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North Dakota oil town: Is it a bust or a slowdown?

Wed, 2015-06-03 12:53

Williston, North Dakota, has experienced a few oil booms and busts starting in the '50s, when oil was first discovered there. During the last boom cycle, researchers estimate the town doubled in size to more than 30,000 people.

Some people in Williston disagree about what's in store for the city, given a downturn in oil prices and drilling. Is it experiencing another bust? Or just a slowdown?

Williams County Commissioner Dan Kalil is among the pessimists. 

“It’s very difficult in a boom-and-bust economy,” he says.

Kalil recalls how his dad, a banker, got stuck with loans that soured after oil field companies went belly up in the '50s. Kalil says his dad and the bank president tried to sell oil field equipment for 10 cents on the dollar. Then there was another boom-bust cycle in the early '80s. Kalil had to confront its aftermath directly as a city and county official.

“It took until just a few years ago for the city of Williston to pay off its debt from that boom, for pushing out infrastructure to developers who were going to come in and build and then didn't show up,” he says.

In the last decade, new fracking technologies brought oil rigs roaring back to life in North Dakota. Kalil nervously watched developers descend once again.

“We attracted everyone who had failed in Sacramento, everyone who failed in Phoenix, everyone who failed in Las Vegas, everybody who had failed in Houston, everyone who failed in Florida,” he says. “And they all came here with unrealistic expectations. And it’s really frustrating for those of us left to clean up the mess.”

Kalil says Williston is now $300 million in debt for building up infrastructure like roads and a water-treatment plant to accommodate the boom-time growth. He fears the town has overreached and won’t recover quickly, as global demand for oil is expected to be muted over the next few years.

But others think Williston will snap back after what may be just a temporary slowdown.

Swiss-based firm Stropiq is moving forward with plans to build a $500 million development in Williston that would include retail, residences, hotels and a water park. The proposal cleared some big hurdles in Williams County planning and zoning committee meetings over the past few months.

“If we were to try to time each stage of it with oil price fluctuations, we'd never get any place,” says Stropiq’s Terry Olin.

When Stropiq announced the project last year, oil was trading at about $40 a barrel higher than it is today. And more than twice the current number of drilling rigs were operating in North Dakota — 185 compared to about 80 today.

“Whatever price oil is, it’s temporary, high or low,” Olin says. “We're on one of 10 oil fields in history that's ever surpassed a million barrels a day. Technology is now to the point where we can access oil under the Bakken [formation], and we're not going to forget how.”

A number of experts agree that the oil industry in North Dakota is poised to rebound — eventually. Among them is Elliot Eisenberg, a real estate economist. He says it’s not unreasonable to plan a big project in North Dakota’s Bakken right now, unless you believe oil prices will never rise.

That said, he argues that developers today need a fair dose of patience, given the subdued outlook for oil.

“Investors with very long time horizons might say, 'Look, labor costs are now lower, land prices are lower. We could actually build a project now and decide that, yeah, we're prepared to sit on it two or three years and see what happens,’ ” he says.

Eisenberg says estimating the future population of Williston is, nevertheless, a difficult task. How many kids and spouses of oil field workers will settle in the area?

That question has already vexed the school district. And it could thwart big mall projects like Stropiq's. So says Tom Rolfstad, Williston’s former director of economic development.  He's generally upbeat about the town's future and thinks it's just going through a slowdown, not a full-on bust. But Rolfstad acknowledges retail needs permanent residents to thrive, and many oil field workers around Williston are temporary.

“A lot of people rotate back somewhere else,” he says. “And they spend their money on their house back in whatever state they came from. So that maybe hurts us a little bit.”

Even if the oil boom regains its steam and Williston attracts more workers who will throw down roots, Williams County Commissioner Dan Kalil may not rest easily. While he fears Williston's got another bust on its hands, he doesn't exactly want another boom. It would mean gobs more people, traffic and crime.

“The one complaint that you hear over and over again about this oil boom is that our time has been stolen from us,” he laments. “This was a five-minute town. This was a town where in five minutes you could hit the gas station, the grocery store, the bank and be on your way. It was so easy to live here.”

President Obama says China open to joining trade partnership

Wed, 2015-06-03 06:53

On Wednesday, Marketplace host Kai Ryssdal sat down with President Obama to discuss the future of international trade:

There's this thing that happens when you talk to the president. You kind of stop paying attention. I mean, you're paying attention, of course, but you're not really listening, if you know what I mean. You're thinking about what you should ask next, about how much time you have left — which is never enough — and a thousand other things.

Which is why — early in our interview today — he caught me up short.

I'd asked him about China, about how sure he is that once we and the other Trans-Pacific Partnership countries write the trade rules for the region, that the Chinese will follow. Because it’s a pretty big deal that the second-biggest economy in the world isn’t in the biggest trade deal the U.S. has had in a generation.

He started talking, and I started thinking about where to take the interview next, and then he said, “Well, they’ve already started putting out feelers about the possibilities of them participating at some point.”

That would be a big (trade) deal.

Economists can, and do, argue about free trade all the time. But it’s pretty much accepted wisdom that in the aggregate — and that’s the key word here, aggregate — free trade is a net positive.

The catch, of course, is that with winners come not-winners, and so I asked the president about that.

“The question is, 'Are there a lot more winners than losers?' And the answer in this case is, 'Yes.' But that doesn’t mean that there is not going to be some impact on some sectors of the economy, by definition,” he said.

A lot of the pushback against the TPP is coming from the president’s side of the aisle: Democrats who remember the North American Free Trade Agreement and what it meant to a lot of their constituents — lower wages and lost jobs. Which the president gets. Kind of.

“The argument that I make to my friends, whose values I share, is that you can’t fight the last war," he said.

This time, he says, will be different, with tougher regulations and higher standards covering workers who make up almost 40 percent of the entire global economy.

“If we’ve got potentially hundreds of millions of workers who are now subject to international labor standards that weren’t there before, and now when we’re working with them, even if they’re not enforcing those standards 100 percent, we’ve got enough leverage to start raising those standards," he said.

And really, he said, it’s not like we’ve got a choice.

“We are completely woven into the global economy. We’re the hub to many, to a large extent of the global economy," he said. "The question is, 'How do we construct a set of rules and how do we make sure we’re adapting and using the incredible advantages we have to the best of our ability?' ”

To read the full interview with President Obama, click the "Transcript" tab at the top of the story.

KAI RYSSDAL: Mr. President, good to talk to you again, sir.

PRESIDENT OBAMA: Great to be here.

RYSSDAL: So, you spent the first couple of years of your presidency, as you say, trying to drag the economy out of a ditch. Here we are now. Recovery's five years old. Jobs are back, growth is back. And yet you have chosen an issue where you are arm-wrestling members of your own party, you're aligning with the GOP, who’ve spent six years throwing everything they can at you to stop you. Why this issue now?

OBAMA: Well, keep in mind that we started this issue four or five years ago, and in my trips to Asia, what became very clear is this is the fastest growing part of the world economy, the most populous, the most dynamic. And, if we are not there helping to shape the rules of the road, then U.S. businesses and U.S. workers are going to be cut out, because there's a pretty big country there, called China, that is growing fast, has great gravitational pull and often operates with different sets of rules. 

So, we started this negotiation, the Trans-Pacific Partnership, recognizing that a third of our recovery's been driven by exports, that typically export industries pay higher wages, and if we want to make sure that we're selling American products, American services into not just the next decade, but the next several decades, then we've got to have high standards, high labor protections, high environmental protections, in that part of the market, that part of the world, where we need to do business.

RYSSDAL: I get all that, and I understand it, but you brought up China, so I'm going to go there. China is the 800-pound gorilla that is not in this deal. You say you want to write the rules of trade for the global economy so that the Chinese don't. On the theory that this agreement is about our place in the global economy, how confident are you that the Chinese, who, as you know, do what they want, when they want, the way they want to do it, how confident are you that they're going to follow?

OBAMA: Well, they've already started putting out feelers about the possibilities of them participating at some point.

RYSSDAL: To you?

OBAMA: To us, to Jack Lew, the Treasury Secretary. The fact is that if we have 11 of the leading economies in the Asia-Pacific region, who have agreed to enforceable labor standards, enforceable environmental standards, strong I.P. protections, non-discrimination against foreign firms that are operating access to those markets, reduced tariffs, then China is going to have to at least take those international norms into account. And, we are still pursuing strong bilateral economic relations with China, we still pressure them around issues like currency, or the subsidies that they may be engaged in, or theft of intellectual property.

We still directly deal with them on those issues, but it sure helps if they are surrounded with countries that are operating with the same kinds of high standards that, by the way, we already abide by. So, part of what we're doing here is we're leveling up, as opposed to a race to the bottom, which means no labor protections, no environmental protections. We want to make sure that there is a level playing field that's going to allow us to be successful, and will help to shape trade and commerce, not just in the region, but in the world for a long time to come. 

RYSSDAL: Let me get back to the American economy here, for a minute. Economists generally — generally agree — and, I'll get some push-back here from economists who will hear this — but, they generally agree that in the aggregate free trade, is a net plus. 25 years ago, 20 years ago, the last time this country dealt with a big free trade agreement, it didn't work out well for a whole lot of people. Wages were lost, jobs were lost. Do you understand the push-back on that, that you're getting?

OBAMA: Absolutely, and I've said repeatedly, publicly, there is a reason why you've got labor unions, and some of my best friends in the Democratic Party concerned about any trade agreement, because the truth is, is that globalization, advances in technology, big cargo containers shipping goods in that are sold through the distribution and logistics networks in this country, over the last 20, 30 years, played a role in reducing the leverage that workers had, played a role in outsourcing, but the argument that I make to my friends, whose values I share, is that you can't fight the last war. The truth is, today, if there is a company in the United States that wants to find low-wage labor – if that's their business model, I think it's a mistake, but if that's their business model – they can do it now, under existing rules. NAFTA did not have labor protections or environmental protections that were enforceable; that was a side-letter.

So, part of what I'm saying to our folks is that precisely because the existing rules oftentimes disadvantage U.S. workers and U.S. businesses, for us to create new rules that raise standards in an important part of the world — including, by the way, the two countries that were signatories to NAFTA, Canada and Mexico, so that now, suddenly, they've got to have stronger labor rules — if we've got potentially hundreds of millions of workers who are now subject to international labor standards that weren't there before, and now, when we're working with them, even if they're not enforcing those standards 100 percent, we've got enough leverage to start raising those standards, that is good for us. So just because past experience raised concerns around outsourcing, we've got to think about the future and where our economy is now going. It's not going to be based on low-wage work. It's going to be based on high-skill, high-value-added, high-wage work, which we're good at. But that allows — that means that we've got to be able to access those markets to sell those goods.

RYSSDAL: Which is based on a change in the American economy, and we all know that, right? Now it's moving towards knowledge-based, it's moving toward innovation and away from manufacturing, but there's still a huge manufacturing base in this country. So, that brings up this question: You know, last week, or a couple of weeks ago, I guess, in Oregon, you went out to Nike, and you gave a long speech on the TPP, and you said, when the rules are fair, we win every time. We win every time. And, I get that you're using the presidential 'we' here, the national 'we.' But, what do you say to the blue-collar worker who's lost wages over the past decade, who's lost, perhaps, a job, to the small business owner who's had to shut down. How do you say to that person, listen, this is really for the greater good, here.

OBAMA: Well, no, no, no. Keep in mind that this is important not just for the Boeings of the world. This is important for small businesses and medium-sized businesses. They constitute the majority of exporters, and we know that wages are higher for firms that also are accessing international markets. And even the large firms like a Boeing have hundreds, maybe thousands, of suppliers all across the country, many of them small- and medium-sized businesses who benefit and who are able to hire more workers because they have access to these new markets. Nike's actually a great example. The truth is, is that the footwear industry in the United States got decimated. Now, part of that was technology, part of it was globalization, and much lower labor costs elsewhere. The reason I went to Nike is because they said that if this passes, they're in a position to bring 10,000 new jobs to the United States, partly because technology is now advancing, essentially, 3-D printing for footwear, where the labor costs per shoe are inherently lower because of technology. On the other hand, the need for knowledge, skills, reliability, all those design, all those things have increased. This is part of the reason why since I came into office we've seen the strongest growth in manufacturing since the 1990s. Part of that is we made some good decisions around the auto industry, but part of it is, generally, we're actually seeing insourcing, as opposed to outsourcing. There are a bunch of manufacturers who are saying, you know what? It's actually smart for us to be in the United States. Low energy costs, great workers, great infrastructure, access to the largest market.

So, manufacturing has been growing faster during my presidency than at any time since the 90s and faster than the overall growth of the economy. But, even manufacturing's changed. It's not--you know, if you go into an auto company where it used to take a thousand workers in a factory, now it might a hundred. Those jobs aren't coming back regardless of where we go, because, really, it's due to technology. What we can do, though, is continue to expand our markets, and 95 percent of the world's marketplace is outside of the United States; we've got to have access to it.

RYSSDAL: I understand that when you say things have grown over your administration and that manufacturing is still solid in this country, one of the things I don't understand, though, and this is a larger free trade debate, which we've been having in this country for decades now, it is generally acknowledged to be a good, as I said before. And yet, one never hears from proponents of free trade, yourself included, that there are losers, full stop. There are losers.

OBAMA: The truth is, Kai, if you look over my interviews, you'll see I've said there are losers. And, we have to take account of those losers. The question is, are there a lot more winners than losers? And, the answer in this case is yes. But, that doesn't mean that there is not going to be some impact on some sectors of the economy, by definition. That's going to be true anyway, by the way. But, it may be that as a consequence of this trade deal, there are particular markets, there are particular niche parts of the economy, where we've got to provide help to transition, and to re-tool and adapt. That's part of the reason why part of this package includes trade adjustment assistance. But, one of the basic premises for me in pursuing this, is that we can't just draw a moat and pull up the drawbridge around our economy. We are completely woven into the global economy. We are the hub to many, to a large extent, of the global economy. So, the question is, how do we construct a set of rules, but then, also, how do we make sure that we're adapting and using the incredible advantages we have to the best of our ability. And so when I talk to labor leaders, for example, I say, you are absolutely right that there's been growing inequality, and some of that has to do with globalization and technology.

The answer's not to not trade anymore. The answer is, how do we upgrade our skills? How do we make sure that the laws, and the tax rules, and how companies compensate their workers versus their CEOs, how are those rules fair? And, if we do that well, then we can address those issues. But, we're not going to address those issues by not trading with Japan. We're not going to address those issues by pretending that the global supply chain doesn't exist. The same is true when it comes to environmental issues. If we want to solve something like climate change, which is one of my highest priorities, then I've got to be able to get into places like Malaysia, and say to them, this is in your interest. What leverage do I have to get them to stop deforestation? Well, part of the leverage is, if I'm in a trade relationship with them, it allows me raise standards. Now, they have to start thinking about how quick they're chopping down their forests and what kinds of standards they need to apply to environmental conservation. So, we have to engage, not withdraw. And, I think the big mistake that some of my progressive friends make when it comes to trade, is not the values they're pursuing, or the very legitimate concerns they have about some past trade deals.

The issue is, are you now identifying what's going to make the biggest difference in helping American workers compete and prosper? And, that's not to shut off trade, that's designing good trade agreements, and then doing the things that are fully in our control in this country, like raising our minimum wage, like making sure that we are providing job training and apprenticeship programs, making sure that our education system works, making sure we're investing in R&D, making sure we've got a fair tax system and we're closing corporate loopholes that allow us to fund things like infrastructure; all that stuff has to be at the center of our agenda. 

RYSSDAL: Last thing, sir. There are a lot of issues in this free trade debate that play directly into the election next fall, right? Economic inequality, opportunity, the wealth gap. What do you figure the average American's economy looks like to them right now? The person making the median income, $53,000 a year.

OBAMA: I think they feel better than they did when I came into office. I think that they feel somewhat more stable. But they are still traumatized by seeing their home values drop as fast as they did, by seeing their 401k’s shrink, even though they've now more than recovered their value, if they left those 401k’s untouched. So they still have those memories of instability, and that's made them cautious. I also think that the long-term trend that predates the last economic crisis and predates my administration, which is incomes and wages flat-lining at a time when corporate profits and the stock market have all been booming and the winner-take-all elements of our economy have been entrenched, I think that continues to concern them. And my hope is that next year part of what we discuss is how to combine a competitiveness and growth agenda with an inclusive, broad-based middle-class economics agenda. And, those things I do not believe are contradictory. Sometimes they get framed as, either you're for free trade or you are for a strong worker voice. Either you are for the unfettered market, or you are for a higher minimum wage. And, my attitude is that we have to be for both. We have to compete in the world's stage. The world is not slowing down. Technology is not stopping, and technology's probably had a bigger displacement effect on the economy than anything like trade has.

So we've got to continually adapt; we've got to be nimble. We've got to be efficient, but we also have to be fair, and we have to give everybody access, and we've got to make sure that those at the very top are not using their economic wealth to influence the political process in ways that disadvantage middle-class and working-class folks. And, if we do these things simultaneously, think about fairness, but also about growth and efficiency, that turns out to be the best recipe for growth and prosperity, and that's part of what has always been the hallmark of the American economy. When the middle class grows, and there are ladders into the middle class, and everybody's participating, and income inequality and wealth inequality is not too skewed, that tends to be when we've got all cylinders clicking, and we can compete against anybody.

RYSSDAL: Mr. President, thanks very much for your time, sir. 

OBAMA: I really enjoyed it. Thank you. 

PODCAST: Revisiting history

Wed, 2015-06-03 03:00

The payroll company ADP released numbers today, showing that 201,000 more people were on private sector payrolls in May. We'll talk about the implications of that number. Plus, was Richard Fuld, former CEO of Lehman Brothers, re-writing history with his first public history since the collapse of his firm? Washington Post columnist and Marketplace contributor Allan Sloan stops by to weigh in. Plus, Jurassic World is coming out June 12th—and it’s expected to dominate the box office. It’s also an opportunity for Natural History Museums to educate…and maybe raise some money.

 

 

Offering treatment, not punishment, to veterans

Wed, 2015-06-03 02:00

Five years ago, Erik Castro came back from Afghanistan with post-traumatic stress disorder and an alcohol problem, though he wouldn’t admit to either.

“I don’t want to ask for help,” he says. "I wanted to do what I know how to do. Violence. Drinking. In the Marine Corps, it was just drinking a lot.”

It’s a combination — PTSD or other mental illness and substance abuse problems — that has landed a disproportionate number of veterans in the criminal justice system. In response, more than 200 jurisdictions have opened veterans courts. Modeled on drug courts, they offer defendants an alternative to jail or prison time, and proponents say, save counties and states money in the process.

Castro ended up in the veterans court in Orange County, California, after he got drunk and beat up a worker in a Subway restaurant. He says he doesn’t remember much of what happened, but he woke up the next morning in jail facing a bunch of felony charges.

The veterans court wasn’t his first choice, he says, but it seemed better than prison. And when he started the program, he was pleasantly surprised to find that it felt familiar.

“It was like being in the Marine Corps again,” he says. “They’re watching you ... they’re on you.”  

The program is modeled on drug courts, so the emphasis is on treatment and recovery rather than punishment. In this case, the court connects clients to existing services, mostly through the Department of Veterans Affairs, and then forces the vets to make use of them or go back to jail.   It’s intense: there’s substance abuse treatment, group therapy and individual therapy, plus regular check-ins with the judge and probation officer at court.

“They make you get those demons out,” Castro says. “They make you work, work, work.”

But it’s also supportive.

“What makes this unique,” says Joe Perez, the presiding judge, “is we’re all getting together, trying to figure out what’s the best way to keep this person from coming back.”

In Orange County, one of the ways they try to keep people from coming back is to make court feel like the military. The judge makes references to the military, sometimes addressing clients by their rank.

Every participant is assigned a mentor — themselves all combat veterans — to help them figure out how to cope. At the beginning of each court session, the mentors introduce themselves by name and branch of service. The courtroom responds with a cheer.

Perez says keeping people like Castro out of prison has all kinds of benefits, but “the bottom line: it’s saving lives and money.”

The court estimates the program has saved the county more than $2 million in jail and prison costs since it started five years ago. But it’s still small. There are just under 40 people in it today; about 100 others have either graduated or been asked to leave.  

Douglas Marlow, who is an expert on these kinds of alternative courts, says it’s too early to say how well veterans courts work. “But comparing it to what the success rates are in the justice system in general,” he says, “we have good reason to believe we will have substantial impacts above and beyond what’s happening currently.”  

In other words, veterans fare so poorly in the regular criminal justice system, these are almost guaranteed to have better outcomes.

Roth's reporting on mental illness and the criminal justice system was supported by a Soros Justice Fellowship.

Big dinos mean big opportunities for museums

Wed, 2015-06-03 02:00

Palentologists have to do a lot of digging to tell a story.

But it didn't take much to unearth the news that lots of natural history museums are hoping to capitalize on "Jurassic World,"  when it makes it ways into theaters next week.

"We felt like Jurassic World was a great opportunity for us to sneak in a little promotion," says Randall Gann from the New Mexico Museum of Natural History & Science. The museum will have a booth in the lobby of one of the biggest theaters in Albuquerque on opening day, with staff, brochures and a Tyrannosaurus rex skull.

The Museum of the Rockies, in Bozeman, Montana, is holding a fundraiser where the movie will be screened before it opens in theaters. Tickets, which cost between $35 and $75 sold out in hours.

The Academy of Natural Sciences of Drexel University in Philadelphia recently screened the first three Jurassic Park films and held a dino-themed dance party.

The Morrison Natural History Museum in Morrison, Colorado, will also try to raise money with a special screening.  

But, the bigger goal, says Morrison Director Matthew Mossbrucker, is education. "We're going to be able to take movie monsters and use them to generate conversation about real animals and real science," he says.

For one, Hollywood dinos are inappropriately large. "I've seen many times people stand in front of the skull of a T. rex and wonder if it's a baby," Mossbrucker says, "even though it's as big as a washing machine."

The goal is to turn fans of Hollywood’s supersized prehistoric creatures into fans of the real thing.

 

In drenched Texas, the drought may be over ... or not

Wed, 2015-06-03 02:00

May's heavy rains have raised Texas reservoirs to 83 percent full, compared with 66 percent a year ago, according to the Texas Water Development Board. On the surface, that is good news for Texas, which has struggled with severe drought for years. But water experts say what looks like the end of a drought might just be the middle of one. 

As of this week, more than 1,000 Texas public water systems were enforcing water restrictions. The good news: about 70 percent of Texas is now drought free, and the three-month outlook shows drought improving or ending in August.

But it’s tough to know when a drought starts and when it ends. John Tracy, president of the American Water Resources Association, says in the short term, Texas has more water than it can deal with.

“But when you look out a month or two, if the rain completely shuts off and they go back into low precipitation for the rest of the summer,” he says, “you can find yourself back in a drought pretty quickly.”

Tracy says drought is simply when you have a hard time meeting water needs. And if groundwater and reservoir levels are any indication, there’s still a lot of uncertainty. Paul Block, who teaches civil and environmental engineering at the University of Wisconsin-Madison, says record-breaking rains have bolstered many Texas reservoirs, “but they are by no means full yet.”

 

When medical procedures outpace inflation

Wed, 2015-06-03 01:57
10 percent

That's about how much the average sticker price for medical procedures rose from 2011 to 2013, according to new government data, far outpacing inflation. The New York Times notes a couple of the highest-earning physicians are fighting charges related to alleged shady billing practices. 

200

That's how many jurisdictions have opened veterans courts. Like drug courts, they offer treatment options in lieu of prison time. With veterans often suffering from some combination of PTSD and mental illness, the courts can offer much needed help that officials say saves the state money in the long run.

240,829

As of this writing, that's how many retweets the Vanity Fair cover debut of Caitlyn Jenner — formerly Bruce Jenner —  received. It was a massive scoop for the magazine, and keeping the story and first photos of Jenner after her transition from leaking wasn't easy. Mashable learned that the whole package was produced on a single computer that wasn't connected to the internet, then stored on a flash drive overnight while the computer was wiped each day.

$35 - $75

That's how much a ticket will cost you to a screening of the forthcoming "Jurassic World" at the Museum of the Rockies in Bozeman, Montana. Sensing a marketing goldmine, many museums with dinosaur wings (both literal and figurative) are getting in on the potential for blockbuster fundraising.

$8,500

That's about what it costs for horses to fly "business class." Yes, there are several businesses that will fly your prized horse around the country if need be, but they don't come cheap. As with human air travel, extra legroom is going to cost you.

A Boeing 747 pilot writes a love letter to flight

Tue, 2015-06-02 13:00

Mark Vanhoenacker is a commercial pilot who flies a Boeing 747 from London to major cities all over the world. Although he has been flying planes for years, Vanhoenacker is still mesmerized by the wonder of flight. He poetically shares his experiences in his first book, "Skyfaring: A Journey With a Pilot."

On the scale of travel:

Pick a city on the front of the globe and a city on the other side, and imagine the distances between them are geographic but also historical and linguistic and cultural. The plane connects them. It takes people and ideas and goods and awareness between those places. That world of possibility is built into how we think of the planet. It’s built into modernity itself, but that doesn’t mean we should take it too casually or take it for granted.

On the idea of “place lag”:

Place lag is the best term I could think of for the kind of experience we have when we take a long-haul flight. There’s a kind of shock. When I fly to Singapore, the last hour of the flight is quite busy, and then we go through customs and immigration and get our bags. And suddenly we’re on a bus. I’m suddenly off duty for the first time in 16 hours, and I look around, and it’s just a regular afternoon in Singapore. Everybody’s going about their business. It’s all these people doing all these things that they would have been doing if we hadn’t flown there.

There’s this sense that planes show us that the whole world is going on at once. When we fly between places, we’re confronted with that. It’s a kind of wonder. Like jet lag, I think it’s something that we won’t ever get used to. And that’s probably a good thing for retaining that sense of magic.

On kids reading his book:

I’ve had a whole bunch of letters from kids, and I didn’t expect that. I wasn’t writing the book for children specifically or for early teenagers. I think that kids love looking up at planes or down from them, and the things that amaze children are usually a good guide to what we, as adults, may want to rediscover.

Purchasing items on Pinterest is now a pin away

Tue, 2015-06-02 13:00

Say goodbye to your bank account. Pinterest just announced what it's calling "buyable pins," which is, basically, the option to instantly buy the pretty things you see on the app.

Ordering items on Pinterest's new purchasing service. (Courtesy Molly Wood)

The feature will be coming to iOS (sorry, Android fans) sometime in June, according to co-founder and CEO Ben Silbermann. He said shopping on Pinterest was the No. 1 request of "pinners" who fill the app with photos of clothing, cars, curios, furniture, shoes and much, much more. 

Silbermann said Pinterest is partnering with retailers big and small, like Macy's, Nordstrom, Cole Haan, Poler Stuff and others, and will have a catalog of 2 million items available to buy when the feature launches. Buyable pins are tailored for mobile shopping, and you'll be able to check out with either a credit card (that will then be stored in the app for future shopping) or by using Apple Pay.

Navigating buyable pins. (Courtesy Molly Wood) 

If an item on Pinterest is available to buy, you'll see the usual red button (Pin It) or a blue button that says "Buy It." And you can search for buyable items by tag (like "jacket") or by a sliding price filter.

Freshly re-elected Sepp Blatter leaves FIFA

Tue, 2015-06-02 13:00

Sepp Blatter was re-elected as the president of FIFA, world soccer’s governing body, last Friday. It looks as though, however, the ride is almost over for Blatter: he announced Tuesday that he will resign his position. To say it came as a surprise is something of an understatement.

Daniel Roberts, a sports business writer for Fortune magazine, says the reasons why Blatter decided to resign is unclear.

"My bet though is that it was the [New York] Times report, which came out Monday night, and that fingered a top lieutenant of his, Jérôme Valcke, as having personally handled $10 million in bribery money. I think that’s what did it," Roberts says.

Blatter’s departure from the organization might reopen the battle to host the next two World Cups. Qatar fought hard to win the voting and host the 2022 tournament; the United States finished second. However, Roberts does not think the location will change.

"It would be a bigger shock if they manage to get this World Cup out of Qatar’s hands," Roberts says.

Insurers grapple with keeping premiums stable

Tue, 2015-06-02 13:00

Around the country, major health insurers are proposing to increase monthly premiums by 26 percent to 51 percent. This, predictably, has reignited the political debate over the Affordable Care Act. But there’s something more important going on, and it’s happening in the belly of the insurance industry.

Insurers are grappling with new rules to bring price stability to their businesses.

Before the ACA, insurance premiums were crazy. In one year, sick people buying their own insurance could see a 39 percent spike, but if you were young and strong, almost nothing.

Insurers can’t divide customers like that anymore, says industry veteran Jay Silverstein. Now they set one price for everyone on the individual market.

“When you have one big pool, you have to price towards making sure you are retaining your book of business and attracting new people in,” Silverstein says. “So ultimately you have to be very good at managing cost."

The better a company manages those costs, the more stable the premium.

But it’s tricky. Companies must factor in expensive new medications and new customers that come along, and Silverstein says consumers have more choices.

“If a company comes out and says, 'We have a 20 percent rate increase,' I have the chance to shop and enroll with a new carrier,” he says.

Under Obamacare, any company looking to increase premiums by more than 10 percent must post that publicly.

Joel Ario, a former insurance commissioner in two states, says public scrutiny pushes insurers to find a middle ground.

“When I was the Pennsylvania commissioner, I told carriers that I would want to hold a public hearing on rate increases over 10 percent,” he says. “And I got mostly rate increases less than 10 percent.”

Ario says eventually insurers will figure out how to run their businesses with more price stability. He shrugs.

 

JPMorgan Chase to eliminate voicemail

Tue, 2015-06-02 13:00

JPMorgan Chase has joined the 21st Century.

A bank executive said at a conference today that the company's going to start phasing out voicemail for some of its employees. Which I get — cell phones and email and texting and all that.

Here's the kicker though, and maybe this was just me — JPMorgan is still paying $10 a month per employee for corporate voicemail.

Seems kinda steep.

Keeping mental health patients stable and out of jail

Tue, 2015-06-02 13:00

Jesse Harrison’s parents used to have to call the police to get him to come out of his bedroom, so it’s something of a triumph he took visitors up there himself.

His psychiatrist, Rob Weisman, follows him up a narrow carpeted staircase into the attic room. The light was broken, so it was very dark. An unmade bed is on one side of the room, and an asthma nebulizer sits amid Styrofoam cups and other trash on the floor in front of the TV.

“We’ve got to get you cleaned up in here,” Weisman says.

Harrison is schizophrenic and smokes a lot of marijuana.

Weisman visits Harrison at least once a week to check up on him. Weisman is part of a Forensic Assertive Community Treatment team out of the University of Rochester, a special program that aims to keep people with mental illness out of the hospital and out of the criminal justice system.

“I wanted to talk about the medicine we give you. We give you that long-acting injection. Is it working?” Weisman asks.

“Yeah,” Harrison replies.

“How does it help you, if at all?” Weisman wants to know.

“I’m really doing well since then,” Harrison responds in a quiet voice.

“Does it make you feel less anxious?”

“Yeah,” Harrison replies, still mumbling. “I haven’t wanted to harm myself or anything like that.”

Assertive Community Treatment teams were first developed in the 1970s as a way to help people with severe mental illness live on their own, outside of institutions. The teams are made up of experts, such as psychiatrists, psychologists, social workers and employment specialists, who are on call 24 hours a day, seven days a week. ACT teams are expensive. But early studies showed they saved money by keeping people out of the hospital. The Rochester FACT team is a new spin on the approach — trying to keep people like Harrison not just out of the hospital, but also out of jail.

It sounds unlikely that a man who spends months at a time hiding in his room needs a whole support team to keep him out of jail.

“He’s not a hardened criminal or gang banger. He happens to live in a very bad area,” Weisman says. “[He] is at risk because of his drug use. And when he does go out, he’s involved in some card games, and a little bit of gambling and trouble can find him.”

This team of specialists meets clients where they are, literally: at home, on street corners, or, even under bridges. Dr. Steve Lamberti, another psychiatrist on the Rochester team, says the trick is to figure out how to treat the clients medically and understand why they keep getting in trouble with the law.

“Is it driven by their addiction? And if so, how so, are they selling drugs?” he says. “Are they appearing drunk in public? Is this somebody with DWIs, and that’s their channel into the criminal justice system?”

Lamberti’s team has just finished collecting data for a study to see how well their program works. Early results suggest their clients spent less time in jail, less time in the hospital and were more engaged in their outpatient treatment. The more complicated question is whether the program saves money.

In the short-term, FACT teams are expensive.

“If you’re running a clinic and you hire a psychiatrist, you could either get that psychiatrist to run a FACT team, which has on average about 50 patients,” Lamberti says. “Or you could get the psychiatrist to see outpatients … it would be more like 1,000.”

It seems that in the longer term, though, the money you save on hospitalization and incarceration should add up. And earlier studies suggested the traditional ACT teams did save money by keeping people out of the hospital.

But in the early days of ACT teams, psychiatric patients were often hospitalized for years, which was very expensive. Nowadays, it’s rare for people to stay in the hospital for more than a few days, or at the most, a few months.

“The cost savings aspects of Assertive Community Treatment programs may have changed,” says Eric Slade, a health economist at the Veterans Affairs who has studied ACT teams. “To the extent that public agencies are expecting savings from Assertive Community Treatment, that assessment may need re-evaluation.”

There’s also the question of how long somebody like Jesse Harrison will need his intensive support team.

“A success for Jesse is getting him mobile, moving him out of his attic room," Weisman, his psychiatrist, says. "Getting him to get medical care as well as accept mental health care. And get him to minimize, what we call harm reduction related to his substance use."

All of those interventions will probably keep him out of the hospital and out of jail, but what remains to be seen is whether it will save any money.

Roth's reporting on mental illness and the criminal justice system was supported by a Soros Justice Fellowship

When horses fly

Tue, 2015-06-02 13:00

The next time you find yourself balking at the cost of air travel, think of this: horse owners have it worse. Every year, thousands of horses travel by air domestically and internationally. And the price tag for these flights can be extravagant.

Triple Crown contender American Pharoah was expected to touch down today at Long Island's MacArthur Airport before making the 40-mile trek over to Belmont Park.

When it came time for Mersad Metanovic to send his racehorse, Metaboss, from Los Angeles to Kentucky for a Derby prep race, he had a decision to make. Send him on a 72-hour road trip, or put him on a plane. For Metanovic, the choice was simple.

“We don’t want to put the horse on a van and go clear across country," he says. "Especially that caliber of a horse. No way.”

Instead, Metaboss flew the horse equivalent of business class — two slots in a stall that holds three horses. Lots of leg room. Well worth the $8,500 price tag, Metanovic says.

“Those are better seats than sitting in between two people going clear across country,” he said.

Metanovic used Equi Air Shipping, which ships 500 to 800 horses a year. Co-owner Rachel DeBerdt says they’ve sent horses to Singapore, Malaysia, all over Europe and Saudi Arabia. Most expensive these days is Australia, DeBerdt says, because there’s a lot of quarantine involved.

"So for that, you’re probably looking at about $20,000 a horse," she says.

Shipping to Europe from the U.S. bare bones is about $5,000. And what does a horse get for that kind of money? Alfalfa, on demand, according to Katie Schroeder, owner of Equiflight, another air transport company. “And then they get complimentary water,” she says. Horses get jet lag too, so just like with people, water is key.

KLM also transports horses, often with people.

“So it looks like it's the back of the plane,” Schroeder says, “but then when you open the door thinking you’re going to the restroom or something, there’s actually a whole row of horses back there.”

A literal underground music scene

Tue, 2015-06-02 13:00

The subways of New York echo with lots of different sounds — the footsteps of commuters, the rumble of trains, announcements about arrivals and departures — but occasionally, through the din of the daily commute, there breaks through the sound of a musician performing on the subway platform.

And for those musicians who make some or all of their living underground, it can be a hustle trying to eke out a living based on tips from commuters. There's another challenge, too. Choice times at some of the busiest subway stops in New York are available to performers only after they pass an audition.

Run by the Metropolitan Transportation Authority, Music Under New York is a program that schedules performers for events throughout the city, including regular time slots at some of the prime subway stations like Times Square or Grand Central. Every year, hundreds of musicians submit CDs for the chance to score a live audition. Come audition day, 70 were given the opportunity to perform live, with just 20 to 25 spots available on the roster.

For those who make the cut, there are perks. MUNY groups receive an official banner and can reserve performance space at some of the most popular subway stations during high-traffic hours. And that means dollars.

A video posted by Marketplace (@marketplaceapm) on Jun 2, 2015 at 1:16pm PDT

Alex Steyermark, a film and music producer, has hired some of the performers out of the program. He has also seen first hand just how lucrative a couple hours in the subway can be. He remembers a particular recording session when two musicians used their break to perform in the subway. “They came back two hours later with $1,000. And I was like, ‘Wow, that’s like how to earn a living as a musician,’ ” Steyermark says. 

MUNY musicians also avoid any run-ins with the police. Legally, musicians can perform anywhere in the subway without a formal permit. But there are rules about amplification and volume that can get tricky, and sometimes that leads to performers being ejected from the subway or arrested (though law enforcement understands that groups performing under MUNY banners have been pre-approved to perform).

It’s why Daniel Duke’s jazz ensemble decided to audition this year, even though they’ve already been performing in the subway for years. “We don’t like to deal with cops that come and kick us out or give us tickets or stuff like that. It really messes up our day and our vibe,” Duke says.

But aside from the day-to-day perks, many of the musicians are thinking about the larger value of being part of the program: exposure. “We would love for this to lead to … just a passerby to be like ‘Wow, I’m really interested in that.’ And then allowing that to give us bigger and better shows,” says a singer who performs as Lachi in an all-female a capella group, Femme Rhythm. They're hoping that a spot on the MUNY roster will mean reaching a much larger audience.

And ultimately, that’s what a lot of the groups want out of passing the audition. The hope is that maybe the next big gig will come from one of those subway commuters.

The great trade debate: nine sticking points

Tue, 2015-06-02 12:48

On Wednesday, Marketplace host Kai Ryssdal will sit down with President Obama to discuss the future of international trade. Here's a look at what's on the table:

Among the top issues facing the House of Representatives this summer is whether to give President Obama enhanced power to negotiate trade deals. It's known as "trade promotion authority," and passing it means Congress agrees to give completed trade packages a straight yes-or-no vote without amendments or filibusters. 

The Senate passed TPA after vigorous debate in May.

If TPA passes, it would clear the way to move forward with a giant Pacific free-trade agreement among the U.S., Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. Together, the dozen nations make up 11 percent of the world’s population and 37 percent of the world’s GDP. Here’s a summary of U.S. objectives for the agreement, known as the Trans-Pacific Partnership or TPP, from the U.S Trade Representative.

Some of the major sticking points in the current trade debates include:

1. Whether free trade is good for the U.S. – and who benefits

In part because we haven’t had a big new trade deal in quite a while, much of the debate about upcoming trade deals circles back to the pros and cons of past free trade deals, whether free trade is, in practice, good for the U.S. and who benefits most from new agreements. While many economists argue there is consensus on the benefits of free trade, others counter trade in the real world is complicated and only as good as the rules that govern it.   

2. Transparency

Drafts of the TPP are classified, which means members of Congress and their staff who meet a required security clearance are able to view the text. Members of trade-advisory committees – which include labor, environmental and business groups, among others – can view negotiating proposals, but not the full document. The agreement won’t be publicly available until the deal is finalized, at which point there is a mandatory review period before Congress votes on it. But some members of Congress and advocacy groups worry the process is not open enough and that by giving the president TPA, they’ll essentially be green lighting the Pacific trade deal without knowing what’s in it.

3. Currency Manipulation

If countries devalue their currencies, it makes their exports cheaper relative to other countries, which gives their exporters a competitive advantage. Therefore, the American Automotive Policy Council, among others, would like to see the TPP include rules against this type of behavior. However, the Obama administration is opposed to including rules about currency manipulation in the deal, arguing that it would limit U.S. monetary policy options and threatened to veto a bill that includes such controls.

Opponents of strong currency control measures also argue that trying to stimulate your domestic economy can devalue your currency even if that’s not the stated goal, and that it becomes a question of a government’s intent and that gets murky very fast. Others say currency manipulation can be narrowly and clearly defined in a way that doesn’t limit U.S. activities.

4. How to resolve disputes

The heart of this issue is whether an independent international tribunal should hear complaints by companies that believe they’ve been harmed by government actions. The argument for such a system is that domestic courts can be biased in favor of their home countries and having independent arbitration protects international investors. The Office of the U.S. Trade Representative points out the U.S. has versions of this in 50 other agreements already, that cases are rarely brought against the U.S. and that the U.S. has never lost one. Opponents say this process could limit democracy by giving companies a vehicle to challenge U.S. regulations, often pointing to an example of how a tobacco company sued the governments of Uruguay and Australia for restrictions they’ve passed on the design of cigarette packaging.

5. Environment

Environmental groups, like the Sierra Club, World Wildlife Fund, and that Natural Resources Defense Council, worry that the TPP could lead to increased fracking and put stress on natural resources. After analyzing a draft chapter of the Pacific trade agreement released by Wikileaks, the environmental groups warned that environmental provisions aren’t as strong as previous agreements.

6. Intellectual Property

Intellectual property provisions of the TPP are especially controversial as they relate to pharmaceutical patents. But Doctors Without Borders and Oxfam are concerned the deal could lengthen the duration of pharmaceutical companies’ patents and therefore restrict access to more affordable generics.

7. China

The Pacific trade negotiations do not involve China, and the Senate failed when it tried to pass an amendment requiring Congressional approval for new countries to join the deal. Sen. Sherrod Brown (D-Ohio), who sponsored the amendment, said China had already expressed interest in joining the TPP and that because of its size, “a deal of that scale demands that the American public weigh in.”

President Obama has frequently evoked China while calling for the passage of TPP, saying that if the U.S. doesn’t write the rules on global trade, China will.

8. Human Rights

The Senate passed a human rights measure seeking to bar countries complicit in human trafficking from receiving the benefits of a trade deal passed under TPA. The White House opposes such a provision, as it says it would exclude Malaysia from the TPP.

9. Trade Adjustment Assistance

Trade has winners and losers – that’s often repeated regarding these deals. The idea behind Trade Adjustment Assistance is to provide assistance to workers displaced by trade deals. It is favored by labor unions, like the AFL-CIO, but whether this assistance is renewed and how much funding it receives have been sticking points.

PODCAST: Homeless in Hollywood

Tue, 2015-06-02 03:00

The Supreme Court says bankrupt homeowners are still on the hook in many circumstances for their second mortgages—for many that's a home equity loan—even if their home is worth less than the money owed. More on that. Plus, as Los Angeles County experiences an increase in homelessness, we take a look at Hollywood, which has had a homeless problem since its first days as a film center.

Facebook introduces new encryption features

Tue, 2015-06-02 02:00

Facebook says it is rolling out an experimental new feature that increases access to encryption technology for its users.

A new setting on the social networking site allows users to encrypt emails between them and Facebook, such as messages for resetting passwords. Facebook will also allow users to share their public encryption keys right along with all their other contact info on their profiles.

Those keys can be used to send a scrambled message, which only a recipient can read. 

It's a highly secure form of communication. And one rarely used by the general public.

"Facebook's move means that there is a much broader audience of people who are thinking about end-to-end encryption," says Heather West of the Internet security firm CloudFlare. Putting encryption keys on Facebook profiles can bring them into the mainstream, she says.

The increased use of encryption by tech companies is fueling a debate, with tech companies on one side and law enforcement on another. Deputy Assistant Attorney General David Bitkower, speaking at a public forum in May, said encryption could shut out law enforcement even if agencies obtain a search warrant.

"That warrant, effectively, is no better than a piece of paper," Bitkower said, "because the information cannot be accessed without the permission of the ultimate end user or end possessor."

Many in Silicon Valley aren't swayed. Tim Lordan, who heads the non-partisan, non-profit Congressional Internet Caucus Advisory Committee, says the use of encryption is growing.

"A lot of engineers and companies in Silicon Valley feel like it is the only way that they can protect their customers from the NSA and from would-be hackers," Lordan says, adding that while Facebook's latest move is modest, it is symbolically important in the context of the broader encryption debate.

Strong auto sales without big cash rebates

Tue, 2015-06-02 02:00

Domestic and foreign automakers report their U.S. sales for May 2015 on Tuesday, and sales are expected to show an improving trend for the year. April’s annualized sales of cars and light trucks hit the 16.5 million level. The consensus among economists is for May’s sales to hit 17 million.

U.S. auto sales have been rising since bottoming out at 10.4 million in 2009. If the anticipated pace for 2015 continues, it will be the best year for vehicle sales since 2000.

Auto industry equity analyst Ephraim Levy at S&P Capital IQ says automakers are not driving sales by massive discounting. “We’re close to near record-levels in terms of average transaction prices for vehicles,” says Levy. “And recently, the incentive levels have been declining year-over-year. Higher prices and lower incentives is good.”

That scenario is good for automakers, because it supports higher profits and demonstrates consumers are being enticed to buy with quality and new features, not cash rebates and below-market financing.

Consumers can do well in this environment too, says Greg McBride at Bankrate.com. In addition to low interest rates for car loans, says McBride, “with more people working, and gas prices down from one year ago, we continue to see a robust car-sales environment. Those that had put off buying a car in recent years jump back in the market.”

SUVs and pickup trucks are hot right now—Jeeps, Ford F-150s, and Chevy Silverados. That reflects a strengthening construction industry—contractors need big vehicles—and consumers’ expectations that gas prices will remain low for a while.

In Hollywood, a history of homelessness

Tue, 2015-06-02 02:00

As the number of homeless people in Los Angeles County grows—12 percent in the last two years—some businesses are feel the consequences. That's true in Hollywood, where tourists come expecting to see a celebrity, but are more likely to find a panhandler.

The situation isn't new.

Red Line Tours offers historical walking tours of the old movie palaces lining Hollywood Boulevard. As the tour guide explains, actors in the 1920's had a bad reputation.

"It was so bad that landlords would not rent to them. These actors would show up to apartment buildings, looking for housing, and all they found were signs in windows that read, 'NO DOGS, NO ACTORS ALLOWED.' It was such a problem for the studios that many of them had to build housing facilities of their own because many of their actors were homeless on the street."

Today, homelessness in Hollywood is still a problem.

"In the last couple of years, I've seen a pretty dramatic increase in homelessness on the street," says Tony Hoover, who owns Red Line Tours. He says Hollywood has gotten a bad reputation, partly due to aggressive panhandlers. And it has hurt his business.

"Our walk-in business—the people just coming here, that we would get randomly—that's probably dropped off a huge percentage, probably close to 50 percent," he says.

Businesses have hired a former policewoman, Courtney Kanagi, to help deal with the people camped out on Hollywood Boulevard.

"People want to see the Walk of Stars," she says. "They don't want to be stepping over people who are panhandling, asking for money, sleeping on the sidewalk. People may not want to go inside their business to buy products if they are being hassled on the way in."

Standing beside his homeless buddy, a 24-year old who goes by the street name Solo says he understands the tension between the homeless and wealthy business owners.

"They're walking around with a $40,000 Rolex, you know, for an accessory," he says. "That amount of money would change both of our lives."

For many tourists, the sight of panhandlers and the mentally ill sitting on the sidewalk is not what they expected.

One tourist from Israel says, "I didn't know so many people could live in the streets like this. I was shocked."

A man from India also noticed the homeless. "There's like quite a few over there. It doesn't look good."

But a family from Memphis says that the situation didn't hurt their experience. Instead, they say it inspires them to spend more time volunteering at a homeless shelter when they get home.

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