Hollywood is no longer the go-to place for shooting feature films and TV shows.
Just eight percent of big budget Hollywood films were made in LA in 2013, down from 65 percent in 1997. And from 2005 to 2013, California's share of one-hour TV series dropped from 64 percent to 28 percent.
Why the big exodus? States like Georgia, New York and Louisiana -- and countries like the UK and Canada -- are offering attractive tax subsidies to lure filmmakers.
Los Angeles Mayor Eric Garcetti has declared a "state of emergency" in the local film and TV production industry.
The Association of Film Commissioners International held their convention in March at the Hyatt Regency hotel in Century City. It’s been called “The Poacher’s Convention.” Dozens of booths lined a big hotel banquet hall. Each one promoted the natural beauty of their state or country -- and their generous tax incentives.(Frazer Harrison/Getty Images)
A sign atThe Association of Film Commissioners International (AFCI) Tradeshow in West Hollywood, California.
“The show is called ‘Locations Trade Show’ but it’s really not about locations anymore, it’s about incentives, and North Carolina is a 25 percent fully-funded rebate,” said Aaron Syrett, the North Carolina Film Commissioner.
The movies “Iron Man 3” and “The Hunger Games” and the TV shows “Homeland” and “Sleepy Hollow” were all shot in North Carolina. The state spends $80 million a year on those rebates.
But, Syrett said, his state isn’t really competing with California. “We’re competing with Georgia and Louisiana,” he said.
States like Utah also offers filmmakers a 25 percent discount. To drive the point home, the wallpaper in Utah’s booth was just the number “25%” repeated in a huge font.
“The business is here in Hollywood. We want to keep it here. Everyone here wants to take it away,” said Art Yoon with Film LA, the group that issues permits to shoot in Los Angeles. “I mean, we have a $100 million tax credit, that’s not nearly enough. We’re going to have to up that if we want to be serious about keeping the industry here.”
California, by all accounts, hasn’t kept up. The state has a lot else going for it: local talent, sunny weather, and a support system, like caterers and electricians.
But documentary filmmaker Deborah Rankin said it ultimately comes down to dollars and cents: “Especially as an independent filmmaker, it’s really, it’s hard. It’s hard raising the money, and you’ve gotta make it go as far as it can,” Rankin said.
Filmmaker Dan Gagliasso is working on a Bosnia-Kosovo war film, and plans to shoot it in Minnesota, largely because of generous tax credits – especially if you shoot in the northern part of the state. And, he said, the red tape in Los Angeles makes shooting there more difficult.
“You know, if you say the wrong word, suddenly you have to have a study because you’re crossing a stream with a horse. It’s like, ‘Well gee, it’s a private horse ranch, that horse crosses that stream every day!’ They don’t care. It’s bureaucracy,” Gagliasso said.
Hollywood filmmakers are hoping California lawmakers will pass a bill that would extend the state's current $100 million a year film production tax credit. The bill would also expand the range of films eligible to apply for tax credits, and would open the credits to television pilot production. Its main opponents are education groups who are lobbying for more school funding rather than increasing production incentives.
If you're of a certain age, you'll recognize this familiar sight:
From the VHS of yore, this bright green FBI warning prohibited the "public performance" of any content. That distinction between public and private is what will largely decide the outcome of Aereo's case. Aereo argues that since the content is going directly to a customer, it's not that different than picking up a TV signal via an antenna you might buy and set up in your house. Or as CEO Chet Kanojia puts it, it's what makes it legal for you to sing a Miley Cyrus song in your shower: no one but you is enjoying/suffering through that performance but you.
But there's more than just television at stake in this case, something that everyone involved seems to be aware of. Cloud computing companies in particular are keeping a watchful eye on how this all plays out.
A lot of companies that rely on the cloud are worried that depending on how the court rules, it could mean companies will need to look differently at the content on their servers, including issues of copyright and licensing.
You've seen those high-tech bracelets worn by everyone from Oklahoma City Thunder hoops star Kevin Durant to Apple CEO Tim Cook. And yet, Nike reportedly is going to shutter the division, and lay off the engineers, who make the athletic company's FuelBand wearable fitness tracker.
Is the wearable fitness device market slowing down? No, not really. In fact, for many, the standard Fitbit or calorie-counter apps are too basic. Check out these unconventional additions to the list of tech aimed at getting you in shape.
Not everyone can afford a personal trainer or a life coach who takes responsibility for their clients' health. That's where Coach Alba comes in. After answering a survey on pivotal moments in daily life, Coach Alba is designed to text users during "crucial moments" to remind them of goals, and to encourage good behavior. If, for example, late night snacking is your vice, Coach Alba will ping you in the evening with reminders of what you've already eaten that day. Find out more about Coach Alba here.
If you think words are cheap, then Pact might be the right phone app for you. Aside from allowing you to track your diet and exercise on your phone, Pact adds the element of financial reward if you keep your set goals. Your pay off comes at the expense of fellow users who did not make it to the gym when they said they would, or those who ate a donut instead of a salad. Be warned: fail at meeting your goals, and you end up paying more successful Pact users with your hard earned cash. Find out more about Pact here.
Like Pact, GymShamer uses public accountability as motivation. Unlike Pact, you pay with your dignity, not your money. GymShamer is set up to notify your friends via your social media accounts when you miss a trip to the gym. Winner of a Foursquare hackathon in January, GymShamer may be coming to an embarrassing social media debacle near you. Find out more about GymShamer here.
If you're a gamer, gameplay advantages may be more your speed. The Striiv Pedometer rewards the amount of steps you've taken by providing goods for a Farmville-esque game on your phone and computer. In this case, you're populating an enchanted island with trees and animals. It's like Lost, but with rewards for people who continue to pay attention. Find out more about Striiv here.
Speaking of gaming and fitness, "Zombies, Run!" is an app that places the user in the middle of a post-apocalyptic dystopia where running isn't just for exercise, it's for survival. Like Striiv, the more you exercise, the more rewards you receive. Unlike Striiv, you're also running for your life. "Zombies, Run!" will instruct the user on how far they have to go in order to escape the hoarde of imaginary zombies following close behind. Think "Running Dead," not "Walking Dead." Find out more about "Zombies, Run!" here.
The Centers for Disease Control tells us that about 2.5 million people die in this country every year.
And 44 percent of those people are now dying in hospice care.
That's surely a cultural change, but it's also a business opportunity. Hospice care has become a $17 billion business.
Fran Smith wrote a book about hospice care called "Changing the Way We Die."
She describes hospice care as the most successful part of the healthcare industry, and says it's surprising who is getting into the game.
"More than half of hospice programs are run by for profit companies. All the growth in hospice over the past ten years has been in the for-profit sector. The company that owns Roto-Rooter, ChemEd, is the owner of the largest hospice chain in the country - Vitas."
Apple is expected to report mostly flat revenues from a year ago, when it releases earnings after the bell Wednesday. It wasn’t so long ago, of course, that Apple’s stock was a rocket ship, seeing the kind of exponential growth you find in tiny startups. Another tech company used to be like that: Microsoft.
Until around 2000, it was a growth story. Then, it got big and slow and its stock stagnated and people just stuck with it for the dividends. The question on investors’ minds is whether Apple will have a similar fate.
“There are very different circumstances that faced Microsoft in the 1990s and Apple of today,” says Pai-Ling Yin, a Social Science Research Scholar at the Stanford Institute for Economic Policy Research. She says Apple is no Microsoft.
First of all, it can’t afford to sit still. Unlike Microsoft’s monopoly position, Apple faces stiff competition from the likes of Google and Amazon.
And, Apple has a different culture.
“It has demonstrated a unique ability to reinvent itself every few years,” says Ross Rubin of Reticle Research.
Now, investors are used to the company reinventing itself with new products that cannibalize its old ones.
“Apple is in a transition but I don’t think we’re ever going to find a point where Apple isn’t in some kind of transition,” says Robert Paul Leitao, founder of the Braeburn Group, a network of Apple analysts.
Soon, we may find out if the company can pull off another winner.
Apple’s CEO Tim Cook has been promising to enter “new product categories” soon.
When Nike first came out with those little bracelet-fitness trackers they call FuelBands, everyone from basketball star Kevin Durant to Apple CEO Tim Cook was wrapping them around their wrists. But there are reports out now that Nike might be stepping out of the wearable technology market, after it made layoffs in its FuelBand engineering team.
The brave new world of wearable technology has come a long way since the good old fashioned wrist watch.
Of course, these days, wearable tech can do a lot more than just tell time. Gadgets like the FuelBand and FitBit track the steps you take, and the calories you burn. Others can track your heart rate, or control your thermostat and the volume on your stereo.
And while Nike may be stepping back from manufacturing its own wrist-band activity tracker, that area between your arm and your hand is still shaping up to be a very hot place for tech innovation. Apple is expected to come out with an iWatch sometime this year. Google has been developing an operating system, designed just for watches and other wrist-friendly gadgets.
"We expect great growth in this market over the next few years," says Chris Jones, vice president at the tech analyst firm Canalys. Jones says just over 7 million of these "smart bands" sold around the world last year, and predicts that number could triple in 2014.
But all you other body parts out there-- don't be jealous. You too will get cool technology. Over at the wearable tech company i1 Biometrics, they are developing mouth guards that go in the mouths of football player, "to sense whether or not they've suffered impacts that might warrant them being pulled from the game," explains David Gallaher, the firm's social media director.
There are also smart band-aids that adhere to your skin and track your hydration. Smart tattoos with RFID chips you can plant under your skin to monitor all sorts of things. Only the tech crazed will be using this kind of stuff in the near future, but soon they might be as common as a wrist watch...used to be.
And this final note which may rekindle your interest in bitcoin.
From the Wall Street Journal: money is even dirtier than your mother told you it was. The Dirty Money Project at NYU conducted what's called the first comprehensive study of DNA found on dollar bills.
And found the bacteria that causes acne, other bacteria linked to gastric ulcers, pneumonia, food poisoning and staph infections. They also discovered extremely minute traces of anthrax and diphtheria, and DNA from horses, dogs, and white rhinos.
Why can’t the corporate world be more like major league sports? When a sports team loses too much, the coach gets the boot, and gets it fast. In the past week, the Knicks fired their entire coaching staff, Manchester United sacked their manager, and the U.S. National Women’s Soccer Team coach was fired too.
Far be it from us to endorse bloodlust, but why aren’t CEO's dealt this kind of fate?
1. They are, you just might not know it.
The Conference Board has done a lot of research on corporate succession, and one of their researchers, Melissa Aguilar says “the probability of a succession event is higher following poor performance.” Huh? What? Succession event? Yes, ‘succession event’ – Aguilar didn’t say ‘firing’, because “not everything that gets called a retirement is a retirement.” You’d be surprised at how many CEO’s “retire” at a young age. Plus, coaches are more like managers, not corporate executives. And you can be sure that in the corporate world, a manager who doesn’t perform well will be shown the door.
2. A good CEO is hard to find.
“I can tell you, I’ve managed a number of successions – it’s very hard!” in the words of Joseph Bower, who teaches at Harvard Business School. “Companies are much more idiosyncratic than we think or as an economist would pretend - they have complex cultures, they have capabilities that tend to be unique,” and they’re made of complex arrays of humans which, as we all know, behave rather strangely in large groups. Finding the right person can be hard, and it can take a long time.
“I remember at one point the head of Johnson wax was hired by Nike because he was a good marketing executive and it was thought he could do well at Nike,” says Bower. “It turns out that marketing furniture polish is very different from marketing running shoes. That didn’t work out.”
3.Because a CEO isn’t a real thing.
Otherwise put, being a CEO isn’t a real thing. It’s not like being a blacksmith or a French teacher, where there’s a specific and universal skill set. You could run a company of two people selling pickles or a company of two thousand advising commodity investors – in both cases you’re a CEO. That doesn’t mean you can do both well.
4.You can’t hide the fact you lost a game. You can totally hide the fact your earnings are down.
“For a corporation, results are much more opaque,” says Smith college’s Andrew Zimbalist. “It’s not win or lose. Although corporations like to have growth and profit, there are ways to hide the lack of profits or to inflate the actual profits.”
To be fair there are a lot of other things you can blame for bad results if you’re a CEO – the economy, GDP, China – take your pick of scapegoats real or not.
“At a corporate level there’s more cronyism,” says Zimbalist. “You have boards of people who are CEOs themselves. It’s a social circle that’s more tight, and they are likely to be more lenient since they are in a similar situation.
5.If Shareholders were like fans, Wall Street would be full of drunks and burnt out buildings
“It’s well known that some investors are not rational, but almost anybody would agree that very few sports fans are rational,” says Matteo Arena, who teaches finance at Marquette University. “Most fans react to poor results in a very passionate way and put a lot of pressure on teams.” That thirst for revenge and destruction is why sports teams often ditch their coaches or managers so quickly.
6.Maybe Shareholders are like sports fans, but just slower.
A sports team can lose ten games in a month, but it takes a corporation 2.5 years to have 10 quarters of bad earnings. And CEOs usually walk shareholders through the ups and the downs, explaining what they expect to happen, which can sometimes be like talking down an angry mob.
7.The CEO is often in charge of replacing the CEO
“In more than 50 percent of publicly traded companies in the US, the CEO is also chairman of the board,” says Matteo Arena. How easy do you think it is to replace the person in charge if that person ... is in charge of replacing the person in charge?
The Supreme Court on Tuesday heard arguments about the legality of broadcast TV streaming operator Aereo. The case pits traditional television broadcasters against Aereo, which lets customers record broadcast TV in their local markets and then watch programs via television, computer, tablet or smartphone.
Q. What is Aereo?
A. Aereo, which was founded in 2012, is a service that lets paying subscribers watch broadcast TV on smart phones, tablets and computers. The company builds “antenna farms” that are filled with DVRs and thousands of dime-sized antennas. Using the Internet, customers can tune in and record local affiliates.
Q. Sounds complicated? Was it for the justices?
A. Most of the justices displayed a decent understanding of technology, actually. Justice Sotomayor revealed she has a Roku, for instance. Other justices invoked Dropbox and Netflix. There were some exceptions, however. Justice Breyer made a few dated references to record stores – that is, stores that sell phonograph records.
Q. What does the case hinge on?
A. Under copyright law, there is a distinction between private performances and public performances of copyrighted works. Private performances are legal. You could invite friends over to your house to watch a basketball game, for instance. Public performances are illegal.
Aereo stresses each subscriber has a one-to-one relationship with its technology – DVRs and antennas. Each customer has total control over each of those two things. Broadcasters argue that, because Aereo has thousands of customers, what it is doing is illegal.
At Sarah Lawrence College in Bronxville, N.Y., about ten students — all women but one — sit at a round table discussing Jane Austen’s “Northanger Abbey.”
The 88-year-old college has a reputation for doing things differently. Most classes are small seminars like this one. There are no majors. Students do a lot of independent projects. And grades aren’t as important as the long written evaluations professors give every student at the end of every semester. It’s no surprise, then, that professor James Horowitz is skeptical of any uniform college rating system, like the one being proposed by the Obama administration.
“The goals that we are trying to achieve in instructing our students might be very different from what the University of Chicago or many other schools or a state school or a community college might be striving to achieve,” Horowitz says.
The Obama administration is due out this spring with details of its controversial plan to rate colleges on measures like value and affordability. The idea is that if students can compare schools on cost, graduation rates and even how much money students earn after they graduate — colleges might have to step up their game. Especially if, as proposed, poor performers risk losing access to federal financial aid.
All that, naturally, makes colleges just a bit nervous. Sarah Lawrence is fighting back with its own way of measuring value. The faculty came up with six abilities they think every Sarah Lawrence graduate should have. They include the ability to write and communicate effectively, to think analytically, and to accept and act on critique.
“We don’t believe that there’s like 100 things you should know when you graduate,” says computer science professor Michael Siff, who helped develop the tool. “It’s much more about are you a good learner? Do you know how to enter into a new domain and attack it with an open mind, but also an organized mind?”
Faculty advisors can use the results to track students’ progress over time and help them address any weaknesses. A student who’s struggling with communication could take class with a lot of oral presentations, for example, or make an appointment at the campus writing center.
But Siff says the tool is also about figuring out what the college can do better.
“This tool will allow us to assess ourselves as an institution,” he says. “Are we imparting what we believe to be these critical abilities?”
So how is the school doing? So far there are only data for two semesters, but on every measure seniors do better than juniors. Sophomores do better than freshmen.
Starting next fall, advisors will meet with their students at the beginning of each semester to talk over their progress. In sort of a trial run, Siff goes over the results so far with one of his advisees, junior Zachary Doege.
On a scale from “not yet developed” to “excellent,” he’s mostly at the top end. Doege says he likes seeing his own growth.
“I think the thing I like the most about this is just the fact that I can look back at how I was doing in previous semesters and sort of chart my own progress,” he says. “Not comparing me towards other students—just me to myself.”
That’s a different measure of the value of an education than, say, student loan debt or earnings after graduation — the sorts of things the Obama administration is considering as part of its ratings plan. Students and parents are right to ask if they’re getting their money’s worth, says the college’s president, Karen Lawrence. After financial aid, the average cost of a Sarah Lawrence education is almost $43,000 a year.
“People are worried about cost,” Lawrence says. “We understand that.”
And they’re worried about getting jobs after graduation. But she says the abilities that the new assessment measures—critical thinking and innovation and collaboration—are the same ones employers say they’re looking for.
“We think these are abilities that students are going to need both right after graduation and in the future, and so it could be an interesting model.”
One she hopes other schools will take a look at as they figure out how to answer the national debate about the value of college.
The six "critical abilities" that Sarah Lawrence College identified as skills that every graduate should have:
- Ability to think analytically about the material.
- Ability to express ideas effectively through written communication.
- Ability to exchange ideas effectively through oral communication.
- Ability to bring innovation to the work.
- Ability to envisage and carry through a project independently, with appropriate guidance.
- Ability to accept and act on critique to improve work.
There are parts of the South that continue to battle high unemployment, but Lincoln County, Tenn. is not one. It’s one of just two counties in the state that’s had the jobless rate dip below 5 percent in recent months.
This county of rolling farmland dotted with rusty silos and wooden barns has just 33,000 residents. Fewer than 900 are considered jobless. In some months, the county has had the lowest unemployment in Tennessee.
“Most everybody I know that wants a job has got a job,” says Jonathan Smith, who works at Goodman Manufacturing alongside his sister and parents.
Most who work in Lincoln County turn screws for a living, or something close to it. A handful of factories drive the local economy. Goodman is – by far – is the largest. In all, 1,500 employees build heating,ventilation, air-conditioning (HVAC) units from the ground up.
“We make plastic parts, we make wires, we make sheet metal,” says longtime plant manager Bill Miller.
Keeping Jobs In House
Instead of importing components from China, Miller says they’re made in house so the plant can respond to market demands. Sheets of metal are stamped and crimped into cooling coils as needed.
And looking around the factory floor, one can count on one hand the number of robots. Miller says there’s too much variability between small air-conditioning units for homes and monster machines meant for hotels.
“Robots are very difficult to program for that kind of complexity,” he says. “Human beings are very trainable for that kind of complexity.”
And that’s why there’s still a hiring sign out front. Goodman Manufacturing needs people. It’s hard work, but it pays pretty well compared to other jobs around. Average wages are $17 an hour – much better than some hospitality jobs.
“You can only clean so many toilets, and stuff, make beds,” says Louise Alaweneh, who left the local hospital to take a welding job at Goodman. "Then you come out here and you get a taste of really working.”
Lincoln County has lost some factories as companies found it more profitable to move overseas. But the area has also recruited new employers to replace them, like a big Frito-Lay plant.
Who Gets Credit?
“We’re lucky, I guess,” says John Ed Underwood, mayor of Fayetteville, the county seat.
Considering he’s a politician, Underwood doesn’t take much credit for the economic good fortune. He tries to bring new companies to town, but he finds corporate recruiting to be a game of chance.
One executive recently showed up on a Lear Jet.
“We talked with him, would have thought we done a good job selling Lincoln County and Fayetteville to him. He got on his plane, and we ain’t heard from him since,” Underwood says.
Really, Lincoln County has held it’s own against the odds. It has no Interstate. A rail spur was recently shutdown. And it’s not like there’s been a construction boom of subdivisions or a surge in any particular industry.
Underwood figures there’s just been a good balance of people and jobs in Lincoln County, at least until now. Several local factories are expanding.
“Four of them are going to hire are going to hire as many as 600 new employees,” he says. “Where are they coming from?”
One More Thing
There’s no bite-sized explanation for why Lincoln County has such low unemployment. But it certainly hasn’t hurt to be 30 miles from Huntsville, Ala.
“I work in Huntsville,” says Didre Smith. “I know several people who do.”
In fact, local officials estimate hundreds of people make that commute across state lines to Alabama. Many work at Redstone Arsenal.
Smith has an administrative job in a doctor’s office – something she couldn’t find in her home county. She used to work in a nearby pants factory.
“I chose that that would not be my profession always,” she says.
But outside of being a teacher, there aren’t many non-factory jobs here that pay a decent wage, hence the number who drive to Alabama every morning.
Lincoln’s lack of white-collar work is a problem, but most counties this size would trade places in a heartbeat. Other rural areas – even just a few counties over – are battling double-digit unemployment.
CVS is trying to cash in on the Affordable Care Act. Customers will soon be able to pay their premiums at their local CVS store.
The pharmacy is hoping the additional foot traffic will lead to more sales, analysts say. But there are pitfalls. For example, if there are problems with the payment processing, it might not be all CVS's fault. "But it will be CVS where the patient is standing, frustrated," says George Hill, healthcare services analyst at Deutsche Bank.
CVS says it'll start accepting the premium payments later this spring.
From the Marketplace Datebook, here's a look at what's coming up April 23:
In Washington, the Commerce Department reports on sales of new homes in March.
William Shakespeare is believed to have been born 450 years ago on April 23rd.
Domestic flights got a little less cloudy on April 23rd, 1988 when a smoking ban on trips under two hours went into effect. Does anyone actually tamper with those bathroom smoke detectors?
And for fresher air why not pack up some lunch and go outside. It's National Picnic Day.
Activist investor William Ackman has set his eyes on a new target: Allergan. Ackman has joined forces with Valeant Pharmaceuticals to purchase the Botox-maker for an undisclosed amount -- $50 billion is one educated guess. Ackman along with other so-called corporate raiders Carl Icahn and Nelson Peltz, have become famous, and sometimes infamous, for shaking up the companies they invest in. Do they do more harm than good?
Netflix stock saw a jump after its quarterly profits report beat forecasts. The streaming video company also said it's raising prices for new subscribers by $1 to $2 a month. Existing members won't see their subscription fees go up any time soon, though, and new members still have some time to get the cheaper price; the increase won't happen until the end of June.
Earth day, at 44, may be a little tired. The United Nations continues to report that the urgency of fighting climate change, for instance, should be red hot. But polling from Gallup shows that fewer people say they worry about it "a great deal" than at any time since 1998, when Gallup started asking the question.
Netflix stock saw a jump after its quarterly profits report beat forecasts. The streaming video company also said it's raising prices for new subscribers by $1 to $2 a month.
Existing members won't see their subscription fees go up any time soon, though, and new members still have some time to get the cheaper price; the increase won't happen until the end of June.
The slower rollout of the price hike contrasts with Netflix's abortive attempts several years ago to split its DVD rental and streaming services to charge separately for each, which lost them subscribers and hurt their stock price.
James McQuivey, an analyst with Forrester Research, says as Netflix has grown its user base and built up its streaming video library, consumers may find the content worth the fee increase.
Numbers are fundamentally utilitarian. They tell us about the economic world around us; both the big, broad economic world, and our own little slices of it.
Sure, the unemployment rate and GDP are important. But on a personal level, few numbers are as significant as the credit score. It’s one of the building blocks of the consumer economy. “It’s immensely important,” says John Ulzheimer, a credit expert from creditsesame.com, “it controls everything from the terms and interest rates on loans, your access to mainstream loans, what you pay for insurance premiums.”
It’s not overblown, he says, to call the credit score the most important financial metric that we live with.
Some employers look at credit scores to decide between job candidates. Some potential partners look at credit scores to decide between dates.
There's even a dating service that offers to match you up based on credit scores.
800-850 is "MARRIAGE POTENTIAL DING DING DING"750-800 is "take him/her home to Mom"700-750 is a "fixer-upper"650-700 is "fun for a night out, maybe, but bring cash"600-650 is "keep lookin'!"anything below 500 is "RUN because they won't even get a car loan, probably, and how embarrassing will that be at the PTA meetings?"200 is "this person is just pulling your leg and is really royalty"
But it wasn’t that long ago that the credit score we know today, the FICO score, didn’t exist. The first general-purpose FICO score came along in 1989, only 25 years ago.
Highlights from the history of the FICO credit score
- 1958: FICO sends letter to the 50 biggest American credit grantors, asking for the opportunity to explain a new concept: credit scoring. Only one replies.
- 1970: Congress passes the Fair Credit Reporting Act, encouraging privacy and accuracy in credit reporting
- 1975: FICO develops first behavior scoring system to predict credit risk of existing customers, for Wells Fargo.
- 1989: First general-purpose FICO score debuts.
- 2003: Congress enacts the "Fair and Accurate Credit Transactions Act of 2003", which includes the right to free credit reports every year.
- 2014: FICO claims its scores are used in more than 90% of lending decisions.
Before the FICO score came along, lenders did what they could to determine credit worthiness. Not all of it good. According to Frontline:
Credit reporting was born more than 100 ago, when small retail merchants banded together to trade financial information about their customers. The merchant associations then turned into small credit bureaus, which later consolidated into larger ones with the advent of computerization.
By the 1960s, controversy surfaced over the CRAs, according to Chris Hoofnagle of the Electronic Privacy Information Center, a public interest research center. Hoofnagle says the credit reports were being used to deny services and opportunities, and individuals had no right to see what was in their files. In addition, CRAs back then reported only negative financial information as well as "lifestyle" information culled from newspapers and other sources -- information such as sexual orientation, drinking habits, and cleanliness.
Many times, getting a loan was about having the right personal relationships. “You almost always did business with a banker who was a friend of the family, or someone with whom you'd golfed, or someone with whom your parents worked, or you went to church with, or were in rotary club with,” said Ulzheimer. “They would make a decision largely on a gut feel.”
It was a system of credit that left a lot of people out of the credit market based on gender, race, nationality and marital status.
Graphic by Shea Huffman/Marketplace
Earth day, at 44, may be a little tired. The United Nations continues to report that the urgency of fighting climate change, for instance, should be red hot. But polling from Gallup shows that fewer people say they worry about it "a great deal" than at any time since 1998, when Gallup started asking the question.
Frank Newport, Gallup's editor in chief, says there's a trend that the top-line numbers don't show: The people who have moved from saying they're concerned about the environment to saying "not-so-much" are Republicans.
"So clearly the fact that this has become a political football has kept the overall concern numbers down," he says. "You’ve got a lot of conservatives and Republicans who say that it's exaggerated, and the concern and alarm are not nearly as high as Democrats say they are."
Fred Krupp, president of the Environmental Defense Fund, doesn’t think that polarization will last. He cites numbers from a poll commissioned by the Sierra Club, showing that young voters want action on climate change.
"To me, that says you’re going to see a return to bipartisan solutions on this issue sometime soon," Krupp says. "Because for either political party to have a future, they’re going to have to address this overwhelming challenge."
Shinzo Abe came to power in December of 2012 with a strategy he called "the three arrows." Everyone else in the world has taken to calling it "Abe-nomics." Roughly approximated, you might call it: Inflate, stimulate, and deregulate.
How's it working? Depends who you ask.
Inflate: Fighting the deflationary monster
Deflation, or the threat of deflation, has stalked Japan for nearly 20 years. Deflation is poison for economic growth. Consumers put off today's spending because things will be cheaper tomorrow, wages don't rise, and both of those things reinforce future deflation.
Abe appointed a new Central Bank president, Haruhiko Kuroda, and they went to town on the money supply and interest rates. They proclaimed a goal of doubling the monetary base and achieving inflation of 2 percent within two years, says Georgetown University's Arthur Alexander: "It was like a 222 program, very easy to sell, bumper sticker type of policy."
Some results were immediate.
Longer term bond yields rose as people began to expect inflation and demand protection against it.
"The new approach was also reflected in the exchange rate," says Stanford University's Takeo Hoshi. "It depreciated between 20 and 30 percent in the last year and a half," again reflecting people's expectation that inflation would at some point make the Yen less attractive – a good sign if you are trying to break the back of deflation.
Finally, inflation as measured by consumer price indices eventually rose above 1 percent. Japan may not get to the 2 percent Abe would like, but it’s certainly better than a zero or negative number.
Abe has put forth a major stimulus package, but that, plus the ongoing expense of rebuilding after the Fukushima disaster, has resulted in a government debt of 227 percent of GDP. The country’s fiscal situation was problematic to begin with, and this has made some Japanese even more concerned.
"People are seriously divided," says Ulrika Schaeda, who teaches Japanese business at the University of California, San Diego. It's reminiscent of the debates over government spending here.
A value added tax was introduced on April 1, but opinion is mixed as to whether it is sufficient to stabilize Japan's fiscal situation.
Deregulate: structural reform and the Big Picture
"The verdict on Abenomics will depend on whether or not they do the structural reforms," says Anil Kashyup, professor of Finance at the University of Chicago's Booth School of Business. The structural reforms are the big picture problems.
"There's all kinds of frictions that make Japan an unappealing place to do business," says Kashyup. Starting a business, getting hired full time, even finding childcare is hard in Japan.
Some parts of Japan's economy are subsidized, protected, and unproductive says Kashyup.
"Rice in Japan is seven times the price on the world market," says Arthur Alexander, adjunct professor at Georgetown University. It appeared for a time that some headway was being made on opening Japan up to more international trade and a more vibrant retail sector, "but domestic politics seems to have reared its ugly head," Alexander says, referring to a cooling in negotiations between the U.S. and Japan over the Trans Pacific Partnership trade agreement.
This is the most difficult of Abe's arrows to guide, and it's what Japan watchers will be following closely. So in some ways Japan has changed a lot in a year.
The question is, will it keep changing?
Update, April 22, 8:15 am ET: Mt. Everest's Sherpa guides decided late Tuesday to abandon the rest of the climing season, according to AFP. The decision came after a meeting with government officials in Nepal over insurance and financial aid for victims of last Friday's avalanche on the mountain that killed 13 people.
Original story, April 22, 7:00 am ET: Sherpa mountaineers believe insurance and financial aid for families of victims is inadequate. The minimum insurance policy for the guides pays a death benefit of about $10,000 and the Nepalese government has announced a special payment of $415 to families in the wake of a tragedy. Average per capital income in Nepal is about $645 a year.
The sherpas who climb Mount Everest above the base camp, which is where the danger begins, make a base salary of about $2,000. But their pay is also determined by a bonus sytem for delivering loads to various camps. If they make the summit, they are paid $250 the first time. And every additional summit is worth $500, according to Conrad Anker, the world-renowned mountaineer who has scaled Everest several times.
"A good sherpa can earn between $4,000 to $6,000 in pay in one season," says Anker. "But it is extremely dangerous work."
Anker says the economics in Nepal, outside of the climbing season, is mostly subsistence agriculture.
Activist investor William Ackman has set his eyes on a new target: Allergan.
Ackman has joined forces with Valeant Pharmaceuticals to purchase the Botox-maker for an undisclosed amount -- $50 billion is one educated guess. Ackman along with other so-called corporate raiders Carl Icahn and Nelson Peltz, have become famous, and sometimes infamous, for shaking up the companies they invest in.
Do they do more harm than good?
Bloomberg News reporter Tara Lachapelle joins Marketplace Morning Report host David Brancaccio to discuss the track record of activist investors, noting that more often than not, these in-it-to-win-it investors are actually a shareholder's friend.
Click on the audio player above to hear more.