In the thick of the housing crisis, some lenders slashed borrowers’ interest rates to as little as 2 percent. But rates start to rise again this year, and that will be hard for homeowners who are still struggling.
That group includes Adriana Martinez. She and her husband bought their dream house, in Olney, Maryland, in 2005. Right now, their monthly mortgage payment is about $2,200, thanks to an interest rate cut they got in 2010, through the government’s Home Affordable Loan Modification Program, which is referred to as HAMP. But even that payment has been tough, since Martinez lost her job last November.
“I need to find a job because, you know, it’s hard. It’s hard,” she says, holding back tears.
Martinez’s 16-year-old daughter, Julie, tries to help. She works part time at a gift shop. Julie says she and her mom were at the bank last week, confronted with a zero balance after the mortgage payment was deducted.
“I gave my mom my entire paycheck -- it was like $150 -- because she really actually needed it," she says.
And Martinez’s mortgage payment will rise by about $240 a month next year, because the HAMP interest rate cut is only temporary. After five years, the rate goes up by one percentage point a year, until it reaches the average interest rate at the time the loan was modified. Now, Martinez is afraid she’ll lose her home.
She is trying to get help, meeting with a housing counselor at the non-profit Housing Initiative Partnership, or HIP. They talk about how Martinez can pare expenses, maybe try to get the principle on her loan reduced.
HIP counseling director Mary Hunter says they have a lot of clients like Martinez, who are already struggling and now face rising interest rates.
“If the mortgage payment goes up but their income hasn’t gone up, they’re going to be stretched,” she says, adding that some my lose their homes. “I am worried that there’ll be a new wave of foreclosures in the next year.”
It’s already happening. More than a million homeowners got a mortgage interest rate reduction through the HAMP program. But since the program began in 2009, about a third of them have dropped out.
“Well, over 350,000 were not able to make their payments," says Christy Romero, inspector general of the Treasury Department’s Troubled Asset Relief Program. "And more than a third of those lost their home in foreclosures. Others lost their home in other ways, like short sales.”
Romero says the Treasury still hasn’t spent about $26 billion that was supposed to be used to help homeowners. Recently, Treasury announced it’ll use some of that money to extend the HAMP program to more people, through 2016. But Romero says Treasury should focus on homeowners already in HAMP, to keep them from dropping out, and causing that new foreclosure wave.
Homeowners across the country who got an interest rate cut through HAMP are now facing a rate increase. Some haven’t been able to keep up with their mortgage payments.Special Inspector General, Troubled Asset Relief Program quarterly report to Congress. April 30, 2014
So here's something I don't get to say every day.
The White House called Tuesday.
I know, right?!
They said if I can be in Washington on Wednesday by 2 p.m., I can have 15 minutes with the President.
So...we said "Sure." (Duh.)
A funny thing happens when that happens, though.
We gather a brainstorming team, of course, to figure out what we want to get out of the interview and how to frame the questions.
But then the ideas start coming. Everybody's got a thought on what I should ask him – which is great. Catch is, I've only got a finite amount of brain space to process all those ideas.
So the closer the interview gets, the more the stress mounts.
It happened last time we had the President on, too. Exactly this way. More and more ideas, less and less time to process them, until that moment when he and I shook hands as we prepared to sit down.
Then – and this is the only way to describe it – I had a moment of clarity. I knew how the interview was going to go, I knew how his answers were going to go, and I knew exactly how it was going to turn out.
And it did. Just like I thought it would.
All of which is to say – I'll be in Washington today.
Because the White House called.
The interview airs on Thursday. Here's the way it turned out last time. Me and the leader of the free world. On folding chairs. In the middle of the desert.
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"Faster Does It" Kevin MacLeod (incompetech.com)
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"Backed Vibes (clean)" Kevin MacLeod (incompetech.com)
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"Shades of Spring" Kevin MacLeod (incompetech.com)
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The FTC says T- Mobile made hundreds of millions of dollars from bogus charges on consumers phone bills. The charges were from third parties, but T-Mobile’s cut was allegedly as much as 40 percent.
"These were charges for things like flirting tips, dating tips, horoscopes, and other things that the consumer didn’t want," says FTC attorney Malini Mithal. "This is a practice called mobile cramming."
And it’s not something that T-Mobile invented. "It’s been going on for years—decades even," says David Butler, a spokesman for Consumers Union. "Long before the popularity of wireless phones, landline phone users were getting hit by cramming charges."
A Senate Commerce Committee investigation from 2011 estimated the costs to consumers across the industry in the billions. The committee report details just how consumers end up getting stuck with these charges:
1. 100 Percent, straight-up scamming. Billers just submit customer phone numbers to telecoms.
That includes unpublished numbers that nobody actually uses for phone calls.
"Numerous businesses and government agencies told Committee staff they have incurred crammed charges on telephone lines that are dedicated to alarm systems, elevators, modems, and other lines that are not assigned to any employees," says the report. Many of the numbers were completely unpublished. A fax line got billed for music downloads. An ATM line got billed for "Internet services."
A man in Connecticut fought charges from "Talent & More," which was charging his mother-in-law for hosting an online profile marketed to casting agents. "My mother-in-law us 82 years old, does not have internet access, and would not know how to use a website," he wrote to the state attorney general.
2. Dummy calls to get bogus "authorization"
Business owners told the Senate committee staff that when they tried to fight bogus charges, they were told there was a recording of them giving authorization. The committee got some of those recordings, which "show telemarkets quickly reading through long scripts, while employees answer 'yes' or 'okay' to questions they clearly do not understand."
3. Soliciting business via text... and not taking "no" for an answer
One company allegedly sent text messages offering horoscopes, dating tips and other services, and (according to the complaint in a class-action lawsuit) started charging people even if they replied "STOP" or called to say they didn't want the service.
4. With telecoms generally turning a blind eye — and sharing the profits
The Senate committee estimated that phone companies, which take a cut from third-party transactions, made more than a billion dollars from the practice over a ten-year period, and found that telecom companies did little to help their customers fight charges, or to check out companies that were obvious scammers.
Which is pretty much what the FTC is charging in T-Mobile’s case. The FTC says the company ignored signs that charges were bogus. And that the company buried those charges deep inside phone bills.
For its part, T-Mobile doesn’t dispute that stuff like this happened. But the company says it stopped billing for these services in late 2013.
For further reading: Our friends at Ars Technica have been covering the cramming story for years, starting with an account by editor Nate Anderson of his own experience getting crammed in 2008.
Here's an example the FTC says comes from a T-Mobile bill:
Train hopping, or the act of getting on freight trains without permission and riding them from depot to depot, is illegal and dangerous. It's also something that is, for many, a romantic endeavor, capturing the American spirit of adventure and travel.
Ted Conover did some train hopping in his youth, later writing a book about the experience entitled, "Rolling Nowhere: Riding the Rails with America's Hoboes." When his son Asa read his book, he felt the impulse to go train hopping himself. So Ted and Asa took a trip together, discovering along the way that new technology had changed the game.
In Ted’s experience, one of the hardest things used to be knowing where one was geographically while riding on a train; less of an issue today in an age of GPS-enabled phones.
Smartphones also allowed Asa an advantage over his father's earlier train-hopping days: the ability to document the experience in greater detail.
“I was on the trip to see what riding trains was like, rather than what being a hobo was like,” Asa said.
In addition to keeping them abreast of their location, the smartphones they were using let them contact home, document the trip through photos, and download a digital copy of an older guide to riding the rails, which the pair used often during the trip.
But even with digital enhancement, Ted believes the basic spirit of the endeavor has remained the same:
“One of the things that hasn’t changed is that your ability to get from point A to B on the rails is 100% determined by your own ingenuity and what you bring to the table.”
More on the lawsuit filed against Goldman Sachs that highlights alleged gender discrimination at the banking firm. Plus, the US Marshals' auction of bitcoin may have had an unintentional positive side-effect for the digital currency. Also, a look into why some companies are trying to offer healthier products without any prompting from government or legislation.
For five years, Derek Yach pushed to make PepsiCo – the brand behind munchies like Lays and Cheetos – a producer of healthier, lower sodium, lower sugar foods and beverages.
The responses were both sweet and salty.
“There are parts of a company where the support and awareness of the needs to change are very high,” Yach reflects. “But of course there were many who isolated me.”
Yach is attending this year's Aspen Ideas Festival in Colorado as corporate insiders reflect on their role in creating a healthy society. He was brought on by PepsiCo’s CEO, Indra Nooyi. Yach says she saw the potential of a multinational to influence public health with different products.
“While I was there, I saw the growth of hummus, the launch of dairy products for the first time, yogurt, and we saw a range of other healthier products being tested," says Yach.
Still, the company wasn’t willing to invest as much into research and new products as Yach had hoped. He's now with a health research group called The Vitality Institute, but says unlikely companies are coming together with an interest in health and prevention.
“They include companies like Samsung, Microsoft, General Electric, small startups,” he says. “They’re looking of a root to profitability through new products to promote better health, whether it's devices or smart phones, or alerts, or adherence. And they’re looking at how it’s going to benefit the bottom line, and people’s personal health.”
Power From Behind The Counter
Rather than wait for consensus, or for the government to make the first move, drugstore chain CVS is trying to make the products behind its counters healthier. In October, CVS will stop selling tobacco products altogether, wiping out an estimated $2 billion a year in sales.
Dr. Troy Brennan, Chief Medical Officer and Executive Vice President of CVS, says it will be only a short-term loss.
“If you’re creative, you’ll be creative to the bottom line,” Brennan says. “Taking two billion out now, long-term that’s going to be a smart decision.”
He admits a lot of people were holding their breath before the announcement, expecting the stock to drop. Instead, Brennan says, it went up.
“We’re beginning to know we have to do something to take better care of ourselves. Companies that do those sorts of things, I think consumers are attracted to that and that’s the business interest.”
Across the pond, supermarket chain Tesco is also trying to nudge customers towards healthier decisions. By the end of the year, Tesco will remove displays of chocolates and candies at the checkouts in grocery and convenience stores.
Many more corporations are turning inwards and focusing first on wellness among employees. Yach says whether companies are changing products in stores or implementing health programs for workers, evaluation by a third-party will be key to understanding what works.
“The win will come through seeing whether the companies who do the right thing will see the uplift on the share price over the long term,” he says.
Hyatt is building a five-star hotel on West 57th street in Manhattan. According to Forbes Travel Guide, there are only seven others in New York City. The hotel’s pool will feature underwater speakers with a custom soundtrack from nearby Carnegie Hall, and the hotel's bath amenities are perfumed with Tubereuse 40, a custom scent created by Le Labo.
Hanya Yanagihara, an editor at large at Conde Nast Traveler, says there are various evaluative bodies - AAA, the Michelin Guide - that rank hotels. For a hotel to win that coveted fifth star, certain standards must be met.
“There has to be a 24-hour reception area, and there has to be an onsite restaurant, there has to be 24-hour room service, there has to be express dry cleaning service,” she says.
Forbes Travel Guide uses 800 standards on a checklist used to evaluate hotels. Michael Cascone, the guide’s president and COO, says 70 percent of its secret algorithm is tied to customer service.
"No one leaves a hotel and says, 'you know what? That lobby was beautiful, but the service was bad and I’m going back.'”
Bruce Wallin, editorial director at luxury lifestyle magazine "Robb Report," which covers hotels, says five-star guests expect 400-thread count sheets and nice artwork.
He agrees that top-notch hotels need to maintain high-end facilities, or as he puts it: "It can't be fake wood and Formica."
But Wallin also points out that ranking systems can be too focused on checklist items, and as a result, might overlook the less tangible elements of a hotel. This could potentially excluding smaller, yet special, properties.
What really sets top hotels apart, he notes, is service and surprise.
“In Milan there’s a hotel where every afternoon, you get a knock on your door, and instead of housecleaning it’s a cocktail cart and they’ll make whatever drink you want, right in your room," says Wallin.
But the real surprise may be six and seven star hotels, which Yanagihara says can be found in Dubai.
"It can mean that every guest has acess to their own Bentley, or there’s a helicopter pad on the roof," she says.
The ranking, notes Yanagihara, is not formally recognized by any governing body.
A Five-Star Rating by the numbers
Inspectors for Forbes Travel Guide’s respond with a “yes” or “no” answer to certain standards during an incognito visit to a hotel. The hundreds of yes's and no’s on the inspection report are tallied into a score that ultimately earns the hotel a "Five-Star," "Four-Star," or "Recommended" rating. Here's some more numbers behind a Five-Star rating:800 items
The number of items on the checklist that determines star ratings.70%
The percentage of items on the checklist that are specifically related to service quality.
To receive a Five-Star Rating:10 minutes
The amount of time within which bags should arrive after registration.90 minutes
The amount of time within which the staff at the pool should offer a complimentary drink on a warm day.5 minutes
The window of time surrounding the estimated time of delivery within which room service should be delivered.24 hours
The amount of time that both a reception desk and a restaurant must be available and open.
To receive a five-star rating, a specific welcome gift should be provided, and bathrooms should be supplied with a variety of items the guest would find useful. For example, guests at Park Hyatt New York will be offered bathroom amenities scented with Le Labo Tubereuse 40, a custom designed scent for the hotel.
The US Marshals Service has announced that the bitcoins sold in its auction on Friday went to one, lucky bidder. Now, the almost 30,000 bitcoins have been transferred to that winner.
The Marshals routinely seize the property of criminals, but only auction stuff off that’s legal. You wouldn’t have a heroin auction, for example. But they did auction the bitcoin seized from the black market website, Silk Road.
Why auction bitcoin?
“Because bitcoin is a legitimate asset," says Gil Luria, a managing director at Wedbush Securities. "And now the US Marshals Service has acknowledged that.”
But even with that legitimacy, bitcoin still isn’t easy to trade. To get it, you have to go to unregulated markets in places like Slovenia or China. Still, CoinDesk US editor Pete Rizzo says the auction helps.
“Is it raising awareness beyond where bitcoin was maybe a month ago? I think absolutely," he says. "Does it still have a long ways to go? I think yes.”
The new respectability has pushed up the price of bitcoin. And even though it fell when the Marshals first announced their auction, it’s made up the lost ground, and then some.
Today's US-Belgium World Cup game arrived at a most inconvenient time, coming as it did just an hour before deadline here at Marketplace.
— Marketplace (@Marketplace) July 1, 2014
We got the first half in.
But anyway: From the files of Intercall, a conference calling company, this little nugget (which we found on Quartz):
Conference call volume last week during the US-Germany game was off 11 percent. That's "volume" as in the number of conference calls, not "volume" as in sound.
And to be honest, we were kind of lucky to get the show on the air today.
If you take a look at Aereo's website, there's a letter from the CEO that says the streaming TV company put its operations to a halt. The Supreme Court ruled last Wednesday that Aereo's service was deemed illegal.
That ruling - bad as it was for Aereo - was an opportunity for its competitors. Mark Ely is the founder and CEO of one of them: Simple.TV.
Ely says his company does things differently from Aereo. In his mind, the ruling was about "where that TV content is fundamentally captured." Aereo captured broadcast TV content from a central facility and streamed it out to their subcribers. Simple.TV?
"We put the capture point in the user's home, and by doing so...really sit it in the same place that your traditional DVRs and place shifting technologies sit. It turns out that where you capture the content - who's doing it - really makes all the difference."
According to The New York Times, the number of households who subscribe to paid television is down seven percent from last year while the number of households who use internet or other streaming services is up 30 percent from 2013. Ely sees this as an opportunity to increase business, especially since one of his main competitors is on pause.
"What we see is a whole generation of people growing up on Netflix and Hulu and over-the-top streaming services. And see those kinds of traditional networks - ABC, FOX, NBC - and others as having great content but they're not willing to necessarily buy those in a large bundle of other expensive channels that they don't care about."
Listen to our full interview with Mark Ely in the media player above.
If you take a look at Aereo's website, there's a letter from the CEO that says the streaming TV company put its operation at a halt. The Supreme Court ruled last Wednesday that Aereo's service was deemed illegal. What it came down to is "where that TV content is fundamentally captured," says Mark Ely, the CEO of Simple.TV.
Aereo captured broadcast TV content from a central facility and streamed it out to their subcribers. Ely says his company does things differently.
"We put the capture point in the user's home, and by doing so, kinda really sit it in the same place that your traditional DVRs and place shifting technologies sit, and it turns out that where you capture the content -- who's doing it -- really makes all the difference."
According to The New York Times, the number of households who subscribe to paid television is down seven percent from last year while the number of households who use Internet or other streaming services is up 30 percent from 2013. Mark Ely is aware of this trend and sees the opportunity to increase business, especially since one of his main competitors is on pause.
"What we see is a whole generation of people growing up on Netflix and Hulu and over-the-top streaming services. And see those kinds of traditional networks -- ABC, FOX, NBC -- and others as having great content but they're not willing to necessarily buy those in a large bundle of other expensive channels that they don't care about. So we see ourselves as kind of a supplement to the whole generation that's growing up on internet video."
NBC’s TV show 'Community' was a cult favorite, but largely a ratings loser for the network, meaning it often seemed to be on the brink of being canceled.
Now, despite being canceled by NBC in May, "Community" is getting a second shot at life. Its sixth season will air – or rather stream – on Yahoo, which will use the show to beef up its original video content.
“Literally, last year we produced 86 series, none of whom you’ve ever heard about because it was sort of a failed branding exercise,” Yahoo CEO Marissa Mayer admitted at TechCrunch’s Disrupt New York event in May.
Mayer hopes that original content, along with the company’s more established search and email services, will help make the site part of consumers’ daily online routines, which would then boost advertising.
In order to draw people to the site, Yahoo needs strong, unique content – different from what Netflix or Hulu is offering, says Sam Craig, a professor at NYU’s Stern School of Business.
“It’s a crowded marketplace out there and unless you have something with an identity, people aren’t going to come to it,” he explains.
"Community" offers a dedicated audience, which – while small by broadcast standards – is passionate about the show and loyal to it, says Max Dawson with the media consulting firm Frank N. Magid Associates.
Another plus – the wealth of the show's existing viewers. 'Community' has very strong support among households making over $150,000.
“It beats out things like The Voice. It beats out mega-ratings success stories, [like] Big Bang Theory, in attracting those rich viewers,” says Dawson. “Thpse are viewers who are the most difficult to attract and the most appealing for sponsors.”
One network’s trash could be a tech company’s treasure.
We put a lot of trust in computers. We use them to find dates online, to give us music recommendations, and, of course, the list goes on. But would you trust a computer to make you food?
Well, not literally. The people at IBM have programmed Watson, the supercomputer that made its debut on Jeopardy, to come up with the most unique and creative food recipes using trillions of ingredients. From Indonesian Rice Chili Con Carne to Austrian Chocolate Burritos, the computer takes a base ingredient, a style of food and some additional suggested flavors and complements to come up with recipes. This process is named "cognitive cooking".
Florian Pinel is the head engineer at the Cognitive Cooking project. He says most people cook in their comfort zone:
"They always cook the same things... and the computer doesn't have that bias. So it comes up with combinations that do work, because we use a number of theories that tell us that they are likely to work together. But that you wouldn't think of."
One of those recipes Watson came up with? Bengali Butternut Barbecue Sauce. Yeah...
The team debuted this recipe for SXSW on the IBM Food Truck. While it may not have gone over well at the Marketplace offices, Pinel says the system is there to help people be more creative when it comes to cooking.
It’s not every day that five government agencies, including the Federal Reserve and the FDIC, all come out with the same warning on the same day. That’s what happened this morning, and it amounted to a collective "watch out" to banks over homeowners ability to pay back lines of credit in the next few years.
Back in the early 2000s, right up to 2008, a lot of people took out lines of credit on their homes – this is where you can borrow money and use your house as collateral. They’re known as HELOCs (Home Equity Lines of Credit).
“Anybody who had a breath, any house still standing, seemed to be eligible for these kinds of loans,” recalls Nicolas Retsinas, senior lecturer in real estate at Harvard Business School.
HELOCs can typically last 10 years in what’s called a “draw period,” where people can continue to draw on the line of credit. After 10 years, they can’t draw any longer and they have to start paying back the principal. Starting about now, 10 years have gone by. Now it’s time to pay up.
“This is another bill coming due from the lending binge of the early 21st century,” says Retsinas. A bill that, according to the Office of the Comptroller of the Currency, now totals around $218 billion, of which $199 billion will be due by 2018.
If homeowners haven’t been paying down the principal, the change in bills may be substantial when they have to start doing so.
“We’re seeing that payments can go up 100 percent or even 200 percent or higher,” says Bob Piepergerdes, director of retail credit risk at the Office of the Comptroller of the Currency.
Given median incomes are lower than they were in 2007 and unemployment is higher, some borrowers may experience problems paying up.
“There is some risk of repayment so we’re asking institutions to evaluate where their borrowers are,” says Piepergerdes. And then he needs them to prepare accordingly
“The good news,” he says, “is that institutions have taken action.” The guidance put out by different agencies “is really to set forth the expectations of what we would like to see institutions do from a risk management stand point, but the institutions have been preparing for this for as long as we’ve been talking about it.”
JPMorgan Chase, for example, says it’s stocked up on reserves and is reaching out to customers.
“We are looking for ways to limit payment shock for our customers by being hyper-focused on communicating options to them,” the bank, which holds $49 billion in HELOCs, of which $29 billion will require higher payments through 2017, said in a statement. “We want to make sure customers are making enough of a payment so when they go into the repayment period of the principal it’s a step up not a leap up.” The bank estimates that more than half of the $29 billion will refinance or pay off before payments jump higher.
Overall, the largest lenders have reduced exposure by 20 percent through refinancing.
Homeowners would be advised to dig out their old loan agreements and look at the fine print, says Bob Davis, Executive Vice President at the American Bankers Association. “That’s one thing consumers ought to do right now, they ought to look at the payments they may have to make,” Davis says, “and if they want to change the loan arrangement and pay off their home equity line of credit by refinancing, they ought to be aware of their access to credit and whether their credit rating will allow them to.”
Every year, hundreds of new charter schools open in the U.S. – largely in low-income, urban neighborhoods. This fall, Sejong Academy in St. Paul, Minnesota, will be one of them. The Korean-immersion school for kids in kindergarten through sixth grade will be located just a few miles from the nation's very first charter school, which opened in St. Paul in 1992.
A big idea behind charters, which now educate roughly 2.5 million kids in the U.S., is to try out concepts that traditional public schools typically wouldn't, like focusing on the outdoors, Korean language immersion – or even yoga.
Sejong Academy's founders hope their curriculum will appeal to a big population of Korean adoptees in the Twin Cities. Plus, they think non-Koreans might like learning another language. Board chair Grace Lee, herself Korean-American, thinks Sejong will offer richer cultural lessons than your typical public school might.
"I think of course a lot of schools will say, 'Oh, we promote global diversity.' But how are they demonstrating that? Are they just having some ethnic food at an open house, or something like that?" she says.
The real battle between charter schools and their traditional counterparts is far more pitched. One of the contentious aspects is that the roughly 6,500 charter schools in the country are public schools, and they get taxpayer dollars. But they're run independently, meaning that in many states they are not subject to the same rules and regulations as are traditional public schools. Each school is overseen by a so-called "authorizer," which approves the school's charter and makes sure the school meets its performance goals.
Charter advocates include lots of average parents as well as some very big guns like the Gates and Walton Foundations, which funnel millions of dollars to organizations that support charter schools. They believe there's greater flexibility in charters than in the traditional system. It's easier to hire and fire teachers – and open and close schools.
"That is the secret ingredient to chartering, the fact that if the school isn't performing well, it can be closed," says Nina Rees, president of the National Alliance for Public Charter Schools. She says each year, about 500 charters open and 150 or so close. The authorities who oversee them, called authorizers, might pull the plug due to low enrollment, poor performance or mismanagement.
Opponents, often local school boards and powerful teachers unions, say charters leech money from the traditional school system. They also complain that charter school teachers, who tend to work in poor districts, aren't in it for the long haul.
"I think schools that serve in high poverty areas, the revolving door of principals and teachers is really a disservice to students," says Dennis Van Roekel, president of the nation's largest union, the National Education Association.
Lots of charter schools are operating with mixed results. A recent study by researchers at Stanford University found that about a quarter of charter schools studied achieved better outcomes on reading measures than traditional schools. But nearly a fifth of the charter schools did much worse. For math, an even greater share of charter schools were underperformers.
"I think the evidence tells us that the best charter schools are exceptional schools, and that the worst charter schools are extraordinarily bad," says Jack Schneider, an education expert at the College of the Holy Cross. "And the vast majority of charter schools are more or less equivalent to traditional public schools."
Andrea Springer is about to test her luck. She's Korean-American and is considering sending her kids to the Korean immersion charter school in St. Paul that opens this fall.
"We've stayed away from what I view as traditional public education because I think as a child I was pretty bored or the teacher was dealing with behavior problems versus teaching us," Springer says.
Springer also likes that her kids could learn Korean at the charter school without her having to nag them with workbooks.
But Springer does have some reservations about sending her kids to a start-up charter.
"It's the first year, so you get nervous, 'Do I want to be the test batch parent?'" she asks.
Even as charter schools remain controversial, demand for them appears to be strong. The National Alliance for Public Charter Schools says hundreds of thousands of kids are on charter school wait lists.
To hear more about the growth of charter schools in the country listen to the Marketplace on-air story.
Hollywood has been dealing with the problem of runaway production for years. A growing number of film and television productions are being lured away from Los Angeles by tax credits.
One group of show business employees is speaking out about it. The American Federation of Musicians recently held a protest outside the Los Angeles offices of Lionsgate, the studio responsible for, among other blockbusters, "The Hunger Games". The musicians work in film scoring. They’re upset with Lionsgate for accepting millions in tax credits to film in the U.S., but then score those films overseas.
Marc Sazer is a violinist and a member of the American Federation of Musicians. He’s worked for decades in film and television. “The major studios have longstanding relationships with the American Federation of Musicians,” said Sazer. “Fox, Universal, Columbia, Paramount and Disney, when they produce domestically, they score their films with us.”
Lionsgate is not considered a major studio. Technically, it’s a mini-major studio. But Sazer and the other members of the musicians' union argue that Lionsgate is at the same level as the major studios. Last year it generated $2.7 billion in revenue, millions of which came in the form of tax credits.
“We’re trying to bring attention to the fact that companies are taking our tax dollars and then taking our jobs overseas, which depletes our social compact," Sazer said. "It also depletes our cultural equity, because it undermines the livelihoods and the sustainability of our musical culture.” Lionsgate did not respond to a request for an interview.
In an outdoor amphitheater in the shadow of the San Gabriel Mountains, the Pasadena Symphony is tuning up for a rehearsal. Hundreds of empty chairs face the stage. Peacocks outnumber audience members.
“We have about half of the orchestra on stage, some early birds, some will whisk in at the last minute,” said trombonist Andy Malloy. He’s worked in film and television since he got his first gig on "Laverne and Shirley".
Film and TV gigs used to make up 75 to 80 percent of Malloy’s income. “My guess, if there are 60 musicians here, easily 40 to 50 people do recording work as well," he said.
According to the union, total earnings of its members have fallen by half since 2007. During a recent protest, Malloy and his colleagues delivered a petition to Lionsgate headquarters. At the time, they singled out one film in particular, "Draft Day" starring Kevin Costner.
The score to "Draft Day" was recorded at a studio in Macedonia called F.A.M.E.’S. Laurent Koppitz, the founder of F.A.M.E.’S, is a musician himself, originally from France. He was working at a classical music record label in Paris when he visited Macedonia for the first time. “I discovered a country that was really interested in attracting investors and doing business,” said Koppitz.
Koppitz was able to get a loan, fix up a recording studio and audition more than 100 classical musicians. That was six years ago. Nearly all the jobs he gets are low-budget productions, accompaniment on pop albums, Bollywood films and video game music.
“Ninety-nine percent of what we do is independent projects,” Koppitz said. Some of them turn famous.
Koppitz was surprised when he came across news reports that F.A.M.E.’S was taking jobs from American musicians. He says he can’t compete with the quality of studios in Los Angeles. And that was not his intention. Kopitz started F.A.M.E.’S to make live orchestras affordable to those with small budgets, who might otherwise use pre-recorded or electronic music.
So when a low-budget production hires his musicians, that, he says, is an example of the good aspect of globalization: more musicians get work and more productions have live music.
But if large studios hire him simply because he’s cheaper, then he says they are coming to Macedonia for the wrong reason. “When you go for the wrong reason, like 'Oh, it’s cheap,' it’s not very nice for anybody because it takes the job here which is a problem,” he said
That problem Koppitz said, is the bad aspect of globalization.
Lesley Perkins is a human resources management consultant who’s been unemployed for about 3 1/2 years.
“I feel forgotten and ignored by our society,” she says.
Perkins also feels ignored by the federal Bureau of Labor Statistics. It only counts you as unemployed if you’ve “actively looked for work” in the past four weeks. But Perkins isn’t sure what that means.
“Is it actually filling out a job application or is it actually going to networking functions and trying to connect with people there?” she says.
I was confused, too, so I called Jim Walker, a Bureau of Labor Statistics economist. He says the Bureau will count you if you send out a resume as you’re surfing websites. Or hand someone a resume as you’re networking. People who aren’t so active in their job search aren’t counted in the official jobless numbers. But the Bureau still keeps track of them. They’re labeled the “marginally attached.”
“People who just say 'Well, I’m not working. I would want a job but I’m not looking right now,'” says Walker.
The Bureau gets its numbers by talking to real people. It surveys 60,000 households, asking people if they’re working or looking for a job. Justin Wolfers, a labor economist at the University of Michigan, says part of the confusion is you can be counted as unemployed, even if you don’t get an unemployment check.
“One part of the government says you’re not unemployed in the sense that they’re not going to pay you benefits. But another part says 'No, no, we’re definitely going to count you as unemployed,'” he says.
Wolfers says the Bureau’s system isn’t perfect. But it’s about the best we can hope for, because there is no easy way to measure unemployment.