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Turning a new leaf can prove elusive in tobacco-built South

Tue, 2014-07-22 12:44

His mentor sat in a hospital bed, dying. 

Glenn Hayes walked into the room, and saw his old friend batting his hand in front of his face, as if waving away a persistent fly, and muttering. 

“What are you doing?” Hayes asked. The man, startled, smiled sheepishly and said “I’m biddin' tobacco!” 

The two men had spent decades as tobacco buyers for large companies. Though they didn’t smoke, they had lived and breathed the crop since childhood. And it was time to say goodbye. 

Hayes, born in 1936, had already said goodbye to his career in the tobacco industry when he retired in the '90s. But even by then, tobacco was already submitting its long farewell to many small towns peppering the belt from Kentucky to the coast - some it had sustained for centuries.

“We would get up before day. Before I went to school that morning, when I was 9 or 10-years-old, we would lay tobacco out for our parents to grade that day,” says Hayes. “And when we came in we’d tie it and stick it up; had to be done.” 

Hayes has come to the South Carolina Tobacco Museum in Mullins, South Carolina. Mullins was once the tobacco capital of the state, its warehouses once numbered 41, and $120 million would flow through this small town each fall in the early '80s. While tobacco is still grown in the state, a visitor from Charleston would likely now see more golden leaves on display in the museum than in roadside fields during the two hour drive.

“My first job was driving a mule when I was 8 or 9, and I thought I was somebody,” Hayes remembers in a drawl and with a chuckle. “We didn’t get paid, we had four families on the farm, and we divided the crop up – 25 acres of tobacco – and we all helped each other put in. About 80 percent of our income came from tobacco.”

People lived the crop’s ups and downs together, which Hayes says connected them in a way that’s rare now.

“I remember a farmer comin' to me one time, he said 'I got an awful crop, Glenn, I can’t help it,' and it wasn’t a good crop. But I wouldn’t’a told him that for nothin' in the world. He’d worked just as hard as the next man. If you could stretch a grade you did, if you could help him out you did," says Hayes. "We all did that.” 

Hayes's old friend Jimmy Daniel, who worked at a warehouse and is now passed away, put it this way in one of the museum’s archival recordings:

“It was hard work, like anything is. And if the farmer fared good then I fared good. If he catch the devil then I caught the devil too.”

Explains Reggie McDaniel, curator of the museum: “If the bids weren’t good and the tobacco was not good and the farmers didn’t get A1 top prices, the warehouse suffered along with the farmers. If the farmer 'caught the devil,' the warehouse 'caught the devil' too... That just means it all filters down, 'We all are taking a diminished return here.'” 

Hayes has become a painter in retirement, and often depicts scenes from the farms of his childhood – every detail corresponding to a memory and reflecting the vibrant role tobacco once played. 

In some paintings, his 9-year-old self is lifting sticks, holding bundles of tobacco ready to cure in a barn. In others, his middle-aged self is walking through rows of 300 pound piles of tobacco leaves, bidding as he goes.

Many of the paintings hang in the Tobacco Museum, whose rooms full of artifacts include hundreds of colorful unopened packs of cigarettes made by long-defunct companies, war bonds from WWII sponsored by Lucky Strike, a pioneer-era kitchen and a pre-WWI quilt made of flags, many of which came from countries that no longer exist.  There’s also a 100-year-old rebuilt tobacco barn inside the museum; it still smells warmly of tobacco. 

“It’s got a sweet, earthy smell,” says Reggie McDaniel, curator of the museum. “My dad used to say it smells like college.”

Why’d he say that?

“...‘cause it pays for your college!” McDaniel says with a laugh.

Tobacco marked the calendar and tobacco marked the social life.

“We had well-known orchestras and band leaders for one warehouse, the next warehouse would be square dancing and more country fare, and the third warehouse would be what we call beach music today for the African American community.”

Part of economic growth is what economists call "creative destruction." As new industries emerge, old ones die. There are booms and busts and growth moves from place to place, disrupting old ways of doing things and creating new ones. If people are lucky, they can move with it. 

But not everyone, and certainly not every place, can get out of the way. 

Mullins, South Carolina couldn’t get out of the way. 

Mullins, South Carolina caught the devil.  

It now has the highest unemployment rate in the state.

The devil might’ve been in Mullins all along.

Tobacco is addictive and deadly. It killed 100 million people in the 20th century.  As people began to realize that, smoking declined, and government subsidies were withdrawn. Tobacco farming became mechanized and then shifted overseas along with other industries like textiles. The population has been declining for 25 years now.

Antonio Williams is hanging out under a pecan tree in a lot full of rubble and weeds. They say it used to be a small mall before it was torn down. Sometimes people come here for daywork. Right now a few kids are running around, and a few old men are sitting on milk crates drinking. 

“The jobs are limited, all the textiles and companies have left and there’s no incentive for people to stay here,” he says. “It’s not for a young person here. My son is 17-years-old, he got a scholarship, A-B honor roll student, and I just wanna get him up outta here.”

When Hayes retired, he retraced his old auction route through south Georgia and eastern North Carolina, the border belt of Tennessee and Kentucky. “And when I went back to some of these small towns that had tobacco markets, and when these markets left they didn’t have anything left but a little town. They dried up. It’s sad to describe it like that but that’s how it was. You felt bad for ‘em.”

McDaniel, the curator and a descendant of one of Mullins’ founders, is steadfast. “We have a newspaper that was established in early days, and the motto on the front of the paper was ‘Pull for Mullins or pull out, no room for town knockers.’ So even though everything’s not perfect and flawless, we love our little town and it’s part of what we’re made of.”

The museum helps. One of Mullins’ last two remaining warehouses – a towering, cavernous space – holds an extensive antique mall. McDaniel praises the local cuisine at places like Webster Manor: “If you leave Mullins hungry it’s your own fault.” But for now, Mullins has more charm than visitors.

“The story of Mullins is the story of lots of small towns in the tobacco belt,” says Eldred Prince Jr., professor of American History at Coastal Carolina University in Conway and author of "Long Green, The Rise and Fall of Tobacco in South Carolina".

“Nobody – no sensible person – would lament the loss of tobacco as a substance. It has a lot to answer for in the illness that it has caused,” says Prince. “On the other hand, the culture that it inspired and created, there are some valuable things.”

To have entire towns working on the same thing, winning or losing together. And sharing work.

“We’ll go over and help you today at your farm and tomorrow you can come over and help us. 'Swapping work' it was called, it built neighborhoods like that.”

Of course, plenty of southern towns survived and even thrived after tobacco. They replaced tobacco fields with a Boeing plant or an auto manufacturer, or in many cases turned to tourism.

“We’re very much part of the sun belt here,” says Professor Prince. “But Mullins is still in the shade.” 

Turning a new leaf is elusive in tobacco-built South

Tue, 2014-07-22 12:44

His mentor sat in a hospital bed, dying. 

Glenn Hayes walked into the room, and saw his old friend batting his hand in front of his face, as if waving away a persistent fly, and muttering. 

“What are you doing?” Hayes asked. The man, startled, smiled sheepishly and said “I’m biddin' tobacco!” 

The two men had spent decades as tobacco buyers for large companies. Though they didn’t smoke, they had lived and breathed the crop since childhood. And it was time to say goodbye. 

Hayes, born in 1936, had already said goodbye to his career in the tobacco industry when he retired in the '90s. But even by then, tobacco was already submitting its long farewell to many small towns peppering the belt from Kentucky to the coast - some it had sustained for centuries.

“We would get up before day. Before I went to school that morning, when I was 9 or 10-years-old, we would lay tobacco out for our parents to grade that day,” says Hayes. “And when we came in we’d tie it and stick it up; had to be done.” 

Hayes has come to the South Carolina Tobacco Museum in Mullins, South Carolina. Mullins was once the tobacco capital of the state, its warehouses once numbered 41, and $120 million would flow through this small town each fall in the early '80s. While tobacco is still grown in the state, a visitor from Charleston would likely now see more golden leaves on display in the museum than in roadside fields during the two hour drive.

“My first job was driving a mule when I was 8 or 9, and I thought I was somebody,” Hayes remembers in a drawl and with a chuckle. “We didn’t get paid, we had four families on the farm, and we divided the crop up – 25 acres of tobacco – and we all helped each other put in. About 80 percent of our income came from tobacco.”

People lived the crop’s ups and downs together, which Hayes says connected them in a way that’s rare now.

“I remember a farmer comin' to me one time, he said 'I got an awful crop, Glenn, I can’t help it,' and it wasn’t a good crop. But I wouldn’t’a told him that for nothin' in the world. He’d worked just as hard as the next man. If you could stretch a grade you did, if you could help him out you did," says Hayes. "We all did that.” 

Hayes's old friend Jimmy Daniel, who worked at a warehouse and is now passed away, put it this way in one of the museum’s archival recordings:

“It was hard work, like anything is. And if the farmer fared good then I fared good. If he catch the devil then I caught the devil too.”

Explains Reggie McDaniel, curator of the museum: “If the bids weren’t good and the tobacco was not good and the farmers didn’t get A1 top prices, the warehouse suffered along with the farmers. If the farmer 'caught the devil,' the warehouse 'caught the devil' too... That just means it all filters down, 'We all are taking a diminished return here.'” 

Hayes has become a painter in retirement, and often depicts scenes from the farms of his childhood – every detail corresponding to a memory and reflecting the vibrant role tobacco once played. 

In some paintings, his 9-year-old self is lifting sticks, holding bundles of tobacco ready to cure in a barn. In others, his middle-aged self is walking through rows of 300 pound piles of tobacco leaves, bidding as he goes.

Many of the paintings hang in the Tobacco Museum, whose rooms full of artifacts include hundreds of colorful unopened packs of cigarettes made by long-defunct companies, war bonds from WWII sponsored by Lucky Strike, a pioneer-era kitchen and a pre-WWI quilt made of flags, many of which came from countries that no longer exist.  There’s also a 100-year-old rebuilt tobacco barn inside the museum; it still smells warmly of tobacco. 

“It’s got a sweet, earthy smell,” says Reggie McDaniel, curator of the museum. “My dad used to say it smells like college.”

Why’d he say that?

“...‘cause it pays for your college!” McDaniel says with a laugh.

Tobacco marked the calendar and tobacco marked the social life.

“We had well-known orchestras and band leaders for one warehouse, the next warehouse would be square dancing and more country fare, and the third warehouse would be what we call beach music today for the African American community.”

Part of economic growth is what economists call "creative destruction." As new industries emerge, old ones die. There are booms and busts and growth moves from place to place, disrupting old ways of doing things and creating new ones. If people are lucky, they can move with it. 

But not everyone, and certainly not every place, can get out of the way. 

Mullins, South Carolina couldn’t get out of the way. 

Mullins, South Carolina caught the devil.  

It now has the highest unemployment rate in the state.

The devil might’ve been in Mullins all along.

Tobacco is addictive and deadly. It killed 100 million people in the 20th century.  As people began to realize that, smoking declined, and government subsidies were withdrawn. Tobacco farming became mechanized and then shifted overseas along with other industries like textiles. The population has been declining for 25 years now.

Antonio Williams is hanging out under a pecan tree in a lot full of rubble and weeds. They say it used to be a small mall before it was torn down. Sometimes people come here for daywork. Right now a few kids are running around, and a few old men are sitting on milk crates drinking. 

“The jobs are limited, all the textiles and companies have left and there’s no incentive for people to stay here,” he says. “It’s not for a young person here. My son is 17-years-old, he got a scholarship, A-B honor roll student, and I just wanna get him up outta here.”

When Hayes retired, he retraced his old auction route through south Georgia and eastern North Carolina, the border belt of Tennessee and Kentucky. “And when I went back to some of these small towns that had tobacco markets, and when these markets left they didn’t have anything left but a little town. They dried up. It’s sad to describe it like that but that’s how it was. You felt bad for ‘em.”

McDaniel, the curator and a descendant of one of Mullins’ founders, is steadfast. “We have a newspaper that was established in early days, and the motto on the front of the paper was ‘Pull for Mullins or pull out, no room for town knockers.’ So even though everything’s not perfect and flawless, we love our little town and it’s part of what we’re made of.”

The museum helps. One of Mullins’ last two remaining warehouses – a towering, cavernous space – holds an extensive antique mall. McDaniel praises the local cuisine at places like Webster Manor: “If you leave Mullins hungry it’s your own fault.” But for now, Mullins has more charm than visitors.

“The story of Mullins is the story of lots of small towns in the tobacco belt,” says Eldred Prince Jr., professor of American History at Coastal Carolina University in Conway and author of "Long Green, The Rise and Fall of Tobacco in South Carolina".

“Nobody – no sensible person – would lament the loss of tobacco as a substance. It has a lot to answer for in the illness that it has caused,” says Prince. “On the other hand, the culture that it inspired and created, there are some valuable things.”

To have entire towns working on the same thing, winning or losing together. And sharing work.

“We’ll go over and help you today at your farm and tomorrow you can come over and help us. 'Swapping work' it was called, it built neighborhoods like that.”

Of course, plenty of southern towns survived and even thrived after tobacco. They replaced tobacco fields with a Boeing plant or an auto manufacturer, or in many cases turned to tourism.

“We’re very much part of the sun belt here,” says Professor Prince. “But Mullins is still in the shade.” 

A new and faster way of buying concert tickets

Tue, 2014-07-22 10:59

Buying concert tickets these days requires a lot of planning and speed.

You have to be on the dot when tickets go on sale, and even if you are, page loading, internet speed and the always-annoying captcha code can slow you down. Marketplace Tech's Ben Johnson may have a trick up his sleeve to get tickets faster and with less hassle.

Ticketmaster now has an app for buying tickets. Ben says the things that usually make people nervous about ticket buying — like giving out personal information — can be strengths when purchasing through an app.

"It knows your location, it knows your identity and that means you might get tickets faster and score better seats if you use the app," Johnson says.

Your smartphone can also help you find closer seats even when you've already purchased a ticket. iBeacon uses its technology to pinpoint your location using your mobile phone and ticketing apps use this feature to help you move up. Unfortnately if this option doesn't suit you, there isn't really an alternative, save for standing in line.

A new and faster way of buying concert tickets

Tue, 2014-07-22 10:59

Buying concert tickets these days requires a lot of planning and speed.

You have to be on the dot when tickets go on sale, and even if you are, page loading, internet speed and the always-annoying captcha code can slow you down. Marketplace Tech's Ben Johnson may have a trick up his sleeve to get tickets faster and with less hassle.

Ticketmaster now has an app for buying tickets. Ben says the things that usually make people nervous about ticket buying — like giving out personal information — can be strengths when purchasing through an app.

"It knows your location, it knows your identity and that means you might get tickets faster and score better seats if you use the app," Johnson says.

Your smartphone can also help you find closer seats even when you've already purchased a ticket. iBeacon uses its technology to pinpoint your location using your mobile phone and ticketing apps use this feature to help you move up. Unfortnately if this option doesn't suit you, there isn't really an alternative, save for standing in line.

Hospital agrees to pay $190 million for recorded exams

Tue, 2014-07-22 07:00

Johns Hopkins Health System has agreed pay $190 million to 8,000 women who were patients of a gynecologist found to be secretly recording their exams.

The women’s faces aren’t visible in the recordings and police don’t believe the images have been shared, but they have been traumatized nonetheless, says plaintiffs’ attorney Jonathan Schochor.

“They stopped seeing their doctors,” he said at a press conference on Monday. “They stopped taking their children to see doctors. They refuse to see a male OBGYN. Many refuse to see any OBGYN.”

If the settlement were divided equally, each woman might receive roughly $24,000, but compensation will be made after reviewing each patient’s case.

“T­­­he question is how do [they] allocate that fairly among the victims?” says J.B. Silvers, a former insurance executive and a professor at Case Western Reserve University's Weatherhead School of Management.

Counseling costs or lost wages might be taken into account. But Silvers says it’s a tricky, delicate problem trying to determine the amount of trauma each women may have suffered, especially with so many victims.

“We’ve done this with the World Trade Center, for instance, so this process isn’t new,” Silvers says. 

The doctor accused of making the recordings committed suicide after being discovered last year.

Where Europe stands on Russian sanctions

Tue, 2014-07-22 04:00

The European Union met on Tuesday to discuss the possibility of further sanctions on Russia after the downing of Malaysian Airlines flight MH17. The U.S. says a missile fired from separatist territory brought down the plane. Russia's defense ministry says it sees no evidence of a missile, and suggested Ukraine's military could be at fault. 

With tensions mounting, President Obama has called on the EU to take a bolder stance -- Britain, France, and Germany say they would be ready to increase sanctions against Russia, but reaching a concensus could prove difficult. Given a disputed delivery of a warship to Moscow from France, some point out that stronger actions, not words, are needed.

Click the media player above to hear BBC Economics Correspondent Andrew Walker in conversation with Marketplace Morning Report host David Brancaccio.

PODCAST: American-made jobs

Tue, 2014-07-22 03:00

More on news that Johns Hopkins Hospital will pay $190 million in a settlement to victims of a gynecologist who secretly filmed patients' exams. Plus, a look at sales of existing homes in June -- With that number having increased in May, it's expected to continue an upward trend. Plus, a conversation with Beth Macy, author of "Factory Man," which tells the story of an American furniture company that managed to stay open even in the face of the competition shipping jobs overseas.

Other cities feel sting of Detroit bankruptcy

Tue, 2014-07-22 02:00

When a community needs to build a new school or a jail, it sells bonds on the municipal bond market. The bonds are a city’s promise to pay. But if one city doesn’t pay up in full, does bond money dry up for everybody else?

“I think it depends a lot on the city,” says Kim Rueben, a public finance economist at the Urban Institute. 

Rueben says some Michigan cities have to pay a premium in the bond market because they’re in the same state as Detroit. Many of them have the same problems. Ditto for some rustbelt, Midwestern cities:

"So, other places that are seeing similar demographic trends, in terms of aging populations and declining populations,” says Rueben.

What about cities without these problems? They can still sell bonds, but they have to work harder, according to Lisa Washburn, managing director of Municipal Market Advisers, a bond research company.  

Washburn says investors are justifiably skeptical: “So you want to know ahead of time what kind of risk you’re taking on.”

Still, Washburn says, there is a lot of demand for municipal bonds. Once investors decide they’re safe, that is.

 

 

More schools offer free lunches, but who's paying?

Tue, 2014-07-22 02:00

The Community Eligibility Provision, part of the National School Lunch Program, was signed into law by Barack Obama in 2010. It enables school districts in which 40 percent of children or more are eligible for free lunches to skip paperwork requirements and offer free meals to all students, regardless of their household income. Some educators say the provision could lower stress levels for low-income kids and help them focus on learning.

"Sometimes they worry about not having enough money to pay for their meal," says Dora Rivas, Executive Director of the Food and Child Nutrition Program for the Dallas Independent School District. "I think this is going to be a great benefit to them."

Rivas adds that paying for meals for all students in the district means officials will no longer have to spend time and money processing papers for families applying for the lunch benefits.

"Our funds are going to producing the meal instead of all the paperwork," she says.

The National School Lunch Program costs the government nearly $12 billion a year, a reflection of a troubled economy in which many working parents are unable to make ends meet.

"Most of the kids in the free and reduced price meals program are kids whose parents are working, working full time at very low wages, or working part time," says Jim Weill, president of the Food Research and Action Center. On an average school day, Weill says, some 21.5 million kids eat a free or reduced-price lunch.

Long-term unemployed suffer shaky re-employment

Tue, 2014-07-22 01:00

Even though the economy is improving, there are still about 3 million Americans who have been out of work for six months or more. Plus, research indicates that the longer they are out, the tougher it will be for them to get back into the workforce. Making matters worse: when they do find work, it often doesn't last.

Lori Barkley Struckman knows what that's like. At the end of 2011, she lost her job as an office administrator. For the next two years, she bounced around jobs that were temporary or part-time.

"I had five different jobs. But nothing full-time," she says.

Struckman finally landed a full-time position as an office administrator at a Twin Cities law firm earlier this year. Her rocky road to recovery would not surprise researchers like Alan Krueger, a professor of economics at Princeton University and former White House chief economist.

"The long-term unemployed, when they do find work, it's often inconsistent, it's often part-time, they often find a job that doesn't last very long," says Krueger.

Krueger and fellow researchers looked at government surveys of Americans who said they'd been out of work for six months or longer at some point between 2008 and 2012. When those individuals were surveyed again more than a year later, only 36 percent had landed work. Of that group, only 11 percent had steady, full-time jobs.

Krueger says a lot of these folks end up suffering the same setbacks, and unsteady employment, as new workers.

"If you look at workers just starting out, a lot of the jobs they find don't work out, they're transitory, it's a mismatch," he says. "They don't get along with the employer or their skills aren't right for the job."

And sometimes the stress of  having been out of the workforce for a long time persists, making it hard to hold onto a new job. 

"There's a lot of spiralling of all sorts of things, trouble with the children, trouble with finances, which affects every piece of your life. Do you still have health insurance? Were you able to keep your house? All those things are so stressful; you're just treading water," says Mary White, a job counselor with a nonprofit called HIRED in St. Paul.

Lori Barkley Struckman is familiar with some of those stresses. A layoff she suffered a decade ago, well before her more recent jobless spell, coincided with her divorce. When she returned to work back then, she was easily distracted.

"You're still thinking about all the other turmoil that's going on in your life. It's hard for you to concentrate. So that is a real task to just make yourself go, 'Okay you're here to work. Give it up,'" she says.

Faced with poor job prospects or additional layoffs, many long-term unemployed give up looking for work. Krueger's collaborator, Judd Cramer, a doctoral student in economics at Princeton University, says the expiration of extended unemployment benefits has contributed to that trend.

"We've seen the rate at which the long-term unemployed have exited the labor market has risen," Cramer says. 

Breaking down the fees and taxes in a plane ticket

Mon, 2014-07-21 13:29

The Transportation Security Administration is increasing the fees it assesses travelers to $5.60 per leg of your flight.

What's that mean? If a layover is more than four hours, then the TSA considers that to be two trips and assesses the fee again.  So, that could mean about $22 extra on your layover flight. That made us wonder what are we paying for air travel these days.... besides the actual airfare, that is.

Let’s say you’ve got a $500 round trip ticket from New York City to Los Angeles with a long layover in each direction, here's what you'll be paying.

(Numbers courtesy of Airlines for America.)

Fare: $500

TSA 9/11 Fee: $5.6 per segment x 4 = $22.40 

Federal Aviation Excise Tax: 7.5% = $37.50

Flight Segment Tax: $4 per segment x 4 = $16.00

Airport passenger facilty charge: $4.50 per segment x 4 = $18.00

Effective Tax Rate: 18%.  This can vary depending on how many layovers and how expensive your fare is.  If this example fare were for a direct flight, for example, it would be taxed at an effective rate of 9 percent. 

Flying international? International flights have a whole additional set of fees depending on the country and the airport, and these fees can range into the hundreds of dollars. 

And let us not forget the fees for some kind of basic rudimentary comfort, says airline analyst Robert Mann, Jr:

Want to pick your own seat? $0 to $25

What about a seat with legroom? $25 up to hundreds of dollars

Check a bag? $0 to $80

Oh, you want to carry on that bag? $0 to $100

Hungry?  How does $5 for a snack and $15 for a sandwich sound?

The TSA has said historically, it spends significantly more money on aviation safety than it receives from airlines or passengers.  However, the revenues raised from government fees and excise taxes do not directly go to their supposed purpose, says George Hobica, founder of AirfareWatchDog.com.

“A lot of the money actually ends up in the general fund to reduce the deficit and never sees its way as was intended to improve air travel.”

Breaking down the fees and taxes in a plane ticket

Mon, 2014-07-21 13:29

The Transportation Security Administration is increasing the fees it assesses travelers to $5.60 per leg of your flight.

What's that mean? If a layover is more than four hours, then the TSA considers that to be two trips and assesses the fee again.  So, that could mean about $22 extra on your layover flight. That made us wonder what are we paying for air travel these days.... besides the actual airfare, that is.

Let’s say you’ve got a $500 round trip ticket from New York City to Los Angeles with a long layover in each direction, here's what you'll be paying.

(Numbers courtesy of Airlines for America.)

Fare: $500

TSA 9/11 Fee: $5.6 per segment x 4 = $22.40 

Federal Aviation Excise Tax: 7.5% = $37.50

Flight Segment Tax: $4 per segment x 4 = $16.00

Airport passenger facilty charge: $4.50 per segment x 4 = $18.00

Effective Tax Rate: 18%.  This can vary depending on how many layovers and how expensive your fare is.  If this example fare were for a direct flight, for example, it would be taxed at an effective rate of 9 percent. 

Flying international? International flights have a whole additional set of fees depending on the country and the airport, and these fees can range into the hundreds of dollars. 

And let us not forget the fees for some kind of basic rudimentary comfort, says airline analyst Robert Mann, Jr:

Want to pick your own seat? $0 to $25

What about a seat with legroom? $25 up to hundreds of dollars

Check a bag? $0 to $80

Oh, you want to carry on that bag? $0 to $100

Hungry?  How does $5 for a snack and $15 for a sandwich sound?

The TSA has said historically, it spends significantly more money on aviation safety than it receives from airlines or passengers.  However, the revenues raised from government fees and excise taxes do not directly go to their supposed purpose, says George Hobica, founder of AirfareWatchDog.com.

“A lot of the money actually ends up in the general fund to reduce the deficit and never sees its way as was intended to improve air travel.”

Orange really is the new black (and white)

Mon, 2014-07-21 13:29

The quarterly earnings report from Netflix came out this afternoon and Netflix did just fine, making just about as much money as everybody expected.

But that's not really the point. The biggest takeaway?

Netflix's comedy-drama series "Orange Is The New Black" was the most watched show on Neflix So many people watched world-wide, the orange jumpsuits in the series have apparently become chic enough to irritate the sheriff in Saginaw County, Michigan.

"You see people wearing all-orange jumpsuits at the mall," he said.

The local sheriff has become so fed up that he's started ordering the old-style black and white striped uniforms for his inmates.

Europeans weigh economic sanctions against Russia

Mon, 2014-07-21 13:29

Tensions between Russia and the West over the downing of a Malaysian Airlines plane may have receded slightly Monday. But President Vladimir Putin is still facing a fresh wave of economic sanctions. Tuesday, European Foreign Ministers meet to consider tough new action to pressure the Russians into helping end the fighting in eastern Ukraine. These would follow last week’s additional U.S. measures.

The Europeans have bickered for months over stepping up sanctions against the Kremlin. Countries like Britain want to hit the Russians hard, but the Germans and Italians – who are heavily dependent on Russian energy – are afraid of antagonizing President Putin. The French are in the process of supplying two warships to Moscow and don't want to rock the boat.

However, Britain’s Foreign Secretary, Phillip Hammond, says the downing of flight MH17 changes everything, uniting the Europeans.

“What we need to do now is use the sense of shock, the sense of outrage to galvanize opinion behind a more robust stance. We have tools in our tool box,” says Hammond.

The UK wants to follow the U.S.'s example and slap Putin’s inner circle of oligarchs with visa bans and asset freezes, even though that could harm London’s financial sector. Nina Shick of the Open Europe think tank says Europeans could also use their leverage as Russia’s biggest trading partner.

“They could target European exports to Russia, which Russia is dependent on," she says. “We’re talking about things like machinery and medicine. These are things that Russia depends on, things that Russia won’t be able to source easily from other places."

Russia could retaliate by turning off the oil and natural gas that supplies 30 percent of Europe’s energy needs. But that would spark an all out economic conflict which – some analysts claim – Europe would win.

“Any economic war would be compounded five-fold on Russia compared to that of the EU. If it were to genuinely get serious, then the effects on Russia would be such that I think President Putin is actually a very worried man right now,” says James Nixey of the Chatham House Institute.

But as they prepare for their meeting on Tuesday, some European foreign ministers are also very worried. They feel they have to punish Putin but without driving up their own energy costs and tipping their fragile economies back into recession.

4 ideas from Nest CEO Tony Fadell

Mon, 2014-07-21 12:40

Tony Fadell is the founder and CEO of Nest, the company seeking to reinvent household techonolgy. The big idea... is an energy-saving, smart thermostat.

Fadell, a veteran of Apple., founded Nest Labs in 2010, which was acquired by Google earlier this year for $3.2 billion.

There are plenty of ideas floating around in Fadell's head, but here are four that came up in his interview with Kai Ryssdal:

Idea: We give too much power to one little switch.

There are about 250,000,000 U.S. thermostats operating in residential and light commercial buildings. The industry standard, Honeywell thermostat, has been around since 1953.

"When we look at the data," Fadell said, "less than 10 percent of those were ever programmed to save any energy."

Fadell said he was taken aback by how much power we give to the little on-and-off switches on the thermostats common in most homes: "[They're] controlling what amounts to be 50-to-60 percent of your total energy consumption for a year.. . That's really where the genesis of this whole idea started."

Idea: Making products people love matters.

"If you want to change people's behaviors or the way they think about something, you have to change the exterior," he says. "If you look at...thermostats on the wall today, they're ignored. People don't want to program them, people don't really use them." 

Fadell said Nest wanted to make sure the thermostats they were creating were eye-catching and engaging.

Their plan? Get customers "intrigued — that's how you grab them — through something that looks great, and then, ultimately, works great." 

Idea: Nest isn't a quick-hit, one-product company.

Fadell feels like it will take for him ten years to consider Nest (Nest Labs) profitable. And they have plenty of things to work on: Nest not only has the thermostat, but smoke and carbon monoxide detectors. The company also they just closed their acquisition of Dropcam.

"We could be profitable if we wanted to stop, but we have very, very big ambitions. This is a ten year kind of investment that we're making."

Idea: The disruption-innovation era isn't over yet.

In response to the idea that innovation and disruption are overrated, Fadell said that's simply not true.

Fadell said one innovation or disruption has the ability to unseat a market leader overnight - think Sony, Nokia and Blackberry.

"Look where Sony used to be just 15 years ago," he said. "These kinds of disrutptive techologies allow us to create all kinds of new businesses and new services. Look at Uber."

He said these kinds of disruptions are innovations that are packaged well enough for consumers to understand and embrace. 

"I think we're only going to see more of these types of changes coming, not less and less." 

Humans make a house for sale feel more like home

Mon, 2014-07-21 12:40

About a year ago, Cora Blinsman’s mom passed away. Needless to say, it was a really hard on her. She started taking stock of her own life. Blinsman had been a full-time, stay-at-home mom for 20 years, and she was feeling burnt out. She needed space.

So she got a lot of it.

Blinsman applied to be a home manager with Showhomes, a nationwide home staging company. Basically, she pays a monthly fee to live in a really nice house for sale in one of the nicest upscale communities in Chapel Hill, N.C. Her latest is currently going for $430,000. It's got four bedrooms, two baths. The kitchen has two cooking surfaces; gas and electric. The backyard has three descending layers of gardens.

The idea behind Showhomes is that when someone lives in a home, it just feels warmer. More attractive to buyers.

"You’ve got your slippers by the bed," Blinsman said. "I mean, I kept it very neat, but you could tell somebody lived there."

Fred Pierson is the franchise manager for Showhomes in the Chapel Hill area. Pierson says the home manager method is the company’s most effective service. Seventy percent of the homes with managers living in them get an offer.

"Buyers are smart. They can tell when they’re walking into a staged home," said Pierson.

These are not always easy homes to sell — they’re often worth more than $1 million. The home Blinsman is in had been on the market a year before she moved in two months ago. Now, she pays $1,100 a month for a home that would normally have mortgage payments two or three times that amount. So, it’s a good deal. But there are drawbacks.

"If home managers are doing this just for the savings, it will not work," said Pierson. "It has to be a lifestyle they are willing to compromise."

For example, Blinsman only lived in her first home for five weeks before it sold. Some managers can move up to five times a year. And there are rules.

"They’re very basic," said Pierson. "You make your bed every day. Towels are not hung up over the shower, they’re placed in the dryer... You know, pick your stuff up and make sure it looks nice... The stuff I was always telling my kids," said Blinsman.

Also, home managers can't keep anything too personal lying around. No religious insignia. No family photos. One of Pierson's homes had a mural of the Dallas Cowboys up on the wall. Showhomes needed to remove it because there's always the chance someone looking to buy a home might love the house, but hate the Cowboys.

Blinsman says the rules haven’t been so bad. On the contrary, she says, being in this kind of home at this kind of time has been really good for her. Living in a wealthy community has opened her eyes to an entirely different lifestyle.

"I can be a part of the community and I can fit in pretty well," she explained.  "But if I had a little broken down car, I could never drive through this neighborhood. I’d be like, 'Oh my God, they’re gonna want to throw me out.'”

This is the real trick behind Showhomes. It’s not just about giving those looking for a home a look into someone else’s life – it’s about doing the same for the home manager. Giving them a chance to be someone else, if only for a little while.

Clarification: An earlier version of this story used the phrase "buyers" to describe situations home managers find themselves as part of their arrangement with Showhomes, as opposed to those looking to buy a home that is on the market. The text has been clarified throughout the story.

EnergyStar keeps consumer trust, despite bumps

Mon, 2014-07-21 12:29

Whirlpool Corporation is reportedly threatening to back out of the EnergyStar program unless Congress grants it— and other manufacturers— immunity from consumer lawsuits demanding compensation for EnergyStar products that don’t measure up. A voluntary program run by the Environmental Protection Agency and the Department of Energy, EnergyStar’s credibility took a hit four years ago, when the Government Accountability Office successfully scammed it into certifying bogus products.

The report was a doozy. GAO investigators submitted an application for a gasoline-powered alarm clock. It got listed. They submitted a “room air cleaner,” and linked to a picture of an electric space-heater with a feather duster attached. That got listed too.

Photo: Government Accountability Office

“Really, EPA wasn’t looking at every application,” says Shanon Baker-Branstetter, an attorney with Consumers Union. “The manufacturers were self-certifying.”

EPA made changes, says Ann Bailey, who runs the EnergyStar products program for EPA. “Since then, we’ve dramatically improved the rigor of the certification process and we’ve instituted third-party certification.”

Manufacturers now submit their products to an EPA-approved lab, like Underwriters Laboratories, which signs off. The third-parties also pull a few products off the shelf every year to see if they measure up to the claims. That led to 62 products getting disqualified last year.

“I think EPA has done a good job addressing the concerns that GAO had,” says Steve Nadel, executive director of the American Council for an Energy-Efficient Economy.

Nadel thinks the current standards are high enough that he supports the proposed legislation, which would protect companies like Whirlpool from some consumer lawsuits, in cases where EPA has done a review.

“I think consumers tend to trust EPA,” says Nadel. Sales figures collected by EPA seem to back him up. Even in the years after the GAO report, the number of EnergyStar products sold continued to increase.

CORRECTION: The original version of this story gave the incorrect name for the Government Accountability Office in a caption. The text has been corrected.

Same-day delivery gains traction

Mon, 2014-07-21 11:23

Online shopping's convenience can be tripped up by long shipping times, keeping retailers like Amazon from being the go-to place to pick up ice cream or deodorant.

That's why the online retail giant is experimenting with same-day delivery in a few cities, says Marcus Wohlsen, senior staff writer at Wired. These new trucks would come pre-loaded with items just waiting to be ordered.

"You've got this fleet of trucks that's constantly combing through city neighbords," Wohlsen says. "Lo and behold, somebody orders something that Amazon predicted they or someone in that general vicinity would order and it's already on that truck ready to bring to that person's door."

Amazon's recent interest in drone delivery has also attracted attention recently. Though those trucks "aren't nearly as sexy as a drone," Wohlsen says, they're much more efficent, and give Amazon control over more of the buying process. But filling those trucks and sending them out presents a big logistical problem.

"You can't virtualize that tube of toothpaste; you still have to figure out how to get it there," Wohlsen says. "That said, I think that companies like Amazon and Google are in the best position to make advances in the field of logistics because logistics is a very, very complicated math problem. That's what these companies prioritize. It's how they make money."

For Amazon, Wohlsen says, the move is all about trying to "overtake brick and mortar stores as the main way people buy things. Online retail is still a very small portion of commerce in the U.S. It's something like 6 percent of retail purchases. There's a lot of runway left for Amazon."

Summer fun for future Fed chiefs? Maybe.

Mon, 2014-07-21 10:52

If sprinklers, Slip'N Slides and the other joys of summer aren’t wonky enough for your kids, there’s always Fed camp. The Federal Reserve Bank of Richmond runs a summer program for kids in grades K-8. It’s a field-trip destination, with half-day workshops meant to boost children’s basic financial literacy.

Outreach specialist Angela Collier gathers a group of rising kindergarteners around her at the Richmond Fed. They’re four- and five-year-olds in bright orange T-shirts, visiting from Camp Primrose.

In her best ‘this-is-awesome’ voice she tells them, “We’re gonna be talking about goods. And services. And consumers and producers and spending and saving.”

Oh yeah, it’s Fed boot camp.

“Uh, I wouldn’t call it Fed boot camp,” Melanie Rose quickly corrects. She oversees the Richmond Fed’s economic education programs, including its Summer Camp Challenge.

Is she at least scouting for the next Janet Yellen? Or Ben Bernanke?

Well, if we happen to find one I’m sure we would take him,” she says. “But no.”

Really, this is more like Fed-lite. It’s a chance for almost a thousand kids to stop by, play games about personal finance, and build their economic knowledge. But let’s just say you were secretly grooming future Fed chairs. You’d start young, right?

Step One: Establish everyone’s weight in gold.

“Probably all of you weigh about … one and a half, maybe two gold bars,” Collier tells the 40-pound kindergarteners. They’re standing in front of a gold brick that weighs 401.75 troy ounces.

Now that they’ve got the gold standard down, it’s time for Step Two: Master the difference between a good and a service.

A good, Collier says, is “something you can touch and feel and take home. Can you think of anything that would be an example of a good?” she asks.

“Play dough?” suggests camper A.J. Salvatto.

“Play dough is a great example of a good!” Collier cries.

Well done, A.J. Save that kid a space on the Federal Open Market Committee.

Step Three: Practice. The kids turn over cards, with pictures of cars and clocks and waiters. They try to identify goods and services. There are a lot of question marks in their little voices.

“Uh, a service?” asks one.

“A good?” asks a bunch of them.

Camper Tony Cavero nails it. He holds up pictures of firefighters.

“Are they providing a good or a service?” Angela Callier asks.

“A service,” he replies.

Tony Cavero: destined for the Board of Governors.

Now, older kids come through the Fed summer camp challenge too. But these little guys showed so much promise, we asked them about the biggest lesson learned from their day at the Richmond Fed.

Like Skanda Athreya, whose dad is an economist there, they all mention the same thing: the bus ride.

“I learned on the bus, when the driver’s driving, don’t distract your driver, ‘cause it can make him get in a car crash,” Skanda says.

Which in the coded language of Fed-speak says a whole lot about how to manage the economy.

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