alexis Tsipras said Tuesday that the International Monetary Fund bears a “criminal responsibility" for the situation. He’s heading to Russia later this week, perhaps cozying up to President Vladimir Putin – just in case.

“We’re at the 12th hour, more or less,” says Douglas Elliott, a fellow at the Brookings Institution.

However, Elliott thinks things might need to start tangibly falling apart in Greece before its leaders are able to compromise. 

PODCAST: Tux rentals tucker out

Tue, 2015-06-16 03:00

The Pope weighs in on climate change, and why it's an economic change, as well. Plus, the Army is looking to replace its Humvee with a new vehicle. And that means an opportunity for a defense contractor. Next: it used to be a rite of passage to rent a tuxedo when it came time to go to prom or get married. But the tuxedo rental business may be fading away. We take a look at why.

Lessons learned from the Humvee

Tue, 2015-06-16 02:00

 The military is in the market for a replacement for its iconic and ubiquitous vehicle: the Humvee.

The army’s joint light tactical vehicle program — or JLTV — aims to buy around 55,000 of these new vehicles over the next 25 years, says Brian Friel, a government contracts analyst at Bloomberg.

The Humvees are outdated, but they also developed something of a reputation during the wars in Iraq and Afghanistan, and that was for being ill-equipped to deal with IEDs, or improvised explosive devices. The military reacted to the growing threat by fortifying existing Humvees and bringing in MRAPs, or mine-resistant, ambush-proof vehicles.

“The JLTV is seen as the longer-term fix to a problem that was sort of Band-Aid patch,” Friel says. Those battlefield improvisations came as at a cost: they were too heavy.

The new JLTV will get back to basics: light, quick and ubiquitous.  

Lockheed Martin and Oshkosh Defense have submitted bids, and so has AM General, which made the original Humvee.

Byron Callan, an analyst with Capital Alpha, says all bids are not created equal. “Lockheed Martin, you know, this will probably be a picture and a footnote in their annual report if they win it,” he explains.

On the other hand, winning the contract might be make or break for AM General, he says.


Fixing the TSA will take time, expert says

Tue, 2015-06-16 02:00

On Tuesday, the Transportation Security Administration is under the microscope again on Capitol Hill. A House subcommittee is expected to take a closer look at how the TSA vets airport workers after an investigation found that 73 workers with ties to terrorism passed background checks.

Earlier this month, the TSA’s acting director was reassigned following reports that in undercover checks, airport screeners failed to detect mock explosives and weapons 95 percent of the time.

Critics of the administration are calling for a cultural shift at the agency. But that doesn’t happen overnight, says Michael Useem, who teaches leadership and corporate restructuring at the Wharton School.

“Typically, if it’s a big organization — this is one of America’s biggest, obviously — it can take six months to a couple years,” he says.

Click the media player above to hear more.

Lucy Jones on why scientists need to craft stories

Tue, 2015-06-16 02:00

Persuading the public to pony up for infrastructure can stump the best politicians. It can also frustrate the engineers and scientists warning about the dangers of ignoring crumbling roads, bridges and water systems.

Lucy Jones, a seismologist with the U.S. Geological Survey, knows the feeling. But when she and 300 other academics, businesspeople and government officials published a 2008 study called “The Shakeout Scenario,” she discovered that “stories matter.”

“Scientists don’t believe we should do stories,” Jones told colleagues in a recent speech. “The reality is that is how people communicate, and when we reject the stories, we are rejecting a lot of the ways that we can connect to other people.”

“The Shakeout Scenario” still inspires yearly earthquake drills. The authors used scientific and economic data to create a plausible story about Los Angeles after a hypothetical 7.8 quake on the San Andreas Fault. It starts 10 minutes before the quake and ends six months later. Buildings collapse, others burn. Water and power fail. Businesses shutter. Jones said the scenario was helpful in persuading civic leaders to make seismic resiliency a priority.

“The Shakeout was an attempt to bridge the gap between scientific analysis and the human need for stories,” the seismologist says.

U.S. Geological Survey/film by Theo Alexopoulos

Jones notes that historically, San Francisco has been particularly active on earthquake issues. “Part of it is because they have a civic memory of catastrophe,” she says, referring to the 1906 earthquake that nearly burned the city to the ground.

In contrast, Los Angeles' “earthquake story” is the Northridge quake in 1994, which was smaller. Jones says that story “is of resilience and recovery and 'look how great we did.' So it’s harder to believe you have to make the difficult investments.”

Jones says city leaders want to make those investments. Late last year, Los Angeles Mayor Eric Garcetti announced a plan to tackle the city’s earthquake vulnerabilities. Now it’s a matter of funding the recommended changes.

Jones, meanwhile, has her own “earthquake story.” It takes place in 1957 in Ventura, California. She says it’s her very first memory. “I’m home with my mom and siblings, and I remember my mother getting us into the hallway and crouching over and protecting us and my Siamese cat screaming.”

A screaming Siamese cat. Now the scientist has our attention.

Pope calls climate change a moral issue

Tue, 2015-06-16 02:00

Pope Francis is taking on climate change in a leaked draft of a papal letter, known as an encyclical, to be published on Thursday, in which he couches climate change as a moral issue and one of wealth inequality.

The pope says wealthier countries have to help developing ones in dealing with the problem.

"Once the encyclical letter comes out, then priests all around the world are going to work it into their sermon," says Andrew Hoffman, professor of sustainable enterprise at the University of Michigan.

"Right now, the primary messengers on climate change are democratic politicians, environmentalists and scientists. And we need more messengers from different domains," Hoffman says. "The pope coming forward can make a moral argument where others can't."

The letter's timing is important. About 200 countries plan to meet at the end of the year to sign a new climate change agreement. The pope wants to influence that process.

In his letter, the pope appears to be against carbon credits — a financial instrument that puts a price on air pollution. In his letter, the pope argues carbon credits could "give rise to a new form of speculation."

Elections on Facebook, whether you 'like' it or not

Tue, 2015-06-16 01:56
1,000 workers

That's the number of Mexican agricultural workers who are being held at the border because of a computer glitch. The error has prevented the government from issuing the immigrant visas that would allow them to come into the U.S. for the summer harvest. As the Wall Street Journal reports, it is estimated that California agriculture is losing up to $500,000 to $1 million a day because of the holdup.


That's how many cars travel per day on the Pulaski Skyway, a 3.5-mile stretch of elevated "superhighway" that connects the Newark airport to the Holland Tunnel. It's a particularly important and difficult-to-fix piece of the highway system, and it's the case study that kicks off our new series on infrastructure.


That's how many TSA workers who passed the vetting process had ties to terrorist organizations, as revealed in a recent investigation. On Tuesday, a House subcommittee will review the process by which airport workers are screened before getting hired. But re-organizing hiring practices may not be as simple as, say, when a company rewrites its rule book. Critics are calling for a larger culture shift within the organization, and that kind of change can take much longer to enact.

190 million

That's how many users Facebook has in the U.S., with virtually unlimited ways to divide them based on demographic information, "likes," browsing history and more. It's an absurdly powerful platform, National Review notes, and it's one 2016 presidential candidates are already leveraging for donors. The killer feature for this election cycle is video, which is far more ubiquitous, targeted and cheap than it was in 2012.

71.5 percent

That's the portion of revenue rights holders will get from Apple Music, Re/Code reported. That's not out of bounds with similar on-demand streaming services, like Spotify. 

$524.1 million

That's what "Jurassic World" made in its record-smashing opening weekend, and about a fifth of that came from the growing but restricted Chinese market. The folks at Vulture talked to an expert in insurance involving "rare and unusual risks," and it turns out there's some precedent for the kind of coverage a real-life Jurassic World would have to get.

U.S. is locked in to an aging highway system

Mon, 2015-06-15 14:17

America’s highway system, more than 200,000 miles of freeways and bridges, is the largest infrastructure project in the world.  It’s a feat of engineering that laid the foundation for decades of economic growth and prosperity.

By now, it’s also become a cliché to point out that it’s falling apart. In fact, the massive size of the highway systems is also its weak link. We built it, we’re dependent on it, and like all things made by man, now it is breaking, crumbling, and in some cases, falling down.

Back in 1932, the United States was suffering through the Great Depression, and its love affair with cars was just starting.

Just north of Newark, New Jersey, the Pulaski Skyway became the country’s first so-called “superhighway” — a 3.5-mile raised roadway running over the top of some of the most heavily industrialized property in the country.

Even if you’ve never heard of the Pulaski, you’ve probably seen it — the skyway looms in the background during the opening credits of "The Sopranos." In the early 1930s, the only people who knew how to build something this big were railroad engineers, and that's why the skyway looks like a railroad bridge, complete with steel trusses, rivets and cantilevers. It's also 80 years old and falling apart.

“There were pieces of steel that literally looked like Swiss cheese," says Stephen Schapiro, director of communications for the New Jersey Department of Transportation. "The holes in it were bigger than your head.”

Construction teams are completing a two-year, $1.2 billion rehabilitation of the Pulaski’s concrete deck and steel cross braces.

“The steel just flakes off. You can go to it and just peel a piece of steel off because it's rusted, deteriorated, and that's why it's being redone,” Schapiro explains.

The Pulaski Skyway under construction.

Adam Allington/Marketplace

In infrastructure terms, the Pulaski is what’s called “functionally obsolete,” meaning it doesn’t meet modern design standards —and the money being spent to fix it up won’t change that.The skyway carries about 70,000 cars per day. Trucks however, were banned only two years after the skyway opened, because its narrow lanes and steep off-ramps were too dangerous.   The Pulaski Skyway is bound by Newark International Airport on one end and the Holland Tunnel on the other. In between are continuous factories, warehouses and rail yards, as well as the ports of Newark and Elizabeth. It is some of the most built-up infrastructure anywhere.

But its not like New Jersey could just knock it down and start over.

“We don't have the space to build out new highways like they do in Texas or the Midwest, where they can just build more lanes. We can't do that here," Schapiro says. "We have to work with what we've got.”

In other words, having built it, we’re locked in. It’s a system of diminishing returns in which more money is spent repairing old infrastructure that delivers less-than-optimal results while still adding hours to commutes.

Bryan Higgins lives in Hoboken, New Jersey, and commutes daily to Newark. Normally, he takes the skyway both ways, but with the northbound lanes closed for construction, he has to find an alternate route home — which can easily double or triple his driving time.

“Going home is where there's issues, especially as they continue to do construction on this route we're taking home now,” Higgins says as he drives toward Hoboken. “If they close down a lane on it now, we're looking at what goes roughly a 35 minute commute, it puts it an hour and 15 minutes easily."

Higgins’ commute underscores a key point about highways in America: that even in a place as urbanized as northern Jersey, with public transit available, most people still drive to work.

“In this region, four out of five people drive to work, most people drive to work. In New Jersey it's over 90 percent,” says Richard Barone, director of transportation for the Regional Plan Association, a policy group based in New York City.

An archival photo of the Pulaski Skyway.

Courtesy: New Jersey Room, Jersey City Free Public Library

But Barone says that can’t go on forever, because there isn’t enough money to maintain everything that's been built. Priority should be given to infrastructure that gives the most return on our investment, and that may mean fewer highways, he says. He says this situation is true among urban areas across the country; cars are still the way people get to work.

“You know, we're entering a phase where we have to make tough decisions, and the idea of removing a link from the network, especially the highway network, is very unpopular,” Barone says. The golden age of freeway building is starting to wane, he says, they cost too much and as soon as they are built, they start breaking down. 

“It’s just reached the end of its useful life," says Robert Puentes, director of the Metropolitan Policy Program at the Brookings Institution. "A lot of it was just engineered to last for a certain number of decades, to accommodate a certain number of drivers, and we've blown way past a lot of those indicators in some areas.”

Puentes says the U.S. will never be able to build its way out of its infrastructure challenge. Even if it did have enough money to fix everything, there would still be gridlock, dangerous roads and, likely, wasted economic opportunities.

One way to change that prospect is to think about the future of highways as being driven by trucks. “We move an enormous amount of goods in this country, 77 percent of which cross state lines, which really is the definition of interstate commerce," Puentes says.

The rapid growth of the e-commerce economy and the prospect of technology that includes, among other things, driverless trucks, means freight may soon compete for a greater share of the roadway.

“So when we think about how this nation has grown in the past, and the role of the interstates, maybe the new era is going to be a lot around freight and good movement," he says.

Many of those goods arrive here by ship and are then unloaded at New Jersey shipping terminals.

“We see a 3 to 5 percent growth every year,” says Jeff Bader, president of the Association of Bi-State Motor Carriers.

Much of that freight, Bader says, is funneled onto roadways that weren’t designed with trucks in mind.

“I mean, we have trucks that are 53 to 54 feet long that cannot accommodate some of the roadways to make the turns," he says.

A 1940s postcard from Mayrose Company.

Courtesy: New Jersey Room, Jersey City Free Public Library

"Their putting billions of dollars into it now to make it more roadworthy for commuter vehicles," he says. "You look down underneath the Pulaski Skyway. The truck route 1 and 9, which is the sister bridge to it, is antiquated.  It needs to be modernized and upgraded too."And remember, the Pulaski can’t carry any trucks. Even when freight can be moved by rail, Bader says, that last mile will always involve trucks. He says the money being spent on the skyway, the biggest infrastructure project in the state of New Jersey, should have been put toward infrastructure that is more critical to the regional economy.

The Port of New York and New Jersey is spending $6 billion to improve its harbor and shipping terminals in preparation for the completion of the Panama Canal expansion next spring. That’s when so-called “super cargo” ships will start sailing into New York Harbor, delivering even more containers, which will then be funneled onto increasingly crowded, outdated, highways.

Correction June 16, 2015: This story originally misstated Robert Puentes' first name.

Helping global trade's 'losers'

Mon, 2015-06-15 13:31

The vote in the House of Representatives last Friday that effectively stalled President Obama’s push for a big Asia-Pacific trade deal has brought attention to a little-known worker assistance program called Trade Adjustment Assistance. That program’s been around since the 1960s to help Americans who lose their jobs because of global trade.  

Under the president’s trade bill, it would have been retooled and extended, but Democrats in the House torpedoed that idea as a way to put the brakes on the larger trade legislation. But far outside the beltway, in the other Washington – Washington state – workers who have benefited from the assistance program say it shouldn’t be allowed to die.

One town that’s felt the brunt of global trade is Aberdeen, Washington.

When you drive into Aberdeen, near the Pacific Coast, you see a welcome sign that says “Come As You Are” – a tribute to Nirvana singer Kurt Cobain, who grew up here.

That grunge sound grew out of tough economic times here in the early 1990s, and if you look around Aberdeen today, it seems hard times are still here. There are boarded up storefronts downtown.

Brad Pierog is one of the people who lost his job because of the declining timber industry. On a recent day, he stood out in his yard describing everyone on his block who worked in the mills. Not many do anymore, including him.

On a January day in 2009, he was supposed to work the night shift at the Weyerhaeuser sawmill in Aberdeen. In the afternoon, his buddy called and said, “Want to go fishing tomorrow?”

“And I said, `Well, we got to work tomorrow,’ and he says, `Well, no, we don’t. We got some time off,’ ” Pierog recalled. “And I said, `What, are we laid off or what?’ He said, `Nope, they just pulled the plug. The mill’s done.’ ”

He’d spent 25 years working there. His wife worked there. All his friends worked there.

“We weren’t able to compete with subsidized Canadian lumber,” Pierog says.

That’s not the only reason, but the U.S. Department of Labor agreed that imports were a factor. So Pierog and his coworkers qualified for Trade Adjustment Assistance. It was created in 1962 as a way to acknowledge that there are winners and losers when we trade and to help people who wind up on the losing end.

Pierog went to a meeting with union representatives and state officials to find out what kind of help he could get.

“And I said, 'Since I’ve already got an associate’s degree, can I go get a bachelor’s?’ And they said, `It has to be something you can actually get a job in.’ And I said, `Well, I want to get a bachelor’s in computer science.’ ”

Boom. It was like he said the magic words. They got him into a college within three weeks. And now, six years later, he’s a software developer for the state of Washington.

The person who helps make all that happen in Washington state is Bill Messenger of the Washington State Labor Council. Before this, Messenger spent more than 30 years working in a pulp mill himself and had never heard of Trade Adjustment Assistance until he got word his mill was closing down.

Many people haven’t heard of it, but Trade Adjustment Assistance offers benefits to about 100,000 people a year. Once he lost his pulp mill job, Messenger came to work for the state labor council to help workers apply for this program. He’s almost like a bereavement counselor, showing up at factories right after employees find out they’re losing their jobs.

“Up to 800 people, 900 people — all in one facility — looking at you like, 'What now?' ” Messenger says.

Messenger says he’s helped thousands of workers in Washington state get benefits.

Now that program may be in jeopardy. Democratic Rep. Rick Larsen, who represents a district north of Seattle, is upset about that.

“As a Democrat, I think I would call on my fellow Democratic colleagues to change their minds,” Larsen says. 

He supports the fast-track trade bill, but he’s concerned the Republicans have the votes to pass it without the worker-retraining legislation.

“That would be more than unfortunate,” Larsen says. “That would be devastating to folks who are thrown out of work.”

Jeffrey Schott, with the Peterson Institute for International Economics in Washington, D.C., says the program does have critics. Some say companies should provide this assistance — not the government.

“Others feel that the program is justified, but it hasn’t been well constructed, and that the current programs are inefficient,” Schott says.

Schott says in the end, though, it may organized labor — a group that traditionally supports the program — that brings down the president’s trade agenda.

“Big labor unions, for tactical reasons, have basically pulled the rug out from under him,” Schott says.

It’s unclear what’s going to happen next.

What is clear is that if the Trade Adjustment Assistance program doesn’t pass within the trade package, the original program could die. It needs to be reauthorized by the end of September.  

Bridging the edtech gap from Oyler School to home

Mon, 2015-06-15 13:12

Ray Nephew’s seventh-grade English class at Oyler School is about as high-tech as it gets. Every student has a laptop to use. On one wall, a device turns his whiteboard into an interactive touch screen. A 32-inch “coffee table” computer sits idle against another wall, covered with a cloth.

“That thing is malfunctioning,” Nephew says.

Nephew explains that it is a great tool — when the computer works. 

"It’s just another way for kids to be engaged," he says.

This is not your typical classroom at Oyler School, a high-poverty school in Cincinnati, Ohio, or in most places. It’s one of six “demonstration classrooms” in the district. Teachers from around the city visit to watch Nephew model the latest teaching techniques and technology.

On this day, students work on their laptops, preparing presentations about a novel they’ve just read. Student Edward Denham, sporting glasses and a mop of wavy brown hair, selects a font to use for his digital slideshow.

“I always choose neon green, because it’s awesome,” he says.

In Ray Nephew’s seventh-grade English class, every student has access to a laptop and other tech devices. (Mary Wiltenburg/Marketplace)
Ed is 12, and he loves computers. But when he goes home at the end of the day, he has to leave the laptop at school. In his small beige house a block from Oyler, Ed has an Xbox game console, but no computer anymore. His mom, Diane Gribbins, had a laptop years ago when she had a job at a bank.

“Like everything else, they wear out or tear up,” she says. “I just don't have the cash to replace something like that when it goes.”

The family of six can’t afford high-speed internet either. Like many kids at Oyler, Ed has a smart phone, but he says the connection is slow.

“If I had internet at home, the first thing I'm asking my mom for is a laptop,” he says. “You can use a laptop for so many things that I can't do on my phone.”

Like watch videos on YouTube, he says, and play better games.

“A lot of research and things you could be looking up for school, too,” his mom interjects. “You could do that.”

Oh yeah, school work. It’s not exactly easy to write a paper on a smart phone. Games aren’t just play for Edward, though. He wants to be a game designer.

There’s a name for Ed’s situation, says Jim Steyer, CEO of the advocacy group Common Sense Media. He calls it “the homework gap.” As schools bring high-speed internet and the latest devices into the classroom, he says nearly one-third of families still lack broadband access at home.

brightcove.createExperiences(); Video edited by Patrick Wright

“We see this situation in low-income schools across the country, where kids do not have access to the internet at home and literally can’t do homework assignments that their technology-enabled classrooms would require,” Steyer says.

Oyler is working to close that gap. The school has teamed up with a local telecom company to bring several free WiFi hotspots to the neighborhood. None of them reaches Ed’s house yet. Even kids who now have access don’t always have the right device, Nephew says.

“It's forced us to do more in class than we really want to eventually have to do,” he says. “We try to move towards that flipped classroom model, where the students can do a lot of the work outside of class via Blackboard or their Google account, but if you don't have a device at home, and all you have is a smart phone, it is more difficult.”

Technology has flipped the classroom in another way. Nephew is 52, and before this year had never even had a computer in his classroom.

“My 15-year-old daughter would make fun of me that I couldn't send a text message or know how to work the new TV remote,” he says.

Nephew often asks his students for help, and that’s been empowering for kids like Ed. At a recent tech fair, he and his classmates got to dress up in professional clothes and school the teachers on using their computers.

“It felt like they were actually learning something about it, and I was actually teaching them about it,” Ed says. “I was being helpful to them.”

Nephew still has plenty to teach Ed and his fellow digital natives. In his high-tech classroom, Nephew discovered a far more basic gap. Before the book they just finished reading, he says, most of his seventh graders had never read a novel.  

Why Target is selling its pharmacies to CVS

Mon, 2015-06-15 13:00

First it bailed on Canada. Then it shed its furniture business. Now Target’s dumping its unprofitable pharmacies and clinics, selling them to CVS Health Corp. for $1.9 billion.

The deal will put the CVS brand on Target’s roughly 1,700 pharmacies and 80 clinics.

“Only about 5 to 7 percent of Target's customers actually utilize the pharmacy business, and so Target was basically operating that business near break-even,” says Ken Perkins, an analyst with Morningstar.

The problem may have been a brand disconnect.

“A lot of consumers are reluctant to use a pharmacy at a mass merchant," says Adam Fein, president of Pembroke Consulting, a pharmaceutical management consultancy. "They don't think of the place where they get their DVDs, their TVs and their bed sheets as the place where they can also get their prescriptions.” 

But Fein expects that will change with pharmacy industry giant CVS taking over Target’s pharmacies and clinics. Fein says CVS will connect Target customers to more generic drugs and a program for managing prescriptions, and give them access to high-priced specialty drugs, like one for treating Hepatitis C.

“CVS is the largest dispenser of these specialty drugs and has a number of programs and services that Target just can't offer,” he says. “Target just doesn't have the scale and capabilities to play in this new world.”

Fein says if customers can get those drugs and services at a CVS within Target, they might stick around and stock up on other stuff.

China helps 'Jurassic World' devour the box office

Mon, 2015-06-15 12:58

"Jurassic World" roared to an international box office record this weekend — $524.1 million — propelled by a $100 million-plus opening in China.

"I think it's not such a surprise," says Aynne Kokas, an assistant professor of media studies at the University of Virginia and a scholar at Baker Institute China Studies Program at Rice University.

Kokas expects China will keep box office records for American films. 

"At some point soon we’ll see the Chinese market becoming larger than the U.S. in every successive month," she says. By some estimates, the Chinese box office will overtake the U.S. box office by the end of the decade.

There’s a huge expansion in the number of theaters in China, Kokas says. There are a growing number of 3-D screens and digital screens. And there are more theaters in second- and third-tier markets in the country.

There's also a wealthier Chinese population that likes going to the movies.

"It’s the sort of thing that Hollywood studios salivate about," says Michael Curtin, a professor of film and media studies at the University of California, Santa Barbara.

But Hollywood saliva alone does not land a movie on Chinese screens. The Chinese government allows only 34 movies a year to be imported.

And how exactly a film gets on that list is a little murky, Curtain says. "I don’t think anyone in Hollywood can really tell you.  It has to do with relationships, it has to do with the nature of the film."

Curtain says these days studios work with Chinese censors in the earliest phases of planning a movie to try to get it on the list.

Hollywood is also working on co-productions with Chinese studios, which aren't subject to the quota. 

And, more broadly, everyone in the industry is thinking about the global audience.

Janet Yang,  a film producer and head of Janet Yang Productions, helped negotiate the distribution of U.S. films into China in the 1980s. She says in the past, studios tried to appeal to an international audience in a pretty rudimentary way: "Let's put in a Chinese character or two in a primarily Western production, or conversely, let's put a Western character or two into a Chinese production," she says.

Yang says that's changing. Now it’s about finding truly organic, international stories and bringing writers, directors, crew and actors together — from the West and China.

Welcome to the party, Jeb

Mon, 2015-06-15 12:58

Jeb Bush made it official today: he wants to be president.

There's a big rally down in Miami — campaign posters, the whole smash. 

Also, as it turns out, a little digital fun.

The New York Times' Jeremy Bowers noticed on now-candidate Bush's website that the JavaScript of the announcement includes a synopsis of the movie "Die Hard."

Seems like an odd thing to include in the JS of your presidential announcement page.

— Jeremy Bowers (@jeremybowers) June 15, 2015

Yeah, that "Die Hard."


No idea.

AIG bailout trial: a partial moral victory

Mon, 2015-06-15 12:55

The former chief of American International Group Inc. has been handed a victory of sorts.

In a class action lawsuit, Maurice “Hank” Greenberg argued that when the government bailed out insurance giant AIG in 2008 during the financial crisis, the terms of that $85 billion loan were unfair to shareholders. A federal judge in New York agreed Monday, finding that those terms were “unduly harsh” when compared to its treatment of other institutions.

However, while Greenberg may been vindicated by this decision, it was only a partial win, says Ernie Patrikis, a partner at White & Case who previously worked at both AIG and the Federal Reserve Bank of New York.

"A Pyrrhic victory is, you win the battle but you still lose the war,” he says. “Here, he won the battle of 'was it an unconstitutional taking?' but he lost the battle of 'does he get damages?' "

Greenberg had been seeking up to $40 billion in compensation, but the judge wrote in his decision that without the government’s intervention, AIG would have filed for bankruptcy and therefore didn’t award any damages, even as he agreed the government overstepped when it took 80 percent of AIG’s equity in exchange for the loan.

“Remember [the government was] making an $85 billion loan, an extraordinary loan to one financial institution that had seemingly been run in reckless fashion,” says John Coffee, a professor at Columbia Law School. “They were buying a pig and a poke. They didn’t know just the full major liabilities they were going to encounter when they took over the company. They wanted complete control.”

The big question, in light of this decision, is what this means for how the next financial crisis is handled, if there is one. Carl Tobias, a law professor at the University of Richmond in Virgina, says the government could likely still make emergency loans, just not take equity, as it did with AIG.  

“It may be if this stands that Congress would have to revisit the authority of the federal government and try to expand it so that it does have the flexibility to move in financial crises,” he says.

But first, Tobias says this decision will almost certainly be appealed.

The Pope's thoughts on climate change are leaked

Mon, 2015-06-15 12:06

Setting aside for the moment the issue of who inside the Vatican might leak a papal encyclical, it does appear that that's what has happened. The Italian magazine 'L'Espresso' leaked a draft of the document today... 192 pages about climate change and its effects on the poor. In the document, Pope Francis calls for “urgent action” against climate change and endorses biofuels. The official release date is Thursday, and Vatican authorities are saying the official text is still under embargo.

Scott Tong explains the effects of this leak. 

Show us your commute's #WeakLink

Mon, 2015-06-15 09:11

This week, Marketplace’s sustainability desk explores the state of infrastructure across the U.S. We’re teaming up with Waze to look at the nation’s freeways and our transportation infrastructure.  

If you want to be part of our series and report bad infrastructure on your own commute:

1. Download and open Waze

2. Select the "Report" icon in the lower right corner

3. Press "Hazard" and choose the problem

4. Describe the problem and add the hashtag #WeakLink

5. Hit send! 

Safe-driving reminder: We want everyone to drive safely, so please only use this feature if a passenger can assist you or if you're at a complete stop. Or use it if you're walking or at home.

PODCAST: Is this the year VR will dominate?

Mon, 2015-06-15 03:00

On Friday, the house of representatives failed to pass measures that would have granted President Obama a kind of fast-track authority to negotiate the so-called Trans-Pacific Parternship. Claiming victory here: labor unions. More on that. And with the E3 video game conference beginning Tuesday, will this be the year that virtual reality takes prominence in gaming? Plus, a huge swathe of people don’t take all their vacation in this country. To what extent is corporate culture and badly designed vacation policies to blame?

A trans fat ban might just be the icing on the cake

Mon, 2015-06-15 02:00

About a year and a half ago, the FDA said that partially hydrogenated oils — the source of trans fat — “are not generally recognized as safe.” 

Would an outright ban be a big burden for the food industry? Food companies say they’ve already eliminated 86 percent of trans fats voluntarily.

“There’s been huge progress," says Michael Jacobson, executive director of the consumer group Center for Science in the Public Interest. “And now the FDA needs to nail the coffin shut,” he says.

The Center for Science in the Public Interest tracks food that still contains trans fats:

Follow CSPI's board Trans Fat Wall of Shame on Pinterest.

Jacobson says the FDA would probably ease in a trans fat ban over several years but still allow minor uses, like in cupcake sprinkles.

“It’s almost like this is just the icing on the cake — I think icing might actually have trans fats too — but anyway, it’s just solidifying what the industry has already begun to do,” says Darren Seifer, the food and beverage industry analyst at the NPD Group. 

Seifer says he hasn’t heard any complaints from the industry.

I couldn’t get anybody in the food industry to do an interview. But I did get an email from Cargill, which makes partially hydrogenated oils, touting other oils it makes that could work as replacements.