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Apple readies streaming music service

Fri, 2015-06-05 01:58

Apple is expected to announce its long-rumored streaming music service next week during its developers' conference in San Francisco.

The service has been anticipated ever since the tech giant bought Beats, the headphone and streaming music company, last year. It is expected to cost about $10 a month, and include radio-like music channels with DJ hosts.

Apple will enter into a crowded field with established players such as Spotify and Pandora, which command the most music streaming plays.

The company is taking on that challenge as music consumption shifts from downloaded, and bought, mp3 tracks to streamed music that is either made available free through ad-supported networks or through a monthly subscription.

In May, Warner Music Group, one of the three biggest music license holders, said that streaming music revenue in the last quarter surpassed revenue from downloads for the first time, growing 33 percent.

Younger audiences, such as 20-year-old Sylvie Grace, a musician from Chicago, are increasingly streaming rather than downloading.

"I used to [download]," Grace says, "when my mom was paying ... but I haven't bought something online in a long time."

Twenty-year-old Michelle Chan, who was visiting the Apple store in downtown Chicago on a recent afternoon, says she streams music for free on Spotify, as much for the convenience as for the price.

"They have playlists all set, so you don't have to look for music. And you can type in whatever you want," Chan says, adding that she does occasionally pay to download music, but only when it is not available on Spotify.

"The trend right now is pretty clearly that streaming is growing by leaps and bounds," says David Bakula of the entertainment tracking firm Nielsen.

Single track sales of mp3s on iTunes and elsewhere are down about 10 percent so far this year, Bakula says, while the volume of on-demand streams, in which Apple has little presence, has almost doubled to more than 110 billion in the first five months of this year.

"We found that two-thirds of people are streaming music on a weekly basis," Bakula says, "It's really permeating every demographic of society."

This massive audience is fragmented among a number of disparate music services: Spotify, where they can play specific songs on demand; Pandora, which plays music in channels, curated by an algorithm; YouTube and Vevo, which stream music videos; live streams of terrestrial radio stations with DJs, and other services.

Apple could entice that fragmented audience just by making music streaming easier on the iPhone, for example, by integrating into the phone's native music app.

Colin Gillis, an analyst who tracks Apple at the brokerage firm BGC Partners, has been sounding caution about the tech giant's reliance on the iPhone for profits, and says diversifying into other revenue streams and protecting their revenue from music are both important goals.

"They should have a streaming music service. They should have a streaming video service, a la Netflix," Gillis says, adding that ancillary services are still likely to generate only a small fraction of Apple's profits in the near future.

Silicon Tally: How many researchers does it take...

Fri, 2015-06-05 01:46

It's time for Silicon Tally! How well have you kept up with the week in tech news? 

This week, we're joined by Marketplace reporter Stan Alcorn.

Click the media player above to play along.

How the two-liter soda is a relic of change

Fri, 2015-06-05 01:07

That's about how much Apple's new streaming music service will reportedly cost for unlimited music. The two-tiered service is likely to be announced next week. We took a closer look at what Apple might have to offer in comparison to other options in an already overly crowded music streaming market.

$488 million

That's how much the Red Cross raised for aid in Haiti following a devastating earthquake in 2010, more than any other aid organization. The Red Cross pledged to build hundreds of homes and says it's helped millions of Hatians with that money, but NPR and ProPublica's continuing investigation found that most of these claims were murky and unsubstantiated. In fact, some communities have reportedly received little or none of the promised aid.

17 percent

Summer is upon us, which means many teenagers will be looking for jobs. The good news is that teen unemployment is down to around 17 percent;  in 2009, it had soared to 27.2 percent. But experts point to other economic challenges getting in the way of young Americans and that summer gig.


That's how many countries don't use the metric system: Liberia, Myanmar and the U.S. There have been some changes here, but they haven't moved past the beverage aisle. The hope was that recognizable, accessible measurements like a two-liter soda would ease the transition, but somewhere along the line things stalled.


That's the vote by the Food and Drug Administration approving flibanserin. Think of it as "Viagra for women." As the New York Times reports, the vote followed an intense lobbying campaign that accused the FDA of gender bias when considering drugs that treat sexual performance.

How the 2-liter soda is a relic of change

Fri, 2015-06-05 01:07


That's about how much Apple's new streaming music service will reportedly cost for unlimited music. The two-tiered service is likely to be announced next week. We took a closer look at what Apple might have to offer in comparison to other options in an already overly crowded music streaming market.

$488 million

That's how much the Red Cross raised for aid in Haiti following a devastating earthquake in 2010, more than any other aid organization. The Red Cross pledged to build hundreds of homes and says it's helped millions of Hatians with that money, but NPR and ProPublica's continuing investigation found that most of these claims were murky and unsubstantiated. In fact, some communities have reportedly received little or none of the promised aid.

17 percent

Summer is upon us, which means many teenagers will be looking for jobs. The good news is that teen unemployment is down to around 17 percent;  in 2009, it had soared to 27.2 percent. But experts point to other economic challenges getting in the way of young Americans and that summer gig.


That's how many countries don't use the metric system: Liberia, Myanmar and the U.S. There have been some changes here, but they haven't moved past the beverage aisle. The hope was that recognizable, accessible measurements like a two-liter soda would ease the transition, but somewhere along the line things stalled.


That's the vote by the Food and Drug Administration approving flibanserin. Think of it as "Viagra for women." As the New York Times reports, the vote followed an intense lobbying campaign that accused the FDA of gender bias when considering drugs that treat sexual performance.

WikiLeaks offering $100,000 for copy of the TPP

Thu, 2015-06-04 13:00

One last mention of the video version of our interview with President Obama: find out why we don't let him hold the microphone all by himself.

Oh, and there's some good trade policy stuff in that interview, too.

In other news: Wikileaks still has that $100,000 reward out for a copy of the Trans-Pacific Partnership.

Their crowdfunding of it isn't working out so well.

About $47,000 had been raised as of Thursday afternoon.

This phone and TV merger is all about spectrum

Thu, 2015-06-04 13:00

There once was a time when we got our phone service from the phone company, and our cable TV from the cable company, and our wireless from a cellphone company.

Then, along came bundling. But these days, market growth for everyone hinges on one factor — wireless spectrum, the capacity to stream loads of content to customers.

So now entire companies are getting bundled. Merger talks between Dish Network and T-Mobile are the latest in a flurry of deals that could reshape the telecommunications industry.

“The deal makes sense. It makes sense for both of them,” telecommunications analyst Jeff Kagan said.

What all of these deals come down to is reaching consumers on their wireless devices.

“Instead of it being new and a novelty, all of the competitors are going to be jumping into the same space offering the same kind of delivery methods because that's what customers want, and if you don't offer it, you're going to go out of business,” Kagan said.

But unlike previous mergers, say, between your internet and cellphone company, to roll out wireless streaming you need spectrum—lots of it. Think of it as the invisible signal that delivers the content to your device.

“You’re really seeing a bit of an arms race right now, or maybe a land grab, in terms of getting some of the spectrum under ownership,” William Blair and Company senior analyst Jim Breen said.

Spectrum, Breen notes, is a finite resource, there is only so much, and Dish has been buying up spectrum at government auction for years.

What Dish doesn’t have is a wireless carrier. T-Mobile has the wireless network and wants more spectrum.

“It would put them on par with AT&T and even slightly ahead of Verizon in terms of the total spectrum capacity that they have,” Breen said.

Breen said this marriage of a TV company with a wireless carrier has raised concerns from regulators in the past. Those fears seem to be waning, as many expect the government to soon okay the proposed $49 billion merger of AT&T and Direct TV.

China may join the TPP...but it'll take a while

Thu, 2015-06-04 13:00

President Obama, in an interview with Kai Ryssdal yesterday, revealed that the U.S. and China have been in talks about the Trans-Pacific Partnership. Andy Rothman, investment strategist at Matthews International Capital Management, analyzes the impact of China joining the TPP.

On Chinese and U.S. conversations about the Trans-Pacific Partnership:

These talks, I think, are at a very preliminary stage largely because the bar that the U.S. is setting for countries to join the TPP is pretty high. At the same time, we need to keep in mind, that there’s a lot of other stuff going on out there. The Chinese and the U.S. are having much more detailed conversations about a bilateral investment treaty known as a BIT and that’s likely to happen a lot earlier than China joining the TPP.

On who writes the rules:

What China wants to do is have a hand in writing the rules. That’s really what trade negotiations are about. It’s everyone getting together and writing the rules, and in fact that’s worked really well for us in the past…since China has joined the WTO, U.S. exports to China are up more than 600 percent whereas during that time, U.S. exports to the rest of our major trading partners are only up by 100 percent.

On the U.S. including China in the TPP:

 I doubt that the TPP will even come to life without China in the next couple of years. It’s going to take time, but in the meantime, we need to make sure that we keep bringing China into more trade agreements like the bilateral investment treaty, because these have always proven to be good for the U.S.


America's lengthy courtship with the metric system

Thu, 2015-06-04 13:00

Meters and litres. It's an unusual plank for a presidential platform, but Lincoln Chafee, the former US senator from Rhode Island — who was first a Republican, then an independent, and now a Democrat — said in his campaign announcement this week that the U.S. ought to convert to the metric system.

It highlights our lengthy history with the measurement system used by everyone else, besides fellow holdouts Liberia and Myanmar.

But the U.S. wasn’t always so lonely. The U.S. started down the highway to metrication, but pulled over the side of the road. Don Hillger, the president of the U.S. Metric Association, says the golden period for metric fans was around 1980. "Many former British Commonwealth, English-speaking countries in the world decided that they were going to adopt the metric system," he says.

Canada went metric in the 1970s. They had a plan and a public awareness campaign. One of their ads, which featured a cartoon shoveling his stoop, says "100 centimeters of snow … is an awful lot of snow."

That’s what works, apparently, a cultural change that helps people imagine the differences between old and new. Hillger says the problem here is the Metric Conversion Act of 1975 had one deadly word: voluntary. "I think they thought that, well, it would probably happen because big, larger companies change and then the other ones follow."

As you know, that didn’t quite happen.

But Elizabeth Gentry, the metric coordinator at the National Institutes of Standards and Technology says a lot of big companies did convert after that act: Caterpillar, GM, IBM. Plus, an entire industry: booze.

"They modified the law to permit the use of metric units on the packaging," Gentry says.

She says that business-focused change helped Americans become comfortable with liters and grams… that’s why you know what a two-liter bottle of coke looks like:

Daniel Case/Wikipedia/Creative Commons

In fact, metric is officially America’s preferred system for trade and commerce. Meters in the office, inches at home. This exact problem was identified in our own metric cartoon from the 1970s:

How do you parody a parody?

Thu, 2015-06-04 13:00

What is it about those salacious, outrageous Lifetime movies that keep us coming back for more?

Well, for one thing, they're kinda awesome.

Take this trailer for the new high school-thriller "Double Daddy." The plot? Oh, just your average 17-year-old who is shocked to learn her boyfriend has impregnated a new girl at school ... but even more shocked when she discovers that she too is pregnant. Cue the dramatic music.

So when Lifetime put up a poster announcing a movie called "A Deadly Adoption," starring the comedians Kristen Wiig and Will Farrell, it got us wondering: How exactly do you pull off a spoof of yourself, without alienating your fans?

Emily Newman, art professor at Texas A&M University-Commerce, is writing a book on Lifetime. She's a big fan.

"Most Lifetime viewers are in on the joke," she says. "We know we are watching these movies that are ridiculous and terrible and over the top, and that’s part of the fun of it."

Which seems to raise another important question: How do you parody a parody?

David Isaacs, professor at the USC School of Cinematic Arts and the co-head of the Comedy @SCA initiative, says the trick to pulling it off will be playing it dead on. Straight ahead.

But, regardless of the quality of "A Deadly Adoption," Lifetime has already scored, he says.

"When you are competing with so many other broadcast entities, cable, pay, this gives them an absolute promotional bonanza, I would suppose," Isaacs says.

When graduating from high school is just the first step

Thu, 2015-06-04 11:39
When I first met Raven Gribbins almost three years ago, she was 17, a senior at Oyler School, in Cincinnati, Ohio. Her light brown hair was slicked back in a ponytail after volleyball practice. Raven grew up in Lower Price Hill, one of Cincinnati’s poorest neighborhoods. No one in her family had ever finished high school.

"Everybody used to tell me all the time, 'You’re not going to make it through high school,'" she said then. "You’re going to have a baby by 16. So I'm glad to prove all them wrong."

Now, Raven is sophomore at Penn State State Greater Allegheny, a small campus outside Pittsburgh. Her long hair is dyed black, to match her name. And her old teenage defiance now sounds a bit more like confidence.

"Since I've been here, I done [sic] grew up a lot more," she says. "To be in the first in my family to go to college, and to make it here and still be here, it's a good feeling."

Raven almost didn't make it. When she started college last year, she acted like a lot of students away from home for the first time.

"I was trying to live the college life like you see on TV and movies and stuff," she says. "You get to turn up and drink and have fun and don't worry about school work."

She ended up failing several classes. As a result, she lost her financial aid for this year, and had to borrow more than $18,000 to stay in school. Her bad grades also got her tossed from the volleyball team. Volleyball was the reason she'd been recruited to Penn State.

"It broke my heart going to the games," she says. "I was like, 'I can't do it no more, I've got to get my stuff together. I've got to get these grades up so I can play.'"

So she's been getting help, from people like April Belback, who runs a program on campus called ACE, the Center for Academic and Career Excellence. It's a federally funded support program for low-income and first-generation college students. The push to enroll more low-income students in college has left schools grappling with how to help them succeed. Those students are much more likely to drop out than students from more affluent backgrounds.

Raven comes to the center for tutoring, workshops and advice about classes. On a recent day, she and Belback go over a presentation Raven will give later in her criminal justice class.

"Do you want to practice?" Belback asks.


"Do you have a PowerPoint?"

Another "nope."

Belback keeps pressing until Raven fishes a paper out of her bag for Belback read.

This is known as intrusive advising. It's a strategy to keep at-risk students on track. Belback says last year she needed to intrude a lot more. She went to Raven's classes to make sure she showed up, and even woke her up for class on occasion.

"She just doesn't need me to do that anymore, which is kind of cool," Belback says. "The second year, I just feel like she’s coming into her own."


Raven wanted to be a math teacher, but struggled with college-level math. So she also switched her major this year, from Education to Criminal Justice. And she's brought her grades up enough to get her aid back, and play volleyball again next fall.

But Raven's second year hasn’t been easy either. Her dad, who had been clean for almost seven years, started using heroin for a while. Raven blamed herself for not being around. Her grandfather, who pretty much raised her, got really sick.

"A lot of times I was ready to just transfer and be back home with my family," Raven says. Her grandfather told her she was better off staying in school.

"I'm going to do it for him," she says. "To prove to him that he raised a great granddaughter and I'm going to make something out of my life. To show him that we can do it."

There is a lot of pressure on Raven. For one, Marketplace has been reporting on the progress of Raven, and her old school Oyler, since 2012. A mentor who heard one of those stories paid for half of Raven's tuition. Raven is also well aware a close cousin who finished high school the same year she did dropped out of college after one semester.

"It makes me feel like I can't fail," she says. "If I fail, then I'm letting my whole family and everybody else down."

That evening, Raven gives her presentation about domestic violence in front of her criminal justice class. She's nervous, but she nails it. Afterward, we go out for milkshakes, and a guy who's visiting from Cincinnati — just a friend, she says — comes along.

On the ride back to campus, Raven fiddles with the radio, and then chats with another guy on the phone. Guy number one sits in the backseat, becoming increasingly agitated. When we get to Raven’s dorm, she tells him to wait outside while we finish the interview in my car.

She tells me she wants to be a juvenile probation officer and work with kids in her old neighborhood, so she can tell them, "Hey, I came from the same place you did — look where I'm at."

Meanwhile, her visitor has started yelling outside the dorm. Someone calls the cops. Raven jumps out of the car to see what's going on. After a while, the guy is led away in handcuffs. Raven says she almost went to jail with him.

"What happened?" I ask when she gets back in the car.

After a long sigh, she says, "Life."

Life. The old one keeps threatening to pull Raven back as she tries to build a new one.

Will China actually join Obama's trade deal?

Thu, 2015-06-04 09:00

President Obama says China is “putting out feelers” about joining the big trade deal that’s under negotiation, which will liberalize trade rules for 12 countries around the Pacific, including the U.S., Mexico, Japan — and maybe China.

So what's it going to take the economic powerhouse to actually be part of this agreement? 

"I think it's a question of how open the Obama administration is to giving China enough time to get up to speed on the requirements of this agreement," says Marketplace's China correspondent Rob Schmitz. "China's got the biggest labor force in the world. It's the second-largest economy, so it's going to want to play just as big a role as the U.S. in this agreement if it signs on." 

Schmitz says that a Trans-Pacific free trade deal without China looks, frankly, kind of weak. The East Asian country has been making trade deals with countries on its own continent—and has been trying to "[strengthen] its economic ties" with various South American and European countries.   

"So China's moving on from the familiar trope of 'the rest of the world is trying to contain us,'" Schmitz says.   

Click the audio player above to hear the full interview about the Trans-Pacific Partnership and China's potential role in the deal.  

PODCAST: Another media merger

Thu, 2015-06-04 03:01

First up this morning, the 10-year treasury yield jumped dramatically, meaning some were reaching for the smelling salts for the bond market. We'll talk more about why. And there's news of a possible merger between Dish Network Corp. and T-Mobile US Inc. We'll speak with Wall Street reporter Ryan Knutson, who broke the story.

President Obama: the full interview

Thu, 2015-06-04 02:46

Host Kai Ryssdal sat down with President Barack Obama to talk about the future of international trade. Here is their full conversation.

Produced by Preditorial | Director and Camera Operator: Rick Kent Cinematographer: Anton Seim Producer: Mimi Kent

Why women are finally in the FIFA videogame

Thu, 2015-06-04 02:00

For the first time in its more than 20-year history, the Electronic Arts' FIFA videogame series will include women's soccer teams when FIFA 16 comes out this fall. 

It's been a long time coming. Fernanda Schabarum started a petition in 2012 to bring female players to the series, after playing only as male teams since her first game of World Cup 98 more than a decade earlier. "It was kind of difficult not having anything to relate to," she says. 

Game designer and Georgia Tech professor Ian Bogost says it may be a sign that we're finally coming out of a "Dark Ages" in which games became entrenched as a medium for men.

Click the media player above to hear more.

Walmart turns up the heat ... literally.

Thu, 2015-06-04 01:57

That's how many stores H&M plans to open this year, surpassing last year's number of 379. But perhaps most notable of those new outlets will be a planned opening in India. With a $41 billion market for clothing, and a demand for affordable apparel, India is a natural fit for the company. As Quartz reports, the hold-up on H&M entering India has had a lot to do with (you guessed it) location, location, location.

30,000 people

That's how big the population Williston, North Dakota has become, doubling during the last oil boom cycle. But it's experienced its share of busts as well, and with oil prices down, some local officials think the town should be prepared for the other shoe to drop. And with $300 million in debt from building new roads and a water-treatment plant to accommodate the influx of people and industry, they're worried about what happens next.

1 degree

That's how much Walmart has agreed to raise the average store temperature in the majority of its stores. It was one of a few concessions as workers protested ahead of the annual shareholder's meeting. As the New York Times reports, agreements were made on everything from uniforms to what music is played.

$31 billion

That's the market capitalization of T-Mobile US Inc., which sits just below the $33 billion figure for Dish Network Corp. In what could be the latest in the massive media mergers of late, the Wall Street Journal reports that the two are in talks about joining forces. 


That's how robots are gearing up to compete in a Pentagon-sponsored competition taking place on Friday and Saturday. Challenged with completing disaster-related tasks for $3.5 million in prizes, the robots represent teams from around the world. But as the BBC reports, a team representing Google has pulled out of the competition, with rumors circulating that they had reservations about participating in a military-sponsored competition.

Amid water shutoffs, Detroit residents struggle

Wed, 2015-06-03 13:00

When you get home tonight, you might grab a fast shower before dinner or maybe after the gym. You’ll wash some dishes, brush your teeth – all things that take tons of water.  California has been thinking about that with its current drought.

But they’re thinking about water in Detroit these days, too. That’s because the city is resuming mass shutoffs, again, for possibly thousands of people who are behind on their bills.

When these mass shutoffs started last summer, it made national news, then international news – at one point even the United Nations got involved.

So when Detroit Mayor Mike Duggan rolled out his plan to address the shutoffs last August, he started out by saying, look, water isn’t free.

"I don’t know how to filter water and pipe it from the river to somebody’s house, at no cost,” he told reporters at a press conference. “Right now, it is other Detroiters paying for it. And there are a lot of Detroiters paying a water bill who can’t afford to be paying other people’s bills as well.” 

So Duggan offered a different solution: payment plans. People could pay off what they owed the water department a little bit at a time, so long as they stayed current on their new bills.

But, Duggan stressed,“You have to stick to the payment arrangements. We’re not going to make a payment arrangement with you, and then a month or two later you don’t pay.”

But here’s the thing. That’s exactly what happened.   At one point over the winter, nearly all 24,000 or so of those households that had signed up for the payment plans had fallen off.

Just 300 of them were current.  Every other household was at least two months late.

Andrea Malone is one of the people who’s fallen off the payment plans. She’s a single mom, and she says her 9-year-old daughter has been in and out of the hospital in recent months.

"I missed a payment because I had to pay another bill,” Malone says, sitting on her couch on a warm spring morning. “It was either pay the water, or pay the electricity, or buy food, or pay her hospital bill. So I'm robbing Peter to pay Paul!”

So today, Malone’s calling the water department. Like a lot of people, she’s trying to get back on that payment plan now that the city is once again shutting off people’s water.

After a few minutes on hold, a water department representative picks up.

While the representative pulls up her details, let’s look at the big picture: as of now, the city says about 30,000 Detroit households are on payment plans. More are signing up each week now that the shutoffs are back. Even so, about 18,000 households are late enough and owe enough to put them back in shut-off status.

Andrea is OK for now — she’s still got some time to pay down her total balance, which turns out to be more than $500. Malone says to get back on the payment plans, she'll try to borrow money from her ex, or maybe pawn her DVD player. But then what? 

When asked if she feels like she can actually stay on the plan this time, she says no. "Not really. Like I said, it's tough. It's either pay the water bill or get it shut off. And I can't be without water. So, I'm struggling."

So right now it kind of looks like there's a cycle happening in Detroit: the city shuts off people's water, so people get on payment plans. But then people fall off the payment plans. And the city shuts off people's water.

It’s no secret that the payment plans don’t look like they’re working out. 

Detroit’s city services director Gary Brown said so during a city council committee meeting last month: “We’re telling you, the plan was not successful. Based on what we've all agreed success should be measured by."

So what Brown suggested at that meeting is something new: It’s called an affordability plan. In other words, charging low-income people less for their water. 

"Because that really speaks to the poverty that's going on in our city,” Brown says.

The city council has put together a work group exploring this idea.  Councilwoman Janee Ayers says the city has to figure something out. “We can’t have that many people without water. I can’t sleep at night knowing that.”  

But the city’s legal department says this all could get very messy. It points to a Michigan law that says city rates have to be based on the cost of service — not on what people can afford.

Other city council members have said, OK, let’s get creative—maybe can we offer subsidies or something.

Duggan is skeptical. “I don’t know how you begin to do an affordability plan. We’ve got 275,000 households in this city. People move every day. How would you ever figure out what the income is in a household from one day to the next?”

Actually, other cities already do this — Cleveland, for one. Portland, Oregon does too. So it may not be impossible. 

For his part, Duggan is reminding people there is financial assistance available if you’re low-income, and you fall behind on your water bill.

That pot of money is around $3 million.  Detroiters owe the water department about $47 million. 

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.