Marketplace - American Public Media

Coding in classrooms

Thu, 2014-12-11 10:16

Marketplace Tech Report host Ben Johnson chats with Adriene Hill about the Hour of Code, code.org, and why some classrooms are rushing to add coding to the curriculum. 

Click play above to hear the interview

Quiz: TMI? No such thing

Thu, 2014-12-11 04:58

A majority of Americans say the internet and cell phones improved their learning abilities, according to the Pew Research Internet Project.

Medical bills, bills, bills

Thu, 2014-12-11 03:00

43 million Americans have overdue medical debt on their credit reports, according to a new report out today by the Consumer Financial Protection Bureau. This means about one in five credit reports contain medical debt that’s been turned over to a collection agency, often dragging down consumers’ credit scores.

Unlike a credit card bill or an auto loan, medical bills often takes people by surprise, says Chi Chi Wu, a staff attorney with the National Consumer Law Center.

“Nobody chooses to say, ‘Tomorrow, I’m going to go the emergency room for an appendectomy,’” she says.

“Many people who walk into doctor’s office have absolutely no idea expense they’re about to incur,” adds Dan Mendelson, CEO of Avalere Health, a consulting firm.

Even if patient do ask, it can be difficult to get an answer.

“You’re in a system that is not ready to tell you how much things are going to cost,” says Mendelson.

Moreover, uninsured consumers often pay the highest rates for services, which they can’t afford.

For those patients with insurance, Wu says “there are billing errors [and] the providers might use the wrong codes. What happens is that if the bill gets too old, it automatically gets sent to a debt collector.”

That can ding consumers’ credit scores, which impact more than just interest rates and loan applications, says Susan Grant, with the Consumer Federation of America.

“It can be used by employers to decide whether or not to hire you, by landlords to decide whether or not to rent to you, by your insurance company to determine you rates," she says.

The CFPB is currently reviewing debt collection processes and will require the major credit reporting agencies to submit reports on how consumer disputes are handled.

 

PODCAST: New profits for drug cartels

Thu, 2014-12-11 03:00

A company arrives on the NY stock exchange today that hopes to disrupt how people borrow money. Plus, more on the news that Google News will shut down operations in Spain. And a new reminder today that violent crime and clever business can go hand in hand. We check in from time to time with our colleagues at Univision News, and they've been probing ways Mexican and Colombian drug cartels are diversifying into additional lines of work. 

Google News to shut down in Spain

Thu, 2014-12-11 02:00
3.5 million visitors

That's how many visitors Google News in Spain receives per month. Google announced it would be shutting down Google News in Spain in response to a new law that would charge the news service every time content from Spanish newspapers and publishers appeared.

252

The total mentions of waterboarding, and other interrogation methods involving water or temperature in the Senate's long-anticipated CIA torture report. The Washington Post published a graphic letting users explore all instances of "enhanced interrogation" described in the report. Or, if you'd prefer, here's a visualization of the report's redactions.

$4.5 billion

That's how much Lending Club, the leading online-lending-marketplace, could be valued at after its IPO on Thursday. It will be the first among several fast-growing financial start-ups expected to go public in the peer-to-peer lending industry.

300 million users

Instagram passed that benchmark Wednesday, edging out Twitter and getting that much closer to Mark Zuckerberg's billion-user gold standard. Comparing social networks isn't a perfect science, but Re/Code has a look at how active users compare across services. 

Re/code

42.9 million

That's how many Americans have unpaid medical bills according to the findings of a new report by the Consumer Financial Protection Bureau. That's nearly 20 percent of consumers.

$634 million

Universal's cash flow for the first nine months of 2014, putting the studio on track for its most profitable year ever. What's notable is that Universal did it without a big summer tent pole, Forbes reported. The studio's film slate, which is nearly complete, was full of projects with modest budgets. There weren't any earth-shattering successes or flops, but lots of return on investment.

Drug cartels find new ways to make money

Thu, 2014-12-11 02:00

Mexican and Colombian drug cartels are diversifying their sources of income, according to a new investigative report from Univision News. The report, “Los Nuevos Narcotesoros” (New Narcotreasures), details how illegal mining of gold and iron ore is fast becoming a profit center rivaling that of drug trafficking.

Marketplace Morning Report host David Brancaccio speaks with Gerardo Reyes, director of Univision’s investigative news unit, about the business and violence behind illegal mining.

Click on the audio player above to hear more.

Spanish speakers can learn more on Twitter via @UniNoticias.

An illegal mining site in Peru.

Univision

Miner vs Miner: A different kind of mineral conflict

Thu, 2014-12-11 02:00

Biyamungu Ngalikyana, in his mid twenties, sports shiny white rubber boots and a mining helmet as he walks down a dirt road in the mining town of Luhwindja in South Kivu, DRC. A former Mai Mai rebel fighter, he now digs for gold hundreds of feet beneath the surface. He’s what’s known as an ‘artisinal miner,' which means he’s just a regular person with hand tools, as opposed to a mechanized industrial outfit.

Mining in Eastern DRC has, over the past two decades, become an important source of revenue for individuals and towns during periods of insecurity and war. There are an estimated half million artisanal miners in Congo. At Luhwindja, 6,000 people in this town depend on the gold in the hills.

Perhaps not for much longer.

“Banro comes and tells us to leave fairly regularly,” says Ngalikyana. 

Banro is an industrial mining company that has held concession rights to this land for decades. 

“These miners are a handicap,” says Maitre Crispin Mutwedu, in charge of stakeholder relations for Banro. “The law that says no [outside] miner is allowed to work inside these areas covered by the concession, and yet every time we show up at a place, we find we were beat to it by several years by artisanal miners.” 

The Democratic Republic of Congo has granted thousands of mining concessions to industrial mining companies over the years. Industrial mines, when they can operate in conflict free areas, can prevent minerals from seeping into the black market or funding armed groups. They also provide tax revenue or infrastructure construction services. 

They do not, however, come close to providing the kind of employment that less efficient hand-mining provides to communities. And in regions that have been courting war for decades, unemployment can have dire consequences.

“I’m not leaving,” says Ngalikyana. “There’s nowhere else to go, there’s no work. If I end up in the street, I”ll go back to the bush and start robbing people again, and maybe I’ll rob Banro.”

These risks are not lost on Mr. Mutwedu with Banro.

“These people who are here, these are people who we have to take seriously. Because if you don’t, and if they’re out of work, you will be too,” he says.

More than most mining companies, Banro has engaged with communities to determine compensation packages or the possibility of relocating to ‘artisinal zones’ set aside elsewhere. 

Valentin Lubala, president of the miners association at a mine called Mukwunge (also in the Banro concession), is frank about the reality: “We understand the site belongs to them. We negotiated, and Banro said they’d give us some time, and the government could help us relocate.”

“The problem comes from the regional government,” he says. 

Technically, it’s not legal to share a concession with artisanal miners, and the regional minister of mines, Adalbert Murhi, has refused to sign off on their agreement. 

A group of NGO’s in South Kivu has accused him of mismanagement and corruption, charges which he firmly denies. 

Meanwhile, groups are trying to convince the government to alter the law or be more flexible. For the moment, it’s easier to find gold than solutions.

Google News shuts down in Spain

Thu, 2014-12-11 02:00
3.5 million visitors

That's how many visitors Google News in Spain receives per month. Google announced it would be shutting down Google News in Spain in response to a new law that would charge the news service every time content from Spanish newspapers and publishers appeared.

252

The total mentions of waterboarding, and other interrogation methods involving water or temperature in the Senate's long-anticipated CIA torture report. The Washington Post published a graphic letting users explore all instances of "enhanced interrogation" described in the report. Or, if you'd prefer, here's a visualization of the report's redactions.

$4.5 billion

That's how much Lending Club, the leading online-lending-marketplace, could be valued at after its IPO on Thursday. It will be the first among several fast-growing financial startups expected to go public in the peer-to-peer (P2P) lending industry.

300 million users

Instagram passed that benchmark Wednesday, edging out Twitter getting that much closer to Mark Zuckerberg's billion-user gold standard. Comparing social networks isn't a perfect science, but Re/Code has a look at how active users compare across services. 

A graph of Active Users on the top social networks.

Re/code 42.9 million

That's how many Americans have unpaid medical bills according to the findings of a new report by the Consumer Financial Protection Bureau. That's nearly 20% of consumers.

$634 million

Universal's cash flow for the first nine months of 2014, putting the studio on track for its most profitable year ever. What's notable is that Universal did it without a big summer tent pole, Forbes reported. Their film slate, which is nearly complete, was full of projects with modest budgets. There weren't any earth-shattering successes or flops, but lots of return on investment.

Lending Club goes public

Thu, 2014-12-11 02:00

Lending Club—the leading online-lending-marketplace, based in San Francisco—goes public on Thursday. The IPO will be the first among several fast-growing financial startups expected to go public in the peer-to-peer (P2P) lending industry, and could raise $800 million or more for the company, giving it a total market value of in the range of $4.5 billion.

Lending Club matches individuals and businesses that want to borrow with lenders—mostly hedge funds, wealth managers and institutional investors. Borrowers pay interest rates ranging from 7.6 percent to 24.9 percent, based on their credit-worthiness, according to Lending Club’s website. Lenders on the site, meanwhile, can realize attractive net returns, in the 7 percent to 9 percent range.

Loan applications and underwriting are done online, cutting some of the cost and hassle of borrowing from a regular bank. That could help P2P lenders disrupt the established banking business and grab market share.

10 of the most expensive TV shows ever made

Thu, 2014-12-11 00:12

Netflix's newest series, “Marco Polo,” will cost $90 million for a 10-episode season, making it one of the priciest TV shows ever ... pretty steep for a show that won't actually air on TV.

How did TV shows become so expensive? 

In honor of "Marco Polo's" premiere, here is a list of some of the most expensive TV shows ever made. 

10. Terra Nova (2011): $4 million per episode

(Youtube)

“Terra Nova” was an ambitious flop, and proof that a big budget does not necessarily equal commercial success. Despite a pilot that reportedly cost at least $10 million, Fox cancelled the sci-fi epic after a few weeks.

9. Deadwood (2004-06): $4.5 million per episode

(Warning: An obscenity is uttered at the end of the trailer)

“Deadwood” is a western that aired on HBO for three seasons. Between horses, wagons, livestock coordinators and a large ensemble cast, the show was gorgeous to look at, but as with many other HBO shows, that quality came at a price.

8. True Blood (2008-14): $5 million per episode

 

(Youtube)

Sure, vampires are trendy and oh-so pretty, but in this case they also come with a hefty price tag. “True Blood” is one more example of HBO 's willingness to shell out to create good-looking television. Unlike other high-budget HBO shows that aired for for only two or three seasons, “True Blood” got seven thanks to a vocal committed fan base.

7. Boardwalk Empire (2010-14): $5 million per episode

(Youtube)

At about $5 million per-episode, “Boardwalk Empire” is an expensive production – but the most staggering number is the nearly $20 million it took to make the pilot. Directed by Martin Scorsese, the show built a $5 million, 300-foot-long boardwalk to re-create Atlantic City in the '20s.

6. Game of Thrones (2011-present): $6 million per episode

(Youtube)

HBO, again: “Game of Thrones” premiered on the network in 2011, and is currently one of the most popular shows on television. It made headlines when $8 million was spent on one particularly epic second-season episode – it cost $2 million more than the average "Thrones" episode. (By comparison, an average cable show costs $2 million per episode.)

5. Camelot (2011): $7 million per episode (Starz)

It was received moderately well by audiences, but “Camelot” was not the success the Starz network hoped for. One problem: It had the misfortune of premiering around the same time as “Game of Thrones,” which would win the battle of the period dramas. “Camelot” was cancelled after one season. 

4. Rome (2005-07): $9 million per episode

The two-season historical drama had all the elements of an expensive production: Elaborate sets and costumes, overseas locations and a large cast. Series creator Bruno Heller has laid claim to being a pioneer, saying that “Rome” paved the way for other big-budget dramas like “Game of Thrones."

3. Marco Polo (2014-present): $9 million per episode

“Rome” also may have paved the way for the new show, “Marco Polo." The Netflix show, premiering on Dec. 12, has many of the trappings of other recent high-budget shows: It is a historically based drama filmed overseas in Italy and Kazakhstan, and produced in Malaysia.

2. Friends (1994-2004): $10 million per episode (season 10)

(Getty Images/Handout)

Over the course of 10 seasons, “Friends” became a cultural icon, a huge commercial success and produced no shortage of awkward cast photos. By the final season, the six co-stars each made $1 million per episode, a major reason the otherwise low-budget sitcom ended up near the top of this list. 

1. ER (1994-2009): $13 million per episode (at its peak)

(Getty Images/Handout)

“ER,” like "Friends,” was not always so pricey. But after re-negotiations in 1998, NBC agreed to pay Warner Brothers $13 million per episode. One TV producer called the deal “the half-a-billion-dollar blunder,” since the show cost the network $440 million over a two year period – but the "blunder" had staying power. "ER" ran until 2009, ending after 15 seasons and 331 episodes. Some might say the money was worth it just so George Clooney's million-dollar eyes could seduce the camera. Do you see it?

(Getty Images/Handout)

Yup, there he is.

(Note: Dollar amounts have not been adjusted for inflation.)

BET founder Bob Johnson wants a Rooney Rule for business

Wed, 2014-12-10 13:36

Bob Johnson, the first black billionaire and founder of BET,  has an idea for how to diversify the workplace: use the NFL's Rooney Rule, which requires interviewing minorities for football production jobs.

Don't most big companies already have best-practice rules to encourage diversity? "The companies say they do it, they have a commitment to do it," Johnson says, "but unfortunately, the results don't turn up in terms of the numbers yet." 

Johnson believes that there are countless talented, qualified minority Americans who aren't getting an open door. "If the minority meets the qualifications, they should be given every opportunity to be hired," he says. 

But how do companies get managers to broaden the applicant pool? According to Johnson, the boss has to be on board.

"It takes a commitment from the top, and the top being the CEO ... and then of course the members of the Board of Directors."

 

At climate change meeting, poor countries step forward

Wed, 2014-12-10 11:01

A two-week U.N. conference on climate change is nearing its end in Lima, Peru. The summit tees up a big theme for further negotiations in Paris next year: Make an offer.

Countries will likely make individual pledges to take action, instead of negotiating a global treaty with requirements. In a big change from prior negotiations, historically poor nations have started offering pledges of their own. The trend started with China's agreement with the United States, announced last month.

"The way the paradigm has been laid out for the last 20 years, developing countries – China included – really don't have to take actions or make commitments," said Ray Kopp, a senior fellow at the think tank Resources for the Future, from Lima. Now poorer countries are seeing evidence that they should participate, too.

 

BMW sponsors a series of articles about ... BMWs

Wed, 2014-12-10 11:00

BMW has partnered with the website Medium for a series of sponsored posts explaining how the car company's design process works.

One article focuses on the acoustics of the door closing on the new BMW 4 Series Gran Coupe. The person at BMW responsible for perfecting the new door-closing sound profile, Florian Frank, has an actual title: "Specialist for noise, vibration and harshness."

Click the audio player above to hear what the door sounds like before and after the acoustic engineers got their hands on it.

I couldn't tell the difference either.

All-Christmas music stations make money. Lots of it

Wed, 2014-12-10 11:00

Even before Thanksgiving, more than 100 radio stations across the country have switched to an increasingly popular format: all Christmas music, all the time. 

And that switch to 24/7 Christmas music is coming increasingly earlier in the season, even as early as before Halloween for a handful  of stations, including WVEZ in Louisville, Kentucky. 

"It’s actually a strategic move, in terms of how our radio stations are rated,” says Shane Collins, program director at WVEZ. “We gain tremendous amount of total audience. There are occasions where the audience will increase as much as 40 to 50 percent.”

Across the country, in the top 50 media markets, the combined audience for radio stations playing Christmas music more than doubles during the listening season, according to Nielsen Audio, which provides ratings for radio stations. Last year on Thanksgiving, the stations had a combined daily audience of 12.3 million listeners. By Christmas Eve, the audience peaked at 28.6 million. 

By playing Christmas music starting in October, instead of December, Collins hugely expands his listening audience for two extra months, he says. That means he can charge higher rates for advertising on his station. 

Little wonder then that stations across the country are elbowing each other to be known as the Christmas music station in their cities. Jon Miller of Nielsen Audio says that’s why stations are switching earlier in the season every year, as they try to become the Christmas music leader. 

“That’s kind of a cat and mouse game of who’s going to go first,” Miller says. “There’s not room for four or five stations to do it in every market … and get really big ratings…. Whoever owns the position tends to benefit the most.” 

By the end of the year, some 500 stations will have made the switch, according to Nielsen. Radio industry consultant Jim Richards says the phenomenon picked up steam only in the last 10 years or so. And at first, he says, stations were cautious. 

“We started doing it ... over Thanksgiving holidays … certainly the start of the Christmas shopping season happens there, and ... we weren’t interrupting our normal listening habits,” Richards says. 

Stations were worried that unhappy listeners might abandon their station forever, says Richards. But that’s not what’s happened over the years. 

“The phenomenon of this whole thing is that for the most part, come the second week of January of the third week of January, the listener's patterns of radio usage pretty much return to normal,” Richards says.

That all-Christmas music station makes money. Lots of it

Wed, 2014-12-10 11:00

Even before Thanksgiving, more than 100 radio stations across the country have switched to an increasingly popular format: all Christmas music, all the time. 

And that switch to 24/7 Christmas music is coming increasingly earlier in the season, even as early as before Halloween for a handful  of stations, including WVEZ in Louisville, Kentucky. 

"It’s actually a strategic move, in terms of how our radio stations are rated,” says Shane Collins, program director at WVEZ. “We gain tremendous amount of total audience. There are occasions where the audience will increase as much as 40 to 50 percent.”

Across the country, in the top 50 media markets, the combined audience for radio stations playing Christmas music more than doubles during the listening season, according to Nielsen Audio, which provides ratings for radio stations. Last year on Thanksgiving, the stations had a combined daily audience of 12.3 million listeners. By Christmas Eve, the audience peaked at 28.6 million. 

By playing Christmas music starting in October, instead of December, Collins hugely expands his listening audience for two extra months, he says. That means he can charge higher rates for advertising on his station. 

Little wonder then that stations across the country are elbowing each other to be known as the Christmas music station in their cities. Jon Miller of Nielsen Audio says that’s why stations are switching earlier in the season every year, as they try to become the Christmas music leader. 

“That’s kind of a cat and mouse game of who’s going to go first,” Miller says. “There’s not room for four or five stations to do it in every market … and get really big ratings…. Whoever owns the position tends to benefit the most.” 

By the end of the year, some 500 stations will have made the switch, according to Nielsen. Radio industry consultant Jim Richards says the phenomenon picked up steam only in the last 10 years or so. And at first, he says, stations were cautious. 

“We started doing it ... over Thanksgiving holidays … certainly the start of the Christmas shopping season happens there, and ... we weren’t interrupting our normal listening habits,” Richards says. 

Stations were worried that unhappy listeners might abandon their station forever, says Richards. But that’s not what’s happened over the years. 

“The phenomenon of this whole thing is that for the most part, come the second week of January of the third week of January, the listener's patterns of radio usage pretty much return to normal,” Richards says.

Uber needs to say more than 'I'm sorry'

Wed, 2014-12-10 11:00

Funny how the tables can turn. Uber was once tracking customers to see how many were doing the walk of shame. But now it’s the one looking like a hot mess.  

“When you think about brands, really people judge them the exact same way that you judge people,"says Alyson Schonholz, group director of strategy and insights at strategic branding firm Siegel+Gale. Uber could start cleaning up its reputation by admitting its mistakes, she says, but what it really needs to do is change its business practices so the same problems don’t happen again.

Consider the case of gas and oil giant BP, when it faced a PR crisis a few years ago. 

“They decided to shift their brand from British Petroleum to BP and they launched a new logo that was much more friendly and in tune with environment. But that just became lipstick on pig," said Schonholz.  "There were no real actions behind it that showed people that they were a different kind of company. And people are smarter than that. And they expect more from their brands. So to just apologize alone isn’t going to be enough for Uber."

In some ways Uber is like a little kid sitting at the adult’s table for the first time. But no one’s taught it table manners yet — which fork to use or trained company executives to deal with the media or with a crisis. “What is obvious about Uber is that they don’t have a crisis-management strategy in place — at all,” said Brad Hecht, chief research officer at Reputation Institute. 

"You have to respond immediately. You have to be transparent," he said. You have to apologize and be accountable and you have to have a plan for how you’re looking to resolve it.”

When it comes to reputation, it's not really about the problem, it’s about how a company reacts.

Just look at Home Depot and Target. In the past year, both companies found they'd been the victims of data breaches. Target executives had a delayed response, didn’t fully admit to what the problem was or offer a plan to resolve it, Hecht says. But Home Depot immediately apologized and put a plan in place to provide a fix. The result were visible — in both company's stock prices.

"Really Home Depot just ended up having small blip, while Target’s dropped significantly," Hecht says.

In a blog post, Uber co-founder Travis Kalanick says the company's growth has come with growing pains. And acknowledging its mistakes are the first steps toward fixing them. 

"Done right, it will lead to a smarter and more humble company that sets new standards in data privacy, gives back more to the cities we serve and defines and refines our company culture effectively," Kalanick wrote.

Peter Himler, founder of PR firm Flatiron Communications, says Uber needs help.

"I’m not sure that Uber has been as contrite and earnest as they could be," he said.  But he says, luckily for the company, it has some powerful backers in its corner who stood up for Uber during some of its its recent problems. For instance, investors Ashton Kutcher and Jason Calacanis both have huge social media following and have expressed support for Uber, Himler says.

And while Uber may be feeling growing pains, the company is continuing to grow.

Uber's valutation is in the multibillions and the company has a firm grip globally, Himler says.

"They're making billions, I believe, around the world," he said. "So, there’s no stopping them at this point — even with these gaffes they’re going to prevail."

[PODCAST: Redefining currency in the Congo

Wed, 2014-12-10 03:00

First up, oil prices fell to new lows today, after the oil producer's cartel, OPEC, forecast that demand won't be there in the coming year for all the  fossil fuel its members plan to pump. Using the Texas benchmark, crude fell another 2 percent to $62.54 a barrel this morning, and some market analysts say this is the reason share prices are slumping this morning. And Michigan Governor Rick Snyder has now given the okay to end the city of Detroit's emergency status. This represents a milestone in the city's efforts to move out of its financial crisis, and positions Detroit to officially emerge from bankruptcy as early as this week. More on that. Plus, Eastern Congo was once a leading candidate for worst place on earth. War, child soldiers, rape, refugees. But cautiously, the region has entered a period of reconstruction. After all the reporting on the horrors of Eastern Congo over the years, we thought it's time to also look at efforts to get the region back on its feet. One lifeline over the years has been the U.S. dollar, which has operated in the area as alternative currency. But as we find out, the country is now trying to wring those dollars out of its economy.

Lululemon tries to juice up its product line

Wed, 2014-12-10 02:00

Lululemon Athletica, the retailer known for its line of comfy but pricey yoga and athletic apparel, is still working to regain its balance after some major PR stumbles over the past couple years. It's forthcoming earnings report, out Thursday, will give a snapshot of its current performance.

Lululemon’s reputation, sales and stock price suffered when it had to recall some yoga pants in 2013 for their unfortunate see-through quality. The company’s founder made matters worse when he suggested some women’s bodies weren’t right for the pants.

Now it’s trying to bounce back by updating its product line with snazzy floral prints and even sequined pants. But sequins alone may not make Lululemon sparkle again.

“They’re going to take a lot more fashion risk. Whenever you have that much more variety you have more markdowns, misses," says John Horan, publisher of Sporting Goods Intelligence.

The fancier stuff costs more to produce, according to Sam Poser, an equity analyst with Sterne Agee. And he doubts it will bring new customers in the door.

“They can fix the product but they can't fix the mojo," Poser says.

Poser says Lululemon needs to focus on its other former strong suit: great customer service.

Autoworkers want to make up for long wage freeze

Wed, 2014-12-10 02:00

U.S. car manufacturers are wrapping up a banner year, which saw high sales and high profits, despite the many recalls.

Those profits will be front and center as the United Auto Workers sits down with industry executives to hammer out a new contract.

Five years ago, few would have imagined a future as bright as today. Hiring is up, profits are up, gas is down, and the Detroit Three have a stable of sexy new cars.

Profits are up in part because wages for senior workers have been frozen for 10 years, and new hires are now paid on a much lower scale.

"You know it is hard when you have people working right next to each other making two different wages, basically doing the same work,” says Tim O’Hara, vice president of UAW Local 1112 at the GM assembly plant in Lordstown, Ohio. 

“Hopefully we can get that turned around in the negotiations coming up," he says.

Many industry analysts think the UAW has a strong case. Bill Visnic, a senior editor at Edmunds.com,  says the UAW will likely make the case that the period of austerity in Detroit is over.

“They could say, ‘We see your quarterly reports, you’re making billions of dollars, you know, share that with us,'” says Visnic.

Visnic points out that it hasn’t been all sacrifice for autoworkers, many of whom have received hefty profit-sharing bonuses in recent years. 

Moreover, carmakers aren’t likely to roll back the concessions they feel are key to their current success.

Why the Congo is so dependent on the U.S. dollar

Wed, 2014-12-10 02:00

Ask anyone in the Democratic Republic of Congo what they have in their wallets and you will most likely get the same answer: Congolese Francs, and U.S. dollars. 

"It's not normal. It's not normal!" says Arsene Ntambuka with a resigned laugh. Ntambuka is regional head of TMB, one of the major banks here. 

The U.S. dollar is one of the many scars Congo bears from the two wars and prolonged guerilla conflict that has stayed with the country ever since Rwanda's genocide spilled over the border in the mid 90's. Congo's own currency, the franc, fell apart as the country was plunged into chaos twenty years ago.

"We had hyperinflation in the Congo, running at thousands of percent," recalls Mwanza Singoma, head of the North Kivu Chamber of Commerce. Inflation got so bad, groceries would double in price every 25 days.

The government decided it had to let in the dollar. 

"The only haven that companies had was to operate in foreign currency; this was the only way they could protect themselves against inflation," says Singoma.

The U.S. dollar saved the bank accounts and mattress hoards of innumerable Congolese from evaporating. To this day, 90 percent of Congolese savings are in dollars. 

So why not just adopt the dollar as the Congolese currency? There's one small, but simple, hitch.

"The Congolese Central Bank cannot issue dollars," says Ntambuka dryly.

As time moved on, the dollars didn’t. The Federal Reserve doesn’t operate in Congo, so there was nobody replacing old dollars. They got older, and dirtier. By 2008, some U.S. dollars in circulation were so fouled they were practically jet black. It was hard to see if they were actually dollars at all.

"Worn out dollars lose value," explains Esoko Akambele, a money trader. He stands on street corners with fat stacks of Congolese francs, Euros, and U.S. dollars, willing to trade with any car that pulls up. "The worn out or torn dollars are cheaper than new dollars."

Westerners accustomed to pulling out crumpled dollar bills receive glares or indignant stares for "keeping your dollars so badly."

These days though, many of his Akambele's bills are sparkling, crisp, new. The brand new hundred dollar bill can be found coming out of ATM's in Goma. 

"Currently we can find new dollars bills, it's easier," he says.

In some ways that is a good sign. It means trade is bringing in new dollars, and banks are operating normally. 

The dollar, however, has come with a price, says Ntambuka the banker.

"It costs us dearly to bring in those dollars," he says. Literally, his words translate to "it costs us gold to bring in these dollars." (It may indeed well—Goma is one of several regional hubs for gold trading.)

And quite literally, banks have to fly planeloads of dollars in from accounts in the U.S. These are either accounts that hold U.S. dollars earned from the export of Congolese goods or minerals, or they are investment accounts held by the banks. 

"We have to. All the banks in Congo have to do this," says Ntambuka. 

Banks pass on those costs in fees, says Ntambuka. And there are no U.S. coins here—too expensive to ship—so a price tag that should read $1.50 gets rounded up to $2.00. 

"It's unjustified inflation," he says. But the biggest problem is that the Congolese government can't control it's country's money supply.

"It's not your money, so you have to submit to the consequencs of decisions taken there [in Washington]. You have to adjust your own policy to deal with a monetary policy made by another country," he says.

The Congolese government is trying to slowly reassert the franc. It has kept inflation under control successfully for the past few years, which is important to regaining the trust of every day Congolese. It is slowly releasing 20,000 franc bills to make it more practical to make large payments in francs. Civil servants are only paid in francs, and taxes are demanded in them. But ultimately, you restore a currency "not by law, but by confidence," says Ntambuka.

Which means a dollar-free Congo is still a long way off.

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