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The still looming problems at the VA

Fri, 2014-05-30 13:32

President Barack Obama announced Friday morning he had accepted Eric Shinseki’s resignation. The retired four-star general is no longer the secretary of Veterans Affairs.

While Shineski’s departure may quiet the political storm around how VA hospitals tried to hide long wait times for veterans, it does little to fix the larger task of figuring out what is wrong with the VA health care system and how to fix it. 

This is a big job, and many people would say Shinseki’s successor will be in an unenviable position.

“Good luck to whoever comes in,” says Michael Useem, head of the Center for Leadership and Change Management at the Wharton School at the University of Pennsylvania. “This is a turnaround, a restructuring.”

That has been done successfully, he notes, many times in the private sector, but the new head of the VA will face certain pressures someone in the private sector probably wouldn’t. 

“It’s a highly politicized environment with not a lot of resources to allocate,” says Tom D’Aunno, a professor of health policy and management at Columbia University’s Mailman School of Public Health.

About those resources…

“The system’s growth has been slower than the growth in the demand for services,” says Jack Needleman, a public health professor at UCLA.

The VA has a pretty big budget, but most of it is tied up in pensions and disability. It is possible Congress could step in and give the agency more money.

Some lawmakers want to make it easier for the agency to hire and fire staff, but Needleman wonders if that should be at the top of the agenda.

“What we have learned from decades of work studying health systems and quality is it’s often a system problem, not a personnel problem,” he says.

And the Veterans Health Administration is a big system that is pretty decentralized.

D’Aunno says there will be additional pressure to fix things fast, but, he adds, real reform would take time.

“This is not about making heads roll,” he says. “This is about doing actual problem solving.”

According to D’Aunno, the new secretary’s first objective should be to build trust among the VA’s ranks, to find out exactly what has gone wrong.  

Google gets a makeover

Fri, 2014-05-30 12:41

A story from the Marketplace Desk of "Yes, the internet actually is making us stupid."

 

Google apparently changed its logo this week. Nothing major, really.

Just a tweak. A tiny tweak, you might say.

They moved the second "g" one pixel to the right, and the "l" one pixel down and one to the right.

Makes it more...readable...apparently.

Check out this .gif from Gizmodo -- it all makes sense now, right?

Gizmodo

 

 

One estimate of the cost of new EPA rules: $51 billion

Fri, 2014-05-30 12:39

On Monday, the Environmental Protection Agency will announce the Obama Administration’s biggest concrete push to combat global warming: The first-ever regulations to limit greenhouse-gas emissions from existing power plants. The U.S. Chamber of Commerce put out a report in advance of the rules, saying, in effect: "Hey, this is going to cost a whole bunch of money."

The Chamber estimated that EPA’s regulations could reduce Gross Domestic Product  by up to $51 billion a year.  

Yale economist William Nordhaus — called the father of climate economics — does some quick math in his head when he hears that figure. "That’s a little more than two-tenths of a percent of GDP," he says, "So, that would be one hundredth of one percent off the growth rate."  In other words, he says, given the enormous size of the U.S. economy, and the fact that it grows every year, $51 billion is a rounding error.

Karen Harbert, who runs the arm of the Chamber that put out the $51 billion figure, cites a contrasting view of one- or two-tenths percent of GDP. "I think the White House put it best on Thursday with their energy plan," she says, "when they were giving credit to the oil and gas sector for creating jobs. They said, ‘It was significant, they added .2 percent to GDP!’"

There’s also the cost/benefit analysis: What benefits could the money produce?  In this case: The plan is to mitigate global warming.

There are likely to be side benefits as well, says Dmitri Zenghelis, from the London School of Economics, who compares it to technological advances driven by Cold War competition with the Soviet Union. "You tend to find that you solve that challenge and provide all sorts of spillovers which give you things like Internets and hand-held devices and touch-screens," he says.

"But let's not kid ourselves," he says. "It's not going to be win-win. There are going to be some transitional costs, and there will be some losers in the interim." Those losers can be expected to complain about their costs. 

In the end, those losses don't justify inaction, Nordhaus says. "There’s just no argument I’ve heard for postponing this," he says. "Because it is going to get worse, it is going to get more costly, and the longer we wait, the steeper up the damage curve we go."

An analogy might be a homeowner who notices a couple of loose bricks in the wall of his or her house. A repair guy provides an estimate, which sounds expensive. But if the work doesn't get done now, the expense will only multiply.

That analogy sounds about right to Dallas Burtraw, an economist with Resources for the Future. "You have a problem that you know inevitably is going to catch up with you," he says, "but any single day, it seems to make sense to procrastinate."

How the recession shaped a more humble generation

Fri, 2014-05-30 12:06

Every generation thinks they're better than the next, and the "you kids get off my lawn" attitude has been particularly tough on Millennials. They've been called entitled, lazy and self-involved.

But, they're also young people who came of age during a recession. According to a study done by Dr. Emily Bianchi of Emory University’s Goizueta Business School, recession is an event that could mitigate characteristics of narcissism.

"We don’t know a whole lot about where narcissism comes from, but what we do know seems to suggest that narcissism is tempered by adversity and to some extent by failure,” she says.

Do you think Millennials are more likely to be narcissists?

The word narcissist is one that is often misused to describe people who are vain, rude, or plain old self-centered. In psychology, narcissism has distinguishing characteristics other than self-admiration.

“Hallmarks of narcissism are lack of empathy, a sense that one is better than other people around them, a heightened sense of self-importance. Even a willingness to exploit other people to achieve one’s own gains,” Bianchi says.

While narcissistic tendencies can wreak havoc in one’s personal relationships, these qualities have conflicting implications in the workplace.

“On the one hand, narcissists tend to be very charming, people tend to be drawn to them, they tend to be very charismatic, and they tend to be very inspiring leaders. On the other hand, they tend to be very difficult to work for; they tend to take credit for anything that goes well and tend to assign blame for anything that goes poorly. They don’t tend to make terrific mentors and people often feel out on their own when working for a narcissist,” Bianchi says.

According to Bianchi, "Narcissism is cultivated by allowing egos to expand unchecked by adversity and humbling setbacks or failures." This goes to the pervasive attitude that children of today would be more successful if they weren’t praised as much or didn’t receive a trophy simply for participating, as opposed to actually winning or excelling at something.

Millennials are more likely to graduate college with student debt than those in preceding generations, they are having a harder time finding a job when they do graduate, more than one-third of them are living at home with their parents, and according to Washington Post personal finance columnist Michelle Singletary, Millennials “may be the first cohort to end up worse off than their parents.”

Despite the negative ways in which this generation has been affected by the economy, Bianchi says that there may be a small, bright side to the recession. “We know that their careers have been affected, or likely to be affected in all sorts of negative ways, but I think most people would probably be pleased to hear that this might temper narcissism in the workplace."

Happy anniversary, federal gas tax!

Fri, 2014-05-30 11:48

From the Marketplace Datebook, here's an extended look at what's coming up the week of June 2:

On Monday, the Commerce Department issues construction spending data for April. On Tuesday it reports on factory orders for April.

Have you been doing some spring cleaning? Maybe cleaning out the garage to make room for a new car? Automakers are slated to report sales for May.

On Wednesday, the Senate Budget Committee holds a hearing on "The Impact of Student Loan Debt on Borrowers and the Economy."

On Thursday, chain-stores are scheduled to release sales figures for May.

That brings us to Friday when all eyes will be on the May jobs report.

On June 6th, 1998, HBO's "Sex and the City" premiered. It ran for six seasons and (fortunately) remains in syndication.

It's also the anniversary of the first federal gasoline tax, enacted in 1932. One penny per gallon. That's where it began. Today we pay 18.4 cents per gallon, and state tax too.

And finally, June is National Candy Month. You may ask "why?" But I think the real question is, "Why not?" We'll wrap on that.

The death of manufacturing is greatly exaggerated

Fri, 2014-05-30 10:56

Columbus is a city that was built on industry, on manufacturing. But that description of the city today was't the reality of a decade ago, when big chunks of the manufacturing in this part of Mississippi just went away.

If you think America doesn’t make anything anymore, then come to Columbus, Mississippi.

Severstal Steel has what’s called a mini-mill here, but that’s kind of like nicknaming the biggest guy on the football team "Tiny."

Our guide is Jim Bell. He’s Severstal North America’s Manager of Construction and Engineering. “The name is a little deceiving,” he says, his voice echoing off the 80-foot ceilings. The place is not just cavernous, it’s several football fields long. It’s also loud, hot and smells like gas.

“They’re opening the doors of the furnace now,” Jim says as machine whirs and hisses all around. “That means a bar is coming through.”

Here they are forging steel to the tune of 3.3 million tons a year at temperatures up to 1,700 degrees Fahrenheit.

The steel is formed and pressed into sheets, sometimes 100 feet long and tens of thousands of pounds. They’re then wound up with pressure and heat like a Fruit Roll-Up. The water used to spray them off during this process continues to boil long after a roll is finished.

“It’ll take it about three to five days for it to cool down enough for us to either ship it or process it,” Bell says.

Just across John Bell Way, a road named after Jim Bell’s dad, who helped build this complex, Severstal’s air-conditioned offices sit like an oasis in the fiery brimstone of the mill complex. That’s where Saikat Dey, the CEO of Severstal, North America works when he visits from the company’s headquarters in Detroit.

“The total NAFTA market for steel is roughly 70 million tons,” Dey says. “Columbus, Mississippi, represents roughly five percent of it.”

The company has 674 employees. “Most of them grew up [in Columbus], went to school here, went to high school here,” Dey says.

Dey says that's because Severstal is fairly high up in the value chain of production; for every one steel job created at the company, about seven more jobs are created downstream or in related industries.

"So just the effect of having 674 jobs created in Severstal Columbus, multiply that by seven times and you’re talking of a number north of 4,200,” he says.

The complex is so imposing, that it’s pretty hard to believe that just nine years ago the spot it sits now looked like this.

Tommy Andres/Marketplace

Just an open field, filled with knee-high grass, wildflowers, and that black delta earth.

That was until Joe Max Higgins, Jr. came along. He's the CEO of the Golden Triangle Development LINK. We spoke to Higgins in what could only be described as the middle of nowhere.

"Or we could say the epicenter of the tire industry," Higgins says. "We’re in the middle of about a 1,500 acre site, and Yokohama Tire and Rubber is building a brand new plant here that once complete will be a $1.2 billion investment, about a five-million square-foot building and when it’s done will employ about 2,000 people.”

Higgins has been the head of economic development for Lowndes, the county Columbus calls home, for eleven years. And in those 11 years his team has managed to bring in $4.7 billion in investment and created almost 5,600 jobs in the area.

Higgins says the manufacturing boom all started with one big win.

“People viewed us as the guys who were dipping snuff with no teeth, the girls are pregnant with no shoes, we can’t read and write and half the people will, you know, burn a cross in someone’s front yard on Friday or Saturday night for fun. I mean, that’s how the world would view us," Higgins says.

But then, "All of a sudden American Eurocopter, now Airbus helicopter, they came in and all of a sudden we were building stuff that flies. And I don’t mean flies a little bit, I mean flies real well," says Higgins. "The people from that point on started standing up and being proud. And these other projects are witness to that.”

After Columbus landed Airbus, other companies began to check out the city. What they found was a town nestled between two universities, with plenty of land, plenty of power and plenty of non-union labor. Higgins and his team took the money from Airbus and used it to create more potential sites for development and to land more contracts. Columbus is now home to seven multi-national companies.

“Every project we do, we move forward," Higgins says, "The steel mill in Lowndes County ultimately put the plant together that bought and put together about 5,500 acres of land."

Yokohama Tire Corporation will open phase one of its new tire factory next year on a parcel of that land, and the construction of a new highway, a new railroad and new water and sewer lines to serve it will make the sites next to it even more valuable.

That’s where Higgins is hoping to lure his next big fish. The competition from other cities is intense, and as we head back to the car to continue our driving tour of Columbus’s future, I spot proof of Higgins’ competitive spirit emblazoned right on the front of his big, black pick-up truck.

Tommy Andres/Marketplace

We asked him to explain: “Okay, if you’re a professional golfer, you come in third, fourth or fifth in The Master’s, you’re still getting some money. In my business if you come in second it’s last. You know, we could’ve spent $250,000 chasing this deal and lost it to Alabama or North Carolina or South Carolina and we would’ve been toast. So, 2EQLAST. Second equals last,” Higgins says.

Higgins has been in economic development for 28 years and spent his whole life living in Arkansas. But one day eleven years ago his phone rang with a call that changed all of that.

“When the headhunter called me about a job in Mississippi, I cussed her out and hung up on her. I said no way, no how, no way," Higgins says, "I had just watched Mississippi Burning, and I said I don’t want any part of it. And then I started looking at what was here as far as man-made assets and God-given assets, and I thought, you know, those guys ought to be winning.”

Higgins speaks in the platitudes of a college football coach. In fact the license plate on the front of his truck says “Play like a champion.” And over the past decade he’s strung together a series of wins that would impress any fan. And each one has helped solidify Columbus’s new reputation as a manufacturing hotspot.

“Everything we do tends to be big. If it’s a big project and we’re competing for it, there’s almost a one-in-two chance we’re going to win it," he says. "Based on what we play for and what we want over the last 11 years we’re batting about .225 on the smaller deals and about .445 on the big deals.”

But Higgins and his team aren’t just trying to lure any business to Columbus. They’ve sought out specific industries that they know can help the city grow.

“When we started doing this we said ‘a job’s not a job.’ You know, if we go out here and create a bunch of jobs just in sheer numbers that are poor-paying wages, we’re not really improving ourselves," he says. "So what we wanted to do is just say, let’s just have as a goal that we won’t really recruit or bring in anybody that doesn’t pay more than our county average.”

Higgins says the average worker at the Severstal Steel mill makes $80,000 a year before benefits. And that’s in an area where the median household income is $36,000. But while the city has made big strides, it’s still battling a troubled past.

“This is a two-step forward, one-step back business," says Higgins, "Everybody says if all these jobs have been created, how come the unemployment hasn’t gone down? Well, because Sara Lee closed during that time. Artech, Flexible Flyer, the freezer company. All those companies closed, so when we create 500 Yokohama jobs, that doesn’t replace all those jobs we lost. When we get Yokohama to 1,000 jobs it still doesn’t replace them, when we get them to 2,000 it still doesn’t replace them. But if we weren’t doing that, this would be an awful bad place to be.”

To understand what an awful bad place Columbus could have become, we sought out Brenda Lathan. She’s lived in the city for 40-some years.

Tommy Andres/Marketplace

“This was American Trouser. It was a cut and sew garment manufacturer. They have been closed maybe eight or nine years,” says Lathan, outside what is pretty much your classic run-down factory; it’s literally overgrown with weeds and broken bottles in the parking lot.

Lathan now works with Joe Max Higgins as the vice president of economic development for Lowndes County. She says Columbus exploded with manufacturing in the 1930s and 40s. Factories like this American Trouser one sprung up all over town and neighborhoods formed around them.

But in the 1990s, the manufacturers that called Columbus home started to dry up or move out.

Where did these jobs go?

“Overseas. China,” says Lathan.

She says there are only three or four old-line factories left in town. In fact, from 1993 to 2003, Columbus lost 33 percent of its manufacturing jobs to places like Sri Lanka, Vietnam, the Dominican Republic and, of course, China, as Lathan mentioned.

American Trouser was one of the last to close up shop. The brick building has sat empty for almost a decade now. Lathan says when it was open, it employed about 300 people. And now that it's closed, the neighborhood has suffered.

"I’m heartbroken," says Lathan, "Because we had a facility here that could employ a large majority of our population, and now we don’t have that anymore.”

In 2007 the area was hit with its biggest blow. Bryan Foods, a homegrown pig processor that had been in Columbus’s neighboring town of West Point for a century, closed. Within two months, 1,600 people would be out of a job.

Byron Hampton was one of those workers who was suddenly out of work.

“When Sara Lee closed, it was incredibly deflating," says Hampton, "I mean, there were people who worked there from age 19 to whatever age they were when it closed. I was there until the last day it closed. I started when I was 19 or 20. You know, we all thought we’d kind of be there in a hometown in a place with good wages, great benefits – we all thought that would be the place we would always be.”

Hampton had gotten a two-year degree from East Mississippi Community college. His specialty was IT, but he had to take whatever job he could get at Severstal.   

“I started out in the mill on a crane, and we had some things going on with our network," he says. "My boss said, hey, you know, I see you’ve got this background so let’s talk a little bit.

"So it just blossomed into something else," he says."

Now Hampton is a shipping supervisor, using his degree in computer sciences. He says a lot of his friends from Bryan Foods who got laid off now work for Severstal too.

A big part of Columbus’s appeal to prospective companies is a well-trained workforce. And just up the road from from the Severstal steel mill is a blue-roofed complex where one man heads up the efforts to insure that exists.

Tommy Andres/Marketplace

Raj Shaunak runs the Workforce Development department at East Mississippi Community College, the same college where Higgins got his computer science degree. They train between 5,000 to 6,000 students every year.

Shaunak says that after the Sara Lee plant closed seven years ago, the majority of those 1,600 folks who lost their jobs came through the doors at EMCC.

“About 400 of them had the requisite skills, all we had to do was touch them a little bit and give them a little tangential push so that they could be gainfully employed at Severstal or Eurocopter or other places," says Shaunak. "But 898, that number is stuck in my brain, over the next two and a half years, we worked with them and retrained them for meaningful jobs.”

But Shaunak’s program at EMCC isn’t just about training workers for existing jobs. It’s about training them for future jobs. When Severstal decided to come to Columbus, East Mississippi Community College set up training specifically tailored to the company’s method of manufacturing, with the very equipment that would be used.

“For Severstal, for their 600 jobs, we lined up 10,000 people in ten days,” Shaunak says.

Even though the dirt is still being churned at the site of the future Yokohama Tire plant, Shaunak and his team are already training a pool of workers.

“Other than Mr. Yomomoto and his assistant, everyone from HR to engineers, PhDs to technicians have to go through this pathway,” he says.

Even though they only need 500 employees, they'll have 5,000 ready to go before Yokohama ever opens its doors.

"What happens to those who don’t get hired?" Shaunak asks. "They have higher skills now. They are more marketable. What happens when Yokohama Phase 2 occurs in 2016 or 2017, will they not be qualified? All we are trying to do is move people from dependence to enterprise. And that enterprise requires motivation on the part of those individuals.”

The big pool of trained workers help lures in more businesses and more businesses, bring more jobs, and the cycle of growth continues. When Joe Max Higgins brings around prospective companies, often his first stop is at EMCC, and many times the final decisions are made in its conference room.

Companies from the area donate equipment to the school. Severstal sent computers that run assembly lines, Airbus donated a helicopter, and Paccar, a company that makes semi-truck engines gave the school two of those engines to tinker with.

“We have the exact controls that Paccar has," Shaunuk says. "They gave us [two] engines. We unassemble them and then [the students] learn how to assemble it."

Just a mile up the road from EMCC is where those engines are made. And there is perhaps no greater illustration of how manufacturing in this part of the Mississippi has changed in the past decade or two.

Paccar is no cut-and-sew operation. It's a half-million square-foot, 400-employee, heavily-automated, high-tech facility. And in these walls they churn out one in every ten semi-truck engines in America.

It's ridiculously complicated and spotlessly clean. It's also air conditioned, which is rare for factories in these parts. Paccar pays pretty well too. Folks who work here start out making around $20 an hour with full benefits and a 401K.

PACCAR plant manager Scott Blue says his company can train almost anyone from the area who has at least a high school degree and is willing to work.

Case in point, Scott Croley. He cold tests the engines, checking them over for the last time before they’re shipped out.

“I came from Omnova," Croley says. "I had 23 years in Columbus, but they shut the plant down. It was factory work, but this new technology with the computers we have and everything here is a big change for me.”

Croley didn't have much of a technical background or a college degree. He attended EMCC for one year. 

“I was in forestry. It had nothing to do with here," he says. "And I was worried because I’d been at a place for 23 years and the technology was not up to date. I was worried about that. But they gave me a shot. And I told them I was hoping to get another 20 years in here." Croley says he hopes this is his last job. "I couldn't be blessed better than that."

And we heard that over and over from the workers we spoke with. Jemika Connor left Columbus to get an engineering degree at Georgia Tech, but she was able to come back home and get a job when her mom fell ill three years ago. "I love my job," she says. "I love the atmosphere; I love the people around me. I plan to retire out of Paccar."

We also heard it from Demarius Johnson who is working at Paccar while he finishes his degree at nearby Mississippi State University. Even though he's only 20, he says he's hoping to continue working here and move up in the company. "I don’t plan on leaving because like I said, I’ve been here, I like it, so why leave?”

That level of confidence in job security is not exactly something you expect in a town that still has 15 percent unemployment rate, but that’s down from 20 percent just four years ago. And the people of Columbus know their city’s turnaround is just getting started. Since Airbus came to town, The Golden Triangle has been hit with spillover from Hurricane Katrina, suffered through the recession and continued to battle old-line plant closures. But now that the national economy is turning around, the future looks bright, and Columbus is hoping to change the way people think of Mississippi.

The best days of the week to shop

Fri, 2014-05-30 10:27

You probably don't know this, but you're shopping all wrong.

Don't worry, it’s not your fault.

You have to work all week in order to have money to spend on the weekend. But if you wait until Saturday to step foot in a store, you’ve already missed out on the deals.

Catey Hill, a consumer reporter for Marketwatch, says it's time to set a new schedule if you want to take advantage of the mid-week bargains.

Take poor Tuesday, for example. It's solidly mid-week but not yet hump day. Three long days until the weekend rolls around once more.

No one wants to go out to dinner on a Tuesday, which is why restaurants use that day to pump out deals like free appetizers, half off bottles of wine and free kids meals. And behold, Taco Tuesday.

"Tuesday tends to be the sweet spot for restaurants," Hill says. "So if you can switch date night from Saturday night to Tuesday night you avoid the crowds and you tend to get better deals."

So what about groceries to fill up your plate on all those nights when you're not eating out? Hill says Wednesday is the best day to do your grocery shopping. Not only will there be fewer crowds than on a Saturday morning but you get the double advantage of lower prices and fresher merchandise.

"Most grocery stores release their circulars and deals on Tuesdays and Wednesdays," Hill says. "They also tend to get shipments of all the new stuff right around then. If you want the best deals with the most inventory, you're often best off shopping for groceries on Wednesday."

And when it comes to clothes, you can beat the retailers at their own game by being ready as soon as those 'sale' signs hit the store window.

"They're hoping people will go shopping on Friday or Saturday so they release the deals on Wednesday or Thursday in preparation for the weekend. But there are so many avid couponers that are like, 'Oh deal's released, I'm getting this right now!' that by the time Saturday has rolled around the inventory is much more picked through," Hill says.

"You're better off taking that deal and going for it right away."

 

Shopping: You're doing it wrong

Fri, 2014-05-30 10:27

You probably don't know this, but you're shopping all wrong.

Don't worry, it’s not your fault.

You have to work all week in order to have money to spend on the weekend. But if you wait until Saturday to step foot in a store, you’ve already missed out on the deals.

Catey Hill, a consumer reporter for Marketwatch, says it's time to set a new schedule if you want to take advantage of the mid-week bargains.

Take poor Tuesday, for example. It's solidly mid-week but not yet hump day. Three long days until the weekend rolls around once more.

No one wants to go out to dinner on a Tuesday, which is why restaurants use that day to pump out deals like free appetizers, half off bottles of wine and free kids meals. And behold, the Taco Tuesday.

"Tuesday tends to be the sweet spot for restaurants," Hill says. "So if you can switch date night from Saturday night to Tuesday night you avoid the crowds and you tend to get better deals."

So what about groceries to fill up your plate on all those nights when you're not eating out? Hill says Wednesday is the best day to do your grocery shopping. Not only will there be fewer crowds than on a Saturday morning but you get the double advantage of lower prices and fresher merchandise.

"Most grocery stores release their circulars and deals on Tuesdays and Wednesdays," Hill says. "They also tend to get shipments of all the new stuff right around then. If you want the best deals with the most inventory you're often best off shopping for groceries on Wednesday."

And when it comes to clothes, you can beat the retailers at their own game by being ready as soon as those 'sale' signs hit the store window.

"They're hoping people will go shopping on Friday or Saturday so they release the deals on Wednesday or Thursday in preparation for the weekend. But there are so many avid couponers that are like, 'Oh deal's released, I'm getting this right now!' that by the time Saturday has rolled around the inventory is much more picked through," Hill says.

"You're better off taking that deal and going for it right away."

A pep talk for the self-employed

Fri, 2014-05-30 09:17

Trust exercises, after work softball games, the obligatory happy hour. It’s all part of everybody’s favorite office activity: team building.

But what do you do if you work in an office of one?

The freelance writer Anne Brinser Shelton has some tips. Here’s an excerpt from her recent post on McSweeney’s: Team Building for the Self-Employed.

I bet I’m wondering why I’ve called this meeting today. As CEO of this business, it is my responsibility to ensure that all of our employees are working efficiently in their day-to-day operations and finding their roles fulfilling. It has come to my attention, as I review the figures from our last profit-and-loss statement (which seems to be written on the back of a Wendy’s receipt? Come on, me in Accounting, can’t we at least try to make these things look professional?), that perhaps morale is a little low around here, which might be impacting the bottom line.

While I hate to pick on any one individual, I’ve noticed some patterns of behavior in a number of key areas. Our manager of operations (me) is not doing a great job motivating her direct reports (also me). To be frank, I am a pushover, and I allow myself to get away with a lot that might not fly at other, more professional organizations. For instance, while I’m impressed with my progress in Candy Crush Saga, when I took me on as administrative assistant, I was expecting some actual administrative work to get done, but I’m clearly not taking this role very seriously. I’m still waiting for me to get around to drafting those emails I promised to send out two weeks ago.

 

 

The man behind Fannie and Freddie

Fri, 2014-05-30 07:54
Wednesday, June 4, 2014 - 04:50 Chip Somodevilla/Getty Images

U.S. Vice President Joe Biden ceremonially swears in Mel Watt as the new director of the Federal Housing Finance Agency as his wife Eulada Watt, looks on

In the world of real estate, few people are more powerful than Mel Watt, the head of the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac. Together, the two mortgage giants guarantee about 60 percent of all new home loans. 

Watt hasn’t made a lot of public appearances since he was appointed head of the FHFA in January. In fact, his first major speech wasn't until May 13, at the Brookings Institution. 

“We’re balancing, in a number of instances, contradictory mandates,” he told the audience.

For example, the mandate to protect the taxpayers while trying to get banks to lend more but not make risky loans, which Fannie and Freddie would still have to guarantee. After the speech, Watt hung around outside Brookings and chatted for a while -- Maybe not what you’d expect, but perhaps a throwback to Watt’s previous job. He served in Congress for more than two decades, representing the banking hub of Charlotte, North Carolina. 

The Senate Banking Committee has passed legislation that would gradually wind down Fannie and Freddie, something Watt’s predecessor also tried to do, but without input from Capitol Hill.  

But Congress isn’t likely to act this year, leaving Watt in charge of Fannie and Freddie’s fate.  

“I think he’ll work cooperatively with Congress,” says David Stevens, president of the Mortgage Bankers Association, who adds that he thinks Watt will let Congress decide what to do with the mortgage giants.

“He gets it.  Mel understands his role," Stevens says. "He understands the role of Congress.”

Watt’s role also involves dealing with a lot of money. Since Fannie and Freddie were taken over by the government in 2008, their profits have gone to the U.S. Treasury.

“Even in this town, $25 billion a year is a lot of money,” says Mike Calhoun, president of the Center for Responsible Lending, a homeowner advocacy group.   

Sitting in Calhoun's Washington office, I ask him whether all that money led to pressure on Watt, maybe from people in the White House who don’t want to change Fannie and Freddie because they’re afraid of cutting off the spigot of cash. But Calhoun doesn't think that'll happen.

“They know he is going to be independent.  He’s in his mid 60s," Calhoun says. "He’s quite comfortable standing his ground.”

Marketplace Morning Report for Wednesday June 4, 2014 Nancy Marshall-Genzer

Federal Housing Finance Agency Director Mel Watt spoke at the Brookings Institution on May 13.

by Nancy Marshall-GenzerPodcast Title The man behind Fannie and FreddieStory Type News StorySyndication SlackerSoundcloudStitcherSwellPMPApp Respond No

A scam-free way to consolidate your debt

Fri, 2014-05-30 06:27

We’ve all seen the late night infomercials promising to lift us out of a mountain of crushing debt: It’ll only take a phone call. Just three minutes of your time. And you, too, could be debt free forever.

You don’t need to consult with your financial adviser to figure out that calling that 1-800 number probably isn’t going to solve all of your money woes.

But is there a safe and practical way to consolidate a big chunk of consumer debt?

Gerri Detweiler, the director of consumer education for Credit.com says absolutely. You just need to know where to look.

Debt consolidation vs. credit counseling

“A lot of those ads that you see are not actually companies that will consolidate your debt,” Detweiler says.

"They’re credit counseling agencies and they will work with your creditors to get you on one monthly payment, lower your interest rate and lower your payments but they aren’t actually paying off your debt like a true consolidation loan would do.”

Instead, a debt consolidation loan is one new loan that will pay off all your existing debt, put you on a fixed monthly payment with a set plan for when the debt will be gone. “With a consolidation loan you know, in three, four or five years this loan will be paid off.”

So where do you get one?

Oh, how things have changed. Traditionally if you wanted a consolidation loan you’d have to apply through your bank or credit union or even tap into your home equity. 

"But that industry has changed dramatically in the past few years thanks to the P2P, or peer-to-peer lenders, who take money from investors like you and me and lend it to other people who need to consolidate their debt.”

You can save money, Detweiler says, by using a P2P lender because the interest rates typically are much lower.

How to spot a scam

We’re used to doing everything online these days but when it comes to giving out personal financial information here’s one area where we need to be extra careful.

“There are sites out there that look very professional and they typically promise money with very little in terms of credit standards,” Detweiler says.

 “What they’re doing is they’re gathering your personal information and turning around and selling it to scammers. Even if you don’t get a loan from them there’s a good chance that in a year or two you’re going to start hearing from debt collectors who are telling you that they’re going to have you arrested or sue you in court for paying this debt, whether or not you took out the debt.”

If you’re considering consolidation for student loans you need to be even more cautious. Head directly to the Department of Education for information and bypass any other companies who claim they can consolidate your student loans.

“The big risk with consolidating student loans is you may lose some of the protections you have right now with federal student loans including graduated repayment, deferment and forbearance,” she says.

“If you consolidate a federal student loan with a private student loan you lose those protections.”

PODCAST: A $2 billion bank shot for the Clippers

Fri, 2014-05-30 06:14

Former Microsoft chief executive Steve Ballmer has reportedly won the bidding yesterday for the Los Angeles Clippers NBA franchise, with a $2 billion offer. Getting one of the world's richest people to replace Donald Sterling is a big win for the NBA.

On Monday, the EPA will set greenhouse-gas reduction goals for every state. And some states may be playing catch up.

The best advice for grads? Screw up.

Fri, 2014-05-30 05:15

It’s commencement season, AKA, the month of unsolicited advice.

Many a hungover student will struggle to stay awake in a rented gown, largely tuning out the platitudes doled out from a dais.

BINGO will proceed: believe in yourself, fail, thank your parents, follow your passion. And out into the world will go another crop of young people; smart, terrified, debt-ridden and clueless.

I’ve been mulling this over since Business Insider published this list of advice their reporters wish they’d gotten.

Thinking back on my own college graduation sixteen years ago, I can still feel my own fear. “Who am I? What am I supposed to be? Who is the devil who invented Jagermeister?” Believe it or not, I remember my commencement speaker, the brilliant cellist Yo-Yo Ma.

He walked to the center of the stage and spoke only briefly, with a simple message: find your own voice.

And then he played. I believe it was Bach, though that may be a trick of memory. But it was gorgeous.

What I didn’t know is that the next few years would be hard. I didn’t have a job lined up. I’d try acting, working in a bookstore, leading outdoors trips for kids, and a presidential campaign. It took me until I was about twenty-four until I thought maybe journalism was right for me. And even then, it was a maybe.  I didn’t know for sure until I was twenty-eight, carting around a load of grad school debt. And then, not a single newspaper would hire me. Not one.

But here is what I learned: uncertainty is okay, and the best stuff happens when you are picking yourself up after a fall. A job that helps you pay the rent and pay your loans is a good job. People will help you if you ask them. You will learn through osmosis. That is what my late stepfather used to call “the college of life.”

And yes (cliché alert!), your biggest successes will come from failure.

The actor Charlie Day gave a commencement speech at his alma mater, Merrimack College, and I loved it. 

I made my way to Marketplace after a truly terrible year. I’d been very sick with endometriosis, gone on medical leave and lost my job. I didn’t know if I’d ever work again.

And then an email from Kai Ryssdal popped into my inbox.

This is not to say that everything will work out. It often won’t. But in my imaginary graduation speech, I’d say this: give yourself permission to screw up, because it’s going to happen anyway.

And write thank-you notes. Your mother was right about that. 

How #YesAllWomen reignited the conversation about gender equality

Fri, 2014-05-30 03:00

What does the Isla Vista shooting in California have to do with gender equality you might ask?

Before going into full effect with his plans last Friday, the shooter left behind a 141-page statement where he described his plans to kill people and declare a war on women. According to the shooter's manifesto, romantic rejections by women sparked the 22-year old's rampage.

Dr. Wendy Patrick, business ethics lecturer at San Diego State University, joins Marketplace's Stacey Vanek Smith to discuss #YesAllWomen, the social media conversation that grew on Twitter. 

For NBA, courting Steve Ballmer could be a strategic move

Fri, 2014-05-30 02:14

The NBA hopes it's just made a game saving shot.

Former Microsoft CEO Steve Ballmer plans to buy the Los Angeles Clippers for $2 billion dollars. The deal -- which must still be approved by the NBA -- would come after the NBA Commissioner Adam Silver said he would force current owner Donald Sterling to sell after he made several racist and vulgar remarks in a recorded call.

There's a photo making the rounds of Steve Ballmer at a playoff game earlier this month, with Commissioner Adam Silver in his ear. Wharton Business School Professor Kenneth Shropshire says it's easy to imagine Silver making his pitch to Ballmer right then.

"If you think about the kinds of people you would speak to, Ballmer would certainly be on your list to court," he says.

That's because Ballmer's worth $20 billion dollars, making him one of the richest people on the planet.

Only one of the richest people on the planet can afford to pay a record $2 billion dollars for an NBA team, a deal the league hopes is sweet enough to discourage Sterling from tying up the sale in court.

Going forward, Emory University's Mike Lewis says the NBA would be psyched to have a deep-pocketed guy own the Clippers.

"You know they are sort of the New York Mets or the Chicago White Sox. They are the second team in that city. I think it's really attractive to the league to essentially have two really strong franchises in a major city like LA," he says.

Disposing of Sterling and the Clippers going deep into the playoffs -- for NBA owners that would be fantastic.

Bringing Bono on board might not be enough for Fender's slump

Fri, 2014-05-30 02:01

Bono and The Edge – the singer and guitarist for U2 – will join the board of directors at the Fender Musical Instruments Corporation.

Fender guitars are revered by musicians.

Brian Majeski, an editor at The Music Trades magazine, says Fender does “not need these guys to burnish their credibility with musicians or the music-buying public.”

But, across the industry, guitar sales are down 10 – 15 percent from their peak in 2008.

Perhaps the issue is not supply, but too little demand.

“Maybe this slump in guitar sales is a lot of kids aren’t learning to play the guitar because it’s hard,” says Jimmy Griffin, who manages Killer Vintage, a guitar shop in St. Louis.

Griffin says he never would have bothered learning the guitar if he knew that he could be a rock star with just two turn-tables and a microphone or a computer.

EPA's carbon rules may give some states a head start

Fri, 2014-05-30 02:00

On Monday, when the White House rolls out President Barack Obama’s biggest climate change initiative—proposed rules to limit the carbon dioxide created by existing power plants — there will be greenhouse-gas reduction goals set for every state.  And in terms of carbon emissions, states are, well, all over the map.

That's one way to count. Here's another: 

 The second one gives a clue as to which states are buring the most carbon-intensive fuel -- coal.

"You’ve got some states such as North Dakota or Wyoming where they’re nearly 100 percent coal, so they have very high emissions intensities," says John Larsen, an analyst at the Rhodium Group, an energy consulting firm.   

Meanwhile, Washington gets much of its power from zero-emissions hydro-electric dams.

Some of the variation depends on, yes,  the lay of the land. "It’s not just natural resources, in terms of rivers or sun or wind," says Ethan Zindler with Bloomberg New Energy Finance. "It’s also, 'Do you have an ample supply of fossil fuel nearby?' So, it's not shocking that Kentucky is heavily-reliant on coal for power-generation, since there is a good deal of coal locally available." 

And some places -- like California and some New England states -- already have programs going to carbon emissions.

That could mean a head start when EPA rules go into effect. "Some people will come to the table and say, 'Well, those states are going to be advantaged here,'" says Sara Hayes with the American Council for an Energy-Efficient Economy.

However: Which states actually get a head start will depend on how the EPA writes its rules.

"There’s 25 states that already have energy efficiency savings plans in place," says Hayes. "People will come to the table and say, 'Those 25 states, they’re ahead of the game.' And others will say, 'Well a state that hasn’t done anything yet...'"  Will the abundance of low-hanging fruit be an advantage?  Until Monday's announcement, nobody knows. 

 

Brazil's drought creates a surge in global coffee prices

Fri, 2014-05-30 01:00

If you happen to be drinking your morning coffee right now you might want to take a few extra moments to savor it...

A severe drought in Brazil has hit its coffee-growing region hard in recent months, helping to push prices up and ruining crops in the world's biggest coffee producing country. 

So what does it mean for farmers in Brazil -- and for the price of your cappuccino?

The BBC's Katie Watson joins Marketplace's Stacey Vanek Smith to discuss. 

Silicon Tally: Twins in Space!

Fri, 2014-05-30 01:00

It's time for Silicon Tally. How well have you kept up with the week in tech news? This week we're joined by NASA engineer Bobak Ferdowsi, A.K.A. Mohawk Man .   var _polldaddy = [] || _polldaddy; _polldaddy.push( { type: "iframe", auto: "1", domain: "marketplaceapm.polldaddy.com/s/", id: "silicon-tally-twins-in-space", placeholder: "pd_1401399764" } ); (function(d,c,j){if(!document.getElementById(j)){var pd=d.createElement(c),s;pd.id=j;pd.src=('https:'==document.location.protocol)?'https://polldaddy.com/survey.js':'http://i0.poll.fm/survey.js';s=document.getElementsByTagName(c)[0];s.parentNode.insertBefore(pd,s);}}(document,'script','pd-embed'));

Curveball: Do kids still read actual books?

Thu, 2014-05-29 19:10
<a href="http://marketplaceapm.polldaddy.com/s/ebooks">View Survey</a>

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