National News

How Y2K turned Paul Sullivan's life upside down

Marketplace - American Public Media - Wed, 2015-03-25 10:58

I’ll admit it now: All those Y2K predictions had me scared about what would befall the world when 1999 became 2000.

But it turned out that something more disruptive than my computer clock going haywire or a stock bubble bursting happened to me during those months.

In the six months before Y2K, I bought my first New York City apartment, a studio in a building called Gramercy East. The name evoked exclusive Gramercy Park, but the building was really on Second Avenue, a white-brick apartment building from the 1960s with a bodega and coin laundry on the street level.

Still, I was living in a place with a mortgage, not rent payments, for one of the few times in my life to that point. That was made possible by the down payment my grandfather, then an 85-year-old retired Postal Service worker, had given me.

Since my parents divorced 17 years earlier, he had been the one to steadily offer support and financial advice. Like many grandparents, he was the person to press a $10- or $20 bill into my hand as a kid, or by my 20s, mail the occasional $100 check. But I had never received anything like the $22,000 down payment on an apartment, which was half the size of his modest ranch-style house in Springfield, Mass., and twice the price.

As soon as the purchase closed, I started a new job, which turned out to be the worst job of my life. But it paid the mortgage, and as much as I daydreamed about quitting and getting a bartending job with my actor friends, I knew I’d stick it out.

As 2000 started, I got what was then my dream job at The Financial Times. Within weeks I was jetting across the Atlantic for work, a regular on Virgin Atlantic, with a girlfriend in London and a life full of friends in New York.

I had even started to make plans for my first summer share, that New York rite of passage where a couple of dozen friends share the rent on a rickety beach house to escape the city heat. My life was more than I could have imagined growing up in a former mill town outside Springfield, where my only friend robbed our rented duplex while we slept upstairs. (He was the second person to rob the place.)

But in early 2000 my grandfather, who had been getting “old, old,” as he called it, began to decline, quickly. He had been my rock for over half of my life, since my parents divorced when I was 10. I had gone to him for advice on everything, from girls to school to jobs. And, yes, I also knew that if I ever needed a backstop, financially, he would be there.
That spring, right after my first weekend in my summer share, he died. I had gone home to visit him just two weeks earlier. He had moments of lucidity but was clearly in a lot of pain, a combination of renal failure, a compression fracture in his back and the dementia that would take him.

With him gone, I was alone at age 27 in a way I imagine people probably feel when both parents die much later in their lives. To whom could I turn now? Months later I also realized that my financial backstop was gone. If I ever got into a bind, and needed a couple of hundred dollars, as had happened over the years, I wouldn’t have anyone to provide it. I was on my own.

Fortunately, through decades of being an example of sound financial thinking, he had taught me how to save, spend, give and think about money in a way I would later see as hallmarks of truly wealthy people, including retired postal workers with a sense of enough.

Olalah Njenga on breaking rules and paying the price

Marketplace - American Public Media - Wed, 2015-03-25 10:57

During the 12 years I’ve owned a marketing strategy company, I have set many guidelines and recommendations for myself and my employees — but few hard rules.

Those few rules are in place as a safeguard. We don’t let total compensation exceed 35 percent of the budget, for instance, lest we not have enough sitting on the side in case of a cash squeeze. We also restrict access to proprietary client data in many instances.

But, this is a story about when I did not follow one of our most important rules. It began when I was wavering on making a firm offer to a job candidate, despite an amazing interview and glowing references. Sensing my indecision, one of my senior employees kept nudging me to make the offer. The pressure made a certain amount of sense, since everyone was picking up slack because of the staff shortage.

The screening process had been odd. Most of the candidates had quirks. One put her dripping water bottle on my desk and left it there, and another didn’t want to start work until 11 a.m. because of her two-hour yoga routine. Then there was one who prattled on about her dog and its diarrhea.

There was only one candidate who seemed good, even if she was a little lacking in the experience and skills we thought we needed. She seemed good because she had so much of what those other candidates lacked.

We were tired, I was tired, so I broke a simple rule: Tie new hires to new revenue coming in the door. In breaking it, I was taking a chance by redirecting a chunk of cash into operating capital and crossing my fingers that we would simply make more money once she arrived.

It turns out that my indecision had been my gut reminding me of the rule, even as most of the rest of me just wanted someone to come in and save me from the mountain of work on my desk.

But the choice did not save me at all.

Once she started, she constantly sought approval at each step, instead of completing a project and then seeking feedback. When we suggested finishing things first, you could see the terror on her face. I and others became her strategy buddies, but it did not help.

The fallout was problematic on two fronts. First, we burned through cash on her compensation without generating new revenue, thanks to the lack of productivity. Also, I was chained to my desk trying to both coach and pick up her slack, which meant I wasn’t finding prospects, selling or doing anything future-focused for the company.

It was a nightmare, and when my husband and son staged an intervention in our kitchen, I knew things were out of control and that I had to part ways with her.

If I had honored the rule and waited until there was new revenue to fund the position, I would have approached this decision with more confidence and more money. I’d like to think that if I face this choice again, I would sit tight and make an offer to a stronger, more qualified candidate, even if it cost more in compensation. Potential is great, but experience is better.

After blowing through tens of thousands of dollars on time, training and supplemental talent, the lesson was obvious: Break your own rules at your own risk. Now that I’ve taken that risk and lost, I’m going to try not to forget exactly what it feels like.

Mellody Hobson on making money secondary in decisions

Marketplace - American Public Media - Wed, 2015-03-25 10:56

I was 22 years old, starting my first job out of college and at lunch with my boss, John W. Rogers Jr., the founder and chief executive of Ariel Investments. I hung on John’s every word, filing away his every utterance.

And then he told me this: “Don’t make decisions based on money.”

Come again? This was peculiar advice for an investment manager to bestow — wasn't every investment decision he made based on his research into which companies would thrive and make money?

On a personal level, his words contradicted my entire life’s mission to date. As one of six children born to a single mother, financial security was an elusive and fleeting dream that our family rarely held with a firm grasp. Attaining it was my sole purpose; it was what propelled me to work hard and pursue my dreams, and it was the reason I got out of bed each morning.

Eleven years my senior, John was successful and financially secure. He couldn't possibly understand that money was the most critical deciding factor in life’s big decisions. Clearly, he was out of touch.

But I had completely missed his point. He wasn't suggesting that I be careless about money or unrealistic about living within my means. His counsel was not about trivial matters like what shoes to buy. He also didn't mean that money shouldn't be a factor in my decisions.

What he meant is that it shouldn't be the only factor in my choices.

From my older and wiser perspective, the warning is so legitimate that it is deceptively simplistic. Yet, I see people making major life decisions for the wrong reason nearly every day. So I question the young person who wants to take the job that pays more over the one that inspires her, the graduate who pursues the field he thinks will be more lucrative instead of the one in which he will thrive, the bride or groom who marries the financially secure mate over the one who offers true compatibility, partnership and love. They ought to anchor personal life choices with long-term consequences in something more meaningful than money.

My younger self might judge me now and say, “Sure, it’s easy to say money doesn't matter when you have plenty of it.” But John’s words echoed in my head when I was just 30. A Fortune 500 company offered me a higher-paying, more prestigious position, but it would have meant abandoning a job I not only loved, but that also provided a platform for me to promote financial literacy, which had become my life’s calling. Weighing the relative importance of money instead of making it my singular consideration, I chose to stay at Ariel and have never regretted it.

Today, I consider the advice in my business decisions too: When making a new hire, I want the best person for the job, not the most economical one. Money is without a doubt a practical element that we should carefully measure in our decisions —we need to be pragmatic about paying the bills — but it should never be the solitary driving force behind them.

Money matters, but the question should always be: At what cost?

 

Mellody Hobson on making money secondary in decisions

Marketplace - American Public Media - Wed, 2015-03-25 10:56

I was 22 years old, starting my first job out of college and at lunch with my boss, John W. Rogers Jr., the founder and chief executive of Ariel Investments. I hung on John’s every word, filing away his every utterance.

And then he told me this: “Don’t make decisions based on money.”

Come again? This was peculiar advice for an investment manager to bestow — wasn't every investment decision he made based on his research into which companies would thrive and make money?

On a personal level, his words contradicted my entire life’s mission to date. As one of six children born to a single mother, financial security was an elusive and fleeting dream that our family rarely held with a firm grasp. Attaining it was my sole purpose; it was what propelled me to work hard and pursue my dreams, and it was the reason I got out of bed each morning.

Eleven years my senior, John was successful and financially secure. He couldn't possibly understand that money was the most critical deciding factor in life’s big decisions. Clearly, he was out of touch.

But I had completely missed his point. He wasn't suggesting that I be careless about money or unrealistic about living within my means. His counsel was not about trivial matters like what shoes to buy. He also didn't mean that money shouldn't be a factor in my decisions.

What he meant is that it shouldn't be the only factor in my choices.

From my older and wiser perspective, the warning is so legitimate that it is deceptively simplistic. Yet, I see people making major life decisions for the wrong reason nearly every day. So I question the young person who wants to take the job that pays more over the one that inspires her, the graduate who pursues the field he thinks will be more lucrative instead of the one in which he will thrive, the bride or groom who marries the financially secure mate over the one who offers true compatibility, partnership and love. They ought to anchor personal life choices with long-term consequences in something more meaningful than money.

My younger self might judge me now and say, “Sure, it’s easy to say money doesn't matter when you have plenty of it.” But John’s words echoed in my head when I was just 30. A Fortune 500 company offered me a higher-paying, more prestigious position, but it would have meant abandoning a job I not only loved, but that also provided a platform for me to promote financial literacy, which had become my life’s calling. Weighing the relative importance of money instead of making it my singular consideration, I chose to stay at Ariel and have never regretted it.

Today, I consider the advice in my business decisions too: When making a new hire, I want the best person for the job, not the most economical one. Money is without a doubt a practical element that we should carefully measure in our decisions —we need to be pragmatic about paying the bills — but it should never be the solitary driving force behind them.

Money matters, but the question should always be: At what cost?

 

A Woman's Journey From Cancer Diagnosis To 'Professional Patient'

NPR News - Wed, 2015-03-25 10:56

Advances in cancer treatments have made some forms of the disease a chronic condition. But protracted treatment, even when successful, comes at a high personal toll for patients and their families.

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Army Sgt. Bowe Bergdahl Will Be Charged With Desertion, Lawyer Says

NPR News - Wed, 2015-03-25 10:56

Bergdahl was released by the Taliban in exchange for five detainees at the Guantanamo Bay prison. Bergdahl was captured after he walked off his post in 2009.

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A Chinese cabby's query leads to Mary Pilon's epiphany

Marketplace - American Public Media - Wed, 2015-03-25 10:55

With the Mandarin language skills of a buffalo, I began chatting with my taxi driver in Shanghai, a polite man with plenty of questions about the United States. It was early 2007, and sitting in a back seat that reeked of stale cigarettes and body odor, I certainly didn’t see a financial epiphany coming. Then, the driver went straight for the jugular.
“How much money do you make?”

Like many Americans, I was happy to talk about macroeconomics, such as the dazzling growth of China’s G.D.P. at the time, the increasing cost of living in Shanghai or how his country’s trade relations were knotted with those of mine. But when it came to the more micro, as in the very digits in my bank account, I felt an urge to jump out of the moving cab. (I was a student at the time, so an honest answer was easily at hand: “None.”)

Since then, a recession has come and gone, and I think of this cab ride often. Many of my 20- and 30-something peers struggle with student-loan debt and high rent, and more than once I’ve erupted in laughter at the idea that I will collect any Social Security in my Betty White years.

Yet when it comes to talking about money as in, our money, there’s a risk that we’re carrying the bad financial discussion habits of our parents with us. If I ask any of my friends their “number,” I’m more likely to receive an estimate of the number of people they’ve slept with than anything related to their credit scores or net worth.

Money can be a reflection of our perceptions of power, self-esteem, personal history, fears and happiness. Or, as a friend recently put it to me, your personal finances can feel like “your grown-up report card.” But whatever its source, this reluctance to talk money hurts us. The topic matters if you want there to be gender equity in pay or economic diversity on college campuses. I’ve often wondered what would happen if an Edward Snowden of human resources sprinkled salary spreadsheets around workplaces.

The app Venmo may be our best shot at transparency. Like PayPal, it offers a handy way to exchange money with friends. But people can also display their transactions Twitter-style as a stream of digital money changing hands — a bizarre and sometimes revealing window into the wallets of those you know.

In a recent episode of the engaging podcast Reply All, a guest spoke of knowing via Venmo that a couple was splitting up, by noticing charges for things like “half a couch” or “half a chandelier.” My own feed recently had transactions for “shenanigans,” “your mistake,” “Girl Scout cookies” and “therapy,” the latter two having a certain poetic similarity. So it’s not salary Snowden, but a start, with emoji for emphasis.

After that cab ride with the driver who popped the money question, a Chinese friend explained to me that, in spite of systemic issues with corruption, some transparency around personal finances remained. Under Communism, it was common for people to know what their peers were making. Some Americans, like those working in government or nonprofits, know the consequences of having their salaries public. Last I checked, the planet hadn’t imploded. And I’m sure if I had thought at the time to ask the cabdriver what he made, he wouldn’t have flinched at responding.

While I’m not calling for every American to pick up a copy of “The Communist Manifesto,” I do find it ironic that a country that for decades has enjoyed more personal wealth than most places in the world is more reluctant to talk about it. For the equivalent of a couple of bucks, I received a window into China’s lesser-discussed pockets of openness. As the personal fortunes of many in China continue to swell, I wonder if their willingness to discuss it will as well. Or if, just as it has adopted KFC and “Friends,” China will import America’s money taboos as well.

Meet the pen Obama uses to sign bills

Marketplace - American Public Media - Wed, 2015-03-25 10:45

President Obama signed his — ahem — signature piece of legislation, the Affordable Care Act, five years ago this week. And he had a fancy pen to do it, too. 

More like 11 pens, actually, one for each letter of his name. Note the box to his left. 

Like Bill Clinton and George W. Bush before him, President Obama uses a Townsend pen for signings. That said, Obama hasn't affirmed much legislation lately — no word on whether he uses the Townsend for vetoes. 

Its manufacturer, A.T. Cross, supplies lots of pens to the White House

"The second thing is, the White House gives out mementos to people who come and visit — important people — and we participate in both those categories," says Cross CEO Chad Mellen.

While Mellen says it's a privilege to be the Presidential pen provider, Cross does sell the custom pens to the White House. Not so to the general public, if you want to get Obama's pen, you can find a Townsend like it for about $150 retail. Otherwise, your best bet is Ebay

American Presidents aren't the only notables wielding Cross Pens. Queen Elizabeth signed a bill with one, and former Indian Prime Minister Manmohan Singh was a big fan, often photographed with the silver Century pen glinting from a pocket.

And the Cross pen isn't a recent phenomenon.

"We've got a letter in our archives ... John Steinbeck sent a note back to his editor saying that he's going to have stop writing unless he can get some new Cross pens and refills," Mellen says. 

Looking to the future, is Cross worried by the explosion of tablets, stylus and keyboard? 

"The idea that handwriting is going the way of the buggy whip is not accurate," he says.

Instead, Mellen thinks digital handwriting — stylus or finger on screen — could soon merge with old-school writing on paper. 

"That's where we really see writing instruments and handwriting going."

Takeaways From The Federal Report On Deadly Force By Philadelphia Cops

NPR News - Wed, 2015-03-25 10:30

The Justice Department crunched years of data after Charles Ramsey, the city's police commissioner, requested that it look into how and when his officers used deadly force.

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Nielsen answers Netflix data mystery

Marketplace - American Public Media - Wed, 2015-03-25 10:20

The head of Nielsen, the company behind ratings, told Bloomberg that by the middle of the year they're going to start providing audience data for Netflix and Amazon Prime.

Netflix, for one, has been notoriously vague about exactly how many people watch, such as "House of Cards."

The numbers won't matter much for Netflix and Amazon, other than prestige, because they don't sell ads to support programming — but it's gonna shake things up a whole bunch broadcast-wise.

Scientists Discover A New Form Of Ice — It's Square

NPR News - Wed, 2015-03-25 10:01

Researchers were surprised by what they found when they sandwiched a drop of water between two layers of an unusual two-dimensional material called graphene.

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Meet The Cool Beans Designed To Beat Climate Change

NPR News - Wed, 2015-03-25 09:04

Researchers in Colombia have created new types of beans that can withstand high heat. Many of these "heat-beater" beans resulted from a unique marriage, 20 years ago, of tradition and technology.

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BBC drops "Top Gear" host, risking losses

Marketplace - American Public Media - Wed, 2015-03-25 08:45

The BBC has fired one of its most popular stars, Jeremy Clarkson, host of the "Top Gear" motoring show.

The BBC sells "Top Gear" to more than 200 countries around the world and it commands an audience of 350 million viewers. The BBC said it had no choice but to let Clarkson go after the star punched one of his co-workers. The host had been given many final warnings following a series of allegedly racist, homophobic and sexist comments on and off the show.

But the BBC’s decision to dump him could prove costly. Top Gear earns the corporation $75 million a year and that could be in jeopardy without the volatile but popular Clarkson. 

The sequester's not-so-stringent budget cap

Marketplace - American Public Media - Wed, 2015-03-25 08:45

The Budget Control Act of 2011, also known as the "sequester," is supposed to cap government spending at set levels. But Congress has repeatedly found ways around that, and one main source of the over-limit spending has been the Overseas Contingency Operations fund. 

The OCO fund is for wars, but it's also being used so Congress can pass new spending without running afoul of the sequester, since the OCO fund is exempt from the Budget Control Act.

That doesn't mean the budget deficit hasn't come under control, though. Since 2011, when the Tea Party was at its peak of power and the economy was in the dumps, increased tax revenue from an improving economy has helped push the budget deficit from roughly $1 trillion to $500 billion.

The investors behind the Kraft-Heinz merger

Marketplace - American Public Media - Wed, 2015-03-25 08:43

Kraft and Heinz announced Wednesday they would merge to form the fifth-largest food and beverage company in North America. But the future of the Kraft Heinz Company depends on the pair of investors, Warren Buffett's Berkshire Hathaway and Brazilian private-equity firm 3G, who made the deal happen. 

In general, there's a fairly simple formula for when mergers are a good idea.

"Whenever you're going to be able to create more value than the companies could do on their own," says Donna Hitscherich, director of the private-equity program at the Columbia Business School. "I mean, that's the essence of it. But the devil is always in the details." 

In this case, the details are about cutting costs, as Berkshire Hathaway and 3G have done at Heinz, which they purchased in 2013. In order to reach their declared cost reduction target for Kraft of $1.5 billion by 2017, Anil Shivdasani, professor of finance at the Kenan-Flagler Business School at UNC-Chapel Hill, says there's "no question" this will mean lay-offs.

But Erin Lash, senior analyst at Morningstar, says it won't all be about firing people and spinning off brands.

"You know they're potentially more important to some of their suppliers, so they might be able to negotiate better terms," Lash says.

The fight over America's rails

Marketplace - American Public Media - Wed, 2015-03-25 08:28

There’s something romantic about a train whistle. It makes you think about far-away places. Adventure. Lawsuits.

Yep, lawsuits. The jostling for rail space has actually made it all the way to the Supreme Court

Part of the problem is the way rail traffic is split up in this country. Privately-held freight railways are thriving. Amtrak gets government subsidies, and it mostly runs on track owned by the freight lines. 

Delays peaked over the past few years for both passenger and freight rail.

“Our biggest concern was our customers,” says Ed Hamberger, president and CEO of the Association of American Railroads, a trade group for freight rail companies. “We move what Americans consume, what American manufacturers make, what American farmers grow,” he says.

Meanwhile, over at Amtrak, passengers were frustrated by all the delays.

“We watched on-time performance plummet,” says Jim Mathews, president and CEO of the National Association of Railroad Passengers.  He says, on some trains, there were: “Five, six, seven hour delays.”

Federal law says passenger trains  get priority on the rails. Amtrak says that means freight trains should pull over for passenger trains. But Mathews says that doesn’t always happen. He says at one point, Amtrak’s Capitol Limited train, from Washington to Chicago, was late more than 90 percent of the time.

“It had on-time performance in the single digits last summer,” he says.

The freight railways say they’re often blamed for delays that weren't their fault — delays caused by weather, or accidents. They say they actually subsidize Amtrak, because it uses their tracks. Which they pay to maintain. 

“Last year they spent $26 billion – private money," Hamberger says. "This year they've announced plans to spend $29 billion.”

And that lawsuit, the one that ended up in the Supreme Court? Amtrak scored a partial victory. But the case was kicked down to a lower court, and the legal fight continues. But court battles aside, here’s the deal. Freight and passenger lines  need to figure out how to share the rails.

“The primary issue between the freight and the passenger railroads is both have growing business,” says Steven Ditmeyer, adjunct professor of railway management at Michigan State University. 

You could build more track, Ditmeyer says. The passenger association certainly wants the government to spend more money on rail infrastructure. The freight railways would welcome more government cash, but not if it came with more regulation. 

Ditmeyer says: Let’s think about what we can do, now.

“There can be ways to make sure that both get the time and space they need on the track,” he explains.

Freight trains could run on more set schedules, Ditmeyer says, making it easier to coordinate them with strictly scheduled passenger trains. There’s also a sort of air traffic control system in the works for our railways, designed to eliminate bottlenecks and improve safety. 

It was supposed to be finished by the end of this year, but it's behind schedule.

Obamacare Five Years Later: Thriving Or On Political Life Support?

NPR News - Wed, 2015-03-25 08:23

The health care law has sliced the number of uninsured by a third. Yet it remains deeply polarizing, and its fate could be decided by the Supreme Court and the coming presidential election.

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Patients Often Aren't Offered Minimally Invasive Surgery

NPR News - Wed, 2015-03-25 08:13

Laparascopic surgery can be faster, safer and cheaper, but patients don't always get the choice even if it's appropriate, a study finds. Using it more often would reduce complications and save money.

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Yemen's President Flees Country As Rebels Capture Major Airport

NPR News - Wed, 2015-03-25 07:40

State television, which is now controlled by the Houthis, said the rebels have seized an airbase that was critical to U.S. drone operations against al-Qaida. The base is just 35 miles from Aden.

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