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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.

What goes through the mind of a paparazzi photographer

Thu, 2014-03-13 15:15

Giles Harrison puts over 2,000 miles a month on his Cadillac Escalade chasing celebrities down and snapping their photos.

But then again, Giles Harrison drives an Escalade.

We had a lot more questions for him. Here are some of the answers that kind of blow our mind(s):

What do you do if you see a celebrity?

“Let’s say I see Fergie of the Black Eyed Peas jogging through the streets of Santa Monica.  I’ll take pictures for as long as I can. If she doesn’t see me, I’ll try and follow her and see what she does post-workout. Maybe she goes to Starbucks and gets herself a smoothie. I try to get something to either add to the value of the story or break up the set -- because then I can be like, 'She works out, she gets coffee, she does this, she does that.' I’ll follow her around until she goes home. You’ve got to stick on them all day because, as mean as this sounds, the moment you leave her she could be out and get hit by a bus. And then you wouldn’t be there to witness that and get what you need.”

You take pictures because people will buy them. You've said 'the consumer is to blame.' Care to get more specific?

“What I tell people -- and I will stand by this until the day they bury me in the ground -- people in 'normal places' don’t care. People in New York don’t care. People in L.A. don’t care. It’s that Middle America demographic of people who don’t get to experience these celebrities.”

How do you make it as a paparazzi photographer?

“People who do well in this business are news photographers, because they know how to spot a story, and they know how to make a story out of a set of pictures. I had a colleague once who got just a simple picture of Madonna getting out of a car. Not a great photo. I think he may have gotten four frames. But once we looked closely at the photos we noticed she had an engagement ring on. That’s when she was engaged to Guy Ritchie before she married him and then that became the story. Those were the first pictures of Madonna wearing an engagement ring.”

What’s the craziest thing you’ve done to get a shot?

“I’ve hung out of a helicopter to get aerial shots of a wedding. I mean, literally, hung out of a helicopter. I wasn’t strapped in. I had some guy holding my feet so I wouldn’t fall out. It was for Brooke Shields and Andre Agassi’s nuptials. I’ve been chased across the Gulf of Mexico in gunboats by Federales trying to get pictures of Brad Pitt and Jennifer Aniston on their first away trip together.”

What’s the most famous photo you’ve ever snapped?

“When Michael Jackson got Debbie Rowe pregnant, I remember being sent by my picture desk and them saying, ‘Hey, we need pictures of this lady.’ And I said, ‘Who is she?’ [They said] 'Some pregnant nurse.' I took some pictures of her, took some videos of her. I said, 'This woman is popular, why?' [They said,] 'She’s having Michael Jackson’s baby.' I said, 'Bull$&%#. There’s no way this is true.' A week later it was confirmed by Michael Jackson’s people. Our pictures, our video went everywhere.”

Do you ever feel bad about what you do?

“The worst day I had morally was when I first started...This was post 9/11, so what we used to do on boring rainy days was go hang out at the airport and cover all the flights coming from New York, Miami and DC. One day Muhammad Ali was at the airport and I shot some video of him. This was before his Parkinson’s had gotten as advanced as it has, but he was sitting on his briefcase and shaking so bad. He looked so sad and so much like a shadow of his former self that I felt so bad even shooting that video. I thought 'Why am I shooting this?' 'Why is this newsworthy?' I felt really bad on that day...But that was early on in my career. After a while you kind of get hardened to the necessities of what you have to do.”

Is it feast or famine out there?

“Every little bit counts. You get a little bit here and a little bit there, but I treat every photo like it could potentially be a big story. I average about a set a day. I will shoot pretty much anything and everything. Last week I was at a newsstand reading a newspaper and Glenn Frey of The Eagles came up and he picked up the L.A. Times and then he also picked up four editions of the latest porno mags. I got pictures of it. I didn’t think it would go far. I didn’t think it would go anywhere. Those photos went everywhere. And when was the last time he did something interesting?"

 

The slow process of getting the highest speed internet

Thu, 2014-03-13 15:00

Whether it's your Netflix streaming or something more important like transferring medical records from one place to another, chances are you've heard the promise of gigabit internet. It's supposedly way faster than the broadband access in most cities around the country. Google is starting lay the infrastructure for gigabit internet in a growing number of cities around the US. Kansas City was the first. Up next? Austin, Texas.

According to Marketplace Tech host, Ben Johnson, gigabit internet means more business for cities that make it available.

"Since it rolled out in Kansas City, gigabit internet does seem to be attracting startups and new companies. It could bring more tech industry to Austin. The city's best known local tech company employers are probably Dell and Intel. But there could be a lot more here if it was easier for companies to do their business online at higher speeds."

Johnson adds that in terms of widespread use of super high speed internet, the U.S. is far behind countries like South Korea. Still, cities like Austin can boast advanced internet technology like the Stampede Supercomputer (pictured above), which has a ten gigabit line out. The downside of these giant supercomputers are the sheer size and noise...but man, are they fast.

 

Multiple labor lawsuits hit McDonald's

Thu, 2014-03-13 14:16

McDonald’s faces lawsuits in three states this week from workers who allege the fast-food giant violated labor laws by failing to pay overtime, making them work off the clock, failing to give them breaks, and making them pay for uniforms or uniform cleaning. The suits, seeking class-action status, were filed in New York, Michigan, and California, and could ultimately represent 30,000 or more workers, the plaintiff lawyers said in a press conference. The event was organized by labor-union-backed advocates, who are also pushing for a $15 per-hour wage industry-wide.

A novel aspect of the lawsuits is that they try to tie McDonald’s—and its valuable brand—to alleged wage and hour violations at franchise restaurants that the company neither owns nor directly operates. Lawyer Michael Rubin at Altshuler Berzon in San Francisco is representing a group of McDonald’s workers in California, and has pursued similar class-action cases against Walmart on behalf of temporary workers at its contracted warehouses near Los Angeles.

“The McDonald’s corporate entity was sued as well,” Rubin said, “as a joint employer, and as a principal agent, co-conspirator, negligent franchisor.”

Evidence that will be presented in the case includes software McDonald’s provides to franchises to reduce labor costs.

The company issued a statement saying: “McDonald’s and our independent owner-operators share a concern and commitment to the well-being and fair treatment of all people who work in McDonald’s restaurants. We are currently reviewing the allegations in the lawsuits.”

In a recent 10k filing with the U.S. Securities and Exchange Commission, McDonald’s cited the risk to its business and forward guidance posed by “the impact of campaigns by labor organizations and activists, including through the use of social media and other mobile communications and applications, to promote adverse perceptions of the quick-service category of the IEO (informal eating out) segment or our brand..." The filing also cited upward pressure on wages in many markets around the world, "which may intensify with increasing public focus on matters of income inequality.”

Mary Chapman at food-industry research firm Technomic, which has done work for McDonald’s in the past, said she hasn’t yet seen any impact on fast-food companies’ profitability from activist campaigns. But she said the issue is on the industry’s radar.

“Consumers want to do business with people who feel the way that they do about issues, including social issues,” she said. “For some consumers, employment practices are very important. But for many more consumers, it’s more about price, convenience, and quality.”

Chapman pointed out that the employment narrative has changed over decades—not in the industry’s favor.

“In the past, the fast food employment story was a good one,” said Chapman. “The industry hired young people, and provided so many of today’s leaders with their first job.” But that story has shifted, with more middle-aged workers trying to earn a family wage from fast-food and other low-skilled service work.

Mark Brandau of Nation’s Restaurant News, who covers McDonald’s, said he has never before seen so much attention paid to the labor issues around fast-food. He said companies have to focus on it now. “I’m sure that they would like to see these issues being settled in the political arena,” said Brandau, “not in their dining rooms.”

Amazon Prime's $99 bargain

Thu, 2014-03-13 13:33

Amazon has decided that just being the biggest seller of stuff online isn't enough -- they've got to make a profit, too.   The company announced this morning in what seems like a long-awaited move that its $79 dollar Amazon Prime service will henceforth be its $99 Amazon Prime Service.   The phrase here is "loss leader." Even at $99, Prime is a bargain for shoppers. And it works out well for Amazon, too. One estimate has Prime customers spending $1,340 bucks a year on the site.

States change rules to avoid SNAP cuts

Thu, 2014-03-13 11:53

The long-awaited Farm Bill that passed earlier this year promised to cut $8.6 billion out of SNAP – the Supplemental Nutrition Assistance Program formerly known as food stamps – over the next decade. It did so by restricting a practice known as “heat and eat,” which many in Congress saw as a loophole.

Now at least six states are getting around SNAP cuts by tweaking their “heat and eat” programs.

Here’s what more than a dozen “heat and eat” states realized years ago: Give people nominal heating and cooling assistance – even $1 a year – and SNAP recognized them as paying utilities, whether or not they actually did. That’s an expense which triggered more in food stamps.

The new Farm Bill raised that minimum level of help to $20. That was bad news for 70-year-old Barbara Skinner in Philadelphia.

“There was nothing that I could really do about it.” She says. “So I just left it in the hands of God.”

Without “heat and eat” Skinner would eventually lose most of her remaining food stamps.  (And remember, SNAP benefits already fell last year when the stimulus ran out).

And while we don’t know if God intervened in this case, Republican Governor Tom Corbett certainly did.

“I was elated,” Skinner says. “If I didn’t have the benefits of SNAP, if I wanted to buy a pair of stockings for church or something, it would be a hardship.”

Corbett and the Democratic governors of New York, Connecticut, Rhode Island, Montana and Oregon have all said to Congress: “We’ll see your 20 dollars” – boosting heating assistance to avoid cuts in SNAP.

Now, by spending about $19 million in mostly federal low-income home energy assistance, these states say they’ll preserve $951 million in SNAP benefits. (Though federal projections may differ, as the story is still unfolding.)

As for criticism that the loophole has returned, “there’s nothing loophole-ish about it,” says Connecticut Governor Dannell Malloy. “They wrote a law. And we acted accordingly to protect the families of Connecticut.”

Antihunger advocates say they’re thrilled states are taking action to preserve “heat and eat” programs at a time when they say SNAP benefits don’t go far enough. Whether or not recipients pay utilities separately from rent, they say the roughly 850,000 low-income households that benefitted from “heat and eat” in the past still have great need.

“Governors are doing what I would do too, if I had the fiduciary responsibility. But it’s sneaky,” says Norm Ornstein, with the American Enterprise Institute.

Make no mistake, Ornstein is a SNAP supporter. He believes the program is underfunded. But he says these workarounds by some states just give fodder to those who want to damage or eliminate the program.

“Congress will be tempted the next time around to set the bar much, much higher,” he says. “And in the process of setting the bar much higher they may hurt needed food stamp recipients, and they may hurt people who need additional heating oil assistance.”

Not long ago House Republicans tried to cut $40 billion out of SNAP. That’s a much different picture than the $8.6 billion in cuts states are unraveling now.

Herbalife's high profile investor war heats up

Thu, 2014-03-13 11:46

The Federal Trade Commission is investigating a company called Herbalife. It makes supplements.

Now, the FTC investigates companies all the time, so that's not such a big deal.  But that there has been a very public war going on between the company and one particular investor who has bet against it. 

That investor is a hedge fund manager named William Ackman. He bet more than a billion dollars that the stock price would fall and has been doing everything he can to... make the stock price fall. He's waged a very public campaign against Herbalife, claiming it's a pyramid scheme.

But the public hasn't paid attention: the company's stock has gone up this year. So the FTC investigation news is good news for Ackman.

When the regulators are done with their probe, we'll have more insight into the central question people have about this fight: is Ackman's campaign an unfair smear or a well-deserved takedown?

Alarms went off at Target during the security hack

Thu, 2014-03-13 11:44

Bloomberg Businessweek had a headline this morning: "Missed Alarms and 40 Million Stolen Credit Cards Numbers: How Target Blew It." 

Their story investigated the Target hack, where up to 70 million people had their credit card numbers stolen from the retailer's servers. One of the nuggets the article uncovered: The company had the latest, greatest software to protect them from hackers -- but when the software set off an alarm, Target ignored it.

It sounds sort of crazy, right? The burglar alarm goes off and they hit snooze?

Anthony Di Bello of cybersecurity firm Guidance Software  says it’s more complicated than that. He says computer networks at large retailers and financial organizations are constantly getting hit with malware.

“There’s an indication that this isn’t just a small number -- a 100 or 200 -- this is 10,000-20,000 attempts against a network every day,” he says.  

And an alarm goes off every time.

Sometimes it’s clear that the hack is serious. But there are a lot of false alarms. For example, when a company installs new cybersecurity software, it can take months of fine tuning to make sure it works well with others, says Cameron Camp, a cybersecurity researcher at ESET.

The malware detection tool that first sounded the alarm was installed by Target six months before the hack, according to Bloomberg. Camp says the bigger problem is that when companies aren’t sure how serious an alarm is, they aren’t structured to make decisions quickly.  

“You have silos: Over here is the C-suite, and over here’s the IT guys, and once a week you have a meeting,” Camp says.

He says most companies don’t have a Chief Information Security Officer in the C-suite and there isn’t a direct chain of command when urgent cybersecurity issues come up. That’s because, traditionally, the IT department was thought of as a "glorified garage" or "where the mechanics kept the engines running."

Of course technology’s role in business has changed dramatically. But the corporate structure hasn’t caught up. Camp expects that articles like Bloomberg’s Businessweek will help bring that change about.

“Security is a business imperative now because it costs you a lot of money when it’s done wrong for whatever reason,” he says.

Paparazzi photographer caught in the act!

Thu, 2014-03-13 10:39

Giles Harrison has been a celebrity photographer for 17 years. He studied journalism at California State Northridge before dipping his toe into the paparazzi life. He is now the founder and head of London Entertainment Group, a photo agency that has photographers in New York, Miami, Las Vegas, Jamaica, London, Philadelphia, Canada and France. The company syndicates over 1,000 images each month.

We followed him around for our series, "You Hate My Job".  Here's what he told us about the biz:

11 things we learned from Harrison:

1)    Paparazzi photographers love Jamba Juice. Jamba Juice is like a light bulb to a moth for celebrities, so Harrison often scopes them out. He also jokes that celebrities whose photos aren’t worth much are colloquially referred to as “Jamba Juice money” in the paparazzi biz (looking at you, Zach Galifianakis.)

2)    Dylan McDermott works out in jeans. (Watch the video above for proof!)

3)    Kanye West believes paparazzi photographers are better seen than heard. In fact, he’d prefer neither: "Kanye West comes over to the photographers and says, ‘You know what? Don’t speak to me now, don’t speak to me ever,’" Harrison says. “Well, I’m sorry, that’s not the way of the world. You can’t sit there and order everybody, ‘Don’t say a word to me ever.’ It doesn’t work like that.”

4)    Obviously, a parazzi photographer can make good money. Why else would they do it? But we didn't know how much. Harrison says he makes something in the range of “high six figures” running his agency.

5)    It’s not all about the big shot -- it’s about sets of photos. Harrison says he made over $150,000 on a series he took of Prince Harry outside of a Venice Beach restaurant. It was just after those naked pictures of him partying came out. Harrison keeps the rights to his photos, and can sell them to different publications for years. He’s made up to $250,000 on one set.

6)    New York and L.A. paparazzi have a coastal beef. “New York is a whole different thing, because celebrities can’t get away from it,” Harrison says they all get a bad name, “when you have the New York paparazzi calling Suri Cruise a brat because she doesn’t want her photo taken."

7)    The paparazzi minor leagues can be tough. “When I first started in this business, I was making $50 a day and 25 percent commission. To make matters worse, that $50 was being taken out of my commission,” Harrison says. “Then I got to the point where I was making more money than I could spend, and I used that to hire other photographers.”

8)    Some paparazzi photographers have their own agents. Harrison has one. The agent negotiates all of the deals for Harrison’s pictures and keeps a cut. That way, Harrison is able to focus on what he really loves - being a “field op.”

9)    A picture of Kim Kardashian in a bathing suit can make you almost twice as much as most Americans earn in a year. Harrison says $80,000, easy, for one magazine cover. 

10)  Some celebrities love the paparazzi (even if they pretend to hate them). “Paris Hilton will tweet the paparazzi when she’s going to be somewhere,” Harrison says. And according to him, she’s far from alone. “Yesterday, Joanna Krupa from Real Housewives of Miami and Gretchen Rossi from Real Housewives of Orange County were going to a restaurant in Beverly Hills and the photographers were waiting... because they told the photographers what time they were going to be there. Celebrities who do that have no right to complain because they are complicit to what’s going on.”

11)  There's a  Starbucks with a valet. (It’s this one.)

There's so much more, I just want to reveal all of it. Watch the video above for the EXCLUSIVE, BEHIND THE SCENES LOOK!

Video produced by Preditorial

Director: Rick Kent

Producer: Mimi Kent

Camera: Anton Seim, Zachary Rockwood

I'll take math and science for $200

Thu, 2014-03-13 09:41

From the Marketplace Datebook, here’s a look at what's coming up Friday:

  • In Washington, First Lady Michelle Obama delivers the keynote address at a summit on childhood obesity.
  • He won the Nobel Prize in Physics. Albert Einstein was born on March 14, 1879.
  • And sticking with the math and science category: You need it to solve some of life’s geometry problems like the area of a circle or the volume of a cylinder. What is Pi? Tomorrow is Pi day.

What the numbers behind unemployment really mean

Thu, 2014-03-13 09:00

According to the U.S. Department of Labor, 315,000 Americans filed new claims for state unemployment benefits last week. It’s the lowest weekly jobs number in three months, but it's also not the entire story.

Economists tend to more closely monitor and ascribe more value to employment numbers in monthly summaries from the Bureau of Labor Statistics. The most recent report shows the U.S. economy added 175,000 in February, which pushed the unemployment rate to 6.7 percent.

Jobs data is subject to revisions, and it is probable that figures for the week that ended on March 8 will change in subsequent reports. It is especially likely because there has been so much bad weather across the U.S.

Cooper Howes, an economist at Barclays Capital, says “claims data have been volatile dating back to last fall.” In a note to investors, Howes stated:

“Factors such as computer system upgrades, seasonal adjustments related to moving holidays, and severe weather all potentially complicated the interpretation of the previously steady downward trend."

Democrats, led by President Obama, continue to call for an extension of long-term unemployment benefits, which expired on Dec. 28, 2013. According to the Bureau of Labor Statistics, 3.8 million Americans have been out of work for 27 weeks or more.

Many Republicans have signaled they are open to reinstating those benefits, but they continue to call for the costs to be offset by cuts elsewhere. As of yet, the two parties have failed to agree on a way forward.

Top U.S. lawyer wants better drug sentencing policies

Thu, 2014-03-13 05:54

Today, Attorney General Eric Holder will tell the United States Sentencing Commission, an independent agency that comes up with the guidelines judges use when they sentence convicted criminals, that the average sentence for dealing drugs is too long.

“Eric Holder is signaling that he is drawing down the troops in the war on drugs” - Paul Butler, a law professor at Georgetown University

When it comes to marijuana, the attorney general continues to navigate a changing, challenging landscape. Almost two dozen states have legalized the drug for medicinal use, and recreational use is now legal in Colorado and Washington State. Still, the federal government classifies it as a Schedule I Controlled Substance.

Holder has decided not to stand in the way of state-by-state legalization, and a few weeks ago, the federal government issued new guidance to banks that may want “to provide services to marijuana-related businesses” in states where the drug is legal.

According to Douglas Berman, the Robert J. Watkins/Procter & Gamble Professor of Law at The Ohio State University, economic considerations have motivated Holder to advocate for scaled-back sentencing guidelines. A year of imprisonment in a federal correctional facility costs roughly $30,000 per inmate.

“You multiply that by literally hundreds of thousands of persons serving dozens of years, and it gets to be real money,” Berman says. In FY2013, almost a third of the Justice Department’s $27.1 billion went to the Bureau of Prisons.

“Use those savings to go after the drugs that really are causing the most significant harms to communities” - Douglas Berman, Ohio State University

Incarceration is expensive, but Nora Demleitner, Dean and Roy L. Steinheimer, Jr. Professor of Law at the Washington and Lee University School of Law, says that’s just the beginning.

“It’s not just the cost of imprisonment, it’s also all the subsequent costs.”

It isn’t easy to get a job after serving time in prison. There are stigmas and bans, and Demleitner notes, recidivism rates are high.

 

UPDATE:
In his testimony before the Sentencing Commission, Holder said "straightforward adjustment to sentencing ranges" would send "a strong message about the fairness of our criminal justice system, and it would help to rein in federal prison spending while focusing limited resources on the most serious threats to public safety."

PODCAST: Shop 'til you freeze

Thu, 2014-03-13 04:27

Americans put on their layers, their boots, their gloves and shopped anyway.  Economists are worried about what the weather's doing to the economy, yet there was a vivid sign today that Americans were out there buying after all.  The government said retail sales bounced back in February, up three tenths percent.  It was a decent months for cars and trucks, furniture, and clothes. 

Plus, foreclosure filings in the U.S. hit a seven-year low in February, according to a monthly report from RealtyTrac. But that doesn’t mean there aren't still problems – the newest of which is so-called “zombie properties,” properties vacated by the homeowner, lingering for years without being repossessed or resold, attracting vandals and blight. 

What would a post-Fannie and Freddie world look like?

Thu, 2014-03-13 03:42

Turns out Republicans and Democrats can agree on some things. A bipartisan plan emerged in the Senate this week, backed by Senate Banking Committee leaders Tim Johnson (D-SD) and Mike Crapo (R-ID), that would wind down mortgage providers Fannie Mae and Freddie Mac. 

Fannie and Freddie were originally set up to make buying a home cheaper for many Americans. But after they went bust during the last financial crisis, many in Washington want the quasi-governmental outfits snuffed out for good. That's a tall order, since voters and the powerful real estate industry enjoy their subsidized mortgages.

Marketplace's economics commentator Chris Farrell joins Morning Report host David Brancaccio to discuss the potential consequences for home buyers -- good and bad.

Click on the audio player above to hear the full report. 

Hey, let's crowdsource this California law!

Thu, 2014-03-13 03:29

You know about Wikipedia, the online encyclopedia anyone can edit. Well, there’s an effort in California to use the wiki model to draft legislation -- actual bills that will be introduced to the state legislature.

It’s often said there are two certainties in life, death and taxes. That’s what’s California Assemblyman Mike Gatto was thinking about when he decided to launch an experiment in crowdsourcing legislation.

His chosen topic? The state’s probate code, which regulates wills.

“We’ve seen a lot of very excited feedback on what is, you know, a somewhat boring subject,” he says.

Gatto had heard the probate code needed some updating. And it seemed like a safe topic for his first wiki-bill. Plus, he wanted a boring subject, so special-interest groups would be less likely to co-opt the legislation.

“So we thought this was a wonderfully happy medium, pun intended, for the public to get involved to directly affect a bill,” Gatto says.

Through March 7, anyone can go to the page and add language or start a discussion. But, so far, not too many people have. The wiki-page shows about 12 contributors.

Tim Bonnemann is CEO of Intellitics, a company that helps organizations connect and interact with people through social media. He’s been observing the wiki-bill process and says Gatto’s team was too hands off.

“And they also started at the most difficult part, which is writing legislative copy,” he says. “When maybe they should have invited people more to share stories and indentify challenges and develop solutions together.”

And as for keeping special interests out of the mix, Bonnemann says wiki-bills might actually help. 

“In general, the more public, the more transparent the process is overall, the more difficult it becomes for people to slip things in unnoticed,” he says.

Gatto has pledged to introduce whatever bill his wiki-contributors come up with. And he says, maybe next year, they can refine the process and take on more timely issues, like crowd sourcing ideas for dealing with California’s drought.

Who are the Russian oligarchs?

Thu, 2014-03-13 02:48

Russian Oligarchs are everywhere. Whether they’re losing billions in Sochi investments, escaping sanctions over the Ukranian occupation, or fearing a new front in the crisis, they seem to pop up like boogeymen whenever the media talks about Russia. But who exactly are these shadowy figures? To put it simply, they’re extremely wealthy men that wield an incredible amount of influence in Russian politics. Think the Koch brothers or George Soros multiplied by a thousand. To understand anything about Russia, you have to understand the oligarchs. Here are six of the most prominent:

Alisher Usmanov

The richest man in Russia and the 40th richest person in the world, Alisher Usmanov started in the metal industry, but now has interests in telecommunications, media, and sports. Last year, he invested about $100 million in Apple. The former fencing champion spent six years in an Uzbeki jail on fraud and extortion charges, but was eventually cleared by a Soviet court. Usmanov is close with Putin, firing managers of a magazine he owned after it printed ‘anti-Putin’ photos. Last July, he was given the Order for Service to the Fatherland, Russia’s highest civil award.

Oleg Deripaska

Oleg Deripaska spent $1 billion of his own money to fund the Sochi Olympics, but he’s best known to western audiences for the $15,000 he spent to construct a dog shelter and save some of Sochi’s strays. That good publicity is something of a rarity for aluminum magnate Deripaska, as he was embroiled in ‘yachtgate’, when two prominent British politicians boarded a yacht he owned. He also lost a fair amount of his fortune when the great recession hit and the aluminum market collapsed. Nevertheless, he remains a favorite of Putin, and he’s still worth $6.5 billion, which is nothing to sneeze at.

Mikhail Prokorov

Mikhail Prokorov owns the Brooklyn Nets, rapped on Russian TV, and has backflipped on a jet ski. If that weren’t exciting enough, he’s even criticized Vladimir Putin. In public. Although Prokorov got rich through metals, his current concern is politics. He ran as an independent candidate against Putin in the 2012 election, and he’s now building a political party called ‘The Civic Platform’. Although he only got 8% of the vote two years ago, he intends to expand ‘The Civic Platform’ until it’s ready to face Putin’s ‘United Russia’ party.

Roman Abramovich

An oil tycoon, former governor, and owner of the world’s largest yacht, Roman Abramovich is one of Putin’s closest allies. He also happens to be the 137th richest person in the world. Not just a businessman, Abramovich was governor, then Duma chairman of Chutokta, an icy province in Russia’s far east. At times controversial, Abramovich had a major falling out with former bussiness-partner and Putin king-maker Boris Berezovsky, who committed suicide after his $5 billion lawsuit against Abramovich was unsuccessful.

Leonid Mikhelson

Leonid Mikhelson sold his Soviet car in order to take part in the first rounds of Russia’s privatization. He’s now CEO of Novatek, one of Russia’s largest natural gas producers, and his fortune is estimated at $15.6 billion. Mikhelson is also one of the most important players in the art world, running the V-A-C foundation, which promotes Russian art. And who does he want to eventually run the foundation after him? Why, his daughter Victoria, who, perhaps not coincidentally, the foundation is named after. Not bad for an art history student at NYU.

Mikhail Khodorkovsky

Perhaps the most well known oligarch isn’t really an oligarch at all, as he’s only worth $170 million. Before he spent more than a decade in prison on charges of tax evasion and fraud, Mikhail Khodorkovsky was the richest man in Russia. Like so many other oligarchs, he made his fortune when the Soviet Union privatized its resources, tying himself in to the country’s controversial move to a non-communist economy. But after supporting Putin’s liberal opposition, Khodorkovsky found himself in jail, on what his lawyers contended were trumped charges. Ten years later, in what was widely seen as a move to improve Russia’s image before the Sochi games, Putin pardoned him. Khodorkovsky declared that he would no longer be involved in Russian politics, but on March 10th, he addressed a crowd of protesters in Kiev, railing against the Russian government. As for what’s next for one of the most famous (former) Russian oligarchs, only time will tell.

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