Marketplace - American Public Media

When the coal layoffs trickle down

Fri, 2014-04-11 03:40

Coal communities in eastern Kentucky are feeling the effects of a relentless wave of mining layoffs the past few years. Competition from cheap natural gas and high production costs have hurt the mining business here. That, in turn, is hurting Main Street.

Take Whitesburg, Kentucky, population 2,000 give or take. At the Railroad Street Mercantile, owner Kae Fisher surprises visitors with an eclectic mix of merchandise. Homemade jellies, aromatherapy oils, snack chips, and jalapeno eggs fill the shelves. In the back of the store, she’s selling used LP’s and consignment quilts.

“These are from ladies across the county who try to earn a little extra money because a lot of them, their husbands have lost their jobs,” says Fisher.

Fisher and her husband David opened their “corner market” last year, as mining employment in eastern Kentucky plunged. Inauspicious timing, but Fisher believed the downtown needed at least one store. “We’re able to pay the bills,” says Fisher. “But have we got our money back that we’ve invested? Not yet.”

A midday stroll down Main Street, Whitesburg can be a lonely experience. The courthouse is the busiest place in town, but tables at the Courthouse Cafe across the street are fairly empty. On a weekday afternoon co-owner Laura Schuster worked the kitchen by herself. She can’t afford an assistant right now. “Once the layoffs started we immediately knew what would happen, that people would be afraid that they also would lose their jobs and they would cut back anyway they can,” says Schuster. “And one way to cut back is to not eat out. I’d say business is down 50 percent, if not more.”

Whitesburg and other coal towns in the region are also suffering from a steep drop in coal tax revenue. The money goes to counties and was originally intended for an economy beyond coal. In Whitesburg’s Letcher County, coal tax revenue is half what it was just a few years ago.

Jason Bailey, director of the Kentucky Center for Economic Policy, says over the years coal severance taxes have been diverted for other uses. “Local governments in eastern Kentucky have gradually become dependent on the coal severance as just a general fund source for operations,” says Bailey “For them to pay for police, to do basic road repair. So they’ve had a really hard time because there’s the lack of a tax base outside that as well to generate revenue.”

Justin Maxson, president of the Mountain Association for Community Economic Development, says the transition to a “low-coal” economy will be “slow, hard and expensive.” He points out the region was poor, even while coal boomed. “So there will be no easy fix.”

Why low inflation can be dangerous

Fri, 2014-04-11 03:36

Right now our inflation rate is around 1 percent. But some at the Fed say that's way too low.

The hope is to see inflation go up. But why on earth would we want to increase inflation?  

"A little bit is good, but not too much. It's like a lot of things in life -- good in moderation," says Jeremy Siegel, a professor of finance at Wharton. "Higher inflation is a bad thing, but mild inflation, statistically has been associated with very good economic times."

Siegel says during times of inflation, the dollar decreases in value. So the $100 you borrowed back in the day was worth more then, than your $100 payment today -- which means less financial burdens for consumers and more cash to spend.

And that's one reason the Fed wants to see inflation go up -- just a little bit. 

"It's not so high as to be hurting a lot of people, but it's at a level which would probably create a lot of jobs," says Gary Thayer, chief macro strategist at Wells Fargo Advisers. Thayer says the benefit of job creation would probably outweigh a slightly higher inflation rate.

Ukraine not on the agenda as IMF gathers

Fri, 2014-04-11 03:20

The International Monetary Fund and the World Bank are set to open their annual spring meetings. It will be a busy weekend for finance ministers and economists who are visiting Washington from all over the world. Dozens of panels and speeches are on the agenda, but none are about Ukraine, a country the IMF has offered billions of dollars.

According to Ken Rogoff, former IMF chief economist, right now, “the geopolitics overrides what the finance ministers and the central bankers think.”

But at a gathering of policymakers from close to 200 countries, it is bound to come up.

“I think it’s going to be talked about behind closed doors,” says Barry Eichengreen, an economics professor at the University of California, Berkeley.  

Don't break my heart: This week's Silicon Tally

Fri, 2014-04-11 03:09

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

This week's guest is Nitasha Tiku, , co-editor of Valleywag, Silicon Valley's tech gossip rag.

var _polldaddy = [] || _polldaddy; _polldaddy.push( { type: "iframe", auto: "1", domain: "marketplaceapm.polldaddy.com/s/", id: "silicon-tally-april-11", placeholder: "pd_1397166471" } ); (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'));

Don't break my heart: This week's Silicon Tally

Thu, 2014-04-10 14:07
Friday, April 11, 2014 - 06:09 Paul Gilham/Getty Images

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

This week's guest is Nitasha Tiku, , co-editor of Valleywag, Silicon Valley's tech gossip rag.

var _polldaddy = [] || _polldaddy; _polldaddy.push( { type: "iframe", auto: "1", domain: "marketplaceapm.polldaddy.com/s/", id: "silicon-tally-april-11", placeholder: "pd_1397166471" } ); (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')); Marketplace Tech for Friday, April 11, 2014Marketplace Morning Report for Friday, April 11, 2014 by Stacey Vanek SmithPodcast Title Don't break my heart: This week's Silicon TallyStory Type News StorySyndication SlackerSoundcloudStitcherSwellPMPApp Respond No

What's your type?

Thu, 2014-04-10 13:55

The break-up of a graphic design duo has resulted in a lawsuit of $20 million – over fonts. Tobias Frere-Jones and Jonathan Hoefler worked together for 15 years to create some of the most famous and ubiquitous fonts around– used by GQ, Martha Stewart, the New York Jets and Saturday Night Live. They won awards for their typefaces - before the relationship turned sour. So now we want to know: How much do you care about fonts? Take our survey! (function(){var qs,js,q,s,d=document,gi=d.getElementById,ce=d.createElement,gt=d.getElementsByTagName,id='typef_orm',b='https://s3-eu-west-1.amazonaws.com/share.typeform.com/';if(!gi.call(d,id)){js=ce.call(d,'script');js.id=id;js.src=b+'widget.js';q=gt.call(d,'script')[0];q.parentNode.insertBefore(js,q)}})()

What Family Dollar says about the economy

Thu, 2014-04-10 13:47

The retail chain Family Dollar said Thursday it's going to close more than 300 stores. Shrinking sales and falling profits are the proximate causes. There is a line of thinking that says, "If a discount store like Family Dollar is reporting bad news like this, maybe that's good news for the broader economy."  

Discount stores tend to do well during a downturn, when once higher-income consumers “trade down” for cheaper options, the argument goes, so perhaps the fact that discount stores are showing signs of struggle means those customers are trading back up, in response to a recovering economy.  

And it is true that Family Dollar has thrived during many economic shocks.  In fact, there’s a chart Family Dollar management recently trotted out at a retail industry conference that highlights this phenomenon -- a timeline of shocks to the American economy, events like the 9/11 terror attacks and the housing meltdown. After each of these events, you see a  steep incline on the graph, denoting earnings increases for Family Dollar. 

Family Dollar

But just because Family Dollar is floundering now doesn’t mean the larger economy is thriving. Higher-income customers may be leaving family dollar now that their economic fortunes seem to be brightening in the economic recovery.  But the story is complicated by the fact that low-income households still face high unemployment rates, and less money to spend in the wake of recent cuts to government assistance programs like food stamps and unemployment insurance.

Family Dollar

Greece is back in the bond market

Thu, 2014-04-10 13:27

For the first time in four years, Greece has sold long-term government bonds to international investors—and found a hungry market. It sold 3 billion Euros ($4.14 billion) worth of five-year notes priced at a yield of 4.95 percent—lower than economists expected. And the issue was oversubscribed.

Greece defaulted on its debts in 2012 and nearly crashed the Eurozone. Its economy is now improving, with a return to minimal growth this year after years of deep recession. Still, the government is heavily in debt, more than 25 percent of the population is unemployed (and a higher percentage among young workers), and there are frequent strikes against austerity measures.

Fiscal reforms, wage and benefit cuts, improvements in tax collections—plus bailouts from the EU and IMF—have helped pull the country back from the brink of financial collapse and a chaotic exit from the Euro. But the reason investors now appear willing to take a risk funding Greek debt may have more to do with a statement made by European Central Bank president Mario Draghi at an investment conference in London in July 2012: “Within our mandate, the ECB is ready to do whatever it takes to preserve the Euro. And believe me, it will be enough.”

Economist Barry Bosworth at the Brookings Institution says that statement gave new life to the economic fortunes—and sovereign debt—of Europe’s troubled peripheral countries. Those include Spain, Portugal, Ireland, Italy—and especially, Greece. “At that point investors said, ‘oh, Greece is not really risky. It’s being backed by the full faith and credit of the Eurozone,’” says Bosworth.

Investors now believe no Eurozone country—even Greece—will be allowed to default or pull out of the common currency, says Bosworth.

Greece’s credit rating remains poor, but it is offering relatively high interest to investors—nearly 5 percent—much more than they would earn on safer U.S. or German bonds.

“Global investors are still looking for attractive places to put their cash,” says economic strategist John Canally at LPL Financial in Boston.

Picking up the tab for MH370 search

Thu, 2014-04-10 13:20

There are affordable technologies currently on the market that would have rendered the search for MH370 much quicker.  Corporate jet owners use them.  Even Air France Flight 447 subscribed to tracking services.  In the case of MH370, a back up battery system could have maintained the tracking systems available.  

Sebelius resigns after Obamacare woes

Thu, 2014-04-10 12:43

Kathleen Sebelius, the secretary of Health and Human Services, says the government is making "tremendous progress" toward fixing what she called a broken health system. 
Sebelius commented Friday after President Barack Obama announced her resignation and says he will nominate Sylvia Mathews Burwell, the director of the Office of Management and Budget, to replace her.

Sebelius's departure comes as the Obama administration seeks to move past the woes of the initial rollout of Obamacare, which included a website launch marred by glitches, an unexpected cancellation of some Americans' individual health insurance policies and seemingly endless delays of key deadlines and requirements.

Sebelius faced a high-profile grilling in front of a Congressional panel over the botched rollout of Healthcare.gov, and mentions of her all but disappeared from the President's public comments and addresses regarding the ACA. Most notably, Sebelius did not even appear at President Obama's triumphant announcement of 7 million Obamacare enrollees in the White House Rose Garden last week.

According to The New York Times, Sebelius approached the president last month about the decision. Sebelius was previously the governor of Kansas, until she was nominated for the cabinet position in 2009.

Sebelius will resign after Obamacare woes

Thu, 2014-04-10 12:43

Kathleen Sebelius, the secretary of Health and Human Services, will resign after serving five years in the position and presiding over the rollout of the Affordable Care Act.

President Obama accepted Sebelius's resignation earlier in the week, and on Friday will nominate Sylvia Mathews Burwell, the director of the Office of Management and Budget, to replace her, according to White House officials.

Sebelius's departure comes as the Obama administration seeks to move past the woes of the initial rollout of Obamacare, which included a website launch marred by glitches, an unexpected cancellation of some Americans' individual health insurance policies and seemingly endless delays of key deadlines and requirements.

Sebelius faced a high-profile grilling in front of a Congressional panel over the botched rollout of Healthcare.gov, and mentions of her all but disappeared from the President's public comments and addresses regarding the ACA. Most notably, Sebelius did not even appear at President Obama's triumphant announcement of 7 million Obamacare enrollees in the White House Rose Garden last week.

According to The New York Times, Sebelius approached the president last month about the decision. Sebelius was previously the governor of Kansas, until she was nominated for the cabinet position in 2009.

The GPS trade-off: Get lost less often, but lose privacy

Thu, 2014-04-10 12:34

In the age of Google Maps, Siri, and GPS, it is hard to get lost.

"You can if you really, really work at it,” says Hiawatha Bray, technology reporter at the Boston Globe and author of “You are Here: From the Compass to GPS, the History and Future of How We Find Ourselves.”

“The whole idea of being able to navigate through the world with a higher degree of reliability is one of the most challenging technical problems the human race has ever faced, and it’s taken us centuries to beat it.”

But this technological achievement has come at a price, says Bray: Privacy.

Bray says many technologies weren’t designed to track people, but some companies -- and governments -- are using it to do just that. Cell phones and license plate scanners have new, unforseen second purposes. Many cities regularly scan the license plates of vehicles driving their streets.

"There’s no limit right now, under law, [on] how long you can keep those records," Bray says. “I don’t want to get lost, I just don’t want others to constantly track my location.”

Look out, Human Resources departments

Thu, 2014-04-10 11:59

The Wall Street Journal says there's anecdotal evidence that some companies are choosing to get rid of their Human Resources department. Employers are asking managers to pick up all that interpoersonal stuff, with computer software picking up the payroll and benefits paperwork.

"There's something seductive about the logic of it." says Nancy Koehn, historian at the Harvard Business school.

But she's not convinced it's a good idea. "There's a reason that early twenty-first century companies of any size end up having...a human resource department."

Koehn says it's vital to have someone to settle workplace disputes, manage pay, and to make sure the employees and the company are compliant with state and federal laws.

She also points to companies known for their happy workforce, like Southwest Airlines, Coca-Cola, who invest in huge amounts of human resource management: "It's no surprise -- but an engaged, satisfied, non-bickering workforce that's legally compliant is critically important to the ka-ching, ka-ching of winning in the marketplace."

Can fast fashion compete with Prada?

Thu, 2014-04-10 11:56

The fast-fashion retailer H&M is debuting its high-end spin-off brand, "Collection of Style," in pop-up stores in the U.S. next week. The brand, COS for short, is an upscale line that aims to mimic the look of popular fashion brands, such as Prada or Jil Sander, while keeping costs down. The company is scheduled to open full stores in the U.S. later this year.

"It's much less expensive, and it's hip in a way that I don't think fast fashion has had this hip kind of attitude before," says fashion journalist Kate Betts, author of the book, "Everyday Icon: Michelle Obama and the power of style."

COS has stores in Europe, Asia and the Middle East. It's only now starting to venture into the American market, with plans to open stores in New York and Los Angeles.

Betts points out that COS has a viable market in the U.S.: "The retailers, the department stores have given women the habit of buying everything on sale, so they're not going to pay full-price for anything anymore."

Last week may have been Gouda, but this week is Feta

Thu, 2014-04-10 11:23

From the Marketplace Datebook, here's what's coming up April 11:

  • In Washington, the Labor Department issues its Producer Price Index for March.
  • The International Energy Agency releases its monthly oil market report on supply and demand around the globe.
  • The University of Michigan releases its preliminary April consumer sentiment survey.
  • "Houston, we've had a problem here." That was communication from the aborted Apollo 13 mission that launched on April 11, 1970. The crew didn't land on the Moon as planned, but they did eventually splash down safely on Earth. You probably saw the movie.
  • Iowans were the first to pay a state tax on cigarettes. A 2 cent per pack tax was imposed on April 11, 1921.
  • And foodies probably already know that it's National Cheese Fondue Day. What beats things dipped in cheese? Help me. I'm drawing a blank.

Last week may have been Goulda, but this week is Feta

Thu, 2014-04-10 11:23

From the Marketplace Datebook, here's what's coming up April 11:

  • In Washington, the Labor Department issues its Producer Price Index for March.
  • The International Energy Agency releases its monthly oil market report on supply and demand around the globe.
  • The University of Michigan releases its preliminary April consumer sentiment survey.
  • "Houston, we've had a problem here." That was communication from the aborted Apollo 13 mission that launched on April 11, 1970. The crew didn't land on the Moon as planned, but they did eventually splash down safely on Earth. You probably saw the movie.
  • Iowans were the first to pay a state tax on cigarettes. A 2 cent per pack tax was imposed on April 11, 1921.
  • And foodies probably already know that it's National Cheese Fondue Day. What beats things dipped in cheese? Help me. I'm drawing a blank.

When rural hospitals close, towns struggle to stay open

Thu, 2014-04-10 11:15

There’s a healthcare crisis in America that you might not have heard about: Rural hospitals are closing at a rate that’s starting to get some politicians’ attention. Republicans blame Obamacare, while Democrats blame some states’ refusal to expand Medicaid. In reality, the problem started years before all that.

What's clear is that rural hospitals and the rural economy rise and fall together.

Hancock Memorial Hospital in the tiny town of Sparta, Georgia was among the first of nine rural hospitals that have closed across Georgia since 2000. Today, it’s overgrown with weeds and vines, while the roof caves on the gurneys and computers still inside.

“I mean, it was just not economically feasible to maintain the staff and the equipment,” says Robert Moore, whose family has lived in Hancock County since they were emancipated.

Sparta was once a fancy town with lots of antebellum mansions. But Moore says things really started going south in the 1990s.

“Rural Georgia was based on the textile industry, and when NAFTA was signed, all that moved to Mexico, and… sent everything into a downspin,” Moore says.

Hancock County Commission Chair Sistie Hudson says it’s not surprising that a population so small and so poor can't support a whole hospital. “There’s about 2,600 people [in Hancock County] that still work, out of the little more than 8,000 that we have,” she says.

But with Hancock Memorial boarded up, the prospects for future growth are even worse. When Hudson tries to recruit a new industrial employer, one of the first things they ask is: “Do you have a hospital?”

“You just really need a local facility just in case somebody gets hurt in these factories, you know? It’s something that they like to see,” Hudson says.

Just imagine what having no emergency room nearby would do to a company’s workers comp and other insurance costs. It’s a non-starter for most businesses. 

University of North Carolina professor Mark Holmes studied the economic impact of 140 rural hospital closures nationwide.  He found that three years out, losing a hospital costs a community, on average, “about 1.6 percentage points in unemployment, about $700 in per capita income, and that was in [year] 2000 dollars so that’d be probably about $1,000 currently."

And that’s only the effect on economic health. What about health?

Speaking on the subject a few weeks ago, Georgia state Senator David Lucas paused several times to weep as he addressed his colleagues this spring: “[It] ends up with rural communities, such as Hancock County, where 39 percent of the folks who have a stroke or have a heart attack die." That’s a lot higher than in counties with hospitals close by.

Georgia officials are exploring solutions to this problem that could become a national model – basically, a medical facility that does more than an urgent care clinic, but isn’t as big a whole hospital. But Georgia’s Community Health Commissioner Clyde Reese says America’s healthcare system doesn’t provide enough ways for the operator of that kind of place to get paid.

“They’re not going to be hospitals, they won’t be reimbursed as hospitals, they won’t be able to charge a facility fee, they won’t get the Medicaid add-on rate, etc.,” Reese says.

Reese is working on ways to fix that. Because without reimbursements, there will be no emergency care. And with no emergency care, there probably will be no new jobs in Hancock County.

Why low inflation can be dangerous

Thu, 2014-04-10 10:51
Friday, April 11, 2014 - 06:36 JOHANNES EISELE/AFP/Getty Images

Euro cents are seen on a chessboard and the word 'inflation' as a part of a advertisement on October 12, 2010 in Berlin.

Right now our inflation rate is around 1 percent. But some at the Fed say that's way too low.

The hope is to see inflation go up. But why on earth would we want to increase inflation?  

"A little bit is good, but not too much. It's like a lot of things in life -- good in moderation," says Jeremy Siegel, a professor of finance at Wharton. "Higher inflation is a bad thing, but mild inflation, statistically has been associated with very good economic times."

Siegel says during times of inflation, the dollar decreases in value. So the $100 you borrowed back in the day was worth more then, than your $100 payment today -- which means less financial burdens for consumers and more cash to spend.

And that's one reason the Fed wants to see inflation go up -- just a little bit. 

"It's not so high as to be hurting a lot of people, but it's at a level which would probably create a lot of jobs," says Gary Thayer, chief macro strategist at Wells Fargo Advisers. Thayer says the benefit of job creation would probably outweigh a slightly higher inflation rate.

Marketplace Morning Report for Friday, April 11, 2014by Sally HershipsPodcast Title Why low inflation can be dangerousStory Type News StorySyndication SlackerSoundcloudStitcherSwellPMPApp Respond No

Ukraine not on the agenda as IMF gathers

Thu, 2014-04-10 10:46
Friday, April 11, 2014 - 06:20 Mark Wilson/Getty Images

IMF Managing Director Christine Lagarde speaks during a media briefing at the IMF Headquarters, on April 10, 2014 in Washington, DC. Director Lagarde spoke about their agenda for the 2014 Spring Meetings that are taking place now and will end on Sunday.

The International Monetary Fund and the World Bank are set to open their annual spring meetings. It will be a busy weekend for finance ministers and economists who are visiting Washington from all over the world. Dozens of panels and speeches are on the agenda, but none are about Ukraine, a country the IMF has offered billions of dollars.

According to Ken Rogoff, former IMF chief economist, right now, “the geopolitics overrides what the finance ministers and the central bankers think.”

But at a gathering of policymakers from close to 200 countries, it is bound to come up.

“I think it’s going to be talked about behind closed doors,” says Barry Eichengreen, an economics professor at the University of California, Berkeley.  

Marketplace Morning Report for Friday, April 11, 2014by David GuraPodcast Title Ukraine not on the agenda as IMF gathersStory Type News StorySyndication SlackerSoundcloudStitcherSwellPMPApp Respond No

What Family Dollar says about the economy

Thu, 2014-04-10 10:10
Thursday, April 10, 2014 - 16:47 Ryotaro takao/ Flikr

Family Dollar exterior in Honeoye Falls, NY.

The retail chain Family Dollar said Thursday it's going to close more than 300 stores. Shrinking sales and falling profits are the proximate causes. There is a line of thinking that says, "If a discount store like Family Dollar is reporting bad news like this, maybe that's good news for the broader economy."  

Discount stores tend to do well during a downturn, when once higher-income consumers “trade down” for cheaper options, the argument goes, so perhaps the fact that discount stores are showing signs of struggle means those customers are trading back up, in response to a recovering economy.  

And it is true that Family Dollar has thrived during many economic shocks.  In fact, there’s a chart Family Dollar management recently trotted out at a retail industry conference that highlights this phenomenon -- a timeline of shocks to the American economy, events like the 9/11 terror attacks and the housing meltdown. After each of these events, you see a  steep incline on the graph, denoting earnings increases for Family Dollar. 

Family Dollar

But just because Family Dollar is floundering now doesn’t mean the larger economy is thriving. Higher-income customers may be leaving family dollar now that their economic fortunes seem to be brightening in the economic recovery.  But the story is complicated by the fact that low-income households still face high unemployment rates, and less money to spend in the wake of recent cuts to government assistance programs like food stamps and unemployment insurance.

Family Dollar

Marketplace for Thursday April 10, 2014by Krissy ClarkPodcast Title What Family Dollar says about the economyStory Type News StorySyndication SlackerSoundcloudStitcherSwellPMPApp Respond No
ON THE AIR
Beale St. Caravan
Next Up: @ 12:00 am
Echoes

KBBI is Powered by Active Listeners like You

As we celebrate 35 years of broadcasting, we look ahead to technology improvements and the changing landscape of public radio.

Support the voices, music, information, and ideas that add so much to your life.Thank you for supporting your local public radio station.

FOLLOW US

Drupal theme by pixeljets.com ver.1.4