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Defining the new middle class

Fri, 2014-06-27 10:29

Do you consider yourself middle class?

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Heather Moore is an 11th grade history teacher and lives in Glendora, California, a suburb of Los Angeles, and is 31 weeks pregnant. Her husband, Michael, is a computer programmer and stay-at-home Dad to 4-year-old April.

They live on about $82,000 a year, just over the median income in Glendora.

Moore considers herself solidly middle class. Why? "I don't even know if I could put my finger on it. We have a very suburban life style. We are not struggling, but we are still concerned about money.

Moore wrote us online about how being in the middle is a balance of needs and wants: " My uncle has this great line that he said, 'As long as you have everything you need and a little of what you want, than that is essentially a good life.' And that's where I feel we are today," Moore says. "We can afford to paint our house, and save up a little for new carpet, but then also pay some out of the budget too."

And, they have no debt beyond their mortgage, too.

"Michael and I have a college education with no debt leftover. That was a tremendous gift that my family was able to give us. That's the gift I want to give my children. That's my priority when it comes to saving is to give them a college education that's debt-free. And if I put off retirement a few years, then so be it. I can't think of a better reason to do it... I also kind of see this generationally and see this as an age thing as well. My grandparents did a lot to help out my parents when me and my brothers were born. And my mom is essentially paying it forward. So she's promised the diaper service for this one when he's born. And the way I'm going to thank my mom is to do this for April. In fact, I wrote her a thank you note, and she said you don't need to do this, just do this for April. And that's how you're going to thank me."

Jason DiPinto, a Navy chaplain in San Diego, Calif., calls himself "borderline middle class."

"When I see that sort of thing, and I do, I travel a lot for my job, around to a lot of different communities. And when I see communities, even sometimes new ones, that look like the community I grew up in, but to me that's like watching a black-and-white television show."

Despite a steady job, benefits, and potential job growth, DiPinto is unsure where to place himself. "I think that when I talk to my friends, and I talk to my peers, I think we were very affected by the last four or five years. And I think what it means for us to be secure is very different than when we grew up."

Defining the new middle class

Fri, 2014-06-27 10:29

Do you consider yourself middle class?

(function(d, s, id) {var js,ijs=d.getElementsByTagName(s)[0];if(d.getElementById(id))return;js=d.createElement(s);js.id=id;js.src="//embed.scribblelive.com/widgets/embed.js";ijs.parentNode.insertBefore(js, ijs);}(document, 'script', 'scrbbl-js'));

Heather Moore is an 11th grade history teacher and lives in Glendora, California, a suburb of Los Angeles, and is 31 weeks pregnant. Her husband, Michael, is a computer programmer and stay-at-home Dad to 4-year-old April.

They live on about $82,000 a year, just over the median income in Glendora.

Moore considers herself solidly middle class. Why? "I don't even know if I could put my finger on it. We have a very suburban life style. We are not struggling, but we are still concerned about money.

Moore wrote us online about how being in the middle is a balance of needs and wants: " My uncle has this great line that he said, 'As long as you have everything you need and a little of what you want, than that is essentially a good life.' And that's where I feel we are today," Moore says. "We can afford to paint our house, and save up a little for new carpet, but then also pay some out of the budget too."

And, they have no debt beyond their mortgage, too.

"Michael and I have a college education with no debt leftover. That was a tremendous gift that my family was able to give us. That's the gift I want to give my children. That's my priority when it comes to saving is to give them a college education that's debt-free. And if I put off retirement a few years, then so be it. I can't think of a better reason to do it... I also kind of see this generationally and see this as an age thing as well. My grandparents did a lot to help out my parents when me and my brothers were born. And my mom is essentially paying it forward. So she's promised the diaper service for this one when he's born. And the way I'm going to thank my mom is to do this for April. In fact, I wrote her a thank you note, and she said you don't need to do this, just do this for April. And that's how you're going to thank me."

Jason DiPinto, a Navy chaplain in San Diego, Calif., calls himself "borderline middle class."

"When I see that sort of thing, and I do, I travel a lot for my job, around to a lot of different communities. And when I see communities, even sometimes new ones, that look like the community I grew up in, but to me that's like watching a black-and-white television show."

Despite a steady job, benefits, and potential job growth, DiPinto is unsure where to place himself. "I think that when I talk to my friends, and I talk to my peers, I think we were very affected by the last four or five years. And I think what it means for us to be secure is very different than when we grew up."

Dov Charney, the World Cup and Aereo over Brunch

Fri, 2014-06-27 09:21

As part of the new Marketplace Weekend, Lizzie O'Leary will sit down for a weekly conversation about the topics you want to know more about and the stories you may have missed. In this, the inaugural epsiode, Lizzie sat down at Les Noces Du Figaro in downtown Los Angeles with Andrea Chang of the L.A. Times and Buzzfeed's Ken Bensinger.

The brunch discussion topics included:

1. The Supreme Court's decision on Aereo.

2. Andrea Chang's report on the exit of Dov Charney from American Apparel, the company he founded:

American Apparel founder Dov Charney was an unpredictable executive.

Although heralded as a retail innovator and an advocate for American manufacturing and fair wages, he also faced numerous sexual misconduct accusations.

Over the years, the chief executive -- who on Wednesday was ousted by American Apparel's board of directors because of "alleged misconduct" -- behaved oddly during many interviews with Times reporters. 

During a factory tour several years ago, he refused to answer questions about the company and talked repeatedly about "Sesame Street."

3. Ken Bensinger's report on U.S. soccer and the World Cup, examining the man who helped build soccer in the United States:

In the middle of 1989, suburban soccer dad Chuck Blazer had just lost his job, had no income, and was struggling with debt.

But he did have a few things going for him: He was audacious, with a keen eye for opportunity; he was a splendid salesman; and he knew a vast amount about the world’s most popular sport. Not the fine points of on-field strategy — he’d never actually played the game — but rather the business of American soccer, which was, back then, woeful. Compared to baseball, basketball, and football, soccer was a starving runt. Multiple professional leagues had flopped. TV networks couldn’t even figure out how to fit commercials into the 90-minute, time-out-free games, and they rarely bothered to broadcast the sport. The United States national team hadn’t qualified for a World Cup in nearly 40 years.

A quarter-century later, American soccer has become an athletic and economic powerhouse, due substantially to the contributions of Blazer. He helped win Major League Soccer’s first real TV contract, and just last month the MLS inked a $720 million TV deal. The U.S. national team, which he helped promote, is now a World Cup mainstay, ranked higher than powers such as France and the Netherlands. And more people in America are playing soccer than any team sport save basketball.

Dov Charney, the World Cup and Aereo over Brunch

Fri, 2014-06-27 09:21

As part of the new Marketplace Weekend, Lizzie O'Leary will sit down for a weekly conversation about the topics you want to know more about and the stories you may have missed. In this, the inaugural epsiode, Lizzie sat down at Les Noces Du Figaro in downtown Los Angeles with Andrea Chang of the L.A. Times and Buzzfeed's Ken Bensinger.

The brunch discussion topics included:

1. The Supreme Court's decision on Aereo.

2. Andrea Chang's report on the exit of Dov Charney from American Apparel, the company he founded:

American Apparel founder Dov Charney was an unpredictable executive.

Although heralded as a retail innovator and an advocate for American manufacturing and fair wages, he also faced numerous sexual misconduct accusations.

Over the years, the chief executive -- who on Wednesday was ousted by American Apparel's board of directors because of "alleged misconduct" -- behaved oddly during many interviews with Times reporters. 

During a factory tour several years ago, he refused to answer questions about the company and talked repeatedly about "Sesame Street."

3. Ken Bensinger's report on U.S. soccer and the World Cup, examining the man who helped build soccer in the United States:

In the middle of 1989, suburban soccer dad Chuck Blazer had just lost his job, had no income, and was struggling with debt.

But he did have a few things going for him: He was audacious, with a keen eye for opportunity; he was a splendid salesman; and he knew a vast amount about the world’s most popular sport. Not the fine points of on-field strategy — he’d never actually played the game — but rather the business of American soccer, which was, back then, woeful. Compared to baseball, basketball, and football, soccer was a starving runt. Multiple professional leagues had flopped. TV networks couldn’t even figure out how to fit commercials into the 90-minute, time-out-free games, and they rarely bothered to broadcast the sport. The United States national team hadn’t qualified for a World Cup in nearly 40 years.

A quarter-century later, American soccer has become an athletic and economic powerhouse, due substantially to the contributions of Blazer. He helped win Major League Soccer’s first real TV contract, and just last month the MLS inked a $720 million TV deal. The U.S. national team, which he helped promote, is now a World Cup mainstay, ranked higher than powers such as France and the Netherlands. And more people in America are playing soccer than any team sport save basketball.

If Aereo is dead, what's next in the evolution of TV?

Fri, 2014-06-27 09:18

In a decision this week the Supreme Court effectively pulled the rug out from TV streamer Aereo. The company is small, but the ramifications are big.

Quartz Senior Editor Zach Seward says the decision will impact consumers and could significantly alter the fight to make TV internet-friendly:

But part of the US Copyright Act of 1976 was written explicitly to prevent cable companies from doing that. In its ruling, the court found that Aereo functions like a cable company: “Behind-the-scenes technological differences do not distinguish Aereo’s system from cable systems,” justice Stephen Breyer wrote. As a result, the court found, Aereo’s service constitutes a “public performance” of television for which it needs a copyright license. Aereo had argued that it’s more like an equipment provider: Its customers rent tiny antennas, which are connected to a DVR and attached to a very long cord. But because that cord is actually the internet, the case threatened to implicate other cloud technology, as well.   

“The Court vows that its ruling will not affect cloud-storage providers and cable-television systems,” justice Antonin Scalia wrote in a dissenting opinion, “but it cannot deliver on that promise given the imprecision of its result-driven rule.” He mocked the majority’s finding that Aereo resembles a cable company, saying it would “sow confusion for years to come.”

Underlying the back-and-forth between Scalia and Breyer is a long-running dispute about how to interpret legislative statutes like the Copyright Act. Breyer’s interpretation takes into account that Congress, in 1976, intended to prevent more-or-less exactly what Aereo is now doing. Scalia—along with justices Samuel Alito and Clarence Thomas, who joined him in the dissent—think the only thing that matters is the strict text of the law.

If Aereo is dead, what's next in the evolution of TV?

Fri, 2014-06-27 09:18

In a decision this week the Supreme Court effectively pulled the rug out from TV streamer Aereo. The company is small, but the ramifications are big.

Quartz Senior Editor Zach Seward says the decision will impact consumers and could significantly alter the fight to make TV internet-friendly:

But part of the US Copyright Act of 1976 was written explicitly to prevent cable companies from doing that. In its ruling, the court found that Aereo functions like a cable company: “Behind-the-scenes technological differences do not distinguish Aereo’s system from cable systems,” justice Stephen Breyer wrote. As a result, the court found, Aereo’s service constitutes a “public performance” of television for which it needs a copyright license. Aereo had argued that it’s more like an equipment provider: Its customers rent tiny antennas, which are connected to a DVR and attached to a very long cord. But because that cord is actually the internet, the case threatened to implicate other cloud technology, as well.   

“The Court vows that its ruling will not affect cloud-storage providers and cable-television systems,” justice Antonin Scalia wrote in a dissenting opinion, “but it cannot deliver on that promise given the imprecision of its result-driven rule.” He mocked the majority’s finding that Aereo resembles a cable company, saying it would “sow confusion for years to come.”

Underlying the back-and-forth between Scalia and Breyer is a long-running dispute about how to interpret legislative statutes like the Copyright Act. Breyer’s interpretation takes into account that Congress, in 1976, intended to prevent more-or-less exactly what Aereo is now doing. Scalia—along with justices Samuel Alito and Clarence Thomas, who joined him in the dissent—think the only thing that matters is the strict text of the law.

PODCAST: Bitcoin for sale

Fri, 2014-06-27 03:00

With the the commerce department saying that GDP fell 3% in the first quarter -- the largest revision in three decades -- a look at what investors are saying about the stunning downward revision. Plus, more on the auction of $18 million worth of bitcoin by the U.S. Marshal's office. Also, homeless rates have been steadily going down for a number of years, even through the Great Recession. Part of the credit goes to programs that give shelter to the homeless without any preconditions

PODCAST: Bitcoin for sale

Fri, 2014-06-27 03:00

With the the commerce department saying that GDP fell 3% in the first quarter -- the largest revision in three decades -- a look at what investors are saying about the stunning downward revision. Plus, more on the auction of $18 million worth of bitcoin by the U.S. Marshal's office. Also, homeless rates have been steadily going down for a number of years, even through the Great Recession. Part of the credit goes to programs that give shelter to the homeless without any preconditions

Mental health parity opens new business opportunities

Fri, 2014-06-27 02:00

Business may be looking up if you’re a psychiatrist, own a substance abuse clinic or run a residential treatment program for eating disorders. Thanks to changes in the law that have been in the works since 2008, the behavioral health sector will be on more equal footing with general medical care. That means millions more Americans will soon be able to seek treatment for mental health and substance abuse.

As the owner of the Renfrew Center, established in 1985, Sam Menaged could teach a class on ways to persuade insurers to cover patients. But even with all his savvy, Menaged still loses plenty of business.

“Renfrew turns away at least 40 percent of those patients who are referred to us because it’s prohibited under their policies,” he says.

But Menaged thinks the denial days may be ending.

“I’m already investigating other cities to open in, lower levels of care, but also residential care," he says.

If you are in the behavioral health business, 2014 is a defining moment. First, you’ve got the Affordable Care Act, which opens up service to all the uninsured. The law also requires most plans to include mental health and substance abuse services. The University of Maryland’s Howard Goldman says out-of-pocket spending – deductibles and co-pays – is on par with what a patient would spend on general medical care.

“It means that millions more people will be able to seek services in the private sector and have those services covered -- and covered in a way that will not cause them to be bankrupted,” he says.

More patients with better access to care have providers and investors humming. One in four Americans has a diagnosable mental disorder, including individuals with addiction. About 40 million people are expected to get improved access to mental health and substance abuse services by 2016.

With a market like that, it’s no wonder Wall Street has started sniffing around says Mark Covall, President of the National Association of Psychiatric Health Systems.

“There [are] huge investments in healthcare. And mental health has been on the sidelines. Today we are seeing investors look at this part of healthcare very differently,” he says.

Covall expects providers to plough new money back into their businesses and find ways to make services more affordable and attractive for insurers.

These new financial opportunities also represent behavioral health’s coming out party.

NYU Dean Sherry Glied says that makes "therapy" and "addiction" less like dirty words.

“We’ve deinstitutionalized in some sense stigma. We’ve taken it out of our insurance institutions. Whether we can take it out of our social institutions remains to be seen, but it’s definitely a big step forward,” she says.

Glied says finally, mental health is just another condition. And there’s room to make money off it, just like every other health condition.

Could Russia sanctions backfire?

Fri, 2014-06-27 02:00

As the Obama Administration considers unilateral sanctions against Russia for its actions in Ukraine, business groups are waving red flags.

Both the US Chamber of Commerce and the National Association of Manufacturers have sponsored ads in US newspapers that suggest economic sanctions would really hurt US companies and jobs.

Consider sanctions targeted directly at Russia’s financial sector.

“Any manufacturer that has any office in Russia that uses a Russian bank would no longer be able to transact normal business, meet payroll, pay invoices,” says Linda Dempsey with the National Association of Manufacturers.

Consequences for US companies aside, the real question is: will sanctions work?

“I think US unilateral sanctions send much more of a political message than an economic one,” says Olga Oliker who researches Russia for the RAND Corporation.

She says sanctions would have more impact if they were enacted in concert with Europe.

Giving homes to the homeless without preconditions

Fri, 2014-06-27 02:00

Advocates for ending homelessness reported good news this spring: the number of homeless people in the United States has been doing down for years. It’s a trend that the Great Recession slowed, but did not stop. Advocates credit a strategy called “housing first”: putting people in apartments without pre-conditions — like becoming sober, applying for work, or treating mental-health disorders — and then supporting them with social services.

The strategy cuts against a widespread impulse. Few things are less popular than handouts for the “undeserving poor.”

“Who is more of a poster-child for the undeserving poor than a street homeless person with alcohol and drug addiction and behavior and health problems?” says Dennis Culhane from the University of Pennsylvania.

Culhane's research showed that  leaving those undeserving poor people on the street was really expensive. For instance, they got sick and showed up in ERs. A 2006 New Yorker story by Malcolm Gladwell made just this point, profiling a man Gladwell dubbed "Million-Dollar Murray."

“That has inverted the whole argument,” says Culhane. “The fact that they cost society something has now made their cause deserving." 

Turns out, it’s also easier for people to get off drugs and get their act together when they’ve got a roof over their heads.

Which, put in those terms, sounds like kind of a no-brainer.  

“Doesn’t it?” says Michael Banghart, executive director of Renaissance Social Services, an agency that puts homeless Chicagoans in apartments. “It’s kind of — duh, it sort of makes sense.”  

Still, Banghart admits it took him a few years to catch on. In a year-end review, he asked: Who ended up homeless again? Duh, said the data: people who got kicked out for substance abuse. "We said, 'That’s not working,'" Banghart recalls. "We’re creating homelessness again if we just say, 'You know, if you’re not clean you’re gonna go back to the streets.”'"

Since 2005, the number of chronically homeless people nationwide has fallen dramatically.

Pinpointing chronic-homelessness numbers for Chicago is difficult, but over a recent ten-year period, the city almost doubled its stock of permanent supportive housing, the destination for people served by housing-first approaches.  

Like many cities, Chicago now gives first priority to the most vulnerable people: people who are homeless long-term, those who are mentally ill, and those suffering from addiction.

Still, it takes initiative for someone to get housed. Documenting eligibility requires paperwork and months of meetings with doctors and caseworkers.

Mark Scrimenti got an apartment through Renaissance, though some of his friends are still sleeping in the park.  

"I can give ‘em information," he says. "And they’re all like, 'I don’t care, I don’t care, I don’t care.' But then wintertime comes and they’re underneath their blankets, shaking."

Mental health parity opens new business opportunities

Fri, 2014-06-27 02:00

Business may be looking up if you’re a psychiatrist, own a substance abuse clinic or run a residential treatment program for eating disorders. Thanks to changes in the law that have been in the works since 2008, the behavioral health sector will be on more equal footing with general medical care. That means millions more Americans will soon be able to seek treatment for mental health and substance abuse.

As the owner of the Renfrew Center, established in 1985, Sam Menaged could teach a class on ways to persuade insurers to cover patients. But even with all his savvy, Menaged still loses plenty of business.

“Renfrew turns away at least 40 percent of those patients who are referred to us because it’s prohibited under their policies,” he says.

But Menaged thinks the denial days may be ending.

“I’m already investigating other cities to open in, lower levels of care, but also residential care," he says.

If you are in the behavioral health business, 2014 is a defining moment. First, you’ve got the Affordable Care Act, which opens up service to all the uninsured. The law also requires most plans to include mental health and substance abuse services. The University of Maryland’s Howard Goldman says out-of-pocket spending – deductibles and co-pays – is on par with what a patient would spend on general medical care.

“It means that millions more people will be able to seek services in the private sector and have those services covered -- and covered in a way that will not cause them to be bankrupted,” he says.

More patients with better access to care have providers and investors humming. One in four Americans has a diagnosable mental disorder, including individuals with addiction. About 40 million people are expected to get improved access to mental health and substance abuse services by 2016.

With a market like that, it’s no wonder Wall Street has started sniffing around says Mark Covall, President of the National Association of Psychiatric Health Systems.

“There [are] huge investments in healthcare. And mental health has been on the sidelines. Today we are seeing investors look at this part of healthcare very differently,” he says.

Covall expects providers to plough new money back into their businesses and find ways to make services more affordable and attractive for insurers.

These new financial opportunities also represent behavioral health’s coming out party.

NYU Dean Sherry Glied says that makes "therapy" and "addiction" less like dirty words.

“We’ve deinstitutionalized in some sense stigma. We’ve taken it out of our insurance institutions. Whether we can take it out of our social institutions remains to be seen, but it’s definitely a big step forward,” she says.

Glied says finally, mental health is just another condition. And there’s room to make money off it, just like every other health condition.

Could Russia sanctions backfire?

Fri, 2014-06-27 02:00

As the Obama Administration considers unilateral sanctions against Russia for its actions in Ukraine, business groups are waving red flags.

Both the US Chamber of Commerce and the National Association of Manufacturers have sponsored ads in US newspapers that suggest economic sanctions would really hurt US companies and jobs.

Consider sanctions targeted directly at Russia’s financial sector.

“Any manufacturer that has any office in Russia that uses a Russian bank would no longer be able to transact normal business, meet payroll, pay invoices,” says Linda Dempsey with the National Association of Manufacturers.

Consequences for US companies aside, the real question is: will sanctions work?

“I think US unilateral sanctions send much more of a political message than an economic one,” says Olga Oliker who researches Russia for the RAND Corporation.

She says sanctions would have more impact if they were enacted in concert with Europe.

Bidding on bitcoin in a U.S. auction

Fri, 2014-06-27 02:00

The U.S. Marshal’s office is holding an auction, and those who wish to register are required to send the government $200,000 by wire transfer.

What's for sale? $18 million worth of bitcoins previously stored on the computer servers of Silk Road, an illegal drug website.  

Auctioning off invisible, virtual currency is just like any other U.S. Marshal’s auction, says Andy Schmidt, research director with CEB TowerGroup, a financial services research group.

“From a practical standpoint, there’s no difference," says Schmidt. "You’re breaking up an asset into lots to get the best possible price at auction.”

Schmidt says because this is bitcoin, and the assets to be auctioned were seized from an online drug marketplace, there’s a bit more mystique. But the sale is also just business, says Jaron Lukasiewicz, CEO of Coinsetter, a bitcoin exchange based in New York.

"The auction is a rare opportunity for someone who makes a particularly huge purchase of bitcoin to enter the space at a great price," says Lukasiewicz.

Which is exactly what Lukasiewicz notes several hedge funds are hoping to do.  

Andy Schmidt says it’s unlikely the auction will affect the price of bitcoin. But he says a sale run by the government may have a chilling effect on potential buyers who may not wish to register their names with the U.S. Marshal’s office. Especially after it accidentally leaked email addresses of parties interested in the auction.

Giving homes to the homeless without preconditions

Fri, 2014-06-27 02:00

Advocates for ending homelessness reported good news this spring: the number of homeless people in the United States has been doing down for years. It’s a trend that the Great Recession slowed, but did not stop. Advocates credit a strategy called “housing first”: putting people in apartments without pre-conditions — like becoming sober, applying for work, or treating mental-health disorders — and then supporting them with social services.

The strategy cuts against a widespread impulse. Few things are less popular than handouts for the “undeserving poor.”

“Who is more of a poster-child for the undeserving poor than a street homeless person with alcohol and drug addiction and behavior and health problems?” says Dennis Culhane from the University of Pennsylvania.

Culhane's research showed that  leaving those undeserving poor people on the street was really expensive. For instance, they got sick and showed up in ERs. A 2006 New Yorker story by Malcolm Gladwell made just this point, profiling a man Gladwell dubbed "Million-Dollar Murray."

“That has inverted the whole argument,” says Culhane. “The fact that they cost society something has now made their cause deserving." 

Turns out, it’s also easier for people to get off drugs and get their act together when they’ve got a roof over their heads.

Which, put in those terms, sounds like kind of a no-brainer.  

“Doesn’t it?” says Michael Banghart, executive director of Renaissance Social Services, an agency that puts homeless Chicagoans in apartments. “It’s kind of — duh, it sort of makes sense.”  

Still, Banghart admits it took him a few years to catch on. In a year-end review, he asked: Who ended up homeless again? Duh, said the data: people who got kicked out for substance abuse. "We said, 'That’s not working,'" Banghart recalls. "We’re creating homelessness again if we just say, 'You know, if you’re not clean you’re gonna go back to the streets.”'"

Since 2005, the number of chronically homeless people nationwide has fallen dramatically.

Pinpointing chronic-homelessness numbers for Chicago is difficult, but over a recent ten-year period, the city almost doubled its stock of permanent supportive housing, the destination for people served by housing-first approaches.  

Like many cities, Chicago now gives first priority to the most vulnerable people: people who are homeless long-term, those who are mentally ill, and those suffering from addiction.

Still, it takes initiative for someone to get housed. Documenting eligibility requires paperwork and months of meetings with doctors and caseworkers.

Mark Scrimenti got an apartment through Renaissance, though some of his friends are still sleeping in the park.  

"I can give ‘em information," he says. "And they’re all like, 'I don’t care, I don’t care, I don’t care.' But then wintertime comes and they’re underneath their blankets, shaking."

Silicon Tally: A hurricane shelter grows in Brooklyn

Fri, 2014-06-27 01:00

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

This week, we headed to Brooklyn, where we met up with Jim Garrison of Garrison Architects. Garrison is currently showing off his design for a post-disaster urban housing prototype .

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Everybody's working for the Marketplace Weekend

Fri, 2014-06-27 01:00

Well, here we go.

Marketplace Weekend. A brand new Marketplace show. Yes, it’s got part of the DNA you know, but hopefully a little something new.

Our goals are context and conversation. Where do you fit in the big news stories of the week? Why do they matter for the future? And how can we invite you to talk to us?

Yep. Backtalk. We want it!

This show does not start when I begin talking into a microphone, and it doesn’t stop when you hear me say “this is APM.” There are two key segments a week where we want listeners to participate – online and on the air.

The first is with personal finance. We’ll ask a question on the show, invite you to share your experiences, and then talk about them on the air. This week, we’re looking at the “Gray Economy.” Essentially, what you may have done to get by that was a little…outside traditional lines.

Next week, we’re going to talk about the fine print. Has it tripped you up? Helped you out? Weigh in on our site, record yourself and send it in, or tweet us @marketplacewknd.

In the second segment, you get to vote a Marketplace reporter off the island! Okay, not exactly. It’s more like voting them ON the island.

Like a story you heard on Marketplace this week? Let us know. Then we’ll bring the reporter on to Marketplace Weekend to dig a little deeper. This week you’ve been sharing a lot of reactions to Washington reporter David Gura’s story on paid family leave. So we’ve got him back on to answer some questions, and share a few tidbits from his notebook that didn’t make it into his original piece.

If you hear a story you want to explore further, just let us know

Finally, radio is a team sport. You may hear my voice, or that of another Marketplace reporter on the air, but there’s so much more going on. A fantastic group of people has been working really hard to help get this show on the air.

Yeah, you hear their names in the credits, but here’s another special thanks to Raghu Manavalan, John Sepulvado, Candace Manriquez, Bill Lancz, Paul Brent, Deborah Clark, and our senior producer and my partner in crime, Dan Szematowicz.

Now let’s do it again next week.

Why the Cruze recall won't hurt GM's bottom line

Thu, 2014-06-26 13:26

This story was updated at 6:15 p.m. PT on July 26, 2014 with details on the latest General Motors recall. GM is reportedly recalling more than 29,000 Chevrolet Cruze compact cars related to metal parts in the air bag assemblies.

This might sound like a broken record, but General Motors is preparing to recall some 29,000 cars.

The Chevy Cruze is GM’s most popular passenger vehicle, second overall to the Chevy Silverado truck.

So is this finally the thing that will put a dent in GM sales? Probably not, analysts say.

GM has recalled 20 million vehicles this year, and auto analyst Maryann Keller says much of the public isn’t listening anymore. They’re too saturated with recall news.

“Consumers in general just sort of glaze over when they hear these things,” says Keller. “As long as it’s not, you know, not affecting a car that perhaps is in their driveway. Or a car that they wanted to buy.”

That’s one reason GM’s sales have just chugged along. Keller doesn’t expect this time to be any different.

GM told dealers to freeze sales of potentially problematic Cruze inventory. But Morningstar analyst David Whiston says there’s recent proof that temporarily halting sales might not matter.

Just last month, “GM did a stop delivery order on their large crossovers, like the Buick Enclave, GM Acadia, Chevy Traverse,” he says.

And you know what? GM still did well. Really well.

“In May, it was GM’s best month of sales since August of 2008. So honestly, GM’s product is just outstanding right now in all vehicle segments,” he says.

The stop-sale order won’t really hit GM’s bottom line, but the timing is bad for somebody, according to Michelle Krebs, a senior analyst with AutoTrader.com.

Even if it’s temporary, “that hurts the dealers,” she says. “Because the bulk of a month’s sales occur at the end of the month.”

It’s not just the end of the month, it’s also the end of the quarter. Now’s the time some dealers are trying to hit sales targets to get bonuses from GM. It’s a tough time to not be selling GM’s most popular car.

The four-year degree still rules

Thu, 2014-06-26 12:33
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Island's answer to China-Japan dispute: Tourism

Thu, 2014-06-26 12:20

If you took an actual pin and pressed it into a world map, the hole it would make would dwarf the size of the tiny speck of an island of Ishigaki in the East China Sea.

The lush paradise is 88 square miles of jungle and white sand beaches. It's 150 miles off the coast of Taiwan, and although it’s part of Japan, it’s 1,000 miles away from Tokyo. It’s surrounded by coral reef and turquoise water – making it one of the best diving spots in Asia.

Tour operator Anichi Miyazato prepares a group of foreign tourists for a dive. In the distance, a fleet of Japanese coast guard ships loom over fishing and tour boats in Ishigaki's tiny harbor. They're here to patrol a chain of islands the Japanese call the Senkaku – and the Chinese call the Diaoyu – just 100 miles away.

"We have to protect our nation, our land, our ocean," says Miyazato when asked about the dispute. "Please go away, Chinese military!"

But it seems the Chinese military is here to stay. Just two weeks ago, a Chinese fighter jet flew less than 100 feet away from Japanese air force jets above the disputed islands. Late last year, China’s government declared the airspace over the islands as its exclusive area to protect, requiring other aircraft to identify themselves.

The U.S. responded by flying two B-52 bombers through the area, unannounced.

Below, among the sugar cane fields and palm trees of Ishigaki island, tour operators watched the escalation, worried about how it would impact their business, and wondering when the first shot would be fired.

"Personally, I think it's inevitable," says tour operator Mike Quinn, one of the few Americans on the island. "The first time a missile is fired or the Chinese overrun the Senkaku islands, a lot of tours are going to be canceled, it's going to affect the bottom line, big time."

For tiny Ishigaki, it's the ultimate China conundrum -- bracing for an invasion by China's military while courting an invasion of Chinese tourists.

Ishigaki's bustling new airport -- complete with runways that can accommodate jumbo jets -- just opened last year. There are already flights to and from Taiwan. As of now, Ishigaki isn't on the radar of the world's fastest growing tourist population in mainland China. But Hirohito Kakazu, who plans tourism for the island's government, would like to change that.

"Japan's population is shrinking and domestic tourism to the island will decline," says Kakazu, "so we need to develop tourism from elsewhere -- that's why we built a new airport."

Kakazu is working on establishing routes from mainland China. A charter flight from Shanghai is planned for the fall.

"If there were a plane from Shanghai, it would only take a couple of hours and then suddenly you're surrounded by nature, fresh air, you can catch and eat fresh fish, and you've got some of the best diving in the world," says Ichiro Ohama, president of the local entrepreneur’s club. "These are things you can’t find in China -- and it's just two hours away!”

It's that proximity to China that has defined local attitudes in Ishigaki. Older residents who were born here see China as an old friend -- the island is part of Okinawa, known to many here as the Ryukyu islands, which has maintained close historical and cultural connections with China.

Shigeo Arakaki owns a noodle shop on the island -- he's a retired assistant to a member of Japan's parliament. He'd like to see a more diplomatic approach to resolving the dispute.

"I think Japan and China should explore how to jointly develop the islands rather than fight over them," he says over a cup of tea.

At the moment, this solution doesn't look likely.

"China is becoming more aggressive and they're invading our territory," says Ishigaki mayor Yoshitaka Nakayama. "These are Japan's islands, and by international law, that's a fact. This is non-negotiable."

Japan's government is considering the construction of a military base on Ishigaki, and it's hired local fishing boats to help patrol the disputed islands and ward off Chinese vessels. Still, back on his boat over a coral reef, diving tour operator Anichi Miyazaki says sharing the islands might not be such a bad idea.

China and Japan could combine forces to build something on those uninhabited rocks that would attract tourists. Maybe a theme park?

"I don't know… Disneyland?" asks Miyazaki, breaking down into giggles. Miyazaki says everyone on this island is a businessman -- and war is never good for business.

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