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Apple and IBM: from flipping the bird to partnership

Wed, 2014-07-16 03:00

There’s a famous picture of Steve Jobs flipping the bird at an IBM sign:

Andy Hertzfeld, one of the original members of the Macintosh team, first published the photo to his Google page.

Then there was an Apple TV commercial depicting IBM as Big Brother from the book, 1984.

An annoucer intones, “On January 24, Apple computer will introduce Macintosh. And you’ll see why 1984 won’t be like 1984.”

But that was when Apple and IBM hated each other, and competed for the desktop computer market. 

Now, Apple needs IBM’s expertise as it tries to get companies to order more iPhones and iPads. Apple and IBM say IBM will develop more than 100 business apps for Apple.

Apple hopes the partnership will answer security concerns, and give CEOs one more reason to buy Apple.

“It's not just - hey the employees prefer it. But it also means, hey, the business advantages might even  be stronger if I go with the Apple solution," says Forrester analyst Frank Gillett.

As for IBM, it gets to be part of a winning team. Plus, IBM’s app designers will have greater access to Apple software. 

 

The challenge of funding a community college education

Wed, 2014-07-16 02:30

Federal student loans -- widely regarded as the safest form of education financing because of their low, fixed interest rates and flexible repayment plans -- are out of reach for one million community college students nationwide. That’s according to a new report from The Institute for College Access & Success.

The report says that while community colleges are generally a low-cost way to get a degree or certificate, students can still face roughly $15,000 in annual costs, with tuition and living expenses combined.

The majority of community colleges do offer federal student loan programs. But the report cites big regional differences, with 250,000 students shut out from the programs in California alone.

David Baime with the American Association of Community Colleges doubts the situation needs to change, noting that only 17 percent of community college students take out loans.

Plus, Baime says some schools might be reluctant to offer the loan programs because they fear defaults. High student loan default rates could hurt a college’s ability to secure other forms of federal aid, such as Pell Grants.

The numbers behind a community college education

1 MILLION

The number of community college students nationwide who lack access to federal student loans.

64 PERCENT

The number of African-American community college students lacking access to federal student loans in Alabama, compared to 35 percent of their white peers.

$3,300

The average tuition and fees for a full-time, full-year community college student, as estimated by the American Association of Community Colleges.

$15,000

The full cost of one year of attendance at a community college, including tuition, fees, books and supplies, living expenses and transportation, as estimated by The Institute for College Access & Success.

1 IN 5

The number of community college students defaulting on loans within three years of beginning their repayment, according to the American Association of Community Colleges.

17 PERCENT

The share of community college students who take out loans, according to both groups cited above.

Acid rain aftermath: damaged ecology, damaged politics

Wed, 2014-07-16 02:00

Karen Roy was in grad school in the early 1980s when two things made her realize acid rain was a big deal. The first was the decline of the forest on Camel’s Hump, a mountain in Vermont. The second was learning about dying lakes in the Northeast.

“There were people talking about the record fish that were no longer found,” she says.  

Roy now manages the Adirondack Long Term Monitoring program. When I visited, she and her team were heading to a pond near Lake Placid, New York. They were going to check how acidic the water is these days; a process repeated in dozens of lakes monthly. But first we have to hike through a forest.  

“What affects the forests, ultimately affects lakes and streams as well,” Roy says. 

Forests and lakes are connected, but how they recover from acid rain is very different. 

Since the bad old days of the 1970s and '80s, there has been a whole lot less acid falling on the Northeast. That’s mostly thanks to the 1990 Clean Air Act, which has made a big difference to lakes and streams. Many are now coming back to life, with fish and other fauna reviving. But that’s not the whole story. 

“It’s just like everyone [said], 'Whew, that problem is solved, now we can think about something else,'” says Gene Likens, co-founder of the Cary Institute of Ecosystems Studies, and one of the first people to discover acid rain in the U.S. 

He says forests are having a much tougher time. Years of acid rain falling on their soils has leached away calcium and other minerals that used to neutralize the acid. So, even though today’s rain is far less acidic, sensitive forests are less able to deal with it. 

“The system is more sensitive. And one could argue that the impact is as bad as it was in 1990 when we passed the Clean Air Act amendments,” he says. 

Trees like sugar maple and red spruce are suffering the most. They need a lot of calcium and the soils are depleted. Forests are on a completely different timeline than lakes. 

“Some will recover on the order of decades. But others will not recover for many, many, many decades,” says Charles Driscoll, university professor of environmental systems engineering at Syracuse University.  

That’s why, despite all the progress made since 1990, Likens and Driscoll would like to see lawmakers reduce smokestack emissions even more.

That’s unlikely. The political environment has changed so much since the 1990 Clean Air Act was passed with bipartisan support. That bill included the acid rain provisions, the first widescale use of cap and trade. 

Back then, cap and trade was an idea nearly everyone could get behind. Democrats and environmentalists liked that it could slash pollution. Republicans liked that it used market forces and gave industry choices.

“What had been for decades a bipartisan issue has evolved into what is now a highly polarized, partisan issue,” says Robert Stavins, a Harvard professor who studies emissions trading programs.

The 1990 Clean Air Act was championed by both President George H.W. Bush and northeastern Democrats. The cap and trade program helped cut acid rain-causing sulfur dioxide and nitrogen oxides by more than 70 percent -- faster and more cheaply than planned. 

“It was decidedly a success,” Stavins says. 

But critics say it had one flaw.  

“Congress never put a provision in there to make changes to the program in the future,” says Gary Hart, owner of Clean Air Markets, and former manager of emissions trading at Southern Company, the large utility. 

By the 2000s, the bipartisanship was gone. Democrats killed Republican acid rain proposals because the bills didn’t do what they wanted about climate change. Democrats tried to apply cap and trade to carbon dioxide, which Stavins says led a new breed of Republicans to turn on their own idea, “because it was the mechanism on the table.”  

Critics labeled it "cap and tax." Meanwhile, the public became skeptical of markets after the financial crisis.

With no help from Congress, Presidents Bush and Obama started trying to change the acid rain rules through regulation. Hart says that caused more damage.  

“When the government comes in and changes the program in the middle of the game, and sort of changes the rules, it really impacts investors and the players in the market. It impacts their confidence,” he says. 

Trading in the acid rain cap and trade program has all but ceased.   

In the end, regulations for other pollutants like mercury and particulates have had the side effect of reducing acid rain even more. But those regulations are a final blow to one of the most successful examples of using the market to solve an environmental crisis.

11 email tips from campaign strategists

Wed, 2014-07-16 02:00

To political candidates, email is extremely important. Yes, they want us to vote, but they also want us to give early and often. 

When Barack Obama first ran for president, Steve Geer was his email director. 

“It’s a fun job,” he says. It’s also an important job. In 2012, President Obama’s reelection campaign raised more than $350 million through email.

“You have a subject line that catches your attention,” Geer explains. “You have an introductory sentence that hooks you and brings you into the narrative, and then you get as quickly as you can to ‘the ask.’”

Because our inboxes are so full, a catchy subject line is key. Geer points out, “If no one opens up your email, it doesn’t matter how good your argument is.”

Obama for America used subject lines that were casual. “Meet me for dinner,” one read. It looked like the president sent the message himself.

“Increasingly, people are doing things that will simply catch the eye,” says Patrick Ruffini, the president and founder of Engage, a political consulting firm. He oversaw digital strategy for the Republican National Committee.

 Campaigns are using animated GIFs and countdown clocks. The novelty factor is important, but it is also important to have a message, Ruffini says, and to keep it short.

 “You need to essentially get them off that email as quickly possible,” he notes. An email director or a digital strategist wants you to click a link and donate.

 Campaigns have amassed a lot of data on donors’ habits, including how much money they have given, and when they have given.

 According to Ruffini: “The amount of testing that is now going into emails, to keep people opening, to keep people clicking, I mean, it’s amazing.”

Email, compared to direct mail or TV advertising, is inexpensive, and the return on what is a relatively small investment is huge.

“Having lots of people giving $5 generates this very powerful list that campaigns can use now and in the future,” says Eitan Hersh, a professor of political science at Yale University.

 For that reason, political strategists live in fear of donors unsubscribing. 

“Good copy, good creative will always get attention, but there’s a difference between short-term attention and long-term engagement,” Geer says.

 A campaign wants you to give over and over again.

11 email tips from campaign strategists:

1. Keep it short. According to Patrick Ruffini, a Republican strategist, “You need to essentially get them off that email as quickly as possible.”

2. Spend a lot of time on the subject line. “If no one opens up your email, it doesn’t matter how good your argument is,” says political consultant Stephen Geer.

3. Try new things. Try different things. Compared to TV advertising or direct mail, email is inexpensive, and you can see what works very quickly.

4. Test different drafts of an email.

5. Because “open rates” have been declining, send more emails. But not too many! You don’t want donors to unsubscribe.

6.  Personalize emails. Campaigns have had success referring directly to a donor’s previous gifts.

7. Novelty fades. If every candidate is using a casual subject line to invite donors to enter a drawing, it’s time to devise a new strategy.

8. Try putting things in black and white.

9.  Try “the doomsday e-mail.” Warn donors an opponent may have the upper hand, or that a deadline looms.

10. Remember: Most email is opened on mobile devices these days. Your email should look good on a smart phone, and it should link to a mobile-compatible donation page.

11. Put the links high. “A link towards the top is better than a link at the bottom,” says Rayid Ghani, who was Obama for America’s Chief Scientist. “A large button that makes you click towards the top is better,” he adds.

Bank of America could shell out as much as $10 billion

Wed, 2014-07-16 02:00

Citibank just agreed to a seven billion dollar settlement with the Justice Department.

Paul Miller, Managing Director of FBR Capital Markets, says in spite of settlements, so far, the big banks are showing decent results.

“I mean, you saw JP Morgan blow numbers away," he says. "Citi beat numbers," and while Wells Fargo didn’t beat expectations, Miller calls the bank's earnings acceptable.

Then there’s Bank of America, which Miller estimates could end up shelling out well over ten billion dollars for its role in the financial crisis.

Jim Sinegal, an equity analyst with Morningstar, agrees that the bank, which he calls "the most troubled," will have to pay an enormous amount to the Department of Justice.

Legal expenses, he notes, have been going up at all the banks, like JP Morgan, which he says just paid half a billion in legal fees.

“That really eats into your earnings power and I don’t think that’s anything that’s going to go away anytime soon,” he says.

Sinegal says banks have been trying to cut costs with strategies like layoffs, but he says as long as the stock market keeps doing well, banks can manage more money and charge more fees.

The secret to China's GDP growth rebound: stimulus

Wed, 2014-07-16 02:00

After a tough first quarter, China’s economy grew 7.5 percent this Spring – faster than most economists expected. The reason? Stimulus funding.

China’s government has injected significantly more money into the Chinese economy in the last few months, spending money on railway infrastructure, social housing projects, and public works projects; activity much of the country hasn’t seen since the big stimulus package of 2008 that was launched to cope with the global financial crisis. That stimulus package has lead to economic waste and bad debt.

As a result, many economists are waiting for more meaningful structural reforms to China’s economy. But others don’t see it that way.

"They want to walk this sort of very delicate balance between stimulating to ensure a basic seven, eight, nine percent nominal rate of GDP growth, and then on the other side, pushing through some reforms," says Standard Chartered’s Head of China research Stephen Green.

Those reforms have yet to take shape. So far, Xi Jinping’s government has been too busy expelling corrupt government officials as part of a wide-ranging anti-corruption campaign, which has also had a negative impact on China’s economy. But Green thinks we’ll soon see China’s government allowing private companies to open banks and begin lending, which he says would be a sign that bigger economic reforms are on their way.

 

Bike-sharing's big problem: missing bikes

Wed, 2014-07-16 02:00

Urban bike-sharing programs have exploded— there are now more than 30 in the U.S., with plans for many more. But there are growing pains, and users can't see the biggest one: the bikes they’re not riding, because the biggest supplier went bankrupt six months ago. The biggest, most-popular programs won't expand this year, and planned programs in other cities have gotten stalled in the pipeline. 

For example, a few days before Chicago’s Divvy Bikes celebrated its first birthday in June, general manager Elliot Greenberger noted how much the program’s subscriber base had grown in 2014.  

"We’ve doubled, and it’s only June right now," he said. "We continue to see people signing up at about a hundred a day, sometimes more."

Here's what the growth curve looks like since Divvy started: 

 Here's another, perhaps even more impressive way of looking at Divvy's growth curve:

 Startups would envy this kind of growth. Programs in Washington, D.C., New York and elsewhere have taken similar trajectories.

However, Divvy was supposed to expand this spring — adding about 60 percent more bikes and docking stations. That’s on hold. The company that supplies Divvy’s equipment— Public Bike System Co.*went bankrupt in January. That company also supplies New York, Washington, Boston, Toronto, San Francisco, and other cities.

Those programs are managed by Divvy’s parent company, Alta Bicycle Share. When asked how long it has been since the supplier shipped new bikes, Alta Vice President Mia Birk pauses for a moment.

"Ooh," she says, "It must have been pre-bankruptcy."

That means no new bikes for any of Alta's cities. Meanwhile, programs in cities like Baltimore, Vancouver and Portland — also slated to be managed by Alta and supplied by Public Bike Share — have delayed their launch dates. The equipment includes proprietary designs, so going with another supplier isn’t an easy option.

 

"It’s been a disruption!" says Birk. "I mean, I’m not going to lie to you. It’s been really challenging." Birk says Alta has been working hard to get a new supply of bikes, but new bikes probably won’t arrive until 2015.

"Seems like there were some major promises made, and nobody looked closely at the financials or the supply chain," says Jeremiah Owyang of Crowd Companies. "That’s what you’re seeing here. Everybody went with the one provider, and overwhelmed them."

Colin Hughes studies bike-share worldwide at the Institute for Transportation and Development Policy. He says Public Bike System Co.’s bankruptcy doesn’t worry him.

"There’s plenty of other companies out there making bike-share bikes," says Hughes. "You may see the types of bikes used in some cities thrown out. But I don’t think you’re going to see bike-sharing as a whole thrown out."

Bike-sharing continues to grow worldwide. More than one city in China has more shared bikes than all of the United States. 

 

 *CORRECTION:  The original version of this article misstated the name of a company that provides equipment for municipal bicycle-sharing programs. It is the Public Bike System Co. The text has been corrected.

Washington's still kicking the can down the road

Wed, 2014-07-16 01:00

Remember when Jon Stewart went on Crossfire – the old Crossfire, with Paul Begala and Tucker Carlson, not the new one with Newt Gingrich and whatstheirnames – and begged them to "Stop, stop hurting America"?

Not to put myself on the same level as Stewart, but here's my paraphrase: Washington is hurting America.

Yes, I know Washington has been dysfunctional for years now. And that we've all somehow become accustomed to politicians kicking the proverbial can down the road (gee, love that phrase) on serious and substantive issues of economic policy.

Maybe I'm being naïve here. But, the news this week that the White House has signed on to the Congressional quick fix to shore up the Highway Trust Fund for the short term was especially disspiriting. Why?

You know, I'm not sure. I guess because...in the not too distant past, we had a budget deal. We had responsible politicians acting the way they ought to, planning for the long term and not doing the nation's business in six-month chunks. I guess I thought maybe things had changed.

And then I remembered.

Naïve is probably right.

CORRECTION: The original version of this story incorrectly spelled Jon Stewart's name. The text has been corrected.

Life as a remover

Tue, 2014-07-15 13:19

It takes something very specific to be a remover – the guy who transports a recently deceased body to the funeral parlor. It’s a job that Andrew Meredith describes in his new memoir titled, “The Removers.”

He says his dad, a literature professor and poet who did removals on the side, had the perfect manner for the job.

“He was one of the best at that manner. He was really good at going into a home and making people feel like he was in charge, that everything would be fine, that you’d be hearing from the funeral director in the morning, nothing to worry about, maybe you should go into the kitchen so you don’t see us leave…”

Meredith began his work as a remover after dropping out of college.

“The funeral director would get a call saying so-and-so has died, we need her to be picked up, often at home…so we would get a beep, in 1998, as it were.”

Eventually, Meredith went back to school for his MFA and his working on a novel. But he says he had to write about the experience first.

 “I knew I wouldn’t write about anything worthwhile until I wrote about this.”

Killing Archie, to keep his brand healthy

Tue, 2014-07-15 13:14

Archie Andrews dies on Wednesday. Not Archie the teenager, who will return in future issues of "Archie Comics" and other titles. This is a grown-up version of Archie in a series called "Life with Archie," featuring stories about Archie as a married adult. Each issue features two versions of Archie's grown-up life — married to Betty in one, Veronica in the other. Both die in issue number 36.  

Killing Archie-the-character fits into a strategy for keeping Archie-the-brand alive and relevant.

Archie gets shot defending his friend Kevin Keller, who is gay, married and running for office.

"It’s not your traditional high-school aged Archie," says Jonathan Goldwater, CEO of Archie Comics Publications. "It’s Archie aged-up just a little bit."

And grown-up Archie is a hit. Goldwater estimates the comic sells more than 75,000 copies an issue — a lot more than an issue of "Archie Comics." Just as important as the narrative tweaks, "Life with Archie" comes in a different size and shape — one that goes on magazine racks in supermarkets and bookstores, not just comic shops.

"Basically, the 32 page comic on the newsstand is going away," says Goldwater.  "And most of the sales now on the traditional comics are in the comic-book shops."

The company's other big hit is "Afterlife with Archie"— in which the gang from Riverdale live through the Zombie Apocalypse. (Jughead, ever the hungriest of the bunch, makes a terrifying zombie.)

 Just as important as the content, "Afterlife with Archie" is published as a series of graphic novels sold in bookstores. The latest issue was the biggest-selling graphic novel for June, according to ComicChron.com, which tracks sales figures.

John Jackson Miller, who runs the site, says fans know better than to take the death of a character seriously.  

He credits longtime comics writer Len Wein with the following maxim:  "No one in comics is ever really dead, unless you can see the body. And usually not even then."

Killing a character is also a time-tested way to grab extra sales. Superman died in 1992, and Captain America died in 2007. Both sold lots of comics, and both came back.

"I appreciate in the publishing world that they need to get some kind of event and sensation to get noticed," says Nick Purpura, co-owner of the store JHU Comics in New York. "You’re not calling me because Archie came out every month— you’re calling me because there’s something happening in Archie."

He hopes people come to his shop to find out more. 

What's a comic book death worth?

Killing off its namesake will likely boost sales for Archie Comics, but high-profile deaths (and resurrections) are common in comic books. So with characters meeting their "end" at every turn, what's a comic book death actually worth? We looked back at some recent deaths that made headlines and how they helped – or hurt – sales.

Superman

(Courtesy:DC Comics)

Perhaps the best-known entry on this list, DC Comic's "Death of Superman" storyline found the Man of Steel fighting an alien rock monster called Doomsday, and the image of him dying in Lois Lane's arms became iconic. Collectors snapped up that issue, which sold millions and made headlines around the world.

Of course, it didn't last. Superman returned – with a black suit and a mullet, because it was the '90s – to fight off impostors and resume his post. Fans labeled Supes' death a gimmick, and the backlash arguably helped push the industry into collapse. You can buy the issue, still sealed in cellophane, on eBay for a few bucks.

Spider-Man

(Courtesy:Marvel Comics)

This one depends on your definition of "death," which is already pretty slippery in comic books. To commemorate the 700th issue of "Amazing Spider-Man," Marvel Comics had the wall-crawler swap brains with his dying nemesis Dr. Octopus. During the ensuing battle, Peter Parker died trapped in Doc Ock's body. The issue sold more than 200,000 copies, according to ComicChron.com, making it one of the best-selling comics of 2012. The $8 price tag probably helped.

The decision to have Doc Ock take on Spider-Man's identity divided fans, but a new series about Octopus' exploits debuted with 188,000 copies sold. "Superior Spider-Man" ran for about a year-and-a-half, selling a solid 70,000 to 80,000 copies per issue before Parker returned to his own body this past spring.

Batman

(Courtesy:DC Comics)

Four years before the Dark Knight met his end (sort of) on movie screens in 2012, Batman was killed off in the comic book storyline "Batman RIP." The final issue, in which Batman seemingly died in a helicopter crash, sold a disappointing 103,000 copies, according to ComicChron.com. Maybe that's because Batman survived, only to be killed in an epic battle during a huge crossover series. That issue only sold a little better, but it was another fake-out; it turns out Batman's charred corpse was that of a clone. The real Batman was unstuck in time and ended up back in the Stone Age... you know what? Never mind.

It's worth noting that the conclusion of "Batman RIP" was beat out by the debut of "Ultimatum," a limited series that brutally killed off dozens of Marvel heroes and villains (not to mention thousands of regular folks) in an alternate universe.

Captain America

(Courtesy:Marvel Comics)

As these things go, Captain America's death in 2007 was downright realistic: following a superhero civil war, sniper downed Cap on the steps of a federal courthouse. In the midst of an economic downturn, seeing America incarnate bleeding to death was a poignant image. "Captain America" issue 25 made headlines and became the top-selling comic of the year with over 290,000 copies sold.

Believe it or not, Capitan America's resurrection involved both time travel and brain-swapping. He was back on the job by 2010. In the meantime, Cap was replaced by former sidekick Bucky Barnes, who was himself killed during World War II and resurrected in 2005.

Got all that?

Corporate inversion: an expensive way to save on taxes

Tue, 2014-07-15 13:14

American drug companies AbbVie and Mylan won’t be American long if all goes as planned. Both are involved in international mergers (worth $53.6 billion and $5.3 billion, respectively) with the ultimate goal of moving their home bases abroad.

It’s a move called an inversion, when companies move headquarters outside of the U.S. to avoid American taxes. And many large American companies are doing it or at least considering it.

“What’s going on now is a feeding frenzy,” says University of California, Berkeley law professor Steven Davidoff Solomon. “Every investment banker now has a slide deck that they’re taking to any possible company and saying, ‘you have to do a corporate inversion now, because if you don’t, your competitors will.’”

The math is simple, but international mergers rarely are. Dealing with legal requirements of a new country can be complex and there are invariably cultural issues to handle. There’s also the potential image hit.

“To shift their profits overseas, to some seems unpatriotic,” says Steve Rosenthal of the Urban-Brookings Tax Policy Center. “That’s a real public relations concern.”

Members of Congress are stomping their feet about the current wave of corporate runaways, but partisan gridlock means they’re unlikely to change anything soon. There’s an ongoing debate about how to tax corporations here fairly, but more and more companies are basically exiting that argument, and the country itself.

Mark Garrison: AbbVie is offering $53 billion for Shire. It links up with another company, and in the process saves a bundle on taxes. Arizona State accounting professor Don Goldman says moves like this are especially tempting when competitors do the same.

Don Goldman: It’s kind of a no brainer that if you have a transaction that would allow you to do this, you need to be doing it or you’re gonna get left behind.

Big banks are helping convince companies to move abroad, says Berkeley law professor Steven Davidoff Solomon.

Steven Davidoff Solomon: What’s going on now is a feeding frenzy. Every investment banker now has a slide deck that they’re taking to any possible company and saying you have to do a corporate inversion now, because if you don’t, your competitors will.

The math is simple, but international mergers rarely are. Dealing with legal requirements of a new country can be complex and there are invariably cultural issues to handle. And Steve Rosenthal of the Tax Policy Center points out: companies that do inversions can take a real image hit.

Steve Rosenthal: To shift their profits overseas, to some seems unpatriotic and I think that’s a real public relations concern.

Members of Congress are stomping their feet about the current wave of corporate runaways, but partisan gridlock means they’re unlikely to change anything soon. Mihir Desai is a Harvard Law and Business professor who says it’s no longer a given that companies will be meaningfully part of America, or any country.

Mihir Desai: You can have a financial home in New York, you can have a legal home in a tax haven and your management can sit in London. So that notion that firms are of a country, I think is going away.

There’s an ongoing debate about how to tax corporations here fairly. But more and more companies are basically exiting that argument, and the country itself. In New York, I'm Mark Garrison, for Marketplace.

If California were divided into six states...

Tue, 2014-07-15 13:14

Direct democracy as practiced here in the Golden State has just shot itself in the foot.

A venture capitalist from Silicon Valley offered a proposal late last year to break California into 6 different states.

It wasn't given much of a chance of going anywhere, but then the venture capitalist in question - Tim Draper - announced yesterday he's gathered enough signatures to get it on the ballot in 2016. 

My colleague David Brancaccio talked to Tim Draper about his plan when it came out.

Two things of note here:

1) Silicon Valley and all its money becomes its own state.

Handy, huh?

2) Central California would instantly become the poorest state in the country by per capita income.

'Stopgap' government frustrates feds and businesses

Tue, 2014-07-15 13:14

President Obama gave a speech today on infrastructure and the Highway Trust Fund – a pot of money states use for roads and bridges. If congress doesn’t act, the Department of Transportation says that fund will run out of money next month. So it seems we will see another “stopgap bill” – a “short-term fix,” a “patch.”

After a while, the fiscal crises kind of blend together, don’t they? All the continuing resolutions? The last-minute debt-ceiling deals?

“This is one heck of a way to run a railroad,” says Greg Valliere, the Potomac Research Group’s chief political strategist. “It makes it very difficult for companies to hire, to plan for benefits, to buy supplies.”

According to Linda Fowler, who teaches government at Dartmouth College, short-term legislation is also hard on federal agencies that contract with these companies.

“It makes it impossible to have an orderly bidding process, to get the best price, for people to plan their budgets over the long run, and set priorities,” she notes. “This is just very inefficient and wasteful.”

What could become landmark legislation – immigration reform and tax reform, to name just two examples – falls to the wayside.

“A lot of the issues out there that you think can be solved, and will be solved more easily if they are addressed earlier, as opposed to later, aren’t getting addressed at all,” says Matt Dickinson, who chairs Middlebury College’s political science department.

According to David Canon, who teaches at the University of Wisconsin – Madison, this dysfunction dates back at least a decade. At first it affected budget issues, and programs like the Highway Trust Fund, which funnel money into both Democratic and Republican districts, were safe. But times have changed.

“Everyone loves building highways,” he says. “And now we can’t even agree on funding that.”

Canon says that, as the government lurches from deadline to deadline, it’s capable of doing real damage.

China's fight for cleaner air

Tue, 2014-07-15 12:23

As the saying goes, “You don’t know what you’ve got until it’s gone.”

For the people of Beijing in 2008, "it" was air pollution. "Up until then, every day the sky was a shade of gray or cream," says Huang Wei, Director of Greenpeace's Climate and Energy Program in Beijing, "But in the countdown time to the Olympics, the sky suddenly turned blue. Many of us, people of all ages, would stop on the street and marvel at how wonderful it was."

Beijing had shut down factories, restricted traffic, and improved public transportation, all in time for the opening ceremony of the Summer Games to escape international ridicule and embarassment for its perpetual toxic smog that made any athletic endeavor harmful to your health. But after the closing ceremony, Beijing was right back where it started. As the blue sky disappeared behind the familiar veil of smog, the people of Beijing had learned a valuable lesson: "The Olympic Games revealed to everyone - the government and the people - that in terms of solving our air pollution problem, it can be done," says Zhang Jianyu, China Director of the Environmental Defense Fund.

But China still had a ways to go. In response to the global economic crisis that same year, Chinese leaders announced a $586 billion stimulus plan focused on building infrastructure, allowing the pollution to get worse. At the same time, the U.S. embassy in Beijing installed an air monitor on its building and began broadcasting hourly levels of a range of pollutants, including PM2.5 - particulate matter smaller than 2.5 microns - tiny enough to penetrate your lungs and enter your bloodstream. “Up to that point, China’s government reported the air quality, but it wasn’t very specific," says Greenpeace's Huang Wei. "If the pollution level reached a certain point, they might publish it as simply 'bad.'”

The U.S. Embassy air monitor, however, spat out numbers. People in Beijing downloaded smartphone apps that recorded the U.S. Embassy’s hourly Air Quality Index and many began to memorize what the numbers meant. 0 to 50 meant the air was good – rarely the case. An average air quality reading in Chinese cities hovered around 150 – labeled ‘unhealthy,’ but sometimes, it climbed into the 300 to 500 range, prompting officials to urge people to stay inside. “When it’s 400, I don’t ride my bike anymore,” says Zhou Xizhou, director at IHS Energy in Beijing. “There is the physical side, you can feel it," says Zhou of Beijing's worst air days, "I do feel it in my eyes, but for a lot of people it’s also psychological. Just being in a gray polluted environment, you feel somewhat suppressed.”

In the winter of 2012-13, pollution levels went beyond the U.S. Embassy’s own index, forcing airports to shut down because pilots couldn’t see the runway. The international press dubbed it ‘the airpocalypse’. That winter in Beijing saw air quality index readings climbing towards 1,000. As a comparison, when the air quality in Paris hit 150 this year, the city instituted a driving ban and offered free public transportation.

But Zhou says there is good news on the horizon. “What’s encouraging being in the energy sector is that we are seeing unprecedented actions and determination to address this issue. A part of me wishes that this will be China’s 'Silent Spring' Rachel Carson moment."

Zhou says China’s way of addressing air pollution is different from the American approach of the 1960s and '70s, the era of clean air legislation and the formation of the Environmental Protection Agency.

China’s government prefers the mandate approach. “For example, issuing a mandate that says every coal fired power station in Beijing will be gone by the year 2016," says Zhou, "You can’t do that in America.”

China’s top-down authoritarian regime may inspire hope that China could clean up its air with a few snaps of its leaders’ fingers. But in China, central power has limits - local governments in China often disregard new mandates and laws handed down from the Beijing because there’s often no funding to implement them. “China’s local governments have no motivation at all to deal with environmental problems unless they make money," says Peking University Professor Xu Jintao. "That’s why I think a pollution tax would work. If some of that revenue goes to fund the local government, they’ll quickly help solve this problem.”

Using London as a model, Beijing has plans next year for a traffic congestion charge on drivers who enter the city. Xu says implementing these kinds of measures now, while China’s consumer culture is still young, is important because it frames a new social mindset. “China’s growth model is based on the idea that natural resources are free," says Xu, "We’ve never considered clean water, clean land, or clean air as scarce resources. But now, in China, they are scarce. Nothing is free. When you go the market, you won’t find free cabbage. You need to pay for it. And now Chinese consumers will need to pay for clean air, land, and water.”

But the Environmental Defense Fund’s Zhang Jianyu isn’t sure Chinese consumers will sacrifice the perks of being a consumer just to save the environment. “Everyone in China now wants a car, and it’s hard to deny them that," points out Zhang. "If China’s 1.3 billion people live like Americans, planet earth is finished. That’s my biggest concern. How can you deprive the Chinese of their right to become consumers and live a modern lifestyle? None of the developed countries have been good models, and we're heading down the same path of consumerism.”

It’s a path the U.S. has already traveled, polluting much of the world in the process, and now it’s China’s turn, says Zhang. If the U.S. and other developed countries don’t help China clean up, he says, the smog that plagued LA in the 1950s will return.

Except this time, it’ll be blowing from across the Pacific.

Laughing in Hollywood just got cheaper

Tue, 2014-07-15 12:02

Hollywood is making a lot of comedy films this summer, but they're not spending as much as they were before. The cost of making a comedy has dropped almost 50 percent in the past four years.

So what does this mean for the movies that weren’t a big hit in the box office, like "Blended," starring Adam Sandler and Drew Barrymore? Are those movies going to lose money?

"They’re still going to make money," says Sharon Waxman, editor-in-chief at The Wrap. "It’s not going to make $100 million at the box office, like most Adam Sandler comedies have in the past, but it’s still going to make a profit."

Hollywood has finally figured out how to pay the talent less, and keep production costs down. However, these movies are still profitable because overseas ticket sales make up 70% of the global box office.

"When it comes to comedies, humor is such a particular thing," says Waxman. "It may work in some countries, and not work in others."

In China, the polluter 'that-must-not-be-named'

Tue, 2014-07-15 11:31

Chengdu, the capital of Sichuan province, is home to a thriving teahouse culture. But there’s more than tea brewing here. The tradition of chatting away the day with friends has, for centuries, made it easier for folks here to gossip and talk about politics and current events. Lately, the talk has been about air pollution.

“There are more people and more cars and more industry," complains Wu Youqiong, who sits and drinks tea with her family, "The pollution is bad for all of us – we all have lungs. The government needs to do something about it.”

In the past year, one of the most notorious projects in the history of China’s oil industry began operation outside the city. It’s a $6 billion petrochemical plant run by China National Petroleum Corporation, the country’s largest state-owned oil company, and it has become a focus of a corruption investigation into the family of Zhou Yongkang, China’s former security chief. "The people here didn’t want the plant built, but they built it anyway," says Wu, "It’s going to harm everyone’s health. It’s something people should protest."

The people of Chengdu tried.

Last year, many here among the city’s 14 million residents planned a weekend public demonstration to protest the plant. When the local government found out, police detained organizers, sent out text messages warning people to stay inside, and the government required people to work on the Saturday of the protest, forcing high school and university students to remain in class through the weekend.

Officials are still paranoid– within minutes of arriving in Chengdu, I call a source who had agreed to talk with me about how the pollution affects her family. She abruptly cancels our interview – she’s being interrogated by police officers who had intercepted our emails and text messages. The next day, I hire a driver to take me to Pengzhou, the site of the petrochemical plant. It's a refinery that’s as large as the nearby city. In a small village in the plant’s shadow, I stop to talk to a farmer. "My home was destroyed for the plant last August," a woman tells me, "The sky here is always polluted now. The plant has had a huge impact on our health."

Before I can get her name, a man pulls up beside me on a motorcycle and asks me what I’m doing. He glares at the woman and she dashes off.

I tell him I’m a journalist and I’m talking to people about pollution. “There’s no pollution here,” he says.

Before I can ask him more questions, he makes a call on his cellphone. A minute later, a group of thugs show up. I hop in the car, and we drive to another location where I again begin talking with people, but the men catch up to me and intimidate them, too. Before long, I'm being chased out of Pengzhou by six cars; a motorcade of thugs with a foreign journalist in the lead.

Back safely in Chengdu, I speak with Jin Lei and Guo Xiaohong, a husband and wife who are concerned about the plant. "A lot of people are concerned about the plant," says Guo, who used to work for an environmental NGO in Chengdu. "but people are no longer willing to do anything about it – they don’t think they can change the situation."

Jin and Guo’s two daughters are playing in their living room. A couple of years ago, when the pollution in Chengdu was particularly bad, the couple had to bring both girls to the emergency room several times for breathing problems. “The pollution that year was just as bad as Beijing’s," remembers Jin. "I used to train for triathalons, but I’ve stopped that because my bronchitis was so bad.”

Back in 2005 when Jin and Guo were studying at elite schools in Beijing, they were among a group of students permitted to attend a talk by Al Gore. He was visiting Beijing to talk about his documentary “An Inconvenient Truth”. After the talk, officials allowed only one question from students.

Jin raised his hand and Gore called on him.

“I asked Mr. Gore what can we, as normal people, do to help China’s environment?" remembers Jin. "He said, ‘You are the representatives of China’s young generation, and you must have faith that things can change. If you don’t have faith, then future generations will have less faith.’”

Jin and Guo have now applied this message to how they live in Chengdu. The couple uses reclaimed water to help grow their urban garden, and they’ve taught their daughters to use bath water to help flush the toilet. “Whatever mandate the government hands down that will help protect our environment, we will support it 100 percent," says Jin. "As a country, we must work together. Otherwise, we’ll all pay the price.”

We must have faith, he says, echoing what Al Gore told him - that things can change. But sometimes in China, it’s hard to keep that faith: Just two hours after I leave Jin and Guo’s home, the police show up to intimidate them, too.

What bright lights can tell you about a nation's economy

Tue, 2014-07-15 10:52

The pale blue dot aglow with millions of little lights. It's an image that never ceases to fascinate. But those lights might tell us more than you think.

A new study published in the Quarterly Journal of Economics says that cities and regions that are the birthplaces of a country's leader recieve perferential political and economic treatment in some nations, evidenced by how bright they appear from space after the leader comes into power.

From Wired Magazine:

Paul Raschky from the Monash Centre for Development Economics and Sustainability at Monash University in Australia compared the night-time light intensity of 38,427 subnational regions between 1992 and 2009 with the birthplaces of political leaders of 126 countries.

"Our results suggest that being the leader's birthplace increases night-time light intensity and regional GDP by around four and one per cent respectively," Raschky said, citing previous research that confirms the connection between economic activity and light generated at night.

Here's a look at some of the cities that the study examined, and other images from orbit that show how different economic conditions can change the view from space:

Gbadolite, Zaire (Democratic Republic of Congo)

A screenshot from NASA's "Blue Marble" application showing the city of Gbadolite. (Image courtesy of NASA Earth Observatory)

This small town in the Democractic Republic of Congo (formerly Zaire) was emphazised by the study for the lavish economic favoritism bestowed upon it by the country's authoritarian president, Mobutu Sese Seko, who was born near Gbadolite.

"Mobuto built a huge palace complex costing millions of dollars, luxury guesthouses, an airport capable of handling Concords, and had the country's best supply of water, electricity and medical services," says study researcher Paul Raschky.

Hambantota, Sri Lanka

A screenshot from NASA's "Blue Marble" application showing the region of Hambantota, on the southern tip of Sri Lanka. (Image courtesy of NASA Earth Observatory)

Another region identified in the study for receiving preferential treatment from Sri Lankan president, Mahinda Rajapaksa, who was born in the district. The largest city in the area, Hambantota has a population of 11,000, has seen the construction of a 35,000-seat cricket stadium, and has plans to build a large port.

North Korea and South Korea

An image taken from the International Space Station on Jan. 30, 2014, shows South Korea (lower right) and China (upper left) with North Korea in the center. (Image courtesy of NASA Earth Observatory) 

A photograph from space perfectly illustrates differences in economic development between North and South Korea — a brightly illuminated South, and an eerily dark North.

The Nile River

(Image courtesy of NASA Earth Observatory)

The Nile River with its valleys and delta make up less than five percent of Egypt’s land area, but more than 90 percent of its population lives there. The string of lights illuminating the river's path through the country at night highlights the societal importance of the Nile in Egypt.

North Dakota's fracking fields

Illustration by NPR/NASA

An NPR science writer was looking through NASA's images of Earth at night, and noticed an unusual glow coming from the normally fairly dark North Dakota, one that revealed how the light across the U.S. is still subject to economic changes.

Their explanation:

What we have here is an immense and startlingly new oil and gas field — nighttime evidence of an oil boom created by a technology called fracking. Those lights are rigs, hundreds of them, lit at night, or fiery flares of natural gas. One hundred fifty oil companies, big ones, little ones, wildcatters, have flooded this region, drilling up to eight new wells every day on what is called the Bakken formation.

What was previously wheat and corn fields has quickly become a blazing energy business that has made North Dakota the second largest gas-producing state in the country.

Why Google and Novartis are teaming up

Tue, 2014-07-15 07:00

First, there was Google Glass. Now, Google is getting into contact lenses, teaming up with the Swiss pharmaceutical company Novartis. 

They're working on smart lenses that will be able to monitor blood sugar levels for diabetics through the natural tears in our eyes.  

Google and Novartis also say they’re developing another lens that can auto-focus the eye. It could help with reading, because as the eye ages, it’s harder to see things up close.   

The two companies complement each other pretty well: Google doesn’t need any money from Novartis, while Novartis can help Google navigate the clinical and regulatory side of things.

“They need more the expertise in terms of running clinical trials, getting approval from the FDA, and then marketing after approval,” says John Mack, who follows the pharmaceutical industry as publisher of "Pharma Marketing News."

Google could definitely use an FDA go-between. About five years ago, the FDA went after pharmaceutical companies about ads that popped up in Google searches. The FDA said the ads didn’t contain relevant risk information. 

The partnership also benefits Novartis. Its contact lens division, Alcon, will get a huge jump into smart contact lens technology with the deal. 

Novartis sees a lot of potential for contact lenses that monitor our health. The company says it sees the Google deal as an opportunity to “develop and commercialize” Google’s smart lens technology.

CORRECTION:  The original version of this story misidentified the publication of John Mack. The text has been corrected.

 

Money and love: What would you change about your partner if you could?

Tue, 2014-07-15 06:55

A 2009 study by Jeffrey Dew, faculty fellow at the National Marriage Project and an assistant professor of Family, Consumer, and Human Development at Utah State University, found that couples who argue about money once a week were 30 percent more likely to divorce over time than couples who reported disagreeing about finances just a few times per month.

We're collecting stories and moments that drive you crazy when it comes to your partner and money. Here's a few responses we've received so far:

@lizzieohreally @MarketplaceWknd Daily Starbucks visits (when I bought him an espresso machine for Christmas).

— Melissa (@Muhlyssa_A) July 15, 2014

@lizzieohreally @MarketplaceWknd Bet you'll get this a lot, but too cheap! Example: driving around for 30+ mins to avoid paying for parking

— Daryl Paranada (@darylparanada) July 14, 2014

What could you change financially about your partner if you could? Let us know in the comments or email us.

And if you need more help when it comes to money in your relationships, here are a few stories from our archives:

Marriage and money: Tips before you walk down the aisle
Hiding money from your spouse, for the sake of the marriage
Money & relationships: When you can't just hug it out

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