Marketplace - American Public Media

Subscribe to Marketplace - American Public Media feed
Updated: 34 min 55 sec ago

A day after crash, a vote to cut Amtrak funding

Wed, 2015-05-13 13:00

Ride an Amtrak train from Washington, D.C., to New York, and you’ll notice a lot of clickety clacking.  It’s not a smooth ride. In fact, Amtrak says it has a $52 billion maintenance backlog on its Northeast Corridor.

But Congress won't help much with that.

“There was a lot of hand wringing, where they said, 'We all know this is inadequate, but there’s nothing much we can do,' ” says Sean Jeans-Gail, a spokesman for the National Association of Railroad Passengers, who attended the House Appropriations Committee hearing on Amtrak funding today. The committee members said their hands were tied by spending caps.

So, is Amtrak’s Northeast Corridor safe?

“I would characterize it as safe," says Joseph Sussman, a professor in the department of civil and environmental engineering at MIT.  “But there’s also the question of what quality of service is offered.”

For instance, trains are late if they have to slow down to go over rough track. Sussman would like to see not just track maintenance, but more sections of track good enough for high-speed rail.  If you wanted to run high-speed trains along the whole Northeast Corridor, you’d have to spend billions.

“You’d need to invest in it from one end to the other," says Mark Burton, a professor of transportation and economics at the University of Tennessee. "There would almost certainly be no section of track that was unaffected. ”

The entire proposed 2016 budget for Amtrak in today’s House bill?  Just over $1 billion, which is $262 million less than this year.

 

 

California drought threatens even oldest water rights

Wed, 2015-05-13 13:00

California's first come, first served, water-rights system is about to be tested.

State water regulators are expected to issue curtailment orders to the most privileged water users in California – those with so-called senior water rights, claimed before the state established a permitting process in 1914. 

Those lucky enough to be grandfathered in, including corporations, farms and irrigation districts, usually don’t have much to worry about when it comes to water. They’ve been last in line for cuts in dry years, but the drought is starting to chip away at those historic privileges, says Stanford Law School’s Barton “Buzz” Thompson.

“California’s drought has now gone on for a long enough period of time, and it’s bad enough, that it looks like we might actually shut off our senior water rights holders," Thompson says.

Some rural irrigation districts with senior rights may sue over the expected water cutbacks. Jeanne Zolezzi, a Stockton attorney who represents several irrigation districts with senior water rights, says she doesn’t believe the State Water Resources Control Board has the authority to shut them off. If regulators demand a curtailment, she insists, they need to hold a hearing and provide evidence of harm rather than simply issuing an order. 

 

Most Amtrak long-distance routes are unprofitable

Wed, 2015-05-13 13:00

It's still up in the air how long Amtrak's going to be out of business — or, at best, running reduced service on that Northeast Corridor. 

But here's a quick hint as to how important that New York-to-Washington run is for the company: Amtrak made $286 million there last year.

All its other long-distance routes? They lost the railroad service more than $600 million (PDF).

Facebook and the need for speed

Wed, 2015-05-13 13:00

As we are all well aware, there is a great deal of critical information out on the Internet that we must see.  And we must see it AT ONCE.

Up until now, when hapless users of Facebook’s mobile app come across a link or listicle that strikes their fancy, they have had to endure the debilitating process of clicking on said link and waiting – up to several seconds – for that page to open.  Adding insult to injury, some users have had to resort to exiting the Facebook app and opening the link in a different browser, depriving themselves of precious seconds that could be used to stare endlessly into the eyes of a baby sloth. 

 “You really only have about three seconds for a web page to load fully before a person’s gone,” says Sean Work, director of inbound marketing at KISSMetrics, a firm that tracks customer data online for subscription-based websites like Netflix and Hulu.  “For certain businesses it has a profound effect on their bottom line.”

This is one of the drivers behind the deal that Facebook has struck with nine major publishers, including the New York Times and BuzzFeed.  The deal lets Facebook host and publish content from these publishers on its own servers, and display them quickly – very quickly – within its mobile app. 

In Facebook’s case, if someone gives up on an article or leaves Facebook’s app to view it, Facebook misses out on important data.

The important information for advertisers and for Facebook to produce more clickable content is “How long you spent on the article, did you read half of it and go away from it? Did you watch any of the multimedia or the videos?” says Debra Aho Williamson, principal analyst at EMarketer. If that content is hosted on Facebook servers, “it makes it possible for people to stay in that happy little Facebook universe that Facebook has built,” Williamson says.

So ultimately, getting content in front of people faster keeps people in front of Facebook longer.  

My First Job: Wienermobile Driver

Wed, 2015-05-13 13:00

Some first jobs are exactly what you'd think they'd be: fry-cook at a fast food chain, sales associate somewhere, maybe a telemarketer.

But not all of them.

Natasha Best worked as a "Hot-Dogger," driving the Oscar Mayer Wienermobile across the Midwest and giving away whistles.

"We would park somewhere, and we would just get inundated; people wanting to see the inside of it," Best says. "But then I would even have people come up to me and ask me for my autograph or ask to take a photo with me.  They just loved it." 

Hear Best's full story, including how difficult the Wienermobile was to drive, in the audio player above.

Despite insurance, some Americans still struggle with medical debt

Wed, 2015-05-13 13:00

At the Yakima County courthouse in Washington, presiding District Court Judge Kevin Roy walks past a rattling dot-matrix printer and long rows of color-coded folders to a shelf of files awaiting his signature.

“If I was to pull this file,” Roy says, taking one from the shelf. “Yep, Memorial Physicians, PLLC. That’s not just by luck.”

Not luck, because most of these files are for medical debt. The Affordable Care Act has expanded coverage to more than 10 million Americans who were previously without health insurance and provided subsidies to millions more. But it hasn’t changed much for those who have fallen behind in paying for healthcare.

Roy spends a big chunk of his workday signing judgments against people who owe money to hospitals and medical providers. “It’s like the tide coming in every week," he says.

Medical debt affects one of every four Americans and accounts for more than half of all bankruptcies.

At age 60, Scott Cliett says he’s in debt for the first time in his life. Chronic pancreatitis has forced him to stop working, and regularly sends him to the emergency room for a week at a time. He now has free health coverage through the Affordable Care Act, but he’s still struggling to pay off old debt. Missing a single $25 installment landed Cliett in court.

“The Judge did allow me to speak, but the fact that I admitted I do owe them money pretty much cut everything else off,” Cliett says, reflecting on his day in court. “‘You know, I’m sympathetic to your plight, but I have to follow the letter of the law. You owe them money, so therefore I’m granting the judgment.’”

Most of Cliett’s bills were forgiven through the hospital’s charity care program. But he’s barely made a dent in the remainder, like a $4,000 ambulance ride.

 “Let’s see, $4,000 divided by twenty five dollars,” he says. “My grandkids will probably still be working on it when I’m gone.”

Overall, gaps in coverage like Cliett’s are the exception to the rule. The vast majority of people with medical debt have insurance the whole time those costs are piling up. But the bills insurance doesn’t cover can be devastating on their own.

That’s one reason Dr. Steffie Woolhandler, who teaches health policy at City University of New York, says health insurance is often a "defective product."

“People buy it in good faith to try and get medical care and make sure their bills are paid, and then when they get an expensive or prolonged illness, the health insurance doesn’t work,” she says.

Woolhandler says Obamacare has definitely helped. She says even with Obamacare, many policies still have high out-of-pocket costs.

Karen Pollitz, who co-authored a recent study on medical debt for the Kaiser Family Foundation, says, “We see a lot of plans, still, that have 2, 3, 4, 5,000, $6,000 deductibles. That’s still way more than most Americans have on hand.”

PODCAST: Uber loans

Wed, 2015-05-13 03:00

On top of Macy's reporting disappointing profits Wednesday, there's news that retail sales last month were flat. More on that. Plus, we'll talk about Facebook luring publishing companies into putting their content directly onto the social media site. And Uber has a finance program for potential drivers with bad credit. Getting more drivers on the road means more money for Uber. But those loans can have high interest rates and some drivers are struggling to make the payments. 

Who are AOL's two million dial-up users?

Wed, 2015-05-13 02:59

Verizon's purchase of AOL will include not just AOL's digital content properties and online advertising business, but also about two million dial-up subscribers. 

They are among as many as nine million Americans who still use dial-up for a variety of reasons, including cost and geographic availability of broadband, says Aaron Smith of the Pew Research Center, who looked into dial-up users.

"They're a little bit older," Smith says. "42 percent of dial-up users are over the age of 55. They're also a little bit different in their socio-economic makeup. About half of dial-up users have a high school diploma or less."

Smith says most dial-up users would switch to broadband if it was cheaper or easier to get. But he says a fifth of dial-up users are happy with the service, and just aren't interested in broadband.

So should Verizon make an effort to convert dial-up die-hards?

"The best [Verizon] can do is nothing," says telecom analyst Roger Entner of Recon Analytics. "There is a segment of the population that just wants to have occasional access to the Internet and only pay 10 dollars for it."

Entner says everyone who wants to convert to broadband probably already has. Except, he says, in the most remote and rural parts of the U.S., where a copper telephone line and a dial-up modem may still be the best way to get online. 

Who's the dial-up user?

Wed, 2015-05-13 02:59

Verizon's purchase of AOL will include not just AOL's digital content properties and online advertising business, but also about two million dial-up subscribers. 

They are among as many as nine million Americans who still use dial-up for a variety of reasons, including cost and geographic availability of broadband, says Aaron Smith of the Pew Research Center, who looked into dial-up users.

"They're a little bit older," Smith says. "42 percent of dial-up users are over the age of 55. They're also a little bit different in their socio-economic makeup. About half of dial-up users have a high school diploma or less."

Smith says most dial-up users would switch to broadband if it was cheaper or easier to get. But he says a fifth of dial-up users are happy with the service, and just aren't interested in broadband.

So should Verizon make an effort to convert dial-up die-hards?

"The best [Verizon] can do is nothing," says telecom analyst Roger Entner of Recon Analytics. "There is a segment of the population that just wants to have occasional access to the Internet and only pay 10 dollars for it."

Entner says everyone who wants to convert to broadband probably already has. Except, he says, in the most remote and rural parts of the U.S., where a copper telephone line and a dial-up modem may still be the best way to get online. 

A look at Macy's bottom line ahead of a new strategy

Wed, 2015-05-13 02:00

Macy's, which reports its earnings Wednesday morning, is trying out a new growth strategy. This fall, it will open four discount stores in New York City called Macy’s Offstage.

Other big retailers like Saks Fifth Avenue, Nordstrom and Neiman Marcus have already established themselves in the discount game and are seeing good results from it.

“What is the hottest sector in apparel retailing in America? Off-price,” says retail consultant Howard Davidowitz. Davidowitz says with the middle class shrinking, it's no wonder Macy's now wants to open off-price stores. He thinks it's slow to make the move, but has the chance to stand out against less upscale competitors.

“You can sell off-price, and it doesn't have to be ugly,” he says.

But retail analyst Paul Swinand at Morningstar says discount apparel may already be saturated.

“In my opinion, it's sort of skating to where the puck was,” he says. “I'm not so sure that off-price is going to continue its growth forever.”

Swinand says Macy's should maybe lean harder on online sales, where it's had a lot of success already.

Why Facebook is now a news publisher

Wed, 2015-05-13 02:00

On Wednesday morning, Facebook began its long-awaited foray into publishing, with so-called "Instant Articles" from publishers including the New York Times, Buzzfeed and National Geographic appearing natively in the latest version of Facebook's iPhone app, instead of linking out to their websites.

The social networking site touted the faster load times for these articles in a promotional video.

(function(d, s, id) { var js, fjs = d.getElementsByTagName(s)[0]; if (d.getElementById(id)) return; js = d.createElement(s); js.id = id; js.src = "//connect.facebook.net/en_US/sdk.js#xfbml=1&version=v2.3"; fjs.parentNode.insertBefore(js, fjs);}(document, 'script', 'facebook-jssdk'));

Introducing Instant Articles, a new tool for publishers to create fast, interactive articles on Facebook.

Posted by Facebook Media on Tuesday, May 12, 2015

But that's hardly the whole story.

"It is true that it will load and create a better experience for users, but it's also true that Facebook will get more data and also enable them to sell more ads," says Ben Schachter, Internet analyst at Macquarie Securities. Media partners can choose to sell their own ads and retain 100 percent of the revenue, but they can also rely on Facebook's ad network, and let Facebook take a cut of 30 percent.

Joshua Benton, director of the Nieman Journalism Lab, thinks this deal may work out in the short-term for the nine publishers involved today's launch, but he worries about what will happen further into the future.

"Down the road, I think the dystopian vision is that this is another step toward Facebook becoming the Internet," he says.

Uber drivers struggle to pay subprime auto loans

Wed, 2015-05-13 02:00

Richard Brunelle feels trapped. The 58-year-old says he has to drive for Uber.

Brunelle got a car through Uber's low-credit finance program and needs to make money for the loan. His payments are about $1000 dollars a month, and the loan has a 22.75 percent interest rate. That means by the time Brunelle finishes the loan, he will have paid twice the price for his Kia Optima.

At first, Brunelle thought he could cover the payments and still make a profit. Uber has since cut income to drivers. Now, Brunelle says he's working just to break even.

“It's like a ball and chain,” Brunelle says. “It's ridiculous.”

Brunelle says he has already fallen behind a few payments on the car, and that if he doesn't make a payment it could get repossessed. “I'm just trying to get by,” he says.

Here is how the financing program works: Uber connects low-credit drivers to dealers and lenders. Then it is up to the driver to negotiate the terms of the loan. Uber deducts loan payments directly from the drivers' earnings.

Uber says thousands have used the program. It had me talk with driver Jon Hutcherson, who says he's happy with the loan. Hutcherson says, “The thing about it being no hassle financing is really what attracted me.”

Hutcheron says working with Uber was easier than going to a dealer by himself because his credit isn't so great. Uber spokesperson Kristin Carvell says that's the point of the financing program. It helps people like Hutchinson get cars. And to boot, drivers get a little discount on the cost of the vehicle.

But if you don't drive, you still have to make the payments. Hutcherson says he had to dip into his savings when he stopped driving because of two accidents. He says, “When you aren't working for Uber, you make payments out of your own pocket like you do for a traditional loan.”

Another troubling aspect of the program is who Uber partners with. It's working with subprime lenders like Santander Consumer USA.

William Black is an economist at the University of Missouri-Kansas City and a former bank regulator. Black says Santander “is one of the most notorious sub-prime auto lenders in the United States.”

Black says Santander is known for predatory practices like sky high interest rates and hefty fees. Uber works with multiple lenders says spokesperson Carvell, and they provide loans for people with all kinds of credit.

Richard Brunelle isn't impressed. He feels like Uber would deal with anyone to get more drivers on the road. Brunelle says, “I feel like Uber not only tossed us to these wolves, but they intentionally did it and they are making bank it.”

Brunelle says he's stuck—it's either drive or meet the repo man. Now he is going online to tell others not to take the financing and get trapped like him.

Art auction at Christie's sets record for expensive art

Wed, 2015-05-13 02:00

This week, the art world saw two record breaking sales in the same auction. At Christie’s sale entitled “Looking Forward to the Past," Pablo Picasso's “Les Femmes d’Alger (Version ‘O’)” sold for $179.4 million (with fees), shattering the previous record of $142.4 million for most expensive painting sold at auction. 

Alberto Giacometti's "Pointing Man" sculpture followed suit, eventually fetching a sale price of $141.3 million — the most paid for a sculpture at auction.

Given its origins in a well-regarded moment in Picasso's career, not to mention its size, “Les Femmes d’Alger (Version ‘O’)” was considered by many art dealers to be an important sale, and a rare opportunity.

But don't count art critic Blake Gopnik among those who laud the painting as a work worth $179.4 million.

"One of the thing's about this picture is it's kind of a pastiche of earlier Picassos. It's like Picasso doing Picasso...And what do rich people want? They want Picasso-y looking pictures," Gopnik says.

Click the media player above to hear art critic Blake Gopnik's argument.

All the news that's fit to Facebook

Wed, 2015-05-13 01:56
5

That's how many publishers (the New York Times, National Geographic, BuzzFeed, NBC News and The Atlantic) are involved in Wednesday's roll-out of content published directly to Facebook. Called Instant Articles, the partnership allows publications to put content directly onto the social media site's mobile app. Facebook has lured companies in by promising 100 percent of creative control and ad revenue. But as Re/code points out, that doesn't mean that Facebook can't change its mind down the road.

3.9 million

That's how many viewers watched "The Tonight Show Starring Jimmy Fallon" on average each night last quarter. Viewership is only a little lower for "The Late Show With David Letterman," a two-decade institution that airs at the same time on CBS. But online, it's no contest. Fallon's show churns out one viral video after another, and at a time when "late-night TV" is on TV and on late at night less and less, online success is crucial.

$179.4 million

That's how much Pablo Picasso's “Les Femmes d’Alger (Version ‘O’)” fetched in a Christie's art sale this week. That number shattered the previous record for the most paid for a painting at auction. But art critic Blake Gopnik isn't so sure that the quality of the painting merits the hefty price tag.

2 million

That's about how many dial-up customers Verizon will inherit as part of its deal to buy AOL. Which, of course, begs the question: Who still uses dial-up?

$4.5 trillion

That's the size of the global "vanity capital" market, according to a new report from Bank of America Merril Lynch. Quartz points out that measuring the market on vanity is difficult and subjective — the report includes luxury goods and art as well as makeup and supplements — but its an interesting figure to pick apart, even if it's a rough estimate.

$1,000

That's how much 58-year-old Uber driver Richard Brunelle pays each month towards a loan he took out to purchase his car. With a roughly 22.75 percent interest rate, loans like these can be incredibly difficult to pay off. Even more surprising? They're organized by Uber itself. As part of a program to help potential drivers with bad credit get into the company, Uber connects drivers with lenders. After the deal is negotiated between the lender and the driver, Uber deducts payments out of the driver's earnings. But economist William Black points out that Uber is using notorious subprime lenders like Santander Consumer USA to loan money to drivers.

4

That's how many discount stores Macy's will open in New York City in an attempt to improve sales. Called Macy's Offstage, the venture puts the retailer in the company of other stores like Saks Fifth Avenue, Nordstrom and Neiman Marcus that are already in the discount market. Also worth noting: Macy's reported disappointing earnings Wednesday morning, with sales down 0.7 percent from last year to $6.2 billion.

Pages