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Legal pot businesses would love to take cash to the bank

Fri, 2014-01-24 12:00

Retailers who sell marijuana, even in states where it's legal, may have access to bank accounts – eventually. Attorney General Eric Holder said the administration may propose new rules to deter prosecutors from prioritizing legal marijuana sellers. In the meantime, marijuana dealers continue to pay a high price to operate only with cash.

Retailers of legal recreational marijuana in Colorado say business is good. Tim Cullen, co-owner of Evergreen Apothecary and Colorado Harvest Company, says while perhaps a cash-only business would work for some small companies, he’s at the point where not having a bank account is not an option.

 “We have over a 100 hundred employees. At this point, we lease six different buildings. We will pay somewhere north of $100 thousand in sales tax this month,” he says.  

There’s just one drawback to selling all that cannabis – all the cash.  According to federal law, marijuana is illegal – so banks won’t take retailer’s money.  That means businesses like Cullen’s have to find a work around.

“We use a third party that we pay pretty substantial fees to. That allows us to have access to bank accounts.”

A "third party"? Is Cullen renting a bank account? Borrowing one from a friend, with an accompanying fee? 

“I’m going to leave it at vague and mysterious,” says Cullen, “because I need to keep my bank accounts open.”

But most marijuana sellers,  notes Taylor West, Deputy Director of the National Cannabis Industry Association, are stuck with cash only.

“People are literally having to bring bags of cash in to pay licensing fees, state taxes, even utility bills that can run in the thousands of dollars a month,” she says.

Then, says West, there’s the issue of safety.

“We have heard of members that have to use decoy cars and multiple people leaving at the same time and going in different directions.”

But all retailers still have to pay state sales tax. (Colorado businesses take note - February 20  is the last day you can pay taxes for the month before). And until the rules change, the Colorado Department of Revenue would like retailers to know that it accepts state tax revenue in a number of ways, and cash, it says, is one of them.

Food labels will get their first makeover in 20 years

Fri, 2014-01-24 12:00

We know a lot about our food these days – the calories, the fat, the protein that comes in a single serving of Cheeze-its. And i's all thanks to that little box on the back of the box.

Now for the first time in about 20 years, nutritional labels are getting a make over.

The FDA won't say exactly when the changes will come, or what the new labels will include. But there are some hints: easier to see calorie counts, more up-to-date serving sizes and information on added sugars.

Phil Lempert, editor of Supermarketguru.com says the time for change has come. He attributes some our unhealthy eating habits to consumer confusion over nutrition labels.

"If we can get people to understand that they are consuming too much food, or too many empty calories vs. nutritive calories, we can finally change behavior," he says.

Lempert believes new labels could clear things up for shoppers, and put some pressure on food companies.

"Food manufacturers are going to look very carefully at this, and try to take advantage of this, so their ingredients and the nutritional information becomes a marketing advantage," he says.

So does that mean we are going to see an explosion of whole wheat, tofu and kale in everything?

Ann Yaktine, interim head of the Food and Nutrition Board at the Institute of Medicine, says to expect baby steps.

"I’m not convinced that manufacturers are going to radically change what their food products are now."

Yaktine says over the past several years, food companies have already started to offer consumers different choices.

Just walk down the 50-mile long chip aisle.

"You can see all kinds of different products. Low-sodium, low-fat, low-calorie," she says.  

More than anything, Yaktine thinks new labels will make it easier for consumers -- at least, easier to find information. We haven’t yet met a label that makes it easy to put down the Flamin’ Hot Cheetos.

'A slow motion trainwreck': Argentina's currency woes

Fri, 2014-01-24 12:00

Currencies across the developing world have been sliding recently, but none more so than Argentina. The Argentine peso slid a whopping 16 percent against the dollar this week.

"Fear, uncertainty, abandonment, and confusion," are the reigning sentiments in the country right now, according to Augustino Fontevecchia, a reporter for Forbes and a native Argentinean who travels there regularly. "There’s been problems finding basic supplies from food to electronics. Inflation has led to police going on strike in several provinces, which has in turn, caused crime waves."  The government, he says, has done little to substantially address the problems.

A TRAIN WRECK

"It’s been a slow motion trainwreck," says Win Thin, global head of emerging markets strategy at Brown Brothers Harriman. "Many analysts, including myself, have been predicting a crisis for several years."

2001 DEFAULT SETS THE STAGE

In 2001, Argentina defaulted on its sovereign debt. It did so in an aggressive way that left many investors displeased, says Thin. Since then, the country has been locked out of global credit markets. In other words: It can't borrrow.

That hasn’t stopped the Argentinian government from spending, however.

Peter Hakim, president emeritus of the Inter-American Dialogue, says the government, fueled by revenue from commodity exports, embarked on massive subsidy programs: "Huge expenditures on social programs, subsidies to the airlines, energy subsidies."

During all this time, investment and productivity growth were essentially stagnant. Eventually, when the export boom slowed, “the party ended,” as Thin puts it. 

INFLATION, CURRENCY, AND ECONOMIC WHACK-A-MOLE

The spending contributed to intense inflation, reaching nearly 30 percent. When the government tried to impose price caps, that led to shortages – already exacerbated by subsidies.

"They tried to use policies that have largely failed in other places," says Inter American Dialogue’s Hakim. Each time, it created another problem.

Inflation pushed Argentinians (and investors) to convert their pesos to dollars (or other foreign currencies) to prevent their value from eroding. That caused depreciation of the currency.

"What’s happening is a flood of capital out of Argentina," says Hakim. 

The government tried to prevent more currency from leaving the country, using dollars it had earned from exports to buy its own currency in an effort to prop up its value. That was expensive, and drained the central bank’s reserve of dollars. It finally had to relax its pressure yesterday, and the currency devalued quickly. 

That made people who hold Argentine pesos even more anxious, and even more desperate to sell, which made the currency problem even worse.

All of the policies Argentinians have tried come with "some short term benefits," says Hakim. "But over the long run, they make everybody very nervous about the economy," or have unintended consequences.

TOUGH CHOICES, NO GOOD ANSWERS

"It’s a classic situation of what happens to emerging markets when policy is ineptly followed," says Keith Savard, senior economist at the Milken Institute.

"We’ve seen this play out. When people lose confidence, you have a run on the exchange rate, they try to impose capital controls to ameliorate it, and it’s an impasse,” says Savard. "Governments don’t do what needs to be done."

Unfortunately, what Savard says needs to be done – higher interest rates, less government spending, including on subsidies - would reduce standards of living and employment for Argentinians already badly afflicted with a broken economy.

"The state of denial of policy makers in Argentina is just huge," says Hakim. "They have this unwillingness to recognize how serious this is."

Twitter Chat Roundup: Do you tell people how much you make?

Fri, 2014-01-24 09:52

Earlier this week we aired a report on the “Stealthy Wealthy” – people who have a lot of money, but don’t necessarily want you to know about it.   Reporter Sean Cole's piece raised some good points:  like the fact that a lot of these folks didn’t know they were inheriting large sums of money.

 In my adventures with the stealthy wealthy, I noticed a few commonalities among the folks I interviewed. For instance, none of them seemed to know the money was coming to them until it did, and all of them were thrown by it, to one degree or another. Probably the most unsettled among them was Burke Stansbury. He’s a political activist living in Seattle with his wife and son. He remembers the day his dad handed him a four-page printout of his investments, and trust fund, etc. 

"I laughed," Burke told me, "More than anything it struck me as totally ridiculous that I would have that kind of money. The absurdity of why I, of all people, should have a million dollars coming to me, it struck me. Like I had never done anything to deserve that money."

The story got us thinking: Do the non-rich feel comfortable telling people how much money they have?

On Twitter, the majority of respondents said they prefer not to share their net-worth out of embarrasment.  Some said they work hard to earn what they do, and they're happy to share the amount.  Others said that sharing income is awkward, whether you're rich or poor.  

Here are some of the most interesting responses we received:

@MPWealthPoverty yes, because everyone else in my field makes twice as much!

— Brian Virgil (@SafariBear1107) January 24, 2014

@MPWealthPoverty @MarketplaceAPM Yes. I would be embarrassed for my much more educated friends to know how little we have.

— Apron Boobsface (@1eyedstolenmare) January 24, 2014

@MPWealthPoverty Yes - some people make less than me, some make more. I feel bad when its the former, and awkward when its the latter.

— Laura Lundahl (@LauraLundahl) January 24, 2014

@MPWealthPoverty @MarketplaceAPM No because I don't tell others! It's no ones business but mine what I have. People share way too much info

— Jennifer Rand (@therowdyrands) January 24, 2014

@MPWealthPoverty we don't talk salary because prevailing emotions are either guilt, envy, or pride - all negative

— Benjamin Benavidez (@benbenjr80) January 24, 2014

@MPWealthPoverty @MarketplaceAPM Yes, because certain people might then ask to borrow said money.

— Justine Fred (@PaisleyFred) January 24, 2014

@benbenjr80 @MPWealthPoverty And because workers knowing how their salaries compare gives them more power in negotiating w management

— Robin Amer (@rsamer) January 24, 2014

@MPWealthPoverty Generally people don't ask, most make assumptions. If it really matters to someone to the point the need to ask (1/2)

— Ingrid R Shepard (@IngridRShepard) January 24, 2014

@MPWealthPoverty most times they get uncomfortable when they get the answer. (2/2)

— Ingrid R Shepard (@IngridRShepard) January 24, 2014

@MPWealthPoverty Sometimes. If I know its similar $ to the person asking or I know them very well I done mind. Otherwise it can get awkward.

— Erik Newcome (@ErikNewcome) January 24, 2014

@MPWealthPoverty I don't like the conversation that comes after. I am not where I wanted to be at my age and people always ask or assume why

— Randi Borys (@RandiB1) January 24, 2014

Advertising on the Grammys 'second screen'

Fri, 2014-01-24 09:15

It's awards season, and one of the big events will be this Sunday when the 56th annual Grammys air on CBS. Last year 28 million people watched the show on TV. But more and more, some of the action and the ads will be happening on the so-called second screen. Slate tech blogger Will Oremus tells Marketplace Tech about the online ads for the Grammys.

Butterfinger + peanut butter cups: Should candies mix?

Fri, 2014-01-24 09:00

As busy, thorough, and of course, highly conscientious journalists, we were concerned. We'd raised the question "Can Butterfinger take on the peanut butter cup?"  - but left the investigation incomplete.

To protect the good name of public media, there was only one thing to do. And it wasn't going to be easy.

We took our fake Butterfinger cups to the denizens of the American Public Media/Marketplace offices with the question: What actually happens when Butterfinger meets Reese's?

Rico Gagliano, host of the Dinner Party Download, didn't really care, so long as he got free candy:

Marketplace Sustainability Desk reporters Adriene Hill and David Weinberg decided it was a question of proportions:

Wealth & Poverty Desk reporter Noel King responded with pure disgust to the entire enterprise.

Wealth & Poverty producer John Ketchum had no such scruples:

And editor John Haas may just be the target market:

But engineer Brendan Willard comes out strongest for the candy combo. He prefers "both together to either individually."

The final verdict? It really shouldn't be this difficult to give your coworkers free candy. 

Qualcomm snaps up patents

Fri, 2014-01-24 08:54

Qualcomm, the U.S. mobile chip maker, has bought close to 2,000 patents from Hewlett Packard. Many of the U.S. and foreign patents relate to former smart phone maker Palm. (Remember them?) These days Palm's patents are a bit like hot potatoes -- HP bought Palm in 2010 to get into the mobile device game. The company appears to have lost that game and is now selling. So what does Qualcomm want with Palm? Avi Greengart, research director at Current Analysis, tells Marketplace Tech host Ben Johnson. 

PODCAST: The legal marijuana industry's banking problem

Fri, 2014-01-24 08:52

Several states have legalized marijuana, even though the federal government still considers it an illegal drug. Well, a problem is banks are reluctant -- in most cases unwilling -- to do business with the marijuana industry.

When you think of the 21st century American economy, your mind no doubt flips to things digital and mobile. But corporate earnings out this week were a good reminder that an industry that sounds more 19th century is key to the modern economy as well -- railroads.   

Less than five months before Brazil's World Cup kicks off, 6 out of 12 venues are still unfinished -- including a complex in the northern city of Manaus, where construction workers have died and pay for laborers is an issue.

Marijuana, gambling, lotto tickets: Cash only

Fri, 2014-01-24 08:34

Convenience is king. We pay for our coffee with an app and swipe our plastic to buy a pack of gum or to book a trip to Rio. But there's a reason why wads of greenbacks are still exchanged for goods or services. Do you really want your credit card issuer to leave a paper trail on that stuff you did in Vegas? (Don't worry, it stays in Vegas.)

Card issuers agree, but for their own reasons, usually having to do with risk and federal law. This week brought "10 Things You Can't Buy with a Credit Card" from MarketWatch.

Sure, marijuana is now legal in Colorado — and other states might soon follow — but you're going to need green to purchase this green. The government is hinting that federal law is catching up to legal marijuana purchases, but you'd better bet that credit card issuers are not going to step into the middle of this one until the rules are clear.

Legality on other credit card no-no's is more grey; when it comes to gambling or paying for lotto tickets, much depends on state laws.

Online gambling with cards is clearly illegal in the U.S. — hence Swiss accounts and Bitcoin — but after avoiding trouble with the law, card issuers then turn on, or off, the spigot of credit much more on the basis of risk. For example, you probably can't pay for your mortgage, your student loans, your auto loan or even in some cases your college tuition, with a credit card (though, imagine those reward points!). It's simply not good business practice to enable paying one debt with another form of debt.

Then again, those balance transfer checks you receive in the mail aren't necessarily considered credit. The biggest dangers with these card-linked checks are the high interest rate, fees from the card issuer and turning an asset-backed loan (like a car loan) into unsecured debt.

My favorite star of this list however, is good ol' outlier American Express. They refuse to process payments for online pornography, lotto tickets (no matter the state law), and contributions to Wikileaks. This swipe-for-this-not-that has a long history. Twenty years ago when I worked at Christie's auction house, I remember a kerfuffle at the highest level when a high-rolling buyer tried to pay for a painting with his American Express card. His winning bid was over $1 million. AmEx's reward-points system was already in place and their charging limits were (and still can be) undefined.

Can you blame the guy?

Check, please.

An economic storm in Argentina

Fri, 2014-01-24 07:27

It's been a dizzying 24 hours in Argentina. The peso plummeted 19 percent versus the U.S. dollar. It seems to be stabilized this morning at 7.9, down more than 8 percent from a day ago. The incident is a reminder of the economic turbulence in Argentina a little over a decade ago, with the currency swings that came the country defaulted on its debts. Click the audio player above to hear the BBC's Andrew Walker discuss the story.

5 months before the World Cup, half the venues aren't finished

Fri, 2014-01-24 06:27

Less than five months before Brazil's World Cup kicks off, 6 out of 12 venues are still unfinished -- including a complex in the northern city of Manaus, where construction workers have died and pay for laborers is an issue. Fifa has warned Brazil's World Cup 2014 host city of Curitiba that it could be excluded unless work speeds up. The BBC's Wyre Davies visited the sites of some of the World Cup facilities in Manaus. Click the audio player above to listen to the story.

Banks don't want to hold marijuana industry's stash

Fri, 2014-01-24 06:17

Several states have legalized marijuana, even though the federal government still considers it an illegal drug. Well, a problem is banks are reluctant -- in most cases unwilling -- to do business with the marijuana industry.

Banks worry doing that could subject them to prosecution from the feds, for racketeering or money laundering or aiding and abetting criminal activity.

"The banks have come to the conclusion that the risks are just too great," says Robert Rowe, senior counsel for the American Bankers Association. "Marijuana is still illegal as far as federal law is concerned, and banks are subject to federal law."

Not having access to banks is hard for growers and dispensaries in states where pot is legal.

"You know, it is hard to buy things, it is hard to pay your employees, it is hard to really go about business," says Bill Piper, with the Drug Policy Alliance.

On top of that, it isn't safe when all your business is done in cash. Attorney Genreal Eric Holder made that point yesterday, at an event at the University of Virginia. He said the government is working on new guidance. Dan Riffle, with the Marijuana Policy Project, hopes it will be comprehensive.

"Well, there is a big legal distinction -- for banks, especially, between we're not going to prosecute this crime and we don't consider this a crime."

After all, the Justice Department could reverse a decision not to prosecute banks at any time.

Railroads' earnings -- and their freight -- show where the economy's heading

Fri, 2014-01-24 05:51

When you think of the 21st century American economy, your mind no doubt flips to things digital and mobile. But corporate earnings out this week were a good reminder that an industry that sounds more 19th century is key to the modern economy as well -- railroads.   

For years now, railroads have been smartly and quietly upgrading infrastructure and increasing market share. The days when trains carried grain and coal aren’t over, but they carry a lot more now, too. “They carry just about everything that’s in your house to the materials that built your house,” says Anthony Hatch, head of ABH Consulting in New York. 

For that reason, railroad freight can provide a window on the overall economy. Take Union Pacific’s latest quarterly report. It reported its coal carloads dropped 10 percent, a dip that reflects a broader trend in the economy -- the slow but steady shift to natural gas.   

But the railroad companies are carrying more cars, lumber and piping, which hints at recent growth in auto sales, home construction and fracking. Lee Klaskow, a Bloomberg Industries transportation and logistics analyst, says railroads are playing a key role in the shale boom, “whether they’re hauling crude out or hauling chemicals and sand and water and piping into the places where they’re doing hydraulic fracturing.”

Anthony Hatch says all that hydraulic fracturing will make for more products made from the natural gas they’re drilling in the fracking fields -- plastic wrap and anti-freeze, just to name a couple. Those products will ultimately fill rail cars, too.

 

Happy Birthday, Apple Macintosh, on your 30th

Fri, 2014-01-24 05:40

Apple celebrates the thirtieth anniversary of the Macintosh computer on Saturday, Jan. 25, in Cupertino, California. The unveiling of the Mac to the world by Steve Jobs on Jan. 24, 1984 -- also in Cupertino -- was Apple’s most successful product launch to date, as Apple took on IBM’s domination of the fast-growing market for personal computers.

After the Mac was launched, Apple did well, then not so well in the ‘90s (Steve Jobs had been ousted from the company in 1985). Then he came back in 1996, when Apple bought his company, NeXT, and by the early 2000s Apple was doing well again, revolutionizing the personal computing world with the iTunes store, and iPods, and eventually iPhones and iPads.

Apple’s public pre-launch of the Mac came during SuperBowl XVIII on January 22, 1984 (the L.A. Raiders trounced the Washington Redskins, 38 to 9). A dramatic ad directed by Ridley Scott for the Macintosh ran during the game.

An army of grey robot-men march through prison-like corridors to an assembly area, as a Big Brother figure drones at them from a huge screen about conformity and power. Enter a female runner -- in color, representing Apple -- pursued by helmeted riot police. She runs before them, past the oblivious robot-men, turns once, twice, three times, and hurls a sledgehammer into the screen, smashing Big Brother, unleashing air and light, waking the robots from their authoritarian trance, and ushering in the Age of Macintosh.

“That day the earth’s axis shifted a little bit,” says Guy Kawasaki with a small laugh. At the time, Kawasaki was the Apple Macintosh division’s software evangelist. He was there two days after the Superbowl ad aired, when Steve Jobs unveiled the Macintosh.

“It represented an entirely new way of interacting with computers and accessing information,” says Kawasaki. “This was your computer, and you could do what you wanted with it.”

Technology writer John Battelle was an early adopter and covered Apple for MacWeek; he went on to cofound Wired and The Industry Standard (he’s now CEO of Federated Media). He says Mac’s graphical user interface -- clicking and dragging the mouse across screen displays -- made the personal computer something everyone could use.

“Simply put—you saw yourself mirrored in that machine,” says Battelle. “What you did was directly reflected in the interface of that machine. When you moved your hand, something moved on the machine. The WYSIWYG -- ‘what you see is what you get’ -- interface was magical, and it began a journey of our society into becoming digital and understanding what it means to be data.”

That first post-apocalyptic Mac ad ended with an announcer saying these words as they scrolled down the screen: “On January 24th, Apple Computer will introduce Macintosh. And you’ll see why 1984 won’t be like ‘1984.’”

The beige Macintosh personal computer that Steve Jobs described as being ‘for the rest of us’ -- the one that he believed would unseat IBM’s dominance of the market, and change the world -- had arrived.

Listen to an extended interview with Guy Kawasaki here:

What other technology was "born" in 1984? According to this timeline:
  • The Olivetti PC
  • Flash memory
  • 3D printing
  • The first portable computer (weighing in at 30 lbs)
  • The first desktop laser printer
  • Tetris!

Great Wall of Wyoming? This week's Silicon Tally

Fri, 2014-01-24 05:22

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

This week, Kara Swisher, formerly of All Things D, currently co-executive editor with Walt Mossberg of the new tech news and reviews website Re/Code, takes on the tech gauntlet in our weekly Silicon Tally quiz. Play along at home, below.

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Strutting in style at the Grammys doesn't come cheap

Fri, 2014-01-24 05:05

Singer, actress, and model Colette Falla moved to Los Angeles five years ago, and is used to the ups and downs that accompany life as an emerging artist in a city chock-full of emerging artists.  She’s also used to the expense that her career incurs. 

“When I was a kid I had singing lessons and piano lessons,” Falla said. “I did summer workshops for acting. Then, I went to university and and a course which was theater studies and English.” There was also private vocal coaching and music school in LA. These days, she shells out for studio time, PR, and U-Haul vans to get her to gigs.

So while being invited to an awards show is an honor, it’s not necessarily an excuse to splurge. Falla gets her hair styled at the popular but inexpensive Blow Dry Bar, opts for makeovers at the MAC store (free with a purchase) and even tries to save money on clothes.

“I can wear something simple like a little black dress,” Falla said. “Every girl has one in her closet.” Asked if she ever feels intimidated at events where A-list stars are wearing one-of-a-kind gowns, Falla, always good-natured, laughs.

“I think I get a secret boost out of being like, ‘my dress is from Forever 21,’” she said.

Colette’s wardrobe stylist Catherine Joubert is living her own kind of Hollywood dream. After years working for big movie studios, she struck out on her own, following her passion for fashion. Joubert says the competition in LA can be fierce, but she stays focused and has no trouble making a living. She admits that every stylist dreams of taking on a young client who becomes a superstar. That’s why she’s sometimes willing to reduce her hundred-dollar-per-hour fee.

“In LA, anything can happen,” Joubert said. “You can be working with a fresh, new, young face. And they might land a big role on a TV series and all of a sudden, they take you with them.”

Joubert’s philosophy is that no matter how broke the struggling artist, there is no excuse to look like anything other than a million bucks. For clients with more aspirations than cash, she’ll search department stores for something stunning and, hopefully, on sale.

“A singer’s going to take singing lessons,” Joubert said. “Actors will take workshops. It’s important to think about investing in your image as much as the other parts of your career.”

Days before the Grammys Colette Falla was still hoping to snag an invitation.

“’Im in a relationship with a really successful songwriter/producer,” she said. “He might get an invite and I could be his plus one, which would be great for me.”

She paused a second, apparently realizing how such a statement could be interpreted in a land of vaulting ambition. “I’m not in it for that,” she said with a laugh. “He’s my boyfriend. I love him.”

High stakes question: How many times will Peyton Manning say 'Omaha'?

Thu, 2014-01-23 15:43

You have heard, no doubt, of Peyton Manning's affinity for the word "Omaha." As he brings the Denver Broncos to the line of scrimmage.

It could be a decoy. It could be serious. He's not telling. But come Sunday next, at Super Bowl XLVIII, guessing how many times he's going to say it could win somebody some serious money.

The over/under on "Omaha" has been set at 27 and a half by the online betting firm Bovada.lv. It's just one in a series of what are called proprietary bets, that get set up around the game.

You choose "over" and he says it  28 or more times: You win. On the other side, if you choose "under" and he says it 27 times or less: You win.

 Kai says over. 32, to be specific. He also says: Broncos by a touchdown.

'Is it just me, or are we raising campaign money earlier?'

Thu, 2014-01-23 15:28

Hillary Clinton has not declared her candidacy for 2016. 

 That, of course, has not stopped Priorities USA Action – the largest liberal SuperPAC – from fundraising for her campaign.

 If you are shocked, don’t be.

 “We’ve had a permanent campaign for many, many years. Really, decades,” says Larry Sabato, professor of politics at the University of Virginia.

But even if fundraising isn’t happening any earlier, there is more pressure to get organized sooner. In part, that’s because outside groups or ambitious billionaires can throw money into a race at any time.

Bob Biersack, senior fellow at the Center for Responsive Politics, says you basically have to have your guard up. “In a world where one or two people can decide they really want this [or that] person to be the next president, and they’re going to invest tens of millions behind that effort, and that can come at any time, you can’t afford to wait,” he says.

What about the amount of money that’ll be spent in 2016? Candidates in 2008 spent $1.7 billion, in 2012 they spent just over $2 billion. Sabato say there are a few things that may push 2016 to break a new record.  

“With every additional cycle you have new technologies that have to be funded,” Sabato says. For example, Obama pioneered voter data mining and tracking technology in ’08 and ’12, now every candidate will feel they need that.

But, Sabato says, "they don’t do away with the television advertising, they still have all of that and the radio advertising and the direct mail and the polling and everything else they do.”

 Still, there is a limit to how much campaign spending can grow, and Steve Ansolabehere, professor of government at Harvard, thinks we’re reaching it. “In general, over the long stretch of American history, the amount of money that goes into campaigns tracks with the amount of money in society, the real GDP.”

 So the $3 billion presidential race may be a ways off.

Ukrainian economy goes from bad to worse

Thu, 2014-01-23 15:10

Vice President Biden got on the phone today with Ukrainian president Viktor Yanukovich.

The vice president said there would be "consequences" for the U.S.-Ukraine relationship if the violence and protests in Kiev continued. Demonstrations have been going on for months now.

David Stern is the BBC correspondent in Ukraine.

He says no matter what shakes out politically in Kiev, the economic damage has been done:

"It's difficult to see how they can extract themselves out of this situation. What Mr. Yanukovich seems to have done with his deal with Russia where he got $15 billion in prospective loans and also cheaper gas is to have fended off an economic disaster. And I've been told it was possibly just weeks away. Now he's managed to buy himself a little bit of breathing room. But he's definitely not bought himself a successful economy. Ukraine is in recession right now. It doesn't look like it's going to get out. And the turbulence doesn't make it look like a very (economically) attractive place. But let's be honest, if the turbulance wasn't there it wouldn't be that attractive of a place."

 

Actually, not much has changed about American economic mobility

Thu, 2014-01-23 14:10

There has been rare bipartisanship in Washington lately over the need to regain economic mobility in the United States. But a new study out of Harvard suggests those politicians are wrong – mobility hasn’t really changed much in the past few decades.
 
The study is part of the Equality of Opportunity Project, which is based on tens of millions of anonymous tax records. 

“The level of mobility throughout the past thirty or forty years or so has not been very high compared to most other developed countries,” says Harvard economist Raj Chetty, one of the co-authors of the study.

“We should be quite concerned about mobility in a society with a lot of inequality, because kids who don’t get a chance to move up in the income distribution are really getting left behind in today’s economy.”

And while his study found that mobility hasn’t changed much in the U.S., the rise of inequality is very much a concern. “If you’re born to a high income parent verses a low income parent, that’s going to generate a wider difference in your income level as a child today than it did 30 years ago, when we had a more equal society.”

The study found that geography mattered when it came to the rate of mobility – certain cities had more than others.

But Chetty says there’s still more research to be done: "We don’t know exactly what that secret sauce is."

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