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Paths to prosperity from around the world

Fri, 2015-03-20 10:33

In this round-table discussion wrapping up our series, "Six Routes to Riches" with the BBC, you'll hear from Nkem Ifejika and Linda Yueh, who reported from Nigeria and China respectively, Krissy Clark, who reported from Germany, and Justin Rowlatt, in New Delhi. The four sit down with Marketplace's Lizzie O'Leary to discuss what they learned from their work on our collaboration, reporting stories about the global economy.

Click the audio player above to hear the full discussion.

Finding the beta version of Silicon Valley

Fri, 2015-03-20 09:43

There is probably a particular valley that springs to mind when you think of American innovation. It’s the place where brilliant engineers and scrappy entrepreneurs with a hunch about a new way to solve a problem tinker late at night in their garages, until they come up with the perfect answer. And then they found start-ups that make them fabulously wealthy.

Forget about the valley you’re probably thinking of for a moment, and know this: Before there was Silicon Valley, there was the Miami River Valley where Dayton, Ohio is located.

If Silicon Valley has a beta version, it’s Dayton. By the early 20th century, Dayton had the most patents per capita of any American city. It was home to one of the world’s greatest concentrations of scientists and technicians. One-sixth of all corporate executives had spent a portion of their careers in the city.

“You can hardly get through a day today in 2015 without having a connection to Dayton,” says Alex Heckman, the Director of Education for Dayton’s Carillon Historical Park.

Carillon Historical Park is full of exhibits paying homage to inventions from the area.

A short list: the airplane, the cash register, the pop top on can of soda, Freon and air conditioning, the electric wheel chair, the modern parachute, magnetic strip technology for credit cards, stealth technology for aircraft, bar-code scanners, batteries used on satellites and scratch-and-sniff stickers.

Then there's that whole trope about coming up with a world-changing product in your garage that Silicon Valley loves to celebrate. Well, before the garages that sheltered Hewlett and Packard or Jobs and Wozniak as they tinkered — there was Deeds Barn in Dayton.

The plaque on Deeds Barn on display at Carillon Historical Park in Dayton, Ohio.

Krissy Clark/Marketplace

Deeds Barn is where, back in the 1910s, a couple of Ohio farm boys from modest means, Edward Deeds and Charles Kettering, tried to solve one of the biggest and most important problems facing the nascent auto industry: How to start a car without having to kneel down in the mud and turn an extremely heavy crank by hand — something only the strongest of men, and barely any women, had the upper body strength to do.

“They'd sometimes work for 36 hours in a row,” Heckman says. “All night, all the next day. There’s a story of Kettering literally falling asleep out of exhaustion underneath the car” as he tried to come up with a solution.

Finally, they perfected an electrical part that would make it possible for anyone to start a car. They called it the Delco self-starter.

The self-starter went on to make these two Ohio farm boys, Deeds and Kettering, a lot of money. They sold the company they started in Deeds' barn to General Motors. When Charles Kettering died in 1958, he was worth $350 million.

But "self-starter" is also a pretty good description for the spirit that was alive all over Dayton in its heyday of the early- to mid-20th century. It fit not just the inventors of Dayton, but also the hundreds of thousands of people who found jobs in the area mass producing all the new things being invented.

“It's a situation where success breeds success,” says Heckman. “Someone could pull themselves up by their boot straps by going to work for a major manufacturing facility.”

He compares the way people now flock to Silicon Valley to “make it” in the tech economy to the way people once flocked to Dayton to climb out of poverty and make it in to the middle class.

“Moving from some poor rural community in central Kentucky and landing a job at 'the Cash,'" Heckman says, referring to what Dayton locals called the National Cash Register factory that employed 20,000 people at its height. “You could have a life for yourself and your family. A nice home and the rest of it.”

But of course — and you probably knew this was coming — Heckman says when he goes through his museum’s exhibits, celebrating the local factories and Fortune 500 companies that grew out of Dayton innovations, he can’t help but think to himself, “Gosh. These companies area all gone.”

James Hudson, a big man with a white beard, used to work at one of the last General Motors plants in the Dayton area. He lost his job when GM shut down the factory on December 23, 2008.

“That was our Christmas present from General Motors,” he says.

In the 17 years Hudson spent making trucks and SUVs on the line, he climbed in to the middle class. In the last years before he lost his job, he says he was making $49 per hour, including health and retirement benefits. Pretty good for a guy who never went to college, he says.

Those high wages were part of the reason GM pulled out of Dayton. They could find labor much cheaper in other parts of the world. But those high wages were also what kept James Hudson and his family, not to mention the Dayton economy and the broader American economy, running strong.

“We was living comfortable,” Hudson says.

His son, Adam, elaborates: “We had vacation every summer. Like if we wanted to go out and do something — we could afford it.  If we wanted to go to the movies? We could afford it.  If we wanted to buy some new toys for Adam? We could afford it.”

Since the plant shut down six years ago, life has been very different for the Hudson family. For a while the father, James, got unemployment benefits and a severance package. But when began to run out, he almost lost his house.

“It was a struggle, but I knew how to do all kinds of stuff, so, I made money on the side,” he says. “Flea markets. Buying and selling and trading anything that I can get a hold of that I could make a dollar on. I worked to get what I got. If I lose it, it's my fault because there's too many other ways to make a dollar.”

Eventually, James Hudson started training as an electrical line man, he now fixes power lines across the country. But he says he’s still not making as much as he made at the GM factory.

Adam Hudson is now 22, with a son of his own. He has a big smile and a wiry frame and twin tattoos that he says represent will-power and rage. After his dad got laid off, Adam dropped out of high school and started working as much as he could, while his dad was struggling.

“I think I actually cried the day I dropped out,” he says. “But I was trying to help him out as best as I could.”

But with no high-school degree, the only jobs Adam can get don’t pay much more than minimum wage. He has worked at Walmart, Target, and a string of fast-food restaurants —McDonald's, Steak and Shake, Bob Evans. He’s worked third-shift job cleaning a movie theater. He’s worked temp at a few of the remaining plants in Dayton, making siding for houses.

He says he has had trouble keeping a job because he doesn't have a reliable way to get to work. Public transit in the Dayton suburb he lives in is spotty. And ironically, the son of a man who used to make automobiles for a living cannot afford one.

“It’s kind of downhill, gradually” he says.  

Still, amazingly. Adam has undeniable optimism about his future. I visited him recently at his sister's house. He's been sleeping on her couch for the last few months. Before he headed out to work, his latest job is making dough at Little Caesars, we sat down for a few minutes to talk.

He offered me a lemonade and opened up a can of Mountain Dew, using that Dayton born pop-top technology. He wanted to show me something on his phone: a pep talk he wrote down for himself a couple months ago, when he was feeling especially horrible.

“You're the only one who can change your destiny — the only one who can find your purpose in this world. No one to hold your hand or pick you up. You must pick yourself up time after time and dust yourself off. Because you’re the one who’s going to do this. You’re the one who’s going to win this battle. You’re the one who’s going to make you happy and others may be there to help you but you’re the one who has to do this, not them. So get up, get ready and show them how it’s done because you CAN DO THIS.”

And then he went outside, did a back flip, and headed off to work. 

Click on the audio above to hear Marketplace's Lizzie O'Leary take a tour of the metro area with the highest rate of upward mobility in the country.

Economist Jagdish Bhagwati on where to make it big

Fri, 2015-03-20 09:30

Marketplace’s Lizzie O’Leary speaks with Columbia University professor Jagdish Bhagwati about economies around the world. During our collaboration with the BBC,  Six Routes to Riches, we've visited six countries. Our reporters found some common themes such as mobility, infrastructure and China's economy among them. For instance, if China stumbles, is the rest of the world tripped up?

“I don’t think so, because I don’t think any country has that kind of gravitas in the system,” says Bhagwati.  The economist also offers some advice about where, in his opinion, is the best place to make your fortune. 

Listen to the full interview with Jagdish Bhagwati in the audio player above.

European eclipse sheds light on solar power challenges

Fri, 2015-03-20 09:14

For lots and lots of Europeans, the continent's biggest solar eclipse in many years meant excitement.


— Liamthelion☯☮ (@waverider_) March 20, 2015

But for a few Europeans — grid operators and utility workers — it meant distinct unease. Especially in places like Germany and Italy, where solar power has grown to be a significant part of the electricity supply.

Managing the grid when the sun suddenly went away was a serious concern. And it cast light on a big challenge as renewable energy grows: integrating it into the grid.

Of course, it does get dark every single night. But not all at once. Sunset and dusk add up to an hour or so, which gives power producers time to spin up other generators.

The lead time is important, because the big challenge for grid operators is balancing out supply and demand in real time.  

"A fossil-fired generator is not like a stereo," says Anthony Paul, a fellow at the think tank Resources for the Future. "You can’t just turn the volume from five to ten, in an instant."

Generators take time to ramp up. And down. What happens when the sun comes back, and you've still got all that power from your other sources?

Maybe an overload. In Europe, people worried about blackouts.

That didn't happen, but the episode shows why, even with just regular events — night falling, or clouds rolling in — solar means extra work for grid operators.

One big piece of work is accommodating what's called "distributed generation" like rooftop solar. The grid isn't really built for it.

"Traditionally, our grid has been a one-way street," says John Larsen, a director at the Rhodium Group. "You've got all these power generators, and they shove all the power through the transmission lines, down through the distribution network into your house."

Distributed generation like rooftop solar means changing that traffic flow. "You’re turning it into a two-way street," Larsen says.

And the existing street may not be wide enough to handle traffic in both directions.  

For instance, the amount of distributed generation power coming up from parts of Germany's grid is now six times as much as formerly went out to them, says Ben York, a research engineer at the Electric Power Research Institute.

He picks up Larsen's traffic-pattern analogy. "If you had originally two lanes lanes going one way," York says, "you’ve got to add six or seven lanes going back the other way."

He says Germany is looking at a $30 billion investment to create those lanes in the next few years.

Ryanair: We screwed up.

Fri, 2015-03-20 09:14

At our editorial meeting on Monday, we talked about some reports that the budget airline Ryanair — an airline so budget it once reportedly considered charging passengers to use the lavatory — wanted to expand outside of Europe, where it's based, to fly some transatlantic routes. 

The company confirmed those expansion plans to several reporters.

Well, turns out, that's not going to happen.

The airline issued this one-sentence statement:

"The Board of Ryanair Holdings wishes to clarify that it has not considered or approved any transatlantic project and does not intend to do so."

According to the airline's CEO, there was a "miscommunication."

"We screwed up," he said.

Does net neutrality have a loophole?

Fri, 2015-03-20 09:14

The simple understanding of the FCC's recent net neutrality regulation is this: it makes it so cable companies can't charge the Netflixes of the world more for an Internet fast lane. 

But net neutrality applies only to the "highway" of data that is the public Internet. The cable companies have three routes into your house: the public Internet, pay TV, and "specialized services." The Wall Street Journal reports HBO, Sony and Showtime are in talks with cable provider Comcast to bring their "Web TV" product to that "specialized services" highway, where fast lanes are allowed. 

Susan Crawford, co-director of the Berkman Center for Internet and Society, says this could present an opportunity for cable companies to cap bandwidth on the public Internet, and then charge web TV providers for special treatment for products delivered through the "specialized services" pipe.

But Ian Olgeirson, an industry analyst at SNL Kagan, doesn't see, from the details we know now, how this would be a smart business proposition for the cable companies, since it would undermine their pay TV business.

"There's sort of a tradeoff for the operators," he says. "They're giving up a revenue stream — to gain another revenue stream." 

Your Wallet: What are you waiting for?

Fri, 2015-03-20 09:05

Next week, we explore the economics of waiting.

What are you waiting for? Is it a big purchase? Maybe marriage? Childbirth?

We want to hear from you. Send us an email, or reach us on Twitter @MarketplaceWKND.

What are you waiting for?

Fri, 2015-03-20 09:05

Next week, we explore the economics of waiting.

What are you waiting for? Is it a big purchase? Maybe marriage? Childbirth?

We want to hear from you. Send us an email, or reach us on Twitter @MarketplaceWKND.

Small town hopes to rescue itself by selling pot

Fri, 2015-03-20 09:04

North Bonneville, Washington, is surrounded by forests on one side. On the other is the Columbia River. 

“There is one gas station. There is one restaurant. There is a golf course. And there is the Bonneville Hot Springs Hotel,” says John Spencer, the former city administrator. Now he’s a consultant. And with some exceptions, he’s just described most of the town’s economy.

A few years ago, the town of about 1,000 people stopped watering parks and other public places to save money. And a few months ago, it started turning off streetlights to cut down on its electricity bill.

“The city is on its knees financially. They have run negative numbers in the general fund multiple months in a row because they have no retail sector here,” Spencer says. “This store could very well make a town that is otherwise going to fail.”

The store Spencer is talking about is The Cannabis Corner: the first recreational pot shop in the country run by a government.  

It opened earlier this month. Technically, the city doesn’t own it. Rather, it set up a public development authority to run it.

“In the headlines, everybody wants to say it’s a city-owned pot shop, which, I guess, I leave for the lawyers," says North Bonneville Mayor Don Stevens, who embraces the title of “The Marijuana Mayor,” right down to the personalized license plates he’s ordered for his car that read "MJMAYOR." 

"I guess technically, on some level, it is.” Stevens says there was a strong likelihood of a pot shop opening in the town anyway. So the city decided to open its own store to have more control over how it’s operated.

“Whereas if a private person came in and opened a store and it wasn’t working out in the community’s best interest, we’d have a really long, ugly path to try and straighten that situation out,” Stevens says. He says all the profits from North Bonneville’s pot shop will go back to the community, by partnering the shop with the city on projects.

“While it can’t just deposit its profit directly into our general fund, (it) can as a separate corporation, help us defray costs with law-enforcement contracts, public health and safety programs, any number of things that ultimately will have a positive affect on our bottom line,” he says.

Right now, the city’s annual budget is $1.2 million. Officials think The Cannabis Corner could eventually bring in half a million dollars in profit every year.

That’s big money here. After the timber industry collapsed in the 1990s, tourism became the county’s main industry.

Casey Roeder, the executive director of the Skamania County Chamber of Commerce, says the town’s pot shop adds another reason for people to visit.

“It’s an amenity, in my mind, just as a winery or brewery,” she says. “The cannabis store in North Bonneville just adds to that whole menu of options for folks to come and spend money.”

And Roeder says if people come here and see the region’s natural beauty and lifestyle, they just may want to move here and bring their business with them.


Fun Fact Friday: Much ado about macaroni and cheese

Fri, 2015-03-20 08:35

David Gura offered his final Marketplace sign off Friday, but not before he hosted a discussion about the week that was with Leigh Gallagher of Fortune and Sudeep Reddy with the Wall Street Journal. Listen to that above, then read about some of the best stuff we learned this week at Marketplace:

Fun Fact: It can take between $70,000 and $100,000 to keep a kennel full of racing dogs running year-round. This week, Alaska hosted the Iditarod.

We spoke to Alaska's top musher in long-distance sled dog racing history, Lance Mackey, who broke down the economics behind running races like the Iditarod. This large sum includes the cost of fuel, entry fees and food for the dogs, which costs around $5,000 every race season.

Want to run the Iditarod? You'll need a lot of scratch

Fun Fact: Kids take an average of 113 standardized tests by the time they finish high school.

This year, standardized tests are being tied to Common Core education standards, creating a divide between schools and parents. According to a Gallup poll conducted late last year, 41 percent of teachers say they view common core standards positively, vs. 33 percent of parents. Should parents let their kids decide whether to take the Common Core tests? Take our poll: 

Parents weigh the lessons of common core testing

Fun Fact: Kraft is recalling 6.5 million boxes of macaroni and cheese.

The company said numerous consumers reported finding metal pieces in the packages. While it may be too early to determine the cost of this recall, some experts warn it proves that the food-safety system in the United States is inadequate.

Kraft recalls 6.5 million boxes of macaroni and cheese

Oh, one more thing: We already miss David.

'Match Day' is a rite of passage for young doctors

Fri, 2015-03-20 08:15

Friday was a big day for young doctors across the country. It's Match Day — the day medical students find out where they will spend their residencies.

It's a competitive process. This year, more 41,000 applicants are vying for about 30,000 spots. 

Dr. Atul Grover, Chief Public Policy Officer with the Association for American Medical Colleges, says he remembers his 1998 Match Day well.

"It was really all about the envelopes," Grover says. "We went back to our groups of friends, family, sat down and everybody kind of opened their envelopes on the count of three. And I can just remember, myself, being personally elated of getting my first choice."

But not everyone is so lucky. Thousands will not be placed. A record number of young doctors applied for residencies this year, and while enrollment in medical schools is increasing, funding for residency positions has stayed about the the same, making the process more competitive.

Marketplace asks: Have you cut the cord?

Fri, 2015-03-20 07:38
In 2014, Time Warner Cable lost nearly 600,000 subscribers. Comcast lost 150,00 subscribers of their own service.

1.4 million U.S. households "either canceled pay-TV over the trailing 12 months or never subscribed," according to Wall Street analyst Craig Moffett.

Are you one of them? Tell us how you watch TV:

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Your Wallet: The economics of waiting

Fri, 2015-03-20 06:48

Next week, we explore the economics of waiting.

What are you waiting for in you personal economy? Is it that big purchase? Maybe marriage?

We want to hear from you. Send us an email, or reach us on Twitter, @MarketplaceWKND

PODCAST: A grande race relations conversation

Fri, 2015-03-20 03:00

An announcement from Tesla in the I'll-believe-it-when-I-see-it category. More on that. Plus, Starbucks said this week it wanted to use its big retail footprint to foster a conversation on race in America. It hasn’t gone as planned, as critics have panned the effort as ham-handed. We look at ways companies have had success in talking about diversity and inclusion. And women with limited education beyond high school, especially single working mothers, earn less than men. They’re often shunted into minimum-wage unskilled jobs—in the Wendy’s drive-through or behind the register at Rite-Aid. At the same time, the skilled trades are begging for new recruits: electricians, welders, machinists. There are initiatives to bring women into these traditionally male-dominated professions (by labor unions, community colleges, employer groups). But it’s not an easy gig to work—with a bunch of men on a building site or a machine-shop floor.

Michelle Obama promotes girls' education in Asia

Fri, 2015-03-20 02:00

First lady Michelle Obama is traveling in Asia this week to promote a new initiative with the Peace Corps aimed at closing the education gap for girls. Around the world, an estimated 62 million girls between the ages of 6 and 15 are not in school. The Peace Corps plans to recruit and train at least 650 new volunteers to help remove the barriers to education in developing countries like Albania, Cambodia, Georgia, and Uganda.

The economic payoff can be significant, says Sarah Lynch, a senior director of the global charity Care, which will help train volunteers. "Investments in girls' education have proven to go further than any other spending in global development," she says.

Click the media player above to hear more.


Tesla plans to launch 'autopilot' feature this summer

Fri, 2015-03-20 02:00

Tesla announced a few software updates it’s planning for its electric vehicles on Thursday, including one where the car tracks its distance from charging stations to try to alleviate driver anxiety about running out of juice. CEO Elon Musk said that the company could push another update — autopilot — to its Model S fleet as soon as June.

While Musk said cars would be technically capable of getting from place to place without a driver having to do anything, initially this feature limited to use on highways, as neighborhoods pose safety issues given their many obstacles and variables. Eventually, drivers could also summon their cars or let the vehicles park themselves.

Mike Wall, an auto analyst at IHS, says this move echoes steps taken by other car companies and that driver-less technology is advancing faster than regulations that will govern its use.

Michelle Krebs, an analyst with AutoTrader, says driverless cars could be on the road tomorrow, but manufacturers are holding back because of regulatory concerns and questions about who’s to blame if there’s an accident. Tesla believes its autopilot feature meets current regulations. 

Michelle Obama promotes girls' education in Asia

Fri, 2015-03-20 02:00

First lady Michelle Obama is traveling in Asia this week to promote a new initiative with the Peace Corps aimed at closing the education gap for girls. Around the world, an estimated 62 million girls between the ages of 6 and 15 are not in school. The Peace Corps plans to recruit and train at least 650 new volunteers to help remove the barriers to education in developing countries like Albania, Cambodia, Georgia, and Uganda.

The economic payoff can be significant, says Sarah Lynch, a senior director of the global charity Care, which will help train volunteers. "Investments in girls' education have proven to go further than any other spending in global development," she says.

Click the media player above to hear more.


Silicon Tally: Where's my tax refund?

Fri, 2015-03-20 02:00

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

This week, we're joined by David Gura, senior reporter for Marketplace in our Washington D.C. bureau. We're celebrating his last day at Marketplace, as he leaves for Bloomberg TV.

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Starbucks' race push irks some

Fri, 2015-03-20 02:00

Starbucks new #RaceTogether campaign has set off a storm of controversy. The coffee giant is hoping baristas and customers will have a more frank discussion about American race relations. 

So what's the best way to bring up issues of diversity? Nicole Sanchez, CEO of Vaya Consulting, says Starbucks may have helped create controversy by trying to force this conversation when people are at their most vulnerable—that is to say, before they've had their morning coffee.

But Robert Raben, president of the Raben Group, says Starbucks may be onto something. Its coffee houses are so ubiquitous and integrated that they serve as de facto town halls and community centers for places all across the country. 

Freight rail is king in U.S.

Fri, 2015-03-20 02:00

Railways carry more than 40 percent of the freight shipped between U.S. cities. The U.S. freight rail system is uniquely profitable, and it's been attracting international attention. Europe, Russia, Brazil and Australia have all sent representatives here.

“There have been dozens of delegations just over the last couple of years,” says Patricia Reilly, senior vice president  for communications at the Association of American Railroads, a trade group for freight rail companies.

Reilly has met with some of the international visitors. They want to know everything, down to what stone is used for rail beds. Some come with interpreters, but Reilly says they speak a common tongue.

“They might not speak our language, but they love railroads," she says. "They love the sound of a whistle.”

Garrick Francis loves the sound of a whistle, too. He’s a lobbyist with the freight rail company CSX Transportation.  

He’s also met with the international delegations. He says they’re curious about a huge difference between the U.S. and the rest of the world. The American freight rail system is run entirely by private companies. Francis says he gets lots of questions about investment.

“So how do we have private investors," he says. "How is this a business that attracts investment from major funds or major shareholders on Wall Street and in other places?” 

But Francis gets harder questions, too, about rail congestion in places like Chicago. Freight trains have to share track with passenger trains, adding to the congestion. 

The international delegations also want to know about new safety technology freight railways have developed. Freight rail’s safety record has improved, with the accident rate down by 42 percent since 2000. Still, accidents do happen. 

“Some of these accidents with the crude oil trains have been drastic reminders that there’s still a long way to go,” says Pasi Lautala, director of the rail transportation program at Michigan Technological University. 

Lautala says, in some ways, freight rail in the U.S. is a victim of its own success, making money and growing enough to attract admirers from around the world — but still facing expensive challenges.