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Why retailers still bother to print catalogs

Wed, 2014-05-14 13:49

Whether it's yoga pants or fruit dipped in chocolate, Americans spend an average of $850 a year on catalog purchases, according to FGI Research.

In fact, check the mail at the beginning of the workweek, and you'll probably find a catalog in there.  According to research, Monday and Tuesday are the biggest catalog mail days. Every week, Americans get about two to three of them in the mail.

You'd think online retail would've killed catalogs. But no, says Paul Miller, vice-president of the American Catalog Mailers Association: "Catalog companies are still vibrant businesses."

Miller says postage hikes, cyber retail, and the recession all hurt catalogs. But he says catalogs offer something to retailers that the internet can't: customer loyalty.

"There have been studies that have shown that if somebody purchases an item online, they're much less likely to be a loyal customer than if they purchase something as a result of seeing it in a catalog," Miller says.

Companies have gotten smarter about getting their catalogs into the right hands with the help of huge databases containing all sorts of info on millions of households.

"In many of the databases they'll have every purchase you've basically made for years," says John Lenser,  president of CohereOne, a consulting firm that works with catalog companies. "So they will know whether you're buying in different product categories, they'll know how much you've spent."

Database companies track a lot about our lifestyles. If someone moves, furniture catalogs start appearing. They know who buys office supplies in bulk, and who's developing a taste for wine. It's really specific.

The result? Fewer catalogs immediately tossed into the recycle bin.

Places like American Printing Company, a catalog printer in Birmingham, are all about efficiency. Craig McConnell, sales manager there, says there's a ton of potential waste in the printing business.

"So if you're not very efficient, if you don't do a good job and if you don't provide some extra value to your customers, it's very difficult to compete," he says.

The cost of postage and paper have gone up over the years. On the upside, McConnell says, "For every dollar that someone spends for the production of a catalog, they expect to generate at least $4 of additional sales revenues."

For retailers, that might be the best dollar they've ever spent. 

In New Jersey, mass transit for the masses

Wed, 2014-05-14 13:45

In Jersey City and other towns along the Hudson, home-grown capitalists have wiped out the urban ritual called waiting for the bus.

Private operators jam commercial streets with mini-buses— and in turn spark new issues. (Think: traffic jams.)  Longtime complaints peaked last summer, when a wayward bus killed a baby girl, and the state created new regulations, which take effect next year.

Meanwhile, to hear Haroun Khan tell it, most drivers regulate themselves. He drives part-time, but today he’s a passenger. Sitting near the front of a jitney heading down Bergenline Avenue, he explains to a fellow-rider how drivers keep out of each other’s way.  

“They try to keep two or three traffic lights before or ahead," he says. "Wait, see what he did? There’s a bus behind him. So he’ll skip that passenger, try to get the space, and he’ll pick the other passengers up. So that way, they can both make money.”

People call the buses jitneys, collectivos, immi-vans. They’ve got maybe 20 seats.  They charge less than New Jersey Transit buses. They stop on any corner when a passenger hails. And they always make change, something New Jersey Transit drivers will not do. 

They’ve been driving through towns like Jersey City, Weehawken, and Bergen for decades. And they’re still growing, 40 percent just in the last four years, according to regulators.

Big operators rent out branded buses to drivers like Pasquale Gomez. At the end of his route, he waits in line for a dispatcher to call his turn.

He pays$100 a shift and buys the gas. Asked how much he makes, he says, “Well, it depends, man. Today, I don’t have a dime for me yet.”

He plays by the rules. Waiting for a dispatcher to call his turn, he says, “Sometimes we’re here maybe 20 minutes. Sometimes an hour.”

Nicholas Sacco, the state Senator who sponsored the new regulations, seems surprised when he hears about Gomez’s situation.

“If they were all that organized, maybe we wouldn’t have needed the bill,” he says. “We had no desire to get rid of the omnibuses. Just to  make them safe.”

The new regulations include higher insurance minimums— $1 million — and a hotline for riders to report anything unsafe.

Many of the jitneys fall under federal regulation— taking passengers back and forth to Manhattan, that’s interstate commerce. Anne Ferro, who runs the Federal Motor Carrier Safety Administration, doesn’t expect tighter regulation to slow business.

“It’s a supply/demand situation,” she says. "Trucks and buses are like water: They will always find a way through.”

Pasquale Gomez would like to see things more tightly regulated, even if it meant fewer buses.

“We are too many,” he says, “going up and down like crazy. That will make us doing things we don’t want to do.”

Meaning: Not all drivers follow the rules.

“They have three blocks to work on, they want five,” he says. So greedy drivers block the way for other buses, slowing up traffic in the process.

And misbehavior begets misbehavior— or at least, aggressive driving. “I see him doing that to me—playing games— and what am I going to do?” he says. “I’m not going to stay behind him.”

Why 'infrastructure' may be the new political buzzword

Wed, 2014-05-14 13:30

One of the biggest economic problems facing the nation has become something of a buzzword in politics of late: "infrastructure."

President Barack Obama was in Tarrytown, New York on Wednesday, just up the Hudson River from New York City, talking about the need to upgrade infrastructure, in the shadow of the Tappan Zee Bridge, which is being replaced.

The President isn't the only one who's been talking about infrastructure, and it's enough to make you wonder if it's the new "addicted to foreign oil," i.e., something politicians say over and over again, knowing full well how hard it is to change.

"We laid in place a very good infrastructure, but a lot of those investments were made 50, 80, 100 years ago, and it is time for the U.S. to upgrade and modernize," says Casey Dinges, a senior managing director at the American Society of Engineers (ASCE), a group that gave U.S. infrastructure a “D+” grade last year.

According to Rob Puentes, who directs the Metropolitan Infrastructure Initiative at the Brookings Institution, the numbers are staggering.

"I mean we have 63,000 bridges that are structurally deficient," he says. "Two hundred and forty thousand water mains break every year."

 You can get lost in those numbers, and that is part of the problem. It helps, Puentes says, to talk about what constitutes infrastructure. Yes, it is roads and bridges and waterways, but it is also broadband – pipes of a different sort.

"It's not true that Americans don't understand this," Puentes argues. "When they're confronted with these choices, they are willing to pay for infrastructure projects."

And they have demonstrated that at the local level. States have raised gas taxes, to pay for renovations and modernization, and cities are improving their infrastructure.

But there's another problem, according to Rae Zimmerman a professor of planning and public administration at New York University's Robert F. Wagner Graduate School of Public Service. Fixing infrastructure often becomes urgent only after disasters happen.

"And then there seems to be a lull, and then it comes back, and a lull, and comes back, and hopefully, this time it is going to stick," she says, noting the fact that we are talking about infrastructure now, absent a big disaster, can’t be such a bad thing.

To illustrate part of the infrastructure problem facing the U.S., check out a map showing the 20 worst bottlenecks of traffic congestion, as well as the metropolitan regions around the country with the highest percentage of structurally deficient bridges, organized by population size. All data is based on the 2013 Report Card for America's Infrastructure, from the American Society of Civil Engineers and the 2012 Metropolitan Bridge Rankings, from Transportation for America.

One piece of healthcare jargon worth knowing

Wed, 2014-05-14 13:28

In healthcare there’s a ton of mind-numbing jargon – "providers", "carriers", "the dual eligibles", "fee-for-service".

But if there’s one acronym that should take up just a bit of brain space – other than the ACA, which stands for the Affordable Care Act, of course – it’s ACO. What does it stand for? Accountable Care Organization.

There are more than 600 ACOs up and running across the country. And while you may not know what it means, you may be in one, with an estimated 1 in 7 Americans served by one.

So what is it?

It’s basically a group of doctors, nurses and pharmacists who work together to improve care and lower the cost of that care. Sometimes it’s a simple follow-up call to a patient. Sometimes it’s unraveling a mystery.

Jeff Brown – who works with three New Jersey-based ACOs remembers one Trenton guy who kept showing up in the ER.

“His wife had recently passed away, and he didn’t know how to cook for himself or go to the grocery store," Brown recalled. "And so what the Trenton health team determined was they needed to take this guy home and [show him] how to shop for himself and how to prepare some meals."

If that sounds like more work for doctors and nurses, it is. Shifting people away from expensive ER and hospital stays, and moving them towards cheaper primary doctor visits takes effort. What’s the incentive for healthcare providers? In a word: Money.

In an ACO, providers can get paid more if they meet patient quality benchmarks and keep costs down, said Dr. Kavita Patel at the Brookings Institution.

“This is one of the few ways that we have of trying to change how we actually interact with patients and providers and cut costs at the same time,” she said.

But Northwestern economist David Dranove said, based on 20 years experimenting with similar concepts, when healthcare providers have teamed up, we’ve seen prices rise and consumer choice shrink, leaving communities with partnerships that can stymie future change.

“The way they decide to deliver medical care in a community will become the way that that community receives its medical care, for better or for worse,” he said. Dranove said he hopes that as the creation of ACOs is on the rise, they'll proceed slowly.

Who will pay for climate change? Not us, insurer says

Wed, 2014-05-14 13:28

Climate change is shaping up to be really expensive. So who picks up the tab? That’s the issue in a lawsuit filed recently by Farmers Insurance against Chicago and its suburbs.

A big two-day rainstorm hit the Chicago area in April 2013. Sewers backed up into hundreds of homes. Some people had to leave their homes. Clean-up was a nightmare.

The company wants local governments to pay for damages, and experts say this marks the beginning of a trend.

Andrew Logan looks at the insurance industry for Ceres, a non-profit that coordinates private-sector efforts to address climate change.

“I think what the insurers are saying is: ‘We’re in the business of covering unforeseen risks. Things that are basically accidents,’” Logan says. “‘But we’re now at a point with the science where climate change is now a foreseeable risk.’”

That would make local governments liable, in theory, for not upgrading their stormwater-management systems to account for that risk.  

Legal experts say this theory faces an uphill fight. Very strong legal doctrines protect governments in these kinds of cases, says attorney James Bruen, a partner at Farella Braun + Martell LLP.

“They can say, ‘You can’t second-guess us on that,’” says Bruen. “‘We have to make a decision politically about where to put our services, and just because you don’t have as many services as you’d like is not a basis to sue us. Sorry.’”

So, why bother filing this kind of suit?

“It’s the lottery,” Bruen says.  In other words, the cost of the ticket— filing the suit— is nothing compared to the potential payout: Getting off the hook for climate-related liabilities.

Insurers may also hope lawsuits will influence future government decisions.  “They want to put cities on notice that they’re not going to walk away quietly,” says Robert Verchick, who teaches environmental law at Loyola University in New Orleans.

“Even if a city is likely to win a lawsuit, it still is going to have to spend quite a bit in defending itself,” he says. “And it might just be better for everybody involved for cities to take climate change seriously.”

Michael Gerrard, who runs the Center for Climate Change Law at Columbia University, says he’s been waiting to see a lawsuit like this for a long time.

“There will be many such lawsuits,” says Gerrard. “Some against governments, some against private entities. Often, insurance companies will be in the mix, and we’ll see who pays what.”

For instance, he says, architecture firms could become targets. “If someone designs a building and the building doesn’t survive a foreseeable storm, is there malpractice liability on the part of the architect or the builder?”

 

How to survive the next economic collapse

Wed, 2014-05-14 12:57

Our global financial system relies on so many unpredictable factors that a total economic crash is all but inevitable.

But with careful planning now, you can still win in a post-crash economy where money doesn’t matter. Daniel Kibblesmith and Sam Weiner, authors of "How to Win At Everything" have some tips:
 
1. Immediately withdraw all the money from your 401K and invest it in burlap futures. Twenty-four hours after the coming crash, all clothing will be made from itchy sacks.
 
2. Sell all your stocks and bonds - soon, hearty grains will be more valuable than gold. Fill up a sock with millet seeds - it can be used as currency and doubles as a blackjack for self-defense.
 
3.Abandon your house right this minute and move to nature’s mansion - a cave. The huge home you worked so hard for will make you a target for roving gangs of bandits.
 
4. Gasoline will be impossible to find, so trade in your obsolete gas guzzler for a faithful donkey. Then trade any useless children you have lying around for a second donkey.
 
5. Your current white collar job won’t prepare you for a future where the only available jobs are warlord, balladeer, and widow. Start learning a practical skill today, like identifying poison berries or tricking your enemies into eating poison berries.
 
6. As society continues to crumble, strength will be the only law, so your civilized name is meaningless. Change it to something that inspires people to follow you. Goodbye John Smith, hello Dirk StormRider.
 
We’re headed for a brave new world where crime is legal, family is a liability and wild dogs will be everywhere. But if you follow our tips, you’ll become a pillar of the post-money economy, paving the way for future generations to become just as reckless and complacent as the investors of today.
 

How to survive the next economic collapse

Wed, 2014-05-14 12:57

Our global financial system relies on so many unpredictable factors that a total economic crash is all but inevitable.

But with careful planning now, you can still win in a post-crash economy where money doesn’t matter. Daniel Kibblesmith and Sam Weiner, authors of "How to Win At Everything" have some tips:
 
1. Immediately withdraw all the money from your 401K and invest it in burlap futures. Twenty-four hours after the coming crash, all clothing will be made from itchy sacks.
 
2. Sell all your stocks and bonds - soon, hearty grains will be more valuable than gold. Fill up a sock with millet seeds - it can be used as currency and doubles as a blackjack for self-defense.
 
3.Abandon your house right this minute and move to nature’s mansion - a cave. The huge home you worked so hard for will make you a target for roving gangs of bandits.
 
4. Gasoline will be impossible to find, so trade in your obsolete gas guzzler for a faithful donkey. Then trade any useless children you have lying around for a second donkey.
 
5. Your current white collar job won’t prepare you for a future where the only available jobs are warlord, balladeer, and widow. Start learning a practical skill today, like identifying poison berries or tricking your enemies into eating poison berries.
 
6. As society continues to crumble, strength will be the only law, so your civilized name is meaningless. Change it to something that inspires people to follow you. Goodbye John Smith, hello Dirk StormRider.
 
We’re headed for a brave new world where crime is legal, family is a liability and wild dogs will be everywhere. But if you follow our tips, you’ll become a pillar of the post-money economy, paving the way for future generations to become just as reckless and complacent as the investors of today.
 

So, you wanna be a flipper?

Wed, 2014-05-14 12:50

Believe it or not, house flipping is back with the housing recovery. And while there’s money to be made from flipping houses, there's also money to be made from selling things to would-be flippers. Flipping workshops are crowded again.  

At a recent workshop just outside Baltimore on a recent Saturday, Terry Royce, who’s been flipping houses for seven years, was sharing some of his secrets. Everything from how to find a seller, or a buyer, even time management tips.

“I always like to say, this is work, stuff gonna go wrong," he said later.  "It is. And it’s the reality.”

It was Royce’s first workshop. He charged $97 for a morning seminar and afternoon bus tour of some homes that are being flipped.

Zane Watkins was among those on the bus. He said he’d been to four or five other workshops, one that cost him and his wife $300 and ended with a hard sell for another series of seminars.

“They had three different versions of the package,” he recalled. “One was like $10,000, and $15,000 and $22,000 that you would pay overall.”

The Better Business Bureau rates these types of workshops. It's now tracking 130 of them.

“Of that, only one is a BBB accredited business with an A," said spokeswoman Katherine Hutt. "We have one that has a B+, 13 that have Cs and all the rest have Ds or Fs.”

Hutt said the BBB gets several hundred complaints a year from consumers saying they didn’t get what they paid for from flipping workshops. And, when they tried to get their money back, they ran into a brick wall. Hutt said, just like buying a home, when it comes to flipping workshops, it’s buyer beware.

Harvard's Kennedy School denies 'privilege class' story

Wed, 2014-05-14 12:08

The Harvard Kennedy School responded to reports that it has created an orientation class on "power and privilege" with a flat denial.

Doug Gavel, the school's Associate Director for Media Relations, told Marketplace's Mitchell Hartman that there is "false information in the media" about a class that administrators at the school were reported to have committed to scheduling for first-year students. Several media outlets picked up the story, first reported in New York Magazine's "The Cut" that, "In response to growing demand from student activists, administrators committed Friday to adding a class in power and privilege to its orientation program for incoming first-year students."

The story comes in the wake of a controversial essay on privilege written by a student at Princeton earlier this month. 

Here's the text of Gavel's email to Mitchell:

There appears to be false information in the media being conveyed by reporters who have not contacted Harvard Kennedy School (HKS) officials to verify the accuracy of the information.  Contrary to one article that has been picked up by others, the school is not planning to offer classes, coursework, or sessions devoted specifically to "power and privilege."  The school currently offers a number of opportunities for students to discuss and learn about issues of diversity.  Learning to have constructive conversations in the context of differences in race, gender, cultural background, political viewpoints and many other perspectives is important in any graduate school, particularly one dedicated to preparing its students to be effective leaders and policymakers. HKS examines opportunities offered to students to engage in these discussions, regularly assessing their effectiveness and value.  We look forward to continuing to work with our faculty and students to provide the most valuable learning opportunities in this area. 

American technology, Chinese pollution

Wed, 2014-05-14 11:58

It’s been dubbed by foreign media as "the Airpocalpyse" -- when smog levels in Beijing go beyond what monitoring machinery is able to read.

A hundred miles east of the city, along the swamp surrounding the Bohai Sea, the foul, gray, soupy air is even more airpocalyptic, thanks to a concentration of industrial plants. On an island shrouded in smog, Capital Steel produces 10 million tons of steel a year, and millions of tons more of carbon dioxide – a greenhouse gas. But Capital Steel’s Wang Xi insists a new revolutionary project could change this: “If it’s a success, we will take gases that are now burned and released as carbon dioxide and turn them into liquid fuel instead,” says Xi, pointing to a tower of tangled pipes and valves.

Capital steel has partnered with Chicago-based Lanzatech to build a pilot plant that will trap the mill’s carbon emissions. Lanzatech engineer Jason Bromley stands in front of a five-story column of pipes and tanks. Inside, a special water-borne bacteria feeds on carbon monoxide and, after fermenting for a half day, the concoction turns into ethanol. “You can chuck that straight into most cars," says Bromley, patting one of the ethanol tanks. "In fact, you can blend 10 percent in any car and most modern cars you can blend 20 to 30 percent.”

LanzaTech's pilot plant at Capital Steel's mill in Hebei province. Inside these tanks, carbon monoxide is mixed with bacteria, water, and other chemicals to produce ethanol. The process reduces the mill's carbon emissions by a third.

Rob Schmitz/Marketplace

If the pilot project is successful, it could someday cut the steel mill’s carbon emissions by a third, reduce the mill's particulate pollution, and manage to pump out 5,000 gallons of ethanol a day. The profits from selling the ethanol, says Bromely, would more than offset the cost of the project. At this stage, Capital Steel - known in Chinese as Shougang Group - is funding the joint venture in return for a license to use Lanzatech’s technology.

“Our value in that JV has come from providing the technology and the IP whereas Shougang group themselves actually put the real cash down themselves to build the plant," says Bromley.

It's American technology combined with Chinese funding – a potential template for cleaning up what’s becoming a global environmental mess.

At the Shangri-La hotel in downtown Shanghai, businessman Andrew Chung takes a breather in the lobby. He’s here to set up deals for U.S. clean tech companies. "There are many, many opportunities for U.S.-based companies to explore technology, expansion and adoption in a place like China, because there is such a strong demand for the technology. For the country’s survival," says Chung, who works as a partner at Khosla Ventures.

The venture capital fund was established by Sun Microsystems co-founder Vinod Khosla. Half of Khosla’s $2.5 billion fund has gone to clean tech companies. A few of them operate in China, like Lanzatech and a green engine company from Detroit called EcoMotors, but Chung is surprised more American tech companies aren’t interested in China. "I think very few realize that the Chinese government is putting anywhere from $60 to 80 billion a year, every year, for the next ten years into clean tech related investments, versus the U.S., where the dollars are a fraction of that," says Chung.

Chung says many U.S. companies are hesitant about China, mostly due to concerns about losing control of their intellectual property. And some have an outdated perspective on the country, something Chung witnessed firsthand at a recent White House roundtable on manufacturing he attended.

“One of the folks on the roundtable who was a C-level executive of a very well-known U.S. equipment company, basically said to me, ‘Well don’t they manufacture very simple things in China? Are they gonna be able to get to the level of quality that you need?’ I just was stunned and speechless. I kind of thought, ‘Hmm, well where you have been in the last decade?’”

Chung says this attitude that American technology is far superior to what the Chinese can do is a dangerous one. Despite his work putting U.S. and Chinese partners together, Chung says one of his biggest worries is that if the US government and its corporate interests don’t move quickly enough to fund clean tech start-ups, those American start-ups will have no choice but to take their ideas elsewhere.

Want a raise? Drop a warm puppy into your boss’s lap

Wed, 2014-05-14 11:56

That warm and fuzzy feeling you get sitting in a comfy chair could make you more generous.

So says a new book by Dr. Thelma Lobel called Sensation: The New Science of Physical Intelligence. 

Lobel says she first realized sensations impacted her decisions when she and her husband were trying to sell their apartment in Tel Aviv, Israel.

"We pretty much decided what was the price we were going to ask," she says, "and then they served a lot of hot coffee. And I remember holding a warm cup in my hands all the time. Without noticing it, I went down in the price. I didn't know why I did that."

Lobel's studies later revealed that it wasn't just warm and soft sensations--not necessarily from beverages, either--that made people perceive others as nicer. Cold and hard sensations, she found, have the opposite effect. To that end, the physical copy of her book feels soft on the front cover and rough on the back--an exercise in what she calls "embodied cognition."

"All the things in the environment--the things that we see, the texture of the things we touch, the temperature of the things we touch, the colors we see, the things we smell--they all influence our behaviors, thoughts, emotions, decisions...without our awareness."

PODCAST: Fixing infrastructure and American jobs

Wed, 2014-05-14 07:49

President Obama heads to New York's Tappan Zee bridge today. The crumbling, sixty year old span across the Hudson River will be the backdrop for a speech on America's infrastructure. Barring action from Congress, a federal fund for road, bridge and transit construction and repair is expected to run dry in August, something the adminstration argues could cost up to 700,000 jobs. Marketplace's Krissy Clark breaks down that number.

Meanwhile, Cisco Systems is viewed as a sort of barometer for the tech industry, and when it announces its profits on Wednesday, Silicon Valley will be paying attention to the company's latest push into the "Internet of Things," aiming to link cars, machines, devices and everything in between.

And, we now know once-disgraced mortgage giant Fannie Mae and Freddie Mac have made enough money to hand more than $10 billion back to the U.S. Treasury for last quarter.  That's where the US Treasury says it has to go, given the taxpayer bailout five years ago. But with all things Fannie and Freddit, this is controversial. Marketplace regular Alan Sloan is senior editor at large at Fortune Magazine and joined us to discuss.

How the White House calculates infrastructure jobs

Wed, 2014-05-14 06:42

President Obama heads to New York's Tappan Zee bridge today. The crumbling, sixty year old span across the Hudson will be the backdrop for a speech on the nation's infrastructure.

Barring action from Congress, a federal fund for building and repairing roads, bridges and transit systems is expected to run dry in August, something the White House says could cost a lot of jobs.

As Transportation Secretary Anthony Foxx told a White House briefing on Monday, “Unless Congress acts, up to 700,000 Americans will lose their jobs over the next year and road work, bridge building, transit maintenance – all of these types of projects – may be delayed or shut down completely,”

How did he come up with that 700,000 number?

A Department of Transportation spokesperson directed me to an explanation on the DOT website, which breaks down the calculations a bit. According to the explanation there, the tally includes the number of “direct, indirect and induced jobs” that come from highway infrastructure investment. 

A “direct” job would be the kind of work you see crews with hard hats doing, from laborers to engineers—the folks involved in the construction project itself. Paychecks for those jobs actually come out of federal coffers. 

As for the “indirect” jobs, those involve manufacturing the materials-- the steel, concrete or paint, for example, which are used in an infrastructure project. The “cost of materials” line in the budget for a federal highway project would indirectly fund these sorts of indirect jobs.

And then there are those “induced” jobs—jobs created “elsewhere in the economy as increases in income from the direct government spending lead to additional increases in spending by workers and firms,” according to the DOT. 

I asked Robert Puentes, director of the Metropolitan Infrastructure Initiative at the Brookings Institution, to help translate this one. These jobs, he says could be “everything from the food truck that's getting lunch” for the construction workers themselves, “to the guy that’s cutting their hair.” 

A spokesperson for the DOT would not elaborate on how exactly it estimates the number of induced jobs created, but says that all the numbers are based on research from the White House's Council of Economic Advisers. 

When the Council added up all these jobs-- induced, indirect, and direct—it found that about 13,000 jobs are supported for every $1 billion in federal highway and transit investment.  Recently, the highway trust fund has spent about $50.9 billion dollars annually on infrastructure projects. So, multiply 50.9 by 13,000 and you get a little under 700,000 jobs.

But that may actually be a low estimate, according to research done by Standard and Poor's U.S. Chief Economist Beth Ann Bovino. She recently released a report that found a $1.3 billion investment in infrastructure would likely add 29,000 jobs to the construction sector alone.  Meaning the $50.9 billion annual in federal highway trust fund spending would amount to more than 1 million jobs.

Construction jobs which are, by the way, the kind of “good” jobs that have been largely absent from the economic recovery so far, Bovino points out. 

As her report puts it: “The American middle class, which suffered disproportionately during the recent economic slump, would benefit most from investing in transportation infrastructure because it creates what are traditionally middle-class jobs.” 

Often dressed in cheese, it never goes out of style

Wed, 2014-05-14 06:18

From the Marketplace Datebook, here's a look at what's coming up Thursday, May 15:

In Washington, the Federal Reserve releases its April industrial production report.

Are consumers experiencing inflation in their day-to-day living expenses? The Labor Department releases its monthly Consumer Price Index.

The Senate Health, Education, Labor & Pensions Committee discusses the state of tobacco use in the U.S.

The first woman to be appointed as Secretary of State, Madeleine Albright, turns 77.

And let's build something. How about a big, juicy, burger? May is National Hamburger Month. Now, doesn't that feel productive?

Cisco tries to navigate "The Internet of Things"

Wed, 2014-05-14 02:38

Cisco Systems is viewed as a sort of barometer for the tech industry, and when it announces its profits on Wednesday, Silicon Valley will be paying attention to the company's latest push into the "Internet of Things," aiming to link cars, machines, devices and everything in between.

"It's pretty much this notion of connecting anything that has an on-off switch," says Jacob Morgan, co-founder of Chess Media Group, a consulting firm that helps organizations understand the future of work.

For now, the "Internet of Things" is a long-term strategy for the company.

"In terms of selling cars to people, it may be a little bit trickier because its such a a really big vision, it may be hard to make the benefits obvious to all customers," says Michael Endler, an associate editor with Information Week.

But Cisco says this sector of technology could be worth $19 trillion.

Ruling on Google search highlights privacy rift

Wed, 2014-05-14 02:18

The U.S. and EU have disagreed on everything from the regulation of genetically-modified foods to the appropriateness of violence in the movies.

"In the European Union, they're very heavy on violence being what they consider offensive," says Cameron Camp, a security researcher with ESET. "In the U.S., you can shoot anything."

So perhaps it comes as no surprise that they'd diverge on big data as well.

"The European Union has taken a very strong stance, and strong leaning, on privacy," says Camp.

 

In the U.S., what's stronger is "a commitment to free speech, free communication, free content, which very often has deleterious effects for individuals' privacy," says Ken Bamberger, a professor of law at UC Berkeley, says much of the disagreement is rooted in tradition.

A possible solution? Companies could great a global code of conduct that attemps to comply with everyone's laws.

U.S. manufacturing has an image problem

Wed, 2014-05-14 02:07

American manufacturing has an image problem. Many potential workers don’t want to go near it because they think it’s dirty work. They also worry about job security, remembering outsourcing and plant closures. Now that manufacturing is having something of a comeback in this country, its bad image threatens to block it from getting the talented workers it needs to grow.

Industry efforts to change that image were on display in Hartford recently, where the Mfg4 convention took place. The scene is largely polo and khaki-wearing dudes networking and checking out machines. But those who gazed lower, noticed a sizable contingent of much smaller conference-goers.

Young students were there on a field trip. Among them was sixth grader Isabella Galm. Asked what she thought manufacturing was, she gave an answer that won’t thrill the industry: “Um, boring stuff, like making clothes and stuff,” she ventured.

She’s in a magnet school engineering class, the kind of brain the industry needs. So manufacturers are starting young, hoping tech-savvy students who get an early close-up look might consider it as a career, and take the math and science classes they’ll need to get started in it.

“We encourage manufacturers to open up their doors,” says Debbie Holton, managing director of SME, the manufacturing group that puts on this convention.

The students get access to the whole convention floor and are wowed by the whirring robots, lasers and 3D printers. Their day includes a visit to TRUMPF, an industrial laser plant not far from the convention site. Students get a kick out of the light show as a superfast machine sears a pattern into metal.

The industry says it just needs to get people inside its facilities so it can show them that modern American factories are clean and safe, not the grimy assembly lines of the past.

“A lot of people, it seems to me, still have pictures out of history books in their minds when it comes to manufacturing,” says TRUMPF machine assembly manager Annette Doyle.

The tour seems to be a hit, with students pushing past each other to get a closer look at all the high-tech equipment. They also ask questions, without prodding from their teachers.

Manufacturing also has another image problem. It was among the topics on the table at a recent strategy meeting of the Alliance for American Manufacturing. The group, a collaboration between industry and labor, is headquartered in Washington, where office managers work to ensure furniture is American made. The group’s thinking is that the image of manufacturing as dirty or dangerous isn’t the biggest problem. Its polling shows a more pressing image issue is job insecurity.

“The kids I talk to are not dumb,” says AAM president Scott Paul. “They have seen waves of manufacturing layoffs including, in many circumstances, some of their parents.”

Some 6 million U.S. manufacturing jobs disappeared between 2000 and 2010. Only half a million new ones have come back since. Robot laser show-and-tells won’t work if folks don’t believe those jobs will stay and more are coming.

As for the young student Isabella Galm, a full day of high-tech has clearly changed her view of manufacturing.

“I think it’s basically the future,” Galm says as she prepares to board her school bus.

That’s one young mind changed. But if manufacturers expect to have a future workforce, they’ll need a lot more converts.

Mark Garrison: The Mfg4 convention in Hartford is mostly dudes in polos and khakis, networking, checking out machines.

But gaze lower and you’ll notice smaller conference-goers.

Young students are here on a field trip. Here’s sixth grader Isabella Galm’s (GAHLMS) idea of manufacturing.

Isabella Galm: Um, boring stuff, like making clothes and stuff.

She’s in a magnet school engineering class. Debbie Holton, of the manufacturing group SME, wants tech-savvy young people like her to get a different view.

Holton: We encourage manufacturers to open up their doors.

The students’ day includes a visit to TRUMPF, a nearby industrial laser plant. They get a kick out of the light show as a superfast machine sears a pattern into metal.

TRUMPF manager Annette Doyle says she just needs to get people inside and show them that modern American factories are clean and safe, not the grimy assembly lines of the past.

Annette Doyle: A lot of people, it seems to me, still have pictures out of history books in their minds when it comes to manufacturing.

But manufacturing has another image problem. Alliance for American Manufacturing president Scott Paul believes the more pressing image issue is job insecurity.

Scott Paul: The kids I talk to are not dumb. I mean, they have seen waves of manufacturing layoffs including, in many circumstances, some of their parents.

Some six million U.S. manufacturing jobs disappeared last decade. Only half a million new ones have come back since. Robot laser show-and-tells won’t work if folks don’t believe the comeback is real.

After a full day of high-tech, Isabella Galm boards her school bus with a new view of manufacturing.

Galm: (What do you think it is now?) I think it’s basically the future.

Ok, one down. But manufacturers will need a lot more converts. In Connecticut, I'm Mark Garrison, for Marketplace.

Only neutrality will keep net free, says Franken

Wed, 2014-05-14 01:00

One of the most vocal supporters of Network Neutrality, Sen. Al Franken of Minnesota recently spoke about the issue in even starker terms, calling the fight over net neutrality the "Free Speech Issue of Our Time."

Sen. Franken argues that if given the chance to monopolize access to higher speed, large corporations will dominate the internet, which up to this point has been an equal opportunity space. It's why he and fellow Net Neutrality believers argue that internet providers should be reclassified as "common carriers," subject to the same restrictions as other public utilities.

With FCC chair Tom Wheeler reportedly playing around with the idea of an internet "fast lane," Sen. Franken says he would most likely work on counter legislation if, in fact, the FCC moves forward with the idea. He believes that at the end of the day, the idea of providing faster service for those who can pay infringes on the constitutional rights of American citizens.

"You want someone’s individual blog to travel as fast as the New York Times. It’s a first amendment issue. That should be non-partisan."

 

China accuses GSK foreign executive of bribery

Wed, 2014-05-14 00:02

Chinese authorities have accused a foreign executive with British pharmaceutical company GlaxoSmithKline of ordering his subordinates to bribe Chinese doctors in order to boost the company’s drug sales in China.

China’s government will now prosecute Mark Reilly, the foreign executive for GSK for bribery. For the Chinese government to go after a non-ethnic Chinese foreign executive is unprecedented and in this case, the executive in question - Mark Reilly - returned to China from his home in the UK to assist with the police investigation.

According to Jim McGregor, author of "One Billion Customers," Chinese leader Xi Jinping is doing his best to show his country that the Party will root out corruption. Part of that strategy, says McGregor, is to go after foreign companies.

“When China has troubles and they want to clean up an industry or stop certain practices, they’ll usually go after the foreign companies because they’re not connected politically like a state-owned company who is connected to all kinds of people and it’s very complicated to go after them because you affect a whole network of people, so foreign companies are more of a free-fire zone,” says McGregor.

The move has long-time China hands like McGregor asking: If China's government plans to charge GSK with giving millions of dollars' worth of bribes in China, what does it plan to do about the Chinese officials and doctors who were allegedly on the other side of the bribes?

When a slow news week involves a plane crash...

Tue, 2014-05-13 23:00

Here's what I want to know: When did it become August and I missed it?

I mean, yes, there've been a few things happening business- and economy-wise since Monday, but honestly, it's been kind of slow. Sitting here early in May, you'd just think there'd be... more, you know?

So with that, a couple of themes and/or trends I've got my eye on:

  • I know I say this on the air all the time, but I'm constantly amazed by how enduring the effects of the financial crisis are. To wit, the announcement Tuesday by Mel Watt, the head of the FHFA, that he's going to make sure there's still plenty of liquidity – money – in the mortgage system. We'll see whether that's a smart idea or not, but it's yet another sign it ain't over yet. See also: Geithner, Tim and his new book, about which you heard... well... elsewhere on public radio.
  • Bigger really is better. The Wall Street Journal's been all over this, but apparently AT&T wants to buy DirecTV for $50 billion, in part to keep pace with the Comcast/Time Warner Cable deal. Roll that in with the still-burbling Pfizer/Astra Zeneca talks over in London – at $106 billion, if you can believe that – and I think it spells M&A boom.
  • Pay no attention to the stock market. That is all.

Special bonus thing: Last week I was talking about going out in Jim Fallows' plane for another installment of the project we've got going with him – American Futures. He flies a Cirrus SR-22, for reasons that'll become clear in about three sentences. Anyway, Jim came and picked me up in Birmingham, Alabama, and flew us back over to Columbus, Mississippi. Nice easy flight, if a little bumpy. But that's not what I wanted to mention. Two days after I got back to Los Angeles, Jim posted this on his blog at the Atlantic. Crazy, huh?

The radio story – about Columbus, Mississippi, and what we found there (not about planes parachuting safely to earth) is set to air next week.

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