Marketplace - American Public Media

Ballerina Misty Copeland counts herself lucky

Thu, 2016-06-30 11:20

Update: Misty Copeland was promoted Tuesday, June 30 to principal dancer for the American Ballet Theater. She's the first-ever African-American woman to hold that title.


Age starting dance: 13

Height: 5 feet 2 inches

Bust: "Bigger than most"

At least, that's how ballerina Misty Copeland describes her numbers-defying career in dance. A soloist with the American Ballet Theater in New York, Copeland recently explained how she doesn't really fit into the traditional model for ballet, but still made it work.

“All of those numbers, they just don’t add up to create a classical dancer,” she says. "No matter what, I'm going to be who I am."

Listen to the full conversation from our live show in New York City in the audio player above.

Tesla is disrupting more than just the car business

Sat, 2016-02-06 16:01

Tesla Motors is building the world's biggest battery factory just outside of Reno, Nevada. The company is calling it the “gigafactory,” and when it’s up and running in 2016 it’s expected to make Tesla’s electric cars much more affordable. 

“In a single factory we're doubling the worldwide capacity to manufacture lithium-ion batteries,” says J.B. Straubel, Tesla's chief technology officer. 

That's significant enough. But the company also plans to develop batteries for use with solar-power generation – giving Tesla a shot at challenging public utilities as an energy source, Straubel says.

“At the price points that we're expecting to achieve with the gigafactory ... we see a market that is well in excess of the production capability of the factory,” says Straubel.

The market for batteries is an offshoot of the booming business for solar panels, particularly in states such as California, where solar is becoming commonplace.

“We sign up approximately one new customer every minute of the workday," says Will Craven, director of public affairs at California-based SolarCity.

Much of the excess energy harnessed by solar panels is returned to the power grid, Cravens says. This means homeowners and businesses may earn a credit from their power companies, but have no say over when and how that energy is used.

The partnership with SolarCity will use rooftop solar panels fitted with Tesla’s battery packs to allow customers to keep that energy in-house. That means they can use it however, and whenever, they want. The concept puts Tesla in direct competition with utility companies.

“Stationary storage, or backup storage, is really being considered the ‘Holy Grail’ of renewable electricity generation,” says Ben Kallo, an analyst with the Robert W. Baird financial services firm.

Kallo points out that the intermittent nature of renewable energy sources makes them less reliable because the wind doesn’t always blow and the sun doesn’t always shine.  But with the ability to store that energy, renewable energy sources can compete head-to-head with utility companies for customers.

“There are still many utilities out there who kind of have their head stuck in the sand and just hope that this goes away. What we're seeing is really building momentum,” Kallo says.

Forward-minded utilities might look at Tesla’s business model as an opportunity, he says.  Energy-storage technology could be used to build capacity in their existing grids, and also build new infrastructure for battery-powered cars and homes.


Donna Karan leaves behind a fashion legacy

2 hours 55 min ago

Over the last two decades, Donna Karan International has been one of the biggest brands in the fashion industry. Founder and chief designer Donna Karan announced on Tuesday that she was leaving her namesake company to focus on other projects.

Fashion journalist Kate Betts says that Karan has left a clear impact in the world of fashion.

“She designed for women in a way that was very sensuous and much more feminine than previous looks for women,” Betts says.  “It was a revelation for many professional women.”

Karan was later able to spin off this success into DKNY, which Betts says was the first line in what’s come to be known as the contemporary market.

“She covered a lot of different areas of the fashion market with that one line, and it was a huge hit,” Betts says.

The fact that she was such a trailblazer in this field may have played into her desire to step down when her company was at its peak.

“I think it’s kind of ironic that she created that contemporary market, and now that’s the market that’s taking over for the higher end. And you could argue that that’s one of the reasons that she’s kind of leaving her brand,” Betts says.

Karan will still remain as an adviser to her company.

The Obamacare sales pitch

4 hours 11 sec ago

It’s been almost a week since the Supreme Court’s momentous ruling that further cements the Affordable Care Act as the law of the land, and Wednesday President Barack Obama flew to Nashville, Tennessee, to talk about health care.

While some consider this a bit of a victory lap, the president’s choice of Tennessee suggests it’s much more of an overture.

For those of you not keeping score at home, just 29 states and the District of Columbia have expanded Medicaid, the healthcare program primarily for low-income and disabled people.

The president wants that list to grow.

So how do you convince GOP governors and conservative lawmakers in the wake of the King vs. Burwell decision to do something they’ve sworn to oppose? For years, the Obama administration has made a financial argument.

“When I worked on the Council of Economic Advisers, we did a report and basically demonstrated again and again and again that states would win economically,” says Mark Duggan, now an economist at Stanford University.

That report is from 2009. Since then, study after study has echoed similar themes that go something like this: if Washington picks up nearly the entire tab for expansion, states will see new jobs, budget savings and economic prosperity. With many states still holding out, that argument hasn’t worked on everyone, obviously.

(Courtesy Kaiser Family Foundation) 

But until recently those reports have been a bunch of words. Now, the Urban Institute’s Stan Dorn says there are actual results that may grab the budget hawks’ attention.

“Every state that has looked comprehensively at both costs and benefits has found that the state budget is better off than it would have been without expansion,” he says.

Take Arkansas and Kentucky, says Dorn. They’ve expanded Medicaid and stopped spending money elsewhere.

“On mental health programs, Kentucky is saving $21 million this year; Arkansas is saving $7 million this year. On uncompensated care to hospitals. Kentucky is saving $12 million; Arkansas is saving $17 million,” says Dorn.

This is more than pointy heads in Washington running numbers. Even GOP presidential candidate and New Jersey Gov. Chris Christie says “expanding Medicaid was the right decision for New Jersey.”

While the math may be convincing to some, Stanford’s Lanhee Chen doubts it moves many conservative statehouse types who think Medicaid is a broken program.

“The difficulty is Medicaid expenses continue to increase. So some state lawmakers have a legitimate concern around maybe not what the next five years look like, but what the next 10 or 15 years look like,” he says.

Chen believes the path to expand Medicaid is more about politics than economics. His advice to the president: give states more flexibility in designing their own programs and you’ll see states bite.

U.S. investors could take a hit on Puerto Rican bonds

4 hours 19 min ago

The tiny island of Puerto Rico, the U.S territory in the Caribbean, is being called “America’s Greece” by some.

Like Greece, Puerto Rico has more debt than it can pay back, upwards of $70 billion, and now it’s asking its creditors for a restructuring of that debt.

Unlike Greece, Puerto Rico isn’t talking about abandoning the dollar, but U.S. investors do stand to take a sizeable hit if the territory defaults on its loan obligations.

Puerto Rico has been an enticing place to park an investment for a long time, due to its so-called “triple tax exempt” status, meaning that income on Puerto Rican bonds can’t be taxed at the federal, state or municipal level.

That makes it a popular choice for everyone from hedge and mutual funds to individual investors. But does that mean Puerto Rico is our Greece?

“It might be a larger exposure, but it's not necessarily a more dangerous exposure,” says Brian Jacobsen, a portfolio strategist at Wells Fargo.  Jacobsen notes the overall stake in Puerto Rican bonds is still just a drop in the total municipal bond bucket.

“It’s just really not enough to make a dent for the investing public as a whole. Puerto Rico has $72 billion in debts but the municipal bond market is about $3.7 trillion,” Jacobsen says.

But others says even a partial default may still cause a ripple effect felt by the larger bond market, an effect we might start seeing after the Fourth of July holiday.

“That’s when investors will come back and look at the value of their mutual funds after reading the headlines and start to have concerns,” says Tom Doe, president of Municipal Market Analytics.

Doe adds that even a small decrease in returns might be enough to set off a bank run of sorts, as investors rush to sell off Puerto Rican bonds.

“Prices decline, interest rates rise and the real unintended loser in this are other states and municipalities who are trying to borrow debt for infrastructure needs,” he says.

The island's state-run utility, Puerto Rico Electric Power Authority, is negotiating with creditors to potentially restructure its nearly $9 billion debt load.

According to data released by Morningstar, mutual funds operated by Franklin Resources and OppenheimerFunds and have the highest exposure to Puerto Rican debt.

As of April, Oppenheimer held $4.6 billion in Puerto Rican securities, about 17 percent of its assets.  Franklin held $2.3 billion, roughly a 3 percent allocation to Puerto Rico.

Ford and Chrysler sales kicked into gear for June

4 hours 24 min ago

Two of the Big Three American automakers — Fiat Chrysler Automobiles and Ford Motor Co. — are reporting nice gains in their June sales, according to numbers out Wednesday. A stronger job market and easy access to credit are spurring many Americans to trade up from the older cars in their garages.

But that’s not the only reason carmakers are happy these days. A booming housing market is also a factor: contractors are breaking ground on more homes, which means they’re buying more trucks.

“The beneficiaries of that business are typically the Detroit Three. They make the bulk of trucks — the most popular ones,” says Michelle Krebs, senior analyst at AutoTrader. “Those are vehicles that contribute greatly to the bottom lines of those companies.”

She adds that strong demand means dealers are driving hard bargains and keeping prices up. Better deals can be found for those shopping for cars, rather than trucks and SUVs.

Sports contracts can pay more when they pay later

5 hours 59 min ago

Just like the lottery, sports contracts can pay more when the profits are spread out over time. For example, let’s consider two of, arguably, the most bone-headed (or brilliant?) sports contracts of all time. The deal to fold the St. Louis Spirits has been called one of the best sports deals of all time. The contract has been so profitable that it’s used as a textbook example by business school professors. During basketball season, the deal inspires sports reporters to ask, “Would you believe a team that doesn’t exist still makes $17 million a year?”

The contract, signed in 1976, gave a small but lucrative portion of the NBA television broadcast revenues to three men. Dan and Ozzie Silna, who made their fortune in polyester, and their lawyer, Donald Schupak, owned a pro basketball team called the Spirits of St. Louis. The Spirits played for the American Basketball Association, or ABA. It competed with the NBA for players and fans. The two leagues took turns suing each other. From 1973 up until the end of the ABA in 1976, Michael Goldberg was general counsel for the ABA. “The league lurched to the finish line, kind of a bankrupt organization, exhausted, both mentally and physically, and hoping against hope that there wouldn’t be another ABA season because we didn’t know if we could muster ten teams to have a league and what have you,” says Goldberg.

Eventually, the ABA and the NBA struck a deal to combine forces. Four teams -- the Nets, the Pacers, the Spurs and the Nuggets -- would buy their way into the NBA. Those teams also had the responsibility to compensate the other ABA teams that didn’t make the cut. In the end, only St. Louis stood between the four teams joining the NBA. “St. Louis is holding the cards because unless they agree to something, this merger’s not going to happen for anti-trust and other reasons,” says Goldberg.

St. Louis held out for the best deal. But the teams didn’t have extra cash to sweeten the pot. So the owners of the Spirits got creative. They negotiated a cut of TV revenues expected in the future. And, here’s the kicker. They got the rights ‘in perpetuity.’ “That is something that they wanted,” says Goldberg, “because, I think that perhaps they saw, down the road, that this would be a way for them to get more money than they could have gotten from these four teams had they just kept negotiating a dollar figure.”

St. Louis negotiated a deal for one-seventh of broadcast TV revenues from each of the four teams joining the NBA. Over the years, that fraction has reportedly paid out around $300 million and counting. But back then, who knew? “The concept of cable television -- Turner Sports, ESPN -- these things didn’t exist. And it’s easy today to say, ‘Wow. They made a bad deal.’ But in those days it was not viewed upon that television would be the be-all and end-all as it is today for all sports,” says Goldberg.

The business landscape is always changing. That’s a lesson we see again in another notorious deal. It’s been more than 10 years since slugger Bobby Bonilla retired from baseball. Nonetheless, for the next 20 years, the New York Mets will pay him more than $1 million a year.  “It’s very easy to look at from hindsight," says J.C. Bradbury,  author of "Hot Stove Economics: Understanding Baseball’s Second Season.” 

"You go and say, ‘Well, the Mets are paying Bobby Bonilla over a million dollars a year to not even play baseball. How silly is that?’” says Bradbury. But he says teams defer payments so they can afford new, and hopefully better, players. And that’s just what the Mets had in mind.

“The Mets were building a championship team around that point in time. And what they were looking to do was defer some of Bobby’s money,” says sports agent Dennis Gilbert, who negotiated the contract for Bobby Bonilla. The Mets would spend some of that deferred money on players. But some of it went into investments. “They had a fund. Or, at least, they thought they had a fund. They were investing with Bernie Madoff, and it didn’t work out the way they thought it would,” says Gilbert.

Gilbert structured Bonilla’s payment like an annuity. Here’s where his negotiating skills mattered. He locked-in the interest rate at 8 percent. With interest, the Mets will pay Bobby Bonilla $30 million instead of $6 million. I asked Gilbert for advice in negotiating contracts. “You listen well," he says. "You find out what would benefit the person that you’re negotiating against. Find out how they’ve negotiated historically and be a good counter-puncher.”

Sometimes a team will have its own financial motivations for trying to postpone a payment as long as possible.  “Teams want to off-set the financial obligation as long as they can," says Michael McCann, who directs the Sports and Entertainment Law Institute at the University of New Hampshire.  "And also, in some cases, they realize that the player will no longer be on that team when that amount of money is paid. Either the player is traded. Or perhaps the owner sells to a different owner who inherits that financial obligation.”

Deferring payments can work well for athletes too. But most of them (and most lotto winners) want the money now, even if it means there’s less of it. But Bobby Bonilla didn’t mind waiting to get paid. According to J.C. Bradbury, Bonilla “basically said, ‘I don’t want to have the opportunity to spend that money. I’d like to make sure that my kids have money later on. So limit the amount of money I have now.’ It’s worked out quite well for him,”  Bradbury says.

Even if they involve a lower interest rate, deferred payments could work well for other athletes too. “I think there’s some logic to the idea that players may be better off when they turn 35, 40, 50 -- to get a substantial amount of money coming in -- it may be a very valuable piece of money for them,” says McCann. In 2009, Sports Illustrated reported that within five years of retirement about 60 percent of former NBA players are broke. And in pro football, the numbers are even worse. In which case, a deferred pay-day can be the preferred way to get paid.

2015, the year of the high U.S. dollar

11 hours 21 min ago

Even with hints that an interim resolution may be possible for Greece, the dollar is still up — Today, a euro costs $1.11.

This hurts the way profits of U.S.-based, multinational companies are booked — When the U.S. dollar is strong, American companies doing business overseas often show their profits hurting in their quarterly reports. 

So why does a high dollar seem to make corporations look better according to another key measure that investors love to watch?

Here to resolve the paradox is a man who knows his way around a balance sheet, Washington Post columnist Allan Sloan.

Click the media player above to hear Allan Sloan in conversation with Marketplace Morning Report host David Brancaccio.

PODCAST: The strong dollar

13 hours 59 min ago

With emergency funding drying up, the Greek government sends a letter to creditors saying it might accept terms of a bailout. More on that. We'll also talk to Allan Sloan of the Washington Post about how the strong dollar is ironically helping U.S. businesses.

Career colleges face new "gainful employment" rule

14 hours 59 min ago

Starting Wednesday, career and vocational programs are facing tougher regulations years in the making. The new so-called “gainful employment” rule is meant to crack down on programs that load students up with debt for courses that don’t lead to decent jobs. The rules especially target for-profit colleges, which often make close to 90 percent of their revenue from taxpayer dollars.

A career education program could become ineligible for federal student aid if typical graduates have to spend more than 20 percent of their discretionary income paying off their loans, or more than 8 percent of their total income.

“It’s designed to ensure that taxpayer dollars don’t fund career education programs that consistently leave students with debts they can’t repay,” says Pauline Abernathy with the Institute for College Access and Success.

In anticipation of the new rules, Abernathy says some colleges already have cut failing programs, reduced tuition, and improved job placement.

Some schools will also raise admissions standards, says Robert Kelchen, assistant professor of higher education professor at Seton Hall University. Earlier this week, the University of Phoenix, one of the largest for-profit colleges, announced it would introduce some academic requirements for its degree programs.

“If a student can barely get through the program, and doesn’t seem to be a good bet to get employment, that’s the kind of person that the college might want to discourage enrolling,” Kelchen says.  

Failing programs will have a chance to improve before the money gets cut off.

We're so over you, millennials

14 hours 59 min ago

Move over, millennials. Marketers are zeroing in on the next generation — people still under 18 — whom they’re calling centennials.

Advertising giant WPP has just announced a new partnership with the Daily Mail newspaper and Snapchat. Why Snapchat? It has a reputation as THE app for teens. So that’s where advertising money is going. 

But these aren’t your father’s ads. They blend in with Snapchat videos from your friends.

“Consumers are consolidating their time into a handful of apps," says Julie Ask, a vice president, principal analyst at Forrester Research. "They tend to be apps that are social media, instant messaging,” 

Ask says these kinds of ads are the best way to reach busy, distracted teens.

Another reason advertisers like apps like Snapchat? It helps them get around government regulations against advertising to the very young. Especially since apps like Snapchat don’t verify ages. 

“So once you get past the lack of age verification, it is the wild west,” says Adam Hanft, CEO of Hanft Projects, a brand strategy firm.    

That’s extremely creepy for, say, a parent of centennials. But for advertisers? It’s gold.

Puerto Rico's exodus: vicious cycles and silver linings

14 hours 59 min ago

As Puerto Rico slides deeper into financial distress, flirting with default on July payments on its $72 billion debt, Puerto Ricans are leaving the island. They have been for a decade, in the largest outmigration since the sixties. 

“There’s so much uncertainty about what’s going to happen in Puerto Rico, it’s kind of crazy,” says Carlos Aponte, a 29-year-old native of San Juan who moved to New York last year so that his wife could pursue her medical residency.

The job opportunities here are a world away from on the island.   

“My first job that I got here, I got paid twice as much as I was making in Puerto Rico, and you feel a lot safer,” says Aponte.

Aponte and his wife are not going back any time soon, and his ties to the U.S. have grown stronger as more of his family has moved as well. “Ten years ago they were all in Puerto Rico,” says Aponte. "Now most of them have moved here and those that haven’t are probably looking to move.”

Edwin Meléndez, director of the Center for Puerto Rican Studies at Hunter College in New York says, “There has been a dramatic, tremendous exodus of Puerto Ricans to the United States.”

The number one reason, according to the Pew Research Center, is work. Unemployment on the island is over 12 percent.

U.S. tax credits incentivizing companies to locate factories in Puerto Rico once made the island a hub for manufacturing. Those tax credits expired in 2006. Throw recession on top of that, and the island hasn’t recovered. Outmigration since 2000 has reduced Puerto Rico’s population by 200,000 — a trend expected to continue for decades. According to Pew, the population is expected to drop to around 3 million in 2050, down 20 percent from a peak of 3.8 million in 2000.    

Meléndez says this creates a vicious cycle: “There are fewer jobs, people leave, and as people leave there is less demand and there is less jobs and so forth.”

Isabel Rullán co-founded ConPRmetidos, a group that’s trying to promote investment and growth in Puerto Rico. She sees a silver lining in the exodus: “To have so many Puerto Ricans around the world gaining experiences, working in international companies, becoming part of international networks, we’re starting to look at Puerto Ricans leaving the island as assets that we have.”

Even if they don’t return to the island, Rullán envisions them helping out, linking businesses on and off the island, or offering expertise. 

For his part, Carlos Aponte would love to return, but he says the time is just not right.   

“There’s a debate about whether the people who are leaving are being cowards, forgetting about the island and not staying to commit to it,” he says. “It’s easy to say but so hard to.”

Please place cash in the overhead compartment

14 hours 59 min ago

That's about how many countries Apple Music and the Beats 1 radio station are available in. The streaming service launched Tuesday to solid reviews, but that doesn't mean it's the right one for you. Confused by all the different options out there to stream music? We're here to help with a chart that will help you decide.

12 percent

That's about how high the unemployment rate is in Puerto Rico. The country is also currently burdened by $72 billion in debt, which has led to a spike in outmigration. Many Puerto Ricans have found work and a new home in the U.S., which some experts say adds to a vicious cycle of jobs leaving the country, while others see it as Puerto Ricans creating a larger global stamp on the economy.


That's how much one passenger was carrying in cash at a security checkpoint at the Richmond, Virginia, airport. There's nothing illegal about carrying that kind of cash on domestic flights, the Washington Post reports, but it does arouse suspicion. Often the cash is seized.

18 years old

If you're older than the above age, move over, advertisers aren't interested. Or at least, they're less interested. People younger than 18 have been deemed "centennials" and are the latest group catching advertisers' attention. Which also means a lot of attention is being paid to the tween app of choice: Snapchat. Experts say one reason Snapchat appeals to advertisers is that the app doesn't do much to verify age, and that means a loophole in regulations around targeting ads to children below a certain age.

10 seconds

That's how long a user will have to watch a video ad in order for an advertiser to pay Facebook for the ad time. As the Wall Street Journal reports, it's part of a new option offered to advertisers following complaints about being charged for videos that auto-played with little to now user engagement.

The secret work life of bees

Tue, 2015-06-30 13:37

The USDA estimates that honey bees are worth $15 billion a year in agricultural value. The bee is responsible for as much as one in every three mouthfuls of food that we eat.

Because of the honey bee’s importance, many agriculture officials and farmers are alarmed by something called colony collapse disorder, a phenomenon where bee colonies suddenly die off in huge numbers. In a new issue of New York Magazine, David Wallace-Wells explains why bees are dying off en masse.

“It’s a tough life,” Wallace-Wells says. “Imagine being transported around the country all year on a truck, never being able to eat a balanced diet, and being sprayed with chemicals all the time that are designed to kill you.”

Up to 90 percent of honey bee colonies are transported in trucks, as he describes, from one industrial farm to the next. Once they arrive, they’re let out of their cages so they can pollinate the local crops. Once they’ve done their jobs, they’re scooped up and sent to the next farm.

“They’re not well suited to this life. This is not what they were evolved to do,” Wallace-Wells says. “So all of these strange conditions that they’ve been put in sort of freak them out. Some scientists have found they respond to the stress by foraging earlier and earlier, which they’re really bad at. Then when they come back without much food, (and) the whole colony sort of freaks out and collapses.”

Greece misses debt repayment deadline

Tue, 2015-06-30 13:08

The Greek love of drama was on full display today. As the minutes ticked down to a deadline for the repayment of a massive loan to the International  Monetary Fund, the Greek government sent a startling new message to its creditors: can we have another bailout, please? 

The creditors refused and Greece became the first developed country to fail to repay an IMF loan on schedule. This is not a default — at least not immediately — so Greece is not yet officially bankrupt. But its crisis is intensifying; its banks are shuttered, ATM cash withdrawals are severely restricted, more multi-billion euro debt repayments are looming and agreement between the country and its creditors seems as elusive as ever. 

Officer training for mental health in short supply

Tue, 2015-06-30 13:00

It’s no coincidence the newly appointed head of the Cook County Jail is a clinical psychologist. Like other jails around the country, Chicago has a large number of inmates who have a serious mental illness, so corrections officers end up dealing with a lot of mental health crises.

To Cook County Sheriff Tom Dart, keeping people with mental illness in jail is like sending preschoolers to a college calculus class: they just don’t belong there.

“As opposed to running mental health hospitals, as opposed to having community resources,” he says, “we’re going to take this group of people [and say] — 'Let’s see, where shall we put them? Let’s put them all in jails.'”

As sheriff, the jail is ultimately his responsibility. Jails are designed to hold people for short stretches, Dart points out, after they’ve been charged with a crime but before they’ve been convicted.

“It presents obvious challenges to all of us to take a population that wasn’t meant to be in this environment,” he says.

Cook County Corrections Academy cadets

Alisa Roth

I visited the Cook County corrections academy recently, on one of the last days of the cadets’ training. After a short review of concepts like different kinds of mental illness, and how to reassure inmates that officers are there to help them through their crises, the cadets get to practice what they’ve been learning. Dart is one of loudest voices in what’s become a national conversation about mentally ill in the criminal justice system.

He points out that Chicago closed half of its public mental health clinics in 2012. And he regularly tallies the number of mentally ill inmates in Cook County on his Twitter feed. (On June 4, for example, he tweeted that at booking, 39 percent of inmates self-reported having a mental illness.) It’s because the jail is now a de facto psychiatric hospital that Dart thinks all corrections officers need to be trained on how to deal with mental illness.

Sherie Yarbrough, a corrections officer who has been working with mentally ill inmates since she started with the department in 2000, is teaching one of the sessions. She explains the scene to a team of three cadets, two men and a woman.

“I’m having a problem with the detainee, his name is Bruno,” she says. “Bruno is about to jump. I don’t know. I called the CIT [Crisis Intervention Team] unit in because I can’t talk him down. So hopefully you can. Alright? If you don’t, he going to fall and break his neck.”

Another corrections officer, Angel Garcia, is playing Bruno. He has a big bushy beard, and he’s wearing a black ski cap. Standing on a chair in the corner of the classroom, Garcia/Bruno starts to shout at the officers. 

Officer Angel Garcia

Alisa Roth

“Stay right there,” he says. “Don’t come up these stairs!”

He’s a pretty good actor, and he actually manages to look a little wild-eyed as the cadets approach him.

“What’s going on, man? What’s going down?” says one of the cadets. “My name is Officer Downs. I’m here with Officer Salas.”

Before Downs can introduce the third cadet, though, Garcia/Bruno interrupts.

“Well, Officer Downs, well guess what?” Garcia/Bruno shouts. “It’s about to go downs. I’m serious, man. I’m about to go downs this cliff right here. I’m gonna jump…”

This goes on for a while. Downs keeps trying to calm him down, and Garcia—as Bruno—gets more and more upset. Finally, the woman cadet, Salas, starts talking, and Garcia/Bruno starts to settle down a little. When it’s all over, Yarbrough, the veteran officer, debriefs the cadets, talking them through what they did right and what they did wrong.

“We have to use everything that’s in our arsenals,” she says. “Sometimes male detainees respond to female officers differently. When she started talking to him, he calmed down a little bit.”

When Yarbrough started working in the jail more than a decade ago she said there was no special training on how to deal with mentally ill inmates. And it was terrifying.

“I didn’t know what to do,” she remembers. “I was scared of the inmates, I was scared I might lose my job. I was…I didn’t want to make any bad decisions, didn’t want to tell anybody to do something wrong.”

The training she helped with today is supposed to help these new cadets be better prepared than she was. Ultimately, the idea is to improve outcomes for inmates with mental illness by stopping a suicide attempt or by having officers use force less frequently.

Officer Sherie Yarbrough 

Alisa Roth

Carl Alaimo is a psychologist who’s in charge of mental health training at the academy; he used to run the jail’s mental health services. He says educating officers makes a huge difference in how they respond to mentally ill inmates. Take an inmate who refuses to get out of bed, say, or leave his cell.

“Normally that’s considered disobedience,” he says. “‘You’re not listening to me.’ But in the case of a trained officer, they’re going wait a minute, maybe something else is going on here."

A handful of states, including Indiana, North Carolina and Pennsylvania, have opted to provide mental health training for correctional officers. And more and more counties and states are beginning to follow their lead.   

“It’s not as widespread as we would like it to be. It’s fairly sporadic,” says Ron Honberg, of the advocacy organization, the National Alliance on Mental Illness or NAMI. The training represents a real about-face for corrections officers, he says. “It really sort of flies in the face of their traditional training. They’re taught to keep their distance, they’re taught to speak in a way that calms the person down, they’re taught to reassure the individual and it becomes a win-win proposition.”

A win-win proposition for both the inmates and the officers, since an appropriate response by the officer can keep volatile situations from escalating. And, sometimes an officer who is reassuring instead of threatening can convince an inmate to get treatment. Better outcomes that can mean less time in jail or prison, less violence, and—for the correctional facilities—fewer lawsuits. 

Roth's reporting on mental illness and the criminal justice system was supported by a Soros Justice Fellowship

Facing huge debt, Puerto Rico weighs its options

Tue, 2015-06-30 12:59

Puerto Rico's legislature plans to vote on a budget proposal on Tuesday that would cut hundreds of millions of dollars in spending, in an effort to stave off a looming debt crisis that is larger, by several factors, than the one that bankrupted the city of Detroit.

Unlike Detroit, the U.S. territory cannot declare bankruptcy, because it is treated like a state under federal bankruptcy law.

Still, Puerto Rico's governor Alejandro Garcia Padilla told The New York Times, and then the world, that the commonwealth can no longer pay its debts, which total more than $72 billion. He wants to delay debt payments and negotiate more favorable terms with creditors — in essence, what bankruptcy would have facilitated. 

"This has been a slow motion crisis since 2006," says Juan Carlos Hidalgo, a Latin America policy analyst at the Cato Institute. "The Puerto Rican economy has entered a death spiral, investment is flowing out ... and the cost of getting new debt has risen significantly."

In recent years, Puerto Rico has tried to slash its way out of the problem by making spending cuts. It recently raised its sales tax, and previously had cut some corporate taxes to encourage companies to locate to the island.

Still, the territory's problems persist, because of the magnitude of its debt load in relation to its struggling economy. Unemployment is near 14 percent. This has caused a lot of Puerto Ricans — who are U.S. citizens — to relocate to the mainland, plummeting real estate values on the island and worsening the economic malaise.

"Poverty is already very high. Very few people have jobs," says Barry Bosworth, a senior fellow at the Brookings Institution, who thinks the U.S. government will eventually have to intervene in order to find a more permanent solution to Puerto Rico's problems.

"They need some oversight" to renegotiate debts in an orderly way, says Bosworth, "and frankly, some financial relief from the current situation that they've gotten into."

"The question is, who pays?" asks Brad McMillan, chief investment officer for the Commonwealth Financial Network, a wealth management company.

Debt holders in the U.S. could be on the hook, including many Americans who may not realize that they hold Puerto Rican debt in their mutual-fund portfolios. It is very likely that debt holders will eventually have to take a write-down on some of the debt, or renegotiate interest rate terms that are more favorable to Puerto Rico, Bosworth says.

"So there can be a solution that works for Puerto Rico, in writing off some of the debt...and also works for the investors as a whole," he says.

Londoner crowdfunding cash for Greek bailout

Tue, 2015-06-30 12:59

Here's the latest entry in "Hey, let's see if we can crowdfund this thing." 

There's a new account on Indiegogo called the "Greek Bailout Fund" set up by Thom Feeney, a 29-year-old from East London.  

Courtesy Indiegogo

Here's an excerpt from the page

"[1.6 billion euros] is what the Greeks need. It might seem like a lot but it's only just over [three euros] from each European. That's about the same as half a pint in London. Or everyone in the EU just having a Feta and Olive salad for lunch."

The thing is getting some traction.

Nearly 443,000 euros have been pledged so far — 1.4 billion to go.

Of course that's just the payment that was due today.

University of Phoenix to shrink enrollment

Tue, 2015-06-30 12:59

One of the biggest colleges in the country is about to get a lot smaller. The University of Phoenix has announced plans to close programs, shrink its enrollment and introduce new admissions requirements for students.

The entire for-profit college industry has been under pressure for years now, as lawmakers, regulators and student advocates have pushed back against a business model that left many students deep in debt — often without degrees to show for it.

When the University of Phoenix was founded in 1976, every student had to be at least 25 and have a full-time job, says spokesman Mark Brenner. Then about 10 years ago, Phoenix ditched those requirements and started recruiting as many people as possible. Enrollment swelled, but so did complaints of abusive recruiting tactics, outsized student debt and dismal graduation rates.

Now admissions standards are coming back.

“We’re looking at ways to provide the right diagnostics to make sure that the students that are coming to us have the best chance to be successful,” Brenner says.

Brenner would not elaborate on the new requirements, but says students who aren’t deemed college-ready will be offered remedial training. Phoenix will also close some campuses and retire most of its associate degree programs. 

The university is preparing for the new “gainful employment” rule taking effect July 1, says Ben Miller with the Center for American Progress, a liberal think tank. Career education programs will have to prove their graduates earn enough to afford their loan payments, or risk losing access to federal student aid.

“Phoenix knew a lot of its associate degrees would not fair well under gainful employment, and so it closed them down rather than suffering the reputational risk of having failing programs,” Miller says.

Students are also demanding a better return on their tuition dollars, says Corey Greendale, who tracks the for-profit college industry at First Analysis.

“There are so many forces that are causing institutions to focus on outcomes,” he says. “A lot of this would be happening, I think, regardless.”

Working hard for the money — will overtime help?

Tue, 2015-06-30 12:58

President Obama proposed Tuesday to expand overtime eligibility to salaried workers. Currently, fewer than one in 10 workers qualify, but the proposal would boost that to four in 10.

Under the current rules, salaried workers making more than $23,660 a year are ineligible for overtime pay, under federal law. The White House plan would boost the threshold to any worker making up to $50,440.

The change affects nearly five million workers, according to the Labor Department. The affected workers include those in many sectors, such as law, public relations, professional services, retail and manufacturing, says Ross Eisenbrey of the left-leaning Economic Policy Institute.  

Most of the affected workers are women, says labor economist Daniel Hamermesh, emeritus professor at the University of Texas-Austin. He expects employers to respond by partially cutting back overtime hours for affected workers.

The upshot is, labor will get more expensive, he says. And some overworked Americans will work less. The White House bills this change as “middle-class economics.”

“Will this by itself make us walk away smiling and thinking that all is well with the labor market? No,” says Paul Osterman of the MIT Sloane School of Management. “But it’ll contribute to that.”

Correction: The audio version of this story misstated Ross Eisenbrey's name. The text has been updated. We regret the error.