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PODCAST: The presidential library

Tue, 2015-05-12 03:00

Interest rates are jumping on what is a volatile day for the bond market. More on that. Plus, the announcement that Fox is cancelling American Idol comes right before the first part of the season finale, airing tomorrow. We look at the show which has been on air 13 years and was once a ratings juggernaut, an early talent show setting the mold for others, but which has now lost its luster. And with the announcement that President Barack Obama's presidential library will be located in Chicago, we look at the likely economic impact on the city, and what's happened with the other 13 presidential libraries.

The end is nigh for Idol

Tue, 2015-05-12 02:00

American Idol, the program that launched the careers of singers Kelly Clarkson and Carrie Underwood, will take its final curtain call after its next season, Fox announced Monday.

“Nothing is forever in TV land,” says Sam Craig, a professor at New York University. After 15 seasons spanning 13 years, he says this is an “inexorable movement.”

Idol’s audience is now less than a third the size it was at its peak in 2006. But at nine million viewers per episode, it's still significant, says Max Dawson, the director of national television and video research at Frank N. Magid Associates.

“That still makes Idol one of the top two or three rated programs on Wednesday nights,” he says. “The problem is this: it’s probably one of the most expensive programs on Wednesday night.”

In the beginning, Dawson says Idol was relatively cheap to make, but it’s become increasing expensive as its host and judges have commanded higher salaries. 

The 15-season run of "American Idol" inspired a number of reality TV shows with a panel of snarky judges — some of which will now outlast the program:

Lenders, borrowers remain cool on home equity credit

Tue, 2015-05-12 02:00

In years past, home equity lines of credit, or HELOCs, were part of the reason so many homeowners ended up underwater on their loans. We'll get our latest glimpse at that type of borrowing when the Federal Reserve Bank of New York releases its quarterly Household Debt and Credit Report Tuesday.

But don’t look for a return of the “home as ATM” phenomenon any time soon. Housing values are coming back, but both borrowers and lenders remain cool on HELOCs.

Brian Jacobsen, chief portfolio strategist at Wells Fargo, says homeowners remain gun-shy from the recession, and that's not the only reason: "Perhaps their incomes aren't able to support it. Or maybe their credit ratings are such that they're able to qualify for those loans," Jacobsen says.

Tighter regulation is also part of the story, says Stan Shipley, a managing director at Evercore ISI.

“The consumers would like to borrow more,” Shipley says, “but because of Dodd-Frank laws the banks are not going to let them become as leveraged as they were in 2006-2007.”

Still, if you do qualify, you can still get these loans, and some forecasts point to a slight rebound. 

Erin Lantz, vice president of mortgages at Zillow, says going forward all those low-rate montages people got five to seven years ago could help people tap home equity in the future.

"Consumers have all of these low-rate, first-line mortgages and they'll look at home equity lines of credit as the way to tap equity in their homes without touching that low-rate first mortgage," Lantz says.

According to data from the New York Fed, the real movers on household debt these days, are student loans and car loans.

The scissors that cost as much as $1000

Tue, 2015-05-12 02:00

We're launching a series called Pro Tool: Tools of the Professional. What we're looking for is that must-have device in the possession of anyone in the workforce; be they a welder or a bike messenger or a comedian.

The first item in our series? A pair of scissors.

Professional: Lauren Popper, hairdresser at La Maison Salan & Spa in Short Hills, New Jersey.

Marketplace Morning Report host David Brancaccio gets a haircut from Lauren Popper, hairdresser at La Maison Salan & Spa in Short Hills, New Jersey.

Pro Tool: A pair of 1977 Nic shears, made in Japan.

Why it's a Pro Tool: "You will see the difference, you will hear the difference in a haircut because [cheaper shears] will clank. You won't have a clean line. I see a total difference in how my haircuts look and how they grow out." -Lauren Popper

Cost in 1977: $175

Cost today: Up to $1,000

Do presidential libraries really pay off for cities?

Tue, 2015-05-12 01:59

The waiting is over. Tuesday Morning, President Barack Obama announced the city that will be home to the next presidential library. 

And as expected, the library will be located in Chicago, President Obama's home town. The University of Chicago, which is working with the Obama Foundation, has proposed to house the library on one of three potential sites on the city's economically challenged South Side.

There were also bids from Honolulu and New York.

The Obama Foundation will need to raise hundreds of millions of dollars for the library — a process that will take at least a couple years.

For the winning city, a presidential library can offer mixed results, in terms of economic development.

In Chicago, Washington Park has been mentioned for months as one of the potential locations for the library. It's an area characterized by vacant lots and empty buildings. "It's lacking development and investment," says Jason Horwitz, a senior consultant at the Anderson Economic Group.

In a study funded by the University of Chicago, Horwitz looked at the potential economic benefit of  building a the library at Washington Park, as well as at other nearby areas.

"There's going to be a lot of genuinely new investment in this area, and that's going to provide a real opportunity for others to come in and invest, as well," Horwitz says.

The University of Chicago wants to place it  where it can have the greatest economic impact.

Horwitz says the development could create more than $200 million in economic activity from dozens of new restaurants and shops, even a hotel, to meet the demands of 800,000 library visitors a year.

"It would be fantastically unprecedented for 800,000 visitors to come to a presidential library," says Anthony Clark.

Five years ago, Clark was a senior aide in the U.S. House of Representatives, focusing on oversight of the National Archives and presidential libraries. He has since authored a book on presidential libraries, "The Last Campaign."

"The idea that the library creates an economic boost that lasts indefinitely is just not borne out by the numbers," says Clark. "In fact, library attendance, no matter which library ... declines over time."

Many of the 13 current presidential libraries have attendance figures in the tens of thousands, or low hundreds of thousands.

"The most-visited temporary exhibit at a presidential library in history was at the Reagan a few years ago, and it wasn't on the wit and wisdom of the great communicator, it wasn't on the secrets of the Cold War, it was on the treasures of the Disney vault," says Clark.

So, the impact the libraries have on local economies is modest, he says.

Benjamin Hufbauer agrees. He is the author of  "Presidential Temples," and teaches a course about presidential libraries at the University of Louisville.

But Hufbauer points to one big exception: the Clinton library, which was built amidst mostly abandoned warehouses in Little Rock, Arkansas.

"It sparked hundreds of millions of dollars of private investment," says Hufbauer. "And now it's a very successful touristy area in downtown Little Rock."

So why was the Clinton library different?

Horwitz says it's because the library did not have to do all the heavy lifting in redeveloping the area.

"It certainly seems that the Clinton Library served as an anchor," says Horwitz. "When a lot of other development was occurring in this downtown area, and it was a compliment to that."

In other words, presidential libraries can help, but they can't transform an area all by themselves.

You've got acquisition

Tue, 2015-05-12 01:51
$4.4 billion

That's the amount that Verizon Communications will pay to acquire AOL in an all-cash deal announced Tuesday. The move comes as Verizon attempts to bolster its ability to produce and distribute video content.

800,000 visitors

Some experts estimate that's how many visitors can be expected per year at the new presidential library. And it was announced Tuesday that President Barack Obama's library will make its home in Chicago. While the library could bring in much needed revenue to the area, others point out the sometimes disappointing attendance numbers at other, existing presidential libraries.

53.5 million

That's how many Millennials are in the workforce, according to Pew Research, just edging out Gen X last quarter to become the best-represented generation in the workforce. 

$175

That's how much a pair of Nic shears cost in 1977. These days, they can cost as much as $1000. But hairdresser Lauren Popper of La Maison Salan & Spa in Short Hills, New Jersey, says they're absolutely necessary to do her job well. You'll find out more about must-have tools in our series "Pro Tool: Tools of the Professional." We'll be exploring those absolutely necessary devices in the possession of anyone in the workforce; be they a welder or a bike messenger or a comedian.

11 billion

That's how many ketchup packets H. J. Heinz says it sells every year. It's very likely you've gotten a few of those billions, tossed in a fast food bag, opened with teeth and spilled everywhere, over and over. We looked into the sorry state of the ketchup packet for our "I've Always Wondered..." series. Its invention was a byproduct of the sugar packet, but cost is getting in the way of innovation -- no restaurant wants to shell out more for something they'll give away.

Why are ketchup packets so... unsatisfying?

Mon, 2015-05-11 13:00

The H.J. Heinz Company says it sells about 11 billion of its nine gram ketchup packets every year.

We were directed to examine ketchup packets by Marketplace listener Kali den Heijer for the latest installment of our series, "I've Always Wondered." Den Heijer asked: "I've always wondered how they decided to make ketchup packets the size that they are."

Is that because one is never enough?

"Right, exactly," says writer Rich Cohen. And that's just the start. "You can't open them, and you gotta use your teeth, and you squeeze it out, and you never get enough, and it gets all over your hands."

In other words, there's a bigger question here: Why are ketchup packets so awful? Cohen thinks his Grandpa Ben played a role.

Ben Eisenstadt ran a diner across from the Brooklyn Naval Yard in the 1930s and 40s. It boomed during World War II, then went bust when all the sailors went home. Time for a new business.

"And he had this idea that he should package tea," Cohen says.

Eisenstadt worked in a tea-packing plant as a kid, and knew how the machines worked. He bought a machine to make tea bags, installed it in the empty diner and quickly found that this had been a terrible idea. Too much competition.

"So he didn't know what to do," Cohen says. "He's sort of out of money, completely out of ideas. And he goes out to a meal, at Cookie's in Brooklyn, with my Grandma Betty. And he's like 'What am I gonna do? What am I gonna do?' And she says, 'Why don't you package sugar?'"  

She had worked with Ben in the diner, cleaning up the bowls people had dipped spoons into. Gross. Eisenstadt re-configured the tea bag machine to make sugar packets. It was the first modern food-service packet. Later, he packaged other things: duck sauce, soy sauce.

Choen's theory: "The Platonic form of all the packets is that original tea-bagging machine, turned into a sugar machine, in the Cumberland Diner."

People who have worked in the food-service-packet-engineering world for decades say this is as good a theory as any. They confirm Eisenstadt invented the sugar packet, and that was the first one. The size could be a remnant.

Descendants of Grandpa Ben's tea-bag machine now churn out up to 8,000 ketchup packets a minute in the Red Gold factory near Indianapolis. Red Gold has packed tomatoes since 1942. Later, the company expanded into ketchup.

Dave Halt came in 17 years ago to help crack the food-service market. He asked customers what they wanted.

"It became very clear that they wanted to buy their ketchup packets in a particular size," Halt says. "[I] still haven't quite figured out how they decided that nine grams is the size that was needed."

Red Gold offers seven-and 11-gram packets, but there's very little demand.

Cost is another consideration: keeping moisture and oxygen from getting in, and keeping highly-acidic ketchup from eating its way out isn't easy, or cheap.

"The actual cost of the package is really more than the nine grams of ketchup that's inside," Halt says.

It's not that nobody has tried to design a better ketchup packet.

"There was a time when McDonald's was hiring every designer under the sun," says Jeremy Alexis. He worked for one of those design firms. This was about 12 years ago. McDonald's wanted innovation and improvements. So, the way designers do, Jeremy and the others spent a lot of time observing exactly how people used McDonalds' products. That meant riding around with moms-on-the-go, getting drive-thru while they're on the phone.

"And at the same time," he says, "the kids would be yelling, 'I want the food now! I need it now!' So they'd be handing the food back all at the same time."

Alexis and his colleagues brought a lot of new packet designs to McDonald's leadership. He says it was like lambs being led to the slaughter, because the new packet would cost more. McDonald's gives ketchup packets away; each one might cost a nickel, and this is a nickel and dime business.

Then in 2010, after years of effort, Heinz actually did introduce a new ketchup packet. The Dip and Squeeze was three times larger than typical packets and boasted an easier-to-use design."Old ketchup packet heads for trash" the Wall Street Journal declared at the time.

Nope. The packet costs more than three times as much to make. Operators worry teenage clerks would still pass them out by the handful.

NFL accepted millions in taxpayer dollars to honor military

Mon, 2015-05-11 13:00

The NFL proves itself to be greedier than the greediness it has already demonstrated.

News broke this weekend that at least some of those ceremonies honoring the troops you've seen at games the past several years have been paid advertisements. Paid advertisements funded by taxpayer money. 

To cite just one example, the New York Jets got $337,000 from the New Jersey National Guard over the course of four years for Hometown Hero segments.

Maybe it's just me, but you'd sort of have hoped the NFL would do it—just because.

How much is a 10-year forecast for cheap oil worth?

Mon, 2015-05-11 13:00

The Organization of the Petroleum Exporting Countries predicts oil prices will hang below a $100 a barrel for as long as a decade. At least that's what the cartel is forecasting in a draft strategy report obtained by the Wall Street Journal. OPEC did not respond to a request for the report.

Looking out to 2025, OPEC says crude will trade at about $76 a barrel in its most optimistic scenario.

Experts say it’s hard to predict what that would mean for the U.S. economy. One reason? The time frame isn't meaningful.

“It is always a fool's errand to be making predictions for oil prices — or frankly just about anything — 10 years ahead,” says Pavel Molchanov, an energy analyst with Raymond James.

Molchanov says cheaper oil has meant roughly a dollar-a-gallon decline in gas prices, translating into a $600 to $800 yearly benefit for a typical American household. But that benefit has been muted in the economy so far. 

“We had assumed the money would be treated as a windfall,  and consumers did better than that,” says Doug Handler, chief U.S. economist at IHS Global Insight.

Handler says instead of using their savings at the pump to splurge on clothing or dining out, consumers have been conservative, stashing their money away or paying down debt. That does little to goose consumer spending, a key driver of the economy.

Handler says cheaper oil's benefits may be more noticeable in lower inflation, especially in combination with a stronger U.S. dollar.

“The lower inflation, of course, improves the buying power of consumers,” he notes. “We’re hopeful that that phase two of the impact will kick in this year.”

But the volatility of oil forecasts may complicate any prognostications about economic impacts.

“The average may be $70 a barrel, but the range could be $20-$150,” says Bob McNally, president of The Rapidan Group, an energy policy, market and geopolitical consulting firm. 

McNally says that volatility matters more for the economy, consumers and oil producers than oil’s average price.

 

Riding the oil price roller coaster in New Mexico

Mon, 2015-05-11 13:00

Asked where oil is being produced in Eddy County, New Mexico, Jake Marbach has a one-word answer: "Everywhere."

 He qualifies that with, "everywhere in the east two thirds of the county."  

There's always been oil in Eddy County. It's one of the major oil-producing counties in southeastern New Mexico, part of the Permian Basin that encompasses much of the West Texas oil patch. But in the last few years, fracking has opened up new deposits, with names like Bone Spring and Wolfcamp, and oil companies have been hiring firms like Marbach's Allied Land Services to find and purchase rights to do exploratory drilling.  But fracking is also expensive, and the economic viability of any new wells rides on the price of oil. Not that Marbach was following it last year, when it was up near $100.

"I'd look at it and admired it about once a week, just happy it was where it was at," he laughs. "But as far as actually tracking it? No. We were so busy and the companies kept ordering work, I didn't pay attention to it until it really started going down."

Last fall, he watched it with increasing trepidation as it dropped to $90, $80, $70 a barrel.

"When it went below $50, that's when they started pulling the plug on a lot of these projects," he says.

That happened in January, when his oil company customers cut him off en masse. He had to fire half his staff.

"I had one young guy that moved here from Fort Worth just specifically to work for me, and I had to lay him off," he says. "That was... that was rough."

Months later, oil has crept closer to $60, and his business is just starting to come back. You can see the mood in the records room of the county clerk's office where landmen like Marbach do much of their work. 

It's a room with six long narrow tables that double as bookshelves for hundreds of oversized hardbacks--full of deeds and mortgages going back to the 1800s. When oil was $100, Marbach says these tables were packed shoulder to shoulder, but now there are just four people at each, one of whom is Wesley Burnett—the guy Marbach fired.

"I mean, everyone kind of knew for a couple weeks, you know," he says of his firing. "It was like: 'When is it going to happen?'"

He spent a few unemployed weeks doing odd jobs and watching TV at home, but he's back doing land title research for oil companies. For now. 

"That's also a risk, like, everyone in this courthouse is taking, doing this kind of work," he says. "They kind of know that it can end at the drop of a pin."

But the ups and downs of oil don't only impact the people who work for it. In fact, oil has kind of remade the city of Carlsbad. 

The roads here are full of trucks: eighteen-wheelers hauling water and heavy equipment and pickups with oil company logos on the side or in the rear windshield. They fill the parking lots of restaurants like McAlister's and Happy's, and of the hotels that are the newest, tallest buildings in town. At least six have opened since the oil boom started.

"I would say that a good 75 percent of our guests, are tied to the oil and gas industry in some way, shape, or form," says David Burton, general manager of the Comfort Suites, which opened in October. 

Oil and gas industry workers are easy to identify, from their company shirts, company trucks or company credit cards. As the oil price fell, and companies began to cut back, they also cut back their hotel reservations — and their willingness to pay top dollar. 

"Our rates have come down probably close to a hundred dollars a night," says Burton. "They were about $350 and they've come down to about $250."

For permanent housing, supply has taken longer to meet demand. 

"We were short on housing before the oil boom started," says Jeff Campbell, director of marketing and business development at the Carlsbad Department of Development. 

That housing shortage worsened over the last five years, as the oil boom nearly doubled the population from under 30,000 to what Campbell tallies at more than 50,000 people. (This count is based on water usage and Campbell believes is more accurate than the lower Census figures.)

"Right now when the oil play is down a little bit it gives a little bit of a chance to catch up," he says.

The "catching up" comes in the form of new multifamily housing like the Copperstone Apartments, where contractors were recently spreading cement onto the last few two-story buildings.

"Oh yeah, there's a lot of work right here, bro," said Cesar Enriquez as he rinsed cement off his tools. "There's a lot of work right here and in Hobbs, too."

 Hobbs is another town in New Mexican oil country — where you can be sure a lot people are hoping the oil price rebound continues.

Gen. Stanley McChrystal on what makes a good leader

Mon, 2015-05-11 13:00

When retired U.S. Army General Stanley McChrystal took control of a Joint Special Operations Task Force in Iraq, those in his charge were highly trained, and very good at their job. And yet, "what we found was, the outcomes were diminishing. I.e., we were losing the war in Iraq,” says McChrystal.  “We could either continue to be very, very good at what we did and fail — or we could change ourselves fundamentally, to be successful.”

It's that lesson that McChrystal thinks business leaders should take to heart, something he chronicles in his new book,  “Team of Teams: New Rules of Engagement for a Complex World."

On getting large, bureaucratic institutions to make changes

In the organizations that I was in, which are so elite, sometimes the aversion to change or resistance is even higher. Their very identity is wrapped up into how things have been done. But there still needs to be this creation of the idea of shared consciousness that we all understand what we're trying to do against a common understanding of what the problem is, so we can react quickly.

On "sharing information until it's almost illegal"

The old idea that we will only share information with someone who needs to know, that's sort of the tagline from movies and whatnot, is basically flawed because — who knows who needs to know?

On how technology might, or might not, change the way we do business:

What we see in Silicon Valley right now is a tremendous amount of innovation. But the idea that big data is suddenly going to give us the answer to the problem is something that, in the book, we find to be incorrect because the speed at which data is being created and changed stays ahead of our ability to harness it.

On his ideal leader of the future

I really believe it's going to be someone who creates an ecosystem. In that ecosystem, the leader allows a whole host of leaders inside that to interact and be effective, and that's where the power comes from.

On the Rolling Stone article that led to his eventual retirement

In the case of trusting your staff, I trusted my team in a case that, when sometimes things come out wrong, the most important thing is to learn from it quickly, learn from it immediately, keep the confidence of the organization up and move forward and that's what I think is really important.

Since his retirement, General McChrystal has also been an advocate of universal national service. Listen to the audio below for more of his conversation with Kai Ryssdal:

As upfronts begin, advertisers hedge bets on TV ads

Mon, 2015-05-11 13:00

Throughout this week, network TV executives and advertisers will be meeting in Manhattan to hash out deals for some $20 billion of TV ads for the upcoming year.  People in the business call these meetings the “upfronts.” There's a lot of showmanship. Univision's presentation on Tuesday features a panel that includes Bill Clinton and a performance by Ricky Martin.

At one time, about three-fourths of all TV ads were booked during the upfronts.  But as with most aspects of media these days, this is no longer the case.

Jon Steinlauf is president of ad Sales for Scripps Networks, which produces shows like House Hunters and Chopped.  He says access to more and more consumer data means advertisers are more strategic with their investments. 

"Is it better to make decisions early and get the cost savings that go along with it?" he said. "Or are we better off holding our money and making that decision closer and closer to air?"

Today’s ad buyers want both the broad reach of television and the flexibility of the internet. Steinlauf says the upfront still accounts for half of all Scripps' ad sales. 

And while TV viewership has been dropping for years now, the market for content is actually bigger than ever.

"We have to bear in mind that the definitions are very very much changing in the TV landscape,” said Macquarie Media analyst Tim Nollen.

Even though the upfront may be shrinking, the news is not all bad for the networks. Nollen points to the dramatic growth of mobile apps and DVRs in creating additional platforms to sell advertising.  

"How often do you see people sitting on a train, watching TV on their phone? Which was impossible to do even a few years ago," he says. "So, it’s just about everyone trying to grab pieces of that larger pie now."

Nollen notes that Nielsen ratings are still the metric used for assigning a dollar value to TV ads. However, the company is also looking at new ways to track eyeballs on things like digital ads for mobile aps.

Greece manages to make IMF repayment

Mon, 2015-05-11 13:00

Greece's finance minister on Monday authorized the transfer of 770 million euros to the International Monetary Fund, meaning the debt-saddled nation will meet this particular debt payment. But the Greek government will have very little fiscal liquidity for the month of May.  "This is absolutely the tightest it's been," says Douglas Elliott, a fellow at the Brookings Institution.

Athens will now hope to strike a new deal with European Union creditors that would unlock more bailout money without further tightening the screws on its battered finances. The country has approximately until the end of May or June until its newly-emptied coffers run dry. The question is: can Greece and the EU work out a new deal in time?

Germany's finance minister has said he wouldn't oppose a Greek referendum on the terms of such a deal, though the implication is that Greece's left-wing Syriza government would be supporting its passage. If Greek voters were to reject the terms of a new E. U. deal, Greece would likely exit the eurozone. John Psarapoulos, a blogger for The New Athenian, says "what [Syriza] is entitled to do is negotiate a controlled presence of Greece within the eurozone. It is not authorized to negotiate an exit, even a controlled one."

But even though Syriza has talked tough toward its EU creditors, it has moved to improve the country's finances, says Vicki Pryce, chief economic advisor at the Centre for Economic and Business Research. "In other words," Pryce says, "it's improved its fiscal position a lot more than many other countries have done."

So the EU may be moved by Greece's efforts... or frustrated enough to take a tougher line.

What can a board member do for a high-value startup?

Mon, 2015-05-11 09:41

When the anonymous sharing app Secret shut down recently after taking around $35 million in investment in its first year, it sparked an open conversation that touched on current frothy conditions in Silicon Valley, where high financing rounds and valuations have been getting more attention of late.  (Secret's valuation rose $60 million over just four months last year, but this pales in comparison to Uber, which is growing so rapidly that it might be on its way to a $50 billion valuation). A Google Ventures investor was quoted saying Secret raised too much, too soon. He later wrote that it's inadvisable for companies to sell stock too early

In an unrelated series of tweets, the president of the influential startup incubator Y Combinator presented a different view on today's startup financing scene, but one that also began on a cautionary note: "I am deeply uncomfortable by the continued phenomenon of startups raising multi-million dollar seed/Series A rounds with no board member." 

We wanted to know more, so we asked Y Combinator's Sam Altman for some details: 

What's the purpose of investors also serving as board members for the startups they inject money into?

An outside board member provides discipline and rigor.  If the company knows they have to present to the board once a month, everyone is focused on making sure things are moving in the right direction.  If there is no board meeting to act as a forcing function, there is less urgency.

Also, board members can often talk the founders out of their own (often healthy) delusions.  Delusions are good in some cases but not when a company is getting close to running out of money.  The board provides an important guardrail in cases like these.

 When did you start to see a shift away from that arrangement becoming the norm?  

I started to see the shift about four years ago.  It started with the start of party rounds (lots of investors writing small checks and no one single investor taking a board seat).  Then it got worse when VC firms started doing large seed rounds; they stopped taking board seats too.  It's a case of being very aggressive and trying to participate in more companies than they have bandwidth to help.

What can potential investors do in this environment to balance out responsibility for a startup's performance?

 I think that this is an easy problem for investors to fix — they can just return to their previous practice of rolling up their sleeves and helping companies. 

The 'State of Preschool' really depends on your state

Mon, 2015-05-11 08:15

Providing all kids in the U.S. with high-quality, publicly-funded preschool would take a concentrated overhaul to strengthen and build up existing state programs.

At the current progress rate, preschool for all children would take 300 years to achieve, according to Steven Barnett, director of the National Institute for Early Education Research, which issued the State of Preschool 2014 report Monday.

The 2013-14 school year saw state funding for pre-K increase by more than $116 million nationwide, or 1 percent, adjusted for inflation. About half of that spending was in just one state — Michigan.

Barnett says since spending varies widely state to state, the country is still struggling to make gains in enrollment, funding and quality; ten states don't provide state-funded pre-K programs at all.

"When the average doesn't budge, but some places are moving rapidly ahead, that just tells you other places are dropping behind,” he says.

In five states in 2013-14, state funding per child for pre-K fell by 10 percent or more from the previous year, while in five different states, per-child spending increased by the same margin.

NIEERBarnett says the country spends about $1,000 less per pupil — adjusted for inflation — on pre-K now than a decade ago.

“Preschools are turning the corner, but they are turning so slowly," he says. "If we moved at the same rate as last year it would be 75 years before we enrolled half of the kids."

That's no exaggeration. From 2006 to 2010, enrollment increased every year at a steady pace. Barnett says that rate would have put half of the kids in the country in preschool in just 10 years. But from 2010 to 2014, there was effectively no progress made.

The report also reveals stark regional differences, with more students served in the east and south, compared to the west.

"It matters tremendously where you live," Barnett says. "Last time we measured quality, we saw the same disparities. There's no sense of urgency in many states."

He says more than half a million children — 40 percent of nationwide enrollment — were in programs that met less than half of the NIEER quality standards benchmarks.

"The vast majority of children served in state-funded pre-K are in programs where funding per child may be inadequate to provide a quality education."
—State of Preschool 2014

Barnett says investing in preschool yields a high return, but only if states also invest in high-quality education standards.

Nasdaq experiments with the Bitcoin blockchain

Mon, 2015-05-11 03:00

Nasdaq announced on Monday that it's launching an "enterprise-wide initiative" to use the blockchain—the distributed ledger that makes Bitcoin possible.

The first application will be as a service for privately-held companies to allow their shareholders to buy and sell shares on a system based on the blockchain. Instead of the transactions being recorded in the separate ledgers of various lawyers, Nasdaq CIO Brad Peterson says transactions will be recorded in a form that anyone in the market can see. 

"The best argument against using the Bitcoin blockchain is that it's new," says Jim Harper, senior fellow at the Cato Institute. "It's only been around for a few years and hasn't had the real testing that it probably needs." 

Harper says the Nasdaq experiment could be just such a test.

PODCAST: The solution is border collies

Mon, 2015-05-11 03:00

We look at what happened with German bonds; calm today after a wild ride last week. Plus, we examine the effect Fox's hit show "Empire" has had on the TV advertising game by cutting the amount of commercial time it sets aside per episode. And government contractors come in all shapes, as evidenced by a new effort from the National Park Service to hire border collies to chase geese off the National Mall. 

Washington's plan for getting the geese off the grass

Mon, 2015-05-11 02:17

The National Mall in Washington, D. C., has a fowl problem: Canada geese, and lots of them. These large migratory waterfowl are increasingly non-migratory thanks to relocation and hunting efforts. The roughly 3 pounds of droppings each can produce in one day can cause fish kills in ponds, and could even clog the newly-renovated reflecting pool.

"There's times of the year, when you walk over the Washington Monument grounds, there's not a place for you to put down a picnic blanket without feeling disgusting," says Michael Stachowicz, the National Park Service's turf management specialist.

That's why the government is asking for bids on a contract to have border collies (and their handlers) patrol the Mall. 

Stachowicz used to work for golf courses, and that's where he first witnessed how effective border collies are for humane goose population control. "They go in this crouch," Stachowicz explains, "it's really amazing to watch these border collies transform from a great dog into something that looks really predatory and wolf-like."

That stance, according to Doug Marcks, is called "the eye." The eye is basically the border collies' trade secret. It's part of the whole pantomime these dogs like to play with geese. And play is the key word—border collies are happy without ever actually grabbing the geese. They just enjoy terrorizing them.

Doug Marcks runs Geese Police DC, which is a franchise of the larger Geese Police company, based in Illinois. He and his two border collies Max and Bell drive around the D.C. area every day and make pit stops at clients—usually large, grassy corporate campuses and the like. After enough harassment, the geese fly away at the sight of Marcks's white pickup truck. And eventually they find a new place to live.

The NPS says the dogs will likely become a permanent fixture on the National Mall.

An "Empire" trend for TV ad buyers

Mon, 2015-05-11 02:00

This week, at the annual "Upfronts," TV networks will be showing off for advertisers. Among other shows, Fox will promote "Empire," which was the breakout hit last season. But "Empire" may get attention for another reason: An unusual advertising strategy. 

There are more than 14 minutes of ads on the average hour of network television. But "Empire" had closer to 10 minutes, thanks to a strategy of "limited commercial interruption." 

Billie Gold, VP of TV programming research at Carat, says this strategy makes the available ads more valuable—especially for launching a new product. 

Why isn't this strategy used more often? 

"Well, you can't do it all the time is the short answer," says Brian Wieser, senior analyst at Pivotal Research. "Because there's only so many advertisers willing to pay so much of a premium."

He says it's like the gold-plated Apple Watch of advertising—and there are only so many companies willing to pay that luxury price. 

Russia and China team up in agriculture

Mon, 2015-05-11 02:00

Agriculture makes up just 4 percent of Russian GDP, but that could change, as Russia announced last week the launch of a $2 billion investment fund with China to go toward agricultural projects. The two countries would cooperate on developing big swaths of arable land on each side of their borders. The partnership comes at a good time for Russia, which has been struggling since last year with sanctions from the U.S. and European Union. 

Russia answered sanctions from the West by saying, "Ok. We're not importing any food from Europe or the U.S." Now, Russia's hurtling toward a recession. William Cline, senior fellow with the Peterson Institute for International Economics says Russia’s under a great deal of pressure. 

At the same time, China has more than 1.3 billion mouths to feed. It's also under pressure to diversify its food and energy sources. Will Pomeranz, deputy director of the Wilson Center’s Kennan Institute, says Russia’s got food and plenty of oil and gas to sell. But to put this deal in perspective, “$2 billion is just not a lot of money,” he says.  

Russia’s agricultural output is more than $100 billion; China’s is more like a trillion. So Pomeranz says at best, this investment is really small potatoes. Or a modest beginning to a stronger partnership down the road. 

 

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