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Going to prison can be costly for the whole family

Mon, 2014-02-03 12:13

At the end of last year, the Department of Justice issued a memo stating the federal prison system is in crisis: It’s overcrowded and expensive to run. And while there’s always a lot of hand-wringing over the burdened taxpayer - it costs about $29,000 a year to keep an inmate in federal prison - it can also be expensive for the family. 

For the Hurleys in Maine, having two sons in federal prison has been surprisingly expensive.

The men were arrested for their involvement in a cocaine ring in Waldo County and sentenced to serve 30 and 56 months respectively at a federal prison camp in Florence, Colo.

"Here’s this lower middle class, working class family, our family," explains their uncle, Mike Hurley, "We’re in Maine and they take two guys and stick them in Colorado. You know, don’t look for compassion from these people."

Matt spent $10,000 on a lawyer and Chris used a public defender -- not a lot to spend on legal fees, respectively. Chris says he could have borrowed from his large family.

"They would have done it, but, I didn’t say 'Let’s sell the house and fight this.' I couldn’t ask that."

But even without fancy lawyers, the costs went into the thousands. Chris lost his job and access to his bank account – everything had to be managed, and paid for, by his family back home. There’s also no cash allowed inside prison, although some kind of alternative currency often develops, like trading cigarettes or stamps.

"Some places it’s not stamps. In New Hampshire, it was ramen," Chris, who was held briefly in that state, said. "It was a trip because people would be carrying around laundry bags full of ramen."

He says that it was possible to have your laundry done in exchange for two ramen. But bartering goods in prison isn’t legal, so as their months in the Colorado prison went on, when the brothers wanted something from the commissary: shower shoes, dental floss, sweatpants - Uncle Mike helped the family organize a fund.

"What I was trying to avoid was making these guys beg or do stuff in prison that would get you money in prison."

He made sure that every month his nephews would have $50 each, collected from the family. That adds up to about $2,500. But the biggest expense was for visits. The brother's grandmother figures it cost her $1,500 for one of her two 2,000-mile trips from Maine to Colorado. That’s a lot for Roseann Costello, who still works full-time in her mid-70s. 

"I just needed to see them," Costello said, holding a stack of the various bills she collected over the past few years on her lap. "To see that they were okay. And they needed to see me.  So it was good."

Family members made the trip 13 times over the past few years, totaling roughly $20,000.

"What we know from an analysis we did recently is that the average federal inmate is about 500 miles away from home," explained Nancy La Vigne, director of the Justice Policy Center at the Urban Institute. She says the federal prison system has grown sevenfold in the past 30 years, so the impact is now felt far and wide.

"Virtually every American in this country knows somebody who’s been touched by the criminal justice system."

Including this large, tight-knit family from Maine.

"Frankly, the day they got arrested taught them everything that they learned," argued the brother's aunt, Jerri Holmes. She says that the brothers’ time in federal prison has come at a great cost to everyone involved. When the family added up everything, they figure they’ve spent $60,000.

And the money has been the least of it.  

"It doesn’t heal anything, it doesn’t teach you anything," continued Holmes. "Except for how to hoard your postage stamps."

A woman quit her job on TV: Good news for the economy?

Mon, 2014-02-03 12:01

During yesterday’s Super Bowl, an ad for the web hosting company GoDaddy featured "Gwen," an engineer from New York quitting her job and announcing her new puppet business.  She did this in front of a TV audience of 100 million people -- but apparently, no one from the Department of Labor.

Because while the government tracks how many people quit their jobs, the data doesn’t provide a category for public quitters – like people who announce their departure on You Tube, or on national television.

"The Department of Labor does not track those numbers," says Kent Smetters, a professor of economics at Wharton.

Smetters says 480,000 workers quit jobs in accommodations and food services last November, and that we’re seeing high quit rates from other jobs with low pay, like retail. It's what he'd expect to see as the economy recovers.

"Those were kind of like holding jobs," says Smetters, "Temporary jobs they will quit... if they feel like they can move up."

But William Ward, a professor of social media at Syracuse’s Newhouse School, says public quitters beware – your need to vent on a large platform can come back to bite you in the tuchus.  

"It’s fun to watch on movies and on television and as entertainment, but it’s really never a great career move," he says.

Barbara Pachter, author of the Essentials of Business Etiquette, agrees.

"The bottom line is it’s just not fair to the other people. You’re only presenting one side to the story. There’s always two sides. I mean, people can publicly quit and they can be a bad employee," she says --which means future employers may be wary.

Jon Israel, a labor lawyer in New York, says GoDaddy’s Super Bowl ad could have been a lot worse. Gwen, the worker featured in the ad, appears to have been careful. She didn’t even mention the name of the company she was leaving:

"I suspect there was a lot of consideration given not to make difficulties for her employer," he says.

Or difficulties for herself. Israel says public quitting can lead to lawsuits. Or what Ward calls "social media hangovers,"  the feeling a public quitter might awaken to, the morning after.

"'Did I really do that? Can I take it back?' Unfortunately once you do it it’s out there forever," he says, "so you can’t take it back."

 

United kills another airline hub. What happens next in Cleveland?

Mon, 2014-02-03 12:01

When United Airlines announced that it will be dropping Cleveland as a hub, the move itself wasn’t a huge surprise. The city’s been working overtime to keep United there, knowing the ice was thin.

But the timing was awkward. Just last week, United executives came to town for a big party hosted by the Chamber of Commerce, celebrating the new issue of United’s in-flight magazine, which features a 56-page insert about Cleveland.  

Joe Roman, who heads the Greater Cleveland Partnership, puts on a resolutely brave face.  "Well, we’re certainly disappointed," he says, "but I don’t feel as though we left anything out on the table."

With Roman's urging, the airport got some upgrades, the city pulled back on some airport fees, and Roman says hundreds of local businesses encouraged their employees to fly United for work. 

He says some of them adopted policies putting United’s bottom line ahead of their own.  "Companies have created specific threshhold policies, where they said: 'If the price of flying United falls within $300 or $400 of a competitor’s ticket, fly United.'"

But it didn’t work out. The airline says it was losing tens of millions of dollars a year on its operations there. The company is pulling 470 jobs from Cleveland. 

The worst-case scenario would be that other businesses pick up and move.  

"The major example in recent memory is Chiquita," says Adie Tomer, from the Brookings Institution.

Delta pulled its hub out of Cincinnati’s airport, and Chiquita Brands moved its headquarters to Charlotte.

"It offered them a metropolitan area of similar size, but more-expansive flight connections," Tomer says.

That kind of pullout seems unlikely in Cleveland's case, says Michael Boyd, president of Boyd Group International, an aviation-industry consulting firm.

"Cleveland will do fine," he says. "They’ll end up with 35 to 40 non-stop destinations. They won’t have non-stop flights to Albany anymore, and all seven people who took that flight every day will be upset, but other than that, it’ll be back to normal."

Other, smaller, cities—places that the Cleveland hub serves—will get hurt more. He offers Parkersburg, W.V., as an example.  "Their main access to the rest of the world is on a commuter flight that connects to that hub" in Cleveland, he says. "That hub is gone." 

Tomer and Boyd agree, the smaller number of hub airports, and the smaller number of flights to smaller cities, are part of the consolidation of the airline industry in recent decades.

"Thirty years ago, there were something like 40,000 people who flew between Albany and Boston," says Boyd. In those days, smaller regional airlines made money flying those routes.  

Not anymore. Today, he says, "there's probably not one-tenth that number" flying from Albany to Boston.

"And almost none of them are flying non-stops. There aren't any flights."

So, how are people getting from Albany to Boston?  "They're not," he says.  "The travel paths have changed. You can't fly there anymore, so people just don't travel it."

 

As China slows, emerging markets stamp on the brakes

Mon, 2014-02-03 11:00

The U.S. stock market fell hard Monday—with the Dow Jones Industrial Average down more than 2 percent, a fall of 326 points to 15,372—on concerns about U.S. manufacturing, emerging market troubles, and China’s long-term economic slowdown.

 

With the Federal Reserve now gradually trimming back its fiscal stimulus, international markets have been feeling the pressure. 

Paul Ashworth at Capital Economics in Toronto says: "We’ve had problems emerge in Turkey, in Argentina, and to a lesser extent that has spread to other countries such as Venezuela, South Africa, possibly even to Indonesia," says Ashworth.

 

While Ashworth’s list of troubled emerging markets seems long, he says each country is beset with specific problems, some of which can be traced to unsound fiscal policies.  

What's scarier to Ashworth? China.

China's ongoing slowdown could have knock-on effects in a wide range of emerging economies, and fears of disruption are unsettling global equity markets. China’s manufacturing activity fell to a six-month low in January. Economists predict China is likely to grow at an annual rate of just 7 to 8 percent in coming years, as opposed to the double-digit growth the country has seen for the past three decades.

 

“There’s sort of a snowballing effect here that starts with China but ripples through to many of these emerging-market countries,” says Gary Thayer, chief macro strategist at Wells Fargo Advisors in St. Louis.

 

He points out that China is reorienting its economy intentionally--to focus more on consumption and internal growth, and less on exports and external investment. Thayer says this is impacting major emerging economies on other continents that supply raw materials for China to build houses, and high-speed train lines, and iPhones.

 

"A decade ago it might have been more isolated to Asia," says Thayer, "but now countries in South America, even South Africa” are feeling the slowdown in commodity demand from China. These include Chile for copper, Brazil and Australia for iron ore, and several African countries that export hard-to-find metals."

 

But Nicholas Lardy, senior fellow and China expert at the Peterson Institute for International Economics points out—China’s economic shift also has a positive side.

 

"Incomes are rising in China, diets are improving," says Lardy. "China will still have a large and growing demand for agricultural products—American soybeans for animal feed. Services are rising—medical services, education. Chinese are traveling more abroad, so Boeing and other aircraft suppliers are going to do extremely well."

 

And while a few U.S. heavy-equipment makers might see a slowdown in demand for tractors and other capital equipment, Lardy says new exports to serve China’s growing middle class—by U.S. farmers, and software companies and insurance companies—should more than make up for the loss.

 

John Canally, chief economist at LPL Financial in Boston, says that from his scrutiny of U.S. regional reports on economic activity from the Federal Reserve, he doesn’t see much evidence of a pullback in manufacturing or employment by U.S. companies due to China’s slowdown.\

 

"You might have some companies cite China as an excuse for missing earnings projections," says Canally."But thus far we haven’t seen that the slowdown in emerging markets, which has been going on for two or three years now, has had a big impact on corporate profits."

 

Canally does says global growth is shifting, as the recovery from the Great Recession proceeds. Emerging markets led the way back to growth in late 2008 and early 2009—while developed economies were still mired in recession and financial crisis. But some of those emerging economies began slowing down in 2011. Now, with investors pulling out and the Fed’s tapering exacerbating that trend, emerging economies are being overtaken by the biggest, most advanced economies.

 

"The growth pattern in the world is shifting away from emerging markets and toward developed markets," says Canally. "Growth is going to come from the U.S., which we expect to grow at about 3 percent this year. Japan’s economy is accelerating, and so is Europe’s."

PODCAST: Matchmaking in Mexico

Mon, 2014-02-03 06:48

Today, the new Secretary of Commerce Penny Pritzker will lead her first trade mission abroad. Over the next few days, Pritzker visits Mexico along with business leaders from 17 American companies. And what are some metrics for judging whether one of these trips is worth the money?

Plus, if the lopsided Super Bowl didn't fill your sports needs, just wait a few days. The Winter Olympics in Sochi, Russia, kicks off Friday. Athletes are pumping themselves up, but so is law enforcement, including those in Russia doing counter-terrorism.  Beyond that, the international crime-fighters at Interpol have a $20 million deal with the International Olympic Committee to crack down on dopers, match-fixers, and corrupt betting schemes.

Meanwhile, if you think your internet bill is high, try paying to keep 680,000 computers online. As schools try to make sure that every student has a computer or a tablet at their disposal, one often overlooked cost is access to the network itself.  The country's second largest school district, Los Angeles Unified, is learning the real costs of connecting students to the world of data. 

South Africa hosts major mining conference amid labor strife

Mon, 2014-02-03 06:05

The big money business in many parts of sub-Saharan Africa is mining, and that industry's annual conference is playing out today against a back drop of labor tensions in South Africa. The BBC's Lerato Mbele joined us from Cape Town to give perspective on how exploration for minerals and other resources is drawing prospectors to the continent.

"Explorers are very busy prospecting and looking for opportunities in countries such as Ivory Coast, inj Mail, in Tanzania, in Ghana," says Mbele, "Those who are looking for oil are in Sudan, Angola, and other such areas."

China, Mbele says, is an increasingly big player in the region as it consumers more and more African resources.

"Never before has mining and the story of commodities been more relevant for Africa's growth and development than it is now," she says, "Unfortunately on the downside, labor unrest has really been the blemish on the prospects and opportunities that exist."

Today's conference, in fact, happens against the backdrop of a strike by platinum workers in South Africa.

"They are saying, 'We go deep below the Earth's surface to mine this resource, it sells at premium prices internationally, the least you can do is pay us what is decent,'" Mbele says, "Unfortunately plantinum mining is a distressed sector."

The economic downturn, among other things, has hurt global demand for platinum, making it difficult for companies to meet the workers demands. But for many of the workers, Mbele says, the issue is one of social justice as well as economics.

The real cost of connecting a school to Wi-Fi

Mon, 2014-02-03 04:36

As more schools move equip all students with a computer, one cost is often overlooked - getting those computers connected to the network grid.

The L.A. Unified school district is planning to spend over $500 million to upgrade servers, pull wire and connect antiquated schools to a data grid - a necessary part of its huge effort to supply 700,000 students and teachers with an iPad.

The price tag is high, says Joe Monaley, a network engineer at Caltech, because costs start far from the building, out on the street.

“A lot of the pipes going through the city or between cities, those have been built, those have been built,” Monaley says. “The problem is, how do you get from the middle of the street to house, and how do you do that for everybody in city and or everybody in the county?”

It’s not as simple as plugging in a modem and router for a home connection: it's a challenge just to get high-capacity classrooms wired, much less connect whole schools directly to the grid.

L.A. Unified will have to pay to lay cable at the street level or lease it from a utility such as AT&T or the Los Angeles Department of Water and Power, which like many utilities ended up with loads of extra cable after the dot-com bust.

Putting L.A. Unified online is like putting a whole city online. There are more students in the school district than there are people in Seattle or Boston.

The federal government is shelling out a $2.22 billion through its E-Rate program so schools can get more students online.

Often, the districts will pair the federal funds with local issued bond money to pay for the upgrades.

Rosemary Sea, a student at Diego Rivera Learning Complex in South L.A. said as long as the Internet remains spotty, teachers are reluctant to plan iPad lessons.

Last time, she was in the middle of crafting a slideshow for her chemistry teacher when the Wi-Fi dropped out.

“The images wouldn’t come up, but he gave me an extension until my Internet was working,” Sea says.

"The Wi-Fi seems to be shutting down from time to time,” says Robert Sandoval, a freshman at the school. “Since we are all signed into LAUSD [network], they all shut off.”

125,000 iPads are scheduled to arrive at schools as the district continues its push to supply all 680,000 students and teachers with a device.

So construction for wireless upgrades also needs to ramp-up. The district has 486 of its approximately 800 campuses scheduled for modernizations before the end of 2014 with an average sticker price of $736,000.

Why do we have a debt ceiling, anyway?

Mon, 2014-02-03 04:19

The history of the debt ceiling is a little bit like a piece of classical music.  It starts out softly.  Kind of like one of Richard Wagner’s operas. 

Congress used to approve borrowing – project by project. 

 “Wars or projects like canal building and expansion of the navy, etcetera," says Fred Beuttler, a congressional historian at Carroll University. 

He says eventually that incremental budgeting got too cumbersome.  So the modern debt ceiling was born in the 1930s. 

And then the tempo of our debt ceiling ditty changes.   Debt limit votes become a verdict on overall federal spending. 

“It’s really like a stick that Congress uses to beat up on the executive with," says Joseph Thorndike, a historian with Tax Analysts.  "And who doesn’t like to have a stick?” 

The debt ceiling debate first crescendoed in the 1940s and 50s.  As Congress faced off with presidents Roosevelt, and Eisenhower.   There were debt ceiling fights in the 90s.  But the most serious threat of actual default came in 2011.

That’s where Mark Patterson enters the picture.  He was Treasury chief of staff from 2009 until just last May.   He blames the crescendo of debt ceiling rhetoric on the polarization of the country as a whole.  He can’t even remember how many debt ceiling cliff hangers there were while he was at Treasury.

He says, “They are something of a blur to me at this point but we had about a half a dozen of them during the time that I was there.”

I want to jog Patterson’s memory.  So I persuade him to brave the cold and take a brisk walk to the Treasury building.  Patterson remembers 16 hour days.   And lots of takeout food. 

“By the time it gets there it’s always cold though, because the secret Service guards our building," he says.

I ask Patterson where we are now in our musical debt ceiling journey.  Patterson says we’re in an interlude.  He hopes we won’t get so close to defaulting again.   Whatever happens, he says, we’ll survive.  He remembers thinking that on the darkest days of previous debt debates.  As he left the Treasury building late at night. 

“We’ve gotten through worse than this and hopefully these debt limit crises will subside into history, too, he says.  "At least that’s what I’d try to tell myself at night as I got in the car to drive home.”

Then, for further inspiration, Patterson would crank up his favorite debt ceiling musician.  Not Wagner -  Jimi Hendrix. 

 

 

 

 

 

Box headed for IPO

Mon, 2014-02-03 04:08

Some of the newer high-valued companies in Silicon Valley these days are more focused on sharing with your business partners than sharing with your friends. Example: Box helps people and businesses share documents and other data on the cloud. And the young company privately filed for an IPO a few days ago.  Eric Schurenberg, editor in chief of Inc Magazine, joined us to help explain.

Click play on the audio player above for the interview.

Facebook launches Paper app

Mon, 2014-02-03 03:06

Today Facebook releases a new mobile application called Paper. It doesn't really look a lot like Mark Zuckerberg's crowded, blue social network. But, it is part of his empire, and it might help the company keep building engagement by not looking like ... Facebook.

Slate Tech blogger Will Oremus has been reporting on the app and joined us to tell us more.

"This is a really slick-looking app that Facebook just introduced today," says Oremus, "It's a new way to read Facebook, combined with a sort of news reader."

Paper should help filter out much of the distractions found on the main Facebook service: "It's trying to appeal to the people who want less of the random updates about their friends cats and babies, and maybe more of what their friends are talking about that's in the news or what's happening today that's in their area of interest," Oremus says.

With Paper, Facebook is showing that it recognizes that a portion of its userbase is becoming tired of its flagship social network, and the new app is just the latest alternative the company is offering to the original service.

"They've already got Instagram, and they've kept that as a separate entity," says Oremus, "They've built Facebook Messenger, and now they've got Paper, and Mark Zuckerberg on an earnings call that there will be more in store in the years to come."

And speaking of earnings, Facebook has been exceeding expectations recently, thanks to their ability to draw in advertisers and to get users to click those ads. The obvious implication for Paper is its potential as yet another advertising platform.

Global crimefighters on edge at the Olympics

Mon, 2014-02-03 00:50

Athletes from around the world are pumping iron and psyching themselves up.

And so are the cops. Not just Russian security forces, on watch for terrorist threats in the restive region of Southern Russia, where the Sochi games kick off on Friday. But also, the international crime-fighters at Interpol, which has penned a $20 million agreement with the International Olympic Committee (IOC) to help with security, as well as crack down on dopers, match-fixers, and corrupt betting schemes.

Interpol, based in Lyon, France, functions as an information clearinghouse to assist national police forces around the world.

The IOC is backing the effort to guarantee the integrity of athletic competition (at both the Olympics and Youth Olympic Games) after doping scandals like the disqualifications and medal-strippings of star sprinters (Canadian) Ben Johnson after the 1988 Seoul Olympics and (American) Marion Jones after the 2000 Sydney Olympics. Professional sports such as cycling and baseball have also seen major scandals involving banned performance-enhancing substances in recent years.

Last year, the IOC set up a $10 million fund for research into new techniques to identify and detect banned substances. Developers of these drugs are often one step ahead of the World Anti-Doping Agency and other policing bodies for individual sports and from individual countries. The IOC is also setting up a working group to look at the economic legacy for host-cities of Olympic spending and infrastructure-building, amidst concern over Russia’s $50 billion pricetag for the games, and widespread allegations of corruption, waste and fraud by Russian companies and government agencies in the Olympic build-out.

Sports economist Andrew Zimblast at Smith College says the Olympic brand is valuable. So the Olympics’ reputation, as well as that of brands that associate themselves with the Olympics as sponsors, are vulnerable to scandals involving doping or match-fixing, as well as extravagance and over-spending.

“The Winter Olympics, with television and ticket sales and sponsorships and so on, typically generate around $3 billion,” says Zimblast. “To spend $20 million on Interpol to improve their image—it’s worth it.”

University of Oregon sports-marketing expert Paul Swangard agrees that $20 million is a small price to pay to convey the message that the IOC is dead-serious about ensuring the integrity of the athletics; that clean athletes can compete on an even playing field; that judges aren’t influenced or manipulated by bribes or for political reasons; and that matches aren’t fixed by organized crime syndicates.

“There has been concern about match-fixing in tennis, in soccer matches around the globe,” says Swangard. “And Interpol is in many of those markets.” Interpol is helping to implement a new IOC program called the Integrity Betting Intelligence System to detect irregularities.

Swangard says the Olympics have mostly avoided scandal in the past—doping disqualifications like those of Ben Johnson and Marion Jones, and revelations of widespread athlete-doping by the former East Germany notwithstanding. But he and Zimblast agree that poorly-paid athletes in underexposed sports offer a vulnerable target for bribery and gambling schemes.

When doping is exposed (and medals or championships overturned), however, the disrepute and opprobrium tends to stick to the accused athlete(s), rather than to the brands they endorse or even the sports they compete in, says John Horan, publisher of Sporting Goods Intelligence . In the case of the Olympics, that’s especially true, since evidence of doping is rarely detected and exposed until long after the games are over and the pomp and circumstance has faded to distant memory. In fact, the IOC is just now subjecting blood samples saved from the 2006 Turin Olympics to improved steroid detection testing, and medal disqualifications could still proceed if evidence of previously unidentified doping is found.

Government operates as 'matchmaker' for U.S. business in Mexico

Mon, 2014-02-03 00:16

Today Commerce Secretary Penny Pritzker will lead her first trade mission abroad. Over the next few days, she'll visit Mexico along with business leaders from 17 American companies.

For business leaders visiting Mexico or other countries, it's a huge advantage to have the U.S. government make introductions to local companies.

"In a lot of countries around the world, it's important for them to think that you are somehow linked to government. And so that enhances your credibility," says Jock O'Connell, an international trade advisor at Beacon Economics.

Richard Brent has taken one of these trips before.

"The best way I can describe it is a little bit slower than speed dating," says Brent, who is CEO of Louroe Electronics, which manufactures audio monitoring equipment. "The Department of Commerce and our commercial offices in posts around the world do a marvelous job of match-making," he says.

Matches made on the last trip helped boost Louroe Electronics' sales in Mexico by 1,200 percent.

This time, Brent is paying the commerce department $8,000 to tag along on the trade mission. Add in his expenses, and he's looking at $12,000. Brent says, "We consider this an investment, rather than a cost."

But even if all 17 companies see huge bumps in sales as a result of the trip, that new trade won't exactly tip the economic scales.

"While it might be beneficial for the individual companies on this trade mission, the ability of this trade mission to move the numbers -- in terms of US-Mexican trade – is pretty minor," says Jock O'Connell.

Mexico exports more goods to the U.S. than we export to Mexico, to the tune of $60 billion in 2012. That leaves plenty of room for U.S. trade to Mexico to grow.

Ask Carmen: Lightning round listicle edition

Fri, 2014-01-31 15:32

Here at Marketplace Money we get a ton of questions, and we love to answer as many as we can. That's why we created the Lightning Round: 5 personal finance questions, 5 personal finance answers, in 5 personal finance bullet points.

This week, Carmen was joined by Ben Johnson from the Marketplace Tech Report.

1. Matthew from Yonkers, NY asks a question on the minds of many. What steps should I take to avoid identity theft?

Carmen says: “Don’t carry your social security card.” Also, check your credit card statements online everyday. One last tip, “don’t use your debit card to buy things online, please?”

2. Marion from Cincinnati, Ohio says her and her spouse are in their early 60s, and invested completely in stocks. They’d like to put all of their money in a total bond market fund. Should they?

Carmen says: “Any investment at a point in time can be a bad investment.” But being heavily invested in stocks close to retirement means you don’t have time to recover if another stock crash happens. “You should not be more than 50 percent in the stock market.” And diversify! Some stocks, bonds, etc.

3. Jill from Flagstaff, AZ asks, “What happens to the debt of a person that dies without a will? If a blood relative of mine dies, who is responsible for the debt they've accumulated such as a line of credit or mortgage?”

Carmen says: “This is one of my favorite questions of all time, since people don’t ask until it happens to them.” Whatever debt a person has gets taken out of their estate, which could affect your inheritance but “you are not liable for their debt.”

4. Mary in Tuscon, AZ wants to know: “What are the current tax laws regarding capital gains for a home sale?”

Carmen says: “You can make a sweet $250,000, tax free, on the gains on a primary residence.” if you own it as a couple, you’re up to $500,000.

5. And Christian in Duluth, MN decided at the end of this year (New Years resolution!) to contribute more to retirement. His employer 401(k) is already maxed out, should he look for another investment vehicle?

Carmen says: Yes, yes he should. Roth IRA ideally, if Christian is under the income limit, or check out irs.gov for other ideas.

Time's up!

Ask Carmen: Leaving a career for love

Fri, 2014-01-31 15:01

More folks are getting married -- or remarried -- later in life and there's something about blending more-mature finances that can bring up a lot of questions.

We're going to head over to Connecticut and talk to Susi who is 54 years old.

She is engaged to someone who, let's just say, has done very well in his career. But Susi also has a great corporate job that pays six figures and has done well with some of her investments, so she wants to know what the next step should be when it comes to merging money, pre-nups, or if she should leave her job.

“I want to make sure I am doing the best that I can with the assets that I have,” Susi says.

Carmen says: “If he’s asking you to drop a career, and to give that up, there’s a price you’re paying for that … for every year that you’re giving up your corporate year. It’s not just one year salary. It’s pensions and [retirement accounts].”

To hear more of Susi’s questions and Carmen’s advice, hit the play button above

You Hate My Job: Football referee (plus, a ref quiz!)

Fri, 2014-01-31 14:12

Despite a career as an NFL referee from 1989 to 2008, Bill Carollo says it was always nerve wracking: “If you say that you’re not nervous, you’re probably kidding yourself, and you probably aren’t really prepared," says Carollo. “You think you know yourself pretty well, but when you get out on the big stage and Vanessa Williams [is] singing the National Anthem at the Super Bowl and jets are flying over ... I thought I was really ready, and I couldn’t even swallow." 

Carollo says death threats were always part of the job, even when the right call is made. One decision in a championship game that went against Tampa Bay resulted in “200 calls [to] my house. I’m unlisted. 15 to 16 people were arrested for death threats. I had to pull my kids out of school. And that’s when you make the right call." (See video of the controversial call over at NFL.com

Take Bill Carollo's officials' exam  

[<a href="//storify.com/Marketplace/what-s-the-worst-ref-call-in-history" target="_blank">View the story "What's the worst ref call in history? " on Storify</a>]

 

 

Why women don't roar at work

Fri, 2014-01-31 13:39

Tammy M. has never asked for a raise at work.

“If they feel that they want to reward me, then that’s on them,” Tammy says. “I don’t feel it’s my place to say ‘Hey, I need more money, please.’ I don’t like to pat myself on the back. I feel like people will just appreciate what you do and if they don’t, it’s not really my job to point it out to them how ‘good’ I’ve done.”

Crystal M. has requested a raise before, but like Tammy, she’s uncomfortable calling attention to her achievements on the job: “I am not as confident as I think I should be when it comes to talking about my accomplishments at work.”

That raise?

“It’s actually been very slow going and it hasn’t actually occurred. It’s been about a year and a half long process through two bosses,” Crystal says.

If last year brought the era of the “lean-In” approach for professional women, it’s not reflected in the remarks of these two employees or in the behavior of many more women in the workplace.

Psychologist Jessi L. Smith of Montana State University has observed how hesitant her female colleagues can be to self-promote. When she polled her fellow faculty members about their accomplishments – anything from publishing a paper to planting a garden – to print in a staff newsletter, she received “exactly zero responses.”

Smith says there’s “just a real reluctance and discomfort to announce to the small world of Bozeman, Montana the accomplishments they had been so successful at securing over the last year.”

That experience started her thinking about gender norms and workplace culture. Behaviors – like aggressively promoting yourself to your co-workers and supervisors – are largely accepted when a man is displaying them. If a woman exercises her bragging rights, it can be seen as a negative trait that alienates others.

Career coach Peggy Klaus, author of “Brag: How To Toot Your Own Horn Without Blowing It,” says she’s assisted countless women through their unease about talking themselves up over the years.

“I have seen a real shift in women who would come to me and say, ‘I can’t brag. It’s a sin. It’s pride cometh before the fall. It’s not ladylike,’” says Klaus.

She encourages them to practice singing their own praises in settings with an audience that won’t receive it as negative or braggadocios. And Klaus encourages them to understand that employers will not take note of work successes without help from their employees.

“Certainly if 2008 and the recession and taught us anything, [it’s] that if you sit back and don’t ask and don’t offer up what you’ve done, then you won’t get that promotion or that title or that bonus, “ says Klaus.

Join the conversation about women, work and wages. Leave a comment below or Tweet us @LiveMoney

The “black box” experiment

“Within American gender norms is the expectation that women should be modest,” begins the abstract of “Women’s Bragging Rights,” a study published by Smith and her former student Meghan Huntoon. For their research, they designed an experiment that encouraged women to talk about their accomplishments while providing justification for any discomfort the women may feel.

“We had groups of undergraduate women at Montana State University who are applying for a scholarship and we told them write either an application essay for yourself or to write a letter of recommendation and promote the accomplishments of a friend to win.”

Half of the women were told that there was a “subliminal noise generator” in the room – a black box that would emit an inaudible, high-pitched sound that could cause some anxiety. The noise was a fiction, but the women who were informed about the box had a largely different experience than the women who weren’t told about it.

“They enjoyed the experience more,” Smith says. “When women were able to have this black box to blame for any discomfort that they might have been feeling, they wrote better essays and received $1,000 more on average in scholarship money.”

So, what’s a woman to do if she’s mortified by the thought of self-promotion – or if being vocal about her career successes has made her more enemies than friends in the past?

Smith says, in an ideal world, the onus shouldn’t have to fall on the employee.

“Quite frankly, it is a lot of burden to retrain yourself and then if you don’t do it, well then it’s your own dang fault that you don’t make as much money as someone else and you didn’t get that raise and promotion,” she says. “We would suggest from a social-psychological perspective that the burden is on employers.”

She suggests instead having employees write their own freestyled annual review, supervisors should ask pointed questions and normalize the practice of self-promotion.

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Why women don't roar at work

Fri, 2014-01-31 13:39

Tammy M. has never asked for a raise at work.

“If they feel that they want to reward me, then that’s on them,” Tammy says. “I don’t feel it’s my place to say ‘Hey, I need more money, please.’ I don’t like to pat myself on the back. I feel like people will just appreciate what you do and if they don’t, it’s not really my job to point it out to them how ‘good’ I’ve done.”

Crystal M. has requested a raise before, but like Tammy, she’s uncomfortable calling attention to her achievements on the job: “I am not as confident as I think I should be when it comes to talking about my accomplishments at work.”

That raise?

“It’s actually been very slow going and it hasn’t actually occurred. It’s been about a year and a half long process through two bosses,” Crystal says.

If last year brought the era of the “lean-In” approach for professional women, it’s not reflected in the remarks of these two employees or in the behavior of many more women in the workplace.

Psychologist Jessi L. Smith of Montana State University has observed how hesitant her female colleagues can be to self-promote. When she polled her fellow faculty members about their accomplishments – anything from publishing a paper to planting a garden – to print in a staff newsletter, she received “exactly zero responses.”

Smith says there’s “just a real reluctance and discomfort to announce to the small world of Bozeman, Montana the accomplishments they had been so successful at securing over the last year.”

That experience started her thinking about gender norms and workplace culture. Behaviors – like aggressively promoting yourself to your co-workers and supervisors – are largely accepted when a man is displaying them. If a woman exercises her bragging rights, it can be seen as a negative trait that alienates others.

Career coach Peggy Klaus, author of “Brag: How To Toot Your Own Horn Without Blowing It,” says she’s assisted countless women through their unease about talking themselves up over the years.

“I have seen a real shift in women who would come to me and say, ‘I can’t brag. It’s a sin. It’s pride cometh before the fall. It’s not ladylike,’” says Klaus.

She encourages them to practice singing their own praises in settings with an audience that won’t receive it as negative or braggadocios. And Klaus encourages them to understand that employers will not take note of work successes without help from their employees.

“Certainly if 2008 and the recession and taught us anything, [it’s] that if you sit back and don’t ask and don’t offer up what you’ve done, then you won’t get that promotion or that title or that bonus, “ says Klaus.

Join the conversation about women, work and wages. Leave a comment below or Tweet us @LiveMoney

The “black box” experiment

“Within American gender norms is the expectation that women should be modest,” begins the abstract of “Women’s Bragging Rights,” a study published by Smith and her former student Meghan Huntoon. For their research, they designed an experiment that encouraged women to talk about their accomplishments while providing justification for any discomfort the women may feel.

“We had groups of undergraduate women at Montana State University who are applying for a scholarship and we told them write either an application essay for yourself or to write a letter of recommendation and promote the accomplishments of a friend to win.”

Half of the women were told that there was a “subliminal noise generator” in the room – a black box that would emit an inaudible, high-pitched sound that could cause some anxiety. The noise was a fiction, but the women who were informed about the box had a largely different experience than the women who weren’t told about it.

“They enjoyed the experience more,” Smith says. “When women were able to have this black box to blame for any discomfort that they might have been feeling, they wrote better essays and received $1,000 more on average in scholarship money.”

So, what’s a woman to do if she’s mortified by the thought of self-promotion – or if being vocal about her career successes has made her more enemies than friends in the past?

Smith says, in an ideal world, the onus shouldn’t have to fall on the employee.

“Quite frankly, it is a lot of burden to retrain yourself and then if you don’t do it, well then it’s your own dang fault that you don’t make as much money as someone else and you didn’t get that raise and promotion,” she says. “We would suggest from a social-psychological perspective that the burden is on employers.”

She suggests instead having employees write their own freestyled annual review, supervisors should ask pointed questions and normalize the practice of self-promotion.

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Businesses close ranks against Obama energy policies

Fri, 2014-01-31 13:16

The Partnership for a Better Energy Future may be the first group to bring together the American Knife Manufacturers Association, the National Cattleman’s Beef Association, and the Myrtle Beach Chamber of Commerce.  

Led by the U.S. Chamber of Commerce and the National Association of Manufacturers, the business coalition says it wants to work with the Environmental Protection Agency, as the agency looks beyond coal in its efforts to limit greenhouse gas emissions.

Translation: Members say they’re going all out to limit the EPA's impact on their business.

The 70-plus members of the Partnership for a Better Energy Future all have one thing in common, says Karen Harbert, CEO of the Institute for 21st Century Energy at the U.S. Chamber of Commerce: "All of these members utilize energy."

The EPA is moving forward with regulations on coal-fired power plants. Harbert says the partnership’s members see more energy regulations coming down the line. "We recognize that and we support that," she says. "But what we aren’t seeing on the other side, at the EPA is a fair, balanced and open process."

From Harbert’s perspective, the EPA’s coal regulations have been rushed, and she thinks they’ll hurt the energy industry more than necessary. She says her members worry that broader regulations could hurt the overall economy.

That is why the Myrtle Beach Chamber of Commerce is on the member list. "If our economy’s succeeding, people have more money and more wherewithal to travel," says the group's president, Brad Deen. "So we’ve found that what’s good for the American economy is good for tourism." 

The National Fertilizer Institute sees a big threat. "This is a bet-the-farm situation for the industry," says the insitute's president, Christopher Jahn. 

That means pooling resources to lobby both regulators and Congress. And public advocacy. The National Association of Manufacturers says the budget is in the millions, and TV ads are a possibility.  

The partnership’s members say they want to take part in a serious conversation. Pete Altman, director of the Climate and Clean Air Campaign at the Natural Resources Defense Council, isn’t buying it. "The only time when we hear from this crowd, 'Oh we really need talk this through!' is when they're afraid something might actually happen," he says.

He thinks the real goal is delay. He sees the partnership pursuing "a strategy of, 'Well let's drag this out and maybe we'll have a better president.'" If final regulations aren’t in place before President Obama’s term ends, a new president could reverse course.  

Karen Harbert from the Chamber of Commerce denies that her group simply wants to stall.  "We're not saying run out the clock," she says.  "We’re saying, take the time that is necessary to do the analysis."  

 

Amazon Prime: an expensive cash cow

Fri, 2014-01-31 13:16

Not a great day for retail giant Amazon. The company announced 4th quarter earnings and, although revenue was up 20% over the year before, it did not meet expectations.

Amazon might be fast becoming a ubiquitous market force, but its profits have been hit or miss. The company said it might raise fees for its Amazon Prime service from the current cost of $79 dollars a year to $99 or more. Amazon Prime members get free shipping, free access to streaming movies and other perks.

The service is one of the company’s most profitable aspects and one of the cornerstones of its business strategy.

Brad McCarty is director of content for software company Full Contact. He’s a tropical fish man and an Amazon Prime member.

"I have loads of fish. We have primarily angelfish, gouramis, betas and a salt water reef tank as well. I have a few sites that I go to and I do research, but I always end up going back to Amazon to buy them, because I’m a Prime member. And I’m going to get free shipping on that and it's going to be there in 2 days."

Amazon uses data it has on McCarty’s past fishy purchases to get him to buy more. And he does. McCarty says he epitomises the business model for Amazon Prime.

"Amazon is, for the most part, kind of like a perpetual Black Friday sale, right? You bring people in the door with the hopes that they’re going to buy more stuff when they get there."

There are more than 20 million Prime members and the $79 they pay pretty much covers the cost of the free shipping they get. The rest is gravy.

And there’s a lot of gravy. Amazon Prime customers spend twice what regular customers do.

"You start buying everything through Amazon," says Scott Galloway, professor of marketing at NYU's Stern School of Business. Galloway says Amazon has purposefully sacrificed short term profits to get more customers and more pricing muscle. "It's going to have tremendous pricing power and, at a certain point, it will be able to flex that muscle and become a very profitable company."

Still, Galloway says Amazon considering a price hike for Prime could be a sign its investors are getting restless. "Amazon is acknowledging that the cocktail of huge growth and low profitability may be becoming a bitter cocktail for investors," he says.

But the rationale for raising prices, may not be fast cash, speculates Michael Levin, co-founder of Consumer Intelligence Research Partners in Chicago.

"At Amazon, nothing is ever what it seems," he laughs. "If they charge more, I think customers are probably going to spend more. So quite ironically, by raising the price of this membership, they may end up getting people to shop there even more."

A more expensive Prime membership equals a customer who is all the more motivated to get his or her free-shipping’s worth.  

Weekly Wrap: Derivative fight!

Fri, 2014-01-31 13:16

This week's wrap was one of our most Marketplace-esque yet. The New York Times' Catherine Rampell and Reuters' Felix Salmon joined us to talk:

Emerging markets:

Rampell: "Confidence feeds on confidence, and if you have a lack of confidence elsewhere, and so many markets are interlinked, then that's problematic."

Salmon: "Most Americans just deal with other Americans; most American companies deal with other American companies. We're not a tiny island nation like the one I come from. If something is going on in Argetina or Turkey, honestly it doesn't matter that much to the United States."

On the GDP, and on which derivative is better:

"I'm going to be optimistic on the first derivative, and you can be pessimistic on the second derivative, and I'm going to be the person going up, and you're going to be going up as well, just not realizing it."

And finally, on how we'll remember Ben Bernanke next time we're making timelines about Federal Reserve chairmen:

"I think he will probably be remembered very positively. At least for rescuing the economy from going off the brink, particularly at a time when Congress was not doing a whole lot to help."

"He didn't win any popularity contests, but given the utter inaction by Congress, he was the one who got the economy going again."

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