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ISIS gains control of key infrastructure in Iraq

Fri, 2014-08-08 10:41

ISIS militants in Iraq have managed to gain control of a key piece of infrastructure in the country, the Mosul Dam. It’s not the first time the group has taken over a supply of water, electricity, or oil.

It’s likely they will attempt to extort Iraqis in the area, who rely on the dam for water and power. ISIS has shown a “great ability to be self-supporting and self-financing and a great ability to carry out extortion schemes,” says Tim Arango, the Baghdad Bureau Chief for the New York Times.

The worry is that ISIS could open the Mosul Dam and flood the area, as they did with the Fallujah Dam earlier this year. Arango says it will probably be difficult to retake the dam, since the structure itself is very fragile. It’s unclear if ISIS has the “capability to maintain it.”

 “A very small crack in that dam could just start the water flowing.”

Listen to the full conversation in the audio player above.

Money can buy you happiness... sort of

Fri, 2014-08-08 10:36

What if the key to happiness lay in numbers?

Or more specifically, economics. On its face, that seems fairly nuts. Our joyous memories are generally about people or feelings: a night of dancing with abandon, a hug from a child, the certainty of helping another person.

The search for happiness has bedeviled generations of lovers, writers; even the founders of our country of course who took only a swipe at its pursuit – not attainment – in our Declaration of Independence.

And yet, we buy, inserting money into this equation.

For the essentials: shelter, food, security for our families.

The more frivolous things. To fill a need, perhaps? The post-breakup pair of shoes. The clichéd mid-life crisis sports car.

I’ve been reading some economic research on happiness  that my friend Jim Tankersley turned me on to. Richard Easterlin, a professor at the University of Southern California, examined research on money, psychology, and contentment.

Back in the 1960s, a social psychologist named Hadley Cantril asked people what they would need “for their lives to be completely happy,” Easterlin writes.  And pretty much everywhere, no matter their circumstances or culture, people ranked their level of living first, then the desire for a happy family life.

Easterlin goes on to cite studies showing that married people tend, on average, to be happier than single ones (debate away, as needed).

And then comes the part that really intrigues me: our measure of happiness isn’t fixed. It depends on our neighbor’s.

So while research showed that people with a higher income tend to report being happier, that didn’t hold up over a whole life.

“Indeed, if happiness and income are compared at any point in time,” Easterlin writes, “those with more income are, on average, happier than those with less. But what happens to happiness as income goes up over the life cycle – does happiness go up too? The answer is no; on average, there is no change.

So what’s going on? Well, we’re doing everything our mothers told us not to, and comparing ourselves to our other people. No matter how well we do, if it’s not better than everyone around us, we don’t feel like we’re attaining something, because our internal norms are changing.  And p.s., Easterlin says it makes us kinda Grinchy: “The subversive effect of rising internal norms also explains why people think that over the life course more money will make them happier, when, in fact, it doesn’t.”

So what to do?

Awhile back, I interviewed a psychologist, Ryan Howell, about this paradox.

Here’s the trick: spend on experiences, not things.

There is a reason that mental snapshot of your last vacation brings you so much joy.  The “buy high” you have from a physical thing? It doesn’t go away if you’re investing in adventures, connections and people. Year after year, you can unpack those memories and savor them.

Et voila! Money just bought you happiness.

Maybe the dismal science is good for something. 

Luring talent with more than just a basketball

Fri, 2014-08-08 07:00

The NCAA has voted to give schools with the biggest sports programs more leeway to lure talent. The move will affect the five biggest conferences: the Atlantic Coast, Southeastern, Pacific 12, Big Ten and Big 12 conferences.

If finalized, the conferences "will receive the power to raise the value of scholarships, improve health insurance, allow players to consult agents and more," according to the New York Times. For more on what this decision could mean, we spoke to Andrew Zimbalist, an economics professor at Smith College who follows the business of sports. 

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

What you should know about the changes to credit scores

Fri, 2014-08-08 07:00

FICO, the nation's leading provider of those all-important credit scores that so many Americans can feel they have tattooed to their backs, has announced it is changing the formula it uses to score credit. The changes could boost the scores of tens of millions of Americans.

Here are a few things to know about the changes:

Exactly what is FICO changing?

There are two main changes. One is that FICO will stop docking people for being overdue on a payment, as long as they have ultimately paid the bill or settled with a collection agency. Until now, having a collection on your record — even if your balance was at zero — could impact your credit score as much as a foreclosure or a bankruptcy.

The second change will be good news to people with medical debt, which is about 40 percent of Americans. FICO says it will start giving less weight in its credit scoring formula to unpaid medical bills that are with a collection agency.

So how could these changes affect my ability to borrow?

FICO’s goal is to boost lending without creating more risk. Since the recession, it has been hard to get a loan without fairly spotless credit. These new changes could boost certain scores by as much as 100 points, meaning if you have an otherwise good credit record aside from the above issues, you might qualify for a loan you wouldn't have before, or at least for a lower interest rate.

When do the changes go in to effect?

FICO says they will offer the new credit score formulas to credit bureaus in the fall and to lenders by the end of the year. But just because the new formulas are available doesn’t mean they will be used. FICO rolls out new scoring formulas every few years, and it takes a while for many lenders to adopt the newest versions.

Beyond that, even though FICO has changed its approach to unpaid medical bills and debts that have been resolved with collections agencies, those events won’t disappear from your record altogether. Lenders will still be able to see them on your credit report for up to seven years, and can still decide they are a sign of risk.

What are the pros and cons of FICO’s new approach?

Any loosening of credit standards raises worries in some corners, that it could leave lenders open to more risk or entice borrowers deeper in to debt. FICO doesn't think so. But we'll have to see.

If the company is wrong, it could undermine the credibility of their credit scores.

John Ulzheimer, a credit expert at credit education website Credit Sesame and a former manager at FICO, says what is certain is that FICO carefully considered the changes. “The only reason someone like FICO is going to make this type of drastic change to their scoring system is because the science behind it supports the change,” he says.  “As time changes, different data elements on a credit report are tested to make sure they're still predictive of elevated risk.”

For example, as medical expenses have risen sharply in the last few decades, FICO may have found that medical debt is no longer a good predictor of elevated risk.

If FICO is right, and the new scoring system raises credit scores for tens of millions of Americans without opening lenders up to more risk, it could have positive ripple effects on the economy. Part of the slow recovery has been due to tight credit. More people qualifying for loans could create useful momentum.

And don't forget how powerful credit scores have become in our lives. Credit card companies and banks look at them, but so do potential landlords and even potential employers.  

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