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Paula Deen buys back rights to her Food Network show

Wed, 2014-09-24 02:00

Southern cook Paula Deen is attempting a comeback by launching a new online cooking network on Wednesday.

Deen was one of the biggest names in food television until racist remarks she made off screen became public last year. As a result, the Food Network cut ties with her and she was dropped by sponsors. 

But before her racist remarks, Paula Deen was best known for her artery-clogging recipes, like the Lady’s Brunch Burger: a burger paddy stacked with a fried egg and bacon, sandwiched between two glazed donuts for buns. She gleefully described it as “over the top – even for me!”

Viewers eager for access to Deen’s old shows with said gems, plus some new content, can sign up to pay $8 to $10 a month for access to her new online network, launched by her Paula Deen Ventures with the backing of private investment firm Najafi Companies.

“About 15 percent of Americans do look up recipes online,” says Jerry Power, with the USC Marshall School of Business, adding the cook book market is also sizable. “So it’s a fairly stable and good sized market that she’s going after.”

But getting people to subscribe—controversy aside—could be a tough sell, since there’s already so many free sources of cooking shows and recipes, says Max Dawson, director of national television and video for Frank N. Magid Associates.

“Paula Deen’s audience, the sort of people who really love her, they’re not early adopters,” explains Dawson. “They’re not experimenting with new content distribution paradigms.”

Those who do could pay a similar amount for service like Netflix and getting lots more variety.

Paula Deen is far from the first celeb to start her own website. Here's a few other examples:

Preserve

Created—or "edited"—by Blake Lively, Preserve is like Etsy run through an Instagram filter and marketed to a much higher income tax bracket. It's structured like a lifestyle magazine and proceeds go to Lively's charity.

Funny or Die

Will Ferrell and Adam McKay's video site has expanded into a media empire. Its big hits like "Billy on the Street" and "Drunk History" have been adapted for TV, and "Between Two Ferns" won an Emmy after an appearance from President Barack Obama.

Goop

Gwenyth Paltrow's lifestyle site also boasts recipes, a store and a blog, which made the news in March when Paltrow and Coldplay frontman Chris Martin used the site to announce their "Conscious Uncoupling" (some call that a divorce).

Sarah Palin Channel

Another subscription service, the Sarah Palin Channel charges $9.95 a month or $99.95 for the year, but you view a national debt ticker and a countdown of Obama's days left in office for free.

Hello Giggles

Zooey Deschanel's site offers entertainment and lifestyle writing aimed at women, but everyone can enjoy their various live feeds of kittens, puppies, cicadas, owls and more.

CORRECTION: An earlier version of this story misspelled Paula Deen's name in the headline. The text has been corrected.

#Scandal heads to #Twitter

Wed, 2014-09-24 02:00

Even if you don't watch the wildly popular television drama Scandal, you'd probably know of its popularity if you spent some time poking around Twitter. Aside from a huge television audience, the show is a favorite of the blue bird. With the season premiere coming Thursday of this week, we talked with Darby Stanchfield, better known as Abby Whelan on Scandal. And for the record, she has her very own hashtag: #SassyAbby.

Tell me about the community of Scandal fans on Twitter.

They’ve named themselves Gladiators. They’re super passionate. They’re smart. They’re funny. There’s not a thing that doesn’t get by them.

What’s an example of something that fans have caught that surprised you?

I used to have this signature coffee mug that I would use in my scenes, and one time I grabbed one of the company mugs that was in the kitchen area, and I think someone was like, “Wait a minute, where’s Abby’s mug that matches her hair?” Granted, every single series regular, and usually the creator, we’re all live-tweeting, whether we’re on set or we’re not working or at home.

Part of the contract.

You know it’s not, actually. We’re not paid to do it. Actually, Kerry Washington–it was her idea–and she talked to [series creator Shonda Rhimes] about it, and Shonda sent out this email that said we all needed to sign up on Twitter. We all did it, because our boss was asking us to, but it ended up being the most effective, grass-roots way to help the audience discover this crazy political drama called Scandal.

You have your own hashtag, #SASSYABBY.

One of the ways that I differentiate myself from the other cast-mates is I basically go into character during the live tweeting. And the way you know is I put my caps lock on and I just make snarky comments from Abby’s point of view.

How has the way that you think about being an actor changed because of Twitter? And how is your understanding of your own character shaped by the technology around you, even when you’re not on the set?

Twitter almost has the effect of a live theater event. You have an immediate interaction with the audience. You know when something lands and when it’s funny. When I’m on Twitter, there’s a visceral reaction immediately with the flood of tweets that come in about any given moment in my performance. And it’s as close as you can get to live theater with a television show. But in terms of my creative process or how I think about my character, I would say that’s still very traditional. I have my point of view, and I always find a way to love my character and tell that story.

The interstate tax break battle

Wed, 2014-09-24 01:30

Since 1962, Forbes Magazine has been headquartered on 5th Avenue in New York City, behind a limestone facade with Ionic columns. But by the end of the year, it's moving a twenty-minute train ride away to a glass tower in Jersey City.  

For decades, companies in New York City have moved offices across the Hudson River, to the city that has been dubbed New York's "sixth borough."

"You can look not too far away and see Manhattan, you’re on the water, and the rent’s a lot lower," says Gordon MacInnes, president of local policy watchdog New Jersey Policy Perspective. 

For many of those companies, there has been another, bonus factor: Tax breaks. Forbes has been approved for $27 million in tax credits by New Jersey's Economic Development Authority. It's a small example of a growing practice in the state, which has pledged tax incentives of $1.6 billion in the last ten months—more than in the first ten years of the millennium. 

"It’s the only thing that New Jersey’s doing to crawl out of the great recession," says MacInnes. "And so if this is the only thing you have, do a lot of it."

New Jersey's incentive programs have meant a spate of calls from New York City businesses to Lee Winter, director of incentives at Grant Thornton LLP. "There’s a certain back and forth, but right now I’d say New Jersey is winning that battle," says Winter.

But how does bringing a company from New York City to Jersey City affect the regional economy? 

"No one thinks in terms of the region, they just think of their state," says Winter. "So, you know, if a company moves from New York to New Jersey, those really are new jobs—to New Jersey."

While this interstate arms race isn't new, the recession made it more fierce according to Greg LeRoy of Good Jobs First, a long-time monitor and critic of tax incentives. 

"States and cities are spending more than $70 billion a year for economic development, and that number’s been steadily up in recent years," says LeRoy. "There’s less money available to build infrastructure, to retrain workers, to keep classroom sizes small. Those are things that benefit all employers. And instead we’re putting lots of eggs in a few corporate baskets."

Seth Pinsky, former president of the New York City Economic Development Corporation, defends the use of tax incentives for specific projects, such as grocery delivery company FreshDirect, which was granted  more than $100 million by his agency. But he also says they were "not the optimal form of government investment," and emphasized instead the important of long-term investment in workforce training, infrastructure and basic research.

"Tax incentives are easy to explain to people," he says. "They’re easy to explain to businesses. They're appealing to politicians. Long term investments are harder. Unless and until the American public itself starts thinking long term again, it’s going to be hard to turn economic development officials back towards thinking long term as well."

General Motors adds insult to injury for Detroit

Tue, 2014-09-23 13:54

General Motors is trying to re-establish the luxury bona fides of the Cadillac brand, by moving Cadillac's global headquarters to New York next year.

High end consumers in a global city – it makes sense. Still, one wonders what Antoine de la Mothe Cadillac – the guy who founded the City of Detroit – would think if he were still around.

NIH gives $10.1 million for gender-balanced research

Tue, 2014-09-23 13:53

The National Institutes of Health want to end a long-standing bias in biomedical research, towards men. It turns out when researchers do what are called pre-clinical studies, most of the time they’re using male animals and male cells. Today the NIH announced that it has awarded an extra $10 million to help bring more balance into the lab.

Researchers have long preferred male animals and cells, partly because they thought the female menstrual cycle introduced too much variability. That’s not true, says Janine Austin Clayton, director of the Office of Research on Women’s Health at the NIH. This additional funding encourages researchers to study both sexes, she says.

“We’re really looking to transform how science is done, and in order for us to do that, we have to help scientists understand the methods and the benefits of studying both sexes,” Clayton says.

By not studying both sexes, Clayton says we may be missing out on discoveries that could help both men and women. One grant will help look at why women have higher rates of Alzheimer’s disease, for example. Other studies will look at sex differences in stroke, lung disease and alcohol abuse.

But is $10 million enough to change science?

“It will hopefully spill over,” says Kathryn Sandberg, director the Center for the Study of Sex Differences in Health, Aging and Disease at Georgetown University. Researchers will present their work at meetings, and others may become interested, she says.

“I think it’s a good first step,” Sandberg says.

The money won’t just bring more female subjects into the mix. Sarah D’Orazio, an associate professor at the University of Kentucky, has a grant from the NIH to study the immune response in mice to the bacterium Listeria monocytogenes. The extra $100,000 in supplemental funding will help her buy male mice. Each one costs $24, she says, plus shipping and lodging.

“They’re very well cared for here at the University of Kentucky. So I have, basically, a hotel bill that I have to pay for the mice while they’re here during our experiment,” she says.

D’Orazio says she had done small studies with both males and females in the past.

“We had an observation all along that female mice were much more susceptible to the infection, and we just didn’t really have the funding to follow up on that observation,” D’Orazio says.

If she can prove there is a difference, D’Orazio says she could get more funding to study why and develop treatments to help women.

Making the inversion game harder to play

Tue, 2014-09-23 13:52

The Treasury Department has announced that it's going to change tax rules to curb corporate inversions - deals that let U.S. companies move their headquarters overseas, and avoid U.S. taxes. 

The new rules would keep companies from playing one of their favorite inversion games:  hopscotch.

Here's how you play: say you’re a U.S. company with a foreign subsidiary. The subsidiary earned loads of money. But you don’t want to bring it back to the U.S., where you’d have to pay taxes on it.  So the subsidiary loans the money to a foreign parent you create through an inversion.

“They hopscotch over their U.S. parent," says Lee Sheppard, contributing editor to the journal Tax Notes. "That’s why it’s called hopscotch."

Sheppard says the new Treasury rules would make hopscotching illegal. And you can’t play skinny down anymore, either.  That’s a way to shrink a U.S. company’s share in a foreign firm created through an inversion. 

“I think these rules will be effective at stopping some of the abuses of the past," says Steven Rosenthal, a senior fellow at the Urban/Brookings Tax Policy Center. “The question, though, is,  how effective they will be at stopping potentially new abuses.”

Especially since Treasury hasn’t banned all of the inversion games. Take earnings stripping. That’s where a U.S. company takes out a big loan from the foreign parent it creates in an inversion, and gets to write off the debt payments.  

Still, Treasury is making inversions more complicated.

“A lot of transactions that might have been relatively easy are now going to have to be analyzed much more carefully,” says Ryan Dudley, a partner at the accounting firm,  Friedman LLP.

In fact, some of the big inversions announced lately may not go through now, because Treasury says the new rules are effective immediately.  So if you’ve announced a big inversion deal, but haven’t completed it, you may have to find a new game to play. 

Student loan default rates don't tell the whole story

Tue, 2014-09-23 13:30

This week, the U.S. Department of Education will release data on the percentage of borrowers who have defaulted on federal student loans over the last three years. Schools with high rates of default face consequences.

There are new standards. According to Nick Hillman, an assistant professor at the University of Wisconsin-Madison School of Education, a college doesn’t want its default rate to hit 40 percent a year, or 30 percent over three years:  “They eventually could lose access to not just their student loans, but also Pell Grants and other types of federal aid, which can rack up to millions of dollars, depending on the institution.”

If a school is worried about its default rate, Hillman says, that institution will try hard to lower it. “There’s a lot of gaming that can happen, and just really weak incentives and penalties involved with current policies,” he says. Schools can push students to ask for forbearance, or defer payments.

According to Thomas Weko, a managing researcher in the American Institutes for Research’s education program, “Not that many institutions fail to meet this test.” After the government released the last data set on default rates, it penalized eight schools out of some 6,000.  Weko says a school that is worried about its default rate can hire consultants for tracking borrowers who are at risk of default, “doing sort of briefings and trainings with students.” A college that can’t lower its default rate, Weko adds, definitely has problems navigating the federal financial aid system.

“It’s like knowing where the speed camera is, and still getting it wrong,” he jokes.

According to Jacob Gross, a professor in the University of Louisville’s College of Education and Human Development, this highlights a bigger issue. “I think a real important part of this debate is whose fault is default,” he says.

Is default the student’s burden? Or the institution’s? And the federal government doesn’t always consider a would-be borrowers’ credit risk the way private lenders can.

'Black-ish' is a sitcom unafraid of big questions

Tue, 2014-09-23 12:43

“black-ish” is being hailed for bringing new ideas to the family sitcom landscape, but it's all very familiar for creator Kenya Barris.

“My wife is a doctor, we have five kids. We kind of came from humble beginnings and pulled ourselves up," Barris says. "[Then we] looked around at who our kids were, looked around at our friends’ kids, and kept having that same conversation over and over: We didn't really recognize the life that they were living compared to the life we were living."

That closely resembles the premise of "black-ish," which stars Anthony Anderson as a successful marketing executive who's worried his family — his four children, his wife (a doctor) and his father — have lost sight of their roots.

"Black-ish" also stars Tracee Ellis Ross and Laurence Fishburne. Larry Wilmore helped craft the first season before leaving for his own Comedy Central show.

Wilmore says he was on board as soon as he read the first page of the script. "black-ish" tackled race as a social issue, putting it at the center of the plot, not the sidebar.

"There was content on this show that I felt hadn't been on television in a long time," Wilmore says. "And the fact that he was so honest about race: It wasn’t a family that happened to be black.”

The show, which debuts Wednesday on ABC, has already drawn praise for the way it handles nuances of race, class and identity. TV critic Alan Sepinwall wrote that "black-ish" has a smart, defined point-of-view while still achieving the sitcom ideal of "mak[ing] the universal specific and the specific universal." NPR called it one of the fall's best new shows and the A.V. Club wrote that "Black-ish" refreshingly brings more perspectives and ideas to prime time, instead of just "'diversity' for diversity's sake."

For more on "black-ish," listen to Kai's conversation with Barris and Wilmore in the audio player above.

Tungsten: just try and smash it

Tue, 2014-09-23 11:43

The BBC’s Justin Rowlatt has a series exploring the economy through the elements – yes, those elements.

So tungsten is not the most famous element on the table. But you do know it well.

"Tungsten has two incredibly useful properties," says Rowlatt.  "It's very dense and very strong."

Since tungsten is unlikely to break or smash, you probably use it to cut through hard things.

"The only substance harder than tungsten are diamonds," says Rowlatt.

Listen to the full conversation in the audio player above.

Tribune Publishing enters the viral marketing sphere

Tue, 2014-09-23 11:00

Tribune Publishing, newly-created this summer after the Tribune media conglomerate split its print and broadcast operations, has partnered with Contend, a viral video marketing company. 

The deal brings digital video savvy to Tribune Publishing’s four-year-old marketing operations, which has already been courting advertisers with a one-stop-shop approach. 

While many newspapers and other legacy print publications have been beefing up their digital marketing offerings—mostly through native ads, such as sponsored web articles—this appears to be the first time a newspaper chain has made a direct investment in a viral video company, one that is not only creating ad content for Tribune’s websites, but for other websites and social media portals as well.  

“Our digital marketing services are our fastest growing area. It has the most upside. It opens up a whole new client list,” says Bill Adee, executive vice president of digital for Tribune Publishing. “What we’re really doing is we’re focusing on a problem that a lot of businesses have, which is creating content. And at the beginning, it was focused on maybe more text-based needs.”

The investment in Contend, the financial terms of which were not disclosed, allows Tribune Publishing to broaden its portfolio to video content, such as an online video series for the supermarket chain Jewel-Osco, which was the first time Contend and Tribune Publishing partnered on a campaign. 

Something Fresh - Ep3 - Quincy from Contend on Vimeo.

The Jewel-Osco series did not run on Tribune’s website—signaling a shift in strategy in which the ads the newspaper giant creates internally do not necessarily have to be ads that run on its own properties. 

“We’re well-known story tellers, right…So why wouldn't we be very good on behalf of a brand telling a story? Completely separate departments. Completely. But at its core, that’s what we do,” Adee says. 

While marketing and news may be separate departments, newspapers are banking on audiences realizing that distinction. Adee says he doesn’t see a danger of an audience backlash, at least with the video content, because it is not disguised as news content. 

“It’s not 'Jewel presented by the Chicago Tribune.' It’s Jewel. There’s no mistaking where this video came from,” Adee says. 

Newspapers may be willing to take risks with sponsored online content, because digital advertising represents one of the few areas of revenue growth for the industry, says Ken Doctor, a media analyst who used to be an executive at the former Knight Ridder Newspaper Chain. 

“It’s a big industry trend. It’s one of the biggest that we’ve seen in several years. And we see it everywhere from at the top end—the Financial Times, The Wall Street Journal, The New York Times, Hearst magazines—to… smaller papers across the country,” Doctor says. 

As newspapers are losing the big advertisers they used to rely upon, they’re turning to the tens of thousands of small and medium-sized businesses in their markets. 

“So publishers are saying: 'We know media, we know how to tell stories with writing and now with video, and we can also help them with social media.' So they are completely reorienting their sales approach away from just selling space to helping these merchants bring in new customers and retain the current customers they have. So, it’s really been a revolution in marketing, and we’re in about the third year of it at this point,” Doctor says. 

For Tribune Publishing, that revolution is necessary. Its digital ad sales accounted for 18 percent of all its ad revenue. And digital ads are one of the few areas of growth for newspapers, Doctor says. 

Contend CEO Steven Amato says while his company is part of the new media world, there are advantages to partnering with a newspaper chain that has established highly-recognizable brands in many cities. 

“Tribune is sitting on an amazing bunch of assets… and they have such deep relationships in local markets. That’s an unbelievable asset. They are part of [their communities]… that is not something you get everyday,” Amato says. “It’s a 167-year-old startup right now, Tribune Publishing. It’s very exciting.”

CORRECTION: An earlier version of this story misstated the name of Tribune Publishing in the headline and when the partnership was announced. The text has been corrected.

The Tribune Company enters the viral marketing sphere

Tue, 2014-09-23 11:00

Tribune Publishing, newly-created this summer after the Tribune media conglomerate split its print and broadcast operations, this week announced a partnership with Contend, a viral video marketing company. 

The deal brings digital video savvy to Tribune Publishing’s four-year-old marketing operations, which has already been courting advertisers with a one-stop-shop approach. 

While many newspapers and other legacy print publications have been beefing up their digital marketing offerings—mostly through native ads, such as sponsored web articles—this appears to be the first time a newspaper chain has made a direct investment in a viral video company, one that is not only creating ad content for Tribune’s websites, but for other websites and social media portals as well.  

“Our digital marketing services are our fastest growing area. It has the most upside. It opens up a whole new client list,” says Bill Adee, executive vice president of digital for Tribune Publishing. “What we’re really doing is we’re focusing on a problem that a lot of businesses have, which is creating content. And at the beginning, it was focused on maybe more text-based needs.”

The investment in Contend, the financial terms of which were not disclosed, allows Tribune Publishing to broaden its portfolio to video content, such as an online video series for the supermarket chain Jewel-Osco, which was the first time Contend and Tribune Publishing partnered on a campaign. 

Something Fresh - Ep3 - Quincy from Contend on Vimeo.

The Jewel-Osco series did not run on Tribune’s website—signaling a shift in strategy in which the ads the newspaper giant creates internally do not necessarily have to be ads that run on its own properties. 

“We’re well-known story tellers, right…So why wouldn't we be very good on behalf of a brand telling a story? Completely separate departments. Completely. But at its core, that’s what we do,” Adee says. 

While marketing and news may be separate departments, newspapers are banking on audiences realizing that distinction. Adee says he doesn’t see a danger of an audience backlash, at least with the video content, because it is not disguised as news content. 

“It’s not 'Jewel presented by the Chicago Tribune.' It’s Jewel. There’s no mistaking where this video came from,” Adee says. 

Newspapers may be willing to take risks with sponsored online content, because digital advertising represents one of the few areas of revenue growth for the industry, says Ken Doctor, a media analyst who used to be an executive at the former Knight Ridder Newspaper Chain. 

“It’s a big industry trend. It’s one of the biggest that we’ve seen in several years. And we see it everywhere from at the top end—the Financial Times, The Wall Street Journal, The New York Times, Hearst magazines—to… smaller papers across the country,” Doctor says. 

As newspapers are losing the big advertisers they used to rely upon, they’re turning to the tens of thousands of small and medium-sized businesses in their markets. 

“So publishers are saying: 'We know media, we know how to tell stories with writing and now with video, and we can also help them with social media.' So they are completely reorienting their sales approach away from just selling space to helping these merchants bring in new customers and retain the current customers they have. So, it’s really been a revolution in marketing, and we’re in about the third year of it at this point,” Doctor says. 

For Tribune Publishing, that revolution is necessary. Its digital ad sales accounted for 18 percent of all its ad revenue. And digital ads are one of the few areas of growth for newspapers, Doctor says. 

Contend CEO Steven Amato says while his company is part of the new media world, there are advantages to partnering with a newspaper chain that has established highly-recognizable brands in many cities. 

“Tribune is sitting on an amazing bunch of assets… and they have such deep relationships in local markets. That’s an unbelievable asset. They are part of [their communities]… that is not something you get everyday,” Amato says. “It’s a 167-year-old startup right now, Tribune Publishing. It’s very exciting.”

At some Wal-Marts, health care in your shopping cart

Tue, 2014-09-23 07:34

Maybe you’ve picked up a prescription medication or been fitted for a pair of eyeglasses at Wal-Mart. But would you trust Wal-Mart with your larger medical care?

The retailer is trying to figure that out, opening up clinics in a handful of stores in South Carolina, Georgia and Texas. 

At a recently opened clinic in North Augusta, South Carolina, a steady stream of patients came through on a recent morning. The clinic is located near the front of the store, with opaque windows for privacy. It’s small, with just three exam rooms.

For $40 you can get a medical checkup with a nurse practitioner. For Wal-Mart employees on the company health plan, it’s only $4.

Roger Beahm, the executive director of Wake Forest University’s Center for Retail Innovation, says the move is a natural step for Wal-Mart. He says growing companies are always looking for the next big thing.

“So how do you that? How do you get more customers into the store? How do you increase the size of the shopping basket when they are in store?” Beahm says. “The answer to that lies in getting more products, more services that customers are willing to buy when they come into the store.”

Wal-Mart has done that before by offering in-store banking and food service.  Some locations already host walk-in clinics in space leased to local healthcare providers.  But now, Wal-Mart is opening its own on-site primary care clinics.

By owning the clinics, Wal-Mart can control costs and the services offered, says the company’s senior health and wellness director, Jennifer LaPerre. She says the company has a track record of pushing other retailers to provide health services at a lower cost.  She cites the $4 generic prescription drug program the company rolled out in 2006.

“That became branded in the community. It caused numerous other pharmacies to follow suit,” LaPerre says.  

The company is piloting the concept in areas with high rates of chronic disease and a shortage of healthcare providers.  So far, that means smaller cities in the South, in states that aren’t expanding Medicaid under the Affordable Care Act.

It’s an obvious place to start, says Dr. Harris Berman, the dean of Tufts University School of Medicine. Berman says he would have been skeptical of the idea a decade ago. But he says technology is making it easier for nurse practitioners to stay in touch with doctors who will supervise them remotely and help ensure better care.  He says rural areas have an especially critical need for primary care providers.

“I don’t think patients in Boston would go for this concept, or in metropolitan areas,” he says. “But Wal-Mart is very much into rural areas. And I think there, there really is an acute shortage and this would be seen as better than no care.”

PODCAST: The climate change odd couple

Tue, 2014-09-23 03:00

Stock markets around the world are having a downbeat day so far, in part because that's what tends to happen in September, but also because of a new signs of trouble for Europe's economy. A survey of business activity in the 18 countries that use the Euro suggests recovery there is stalling. Plus, there's news today the Obama Administration is cracking down on what are called "inversions," the controversial maneuver of acquiring foreign companies to save U.S. tax. Targeted are the special loans that make these acquisitions possible. President Obama and republicans and democrats in congress agree that what's need in the longer run is tax reform. Yet that's a process that doesn't seem to be moving forward any time soon. That got federal budget watcher Stan Collender doing the math on an unconventional solution. And among the many announcements coming out of Climate Week in New York comes this news of strange bedfellows: A partnership between some leading environmental non-profits, including the Environmental Defense Fund, and five oil companies.

An unconventional solution to tax reform

Tue, 2014-09-23 02:00

The Obama Administration has announced a crack down on what are called "inversions": the controversial maneuver of acquiring foreign companies to save U.S. tax. Targeted are the special loans that make these acquisitions possible; seen as a stopgap approach.  

President Obama and republicans and democrats in congress agree that what's need in the longer run is tax reform. But that's a process that doesn't seem to be moving forward any time soon.  

That got federal budget watcher Stan Collender doing the math. Collender—who use to work for both the House and Senate budget committees and tweets at theBudgetGuy—has written a column entitled "How to Abolish the Federal Corporate Income Tax without Increasing the Deficit," and stopped by to talk about an unconventional solution. 

Click the media player above to hear Stan Collender in conversation with Marketplace Morning Report host David Brancaccio.

At in-store clinics, $4 checkups for Wal-Mart workers

Tue, 2014-09-23 02:00

You can’t buy a lot for $4—maybe a cup of coffee or muffin. But at about a dozen Walmart stores across the South, $4 will get employees a visit to a nurse practitioner at an in-store clinic. It’s part of a new primary care program that Walmart is testing in three states.

Eric Klein leads the healthcare team at the national law firm Sheppard Mullin Richter and Hampton. He says Walmart could actually come out ahead in the big picture.

“You have to look at the entire cost,” he says. “It’s not just the $4 copay, it’s the entire cost.”

Klein says if employees go to an on-site clinic owned by Walmart, the company could save money on doctor visits and insurance premiums. Cutting out the middle men could bring down the cost of Walmart’s insurance plans.

Dr. Harris Berman, the dean of the medical school at Tufts University, agrees.

“If the employees are getting it done here for $4, it won’t show up in their insurance bill,” he says.

With more than a million employees and their dependents on the Walmart health plan, the program could help shape the primary care market if it goes nationwide.

Jennifer LaPerre, Walmart’s senior director of health and wellness, says the company has a “unique opportunity” to help provide lower-cost care. LaPerre says the $4 figure is also part of Walmart’s branding strategy, in keeping with the $4 generic drug program that it launched in 2006.

Klein says Walmart also wins by having clinics just steps away from the checkout lines.

“By taking better care of their employees they actually get better results economically,” Klein says. “Less absenteeism, and that’s a real cost savings over time.”

Walmart is piloting the idea for now; planning to open about a dozen clinics by the end of the year in Georgia, Texas, and South Carolina. LaPerre says Walmart is choosing stores in areas with high rates of chronic disease and a shortage of primary care doctors.

If the concept works, Walmart may take it nationwide.

Investors await another big IPO

Tue, 2014-09-23 02:00

You heard all about the largest initial public offering (ever) last week. That is, the debut of the Chinese e-commerce company Alibaba. Now, investors are awaiting the second-biggest U.S. IPO of the year.

Shares of Citizens Financial Group are expected to price later Tuesday. It could be the largest bank IPO since Goldman Sachs in 1999.

Citizens Financial Group is one of the largest regional banks in the U.S., but it’s owned by the Royal Bank of Scotland. During the financial crisis, RBS was bailed out by British taxpayers. Now, the UK government wants out, says banking analyst Richard Bove with Rafferty Capital Markets.

“They’re saying, 'Hey look, we don’t want to be in the banking business,'” Bove says. “'You forced us to bail you out. Now give us the money back, and if that means selling off assets, sell them.'”

Kathleen Smith manages a fund that invests in newly public companies at Renaissance Capital. She says this year has been the strongest for IPOs since 2000, but financial companies haven’t fared so well.

With the Citizens offering just days after the biggest IPO ever, “it will be a test of the market capacity to add additional new product to portfolios,” she says.

Smith says investors may also look askance at the $9 million in bonuses Citizens executives are expected to get from the IPO.

Oil companies and environmental non-profits team up

Tue, 2014-09-23 02:00

Among the many announcements at Climate Week in New York comes this news of strange bedfellows: A partnership between some leading environmental non-profits, including the Environmental Defense Fund, and five oil companies. The companies agree to work at cutting emissions of methane—a potent greenhouse gas—in the process of exploration and drilling. 

These oil companies aren’t household names in the United States, but they’re big, like the national oil companies of Mexico and Norway. The absence of “super-majors” like BP and Exxon isn’t the potential weakness that concerns Stanford geophysicist Mark Zoback, who served on an Energy Department panel on shale gas safety.

"You have to understand, it’s not the companies you know," he says with a laugh.  

Rather, big problems may come from small-timers, who operate under a variety of state regulations and ethical constraints. The U.S. Energy Information Agency estimates there are as many as 15,000 oil and gas drillers, most of them relatively small time. An agency report showed almost half a million active natural gas wells in 2012.

"There’s so many wells being drilled, and there’s so many companies in the process," says Zoback. "It only takes a few bad actors to cause problems."

Nathaniel Keohane, vice president of international climate at the Environmental Defense Fund, agrees that there are limits to what this particular initiative can achieve. "We think that by starting with this group and expanding it over time, we can start to make progress and demonstrate what’s possible," he says. 

Thank the Japanese Prime Minister for that new car deal

Tue, 2014-09-23 01:30

When I first figured out that the most popular car in the U.S. costs the same now as it did 25 years ago when Marketplace first went on the air, I was as astonished as I assume you are.

We have been looking at the weird, wonderful but sometimes destructive ways that prices have moved in the last quarter century. When it comes to cars, it has been an article of faith that 2014 cars have so much more sophisticated stuff bolted to them that they must be more expensive.

The 1989 Honda Accord for instance had no airbags at all. ABS braking? Forgettaboutit. The entry level DX sedan didn't come standard with air conditioning. You had to roll down the windows. Its engine generated just 98 little horses. It did come with doors and a steering wheel, however, and luxurious power steering.

The sticker price for that base Honda Accord in 1989 was $11,700. These days, the cheapest Accord has airbags galore, AC standard, Bluetooth, power windows. Its got 185 horses, its fuel economy is much better, and it's even just about a foot longer. But it lists for $21,955. The price of the extras that accumulated over the years.

Or is it?

Adjust for inflation and the 2014 Honda Accord is like $11,445 back in 1989. In other words, the fancy new Accord is selling for a few hundred dollars cheaper than its more Spartan predecessor back when the first President Bush was in the Oval Office.

Since we didn't just fall off the turnip truck however, we know that the cost of a car is not just the cost of a car. What happens to the total cost of driving a mid-sized sedan like the Accord over the last 25 years? The results of that analysis were also a surprise and they're here. Not to ruin the suspense, but while gas, maintenance insurance, taxes/title are more expensive now, the cost of borrowing money to buy a car is much, much lower now. Depreciation is also less as cars get better and last longer.

But I haven't forgotten I mentioned the Japanese Prime Minister in the headline. What does Mr. Shinzo Abe have to do with any of this? Maybe nothing, maybe a lot. One veteran economist I talked to about how the 1989 and 2014 Honda Accord cost the same reminded me that Honda is based in Japan. Prime Minister Abe's economic stimulus program known as Abenomics has had the effect of weakening the Japanese currency. Even though the modern Honda Accord is assembled in Ohio, the low yen/high dollar means that Honda can keep the Accord's price low, in part because the same amount of dollars generates more yen when the profits are sent back to Japan. This economist told me that Honda's competitor Ford grumbles about this and estimates the low yen these days lets Honda sells the Accord for a few thousand dollars less than a U.S.-based car company.

The thing is, Mr. Abe has only been running things since very late 2012 and his Abenomics have held sway since last year. And those Accords have been awfully competitive contenders in the U.S. car market for decades.

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