Marketplace - American Public Media

Why temporary tax breaks remain temporary

Wed, 2014-12-03 11:00

Congress is working on extending a number of expiring tax breaks. These temporary tax cuts are very important to business; some are for research and development, others let companies write off investments in equipment or facilities. 

Corporations really want to see them extended. But nothing’s free in Washington.

“These temporary provisions become very efficient tools for members of Congress to raise money, ” says Lawrence Lessig, a Harvard Law School professor. He says that members of Congress want to keep these tax breaks temporary so they can tell corporate donors: Give us campaign contributions so we can stay in office and renew your tax breaks. This keeps lobbyists busy too, according to Lessig. 

“So everybody inside the beltway wins in this Christmas gift process, which we call the extension of these temporary provisions,”  he says.

There are other reasons the tax breaks are temporary. For one, Congress can’t decide which ones should be made permanent.

“Those require politically difficult decisions, compromise between Democrats and Republicans," says Len Burman, director of the Urban Brookings Tax Policy Center. "And those are things that Congress isn’t good at these days.”

Also, if the tax cuts were permanent, Congress would need a permanent way to pay for them. With tax hikes, or spending reductions.  And keep in mind, Congress is only considering an extension of the tax breaks through this year.

“This has to be taken up again next year and hopefully with a better outcome,” says Chuck Marr, director of federal tax policy at the Center on Budget and Policy Priorities.

What if every travel day was as bad as Thanksgiving?

Wed, 2014-12-03 10:25

Imagine if every week was Thanksgiving at the biggest airports in the U.S.

That is exactly where we are headed, according to the U.S. Travel Association, a group that represents city tourism bureaus, hotels, and other industry groups.

The association says that within the next six years, the 30 biggest airports in the U.S. — which account for 70 percent of air passenger traffic — will see at least one day a week of spiking congestion, equivalent to what we typically see on the Wednesday before Thanksgiving. 

The report says some airports have already hit that milestone, including Chicago's Midway, Las Vegas' McCarran International, and New York’s John F. Kennedy International. 

In 2015, five more airports are expected to achieve the distinction, including Washington D.C.'s Dulles and Sky Harbor International in Phoenix. 

Part of the problem is that air passenger traffic projects to grow about two percent a year, according to the FAA, and will total 738 million domestic passengers by 2018. That's up from 653 million in 2012.

At the same time, airline industry consolidation has meant fewer flights, on bigger planes, carrying more passengers to fewer airport hubs for connecting flights, says Andrew Tipping, a consultant for both airlines and airports at Strategy&. 

The result has led to huge peaks in traffic, as much 10-fold at one client's airport terminal, says Tipping, who would not disclose the client. "It's a complex problem," Tipping says, "This is not a question of if there should be change. It's a question of when there should be change."

Tipping says airports could develop a system, for example, of charging airlines more to land during peak periods. Eventually, he says, the current airport structure in the U.S. will also have to expand to meet demand.

"We can push for a while to keep on using what we've got. But at some point you can't keep on improving and there is expansion needed," Tipping says.

So, who should pay for that expansion?

The U.S. Travel Association is proposing a hike in the fee airports charge passengers on their tickets. The fee is currently capped by law at $4.50, but the association wants airports to have the freedom to raise that amount by as much as an additional $4to fund expansion projects.

"The largest U.S. airports are the most financially strapped, and these are the airports that most people use," says Erik Hansen, senior director of domestic policy at the U.S. Travel Association. 

Hansen says the country's top 30 airports are going to get even more congested within the next six years and expansion will be important to meeting future needs.

"We're investing more in airports all the time," counters Jean Medina, a spokesperson for Airlines for America, who says passengers shouldn't be shouldering airport improvement costs.

"Airports have ... access to government funds, they have access to a trust fund, they have access to concessions which all pay in ... They have numerous access to funding," Medina says.

Medina also points out that there are fewer flights today than there were prior to the recession, although the FAA predicts that domestic air passenger traffic should surpass 2007 levels by 2016.

"What's actually happening is passengers are connecting through a smaller number of airports," says Tipping. "And when you put that into major travel times like Thanksgiving and others, it does cause massive problems."

Quiz: Teen tobacco trends

Wed, 2014-12-03 04:25

Cigarette smoking among American middle and high school students is on the decline, but use of other tobacco products follows a different trend, according to the Centers for Disease Control and Prevention.

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PODCAST: To your right, a lawsuit

Wed, 2014-12-03 03:00

Given new data today, let's give the job market a B-Plus. Today a private sector count of American payrolls showed some strength, even if it wasn't spectacular. More on that. Plus, the publishing company Billboard will be releasing a new top 200 record album chart tomorrow. And for the first time, the rankings include data from downloads and music streamed digitally. And last up, the first amendment says the government can't limit free speech. Except when it can. For instance, you can't yell fire in a crowded movie theater if there's no fire. And what about tour guides who want to speak aloud about local attractions? The guides at some vacation spots are suing their cities for making them get a license. As we find out, claiming the licensing infringes on their First Amendment rights.

The Billboard 200 will now account for streamed music

Wed, 2014-12-03 02:00

When Billboard releases its list of the week’s top-selling 200 albums Thursday, for the first time the rankings will factor in how often songs have been streamed and downloaded. 

That will be welcome news for Richard Laing, head of sales for the record label Sub Pop. He says many of the label's artists, including bands like The Album Leaf, may sell few albums, but do well online. The Album Leaf, for instance, has millions of plays on streaming services like Spotify.

Laing says Billboard's new formula could bring more recognition to bands like The Album Leaf. Billboard is creating a new industry standard that “reflects people's behavior a little more closely,” he says,  and better captures “how people are consuming music.” 

More people than ever are streaming music. According to the Recording Industry Association of America (RIAA), steaming audio brought in 27 percent of music industry revenue during the first half of the year. During that same period, physical album sales declined 14 percent and downloads dropped 12 percent. 

Paul Resnikoff runs the blog Digital Music News. He says Billboard's new metrics probably won’t change album rankings too much. Major artists get traction across almost every platform, he says, so if you were a superstar before streaming was counted, you’ll be a superstar after it’s counted, too. 

In fact, says Resnikoff,  top albums may stay at the top a little longer because of the changes. Right now, he says, records typically get a big bump directly after the album release date. With streaming in the mix, they could get another bump if people keep listening online. 


Does the First Amendment apply to tour guides?

Wed, 2014-12-03 02:00

On mild days along the Georgia Coast, you’ll find “Savannah Dan” leading tours of the city’s downtown historic district. Dan Leger is easy to spot in his traditional Southern garb of a straw hat, bow tie, and seersucker suit.

Leger is also a plaintiff in a lawsuit filed by tour guides in several popular vacation spots. Savannah, Georgia and some other cities require tour guides to obtain a special license to give tours. The plaintiffs say that violates their First-Amendment free speech rights.

Savannah’s requirements — take a test, get a health exam, and pass a criminal background check — are time-consuming and unnecessary, says Leger.

“What my physical fitness has to do with walking around and telling stories, I have no idea,” he says.

Officials with City of Savannah say these requirements protect tourists’ safety, and ensure that guides have at least a minimum knowledge of the city’s history and architecture.

But the Institute for Justice, a public interest law firm, is challenging the law and similar ones in New Orleans, and Washington, D.C. Senior attorney Robert McNamara says the cases test whether or not Americans have the basic right to speak for a living. McNamara says the market, rather than the government, should decide if a tour company stays in business.

“We pay people to give lectures; we pay people to tutor us in math; we pay people to talk on the radio,” he says. “And no serious person believes that those people are somehow outside the first amendment.”

In Washington, D.C, officials say the issue is not free speech, but consumer protection. Matt Orlins is a Legislative and Public Affairs Officer with the city’s Department of Consumer and Regulatory Affairs.

“The licensure requirement is not there to judge whether someone provides a good tour or a bad tour,” Orlins says. “They’re there to ensure that you’re complying with the law.”

The District of Columbia has dropped its requirement that tour guides take content tests to prove their knowledge of the city. But guides still must have a license — at least for now.  The Institute for Justice is asking the U.S. Supreme Court to weigh in on whether licenses for tour guides are constitutional.



Supreme Court hears pregnancy case

Wed, 2014-12-03 02:00

The Supreme Court is hearing a pregnancy discrimination case Wednesday that involves a woman who sued the United Parcel Service. 

Lower courts have basically dismissed the lawsuit, brought by former UPS worker Peggy Young. Still, businesses are paying attention to this case.

“I’m not getting anybody that’s freaking out right now,” says Steve Hirschfeld, an employment lawyer and partner at Hirschfeld Kraemer in San Francisco. But he says clients are wondering what’ll happen if Young wins. “Are we going to need to hire somebody on a temporary basis, or temporarily move this person to another job? For very small companies, that can be very, very difficult to do.”

He says the biggest cost for employers if Peggy Young wins would be an avalanche of pregnancy discrimination lawsuits. Other employment lawyers say, not necessarily. 

Katherine Kimpel represents workers in discrimination cases as D.C. managing partner at Sanford Heisler. She filed a friend of the court brief in support of Young. She says pregnant workers feel vulnerable, and aren't likely to file lawsuits, even if Young wins.

Kimpel also says many pregnant workers request accommodations that cost almost nothing.

“Things like being able to keep a water bottle with them," she says. "Or having—if they work at a cash register—having a stool.”

And Kimpel says, accommodating pregnant workers makes good business sense, because it helps companies retain their workers. 

Breaking YouTube, Gangnam Style

Wed, 2014-12-03 01:30
27 percent

That's the percentage of music industry revenue brought in during the first half of the year by streaming music alone. It's become significant enough that on Thursday, the Billboard 200 will start accounting for streaming data in its calculation of top selling albums.


The number of Sony Pictures employees whose names, birthdays and social security numbers were revealed in the recent hack at Sony Pictures. Payroll, layoffs and other sensitive information were dumped online, Fusion reported, most of it in simple, unencrypted spreadsheets. The documents show an apparent pay gap; Columbia Pictures' male co-president is slated to earn 1.5 times more than his female counterpart. 

$15,000 to $100,000

That's the range of bonuses being given out by a top New York law firm, as reported by the New York Times. Some say the increase in bonuses signals a return of corporate America, as more money is being spent on mergers and acquisitions.

November 25

The day two New York Times reporters covering unrest in Ferguson abruptly stopped tweeting. It was the same day conservative journalist Charles C. Johnson published their addresses on his website, Bloomberg reported. The move was retaliation for a Times story that mentioned the general location of Officer Darren Wilson's home, which had been unoccupied for weeks. The ensuing harassment was predicated on the assumption that the paper had published Wilson's actual address.

2.1 billion views

Entertainment sensation PSY has done the unthinkable: he broke YouTube. Well, sort of. The site announced that it never anticipated a single video receiving so many views, and had to install an update that would properly display the needed amount of commas. PSY's 'Gangnam Style' currently has 2.1 billion views.

18 years

The lifespan of Microsoft clip art, the illustrations that jazzed up countless fliers, book reports and holiday cards during the 90s and early 2000s. Microsoft has finally killed them off in favor of Bing image search this week. The Verge has a look back at the best clip art from the art form's heyday.

The Sony cyber-attack: Whodunit?

Tue, 2014-12-02 14:23

Why would North Korea be mad at Sony?

Well, maybe because of Sony Pictures Entertainment's new movie:

Some speculate the North Korean government was mad enough to carry out the recent cyber-attack on the Sony Pictures Entertainment network. 

But Kim Zetter, a senior staff reporter at Wired, says she's not buying it. 

"Nation State hacks aren't generally noisy like this, and they don't generally start with a picture of a skull on computers," Zetter says. Instead of a covert national effort on North Korea's part, Zetter thinks the attack on Sony probably came from hacker group Guardians of Peace.

The FBI stresses that businesses should take caution due to the recent hacking incidents. But according to Zetter, plenty of individuals within the company also might find themselves victims of malicious software attacks. While Sony has yet to confirm what the hackers acquired, Zetter says it could be Social Security numbers of Sony employees, passport information from celebrities and employee salary information.

What can companies do to safeguard against hackers?

"Everyone is going to get hacked," Zetter says. "The question is: What is your game plan for dealing with a hack once you discover it?"

York & Fig: Marc Maron on Highland Park

Tue, 2014-12-02 12:40

Comedian Mark Maron lives in Highland Park, California, the subject of our York & Fig gentrification project. He produces his popular podcast, "WTF with Marc Maron," out of his garage. He also shoots his autobiographical cable television show, "Maron," in Highland Park.

Read the rest of this interview at York & Fig.

York & Fig: The House on York

Tue, 2014-12-02 12:18

Our Wealth and Poverty team has been working on a project about what happens when the economy that we live in changes. We opened a pop-up news bureau in a neighborhood 8 or 10 miles from downtown LA, called Highland Park, that's basically gentrifying. 

People have moved into the area, and their money has too, which means other people have moved out ... and not always because they wanted to. Housing costs have gone up, a lot.

But if you've lived in the neighborhood a while, it's an opportunity to sell high, because the newcomers can and will pay top dollar. Marketplace's Noel King looks at one house on York Boulevard and three generations of its owners.

Deals and pent-up demand fuel auto sales

Tue, 2014-12-02 12:00

Auto sales recorded their strongest November in a decade, selling a seasonally-adjusted annualized rate of around 17 million vehicles.

Kelley Blue Book senior editor Karl Brauer says there's millions of cars worth of pent-up demand because of the great recession. Plus, this is the best lineup from the Big Three American automakers in a long time, he says.

“They’re not just strong in the large truck and SUV categories, where they have been strong for decades, but they also have very compelling cars — small cars, mid-sized SUVs,” he said.

Things were also helped by old fashioned bargains and promotions. Kirt Frye, who operates the Sunnyside Automotive Group near Cleveland, had a gift card deal going over Black Friday weekend.

“We had them from 9 a.m. through 11:00 a.m. on a website, and at 9:05 all five of the $500 gift cards were already spoken for,” Frye said. “We sold five cars in about 15 minutes.”

Compare that to an average day of three cars sold.

In addition, gas prices have been falling, and cars are more fuel efficient than they were years ago. But Frye said gas prices are “probably not that much of an economic factor.”

“But for someone who is looking at a $12,000 to $15,000 used car, and they can buy an $18,000 new car and that new car gets 30+ miles per gallon, now that math really matters,” he explained.

“The market is up for grabs amongst anybody,” said George Magliano, senior principal economist at IHS Automotive. “So you have to have the product and you have to fight for your marketshare,” he said.

So, consumers who have been waiting for the right time to buy are finding that time is now.

A first: National debt passes $18 trillion

Tue, 2014-12-02 11:00

Here's a big number: $18 trillion. 

That's the national debt of the United States of America. Yesterday, we surpassed the $18 trillion mark for the first time.

Partisan and or political inferences will not be entertained.

Russian ruble suffers huge one-day fall

Tue, 2014-12-02 11:00

If you pulled up a graph of the Russian ruble relative to the dollar, you’d see a line that heads pretty steadily south from summer on. Monday, the ruble suffered its biggest one-day fall against the dollar since the late '90s.

The drop is largely due to falling oil prices, since Russia is a large producer and exporter. Additionally, economic sanctions from the U.S. and EU due to Russia’s involvement with Ukraine are driving away investors. But another reason the ruble is losing value is because the Russian government isn’t trying to prop it up, says Alexander Kliment, with Eurasia Group, a research and consulting firm.  The country had been spending billions buying rubles with the hope of stabilizing its value but stopped a few weeks ago, in part because it didn't want to deplete its foreign reserves.

So what’s a country to do as its currency collapses?

Russia largely has to weather the storm, says Nicholas Spiro of Spiro Sovereign Strategy, which specializes in sovereign credit risk. Russia could try buying up the ruble on a massive scale and raising interest rates, but that’d be very expensive and very risky. It also could enact capital controls, like limiting the amount of money that people can take out of the country. But that’s unlikely he says, because it would send a terrible message to the markets.

Russia has another, equally unlikely option, says Will Pomeranz, deputy director of the Kennan Institute for Advanced Russian Studies at the Woodrow Wilson Center in Washington, D.C. The country could try to resolve the situation in Ukraine, in the hope that the U.S. and EU lift or reduce their sanctions. 

Quiz: Manufacturing job skills around the world

Tue, 2014-12-02 03:30

An OECD report shows which countries are the top for training workers.

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PODCAST: A $90 million game of Marco Polo

Tue, 2014-12-02 03:00

More hedge funds have closed down for good this year than at any time since the financial crisis, according to new calculations by Bloomberg News. These are fancy and often expensive investment vehicles for high net worth people and many have struggled not just to beat the market to but even to keep up. More on that. And who says international trade is a dreary subject? Netflix is betting that the life of an Italian mercantile trader will be the next 'House of Cards' or 'Game of Thrones.' The streaming video company has put up a reported $90 million to produce a series about … Marco Polo. Plus, in case you wondered, the MBA isn't the only way to go. The co-founder of the huge social media company Twitter was a graphic designer. Biz Stone is now CEO of an outfit called Jelly. He joined us to talk about how his experience as a graphic designer gives him a unique advantage.

Black Friday is so last week

Tue, 2014-12-02 02:00

With the big holiday shopping days out of the way, here comes Giving Tuesday. Chances are, some of the money donated will support schools. After religion, the most popular charitable cause in this country is education. Here are some notable numbers in education philanthropy:

$52 billion

The amount Americans donated to education last year, according to the Giving USA Foundation. Adjusted for inflation, that's 7.4 percent more than in 2012.

85 percent

The portion of wealthy donors that supported educational causes last year, according to the 2014 U.S. Trust Study of High Net Worth Philanthropy—larger than the percentage that gave to any other cause. 

$350 million

The size of a record gift to Harvard University's School of Public Health, donated by the family of alumnus Gerald Chan. 

9 percent

The increase in charitable giving to colleges and universities in 2013, which rose to almost $34 billion, according to the Council for Aid to Education

Biz Stone on why philanthropy makes business sense

Tue, 2014-12-02 02:00

Over the last couple of days, the gods (small "g") proclaimed we were supposed to buy things on the internet for Black Friday, Small-Business Saturday, and then Cyber Monday. Tuesday—Giving Tuesday, rather—focuses on charity.

Picking up this theme, we turned to a leading light of online social media who argues that in the near future, companies will spend most of their advertising money on ... philanthropy.

Biz Stone was a co-founder of Twitter and is now CEO of Jelly. Among other things, his new company has an app called "Super," which lets users share stylized images with text (think digital postcards). 

The app certainly draws on his background as a graphic designer. In fact, Stone has no MBA, let alone a formal education. But it's his lack of conventional training that he credits with his success, and the success of many who come from a design background.

Click the media player above to hear Biz Stone in conversation with Marketplace Morning Report host David Brancaccio. 

A recession in Russia

Tue, 2014-12-02 02:00

Russia expects its economy to contract by .8%, as reported by the BBC. That's contradictory to previous estimates which projected a 1.2% growth. Some say Russia's reliance on the oil industry played a large part in the sharp revision.


The number of Sony Pictures movies leaked online this week, threatening the studio's holiday box office returns. The leak comes just as Sony is recovering from a crippling hack that disabled all of their computers and email accounts. Evidence is pointing to North Korea, the Wall Street Journal reported, which was blamed for a similar hack against South Korea last year, and publicly denounced Sony's Kim Jong-un assassination comedy "The Interview."

45 percent

That's how much Jeep sales grew over the last year. In fact, auto sales in general are on the rise, due in part to the economy being up and gas prices down. Not to mention the fact that many car dealers have jumped on the Black Friday craze.

60 percent

The portion of congressional travel costing less than $100 that was provided by Uber during this year's midterm elections. The company's rider data is a treasure trove for politicians, foreign governments, lawyers and anyone else who could benefit from cyber-espionage. Uber has played fast and loose with access to this data, the Washington Post reported, even giving access to a prospective employee during the interview process.

$90 million

The amount of money that Netflix has spent on its new series Marco Polo, making it one of the most expensive TV series ever made (second only to Game of Thrones). And just like the titular explorer of its new series, Netflix has big global ambitions.


As small businesses are turning to Amazon-style fulfillment centers to keep up with deliveries during the holidays, Amazon itself has deployed robots. The company bought Kiva Systems for $775 million two years ago, and more than 15,000 of the firm's robots are managing inventory at Amazon warehouses this holiday season, Reuters reported.

What's driving an increase in auto sales?

Tue, 2014-12-02 02:00

New car sales numbers come out on Tuesday. Many expect the holidays to come early for automakers, with the economy up and gas prices down.

Analysts expect Americans bought as many as 1.3 million new vehicles last month, a nice boost over the previous November. That’s in part because more dealers have hopped onto the Black Friday craze.

They’re also selling pricier vehicles, meaning bigger transactions than ever before. Independent consultant Alan Baum says today’s new car buyer is well off.

“Hence not only the increase in sales volume, but the increase in transaction prices, and therefore profits," says Baum. "All of that is of course very good for the car companies.”

Or perhaps we should call them light truck companies. That's where the action is.

“The small crossover SUV market has really skyrocketed, really at the expense of cars,” says Rebecca Caldwell at "Light trucks have outsold cars for over a year now.”

A big winner in this space is Jeep. Its sales grew a whopping 45 percent the past year, revving up a broader comeback for parent company Chrysler.

One factor nudging up truck and SUV sales, Caldwell says: low gas prices.