A trivia question that will perhaps win you a drink at happy hour tonight (but probably only if you're at a weird politico-economic happy hour in Washington, DC).
Dave Brat, now the Republican nominee for Eric Cantor's seat, is a PhD economist. He'll be the only one in Congress.
So here's the question:
Who was the last one?
Scroll down for the anwer.
Answer: Democrat Tom Lantos from California.
We check in with Austin Golding from time to time to see how his business is doing. He’s the co-owner of Golding Barge Line down in Vicksburg, Mississippi. He says after a rough drought last year, things are looking up. The river is flowing nice and high and there is new demand from a burgeoning industry.
“We’ve really benefited from becoming a true source of quick transportation for anything fracked in this country. The domestic crude oil, the natural gas, the natural gasoline is all being moved by barge now and kind of a new wave of product we’ll be moving soon is the actual fracking water. They’ve been really trying to find a safe way to move it in bulk, so right now we’re working with the coast guard to determine what form of regulation will be placed upon that cargo. But we’re excited because we feel like we’re a great option to move that throughout the country in a safe and efficient manner.”
Listen to the full interview in the audio player above.
After the Target breach, banks gave millions of customers new credit cards. That's a big problem for businesses that rely on subscriptions and monthly memberships. Some are losing significant revenue while scrambling to update customer information.
Rocky Arbitell hates the sound of his gym's scanner rejecting a membership card. Unfortunately, it's what greets about 30 percent of people coming to work out at his Orlando, Florida business, The Gym Downtown. Many just haven't updated their credit card numbers on file.
In his office, Arbitell points to a computer screen. "That is the decline list," he says. "That's all the credit cards that were dishonored, declined and invalid since January, and it's $57,000 worth of cards."
Arbitell's income hit is double that for the past year. He says if his business hadn't been stable before this, it might not have survived.
A solution already exists
At an eCommerce expo across town, payment experts focus on what made customers change credit cards in the first place: fraud. They discuss preventing it – and dealing with it when it happens.
Dan Burkhart is CEO of Recurly, a subscription processor. He says when customers get new credit cards, they can sign up to automatically give those numbers to any businesses they use. Banks and credit card companies just put the information in a database, and merchants check it.
"And, for any match that occurs, this service will provide the replacement card and then transaction is processed with the new replacement card," Burkhart says. "The end customer isn't bothered. They don't know nor care that their card has been updated."
Here's the catch: To use the database, businesses have to pay to work with specific credit card processors. Some big companies don't do that, let alone the corner gym.
Steven Casco says limiting access slows innovation for everybody. He's CEO of Cardnotpresent.com, the company that set up the e-commerce expo. His solution to the subscription problem is competitive cooperation.
"We, in America, invented the very idea of e-commerce," says Casco. "So, I would say, do we have problems with what's going on right now? Absolutely. Are we best suited to solve it and have the rest of the world look to us as the model? You better believe it."
Beyond Credit Cards
Casco says it's even time to look beyond credit cards themselves. He flips through the expo schedule – and points to a name of someone doing just that. Shaunt Sarkissian is the founder and CEO of Cortex MCP, a company that offers a "mobile wallet."
Here's how it works: people put a specific amount of money on their phones. From there, Sarkissian demonstrates on his own mobile: "When I'm ready to make a payment, I just go in. I select the one I want to use, click 'use now,' enter my pin, hit 'pay,' and I can either show that QR code. Boop, merchant scans it, and that's it. Or, I can activate NFC, and I just tap my phone."
A thief can steal only that amount – not drain an entire account.
Other ideas include Bitcoin, biometric identification, and chip and pin machines. In the end, Casco says, merchants from the cable company to the corner gym will have to try something.
After all, he says, "Actually getting paid is the core of that business. So, there's no way around it, you have to become educated."
And, this subscription problem isn't over yet. The largest banks have replaced about 21.8 million cards since the Target security breach. That's only about half the cards affected.
From the Marketplace Datebook, here's a look at what's coming up Thursday, June 12:
In Washington, the Commerce Department reports on retail sales for May.
The House Veterans' Affairs Committee discusses bureaucratic barriers to care for veterans.
The Senate Agriculture, Nutrition and Forestry Committee holds a hearing titled, "A National Priority: The Importance of Child Nutrition Programs to our Nation's Health, Economy and National Security."
The 41st President of the U.S., George H.W. Bush, will be 90.
It's a bird...It's a plane...It's the 36th annual Superman Celebration getting underway in Metropolis, Illinois.
Eric Cantor's surprise loss to fellow Republican David Brat in the Virginia primary elections Tuesday will reshape the leadership in the House, and it will have effects that reverberate into upcoming legislative fights. Here are three takeaways:
Money is something in politics, but it isn't the only thing. Cantor raised more than $5 million, compared to about $200,000 for Brat. Consider this idea: having so little money may have helped Brat. He didn't have the money to do major televsion advertising, so he didn't get the scrutiny that comes with that.
The coming fight over the debt limit has taken on a new element. The U.S. has the borrowing authority to keep paying its bills, but only until March 2015. Cantor's loss may make some Republicans less willing to support an increase in the debt ceiling. As lobbyist Steve Ryan put it, "It unsettles the firmament. There is a ripple in The Force, as we would say. And it's just totally unpredictable now what's going to happen out of that."
It's a new environment for businesses and lobbyists. One of the things that made Cantor so effective in the House was that Tea Party Republicans trusted him, and so did Wall Street. He was accessible to lobbyists, and he was seen as a good fundraiser for his party.
Graphic by Shea Huffman/Marketplace
It has been just over a year since Georgia Tech grabbed national headlines by annoucing it would offer an online Master's degree in computer science for less than $7,000.
Many prestigious universities are starting to offer graduate programs online. The difference between Georgia Tech and many of the others is price. In many cases, learning online does not come with a discount.
Online programs can also present challenges of a different kind to top schools. In our piece on Harvard's new online pre-MBA courses, we explore how elite schools are struggling to expand without damaging their luxury brands.
Harvard Business School is launching an online program today. And , no, you’re not going to be able to get your MBA for free.
The school is rolling out something it calls HBX Core. For $1,500, students take three basic business classes. The program is being billed as a pre-MBA.
And it's the latest attempt by an elite university to open up classes to more people—without diluting its brand. It’s a trick the fashion industry has gotten very good at over the years.
You may not remember French designer Pierre Cardin. But in the '60s and '70s, his name was synonymous with very high fashion. Models in Vogue posed in his futuristic dresses. He dressed The Beatles.
These days, you can walk into Sears and find Pierre Cardin men’s shirts stacked on a table. Poly-cotton blends; marked down to $17.99.
You see, Cardin's haute- couture was not his only claim to fame. He was also the first high-end designer to expand his brand to the masses. Over the years, he put his name on everything, from baseball caps to toilet-seat covers.
“He took a very powerful, designer, marquee brand and diluted it to the point it had no value and no meaning,” said Mark Cohen, a professor of retail marketing at Columbia Business School.
This is the stuff of nightmares for elite universities. The fate they want to avoid: Becoming the Pierre Cardin of colleges.
Turns out, the challenges in fashion and education are similar. How to expand without losing what makes Versace, Versace, Gucci, Gucci and Harvard, Harvard?
“The parallels hold up,” said Cohen, “They have to retain their exclusivity and retain the basis through which they are held to be elite.”
“There are colleges that are very concerned about diluting their brand,” said Ben Wildavsky, director of Higher Ed studies at the Rockefeller Institute of Government at the State University of New York.
It’s not only going online that has schools nervous. “Just the idea of setting up a campus in a different country where you give degrees is something that places like Harvard, Yale, Princeton worry about a lot,” Wildavsky said.
Part of the value of top-tier degrees is that they’re exclusive. They’re expensive.
Elite schools can’t afford to hurt their relationships with past and future students by becoming common.
But, schools like Harvard also need to grow.
“Our mission at Harvard Business School is to train and educate leaders who make a difference in the world,” said Bharat Anand, a professor the B-School and faculty chair of the new HBX program, “It would be a perfect coincidence if there were only 900 individuals every year who fell into this category and could come to our physical campus.”
He says there are a ton of talented students out there whom Harvard’s not reaching.
Enter: the new pre-MBA. Online.
Just as Donna Karan has DKNY, Michael Kors has MICHAEL, and Marc Jacobs has Marc by Marc Jacobs, Harvard has HBX.
Yes, HBX, is more accessible than a Harvard MBA.
But it's not free like many other online offerings. The tab for three courses is $1,500. And the payoff is a certificate, not Harvard course-credit.
It’s a little like a silver necklace from Tiffany. No diamond ring, but it still comes in the blue box.
“We’re not offering any of our MBA courses online,” said Anand, “This is an entirely new program to an entirely new group of participants.”
The plan is for HBX to expand beyond intro business classes. But, as it does, it runs another risk familiar to retail. That customers will trade down. That the new product will cannibalize the older brand -- a problem Dolce & Gabanna, for instance, ran into with its D&G line.
For business schools, this could mean students abandoning another huge profit center: executive education.
The stakes for schools to get this right are high. “Hundreds of millions of dollars for each elite business school,” said Ezekiel Emanuel, a professor at Wharton. “In particular there are tens of millions of dollars in the executive education and continuing education space, and I think that’s what people fear first.”
He says about a fifth of Wharton’s revenue comes from executive education programs. It makes up a quarter of Harvard Business School’s revenue.
The fear is that companies will tell their execs “to go online instead.”
So far, Emanuel said, that’s not happening at Wharton. People are choosing traditional schools over online classes. “Obviously there will be some challenge going forward differentiating them and making the value of each clear to people.”
It’s a tightrope luxury retail has been walking for a long time.
The goal for elite colleges is not to wind-up with their brand-name products wadded in the sale bin.
Randolph-Macon College in Ashland, Virginia. Ever heard of it?
If you hadn't before, it's likely you did on Wednesday. David Brat, an economics professor who just big-footed Eric Cantor and his Democratic challenger, Jack Trammell, are both on the faculty of this one small school outside of Richmond.
"While this may be short-lived, I think if you were to look at the placement of the 'Randolph Macon College' name in the media it would be a very high number," says Dan Hurley, Associate Vice President for government relations and state policy with the American Association of State Colleges and Universities. He says this kind of marketing is worth millions.
Typically a school would have to have a winning football or basketball team to get this kind of press. Like a few years ago, when Butler University in Indiana, made it to the NCAA Final Four.
"That impacted them in terms of inquiries, applicants and enrollments, for a number of years," says Jim Paskill, president of Paskill, Stapleton & Lord, a higher education marketing firm. Paskill says he agrees having two congressional candidates come out of one college sure can make a school look good, but he says he’s a wary. An eight-month campaign season can be a long time under the microscope.
“You know, if this becomes a very divisive campaign and it’s seen as a mud-slinging between two candidates, I don’t think it’s going to reflect very positively on the college,” he says.
No chance of that, says Randolph Macon’s president Robert Lindgren.
“These are two very principled honest, folks who will debate the issues and not do, some of the typically political things that you might in a congressional campaign," he says.
We’ll find out if his prediction holds up in November.
Dave Bratt, an economics professor at Randolph-Macon College, has defeated House Majority Leader Eric Cantor in the primary in Virginia’s seventh congressional district.
A defining issue in that campaign was immigration. Bratt accused Cantor of being “soft” on the issue, noting Cantor had voiced support for immigration reform.
Members of the business community, which have backed reform, reacted to the election results in the same way many Americans did. Bill Miller, with the Business Roundtable, a group that represents CEOs in Washington, said the outcome was “pretty shocking.”
“Nobody really saw this coming,” he added.
Miller cautions against Monday-morning quarterbacking, saying it is too early to know what Cantor’s primary defeat will mean for immigration reform. His group’s goal, he says, remains the same: “It’s important to fix this system.”
Miller argues the U.S. needs more visas for high-tech workers a better guest worker program, among other things.
Edward Alden, a senior fellow at the Council on Foreign Relations, says he expects big business will try to downplay what happened yesterday; instead, they will point to primary victories by pro-reform Republicans, including Sen. Lindsey Graham from South Carolina, and Rep. Renee Elmers from North Carolina.
“They are still pushing very hard for action, but I think they have to be discouraged by this,” Alden says.
There are several new pro-reform groups in Washington backed by business leaders, including FWD.us, which was started by Facebook founder Mark Zuckerberg.
Ali Noorani, who leads the National Immigration Forum, is optimistic the House will tackle immigration legislation this summer.
“Until John Boehner burns down the windmill of immigration reform, we’re still in play,” he says.
If you were to make a list of the top five products that will play a prominent role in our future, the battery would definitely be at the top. Batteries power our devices, our cars will increasingly rely on them, and they are a fundamental component in renewable energy grids.
In Berkley, California, scientists are experimenting with new ways to make safer, more efficient batteries. At the same time, angel investors are experimenting with new ways of connecting those scientists with companies that can get those batteries into the market.
About 10 years ago, when scientists were trying to invent new kinds of batteries, they often used a method called "cook and look."
“So you go cook a material up, take a bunch of compounds, heat it up to very high temperature, and you will then go make a battery with it and you’ll go look and see if that battery worked the way you would expect it to work,” said Venkat Srinivasan, head of the Energy Storage and Distributed Resources Department at the Lawrence Berkeley National Laboratory.
Srinivasan says today his lab uses computers to identify new materials. As a result he can produce quicker results. But turning those results into tangible products is a slow process. “Going from the lab to the market can take as much as 10 years in the battery space," he says. "And that bottleneck in going from lab to market is what we are trying to solve with CalCharge.”
CalCharge is a consortium of companies, universities, laboratories and unions. It was created by CalCEF, the California Clean Energy Angel Fund, which provides seed money to startups in the clean energy field.
CalCEF spent two years studying the process of innovation in the battery industry and found multiple bottlenecks. Labs need more trained scientists. Additional skilled workers are needed to install new technologies when they do get to market and, although the national labs are mandated by Congress to produce practical technology for the private sector, they are burdened by complex regulations.
“For an individual company that wanted to work with a national lab to do cooperative research, it could take between six and nine months easily for a company to negotiate a single project, and that’s just untenable for most companies,” said CalCEF managing director Jeff Anderson.
CalCharge was created to help streamline that process. It connects energy storage companies with the national labs. It also worked with San Jose State University to create a Master of Science program that focuses on battery technologies.
CalCharge gets its base funding from companies that pay annual dues to join the consortium. In the eight weeks since CalCharge officially launched, several companies including Duracel, Volkswagen and LG, have signed on as members.
With Eric Cantor's stunning defeat, a look at how the business community is reacting to the turn of events, and what it means for immigration reform. Plus, with the world cup on the international stage, we take a closer look at the state of Brazil's economy. Also, NASA is launching a flying saucer like space craft bound for Mars. It will serve as a test for new landing gear meant to slow down the craft's 3,000 MPH traveling speed.
The U.S. Bureau of Economic Analysis's data on state-by-state GDP for 2013 lags GDP figures already released for the entire U.S. In March, the bureau reported that GDP nationwide rose by 1.9 percent in 2013. That compared to 2.8 percent growth in 2012.
But drill down, and economic growth varies widely between the states, says Alan Berube, who helps compile the Metro Monitor at the Brookings Institution.
“The picture is still one of a multi-speed recovery,” says Berube.
Mark Zandi, chief economist at Moody’s Analytics, predicts that the states that grew fastest in 2013 — and likely have continued to grow strongly in 2014 — are on the West Coast (California, Oregon and Washington), where home prices have strongly rebounded and high-tech barely faltered in the recession. Other bright spots: states in the South and High Plains where oil and natural gas are booming.
“North Dakota will continue to look really good,” says Zandi. “Texas — the strongest big economy in the country throughout the recession and recovery — that will continue. I think we’ll see some states that got nailed in the housing bust turning more definitively up — Nevada, Arizona and Florida — where the leisure and hospitality industry has also come back.”
While growth rates now look reasonably strong in the upper Midwest, where manufacturing is still a major economic force, “it’s like a rubber ball,” says Alan Berube. “They just bounced back because they crashed so hard. Cleveland, Detroit, Toledo — they’ve been in a long-term recession with job losses dating back to the early 2000's. So they’re doing better than they were two or three years ago — a lot better. But they’re still not quite as well off as they were a decade or two ago.”
Economic growth has lagged in recent years in New England (outside the Boston Metro area, which is a hub for finance, high-tech and higher education), and also in the Mid-Atlantic states: New York, New Jersey, Pennsylvania, and Delaware.
This month marks the first anniversary of the Edward Snowden leaks that changed our understanding of online privacy. Just like the subject matter of the leaks, the reporting over the last year has offered a deluge of information. So this week, we're posting a short series about all that data. Every day we'll bring you another number that reminds us how much we have learned in the last year about online surveillance and the reach of the NSA.30 days
is how long the NSA can store phone conversations after recording
Through its SOMALGET program, the NSA records and store phone conversations in bulk. Agents can go back into those records and review them for up to 30 days.
This practice, and the ability for the government to do it, is something Nadia Kayali, an activist for the Electronic Frontier Foundation, says many find surprising. "I don’t think people think about their phone calls actually being recorded and then being maintained. Being maintained for 30 days? That is shocking."
NASA may, weather permitting, launch what’s playfully being called a flying saucer.
It does look like a flying saucer, but it’s really more like landing gear...for Mars. NASA has ambitious plans for what it wants to send to the Red Planet – like people, habitats, and rockets for return journeys back to earth. This would involve payloads of 20, 30, or perhaps even 40 tons – dwarfing the one ton Curiosity Rover that touched down on Mars two years ago.
To land said gigantic saucers on Mars – which, by the way, travel at four times the speed of sound (Mach 4, 3,044 miles per hour, or 0.8 miles per second) -- you need to slow them down first.
“It’s difficult to land things on Mars versus Earth because the atmosphere is very thin, just one percent of Earth’s,” explains Mark Adler, program manager for the Low-Density Supersonic Decelerator (LDSD) project.
Parachutes alone won’t do, and rockets would require more fuel than anyone would like to carry all the way to Mars. “So we need large decelerators, to slow things down.”
That's where the “flying saucer” comes in. It’s a disc shaped payload that has, among other things, two experimental technologies to slow down vastly massive payloads.
The first is a “supersonic inflatable aerodynamic decelerator”: a doughnut shaped airbag that will make the payload a little more fat and less dense, slowing it down from four times the speed of sound to a mere two times the speed of sound.
The second is a large 100-foot supersonic parachute.
Together, they will be taken up to 120,000 feet by helium balloon, and then launched up to 180,000 feet where the atmosphere resembles that of Mars, reaching Mach 4.
Keith Cowing, editor of NASAWatch, says the technology is “probably one of the most cost-effective things one can imagine,” compared to using rockets to brake a rocket’s fall.
Cost effective doesn’t mean cheap, of course. This program costs $200 million dollars, of which $150 million has already been spent. It's one of the reasons NASA can't privatize the project like it does with cargo flights to the space station.
“You know, landing on Mars so far doesn’t seem to be very profitable,” says Michael Lopez Alegria, president of the Commercial Space Flight Federation. While he foresees a day when private companies will take up the slack, governments will have to open the frontier to Mars.
For now, that means not crashing into the surface of Mars at 3,000 miles per hour.
First of all, mad props to my colleague David Brancaccio for starting – and finishing – the 544-mile AIDS/Lifecycle ride this past week.
Second of all, more and bigger mad props for having the guts to put a picture of himself in full biking kit – spandex shorts, shirt, the whole deal – on his most recent post about the ride. I once did a photo shoot for Runners World magazine in the Marketplace studios, and let's just say, I'm still hearing about it.
This is not, however, a gratuitous post about Marketplace hosts in fitness gear. It's about the point David made more eloquently than I could, so I'm just going to piggyback on it here and add some observations. It's important, he wrote, to unplug every now and then. To consciously unplug. And to take the time you get back to just... be.
Believe me when I tell you I'm not preaching at you here. I'm as guilty as the next guy of burying my nose in my phone; of tuning out my kid's tennis match to check my Twitter feed (Yes, I'm that dad). Part of it is my personality, part of it is my line of work, and part of it is habit.
But seriously – how many different variations of the Hillary Clinton book-tour interview do we need to read to know she's running for president (Yes, there, I said it. Come talk to me in a year, we'll see who's right)? How many times do you have to click on a link about Donald Sterling and whether he will or won't sell the Clippers – I mean, fercryinoutloud – to know he's an unsavory individual? And don't even get me started on the damn missing plane.
Yes, there is real news out there every day. And yes we do have an obligation as citizens in a representative democracy to be informed. But c'mon. Just... be.
Okay, now I'm preaching. So that's it. That's all I got this week. That, and don't ever, ever wear a short suit. As in shorts, but in a suit.