Marketplace - American Public Media

The euro is dropping, but airfares aren't

Thu, 2015-01-22 12:11

Your dollar may go further in Europe these days — but you'll have to get there first.

Airlines know that a weak euro will boost tourism, and they're raising the price of tickets from the U.S. to Europe, Asia and South America accordingly. On the flip side, airlines are cutting prices on flights originating in Europe to ensure demand remains high.

As fuel prices hit record highs over the past decade, many airlines ditched gas-guzzling jumbo jets for smaller aircraft with fewer seats. A drop in fuel prices may mean that some of those larger carriers return to the skies. That should — and the key word is should — lead to a drop in prices.

Striving to get to 'HIV zero'

Thu, 2015-01-22 11:49

Fifteen years ago, the Millennium Development Goals challenged the world to stop and begin to reverse the spread of HIV by 2015. The world missed that goal, and today, 35 million people are still living with HIV and millions are suffering from AIDS. It can be hard to see how to bend the curve on the spread of this virus.

However, several places have managed to start to make inroads against the virus. Vancouver, British Columbia, and San Francisco have both made strides in reducing the spread of the virus. Last year, New York Gov. Andrew Cuomo announced his plan to end the HIV epidemic in the state. Another city that’s had some success is Washington, D.C.

“We had about 1,300 cases at a peak in 2007, and we are just under 500 as our preliminary numbers for 2013,” says Michael Kharfen, head of the Department of Health’s HIV/AIDS, Hepatitis, STD and TB Administration

The district’s three-pronged strategy of outreach, treatment and prevention is the secret to its success, according to Kharfen.

Outreach means finding and testing as many people as possible – in schools, hospitals and on street corners. Sometimes Washington residents have to opt out of a test.

Treatment means getting people who are HIV positive into medical care and onto HIV medications as soon as possible, so they can stay healthy. Recent studies have shown that this method, known as “Treatment as Prevention” or “TasP” makes HIV positive people more than 95 percent less likely to transmit the virus to someone else, Kharfen says.

Prevention means needle exchanges, safer sex ad campaigns and giving out millions of free condoms. All this was achieved, Kharfen said, with an annual budget of around $85 million.

Another factor, he says, is the close relationship between Washington's government and its medical providers, like Whitman-Walker Health. It has many LGBT and low-income clients, two groups that bear a disproportionate burden of HIV infection.

“You can show that over a four-year period you can reduce the incidence of HIV by 70 percent and really get a marked improvement,” says Dr. Richard Elion, Whitman-Walker Health's clinical research director. “But that last 30 percent, over time, is not showing a decline. And that now is really where the illness is.”

So how do public health officials hit a shrinking target?

Washington has to get creative, Elion says. Whitman-Walker runs public health studies and surveys that look at at the next generation of HIV/AIDS treatments, approaches that include new medications and cold hard cash. One study looks at the impact of paying HIV-positive people a couple hundred dollars a year if they remain HIV undetectable, and therefore not infectious. Compare that to the roughly $20,000 it can cost for medicine for each newly infected patient.

Providers face challenges in getting patients to adhere to treatment for most chronic conditions, like diabetes and heart disease, Elion says. “The difference is that HIV because it’s an infectious disease has ramifications as a result of that lack of control," he says.

Whitman-Walker’s surveys helped show that a new prevention strategy known as "pre-exposure prophylaxis," or "PrEP," which involves taking HIV medicine to prevent infection, works in the real world. 

Methods like these, known as biomedical interventions, should chip away at that shrinking target, says Dr. Anthony Fauci, head of the National Institute of Allergy and Infectious Diseases. And as for those lofty Millennium Development Goals? It's OK to miss a target, he says.

“When you set a goal and strive for it – although you may not reach precisely the goal that you set – it increases the energy, it increases the effort and it increases the fate that you’re going to get there,” Fauci says.

The ultimate goal is a world of “HIV zero,” no more AIDS deaths and no more HIV transmissions, Fauci says. He and other scientists say that day probably won’t come until there is a safe and effective vaccine, and that’s at least a decade away.

Pipeline spill exposes a fracking cost

Thu, 2015-01-22 11:35

From North Dakota comes word of a record oil and gas spill. No, not the petroleum itself, but the wastewater from the fracking process. And these days there’s a lot of it.

The water could be toxic, even though federal rules exempt it from treatment as hazardous waste. Fracking pumps huge volumes of water into the well, and even more comes back out. A typical well can spit about 1,000 gallons a day. Some of the water is recycled back into fracking, stored in pits or used to de-ice roads. It's also injected deep underground, which has been known to cause earthquakes.

Google could be your next wireless carrier

Thu, 2015-01-22 09:22

Google reportedly plans to get into the wireless technology space by piggybacking off of Sprint and T-Mobile’s networks. 

The search-engine giant would effectively rent excess network capacity from those providers so it could then sell its own wireless service plans to customers.

Sprint wouldn't comment on the rumored deal.  T-Mobile pretty much said, "Um, go ask Google." Google is keeping mum.

“I think they're looking at adding some other type of value beyond just a cheaper price,” says Bill Menezes of the research firm Gartner.

The wireless industry is already highly competitive, with carriers jockeying to provide cheaper plans and shorter contracts. So it might seem odd that Google would want to get into the game. Google will likely come up with some kind of "wireless services plus” package to differentiate itself, according to Menezes.

“They have other things to offer, whether it's YouTube-oriented or something related to Google apps, if you're a business," he says.

Another possibility is that Google will try to perfect a way of letting customers move seamlessly between wireless and WiFi service, which would disrupt how wireless carriers work. 

“The innovation here is going to be for them to develop ways in which they provide ubiquitous access to, ultimately, what Google wants, which is Google's applications,” says Pai-ling Yin, a social science research scholar at Stanford University's Institute of Economic Policy Research. 

Ultimately, Google may just want to learn more about being a carrier – and experiment with ways to expand Internet access in remote areas, Yin says.

What's in it for Sprint and T-Mobile?  If Google pays to use their excess network capacity, that would help offset costs they incurred building up their wireless networks.

What’s QE and the ECB got to do with you and me?

Thu, 2015-01-22 08:56

The European Central Bank’s quantitative easing bond-buying program is supposed to boost the eurozone’s economy. It could also have some big effects on this side of the pond. A stronger dollar hurts tourism and exporters, but some of that European cash could find its way to our shores in other ways.

Quiz: Not as ready as they think they are

Thu, 2015-01-22 07:50

Employers say recent college grads overestimate how prepared they are for jobs, according to a survey.

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The State of the (Film) Union

Thu, 2015-01-22 06:16

The Oscars debates are alive and well this year.

One of the most talked-about films of this Oscars season is "American Sniper," which — despite a $90 million debut weekend at the box office — is receiving mixed reviews from critics, including Grantland's Wesley Morris.

"I feel like there's a second half to the movie that is only hinted at," Morris said. "The intent is to complicate the automatic urge to turn a guy like [Bradley Cooper's character] Chris Kyle into a hero ... and the thing the movie sets out to do, it just doesn't achieve, I think in part because the script isn't that good."

Watch the trailer for American Sniper here:

Morris acknowledges that Hollywood has a diversity problem, saying the Academy needs "to actively invite people of color." But, he says, it's not the sole issue surrounding the nominations. He points to the release timeline of the film "Selma."

"Selma opened on Christmas Day. It went wide on January 9. This is not really enough time to enter the collective cultural consciousness," he said. "It gives people who thought Selma was a possible Oscar front-runner time to mount a campaign against it."

Watch the trailer for "Selma" here:

PODCAST: The economics of patients on medicaid

Thu, 2015-01-22 03:00

Market participants were looking for Europe to take a serious step toward holding together its single-currency zone. Today, European Central Bank Chief Mario Draghi announced a stimulus plan centered on buying piles of government debt from individual European countries. More on that. We'll also take a look at the tough economics doctors face if they want to treat patients on Medicaid. Plus, there's increasing evidence that companies especially thrive when their executive ranks are not just a bunch of white guys.

A closer look at inheritance taxes

Thu, 2015-01-22 02:00

This week, after the White House circulated some big changes to the tax code the President is now seeking, we took a look at the trust fund aspect of the proposal.

If, for example, somebody's Uncle Jack put $1 million into a tax deferred investment, it rose to $100 million over the years, and then Uncle Jack died, under the current system the heirs pay no capital gains tax on that increase. In other words, Uncle Jack gets to pass on his tax protection in the will. The administration would like to change that.

A number of listeners wrote us saying words to the effect of "Hello...what about inheritance tax?" Good point. How might controversial inheritance tax play out if the President's trust fund plans were to somehow gather steam?

Click the media player above to hear Michael Graetz, professor of tax law at Columbia University, in conversation with Marketplace Morning Report host David Brancaccio.

Executive diversity can pay off, study says

Thu, 2015-01-22 02:00

Gender, ethnic and racial diversity among corporate leaders can correlate to better earnings, according to a report by the consulting firm McKinsey & Co. Working in a diverse environment means "you make very few assumptions about ... the extent to which others will agree with you," says Evan Apfelbaum, who studies workplace diversity issues at the MIT Sloan School of Management. "And so it produces this kind of more rigorous, comprehensive decision-making outcomes," says Apfelbaum.

But Shirley Davis Sheppard, who leads diversity efforts at several major companies, says while it is seen as a worthy goal, "when it comes down to the budget ... and getting senior executive commitment, that's where you start to find a little bit more of the challenge," because diversity initiatives can take a long time to show dividends.

Study links higher Medicaid payments to accessibility

Thu, 2015-01-22 02:00

Most things in healthcare are complicated. This one isn’t.

When the federal government under Obamacare paid doctors more to treat Medicaid patients, the doctors treated more Medicaid patients, according to a new report in the New England Journal of Medicine that comes just a few weeks after Medicaid rates, which had been boosted temporarily, returned to their lower levels.

You could say this report is an example of doctors just chasing a buck. But, of course, most things in healthcare are complicated.

If doctors want to treat Medicaid patients, they face difficult economic realities.

For example, Dr. Shawn Purifoy is living his dream: running his own family medicine office in his home town of Malvern, Arkansas. Setting a 20 percent quota on Medicaid patients wasn’t part of the plan.

“Those patients aren’t different kinds of people. They are just people who don’t make as much money. They are still in my kids’ class or going to church with me,” he says.

But Purifoy says the math makes it simple. For a standard visit, Medicaid reimburses him $36, Medicare sends him $67 and Blue Cross pays him $88. On top of that, Medicaid patients tend to be sicker, which eats up his time.

“That doesn’t work financially,” he says. “That sounds like a horrible thing to say but the truth is you are going to get paid a certain amount, and it really doesn’t make that much difference how much more time it takes to do the work.”

To take on more Medicaid patients could mean Purifoy cutting salaries, maybe jobs. Obamacare architects understood these economics from the start. That’s why they put in the two year fee bump.

It’s helped Camden, New Jersey primary care doctor Ramon Acosta patch up some holes in his practice. Literally.

“We have been able to do some repairs, like some roofing work,” he said of the extra money from Medicaid. “We have been able to pay some tax arrears.”

If the bump were to come back — highly unlikely — it would buy Acosta five to ten more minutes a visit. That may sound trivial, but it would mean fewer gut wrenching conversations like a recent one with a boy and his mother who had two pressing concerns about her son.

“Unfortunately, I said which one of the two problems would you like me to address primarily,” he says, recalling that he did not have the time to address both concerns.

Acosta’s made a living off these sorts of hard choices for 26 years now. Asked the trick to staying in business, he says long hours – and knowing money is something other doctors make.

Technology can't make you fall asleep

Thu, 2015-01-22 02:00

If I learned anything from watching the Back to the Future movies, it is that prescience is dangerous. Someone who knows too much about their own future might try to reprogram it in their favor, and every small change has the potential to rewrite history.

In an early scene from Back to the Future Part II, Marty McFly and his girlfriend Jennifer Parker - played by Elisabeth Shue - travel from 1985 to 2015. The DeLorean is airborne and Doctor Emmett “Doc” Brown is wearing a funky visor.

But forget flying cars and fashion - Jennifer wants to know what happens to her in the future: “I’m gonna be able to see my wedding dress! I wonder where we live. I bet it’s a big a house with lots of kids!”

Worried about where her curiosity might lead her, Doc pulls out his sleep-inducing alpha rhythm generator - it looks like a pair of high-tech opera glasses - and knocks her out with a flash. Doc and Marty then hide Jennifer’s unconscious body in an alley to protect her from the shock of crossing paths with her future self.

"The future? Marty, what do you mean? How can we be in the future?"  

Doc Brown is a time travel expert and practiced meddler, so it is not surprising that he carries around a sleep-inducing alpha rhythm generator in case he needs one to cover his tracks. But does a sleep-inducing device exist in the real 2015? It does not - at least not in the way Back to the Future imagines.

That flash of light is the first clue that the technology is too good to be true. Researchers at Pennsylvania State University found that nighttime exposure to light - especially the kind emitted by electronic devices - makes it harder to fall asleep.

Aiming a little lower than instant-sleep-inducing technology, we find ourselves among a range of devices that won’t make you fall asleep, but might make you sleep better.

The U.S. military is very interested in efficient sleeping. In 2003, the Defense Advanced Research Projects Agency (DARPA) put $20 million toward its “Continuous Assisted Performance program,” research that looked for ways to keep soldiers awake for up to seven days “without suffering any deleterious mental or physical effects and without using any of the current generation of stimulants,” according to DARPA’s then-director Tony Tether.

In conjunction with DARPA, a company called Advanced Brain Monitoring is developing a sleep mask called the Somneo Sleep Trainer. It blocks light and noise, and heating elements around the eyes may help people reach a deeper stage of sleep faster.

Another technique to encourage better sleep is called transcranial magnetic stimulation, or TMS. TMS uses magnetic fields to create small electrical currents in parts of the brain, and researchers are trying to tune those currents to nudge a sleeping brain toward restorative, REM sleep.

Sarah Lisanby is Chair of the Department of Psychiatry and Behavioral Sciences at Duke University. “Sleep is a rhythm,” she says. “And you can actually use the different forms of stimulation - such as magnetic stimulation, or direct electrical stimulation, or sensory stimulation - at different frequencies to modulate those brain rhythms. The idea is to try to entrain the rhythmic activity of the brain in a way that would be comparable to sleep.”  

Which brings us back to Doc’s device. Alpha waves are a type of brain wave that occur during REM sleep. If an alpha rhythm generator did exist, maybe it would stimulate the brain rhythms associated with restorative sleep. But there is another flaw in its design.

Brain-stimulating technologies like TMS are better at suggesting behaviors than forcing them. So, short of a blow to the head or some other kind of trauma, there isn’t a reliable, non-invasive way to knock someone out. To put someone to sleep, they have to want it.

You can find more from our Back to Back to the Future Part II series at Gizmodo’s Paleofuture blog and on Soundcloud.

When the Government fakes out Facebook

Thu, 2015-01-22 01:30
2,400 jobs

Following a disappointing holiday season for sales, Ebay announced it would be cutting 2,400 jobs — roughly 7 percent of its workforce. The  e-commerce company will soon be dividing its PayPal and eBay marketplace businesses into two publicly traded companies.

25 minutes

That's how long President Barack Obama talked about the economy in his hour-long State of the Union address Tuesday, more than any other topic. That's according to the Washington Post, which broke down the speech by topic. Twitter's data scientists also annotated the speech, showing which topics were being tweeted about when both Obama and Iowa Senator Joni Ernst were addressing the nation.

22 years

We've heard of taking a break, but this is a bit ridiculous. A.K. Verma, an executive engineer at the Central Public Works Department in India, took a leave of absence ... back in 1990. In 1992, he was found guilty of  "willful absence," but it would take another 22 years before he was actually fired.

$85,000

That's how much ShipYourEnemiesGlitter.com sold for Wednesday, after the site became a sensation over the weekend, pulling in over 20,000 orders. Flipping these types of viral sites is common, Motherboard reported, usually when the owner hopes to cash in before a fad burns out.

$134,000

That's how much the U.S. Justice Department will have to pay Sondra Arquiett for using pictures of her to create a fake Facebook profile. Arquiett was arrested in 2010 for allegedly being involved in a drug ring. At the time, her phone was confiscated, at which point she gave permission for officers to access data to help with the investigation. She did not, however, anticipate that they would later use photos found on her phone to make a Facebook profile with the intent of trapping her boyfriend, also suspected of being involved in illicit activity. 

72 percent

The portion of Airbnb listings in New York that violate zoning or other laws, according to a report the states's attorney general released last fall. Now the city is using new data-driven tools to crack down on these listings, WNYC reported. One official called the practice "'Moneyball' for quality of life violations," and it means 30 percent more work without hiring anyone new.

Ruthless smuggling trade's new business: 'Ghost ships'

Wed, 2015-01-21 12:03

The wars in Syria and Iraq have triggered an unprecedented wave of refugees eagerly seeking – and prepared to pay for – a new life in Europe.

The United Nations reckons that last year 170,000 migrants, who are fleeing war, persecution or simply seeking a better standard of living, have arrived in Italy. Many have paid people traffickers to smuggle them in, making the perilous journey across the Mediterranean in small fishing boats and even rubber dinghies. More than 3,000 lives have been lost. 

But now the traffickers have developed another business model to cater to this burgeoning new trade: It’s been called “the Ghost Ship” route, and here’s how it works: You buy a battered old cargo ship, pack it with hundreds of migrants, sail it across the Mediterranean, aim the vessel at the coast of a European Union country, and then abandon the ship and hope that the migrants reach safety. 

The Ezadeen, a 50-year-old former livestock carrier, is one of these so-called “ghost”  ships. The Italian Coast Guard intercepted it at sea last month, on its way from Turkey to Italy, and found 359 migrants on board, most of them Syrians, but no actual ship crew.

“It was incredibly dangerous,” says Ewa Moncure of Frontex, a European Union border agency. “There were no lifeboats or life vests." The crew apparently abandoned the ship at full-speed at night in the Mediterranean, a danger to those on board and to others who are at sea, Moncure says.

Three of these ghost ships carrying a total of more than 1,000 migrants have arrived in European waters in recent weeks, an escalation by traffickers that does not entirely surprise experts on this grisly trade. Andrea Di Nicola, a criminologist at the University of Trento and co-author of “Confessions of a People Smuggler,” says traffickers are always quick to exploit a new business opportunity. “These are businessmen, opportunistic, criminal businessmen.” he says. "And this is a travel agency, the most ruthless travel agency on the planet. There’s a huge profit involved.”

Let’s look at the costs. “Ships at the end of their working life are worth little more than the scrap value they will yield if they are sailed to the breaking yards of Bangladesh or India.” says David Osler of Lloyd's List, a maritime newspaper. Italian police claim that one of the ghost ships, the Ezadeen, cost the smugglers only $110,000.

Now, consider what the smugglers are charging for the trip: up to $6,000 per passenger.

“We estimated that one of the ships should have grossed revenues of $3 million," says Joel Millman of the International Organization of Migration. "So if you do the math, you can see there are millions to be made.”

It looks like all of the passengers that have arrived on ghost ships so far are likely to be offered asylum. So far, none have perished at sea. The smugglers’ new business model is paying off, for the smugglers and their customers.

But the scale of the operation is putting many more people at risk. With another four ghost ships reportedly ready to sail, more migrant lives are likely to be lost in the Mediterranean this winter.

The true biography of 'Davos Man'

Wed, 2015-01-21 11:15

The origins of "Davos Man" are murky.  

As a name, it's often an epithet, spoken with venom. It refers both to the individual human beings who attend the World Economic Forum at a ski resort in Davos, Switzerland each year, and the global, capitalist power structure they are taken to represent.

Its first use is often credited to "The Clash of Civilizations" by Samuel Huntington, but, in fact, the words "Davos Man" never actually appear in the book. Instead, the earliest reference I could find was an editorial from 1997 in The Economist, "In Defense of Davos Man," that ostensibly reviews Huntington's book. It seeks not to bury, but to praise and defend "Davos Man" as a paragon of a global capitalism that could transcend culture and bring people of the world together. Here is the ending:  

Although 40 or so heads of state will troop to Davos this weekend, the event is paid for by companies, and run in their interests. They do not go to butter up the politicians; it is the other way around (see previous leader). Davos Man, finding it boring to shake the hand of an obscure prime minister, prefers to meet Microsoft's Bill Gates.

All this should cheer up Mr Huntington, not cast him down. Some people find Davos Man hard to take: there is something uncultured about all the money-grubbing and managerialism. But it is part of the beauty of Davos Man that, by and large, he does not give a fig for culture as the Huntingtons of the world define it. He will attend a piano recital, but does not mind whether an idea, a technique or a market is (in Mr Huntington's complex scheme) Sinic, Hindu, Islamic or Orthodox. If an idea works or a market arises, he will grab it. Like it or loathe it, that is an approach more likely to bring peoples together than to force them apart.

Matthew Bishop, an editor at the Economist who was in the meeting that debated this editorial in 1997, says elements of the argument are still valid.

But Seyla Benhabib, professor of political science and philosophy at Yale University, says the forces that Davos Man represents have also pulled people apart, exacerbating global inequality.

Felix Salmon, senior editor at Fusion, says Davos Man hasn't changed since he started attending. "Rich people don't change that much, I don't think," he says.

Fallout from S&P ban could last longer than a year

Wed, 2015-01-21 11:14

The Securities and Exchange Commission banned Standard & Poor's, the world's largest credit rater, from a large part of the mortgage market for one year. SEC says the time out is because of ratings S&P issued in 2011 that regulators claim were “misleading.”

The suspension will bar S&P from rating securities backed by bundles of loans tied to such structures as shopping malls and office buildings. The ban is significant because investors typically require these kinds of bonds to be graded by two of the three ratings agencies, and now that S&P has been benched, the math is easy.

"So, who do they go to? They have to now, sort of go to Moody's and Fitch," says Amiyatosh Purnanandam, a University of Michigan finance professor. The long-term impact of the ban may extend well beyond a year because so much sensitive information is shared with ratings agencies. "Once you as a potential rater have giving all of this Fitch, you would be reluctant to switch to S&P, even after a year when S&P comes back into the game," he says.

S&P can still issue ratings for corporate bonds. They can also service the residential and municipal bond markets. Moreover, some say the securities S&P is not allowed to rate were never really in its wheelhouse.

"It’s not like these companies are going to be doing more business now that S&P has dropped out," says Dick Larkin, director of credit analysis for H.J. Sims.

In a statement, S&P said that it does not admit or deny any of the charges filed against it. The company also agreed to pay $77 million to the SEC, New York and Massachusetts to settle charges tied to its ratings of mortgage-backed securities.

Tootsie Roll CEO, 95, leaves behind a sweet legacy

Wed, 2015-01-21 11:05

Melvin Gordon, 95, who was the serving chief executive of Tootsie Roll Industries, a company he had run for more than a half-century, died yesterday. He will be succeeded by his wife, Ellen Gordon, who had been its president and COO.

Traders think the transition will lead to a buyout, which led to a 7.1 percent increase in shares today, according to Bloomberg.

Which leads to the question ... Tootsie Rolls are part of a publicly traded company? Well, yes, since 1922 when it was first listed on the New York Stock Exchange as Sweets Company of America. The company changed its name to Tootsie Roll Industries Inc. in 1966.

This vintage animated commercial from the 1970s is a testament to just how little the brand has changed over the years: The same color scheme, font and signature wrapper have stood the test of time to the present day. "Whatever it is I think I see, becomes a Tootsie Roll to me," sings a young child as the commercial complements the lyrics by having everything the animated children touch turn into animated, chewy, chocolate candy. 

Tootsie Roll Industries is one of the largest candy companies in the United States. It also owns Blow Pop, Junior Mints and Dubble Bubble, to name a few. What is perhaps the brand's most famous ad campaign asked a question that has been haunting candy lovers for years: How many licks does it take to get to the Tootsie Roll center of a Tootsie Pop?

The owl's answer — three — proved to be unsatisfying, since more than one group of students has tried to come up with a more scientific answer. (The Venn diagram of engineers and candy eaters apparently has a significant overlap.) A group at Purdue University created a licking machine that took an average of 364 licks to get to the Tootsie Roll center, while a group at Michigan's licking machine averaged 411 licks. The cow, the fox, the turtle and the owl don't know the answer ... and neither does anyone else.

Europe considers quantitative easing

Wed, 2015-01-21 10:00

The European Central Bank is expected to announce a large bond buying program Thursday. Quantitative easing, as it’s called, could help boost the moribund eurozone economy by encouraging investment, but many are not on board. The Germans are the biggest critics, reminded of hyperinflation nearly a century ago, and worried that QE would let weaker European economies off the hook. 

 

Explaining 'middle-class economics'

Wed, 2015-01-21 09:55

Ask just about anybody, and they’ll tell you they’re part of the middle class.

“Certainly, it is the label of choice,” says Frank Newport, editor-in-chief of Gallup. More than half of the people in Gallup's last survey identified themselves as middle class, he says. But there’s more to it than just wealth, or income. “Middle class seems to be a very comfortable place for Americans to put themselves,” Newport says.

In Tuesday's State of the Union address, President Obama called middle-class economics "the idea that this country does best when everyone gets their fair shot, everyone does their fair share, and everyone plays by the same set of rules. "

But "middle class" has no formal economic definition, meaning many people define it themselves.

“And that often means working, not relying on government," says Melissa Kearney, director of the Hamilton Project at the Brookings Institution. "But it’s really a nebulous concept.”

Politicians love to talk about middle-class Americans, Kearney says, but it’s hard to tailor government programs to them, precisely because there’s no middle-class definition. As a result, Obama’s plan bleeds over to not-so-middle class Americans, she says.

“Some of these tax benefits would extend to folks – couples making $200,000,” she says, referring to beneficiaries of a proposed tax credit for two-income couples. 

Other parts of the president’s plan apply mainly to low-income Americans – things like increasing the minimum wage and instituting paid sick days. The president’s proposal would have to be more targeted to reach people truly in the middle of the pack.

Did he hit the target? 

“He threw a water balloon at it, and it splattered all over the place,” says Sharyn O’Halloran, a professor of political economy at Columbia University’s School of International and Public Affairs. “He saw a target – middle class – and just made a bunch of big sweeping proposals which he thought would be appealing to them.”

The proposals won’t necessarily be appealing to Congress.  Still, O’Halloran says, the president has set the stage for Democrats who want to make middle class economics part of the 2016 presidential race.

Marketplace's live coverage of the 2015 State of the Union address

Wed, 2015-01-21 09:41
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