Starbucks files to trademark the name 'Fizzio' for its new line of carbonated drinks

by Jim Romenesko @ Starbucks Gossip

Wed Sep 25 13:58:12 PDT 2013

Starbucks says in a filing with the U.S. Patent and Trademark Office that the name Fizzio would be for its beverage-making machines, as well as a variety of drinks. Starbucks has been testing sodas -- Lemon Ale, Original Ginger Ale...

Starbucks files to trademark the name 'Fizzio' for its new line of carbonated drinks

by Jim Romenesko @ Starbucks Gossip

Wed Sep 25 13:58:12 PDT 2013

Starbucks says in a filing with the U.S. Patent and Trademark Office that the name Fizzio would be for its beverage-making machines, as well as a variety of drinks. Starbucks has been testing sodas -- Lemon Ale, Original Ginger Ale...

Best 6 or 9-Month CD Rates – April 2018

by Danny Nguyen @ Bank Checking Savings

Tue Mar 27 13:23:17 PDT 2018

Browsing the web for the Best 6 or 9-Month CD Rates to invest your funds in? Well, you’re in the right spot. Below is our guide to help you find the Best 6 or 9-Month CD Rates. CDs, short for Certificate of deposits, will offer you one of the top & secure return on your money... Keep Reading↠

The post Best 6 or 9-Month CD Rates – April 2018 appeared first on Bank Checking Savings.

Why did she *ever* bother to give her real name at Starbucks?

by Jim Romenesko @ Starbucks Gossip

Sun Sep 29 15:21:40 PDT 2013

Mirta Ojito wrote in the Miami Herald over the weekend: "Two weeks ago, I caved in. I gave a fake name to a Starbucks employee. After years of not even pronouncing my name, but simply spelling it as if I...

Follow Starbucks Gossip at @sbuxgossip

by Jim Romenesko @ Starbucks Gossip

Fri Oct 11 06:50:19 PDT 2013

Tweets by @sbuxgossip I hang out at Peet's Coffee & Tea (and indie shops) more often than Starbucks these days -- the shitty Wi-Fi that SBUX offers is why -- and no longer have that much interest in Starbucks' doings....

Iceland Is Going to Make Companies Prove They Pay Men and Women Equally. Could That Work Here?

by Jordan Weissmann @ Slate Articles

Thu Jan 04 13:04:06 PST 2018

Iceland is serving as a frosty beacon of inspiration for feminists everywhere this week, thanks to a first-of-its-kind law that will require large businesses to prove that they don’t engage in pay discrimination against women.

Just like the United States and many other countries, Iceland has long had rules on the books banning employers from paying women less than men based on their gender. But the new law, which was passed last year and went into effect Monday, will put the onus on companies to show that they’re actually treating their female workers fairly. Known as the equal pay standard, it requires businesses with at least 25 full-time employees to undergo an official audit of their pay practices every three years, then submit it to the government for a certification. Companies that fail to measure up could face daily fines.

The gender pay gap is an especially fraught issue in Iceland, where women have had much better luck winning equal footing in government than in the workplace. The World Economic Forum ranks Iceland tops for women’s political empowerment—almost half of the country’s parliament was female last year, as is the country’s new prime minister, Katrin Jakobsdottir. Perhaps not coincidentally, Lawmakers have come up with some cutting edge policies meant to promote gender equity, such a rule requiring that females make up at least 40 percent of corporate boards. And yet, Icelandic women still earn about 30 percent less than men on average.

While much of the difference can be explained by the fact that women work fewer hours than men and often in lower paying fields, the intractable gap has inspired widespread protests. Last year, thousands of women walked off their jobs at exactly 2:38 p.m. Activists said that time symbolized the precise minute in a 9-to-5 workday that women stop getting paid.

The new law certainly won’t erase all of Iceland’s economic disparities between the sexes, which, as in the U.S., may have as much to do with cultural expectations about who’s responsible for childcare as outright discrimination on the job. But it does set up a promising experiment that may tell us how much governments can do to bridge the divide, albeit in a quirky, culturally egalitarian nation of just 340,000 people. Other countries, including Great Britain, have experimented with making companies report how much they pay men versus women. And in a bold step last year, the Obama administration released a regulation that would have required larger business to provide detailed salary data of their workers broken down by sex to the Equal Employment Opportunity Commission. That would have given government investigators a chance to look into potential instances of discrimination without employees filing complaints (unfortunately, the Trump administration scotched the rule before it could take effect). But by making employers prove up front that they’re paying men and women the same or risk being punished, Iceland is going much further, and—if it works as intended—potentially creating a model for other countries to imitate.

Could the U.S. ever follow suit? It’s a little hard to imagine. As an official from the Icelandic Federation of Labor has explained, the equal pay standard is designed to make sure that companies pay a “fixed salary for certain types of work”—albeit with a little bit of room to bump up pay for especially valuable employees. The idea is that people should be paid based on their job, not their ability to negotiate or the whims of a boss. But that concept maps more naturally onto a country with a highly unionized and regulated labor market like Iceland, than a place like the U.S. where many workers and employers are uncomfortable with basic collective bargaining.

On the other hand, an especially progressive state like Massachusetts or California might still want to give it a try. Ariane Hegewisch, the program director for employment and earnings at the Institute for Women’s Policy Research, told me that as of now there’s no federal rule that would stop a progressive state legislature from trying out a version of Iceland’s rule. If they did, it would possibly have knock-on effects across the country, since large national companies would have to comply. If a Democratic governor wanted to strike a blow for women’s equality and get a higher national profile, he or she might just want to pay attention to what’s happening in Reykjavic.

What Boycotting the NRA Accomplishes

by Jordan Weissmann @ Slate Articles

Mon Feb 26 07:52:30 PST 2018

For many years, the National Rifle Association has offered its members discounts on services like car rentals, flights, and insurance—the same kind of benefits you’d get for signing up with bland organizations like AAA. But last week, as fury raged over the school shooting in Parkland, Florida, angry Twitter users brandishing the hashtag #BoycottTheNRA started confronting companies for doing business with the gun rights group. Many brands quickly decided it was better to walk away than stick out the controversy. Delta and United Airlines cut bait, as did MetLife. Hertz, Alamo, Enterprise, and National Car Rental all sped off too.

By the weekend, a long list of companies had severed their ties, and Twitter users were busy harranguing holdouts like Amazon (which streams NRA TV) and FedEx. The NRA could do little in response but defensively puff out its chest.

The NRA is probably right about its members, who tend to view themselves as devoted gun rights crusaders and likely won’t stop paying their dues just because they’ve lost a few travel perks. But that’s largely besides the point. Successful symbolic campaigns like #BoycottTheNRA are important because they give causes a sense of momentum—and right now, gun control advocates need all the momentum they can get.

On the surface, #BoycottTheNRA looks a bit like the campaigns that convinced advertisers to pull their support from right-wing cable-news shows like Hannity and The O’Reilly Factor, the latter of which ultimately resulted in Bill O’Reilly getting kicked off Fox News. Both efforts use consumer activism to cut off conservative organizations from their business partners. But beyond that similarity, they’re pretty different efforts. Chasing off Fox’s ad partners was a way to hit the network’s finances directly and force it to make programming changes. Stripping the NRA of its Hertz discount isn’t likely to hurt the organization’s revenues. As long as several million Americans are convinced that New Yorkers want to confiscate their guns and melt them into statues of Barack Obama, they’ll probably keep renewing their memberships.

A more apt comparison might be corporate divestment campaigns, in which activists try to convince big investors like college-endowment and pension funds to pull their money from companies in order to protest their business practices. Divestment campaigns are famously ineffective at bringing down stock values; if someone decides to take a moral stand by selling off all their shares in oil companies, for instance, bargain hunters who are not targeted by any campaign will start buying until the price goes back to where financial math says it belongs. However, divestment can sometimes be a useful tool for stigmatizing industries, especially because it tends to generate lots of press coverage and give activists a goal that’s more easily achievable than passing legislation.

Convincing companies to bail on the NRA is a similar exercise. It may seem a little bit like internet slacktivism. But it does send a message that the organization is no longer politically mainstream, which might ultimately matter to some politicians. And even if it’s not actually moving any important needles in the short term, it gives people a sense that they can make a difference, however marginal, which matters a lot in the long term for any movement trying to keep up its energy.

Of course, there are downsides to trying to stigmatize gun groups. After all, the NRA has spent years convincing its members that their way of life is under threat from coastal elites who want to take away their cherished freedom to tote 30-round magazines. When a bunch of corporations cut ties to the group in response to a celebrity-backed Twitter campaign, it reinforces that message pretty neatly.

But aside from a stray New York Times columnist here or there, I don’t think anybody is banking on winning over the NRA’s hardcore members to the cause of better gun laws. At this point, the only hope is creating a sustained movement that will make it clear that getting weapons of war off store shelves is a serious priority for Democratic voters should the party ever retake power in Congress, and not just a fleeting interest that comes into focus when tragedy strikes. Turning the NRA into a pariah is a useful moral-boosting mission for gun control advocates, even if all it’s doing right now is denying some gun owners cheap car rentals.

Top 3-Year CD Rates – April 2018

by Danny Nguyen @ Bank Deal Guy

Tue Mar 27 16:07:09 PDT 2018

Below is our guide to help you, our readers, find the best or top 3-Year CD rates. In summary, certificate of deposits, otherwise known as CDs, will offer you the best secure return on your money when you invest it with your bank or credit union of choice. The best route to take if you want to... Read More →

The post Top 3-Year CD Rates – April 2018 appeared first on Bank Deal Guy.

The Consumer Financial Protection Bureau Has a New Mission: Protecting America From "Burdensome Regulations"

by Henry Grabar @ Slate Articles

Fri Dec 22 09:30:00 PST 2017

Another day, another federal agency determined to undo the rules it was designed to write and enforce.

The latest is the Consumer Financial Protection Bureau, the crisis-era creation of Sen. Elizabeth Warren charged with investigating the deceptive practices of lenders, wire services, auto dealers, credit card companies, and so on. The banking watchdog’s mission statement now lists its first order of business as hunting down “outdated, unnecessary, or unduly burdensome regulations.”

Slate has reached out to the CFPB for comment, but the change can likely be traced to the arrival of Acting Director Mick Mulvaney, who took over the CFPB on Nov. 27. The South Carolina Republican is also the director of Trump’s Office of Management and Budget, and as the Intercept’s Dave Dayen reports, has quickly moved to fill the ranks of the CFPB with Trump loyalists. (Meanwhile, there is an ongoing legal battle over the director’s chair, to which Obama-era Deputy Director Leandra English also has a claim.)

“Mick Mulvaney’s new slogan shows that he’s more interested in doing the bidding of big banks than standing up for American families,” Warren said in a statement to Slate. “That’s disgraceful.”

Asking Mulvaney to head the CFPB is like having a cat guard a can of tuna: An agent destined not to fail to protect the thing in question, but to lustily destroy it. As my colleague Jordan Weissmann wrote last month, Mulvaney is “not a fan of regulations or regulators, and especially not the CFPB.” He has called the agency a “sick, sad” joke. While a member of the House, he tried to eliminate it. In an interview with the Washington Post this month, shortly after assuming control of the 1,600-person office, he said he supported efforts by House Republicans to block a CFPB rule targeting payday lender fees.

Mulvaney is the latest federal administrator—along with EPA chief Scott Pruitt, HUD chief Ben Carson, and DOE head Betsy DeVos—who appears to be ideologically opposed to the mission of the agency he’s appointed to run. Lucky for him, he’s in a position to change it.

Starbucks UK starts selling Duffins -- two years after a small chain introduced them

by Jim Romenesko @ Starbucks Gossip

Wed Oct 09 12:36:03 PDT 2013

A small London bakery chain has been selling Duffins -- a combo muffin/donut -- since 2011. "Happy customers have been blogging about it, instagramming it, and tweeting about it ever since," reports Channel 4 news. But now Starbucks UK has...

Larry Kudlow Is Joining the White House

by Jordan Weissmann @ Slate Articles

Wed Mar 14 11:38:43 PDT 2018

Conservative CNBC commentator Larry Kudlow is set to become the next director of the White House’s National Economics Council. The Washington Post reports that he has officially accepted the job, which will effectively make him Donald Trump’s top economic adviser.

It would be easy to get snarky about this pick. Trump, the television-obsessed president who appears to get most of his information from cable news, has chosen a cable-news talking head to run point on his economic agenda. It’s a bit on the nose.

But as I wrote yesterday, Trump’s decision to tap Kudlow is probably good news for the country. The man may be a supply-side stereotype who hasn’t had a new thought about the economy since 1982, but as a result, he’s a pretty dedicated free trader. And at a moment when the White House is getting serious about throwing up tariffs, he might restrain some of Trump’s protectionist instincts. (Yes, that’s what we thought Gary Cohn would do too, but that relationship may have been poisoned over Charlottesville.)

Kudlow’s résumé also fits the job reasonably well. He may mostly be known as a pinstripe-wearing Wall Street pundit these days, but despite his lack of an economics Ph.D., he did do time as a junior economist at the Federal Reserve, as the chief economist at Ronald Reagan’s Office of Management and Budget, and as chief economist at Bear Stearns. (Accomplishing that sort of career trajectory without formal credentials is a lot less common now.) He’s an objectively more reasonable choice to run the NEC than Rick Perry was to oversee the Department of Energy or Ben Carson was to sit atop the HUD. Though it may be a low bar, Trump has made much worse decisions.

Here’s What Trump’s Mythical Infrastructure Plan Might Look Like

by Henry Grabar @ Slate Articles

Tue Jan 30 22:20:25 PST 2018

What Donald Trump will actually do with America’s deteriorating roads and bridges is anyone’s guess. Though in Tuesday night’s State of the Union address, the president called for Congress to pass a bill “generating” $1.5 trillion for new infrastructure, that doesn’t tell us much. It’s not clear how much of that money is coming from Washington and how much will be, as he put it, “leveraged.” The idea is that a small amount of federal money can inspire states and cities to either spend more of their own or find private investors to take charge of projects, or both. It sounds like a bargain for the feds: A $1.5 trillion plan for the price of a few hundred billion.

But would it work? It turns out the administration has a kind of trial underway. In August, Department of Transportation Secretary Elaine Chao wrote to Congress to announce that her department would not be awarding any money to large FASTLANE projects. At its core, federal infrastructure funding is served up in a stew of acronyms like FASTLANE, an annual initiative created in 2015 to improve America’s freight corridors by helping to fund state and local projects. (In July 2016, for example, DOT granted $44 million in FASTLANE money to Georgia to renovate the railroads leading out of the Port of Savannah.) In a post-earmark Washington, grants like this bring big money to ports, highways, railroads, and subways. Competition is fierce: 212 projects sought FASTLANE funding in 2016, only 18 received it.

Chao didn’t cancel FASTLANE; she renamed it INFRA and rewrote its guidelines with Trump-era priorities. States and cities were given three months to revise their projects to suit the new DOT guidelines if they wanted a slice of the $1.5 billion pool of money that will be distributed sometime in the next few months.

Chao, like her boss, wanted more leverage. “We need to take steps to get more bang for our buck,” the DOT announced in a fact sheet at the time. For the revised program, the DOT was looking for “projects that use innovative approaches to make each federal dollar go further and encourage more parties to put skin in the game through higher leverage.” The sheet emphasized leveraging “non-federal and private sector funding.” Make our grant a smaller share of your project, the new rules suggested, and you’ll be more likely to get one. “Clearly they want more emphasis on that leveraging,” Paul Lewis, a vice president at the Eno transportation institute, said to me. “If you can’t find local dollars to make that match, perhaps you can find private dollars.”

The Obama DOT never intended FASTLANE to be a primary source of funding. On average in 2016, FASTLANE grants paid for 21 percent of the projects that won them. But if you take out a couple of expensive highway projects in Wisconsin and Virginia, federal funding rose to more than a third of the total cost. With the program perennially oversubscribed—so much so that states sometimes decline to sponsor city projects so as not to spread themselves thin—you can see why Chao thinks the DOT could drive a harder bargain for its outlays.

If there’s a test case for the challenges of leveraging federal dollars with local and private money, it may lie in the scramble this past fall to adapt FASTLANE requests for INFRA—and in the kinds of projects that win federal money this spring.

An encouraging sign for the Trump administration comes from a Rhode Island project to restore an aging bridge that lifts Interstate 95 over the Woonasquatucket River, Amtrak tracks, and local Providence streets. In November, Rhode Island applied for $60 million from INFRA for the project, a nearly identical request to the one it made last year for $59 million from FASTLANE. But the cost of the project had gone from $226.1 million to $342.9 million, despite cutting a $15 million pedestrian bridge. Why? “A big chunk of that cost increase is connected to financing and the private part of the project,” reported Patrick Anderson of the Providence Journal. In addition to the base cost, “the new plan then adds interest on a $45-million private loan and a 15-percent return to the private partner.” This is a typical issue with private investment in projects that might otherwise use low-interest municipal debt: Private investors expect a better return on investment, which boosts upfront project costs.

Officials at the Rhode Island DOT told me the revised application shouldn’t be subject to a direct comparison, because the new project has a different scope and is now designed to benefit from “private sector innovation.” It may sound fuzzy, but in practice that might mean insurance against overruns and delays, a smaller future maintenance burden for the state, a different approach to construction, or a new strategy for restoring the space underneath the viaduct. “The fact that [U.S. DOT] had some thought-provoking criteria made us pull out pencils and think creatively,” said Shoshana Lew, the chief operating office of RIDOT. The incentives had changed.

It’s hard to evaluate those trade-offs until the project is complete, and sometimes for years afterward. But generally speaking, any deal that ropes in a federal grant is going to be a better deal for taxpayers than one that doesn’t—even if private investors cash in too.

Aside from the I-95 project, though, I couldn’t find any others that overhauled their approach in refiling for INFRA, a sign that we may not see a sudden influx of public-private partnerships (“P3s”) or newly leveraged deals, even if Washington is committed to lowering its stake in infrastructure projects around the country. Chicago’s 75^th Street Corridor, for example, a smorgasbord of more than five dozen smaller projects around Chicago Terminal (which handles a quarter of the country’s rail cargo), had asked for $160 million from FASTLANE for a $500 million project. They made the same dollar request from INFRA. The application is essentially the same—but with additional emphasis on the word private.

Billy Hwang, a consultant with the infrastructure giant WSP USA, helped advise 15 projects seeking INFRA grants, about half of which had been retooled from the scuttled FASTLANE contest. None of them wound up seeking private investment in their projects, he said. That’s because of the nature of U.S. infrastructure construction, he explained: Most projects use only public money, and any “leverage” will come from locals paying more through state taxes, local taxes, or user fees like tolls. (Rural projects are also unlikely to attract private investors, but they have a special carve-out under INFRA.)

There are other reasons to doubt that the road next door might soon be brought to you by a corporation. Putting together a P3 requires a lot of legwork, for one, and many projects aren’t big enough to justify the effort. Investors also tend to be most interested when there’s a reliable revenue stream available, like a bridge toll, or when the project involves new greenfield construction. The INFRA proposals are mostly repairs and modifications to the existing stock—not sexy, but exactly the kind of stuff that infrastructure spending ought to prioritize.

But just because the P3 revolution may still be a ways away doesn’t mean the DOT’s new approach won’t affect how stuff gets built. Not many projects were changed to appeal to Secretary Chao. But if the INFRA grants end up spread between projects where federal funding constitutes an increasingly small fraction of the budget, then states might get the message: If you want money from Washington, find more money at home. It looks like that’s going to be the theme of the Trump infrastructure plan too.

Top 2-Year CD Rates – April 2018

by Danny Nguyen @ Bank Deal Guy

Tue Mar 27 08:57:05 PDT 2018

Below is our guide to help you, our readers, find the best or top 2-Year CD rates. In summary, certificate of deposits, otherwise known as CDs, will offer you the best secure return on your money when you invest it with your bank or credit union of choice. The best route to take if you want to... Read More →

The post Top 2-Year CD Rates – April 2018 appeared first on Bank Deal Guy.

It Looks Like Trump Failed to Sabotage Obamacare This Year

by Jordan Weissmann @ Slate Articles

Thu Dec 21 14:59:38 PST 2017

The Trump administration spent the better part of this year attempting to undermine Obamacare. It slashed the outreach budget for open-enrollment. It drove up premiums by cutting off important subsidies for insurers. It cut the signup period in half (albeit, at the request of insurers). It endorsed a tax bill that got rid of the individual mandate. But it seems the Affordable Care Act’s markets managed to survive anyway.

With the federal open-enrollment wrapped up, Centers for Medicare and Medicaid Services administrator Seema Verma announced on Twitter today that 8.8 million Americans had enrolled in marketplace coverage for 2018 on the federal exchanges, down modestly from 9.2 million last year. And because Trump’s people are pure chutzpah, she also lauded the administration’s “cost-effective” approach to driving signups.

These numbers may actually go up a bit, too. Open-enrollment is still rolling in states, including Florida and parts of Texas, where it was disrupted by hurricanes.

This is all a reminder that the ACA, for all its flaws, also created a weirdly resilient insurance market. Yes, premiums jumped a bunch this year as health carriers worried that Trump might try to implode or explode the exchanges. But most marketplace customers were protected from price increases by the law’s subsidies, which cap the premiums at a fraction of their income. When Trump finally tried to go nuclear by ending some of the law’s direct payments to insurers, state regulators found clever ways to let health plans raise their premiums when necessary without hurting customers much, if at all. Thanks to weird interactions with Obamacare’s subsidy structure, Trump’s sabotage attempt may have actually made coverage more affordable for some.

Of course, Obamacare is still under attack. Though the Republican tax bill doesn’t repeal Obamacare’s individual mandate until 2019, it’s not clear how strenuously the Trump administration will be enforcing the requirement that Americans buy coverage. If the administration makes it clear there won’t be any real penalty next tax season for going uninsured, some people who’ve already enrolled might drop their plans. I’m also a bit curious what will happen to the number of people buying coverage off of the exchanges; most of those customers earn too much to be eligible for subsidies, so they’ve been exposed to price hikes. I would be surprised to see their enrollment figures drop.*

But those questions are still up in the air. For now, contrary to what our president might think, Obamacare lives.

*Correction, Dec. 21, 6:28 PM: This post originally stated that the Republican tax bill repealed Obamacare’s individual mandate in 2018. It is repeals it as of 2019.

Americans Haven’t Noticed Trump’s Tax Cut in Their Paychecks. That’s Probably Because There Isn’t Much to Notice.

by Jordan Weissmann @ Slate Articles

Wed Feb 21 15:32:05 PST 2018

When Republicans passed their $1.5 trillion tax cut in December, very few Americans expected to personally benefit from the legislation. Depending on the poll, somewhere between one-sixth and one-third of adults anticipated that their own tax bill was about to go down. In reality, far more households probably stood to benefit. The nonpartisan Tax Policy Center, for instance, estimated that about 80 percent of Americans would get a cut.

Why were so many people confused about what the tax cut meant for them individually? There were lots of theories. Maybe it was the press coverage, which tended to highlight the potential losers from the legislation, and how it would disproportionately benefit the rich. Maybe it was a bad sales job by Republicans, who made the mistake of rolling out early drafts of the bill that would have hiked taxes on more middle-class families than the final version. Maybe the public is just instinctively skeptical about large pieces of legislation rushed through Congress without much debate.

Regardless, Republicans were convinced that once voters started seeing their take-home pay go up, they’d come around to Trump’s sole big legislative accomplishment.

It seems Republicans were half-right. This month, the law’s new withholding rules finally went into effect, and the tax cuts finally started showing up in workers’ pay-stubs. And while the bill does seem to be getting more popular, most voters still say they haven’t noticed any personal benefits.

A handful of polls have shown that the public is generally feeling more warmly about the tax cut than three months ago. According to the New York Times, support is up to 50 percent, from 37 percent in December. A Monmouth poll showed approval surging to 44 percent from 26 percent.

Still, the vast majority of adults don’t seem to have sensed the effects of the tax cut on their personal finances. In a poll by Politico and Morning Consult, just 25 percent of registered voters said they’d noticed their take-home pay increase as a result of the legislation. Another 51 percent said they hadn’t noticed a pay bump, and another 24 percent said they didn’t know or weren’t sure.

We can only guess why so few people are picking up on the fact that their taxes have gone down. But I have a theory.

You might assume that the reality distortion field of partisan politics is to blame here. But that almost certainly doesn’t explain the entire perception gap. Only 33 percent of self-identified Trump voters in the poll say that they’ve noticed their take-home pay go up as a result of the tax cut. That’s better than the 21 percent of Hillary Clinton voters who say the same, but probably still far below the number who are actually benefitting at least slightly.

A more likely explanation, I think, is that for a lot of people, the tax cut is just way too small to pick up on, especially if you break it down into bi-weekly chunks. The Tax Policy Center estimated that Americans in the middle 20 percent of the income distribution who received any tax cut at all could expect their IRS tab to drop by $1,090 on average. If all of that money arrived at once, it would be easy to notice. But divide it by 26, and it comes out to $41 per paycheck. That adds up to real money for many families over time, but it might not jump out from a bank statement—very few of us have the eagle-eyed financial awareness of the public school secretary in Pennsylvania who noticed her paycheck go up by $1.50 a week. It’s going to be especially tough for people to pick up on the small changes in their tax withholding if their pay has changed for other reasons. According to the Federal Reserve Bank of Atlanta, which tracks pay growth for individuals over time, the median worker saw their wages rise 3 percent over the past year. Not many people are going to sit down and try to disentangle the effect of those annual raises on their paychecks from the effect of Trump’s tax cut, because why would they?

It’s possible that this won’t matter a great deal politically. More people seem to approve of the GOP’s bill than think they’ve benefitted directly from it, possibly because they think it has helped the economy. But if Americans aren’t noticing the tax cut in their take-home pay now, chances are they aren’t going to notice it later, either—meaning this may be as popular as the bill ever gets.

The Best and Worst Super Bowl Ads

by Justin Peters @ Slate Articles

Sun Feb 04 23:08:24 PST 2018

Two years ago, I watched every single Super Bowl, so I can say with absolute certainty that, for whatever reason, America’s most-watched sports event is usually a terrible football game. This, I suspect, is one of the reasons why Americans have come to care so much about Super Bowl ads: They know that while the game will probably fall short of its hype, at least they’ll see a few entertaining commercials.

Last year’s Super Bowl reversed that trend, with a great game surrounded by a bunch of lackluster ads. This year’s Super Bowl followed suit. While the game itself was an all-time classic—easily top 10, maybe even top five—this year’s ads were a poor crop. For every humorous or striking one, there were at least three others that were boastful, cloying, cringeworthy, or misguided. I blame Trump, personally. A lot of companies worked too hard to imply or outright shout their high-mindedness in the face of the president’s churlishness; others took the opposite approach, and produced spots that were excessively braggadocious and aggressive. Let’s sort out the good, the bad, and the ridiculous. I couldn’t recap all of this year’s ads—sorry if I omitted one of your favorites—but these are the ones that stood out the most to me. To the commercials!

First Quarter

Toyota leads off its Super Bowl ad buy with a spot featuring Paralympic skier Lauren Woolstencroft, who has won eight gold medals. I’m glad the carmaker gave Woolstencroft some publicity—her perseverance and determination are indeed inspiring—but it makes me cringe when stories like hers are used to, well, sell cars. It doesn’t take any perseverance or determination to buy a Toyota. It takes approximately $20,000 to $40,000, or somewhere between $199 and $399 per month for a series of months.

I’m a sucker for commercials featuring sassy robots, and so I liked the Sprint ad in which a room of hyperintelligent androids mock their creator for sticking with Verizon even though Sprint’s network is allegedly almost as good and half as expensive. It then takes him to a cellphone store where he meets the creepiest robot of all: the Can You Hear Me Now Guy.

M&Ms presents a high-concept commercial in which a red M&M magically transforms into Danny DeVito, asks a bunch of confused strangers if they want to eat him, and then gets hit by a truck. Not sure if I’m remembering correctly, but I think this was basically the plot of Throw Momma From the Train.

Wendy’s—unofficial corporate motto: “Our Food Is Meh, but at Least We’re Jerks on Twitter”—takes a direct shot at McDonald’s for using frozen beef. “The iceberg that sank the Titanic was frozen, too,” says the ad. In your face, McDonald’s!! While I love a good fast-food feud as much as anyone, I feel like Wendy’s would do well to mind that old proverb: “Restaurants that sell weird square hamburgers shouldn’t throw stones.”

Peter Dinklage lip-dubs a Busta Rhymes song in an ad for Doritos, and then is immediately followed by Morgan Freeman lip-dubbing a Missy Elliott* song in an ad for Mountain Dew. These ads seemed lazy to me, but I guess I’m not their demographic: I don’t like chips, Mountain Dew, or lip dubs. Peter Dinklage and Morgan Freeman I can take or leave.

Second Quarter

I didn’t watch much football this year, so I completely missed the rise of the Bud Light “Dilly Dilly” phenomenon, a medieval-themed series of commercials featuring the nonsensical catchphrase “Dilly Dilly.” The beer’s Super Bowl spot concludes the Dilly Dilly saga by introducing a new character—the Bud Knight—who wields a magical sword and always brings enough beer for everyone. An insubstantial yet inexplicably popular spot for an insubstantial yet inexplicably popular beer.

E-Trade presents its version of those terrible Fox News ads that encourage the gullible to invest their retirement savings in commemorative coins. The ad shows a bunch of senior citizens being forced to work well past the expected retirement age—and being forced to listen to a bad parody of “The Banana Boat Song”—because they didn’t save enough money during their prime working years. Yes, our fraying safety net and disappearing pensions mean we’ll all be working into our golden years. No, opening an account at an online stock brokerage is not the way to solve our retirement woes.

Avocados From Mexico continues its entertaining run of Super Bowl spots with an ad in which members of a white-robed guacamole cult seal themselves away in a desert dome that’s stockpiled with “everything [they’ve] always wanted”—only for chaos to ensue when they realize they forgot the tortilla chips. Big points for a very funny Chris Elliott cameo, and for the implication that guacamole eaters are functionally indistinguishable from Heaven’s Gate cultists.

Diet Coke: It’s not just for your colleagues in accounting anymore! The diet soft-drink brand puts a dictionary-definition millennial in front of a yellow brick wall to hold a can of Diet Coke Twisted Mango, dance awkwardly, and mumble to herself. I didn’t really get this ad, but I also think that “off-putting” might have been what the ad agency was going for. Regardless, I am now fully aware that Diet Coke comes in mango. Mission accomplished!

Pringles brings us behind the scenes of a fictitious Bill Hader film as two crew members linger at craft services and stack different flavors of Pringles atop each other to create new flavor combinations, like “barbecue pizza,” and “spicy barbecue pizza.” Funny commercial, but I feel like Pringle-stacking would not be as wow-worthy in real life as it looks on TV. You know what a barbecue Pringle paired with a pizza pringle tastes like? A Pringle.

Febreze gives us a brief faux-documentary about Dave, the only man in the world whose “bleep” doesn’t stink. The reason why Dave’s waste is miraculously odor-free? The spot doesn’t say, but I can only attribute it to midichlorians. The point of the ad: Since Dave won’t be at your Super Bowl party, but everyone else will, you should probably buy some Febreze to deodorize your bathroom after your gluttonous friends destroy it. I’m not typically big on bathroom humor, but I liked this spot for its attention to detail. Well-directed, well-produced.

I loved the Squarespace spot featuring Keanu Reeves talking to himself as he stands atop a motorcycle that he is riding through the desert. Not sure what else to say about this one. Keanu Reeves. Talking to himself. On a motorcycle. In the desert. I fully believe that this is what the John Wick character does in his spare time.

“I have a dream that one day a recording of a speech I gave about redefining greatness as a function of your readiness to serve your fellow man will be licensed by my descendants for Ram to use in an offensive truck commercial.” Remember when Martin Luther King Jr. said that? Oh, wait, he didn’t. Oh, well, some of his descendants licensed the recording to Dodge all the same, and the result was the night’s most tone-deaf and abhorrent ad, in which one of the greatest moral leaders of the 20^th century is made to shill for Dodge.

Halftime

So a priest, a rabbi, an imam, and a Buddhist get in a pickup truck and drive to a football game together. It’s the setup to a bad joke, and it’s also the premise of a Toyota commercial that is much better than it ought to be, thanks to good and funny performances by its lead actors. I want to know more about this unlikely group of friends. What do they do when it’s not football season? Do they ever go on road trips together? And how do the crabby nuns who sit near them at the game affect their friend dynamic? I would watch at least half an episode of this sitcom, if it were a sitcom instead of a dubiously effective Toyota ad.

Pepsi runs a self-mythologizing ad featuring Kyrie Irving’s “Uncle Drew” character, Michael Jackson, Britney Spears, Cindy Crawford, and a bunch of other people who at one point or another have been paid to pretend that they like Pepsi. “Pepsi is everywhere in every timeline” is the gist of the ad. “This is the Pepsi for every generation,” the ad concludes, before abruptly cutting to Jimmy Fallon drinking a Pepsi, apparently sitting high above the ground in the curl of the “S” on a “Pepsi-Cola” billboard. “And this is the Pepsi that brings you the Pepsi Super Bowl Halftime Show!” Fallon chirps. I am sad to report that, as far as I know, Fallon did not fall off of the billboard.

Amazon Prime runs an ad for the new, allegedly action-packed Jack Ryan TV series, starring John Krasinski, aka Jim from The Office, who is trying very hard to make people believe he is a credible action star, perhaps so that they will stop calling him “Jim from The Office.” The ad also features an awful cover of “All Along the Watchtower.” In conclusion, while this ad did not make me excited to watch the Jack Ryan show, I am looking forward to revisiting Season 2 of The Office very soon. Stay in your lane, Jim from The Office!

Mercedes Benz runs a car ad that is plainly and simply a car ad. It just features a bunch of vehicles—a motorcycle, a hot rod, a sports car, a rocket car, a truck of some sort, and, of course, a Mercedes AMG E63 S Sedan—revving their engines at a stoplight in preparation for a drag race. The winner? The Benz, of course, because the Benz can accelerate from zero to 60 in 3.3 seconds.

Third Quarter

Budweiser gives itself a back-pat with a minute-long spot explaining how the company uses its canning infrastructure to provide clean water to disaster zones. Good for Budweiser! Giving needy people cans of water is certainly better than giving them cans of its gross beer.

After Super Bowl season comes tax season, and it’s always been thus, which is why I’m a little surprised that this is the first Super Bowl to count Intuit—maker of TurboTax and QuickBooks—as an advertiser. The 15-second spot makes much of its own brevity—“time is money,” after all—and features a large robot helping a frustrated TV viewer push a “Skip Ad” button. I’m not sure the conceit works, since the Super Bowl is literally the one time of year when people don’t want to skip the ads.

Kia puts an astoundingly haggard Steven Tyler behind the wheel of one of its cars and sends him speeding around a racetrack in reverse. When he gets out, he has apparently traveled back through time, as he looks a good 40 years younger and is immediately beset by groupies. “Feel Something Again,” Kia implores, as “Dream On” plays. This was probably an effective spot for Kia, if only because I feel like “Eagles fans” and “people who still think Aerosmith is cool” are basically the same demographic.

Next, a striking ad featuring the rapper and musician Pras Michel, gagged and blindfolded, on stage in a vast and empty theater. As music begins to play, he removes the tape that had been covering his mouth. Then he removes the blindfold, gives the empty room a look, and leaves the stage. “Be celebrated, not tolerated” appears on screen. This is an ad for Blacture, a (seemingly very well-funded) website on black culture, which Pras plans to launch in two months. Good ad. I’m intrigued!

We see a bunch of babies writhing on a gray sheet as a narrator coos a message of tolerance and equality. What is this an ad for? “Some people may see your differences and be threatened by them. But you are unstoppable,” the narrator continues, as the camera pans across more cute babies. Seriously, what is this an ad for? “You will be heard, not dismissed. You will be connected, not alone,” she says, as the shot slowly fades to pink. Oh. Oh, no. It’s a T-Mobile commercial. Hey, if you can’t compete on cost or quality, you might as well dump a bunch of babies on a bed and make like you’re UNICEF instead of a lesser cellular service provider.

Eli Manning dances to “(I’ve Had) the Time of My Life” with Odell Beckham Jr. in a Dirty Dancing parody for the NFL. Why does this ad exist? I cannot say, but Eli Manning seems to be enjoying himself and I guess I’m glad that he’s keeping busy.

Fourth Quarter

After a long layoff, Groupon is back in the Super Bowl. This year’s ad features Tiffany Haddish singing the praises of shopping local, plus a miserable old plutocrat opening the door of his mansion to be greeted with a football in the groin. All together now: Football! In! The! Groin! Come the revolution, we can clearly count Groupon as an ally.

Amazon posits a world in which its Alexa voice-activated assistant loses its voice, forcing the company to cycle through a slew of celebrity replacements. None is satisfactory—Gordon Ramsay berates a hapless man who asks Alexa for a grilled cheese sandwich recipe (“Its name is the recipe!”); Cardi B does not know the distance from Earth to Mars; Rebel Wilson ruins a yuppie’s wine-and-cheese party by lasciviously misinterpreting his request to “set the mood”; Anthony Hopkins feeds a peacock while insinuating he has kidnapped a woman’s lover. Funny ad, but my main takeaway here was less Alexa is a useful service and more Celebrities are idiots.

In 1971, Coca-Cola put a bunch of jolly hippies on a hilltop and had them sing about world peace and sugary soda in one of the most iconic commercials in history. The company’s Super Bowl spot Sunday night tried to hit similar themes, showing us people of all sorts enjoying Coke all over the world. I didn’t love the ad, which felt like a bunch of incoherently combined stock footage. Coca-Cola should have just re-aired “I’d Like to Teach the World to Sing.” Plus, “there’s a different Coke for all of us” is a fine motif, but it isn’t really true, is it? Some diet and regional variations notwithstanding, there’s only one Coke. It’s called “Coke.”

No joke: I think Peyton Manning is a first-rate commercial actor. I enjoy his doofy TV persona; I am actually always excited to watch his ads. And so it truly pains me to say that the Universal Parks and Resorts spot really misused Manning’s comedic talents. “Peyton Manning: Vacation Quarterback” is a great premise, but his lame interactions with the child actors and Universal characters and attractions all fell flat to me. Call me when Universal launches “Chicken Parm: The Ride.”

Hyundai runs a self-congratulatory ad in which Hyundai owners are whisked away from the security line at the NFL Super Bowl Experience and made to watch videos in which pediatric cancer patients and their families praise Hyundai for donating money to children’s cancer research. Next, the Hyundai owners are forced into in-person meetings with the people on the videos, who dole out hugs and say things like “I just want to thank you for owning a Hyundai.” You’re welcome? I felt bad for the Hyundai owners who were apparently ambushed into appearing in this commercial.

Stella Artois enlists Matt Damon to offer socially conscious viewers a sort of trade: Purchase a limited-edition Stella Artois–branded beer glass online and the beer company will donate money to Damon’s charity water.org, which works to improve clean-water access in developing nations. “If just 1 percent of you watching this buys one, we could give clean water to 1 million people for five years,” says Damon. This sort of pitch always makes me upset. Anheuser-Busch InBev, Stella’s parent company, is a multibillion-dollar corporation that could just donate money to clean-water charities anyway without guilting us into buying a dumb beer glass. Super Bowl ads this year cost around $5 million per 30-second spot. How much clean water could Stella have bought the developing world with $5 million?

Speaking of water, we next see a Jeep Wrangler driving through a swamp of some sort. The Jeep is red, the water is brown. “How many car ads have you seen with grandiose speeches over the years?” asks the narrator as the Jeep proceeds to drive up a rocky waterfall. Too many! (I’m talking to you, Toyota and Hyundai.) “Companies call these commercials … ‘manifestos,’ ” the narrator continues, as the Jeep drives out of sight. “There’s your manifesto.” A Jeep is a car that can drive over rocks and through water is a manifesto I can get behind.

*Correction, Feb. 6, 2018: This article originally misspelled Missy Elliott’s last name.

Larry Kudlow Is an Insufferable Wall Street Hack. Let’s Hope Trump Picks Him to Replace Gary Cohn Anyway.

by Jordan Weissmann @ Slate Articles

Tue Mar 13 15:41:01 PDT 2018

On Tuesday, Donald Trump said there was a “good chance” that he would pick CNBC talking head Larry Kudlow as the next director of the White House’s National Economic Council, the powerful position recently vacated by Gary Cohn. “I’m looking at Larry Kudlow very strongly,” Trump told reporters.

In any other White House, the news that Kudlow was a frontrunner to become the president’s top economic adviser would be cause for despair. A highly paid mouther of ‘80s-vintage supply-side platitudes, the man has spent decades yapping in favor of Wall Street-friendly tax cuts and deregulation while blowing calls about the direction of the economy. He’s the human embodiment of an overpriced power tie—a loud throwback that bankers really like.

But this, of course, is not any other White House. It is the Trump administration. And given the alternatives, I’m rooting for Kudlow to get the job.

Right now, the administration appears to be in full MAGA mode, and is in the process of imposing steel and aluminum tariffs that could—depending on who they actually end up targeting— end up being the start of a nasty and damaging global tit-for-tat. One of the key architects of the tariff plan, White House trade czar Peter Navarro, is reportedly also in the running to become NEC director, a perch that would give him even more influence within the administration. Navarro is a Ph.D. economist who, unlike most of his peers, is obsessed with the trade deficit and is convinced that America is in an existential struggle with China. Worse yet, he seems to have figured out that the best way to win Trump over is to convince him that your idea is his own. “My function, really, as an economist is to try to provide the underlying analytics that confirm his intuition,” he recently told Bloomberg while talking about the tariff plans. “And his intuition is always right in these matters.” Some have mocked these comments as a sign that Navarro is a mere “sycophant” and “propagandist.” But in Trumpland, they seem more like the words of a person who knows how to push his own agenda.

Kudlow, a former Reagan official who spent time as Bear Stearns’ chief economist despite lacking a Ph.D., is Navarro’s antithesis on trade. He has a long track record opposing tariffs—he calls them “prosperity killers”—and criticized the administration’s steel and aluminum plan. But Kudlow also happens to have Trump’s respect. He’s acted as an informal adviser to the president since his campaign, and has been particularly influential on tax cuts. Unlike Gary Cohn, he seems to have found a middle ground with Trump on the trade issue.

“We don’t agree on everything. But in this case I think that’s good. I want to have a divergent opinion,” Trump told reporters. “We agree on most. He now has come around to believing in tariffs as a negotiating point. You know I’m re-negotiating trade deals, and without tariffs, we wouldn’t do nearly as well.” This is obviously a bit of a retreat for Kudlow. But it still suggests he’d be an internal voice of caution on trade, and his trusted presence could keep Trump from chasing his worst “intuitions.”

I don’t want to heap too much praise on Kudlow. As Calculated Risk’s Bill McBride once wrote, the man “is usually wrong and frequently absurd.” He mocked warnings about the housing bubble, wrote that there was “no recession” in December 2007 (the month the recession started), and declared that growth was about to rebound in September 2008—days before Lehman Brothers collapsed. He has occupied himself for the better part of a media career calling for regressive tax cuts of the sort that Trump and the Republican party just enacted. He is no great economic light.

But nor is anybody else who Trump might realistically pick as his new economic lead. Other candidates for the job reportedly include budget director Mick Mulvaney, whose big accomplishments include fooling Trump into proposing cuts to disability insurance and giving a hand to payday lenders, and conservative econo-hack Stephen Moore, who’s basically Kudlow with worse suits and less charisma. There are also reports that Trump is considering director of strategic initiatives Chris Lidell, a former GM and Microsoft executive who seems to have spent most of his time in the White House helping Jared Kushner do whatever the heck it is Jared Kushner has been doing. None of these men are likely to bring much in the way of economic insight, nor is it clear that any of them would be an effective counterweight to protectionists like Navarro, who will likely be sticking around the White House regardless. Kudlow’s being in the administration, on the other hand, might lessen the probability that the country will stumble headlong into the trade war Trump seems to want in his heart. Worst comes to worst, he probably won’t do much additional harm, which is really the best we can hope for.

Mick Mulvaney’s Latest Scandal Makes Him Look Like a Craven Hypocrite

by Jordan Weissmann @ Slate Articles

Wed Mar 21 16:12:31 PDT 2018

For many months, the Trump administration has been attempting to push through a regulatory change that would make it easier for restaurant owners to skim tips from their employees. As if that weren’t rotten enough, it now appears that high level officials, including White House budget chief Mick Mulvaney, attempted to bury a government analysis showing how badly the move would hurt workers who rely on gratuities to make a living.

Back in December, the Department of Labor proposed a rule that would overturn an Obama-era regulation and let restaurants force staff like waiters, waitresses, and bartenders to their share tips with their colleagues in the kitchen, as long as they were paid the federal minimum wage of $7.25 an hour. In theory, this is not an inherently bad idea. It’s unfair that front-of-the-house staff, who in high-end dining tend to be young and white, can make a decent living off tips, while back-of-the-house staff like cooks and dishwashers, who are typically minorities, have found themselves stuck earning near poverty wages. Wouldn’t it be great if the Trump administration’s proposal let managers gather up tips and distribute them more fairly among their whole crew? But in reality, the regulation could also become a license for your local Buffalo Wild Wings proprietor to simply commit tip theft.

As the labor-backed Economic Policy Institute has noted, “the rule doesn’t actually require that employers distribute ‘pooled’ tips to workers. Under the administration’s proposed rule, as long as tipped workers earn minimum wage, employers could legally pocket those tips.” Why not just tweak the language? Labor Secretary Alexander Acosta claims his department doesn’t have the legal authority to ban tip theft; Congress would have to do it.

It’s hard to say precisely how much pay America’s servers could see siphoned off if Trump’s regulation takes effect, in part because there’s a lack of good data about tip theft in general. But it’s possible to make an reasonable estimate. The Economic Policy Institute, for instance, thinks that restaurant workers could lose $5.8 billion annually in the bargain. The Department of Labor, on the other hand, has been officially silent on this point. Despite the fact that federal law requires government agencies to perform a cost-benefit analysis for new regulations, the proposal that department put out in December did not contain any estimate of the economic toll the regulation change might take on workers. The administration claimed that it couldn’t produce such an analysis, because it was too hard to predict how restaurants, their employees, and customers would react to the change.

It turns out that wasn’t the whole story. In February, Bloomberg Law’s Ben Penn broke the news that Trump appointees in the Department of Labor had actually flushed multiple in-house estimates of how the rule would effect restaurant workers, including one that showed they would lose billions in tips:

Senior department political officials—faced with a government analysis showing that workers could lose billions of dollars in tips as a result of the proposal—ordered staff to revise the data methodology to lessen the expected impact, several of the sources said. Although later calculations showed progressively reduced tip losses, Labor Secretary Alexander Acosta and his team are said to have still been uncomfortable with including the data in the proposal. The officials disagreed with assumptions in the analysis that employers would retain their employees’ gratuities, rather than redistribute the money to other hourly workers. They wound up receiving approval from the White House to publish a proposal Dec. 5 that removed the economic transfer data altogether, the sources said.

On Wednesday, Penn reported out Mulvaney’s role in the scheme. In short, the section of Trump’s Office of Management and Budget responsible for reviewing all new federal regulations tried to block the new tip pooling rule unless the Department of Labor added its cost estimates back in. Mulvaney, as director of OMB, overruled them, and let the proposal go through.*

This weird and wonky scandal shows how far the administration is willing to go to downplay unflattering data and push through a regulation that will likely hurt working class Americans. But there may be an upside. Amit Narang, the regulatory policy advocate at Public Citizen, told me that the decision to hide its cost analysis could make the tip pooling regulation easier to challenge in federal court under the Administrative Procedures Act, which requires the government to take certain steps while promulgating new regs. “This is about as serious a violation of the rule making process as there is,” he told me. This week’s revelations “make it 100 percent clear that there was a deliberately withheld economic analysis. That’s a big problem in defending this rule legally. I think that makes it very vulnerable.”

The story also comes served with a bitter digestif of irony. In public, Mulvaney has been a quite vocal advocate for carefully considering the costs of new regulations, presumably because it would lead to government to implement fewer of them. In May of last year, he told reporters that the Obama administration “failed to follow the law in many, many circumstances” and “simply imposed regulation without proper regard to the cost side of that analysis”—a claim that earned him three Pinocchios from the Washington Post’s Fact Checker column. When Mulvaney became acting director of the Consumer Financial Protection Bureau this year—yes, he now wears two major hats in the Trump administration—he sent an email to staff telling them that they’d have to be diligent about justifying all their rules with careful economic analysis.

Speaking of data: the Dodd Frank Act requires us to ‘consider the potential costs and benefits to consumers and covered persons.’ To me, that means quantitative analysis. And while qualitative analysis certainly can play a role, it should not be to the exclusion of measurable ‘costs and benefits.’ In other words: there is a lot more math in our future.

Mick Mulvaney: A stickler for math when it comes to regulating payday lenders, but not so much when it comes to stealing tips from waitresses.

*Correction, March 22, 2018: An earlier version of this story incorrectly referred to Bloomberg’s reporter as Ben Parr.

Cities Are Trying to Make Housing More Affordable—by Making Some Rents More Pricey

by Henry Grabar @ Slate Articles

Thu Mar 22 06:07:58 PDT 2018

One paradox of the housing affordability crisis in the United States is that one of the most popular ways to create affordable housing is to tax new housing.

In December, the Los Angeles City Council voted to create a permanent revenue stream for its affordable housing program by slapping a fee on new homes and apartments. The “linkage fee” ranges from $8 per square foot in South Central L.A to $15 on the city’s wealthy Westside. That will put a $15,000 surcharge on a 1,000-square-foot apartment in a place like Hollywood, with that money going toward the city’s efforts to create and preserve housing for low-income renters and the homeless.*

Affordable housing is desperately needed in Los Angeles, particularly for the homeless. But a new report from the Terner Center at U.C.–Berkeley shows that development fees—which pay not only for housing, but also for inspections, administrative services, parks, schools, and cultural amenities—here and elsewhere across California can have a significant impact on housing prices. Looking at seven California cities, the authors found city fees amounted to between 6 and 18 percent of the median home price.

The fees are one of many factors driving up the cost of buying or renting a home, including income inequality; restrictive zoning; high prices for land, materials, and labor; low construction productivity; and a historic slowdown in housing production. They’re not new. Hundreds of cities and counties have imposed fees on new development, which initially helped relieve local governments from subsidizing roads, sewers, and other expenses associated with suburban sprawl. Now that local governments face an affordable housing crisis with little federal assistance, fees are being levied to support affordable housing, too.

Like inclusionary zoning requirements—which incentivize or require builders to provide affordable units in their projects—the fees theoretically raise the cost of housing on the open market while providing a handful of heavily subsidized units. The two policies can be hard to distinguish: In L.A., developers can dodge fees by providing affordable units. In other cities, developers can avoid providing units by paying into a city fund.

The idea that new development should subsidize affordable housing is popular. “It’s very politically acceptable to implement these linkage fees,” said David Garcia, the policy director at Terner and one of the co-authors. “There’s a lot of literature that shows a lot of the time these fees don’t result in a ton of units and that it’s not the best way to address the affordable housing crisis. But it’s feasible.” This is especially true in California, where the tax revolts, especially the passage of the Proposition 13 property tax freeze, left cities with few reliable fundraising methods. When development fees replace property taxes as a funding source, the burden of supporting the safety net gets passed from current residents to future ones.

While fees rightly place a higher burden (as high as $150,000 a pop) on single-family homes, whose low density imposes environmental and infrastructural costs, the fees per bedroom wind up being higher, in most cases, on multifamily development. A single apartment bedroom in Irvine, California, bears an estimated $42,000 in fees. Developers often pass those fees on to new renters.

The report also describes a web of fees that have not been coordinated between city departments, so tangled that not even local architects, engineers, and developers can always accurately estimate how much it will cost to build. “These are the people designing the projects, intimately familiar with every aspect, and they cannot do that,” said Sarah Mawhorter, a co-author. That opacity drives small developers out of urban housing production, leaving an oligopoly of well-heeled, well-connected builders.

The paper’s estimates are conservative, since they don’t count utility fees or the impact of project-specific agreements, in which local politicians ask builders to provide particular amenities (including affordable housing) in exchange for permits. Nor do they count the complex trade-offs associated with inclusionary zoning ordinances, which often let builders build higher in exchange for providing affordable units.

This approach—making all new housing more expensive to make some housing very affordable—makes sense if you think of the housing market as permanently divided between market-rate luxury building and government-subsidized housing, with the former permanently unaffordable and the latter in perennially short supply. It’s true that the price gap is wide, but the idea of a sharply segmented market is a delusion. The reality is that few renters will ever secure a rent-controlled apartment, qualify for federal housing assistance, or win a lottery for the local affordable housing those fees provide. “You either win the lottery in a big way or you get no housing assistance whatsoever,” says Jenny Schuetz, a fellow at the Brookings Institution who studies housing policy. Most tenants simply pay more than what’s technically considered “affordable,” and when they write their checks, they may be paying for development fees, to

Correction, March 27, 2018: This post originally misstated that Los Angeles’ new linkage fee applied to new homes in Culver City. Culver City is not part of the city of L.A., so the linkage fee is not applicable there.

No, Donald Trump Has Not Made the Economy Great Again

by Jordan Weissmann @ Slate Articles

Fri Jan 05 15:32:41 PST 2018

Donald Trump is convinced that he has done wonders for the economy. The president is especially proud of the surging stock market, which he crowed about Friday morning on Twitter.

But if you look beyond the frothy heights of the Dow and S&P 500, there’s little sign that Trump has accomplished much. Yes, he’s presiding over a gradual, fairly steady expansion left over from the Obama years. And he hasn’t tanked the economy, like some feared he might. But there’s little proof he’s done anything special to significantly boost it.

This isn’t a dig at Trump’s record, exactly. Aside from rare exceptions, like passing a massive stimulus bill in the middle of a recession, there typically isn’t much a president can do to dramatically alter the course of the economy on a year-to-year basisi. But it’s worth keeping in mind that Trump’s tenure has been fairly ho hum the next time someone claims he really is making the economy great again.

Start with the labor market. On Friday, the government reported that U.S. employers added 148,000 workers to their payrolls in December. That figure will be revised a couple of times. But for now, it’s a shrug-worthy number capping off an unremarkable year of job growth. Overall, the country added 171,000 new jobs a month in 2017, down from 187,000 in 2016 and 226,000 a month in 2015. It’s not as if things sped up towards the end of the year, either, as Trump settled into the White House.

Some of this slight slowdown is to be expected. Unemployment is low, at 4.1 percent. And the closer the U.S. gets to full employment, the fewer jobs we need to create in order keep everyone who wants to work employed. The point is, there hasn’t been some sort of dramatic hiring surge under Trump. We’re just seeing more of the same.

Meanwhile, the tightening labor market still isn’t leading to much faster wage growth. Average hourly earnings for all workers rose 2.5 percent in 2017, compared to almost 2.9 percent in 2016. Once you take inflation (last recorded for November) into account, average pay has barely jumped at all.

There are other signs of lingering softness in the labor market, too. The employment rate for workers between the ages of 25 and 54 is still a good deal below its pre-recession peak. It’s rising, but it seems like some Americans who should be working are still on the sidelines.

In short, job growth is trucking along unremarkably and wage growth has actually slowed at a time when we’re still digging our way out of the crater left behind by 2008. A golden era this is not.

What about the blue collar jobs Trump promised to bring back? On the one hand, the U.S. did add 71,000 more manufacturing jobs this year than last. But it added 62,000 fewer construction jobs. Does this have anything whatsoever to do with the president’s regulatory pruning and tax-cutting? Who knows. But it’s not exactly boom times for hard hats.

One thing some serious economic commentators have tried to give Trump credit for has been this year’s surge in business investment. Last week, Binyamin Appelbaum and Jim Tankersley of the New York Times reported that thanks to Trump’s light-touch on regulation, “a wave of optimism has swept over American business leaders, and it is beginning to translate into the sort of investment in new plants, equipment and factory upgrades that bolsters economic growth, spurs job creation — and may finally raise wages significantly.”

This seems to be an overstatement at best. While it’s true that business investment has picked up the pace this year, much of that has been due to rising oil prices, which have led drillers to restart their rigs after shuttering them during the crude crash of 2015 and 2016. As economist Dean Baker notes, at least 43 percent of this year’s increase in business investment has come from the oil and gas industry—which the Bureau of Economic Analysis labels under the category “mining exploration, shafts, and wells.” Without all that oil drilling, investment has been good, but not necessarily something to write a sweeping article about. (Also, it’s worth noting that investment would have looked a lot strong under Obama if oil hadn’t been such a drag).

That brings us back to the Dow. While Trump surely isn’t responsible for every point that stock indexes have tacked on during his presidency—we’re in the middle of a long runup in global asset prices that’s been supported by loose central bank policies—I do think he probably deserves some credit. Corporations will be more profitable thanks to the massive tax cuts. Investors don’t have to worry about any big new regulations that might slow down business. It’s a recipe for high share prices.

With that said, it’s worth remembering that most stocks in the U.S. are owned by millionaires. The top 10 percent of Americans, with net-worths of $1.1 million or more, control almost 84 percent of household-owned stocks (that includes the mutual funds in retirement accounts like 401Ks). While there’s some evidence that Americans spend a bit more when stocks are up, which helps the real economy, the bull market is directly benefiting a relatively small, wealthy slice of the country.*

Obviously, it’s a bit early to tell what the full effects of Trump’s economic policies have been. We don’t even have GDP data for all of 2017 yet. The big tax cut just passed, and might yield a bit more investment by businesses. But as of now, there’s just no sign that Trump has delivered any kind of dramatic change. Donald Trump inherited a pretty good economy. Unlike the rest of his presidency, he’s managed not to muck it up.

*Correction, Jan. 5, 2017: This post originally implied that the 84 percent of all stocks owned by the top 10 percent of U.S. households did not include retirement accounts such as 401Ks. The figure does in fact cover such pension accounts.

Changing The Direction Of Debt Collection

by PYMNTS @ PYMNTS.com

Tue Mar 27 10:45:42 PDT 2018

Debt collectors are historically an unpopular group of people. Even the Bible has shade to throw their way. (Debt collectors, Biblically speaking, share a category with adulterers, swindlers and the unjust.) Part of that is the nature of the beast. Spending money is a good deal of fun. Repaying money is not. No one wants to […]

Scandinavian Women Do Not Have It All

by Jordan Weissmann @ Slate Articles

Mon Feb 05 10:17:21 PST 2018

On paper, Denmark looks like a paradise for working mothers. There’s the ample paid leave. Danish families are entitled to 52 weeks of it after the birth of a child, meaning parents have a year to care for their new baby without having to worry about their job or their ability to pay rent. Once a mom decides to go back to work, there’s generously subsidized public day care—the government picks up at least three-quarters of the tab—to help them juggle a job and kids. More than 90 percent of children younger than 6 end up enrolled.

Here in America, by comparison, mothers get a paltry 12 weeks of unpaid time off to bond with their infant, and day care can cost more than college. It’s enough to give you an acute case of Scandi envy. Remember when Bernie Sanders said America could stand to be more like Denmark? Their family-friendly approach to government was a big reason why.

Yet, for all Denmark does to support working parents, it turns out that there, much like here, motherhood is still a pretty devastating career choice. In a new study, a trio of economists used a large cache of government administrative data to look at what happened to the earnings of 470,000 Danish women who gave birth for the first time between 1985 and 2003. The results were dramatic. Before they became parents, the researchers found, men’s and women’s pay grew at a similar pace. After kids, their career paths split. Fathers mostly continued on as if nothing had changed. Mothers, however, saw their earnings quickly collapse by 30 percent on average, compared to what they would have hypothetically earned without children. They became less likely to work at all, but earned lower wages and clocked fewer hours if they did. Worse, their careers never fully recovered. After 10 years, women’s pay was still one-fifth lower than before they had kids.

The problem isn’t even moving in the right direction. The paper, which is still a draft and was released last month by the National Bureau of Economic Research, concludes that in 1980, Danish women overall earned 18 percent less than men thanks to to the impact of kids on their careers. In 2013, they earned 20 percent less. “There used to be many different reasons for gender inequality [in Denmark],“ Princeton economist Henrik Kleven, one of the study’s three authors, told me. “Many of those are disappearing over time. Children is the one that isn’t changing.”

Denmark isn’t the only plush, pro-family Scandinavian welfare state where having children still craters women’s earnings. A 2013 study of Swedish couples published in the Journal of Labor Economics found that during the 15 years after giving birth, the pay gap between men and women increased by 32 percentage points. In one of the most philosophically egalitarian nations on earth, mothers’ careers flounder, while fathers’ careers march on.

So, why can’t even Scandinavian women have it all?

Part of the answer may be a story about unintended consequences. If your goal is to help women get back to work and earn a paycheck the size of her male peers’, then providing free or dirt-cheap day care is unambiguously helpful. But generous child leave is more of a mixed bag. On the one hand, it allows women to stay at home and care for their infant without having to quit their job. At the same time, it keeps them out of the workforce for an extended period, which can set anyone back in their careers and possibly discourage them from returning to their old path.

That may especially be a problem for women chasing high-powered careers. Economists have found that women in countries with robust welfare states are more likely to work but less likely to end up in high-paid managerial positions. And while extensive paid leave policies may boost employment for females overall, there’s some evidence they may reduce the earnings of more educated women compared to men. (Once you’ve stepped off the corporate ladder, it can be hard to step back on.) In Denmark and Sweden, women have some of the highest labor-force participation rates in the world, but the labor markets are notoriously gender-segregated, with females much more likely to take jobs in the lower-paid, more flexible public sector.

“With some policies, we say if some is good, more is better, and it may be true,” Francine Blau, a labor economist at Cornell University and a leading expert on the gender wage gap, told me. “With parental leave, it may be true, but it’s complicated.”

Some countries have tried to deal with the downsides of family leave by encouraging mothers and fathers to split it up. But for the policy to work, governments need to essentially force men to take time off. In Denmark, spouses can divide up 32 of their 52 weeks of leave however they please. But as of 2014, men took just 27 days on average, or 8.9 percent of all time off. In Sweden, where parents get a whopping 480 days of paid parental leave, three of those months are reserved exclusively for men. The use-it-or-lose-it policy seems to have been at least somewhat effective at getting men to take more time off for child rearing: The country used to have a national joke about dads using their parental leave to go moose hunting; today’s stereotype of the Swedish dad is that of an enlightened male pushing a stroller. Still, the Swedes haven’t evened things out entirely. As of 2014, men still only took about 123 days off, compared to 356 for women.

We also don’t know even know whether policies that nudge fathers to take time off actually help women’s careers long-term. As one article in the Journal of Economic Perspectives explained last year, “[T]o date, there is no evidence of beneficial impacts of paternity leave rights on mothers’ careers.”

Taking time off immediately after giving birth isn’t the only thing that hobbles mothers’ careers in Sweden and Denmark. In both countries, a lot of women simply work part time. In Sweden, some of that may be the result of yet another public policy intended to be family-friendly: parents with young children there are entitled to part-time work schedules. (Notably, feminists in Denmark have opposed implementing a similar policy, arguing that it would be bad for equality.) But much of this also likely boils down to cultural preferences. In their recent working paper, Kleven and his co-authors point out that around 60 percent of adults in Denmark and Sweden believe that women with school-age children should work part time. They also find that how much mothers work after giving birth seems to be influenced by their own upbringings. “In traditional families where the mother works very little compared to the father, their daughter incurs a larger child penalty when she eventually becomes a mother herself,” they write.

Tradition can be hard to budge. In Denmark, labor unions and fathers’ rights groups have actually advocated for a Swedish-style use-it-or-lose-it policy that would require dads to take more leave. Many men would apparently love an excuse to spend more time walking around Copenhagen in a BabyBjörn. But along with employers, they’ve run into opposition from mothers, who don’t want to lose their own time with the kids, even if it means they bear more domestic responsibility. This brings up a point that’s sometimes easy to overlook: In the end, many women may be happy to trade some of their career for a family life, especially when government policies make it into less of an all-or-nothing deal.

So what does all of this mean for the U.S., where we are woefully behind on parental leave and child care policy? To some degree, the situation in Denmark and Sweden—wealthy, progressive countries where cultural expectations are still driving some of the gender gap—suggests that there’s only so much public policy can do. As the authors of the Swedish couples study put it, “so long as family responsibilities are unequally shared, the gender gap is not likely to close and not even to narrow significantly.”

With all of that said, there are still good reasons to yearn for a dose of Nordic-style social democracy here in the states. It might not be a miracle cure for gender inequality. But paid leave and subsidized child care do make being a parent less of nightmare—especially if you do decide to try to balance work and children. Plus, the pay gap between men and women in Denmark and Sweden who choose to work full time is still smaller than it is in the U.S., meaning that they’re arguably closer to achieving equal pay for equal work than we are. It may not be utopia, but it’s better than here.

Why did she *ever* bother to give her real name at Starbucks?

by Jim Romenesko @ Starbucks Gossip

Sun Sep 29 15:21:40 PDT 2013

Mirta Ojito wrote in the Miami Herald over the weekend: "Two weeks ago, I caved in. I gave a fake name to a Starbucks employee. After years of not even pronouncing my name, but simply spelling it as if I...

Trump’s Top Economic Adviser Gary Cohn Is Resigning, but He Got What He Wanted

by Jordan Weissmann @ Slate Articles

Tue Mar 06 16:31:36 PST 2018

Donald Trump’s new trade war appears to have claimed its first casualty. The New York Times reports that Gary Cohn, the president’s top economic adviser, is preparing to quit the White House.

Anonymous officials tell the paper there is no “single factor” behind Cohn’s decision to resign. But the timing is rather hard to ignore. Trump is preparing to impose large tariffs on foreign steel and aluminum, a move that Cohn opposes. The National Economic Council director has been mounting an internal persuasion campaign to convince Trump to water down the plan he unexpectedly announced last week. But as of now, it looks like protectionists in the White House are winning the debate, and Cohn has had enough.

“Gary has been my chief economic adviser and did a superb job in driving our agenda, helping to deliver historic tax cuts and reforms and unleashing the American economy once again,” Trump said in a statement to Times. “He is a rare talent, and I thank him for his dedicated service to the American people.”

That may sound like pro forma praise for a departing lieutenant. But while Cohn may be exiting on a bit of a low note, having lost an important brawl over economic policy, one could argue that of all the major Trump administration officials to bail thus far, he is the only one to have accomplished his major goal.

As the former president of Goldman Sachs, Cohn was the unofficial leader of the White House’s Wall Street wing—capital’s inside man on 1600 Pennsylvania Ave., a status that earned him the not-so-subtly anti-Semitic nickname “Globalist Gary” from the administration’s Breitbart contingent. (Cohn is Jewish.) With his commanding frame and ex-trader’s personality, he quickly won the president’s esteem, and for a while, Trump even considered picking Cohn to be the next Federal Reserve chair. But Cohn’s chances at the job apparently collapsed after he decided to publicly criticize the Trump’s response to the white supremacist rally in Charlottesville, Virginia, during which the president blamed neo-Nazis and counterprotesters for the deadly violence that erupted.

Cohn reportedly considered leaving the White House after the Charlottesville disgrace, going so far as to draw up a resignation letter (a fact which someone of course leaked to press, just so everybody knew just how upset Cohn was). But instead, he stayed on, and ultimately helped oversee the administration’s successful push to massively slash taxes for corporations. He wasn’t always the smoothest public salesman for the effort. He once kvelled that corporate CEOs were the “most excited group out there” about the bill, thus undercutting the Republican Party’s message that their tax cuts would mainly help workers. There was the awkward hand-raising incident. But ultimately, Cohn helped get the job done. And his friends in the banking industry were, of course, one of the biggest winners from the bill.

Gary Cohn: The man who swallowed the president’s racism and personal humiliation in order to guide tax cuts for his old employer at Goldman Sachs, and then quit over some steel tariffs. Wall Street is sure to welcome him back as a hero.

Starbucks gives free brewed coffee to customers who buy a beverage for another customer

by Jim Romenesko @ Starbucks Gossip

Wed Oct 09 06:51:29 PDT 2013

From Wednesday (Oct. 9) to Friday (Oct. 11), Starbucks is offering a free tall brewed coffee to any customer who buys another person a beverage at Starbucks. CEO Howard Schultz says the offer is a way to help fellow citizens...

The Met Will Start Charging Out-of-Towners, and New York City Burns a Little Less Bright

by Henry Grabar @ Slate Articles

Fri Jan 05 07:15:56 PST 2018

The Metropolitan Museum of Art announced on Thursday it would start charging mandatory admission fees to out-of-state visitors, a policy change that will provide revenue for the Met and bring the museum’s business model in line with its global peers. It will also deprive New York of one of its most extraordinary, egalitarian traditions, a rare offering that had lingered from the city’s fading commitment to common public life.

The Met, whose 7 million annual visitors make it the second-most popular art museum on Earth after the Louvre, has long wanted to make more money from admissions. The museum says out-of-staters account for more than half of its annual attendance. (New York state residents and students from around the region will continue to pay what they wish to enter the nation’s largest art museum; admission for children under 12 remains free.) It wasn’t just about making ends meet; it was a matter of principle. “What is it about art that it shouldn’t be paid for?” the former Met director Philippe de Montebello asked in 2002.

But the museum has had to maneuver carefully around a pair of 19^th-century agreements with the city and state that presumed entrance would be mostly free. Since 1970, the Met has squared the circle by asking visitors to make a donation, even if just a few cents, for admission to its vast collections. The language of that request was the subject of a class-action lawsuit settled in 2016; ultimately the museum conceded the fees were “suggested,” rather than “recommended.” New signs advised visitors: “The amount you pay is up to you.”

Not anymore. The new policy, which will be introduced in March, already has the approval of the city, whose populist mayor, Bill de Blasio, framed the new entrance fee as a blow for the common man. “I’m a big fan of Russian oligarchs paying more to get into the Met,” he said when the idea was raised last year.

In a letter published on Thursday, Met President and CEO Daniel Weiss put a more pragmatic spin on it: The Met needs money. The museum has struggled financially in recent years, running up a $40 million deficit that forced layoffs of 90 employees last year and the downscaling of a planned $600 million new wing. Critics say that under Thomas Campbell, who resigned as director in February of last year, the museum had spent recklessly, seduced by visions of new wings, new art, and new donors.

The “suggested” admission is no longer bringing in what it used to, Weiss writes in his letter. While attendance is up 40 percent since 2004, the percentage of visitors giving what the Met suggests has fallen in that time from 2-in-3 visitors to fewer than 1-in-5—a decline of 73 percent. (Perhaps relatedly, the entrance fee in that time has risen from $15 to $25.) The museum reckons the impending change will bring in between $6 million and $11 million a year, according to the New York Times—a paltry sum in a city where scores of apartments sell for that amount each year, but every little bit counts, I suppose. As Times critic Holland Cotter observes, it’s also a pittance compared to corporate gifts like the $65 million David Koch gave the museum in exchange for a pair of fountains in his name. Finally, Weiss argues, the Met has become “the only major museum in the world that relies exclusively on a pure pay-as-you-wish system” without getting the majority of its money from the government.

Damn right it has. No one would contend that a tour of the Met is not worth $25 or that most international visitors, who account for 37 percent of the museum’s attendance, could not afford it. Museum directors and their allies have often said their institutions possess what economists call a low “elasticity of demand,” meaning that price hikes generally don’t drive visitors away.

This may be true and good for globetrotters, and perhaps the Met will still bring in 7 million visitors next year. But the person the museum ought to be trying to get inside is not someone already determined to be there. It’s precisely those who might be turned off by a $25 ticket who are the Met’s perfect audience: the young woman visiting her sister who is not sure if she can afford it, the New Jersey commuter who doesn’t know if he even likes this stuff. The Met has always offered itself to those people, in part because its astounding array of treasures in such close proximity—not just art, but armor, and the choir screen of a Spanish church, and the façade of an 1825 bank building, and an entire Egyptian temple—can melt any skeptic’s resistance. But also because, being free, all you had to lose was your time.

For those who already loved the place, the optional donation made a visit that much sweeter, since there was no pressure to gorge your eyes until you felt your money was well spent. You could duck in and spend a few minutes among the Polynesian masks, or quickly show a friend the Napoleonic graffiti on the Temple of Dendur, and then slip back into the city. This fostered a sense that the interior of the museum was an extension of Manhattan’s public realm, and that Met fixtures like the five-legged Assyrian lions were part of it, a spectacular but out-of-the-way urban detail like a cornice or a façade carving.

Enduring the stern looks of the ticket-sellers when you handed over your $2 was the price you paid to share this sneaky, radical bargain with a friend from out of town. It’s too bad that the Met will no longer mean the same thing to visitors as it does to New Yorkers, because no city is quicker to make you one of its own than this one. However diminished from days when the subway was a nickel and CUNY was free and the Met didn’t “suggest” anything but the city’s tremendous public assets, New York’s occasional largesse was never something that had to be earned. And while the museum remains all but free for New Yorkers, whatever their vintage, the formality of an ID check nevertheless functions as a little marker to remind that some visitors belong and some do not.

Finally, it’s hard to find a place in New York or any city where you can catch your breath without opening your wallet. That our best and biggest free public space also happened to be stacked with the world’s richest art collection was a miracle, but it also felt like a right.

Has Starbucks gotten rid of the newspaper-sharing basket at your store?

by Jim Romenesko @ Starbucks Gossip

Sun Sep 22 13:19:37 PDT 2013

A journalist writes to Starbucks Gossip: "At two Starbucks locations I frequent here in LA, it seems like they've removed what seemed to be the standard newspaper-sharing basket, where people would leave newspapers they'd bought to read there. "I haven't...

Yes, the Martin Luther King Jr. Estate Approved That Ram Trucks Super Bowl Ad

by April Glaser @ Slate Articles

Sun Feb 04 18:49:28 PST 2018

During the second quarter of the Super Bowl, NBC aired a rather surprising ad from Ram Trucks featuring the voice of Martin Luther King, Jr. giving one of his final addresses, “The Drum Major Instinct” sermon. The beginning of the ad points out the speech was delivered exactly 50 years ago from today—today being Super Bowl Sunday. King was assassinated two months later in Memphis on April 4, 1968.

The use of King’s voice in the ad wasn’t just jarring for its tastelessness—which many, many, many people pointed out on Twitter—but also because King’s estate is notoriously litigious when it comes to the use of his speeches without permission, and restrictive when it comes to requests. The film Selma, about the King-led civil rights march on the Alabama town directed by Ava DuVernay, didn’t even use his speeches, likely because producers feared including the speeches would earn the attention the King estate’s lawyers. (The estate had already licensed the film rights to the speeches in question to other movie studios.)

Ram Trucks didn’t have to worry about any legal blowback, because it says it got the nod from the MLK Estate. The brand “worked closely with the representatives of the Martin Luther King Jr. estate to receive the necessary approvals,” a representative from Ram Trucks told me in an email. “Estate representatives were a very important part of the creative process.” The King estate did not immediately respond to a request for comment.

The King estate is not to be confused with the King Center, the nonprofit established by MLK’s wife Coretta Scott King. As it wrote on Twitter:

And Bernice King, Martin Luther King Jr.’s daughter, also distanced herself from the ad, replying to a tweet:

The ad features images of Americans with their families, riding horses, teaching math, working outside, and volunteering in their communities. “In the spirit of Dr. Martin Luther King, Jr., Ram truck owners also believe in a life of serving others,” the description of the ad on the Ram Trucks YouTube page reads.

It’s not a connection King would have likely been OK with. “The evils of capitalism are as real as the evils of militarism and evils of racism,” King said in a speech to the Southern Christian Leadership Conference in 1967.

Update, 10:01 p.m. Slate received this statement from Eric D. Tidwell, the managing director of Intellectual Properties Management, Inc., which is the “exclusive licensor” of the estate of Martin Luther King, Jr.:

When Ram approached the King Estate with the idea of featuring Dr. King’s voice in a new “Built To Serve” commercial, we were pleasantly surprised at the existence of the Ram Nation volunteers and their efforts. We learned that as a volunteer group of Ram owners, they serve others through everything from natural disaster relief, to blood drives, to local community volunteer initiatives. Once the final creative was presented for approval, it was reviewed to ensure it met our standard integrity clearances. We found that the overall message of the ad embodied Dr. King’s philosophy that true greatness is achieved by serving others. Thus we decided to be a part of Ram’s “Built To Serve” Super Bowl program.

How You’ll Be Able to Tell If Trump’s Corporate Tax Cuts Are Raising Wages Like He Promised

by Jordan Weissmann @ Slate Articles

Thu Dec 21 11:12:05 PST 2017

Republicans pitched their tax bill by arguing that cutting corporate rates would boost business investment and eventually lead to higher wages for American workers. Now that the legislation has passed Congress, a number of companies have announced on cue that they are planning to either boost pay, hand out bonuses, or ramp up their investment spending.

These developments have been met by skepticism from Democrats. During the tax debate, liberals, myself included, generally mocked the idea that companies would happily share fatter profits with workers. And many have pointed out that several of the corporations sending out press releases this week touting their investment in their workers have important regulatory issues pending before the Trump administration, and probably need to curry some favor.

The truth is that it’s way too soon to know how and if these cuts will trickle down; we’re going to be debating whether the Trump tax cuts worked for a long, long while. That makes now a good time to offer a very basic primer on how corporate tax cuts are actually supposed to raise wages, and what we should expect to see if this new bill delivers on its promises.

The standard story that economists tell about corporate tax cuts and worker pay is not especially intuitive. It also has nothing to do with corporations generously showering raises on their employees just because they can. Instead, the theory has to do with investment. Cutting the corporate tax rate makes American companies more profitable. That, in turn, should attract money from overseas as investors chase higher returns. Businesses can then be expected to take that cash, and use it for capital investments that will make them more efficient or create money making opportunities—new assembly lines, production robots, AI systems, medical imaging equipment, you name it. As a result of all this high-tech investment, employees should become more productive—which is to say, they’ll generate more revenue for their company per hour of work. As productivity goes up, so should wages. In some cases, companies will be paying more because they’ll be hiring coders and engineers instead of clerical workers and assembly hands. But competitive pressure for labor should also raise wages overall. (None of this is necessarily supposed to affect the total number of jobs out there, mind you; in theory that’s determined macroeconomic factors like interest rates and the size of the potential workforce.)

“It’s not about companies saying oh wow, we got a big tax cut, we’re going to share some of it with our workers. That’s not what the story is,” Tax Policy Center Co-Director Eric Toder told me. “It’s about capital moving to the U.S. and productivity going up.”

To be clear, I am not saying this is the way the world always works. There are serious economists out there who doubt that there is any strong relationship between corporate tax cuts and employee pay at this point, and they’ve raised questions about nearly every step of the narrative that I’ve outlined. Can the U.S. really attract infinite amounts foreign capital? Will companies really invest rather than just spend more on dividends and share buybacks? Is there still a strong link between productivity and pay for all workers?

Once in a while, corporate tax cuts might also lead companies to raise pay for reasons that don’t have anything to do with the productivity narrative. For instance, if a business regularly pays bonuses based on its profitability, and profits go up, then you’d expect bonus season to be more festive. Other employers may realize that they need to raise wages in order to keep up with competitors, but be worried about ticking off shareholders who hate spending money on labor. A tax cut could give those executives space to hike pay. Personally, I have a suspicion that might be why Wells Fargo and Fifth Third Bank are using corporate cuts as an excuse to raise their minimum wage level to $15 per hour. After all, JPMorgan made a similar move in July.

With all that said, the productivity story is the main one that economists tell, and people should keep it in mind as they try to judge whether the Trump cuts are having their supposedly desired effect.

What does that mean in practice? For starters, you should be skeptical every time a company says it’s boosting pay just because the tax cut passed, since that’s really not how all of this is supposed to work. More generally, if wages go up quicker over the next few years, that won’t necessarily be a sign the Trump cuts are working (though the White House will surely treat it that way). The labor market has been getting tighter for a while now, as the economy has finally shaken off the vestiges of the Great Recession. If paychecks start getting fatter faster, it may just be because unemployment is low and companies finally need to compete to keep people on the job.

If we start to see a noticeable jump in corporate investment, however, that might be a sign that the bill Republicans just passed is working as advertised. It could be a hint of other things as well. Some economists think that a tightening job market itself could drive investment and productivity growth as companies look for ways to shave labor costs. Companies could also just think that the economy is strong and now is a good time to spend money to make money. But if there is an investment boom in the near future, and that is then followed by faster wage gains, it would at least open up the possibility that the Trump cuts are doing some good.

In short: If you want to know whether tax cuts are boosting wages, you can’t just track wages. You also have to keep an eye on corporate investment, too. If one goes up but not the other, it means the tax cuts probably aren’t working the way they’re supposed to, at least in the textbooks.

Got it? Now get ready to argue about all this stuff for the next ten years.

We Need More Black-Owned Grocery Stores

by Tom Perkins @ Slate Articles

Thu Jan 11 04:30:11 PST 2018

The full-service supermarket that Circle Food Store owner Dwayne Bourdeaux runs in New Orleans’ 7^th Ward is clean and stocked with locally sourced produce that arrives with days to spare. The butcher cuts meat daily in the store and offers not only standard cuts but also items that are locally popular—raccoon, pig lips, pig ears, rabbit, and so on.

Concerned about the rates of diabetes and hypertension among black Americans—the majority of his customers—Bourdeaux not only sells healthy food but also incentivizes it by offering $5 worth of free, fresh produce to those who spend $5 on it.

“You should serve the community, because it’s not all about making money,” says Boudreaux, a black American in his early 40s who lives seven minutes from the store he worked at nearly his whole life before taking it over from his father. “I’d sell more liquor, alcohol, cigarettes, and fried foods if I wanted to make more money.”

But, he continues, “to be a part of the community, you don’t take the money out of the community and not reinvest it back into it. It’s like a family—you have to nurture it, you have to provide for it, you have to look out for people. To be a part of the community, you have got to care.”

His is a rare success in black and brown communities nationwide but not for lack of effort. In fact, Boudreaux is one of the nation’s few remaining black people operating full-service supermarkets. No organizations track the number, but sources familiar with the situation and some of the remaining grocers suggest that fewer than 10 black-owned supermarkets remain across the entire country. And the number continues to shrink: In the past two years alone, Sterling Farms in New Orleans, Apples and Oranges in Baltimore, and several branches of Calhoun’s in Alabama have all gone out of business.

This is problematic because strong anchor businesses like grocery stores can serve as the center of neighborhood economies, recirculating local revenues through wages and nearby businesses. They can also be neighborhood hubs where people go to buy good food as well as employment centers and sources of community pride. But where there are no grocery stores, or where they’re not enmeshed in the fabric of the community, problems arise: Grocery-store ownership directly ties to larger struggles and themes like economic stability, self-determination, power, control, and racial and class stratification, says Malik Yakini.

Yakini is the director of the Detroit Black Community Food Security Network, an organization that builds self-reliance, food security, and justice in Detroit’s black community. When a neighborhood loses a local grocery store, he says, the black American community essentially becomes what he describes as a domestic colony.

“[Black neighborhoods] are seen as a place for the more dominant economy to sell things,” Yakini says. “We’re more interested in building community, self-determination, and self-reliance. We’re interested in being more than consumers of goods that others bring to sell, and often goods that are inferior to what’s sold in the white community.

“We’re not a place to dump cheap goods,” Yakini continues. “African-American communities need to be producers of goods and stand eyeball to eyeball and shoulder to shoulder to other economic groups. Those that haven’t are subject to all sorts of abuse.”

* * *

In Detroit—a city that’s 85 percent black American—there are no black-owned grocery stores. Instead, Chaldeans—Middle Eastern Christians—living in the suburbs own the majority of the grocery-store options. A recent Fair Food Network study found Detroit’s residents spend an estimated $200 million annually on groceries in the suburbs.

Large chains like Walmart capitalize on this phenomenon. The company was one of three to partner with former First Lady Michelle Obama on a controversial plan to build 1,500 grocery stores in food deserts; fewer than half of those stores were ever built or renovated, and many of them were shuttered within the first five years.

In addition to building (and then closing) stores in underserved communities, Walmart has also been known to bus city residents out of their neighborhoods and into the suburbs to do their shopping under one roof—an attractive option for a population that’s not totally mobile in a sprawling city like Detroit.

Also working in the large chains’ favor is the fact that many stores in black neighborhoods like Chicago’s South Side or Detroit’s east side are dirty, the quality of their food is often lower, and there’s a well-documented pattern of distributors supplying expired or nearly expired food. Additionally, local shoppers often say that management can be disrespectful, and staff often don’t live nearby.

At a now-closed Jewel-Osco location on Chicago’s South Side, Dara Cooper, co-director of the National Black Food and Justice Alliance, says she used to find rotting vegetables, old fruit, and green meat, whereas Jewel’s stores in more affluent white neighborhoods stock better produce and meats.

A neighborhood’s class and race correlate with the quality of food found in its grocery stores, Cooper says, adding that she witnessed the same phenomenon in Philadelphia’s Fresh Grocer chain. (Jewel-Osco and Fresh Grocer didn’t reply to requests for comment.)

* * *

In Chicago, food activist Sheelah Muhammad’s father ran a Nation of Islam grocery store that opened in the mid–20^th century and partnered with black producers to set up businesses to supply its food. But, she says, that fell apart in the century’s final decades as society integrated and people gravitated toward large, white-owned chains in a way that earlier generations didn’t.

“When you’re coming out of slavery, Jim Crow, and having to do for yourself, having to work within your own community after being segregated—there are some positives to that. Not that I want to go back to it,” Muhammad says. “But having to do for yourself and working within your community—we should go back to that.”

And a common argument that blacks hear from the right and libertarian whites is, “Black people should just go and open grocery stores” or some variation of the “bootstraps” cliché. But that ignores the difficulty black people often have in obtaining capital or experience. Malik Yakini claims that black people in Detroit are often shut out of management positions at stores run by those from outside their community, so they don’t have the experience necessary to successfully run a supermarket or obtain capital.

And they’re already at a serious disadvantage when it comes to lending, says Dara Cooper.

“Everybody’s not starting from same playing field, and there’s a history of and contemporary acts of anti-blackness that lead to inequalities around access to capital and massive disinvestments in neighborhoods,” she says. “You can’t take lightly that banks actively drew red lines around black neighborhoods and said ‘I am not lending to you’ while white people got lent to. Active discrimination continues to happen in 2017, and you just can’t say, ‘Pull yourself up by [the] bootstraps.’ Not only is that unfair, it’s offensive.”

Ultimately, it’s all connected: the wealth extraction, the national chains, the rotten food, the redlining, and the lack of ownership. And when all the pieces are assembled, a clear picture of an economic system that’s stacked against black Americans begins to emerge. It’s the forces of racial and class stratification at work, Cooper says, which aren’t unique to the grocery industry.

“It’s based on inferior positionality of black people,” she says. “If we buy into the idea that every owner is white and that’s not a problem, and that black people have no other position but to be empty consumer[s], then that’s perpetuating white supremacy, and that’s a grave injustice.”

* * *

Despite the obstacles and competition they face, there are examples of locally owned grocery stores thriving in Detroit and elsewhere. The Honey Bee Market, centrally located in the predominantly Mexican stretch of Southwest Detroit, is co-owned by a Mexican woman. It’s a clean mom and pop shop that provides healthy foods, fresh produce, and employs neighborhood residents in its management.

The Grocery Outlet in Compton, California, where Kia Patterson, a black woman, is an independent operator, is another good example. Though the store is part of a chain, Patterson grew up in Compton, lives nearby in Long Beach, and talks about the need for grocery stores to support the community.

“It’s not only about providing good-quality food. What I’ve always been about is giving back. Like I have a school drive at the end of August. It’s about playing that role, helping with fundraising with schools, and being there not just to say, ‘Hey, come get your groceries from me,’ but also helping out the community,” Patterson says.

But perhaps the best solutions exist outside the traditional grocery-store model. Bodegas and smaller stores, which increasingly provide more produce and meats, require far less capital to start than traditional supermarkets. In Chicago, where wide swaths of real estate are considered food deserts, Cooper, Muhammad, and two other partners launched a mobile grocery store called Fresh Moves. The mobile model provided them flexibility while allowing them to form partnerships that helped reach more people, Muhammad said.

“It was a good alternative because we could hit multiple communities in one day or one week, and people didn’t have to travel to it,” she says. “It’s a really great way to do community outreach and engagement, and we partnered with schools, senior citizen centers, health clinics, and other community stakeholders … so it can be a different kind of way to get people eating healthy.”

As traditional food systems fail black Americans (not to mention low-income communities and other communities of all colors), effective alternative forms of ownership, like the Southwest Georgia Project food hub, look increasingly appealing, Cooper says. The Georgia nonprofit owns 1,600 acres of land on which black and other socially disadvantaged farmers grow food to meet regional demand.

“Private ownership will not free us, [will] not get us equity, so we have to think about how class inequality is reproduced and challenge that,” Cooper says.

Examples of alternatives are sprouting up around the country. In Minneapolis, the long-standing Seward Community Co-Op last year opened a new supermarket in the minority-majority Bryant neighborhood and went to great lengths to let the neighborhood’s residents shape the new market.

In Detroit, Yakini and the Food Security Network are planning a grocery cooperative for the city’s North End neighborhood, while in northeast Greensboro, North Carolina, the Renaissance Community Cooperative now services what was long considered a food desert. In 2016, Renaissance’s 1,300 owners chipped in at least $100 each to build an 11,000-square-foot, $3 million full-service grocery store.

Ed Whitfield, the co–managing director of the Fund for Democratic Communities, helped organize Renaissance, which is led by a largely black American board of directors, and Whitfield describes as a well-managed, attractive, friendly supermarket that sells high-quality products and serves as a community hub. Should the store find itself holding a surplus, Whitfield says it would hypothetically spend the funds on band uniforms or some other community need—and that, he says, is a mold-breaking strategy.

“Unfortunately, we live in a society that says it’s legitimate just to maximize profit at any cost, and that generates a whole set of problems,” Whitfield says. “This is a place that meets a community need and has good jobs, and when there’s a profit, the board can decide how to put it back into the community.” At Renaissance, Whitfield continues, “we can meet a need and elevate the quality of life in a community without just trying to make a profit.”

Slip Into the Christmas Spirit With These Romantic Japanese Bullet Train Ads

by Henry Grabar @ Slate Articles

Sat Dec 23 07:00:20 PST 2017

In Japan, Christmas is a festival of shopping and ornamentation, with perhaps a trip to KFC thrown in. Mostly, though, it’s considered a holiday for romance.

Which helps explain Japan Rail’s indelible Christmas bullet train commercials, which advertised the Shinkansen service for several years in the late ’80s and early ’90s and again in 2000. Each installment in the “Christmas Express” series is a variation on a theme: Couples reunited through train travel. The soundtrack is Yamashita Tatsuro’s hit “Christmas Eve,” which was released in 1983 but topped the charts after appearing in the ads.

Watching them over and over, I have begun to appreciate the way the direction withholds so much: The romantic encounter itself is always superseded by the excitement or worry of anticipation and sometimes not shown at all. The snub-nosed trains themselves scarcely appear, like in a glossy magazine ad that shows a handsome actor and only a glimpse of the expensive wristwatch he’s selling you. But it’s the trains, perhaps more than your waylaid lover, that you can rely on.

Gitte Marianne Hansen, a professor at Newcastle University who studies femininity in Japanese culture, has written that the advertisements illustrate the evolution of the female protagonist from one who waits passively for her lover to arrive, in the earlier commercials, to one who is making the journey herself. The voiceover narration evolves from one addressed to the traveling male protagonist, “It’s you who makes the jingle bell ring,” to a more neutral invitation, “Let’s meet, no matter the century.” (The translations are hers.)

Throughout this arc, though, the ads all portray a familiar moment of holiday alchemy, when the stress of planning and the strain of distance morph into the joy of seeing the right person at the right time.

Baby-Sitting the Economy

by Paul Krugman @ Slate Articles

Tue Dec 19 05:00:00 PST 2017

This month, Slate is republishing some of our favorite stories. Here's today's selection: The best economic explainers don’t just wade through vast, incomprehensible figures. This 1998 piece by Paul Krugman, which attempts to explain the birth of a recession, approaches the subject through a mundane, but domestically crucial topic. And by making powerful forces that steamroll entire economies seem understandable at any scale, Krugman urges us to hope in moments of panic and dread.—Molly Olmstead

Twenty years ago I read a story that changed my life. I think about that story often; it helps me to stay calm in the face of crisis, to remain hopeful in times of depression, and to resist the pull of fatalism and pessimism. At this gloomy moment, when Asia's woes seem to threaten the world economy as a whole, the lessons of that inspirational tale are more important than ever.

The story is told in an article titled "Monetary Theory and the Great Capitol Hill Baby-Sitting Co-op Crisis." Joan and Richard Sweeney published it in the Journal of Money, Credit, and Banking in 1978. I've used their story in two of my books, Peddling Prosperity and The Accidental Theorist, but it bears retelling, this time with an Asian twist.

The Sweeneys tell the story of—you guessed it—a baby-sitting co-op, one to which they belonged in the early 1970s. Such co-ops are quite common: A group of people (in this case about 150 young couples with congressional connections) agrees to baby-sit for one another, obviating the need for cash payments to adolescents. It's a mutually beneficial arrangement: A couple that already has children around may find that watching another couple's kids for an evening is not that much of an additional burden, certainly compared with the benefit of receiving the same service some other evening. But there must be a system for making sure each couple does its fair share.

The Capitol Hill co-op adopted one fairly natural solution. It issued scrip—pieces of paper equivalent to one hour of baby-sitting time. Baby sitters would receive the appropriate number of coupons directly from the baby sittees. This made the system self-enforcing: Over time, each couple would automatically do as much baby-sitting as it received in return. As long as the people were reliable—and these young professionals certainly were—what could go wrong?

Well, it turned out that there was a small technical problem. Think about the coupon holdings of a typical couple. During periods when it had few occasions to go out, a couple would probably try to build up a reserve—then run that reserve down when the occasions arose. There would be an averaging out of these demands. One couple would be going out when another was staying at home. But since many couples would be holding reserves of coupons at any given time, the co-op needed to have a fairly large amount of scrip in circulation.

Now what happened in the Sweeneys' co-op was that, for complicated reasons involving the collection and use of dues (paid in scrip), the number of coupons in circulation became quite low. As a result, most couples were anxious to add to their reserves by baby-sitting, reluctant to run them down by going out. But one couple's decision to go out was another's chance to baby-sit; so it became difficult to earn coupons. Knowing this, couples became even more reluctant to use their reserves except on special occasions, reducing baby-sitting opportunities still further.

In short, the co-op had fallen into a recession.

Since most of the co-op's members were lawyers, it was difficult to convince them the problem was monetary. They tried to legislate recovery—passing a rule requiring each couple to go out at least twice a month. But eventually the economists prevailed. More coupons were issued, couples became more willing to go out, opportunities to baby-sit multiplied, and everyone was happy. Eventually, of course, the co-op issued too much scrip, leading to different problems ...

If you think this is a silly story, a waste of your time, shame on you. What the Capitol Hill Baby-Sitting Co-op experienced was a real recession. Its story tells you more about what economic slumps are and why they happen than you will get from reading 500 pages of William Greider and a year's worth of Wall Street Journal editorials. And if you are willing to really wrap your mind around the co-op's story, to play with it and draw out its implications, it will change the way you think about the world.

For example, suppose that the U.S. stock market was to crash, threatening to undermine consumer confidence. Would this inevitably mean a disastrous recession? Think of it this way: When consumer confidence declines, it is as if, for some reason, the typical member of the co-op had become less willing to go out, more anxious to accumulate coupons for a rainy day. This could indeed lead to a slump—but need not if the management were alert and responded by simply issuing more coupons. That is exactly what our head coupon issuer Alan Greenspan did in 1987—and what I believe he would do again. So as I said at the beginning, the story of the baby-sitting co-op helps me to remain calm in the face of crisis.

Or suppose Greenspan did not respond quickly enough and that the economy did indeed fall into a slump. Don't panic. Even if the head coupon issuer has fallen temporarily behind the curve, he can still ordinarily turn the situation around by issuing more coupons—that is, with a vigorous monetary expansion like the ones that ended the recessions of 1981-82 and 1990-91. So as I said, the story of the baby-sitting co-op helps me remain hopeful in times of depression.

Above all, the story of the co-op tells you that economic slumps are not punishments for our sins, pains that we are fated to suffer. The Capitol Hill co-op did not get into trouble because its members were bad, inefficient baby sitters; its troubles did not reveal the fundamental flaws of "Capitol Hill values" or "crony baby-sittingism." It had a technical problem—too many people chasing too little scrip—which could be, and was, solved with a little clear thinking. And so, as I said, the co-op's story helps me to resist the pull of fatalism and pessimism.

But if it's all so easy, how can a large part of the world be in the mess it's in? How, for example, can Japan be stuck in a seemingly intractable slump—one that it does not seem able to get out of simply by printing coupons? Well, if we extend the co-op's story a little bit, it is not hard to generate something that looks a lot like Japan's problems—and to see the outline of a solution.

First, we have to imagine a co-op the members of which realized there was an unnecessary inconvenience in their system. There would be occasions when a couple found itself needing to go out several times in a row, which would cause it to run out of coupons—and therefore be unable to get its babies sat—even though it was entirely willing to do lots of compensatory baby-sitting at a later date. To resolve this problem, the co-op allowed members to borrow extra coupons from the management in times of need—repaying with the coupons received from subsequent baby-sitting. To prevent members from abusing this privilege, however, the management would probably need to impose some penalty—requiring borrowers to repay more coupons than they borrowed.

Under this new system, couples would hold smaller reserves of coupons than before, knowing they could borrow more if necessary. The co-op's officers would, however, have acquired a new tool of management. If members of the co-op reported it was easy to find baby sitters and hard to find opportunities to baby-sit, the terms under which members could borrow coupons could be made more favorable, encouraging more people to go out. If baby sitters were scarce, those terms could be worsened, encouraging people to go out less.

In other words, this more sophisticated co-op would have a central bank that could stimulate a depressed economy by reducing the interest rate and cool off an overheated one by raising it.

But what about Japan—where the economy slumps despite interest rates having fallen almost to zero? Has the baby-sitting metaphor finally found a situation it cannot handle?

Well, imagine there is a seasonality in the demand and supply for baby-sitting. During the winter, when it's cold and dark, couples don't want to go out much but are quite willing to stay home and look after other people's children—thereby accumulating points they can use on balmy summer evenings. If this seasonality isn't too pronounced, the co-op could still keep the supply and demand for baby-sitting in balance by charging low interest rates in the winter months, higher rates in the summer. But suppose that the seasonality is very strong indeed. Then in the winter, even at a zero interest rate, there will be more couples seeking opportunities to baby-sit than there are couples going out, which will mean that baby-sitting opportunities will be hard to find, which means that couples seeking to build up reserves for summer fun will be even less willing to use those points in the winter, meaning even fewer opportunities to baby-sit ... and the co-op will slide into a recession even at a zero interest rate.

And this is the winter of Japan's discontent. Perhaps because of its aging population, perhaps also because of a general nervousness about the future, the Japanese public does not appear willing to spend enough to use the economy's capacity, even at a zero interest rate. Japan, say the economists, has fallen into the dread "liquidity trap." Well, what you have just read is an infantile explanation of what a liquidity trap is and how it can happen. And once you understand that this is what has gone wrong, the answer to Japan's problems is, of course, quite obvious.

So the story of the baby-sitting co-op is not a mere amusement. If people would only take it seriously—if they could only understand that when great economic issues are at stake, whimsical parables are not a waste of time but the key to enlightenment—it is a story that could save the world.

Marco Rubio Made the Republican Tax Bill Slightly Better for the Working Poor. It’s Still a Regressive Boondoggle.

by Jordan Weissmann @ Slate Articles

Fri Dec 15 17:26:08 PST 2017

For the last several days, Florida Sen. Marco Rubio has been fuming about the Republican tax bill, arguing that it did not do enough to help working-class families. On Thursday, he threatened to vote against the legislation unless colleagues finally met some of his demands.

Rubio is not exactly known for his titanium backbone, and pretty soon it seemed as if all of political Twitter had started a countdown until he caved. Friday afternoon, he appeared to do just that, announcing he would vote yes after finally winning a few concessions.

But while it’s easy to mock the man for accepting one-fourth of a stale loaf, his efforts have made the GOP’s bill marginally better for lower-income mothers and fathers.

Along with Sen. Mike Lee of Utah, Rubio spent several weeks lobbying for changes to the child tax credit that would make it more valuable to families with modest means. Today, the credit lets families subtract $1,000 from their IRS bill for each of their children. It’s also “refundable,” which a Washington term of art meaning that parents can claim the credit as a cash payment from the government, even if they don’t owe any federal income tax. As a result, the credit doubles as both a straightforward tax break, and a social welfare program buried in the tax code.

The problem is that, as it’s structured now, the child tax credit isn’t worth much to the poorest of the working poor. In order to claim any of it, a parent needs to make at least $3,000. Then, for each dollar a family earns over that threshold, they can get 15 cents back from the government as a refund. To get get the full $1,000 credit for one kid, you need more than $9,000 in earnings.

Expanding the child tax credit, and making it more of it refundable, has long been a central plank of the small but vocal reform-conservative movement that Rubio and Lee represent in the Senate, which wants to push the Republican party in a more family-friendly direction. Unfortunately for them, traditional supply-side conservatives, like the writers of the Wall Street Journal’s editorial page, have been cold on the idea, in part because they’d prefer to spend money on corporate tax cuts, and in part because they don’t like social welfare programs for the poor (even when they’re embedded in the tax code). When Rubio and Lee introduced an amendment late last month vastly expanding the refundable portion of the child tax credit, their colleagues shot it down.

But by threatening to torpedo the whole bill this week, Rubio finally managed to secure changes that will be worth several hundred dollars to many lower-income families. It’s not a lot in the scheme of a $1.5 trillion bill, but it’s something.

Here’s how the math works out. The Senate bill would have bumped the entire value of the child tax credit to $2,000 and dropped the income threshold to $2,500. But it increased the refundable portion by a mere $100, to $1,100.

By protesting, Rubio convinced his colleagues to do a little better. The refundable portion is now worth $1,400. To pay for the change, Republicans undid a tweak that would have let 17-year-old children qualify for the credit, up from age 16.

For a single mother supporting a child on a $12,000 income, that change means an extra $300 per year—or a little more than you could make in typical a week at a minimum wage job. For a single mother with two kids earning $24,000, it would mean an extra $600.

This is less than Rubio and Lee sought in their original amendment. That would have let parents claim the refund starting with the first dollar they earned, giving more aid to the absolute poorest parents. It would have also indexed the child tax credit to inflation, which the tax bill does not. The fact that they had to eliminate the credit for 17-year-olds in order to expand the refundable portion of the credit also speaks to just how unwilling Republicans were to redirect any money from business tax cuts to this cause, as well as to the minimal influence family-friendly conservatism seems to have as political philosophy.

Meanwhile, one could argue that Rubio is simply spraying perfume on a dung heap of a bill, giving the regressive boondoggle aimed at enriching corporate shareholders and wealthy business owners a faint whiff of working-class friendliness. But, hey, if he was always going to cave and vote for the bill, at least he managed to eek out a few improvements. Way to stand strong.

Are you surprised there's no pumpkin in Starbucks' Pumpkin Spice Latte?

by Jim Romenesko @ Starbucks Gossip

Tue Oct 08 15:10:28 PDT 2013

* Is there a conspiracy to discredit Starbucks' Pumpkin Spice Latte?

Bank of America Just Reminded Us of Why We Need Postal Banking

by Jordan Weissmann @ Slate Articles

Tue Jan 23 14:11:06 PST 2018

This week offered a small but vivid reminder that we can’t expect banks to serve anybody except their shareholders.

On Monday, Bank of America ended a free checking service used by some of its lower-income depositors called e-banking, which it had been gradually winding down for several years. The final customers were transferred to new accounts that will require them to keep a minimum balance of $1,500 or agree to have $250 from their paycheck directly deposited into their account every month. Otherwise, they will have to pay a $12 monthly fee.

Unsurprisingly, the move has gone over poorly with the public. For Americans with irregular incomes, even the modest direct deposits required to avoid getting hit with fees may be too much of a hurdle to clear. A Change.org petition protesting the move has more than 50,000 signatures at the moment. “Bank of America was one of the only brick-and-mortar bank [sic] that offered free checking accounts to their customers,“ the petition reads. “Bank of America was known to care for both their high income and low income customers. That is what made Bank of America different.“

Perhaps public pressure will make Bank of America decide to backtrack, but it seems unlikely. What this news mostly shows is that we shouldn’t rely on for-profit financial institutions to provide basic, essential services to the needy. We should rely on the post office.

In spite of what some of its customers may have thought, Bank of America never cared very much about its poorer depositors. That’s because bank don’t care about people. They care about profits. And lower-middle class households who have trouble maintaining a minimum balance in a checking account are, by and large, not very profitable customers, unless they’re paying out the nose in overdraft fees.

As Mehrsa Baradaran, a University of Georgia law professor and expert on consumer banking, pointed out to me, the entire concept of a “free“ checking account has long been a bit of a fiction. “They’ve never been free. That’s the truth of it. They’ve always been laced with overdraft fees and you’ve had to have minimums,” she said. “Free has been a misnomer for a while.” Banks have also had even less of an incentive to cater to low-income customers ever since federal regulations passed in the wake of the financial crisis started crimping their ability to collect overdraft charges.

According to the Wall Street Journal, Bank of America began offering its e-banking accounts in 2010 not as a public service, but as a marketing ploy meant to prod more customers into doing their banking online. Customers were spared a monthly fee, so long as they stayed away from tellers and elected to receive their statements via email. The program soon outlived its usefulness, however, as online banking quickly became the norm; Bank of America stopped offering it to new customers in 2013, and started moving current ones out in 2015.

None of this would be especially scandalous if so many Americans weren’t desperate for affordable banking options. Unfortunately, we live in a country where even middle class households have trouble getting access to basic financial services—about 7 percent of households are entirely unbanked, meaning they lack a checking or savings account, while another roughly 20 percent are underbanked, meaning they have to rely on expensive products like payday loans. It’s understandable that needier Bank of America customers who considered themselves lucky to have nabbed free checking would be dismayed to lose it.

So what’s the solution? You could go back to letting banks charge low-income families usurious overdraft fees in the hope that more of them will at least be able to open a nominally free account, though that seems less than ideal. You could also place your hopes in financial tech firms like Simple, which currently offers no fee, no minimum balance checking accounts without overdraft charges. It can do that, in part, because it doesn’t have any physical branches, which may suit former e-banking customers just fine, especially if they have smartphones. But if mobile banking were really the solution to America’s banking program, I’m not sure we’d still be talking about the issue. Simple is a great solution, in theory. In practice, not everybody has a smart phone or is that savvy a customer.

Instead, it’s probably time to stop hoping that profit hungry banks will provide affordable services to unprofitable customers. There’s been a long-running conversation about whether the United States should bring back the sort of postal banking system common across much the rest of the world, and that the U.S. had up until the mid 20th century. The U.S. Post Office could offer basic financial services, including bank accounts, to needier customers who aren’t being served today.

Though it may seem a tad far-fetched in the anti-government Trump era, this is not an idea that only journalists or academics have been interested in. The post office’s inspector general released an entire report exploring the concept in 2015, and Sen. Elizabeth Warren has been a vocal supporter of it. As Baradaran said to me, Bank of America and its ilk are “not even pretending” to care about the sort of people for whom $12 a month is too much to pay for a checking account. It’s time for the government to take those customers off their hands.

Follow Starbucks Gossip at @sbuxgossip

by Jim Romenesko @ Starbucks Gossip

Fri Oct 11 06:50:19 PDT 2013

Tweets by @sbuxgossip I hang out at Peet's Coffee & Tea (and indie shops) more often than Starbucks these days -- the shitty Wi-Fi that SBUX offers is why -- and no longer have that much interest in Starbucks' doings....

Starbucks gives free brewed coffee to customers who buy a beverage for another customer

by Jim Romenesko @ Starbucks Gossip

Wed Oct 09 06:51:29 PDT 2013

From Wednesday (Oct. 9) to Friday (Oct. 11), Starbucks is offering a free tall brewed coffee to any customer who buys another person a beverage at Starbucks. CEO Howard Schultz says the offer is a way to help fellow citizens...

Homeowners Lining Up to Pay Early Taxes Is a Sign of Blue-State Pain to Come

by Henry Grabar @ Slate Articles

Fri Dec 29 12:30:57 PST 2017

First came the winners: America’s largest corporations, calculating how a 14-point drop in the corporate tax rate would impact their bottom line. The answer: Favorably! Over the course of December, dozens of U.S. companies announced stock buybacks and dividend hikes, and a few went so far as to issue raises, bonuses, or promises of major capital investment.

And now, in these frigid waning days of December, come the tax bill’s first visible losers: wealthy blue-state property owners (and the governments their taxes support). In the four days since Christmas, homeowners have lined up at city halls across the Northeast, doing something whose unnatural aspect reveals the scale of damage the tax bill will wreak in the Northeast: voluntarily handing over thousands of dollars in taxes months and months in advance.

Hundreds of people waited on lines at city halls and county seats from Fairfax County, Virginia, to the suburbs of Baltimore, New York, and Boston, trying to pay their property taxes while they remain fully deductible on federal returns. Starting next year, the IRS will impose a limit of $10,000 on all state and local tax deductions.

Of course, the bracket here is pretty limited to a certain privileged class: homeowners who not only have enormous property tax bills but also the money and the wherewithal to pay them in advance. It is overwhelmingly a wealthy group, and one concentrated in a handful of Democratic states and counties. Real estate taxes make up only about a third of SALT deductions, but they are easy to pay in advance. And if filing now means taking $10,000 off your 2018 tax return, a little dead-week trip to the Finance Department could save you thousands on next year’s taxes.

So it’s not surprising that early payers are dedicating a few hours to fixing cash-flow issues in cities, suburbs, and counties up and down the Northeast Corridor, and in Illinois, Texas, and California as well. On the one hand, it’s hard to drum up much sympathy for the winners of a home price run that has sent the collective value of real estate in the Los Angeles metropolitan area, to take one example, higher than the GDP of the United Kingdom.

On the other hand, this week’s frenzy is a preview of the staggering collective impact that’s just beginning to dawn on state lawmakers. Taxpayers in Los Angeles County pay—and deduct from federal returns—more than $2.7 billion in property taxes each year. In Manhattan, the figure is $1.7 billion. In Westchester County, New York, which has the highest average deduction in the country, the total is $1.5 billion.

Little of that will still be deductible under the plan. Add it up with state income taxes, which make up nearly two-thirds of SALT deductions, and you’re looking at a phenomenon that will feel like a big federal tax hike—but will be taken out on state and local politicians, since blue-state taxpayers have no power in Washington. The burden has already scared pols off one new spending idea, a New Jersey millionaire’s tax for education, as fear of a wealthy-resident exodus to lower-tax locales grows.

Studies show that won’t happen. But that doesn’t mean it doesn’t affect politics in places like Connecticut, to take one state that has shied away from taxing hedge funds to shore up the budget. Wary of the impact on state finances, New Jersey Gov. Chris Christie issued an executive order this week ordering the state’s municipalities to accept pre-payments for at least the first half of 2018. New York Gov. Andrew Cuomo has done the same. And then the IRS on Wednesday warned that only 2018 taxes that had been assessed in 2017 would be eligible for deduction this year, meaning that anyone paying an estimate was merely making a five-figure, interest-free loan to their local government.

This illustrates two things: first, the consequences of a hastily written tax bill whose ambiguity put billions of dollars at stake during this nine-day window between passage and the new year. Expect lawsuits. And this is, in the scheme of the tax bill, a relatively small loophole.

Second, it hints at the enormous reckoning that is coming for the nation’s biggest states, where a federally deductible, high-tax model has enabled the maintenance of stellar university systems and the expansion of the safety net despite Washington’s retreat from public spending.

Blue-state legislatures face a fork in the road. They can restructure their budgets to work better under the new system. Economists analyzing the conference bill in December noted that states could redirect the burden to state taxes that remain deductible—such as employee payroll taxes or taxes on pass-through businesses. Or they could make use of a loophole that, while running contrary to the spirit of the tax bill, might abide by the letter of the law: Simply instruct taxpayers that all the property and income taxes they can’t deduct can instead be made in the form of a charitable gift, which remains deductible, to something like New York Public Schools Donation Fund.

But if they don’t do something like that, a raft of anti-tax candidates may spring from places like Nassau and Fairfax counties. They’re Democratic now, but haven’t been for long. The tax bill was the spark, but it’s blue state budgets that will burn.

The Best CD Rates – March 2018

by Nick Clements @ MagnifyMoney

Tue Mar 27 05:00:21 PDT 2018

Updated March 27, 2018 If you are looking for a better yield on your savings, a high rate CD (certificate of deposit) offered by an online bank could be a good option. Internet-only banks offer much better interest rates than traditional banks. For example, a 12-month CD at Bank of America would require a $10,000 … Continue reading The Best CD Rates – March 2018

The post The Best CD Rates – March 2018 appeared first on MagnifyMoney.

Here Comes the Trade War

by Jordan Weissmann @ Slate Articles

Thu Mar 01 15:20:44 PST 2018

Donald Trump haphazardly shuffled the U.S. into the trade battle he’s been yearning for, telling reporters today that he would impose a 25 percent tariff on foreign steel and a 10 percent tariff on aluminum.

The news capped off a baffling morning during which the White House appeared to waffle on whether to formally announce the new duties, the details of which are still officially vague. The administration is still conducting a legal review of the plan and has not said definitively whether it will single out specific nations like China, or tax steel and aluminum imports across the board. But an unnamed industry executive who was briefed on the plan told the New York Times that the “tariffs are expected to apply to all countries.”

These are the kinds of specifics a normal White House would have of course ironed out ahead of time. But this is the Trump Administration, where the one constant is chaos, and officials are deeply divided over trade, a fact that was reflected in this morning’s bumbling rollout. The administration’s protectionist wing—including Commerce Secretary Wilbur Ross, U.S. Trade Representative Richard Lighthizer, and adviser Peter Navarro—has been building the case for tariffs for months. And in February, the Commerce Department released a 262-page report arguing that the president should impose a 24 percent tariff on all foreign steel and a 7.7 percent tariff on aluminum for national security purposes. But the protectionists have met resistance from officials including Treasury Secretary Steve Mnuchin and National Economic Council Director Gary Cohn, who are concerned that a trade fight will drag down the economy.

In the middle of all this sits the Trump himself, who is convinced the United States is being snookered by its trade partners and would love nothing more than to slap Mexico and China with fat border taxes, but is also easily influenced by whoever he speaks to last. According to the Washington Post, the administration’s pro-tariff faction tried to keep the plans for today’s announcement secret from other staffers until the last minute, so that the free traders wouldn’t try to talk Trump out of it. That led to a bout of confusion once word got out, and it briefly seemed unclear whether the president would roll out his plan at all. Until, that is, he finally blurted the numbers out. That’s the sort of chaos and caprice shaping our country’s trade policy.

Regardless of how exactly things shake out, this is probably bad news for anybody who doesn’t work at a steel mill. The argument against tariffs is that they will raise prices for businesses like construction companies and auto makers that use steel as a raw material. That will hurt those companies’ profits and possibly put a crimp on job growth. The argument in favor of tariffs boils down to the fact that U.S. steel manufacturers have been battered over the past two decades by cheap imports from China’s subsidized state-owned factories, which have been producing far more metal than their domestic market can use, creating a global glut that’s weighed on prices in the process.

But it’s not clear China’s overcapacity is still an urgent issue. Shipments from the country to the U.S. have fallen significantly since 2016, when President Obama increased tariffs on certain types of Chinese steel to more than 500 percent, and major U.S. steelmakers reported healthy profits last year.

Obama’s move was also much more narrowly targeted than Trump’s; it was mostly aimed at China, and specifically designed to punish dumping, a practice where companies price their product well below cost to clear out their inventory. The European Union took similar steps in 2016 to stanch of the flow of Chinese imports. Trump, in contrast, may be about to pick a fight with the whole world. And his pretense that these tariffs are necessary to protect U.S. national security may not hold up at the World Trade Organization, meaning that it’s likely some of our major trade partners are likely to retaliate. Europe and Mexico have already vowed to take countermeasures. There’s a strong chance China will too.

These are not idle threats. President Bush was forced to drop steel tariffs he implemented in 2002, in part because the European Union made it clear it would start putting counter-tariffs on products made in swing states in order to exact political as well as economic retribution. Unlike washing machines and solar panels, which Trump has previously imposed tariffs on, steel is a major piece of global commerce, meaning that today Trump may have fired the first wobbly shot in an honest-to-god trade war.

The Best Business Savings Account Rates in 2018

by Gabby Hyman @ MagnifyMoney

Fri Mar 23 05:00:40 PDT 2018

In this review we’ll cover: The best business savings accounts — March 2018 Community Bank of Pleasant Hill, 1.32% APY, No minimum balance Community Bank of Raymore, 1.32% APY, $25 minimum deposit to open First Internet Bank, 1.26% APY up to $250,000, ATM services BofI Federal Bank: 1.06% APY, $25,000 minimum balance, ATM access Live … Continue reading The Best Business Savings Account Rates in 2018

The post The Best Business Savings Account Rates in 2018 appeared first on MagnifyMoney.

Indiana Members Credit Union Checking Bonus: $150 Promotion (Indiana only) *Carmel Branch offer*

by Anthony Nguyen @ Bank Checking Savings

Tue Mar 27 14:30:47 PDT 2018

Are you interested in putting some extra cash in your wallet? Indiana Members Credit Union is currently offering residents of Indiana a generous $150 bonus when you sign up and open a new Checking Account with direct deposit. To get the first $50, you must apply and open a new checking account and keep the account... Keep Reading↠

The post Indiana Members Credit Union Checking Bonus: $150 Promotion (Indiana only) *Carmel Branch offer* appeared first on Bank Checking Savings.

How to make a Starbucks-like Pumpkin Spice Latte at home

by Jim Romenesko @ Starbucks Gossip

Sun Oct 06 10:40:51 PDT 2013

I have never tried a Pumpkin Spice Latte -- only brewed coffee for me, thank you -- but I certainly know about the Cult of PSL. That's why I'm posting this copycat recipe; let us know in comments how it...

The Republican Tax Plan Wages War on the Housing Industry

by Jordan Weissmann @ Slate Articles

Fri Dec 15 11:13:43 PST 2017

There are lots of ways to think about the tax plan that House Republican leaders finally unveiled today. It is, as expected, a gift to large corporations, which would see their top tax rate plummet from 35 to 20 percent. It’s also a boon for children of wealth, who would no longer have to worry about the estate tax eating into their inheritance. Accountants should do well too if it passes, since many of the bill’s changes to the tax code are comically complicated.

But the thing that stands out most to me about this legislation is its  declaration of war against the housing industry. Politically, that may also be its greatest vulnerability.

The House GOP is looking to make a handful major changes that could put a dent in home  prices. First, it lowers the value of the mortgage interest deduction. Today, taxpayers can deduct interest on home loans worth up to $1 million. Republicans would drop the cap to $500,000 for future home  purchases, limiting its value for luxury real estate buyers (or families stuck house-hunting in San Francisco or New York).

The bill undercuts the mortgage interest deduction in another , more subtle way, by doubling the standard deduction that all Americans can take, to $24,000 for couples. As a result, fewer taxpayers are likely to itemize, which will reduce the tax advantages of owning.

Finally, it caps the amount of property taxes that families can deduct at $10,000. This, too, mostly affects the wealthy; it’s sure to be felt in some tony New York, New Jersey, and California suburbs.

There are some things to like about these changes. As I’ve written before, the mortgage interest deduction is a terrible piece of public policy in desperate need of reform. It’s a historical accident that, according to most analyses, has largely failed to encourage home-ownership, instead prompting Americans who can already afford a down payment to buy bigger houses. Its benefits also skew towards the wealthy. The GOP plan attacks it from both above and below, significantly narrowing its benefits. Few voters will lose sleep over the fact that hedge funders in Greenwich, Connecticut won’t be able to deduct as much of their property taxes.

With all that said, these overnight changes are also very likely to drag down real estate prices all across the country. The mortgage-interest deduction is baked into the value of today’s homes, and seriously curtailing it will hurt their worth (though exactly how much is a little difficult to say). That may sound appealing to young renters looking to one day buy. It’ll be less pleasing to the nearly two-thirds of Americans who currently own.

And it’s going to cause a riot among people who make a living buying and selling houses. The National Association of Home Builders has come out hard against the bill, warning that it could cause “a national housing recession.” The realtors lobby says the bill appears to “confirm many of our biggest concerns” about the GOP’s plan. “Eliminating or nullifying the tax incentives for homeownership puts home values and middle class homeowners at risk, and from a cursory examination this legislation appears to do just that.” These are powerful interests spread across every congressional district in the country, who are threatening campaign aimed at convincing home-owners that this tax bill will kill their home equity. I’d say that it’s impressive that Republicans decided to pick this battle, except that they’re doing it largely for the sake of tax cuts aimed at Walmart and Exxon shareholders.

The bill fires a much larger shot at the housing industry than most expected. The changes to the standard deduction were long anticipated, and there had been lots of speculation that the GOP would do away with the state and local tax deduction entirely (in comparison, simply capping property tax breaks is a gentler move). People did not expect Republicans to go after the mortgage interest deduction directly by lowering its cap. In doing so, they’ve upped the ante.

You can sort of see the political logic if you squint hard enough. The home building lobby announced it would oppose the bill last week, as soon as it became clear the legislation would not contain a new credit for homeowners. Republican leaders may have figured that if they were picking a fight with real estate interests, they might as well try to squeeze as much revenue out of them as possible, since they’re already struggling to limit the budget done by this bill.

But as a result, they’re setting up an extremely high-stakes battle — not just with a powerful industry, but possibly with every homeowner in America.

Has Starbucks gotten rid of the newspaper-sharing basket at your store?

by Jim Romenesko @ Starbucks Gossip

Sun Sep 22 13:19:37 PDT 2013

A journalist writes to Starbucks Gossip: "At two Starbucks locations I frequent here in LA, it seems like they've removed what seemed to be the standard newspaper-sharing basket, where people would leave newspapers they'd bought to read there. "I haven't...

5 Direct Sales Companies For Food Lovers

by Anna J. @ Real Ways to Earn

Wed Feb 28 08:00:09 PST 2018

Nearly all of us, at some point, have probably received a Facebook message from someone we went to high school or college with, asking how we are, stating that they’ve noticed we’ve been going on adventures/growing our family/whatever, and then asking if we would like to work from home. This question invariably brings up red […]

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Yes, I Will Let Amazon Deliver My Whole Foods Produce Even Though I Know It’s Bad for the Country

by Jordan Weissmann @ Slate Articles

Fri Feb 09 06:30:27 PST 2018

On Thursday, Amazon announced that it would begin offering free, same-day grocery deliveries from Whole Foods to Prime members in select cities. Immediately, I felt a familiar combination of glee and guilt, the same sense of ambivalence that accompanies each neat new perk Amazon offers its regular customers.

The news was not unexpected. When Amazon bought Whole Foods last year, it was assumed that the company would eventually use its logistics smarts to start offering cheap and fast online delivery from upper-middle-class America’s organic produce-monger of choice, in order to finally make some serious inroads into the grocery business. The immediate rollout will be modest. For now, the service will only be available to Amazon Prime customers in four cities: Austin, Dallas, Virginia Beach, and Cincinnati. Two-hour delivery will be free on orders above $35, and for $7.99, you’ll be able to get your kombucha and hummus delivered within 60 minutes. The company hasn’t said outright how quickly it will bring the service to other cities, but it’s definitely planning for it. “We’re going to have a huge expansion ahead,” an Amazon vice president told reporters.

As a carless Amazon Prime member who lives in a neighborhood with generally subpar grocery options—two stores that sell horrendously wilted produce and a co-op with Whole Foods prices and one-third the selection—I will almost certainly use this service once it finally comes to New York, however many months or years from today that may be. Right now, I order from Fresh Direct, which is reasonably inexpensive and convenient. Sometimes I stop by the Trader Joe’s near my office and lug the bags home on the subway after elbowing through the crowd in the frozen food section and waiting in the cartoonishly long line that snakes through the aisles. Neither of those options can really compete with free two-hour delivery from a store I’d shop at anyway if it were nearby. When I emailed my wife a CNN story about the new Prime service, she responded with just three words. “Best. News. Ever.”

As for the guilt: I’m an economics writer. Like many of my peers, I’ve spent a lot of time worrying about how America seems to be developing a monopoly problem (or, if you want to get technical, an oligopoly problem). Profits are increasingly concentrated in the hands of a small number of powerful companies, particularly in tech. There’s growing evidence that this industry consolidation is disempowering workers and maybe even making the U.S. less entrepreneurial. I can’t escape the feeling that by buying my groceries at Jeff Bezos’ everything store, I’ll be helping to usher in a future where our lives are even more thoroughly dominated by a few corporate behemoths.

It’s not that Amazon is going to take over the grocery business overnight. As of now, it’s a small fish. At the time of the merger, Amazon was responsible for just 0.2 percent of all U.S. grocery sales, CNBC reported, while Whole Foods captured just 1.2 percent. Both were dwarfed by industry leaders Walmart and Kroger, which control more than 14 percent and 7.2 percent of the market, respectively.

But Bezos has a way of driving down margins and siphoning off sales in most industries he enters. In part, that’s because he has the luxury of subsidizing an extremely low margin online retail operation with a highly profitable web services business. Amazon has already started cutting Whole Foods’ notoriously high prices. And it’s not hard to imagine that combining better affordability with painless, free delivery could turn the chain into a much more dominant player that could end up putting a lot of unionized (or at least higher paying) grocery chains in dire straits.

In the meantime, Amazon’s announcement on Thursday could also be bad news for one of its smaller, upstart rivals in the online delivery business: Instacart. The $3.4 billion startup pays a network of roving shoppers to pick up and deliver groceries to customers who order through an app. Up until now, Whole Foods has been an important source of business; in 2016, Instacart signed a five-year deal to become the chain’s exclusive delivery service for perishables. (Whole Foods also invested in the company, though it reportedly owns less than a 1 percent stake.) I haven’t been able to figure out how exactly that agreement squares with Amazon’s new delivery service, but either way it will eventually expire. At that point, Instacart will squarely be in competition with BezosFoods, which will have a built-in price advantage with the estimated 60 million to 90 million households that subscribe to Prime and—given that they already do enough online shopping to sign up for a $99 free shipping program—are presumably more open than most Americans to the idea of ordering their meat, fruit, and vegetables sight unseen from the Internet. It hardly seems like a fair fight.

It’s possible I’m being overly pessimistic. After all, Instacart reportedly gets less than 10 percent of its revenue from Whole Foods, and after the Amazon deal, other grocers lined up to strike partnerships with the startup in order to gird themselves for the Bezos onslaught. Maybe the pairing of Amazon and Whole Foods will force other chains to compete harder in the online delivery space, and Instacart will emerge stronger than ever as a result. It’s just hard to forget how Bezos has vanquished rivals like Diapers.com by waging all-out price war.

What’s frustrating is that, right now, U.S. regulators aren’t even considering these sorts of issues. Modern antitrust law is mostly concerned with keeping prices low for consumers. As long as Amazon’s growth means cheap retail and free shipping, it’s unlikely the government will make a federal case out of its attempts to buy up other businesses, even if that may have serious downsides. Amazon’s purchase of Whole Foods sailed by regulators, in part because nobody was really worried about whether acquiring a grocery store might put Bezos in a better position to crush smaller rivals in the online logistics space.

The thing is, while there are lots of smart people pointing out problems in antitrust law and trying to rethink its foundations, nobody has really come up with a workable new system yet. Even on the level of theory, it’s hard to say definitely how the government should handle a company like Amazon. Back in the real world, it’s up to consumers to make shopping choices that feel somewhat ethical. But those decisions are constrained by a lack of great options. Want to shop with an online superstore that isn’t slowly undercutting all of American retail using profits from its server farms? Who are you going to pick? Jet? Great. It’s owned by Walmart.

At some point, convenience and cost win out, even when it makes you feel a little queasy. Jeff Bezos is training me to get all of my material desires met more or less instantly using his wondrous fulfillment network. Am I going to fight it by paying more for delivery or grappling with my fellow shoppers for bananas? Absolutely not. While I wait for someone to come up with and implement a 21^st-century antitrust policy that assuages my fears about corporate hegemony, I’ll try to enjoy having my wild-caught Pacific salmon brought to my front door free on short notice. Maybe I’ll be contributing to the slow ossification of the American economy. But it’s still better than getting ripped off at the co-op.

Why Is It So Hard for Americans to Get a Decent Raise?

by Jordan Weissmann @ Slate Articles

Tue Jan 16 02:59:19 PST 2018

If you were a delivery van driver searching for a new job any time between the years of 2010 and 2013, chances are, you wouldn’t have found many businesses competing for your services. In Selma, Alabama, there was, on average, just one company posting help wanted ads for those drivers on the nation’s biggest job board. In all of Orlando, Florida, there were about nine. Nationwide the average was about two.

The situation for telemarketers wasn’t great either. In any given city or town, approximately three companies were trying to hire for their services. Accountants only had it a little better: Roughly four businesses were posting jobs for them.

Those numbers are based on the findings of a new research paper that may help unlock the mystery of why Americans can’t seem to get a decent raise. Economists have struggled over that question for years now, as wage growth has stagnated and more of the nation’s income has shifted from the pockets of workers into the bank accounts of business owners. Since 1979, inflation-adjusted hourly pay is up just 3.41 percent for the middle 20 percent of Americans while labor’s overall share of national income has declined sharply since the early 2000s. There are lots of possible explanations for why this is, from long-term factors like the rise of automation and decline of organized labor, to short-term ones, such as the lingering weakness in the job market left over from the great recession. But a recent study by a group of labor economists introduces an interesting theory into the mix: Workers’ pay may be lagging because the U.S. is suffering from a shortage of employers.

The paper—written by José Azar of IESE Business School at the University of Navarra, Ioana Marinescu of the University of Pennsylvania, and Marshall Steinbaum of the Roosevelt Institute—argues that, across different cities and different fields, hiring is concentrated among a relatively small number of businesses, which may have given managers the ability to keep wages lower than if there were more companies vying for talent. This is not the same as saying there are simply too many job hunters chasing too few openings—the paper, which is still in an early draft form, is designed to rule out that possibility. Instead, its authors argue that the labor market may be plagued by what economists call a monopsony problem, where a lack of competition among employers gives businesses outsize power over workers, including the ability to tamp down on pay. If the researchers are right, it could have important implications for how we think about antitrust, unions, and the minimum wage.

Monopsony is essentially monopoly’s quieter, less appreciated twin sibling. A monopolist can fix prices because it’s the only seller in the market. The one hospital in a sprawling rural county can charge insurers whatever it likes for emergency room services, for instance, because patients can’t go elsewhere. A monopsonist, on the other hand, can pay whatever it likes for labor or supplies, because it’s the only company buying or hiring. That remote hospital I just mentioned? It can probably get away with lowballing its nurses on salary, because nobody is out there trying to poach them.

You don’t have to look hard to tell that we live in a world where many employers have extraordinary leverage over their workers—just read about the grueling, erratic, computer-generated schedules low-wage workers are forced to navigate, or the widespread proliferation of noncompete agreements. And it’s clear that American industry has consolidated enormously over the decades. Years of mergers and the rise of exceedingly profitable superstars like Google and Facebook have concentrated economic power in fewer corporate boardrooms, and research suggests that America’s transformation into a life-size Monopoly board may be cutting into labor’s share of the economy.

But studying monopsony has traditionally been tricky for economists, because they lacked good data that would let them analyze broad trends specifically in labor market concentration. The new paper hops over that hurdle by using a trove of data from CareerBuilder.com, which publishes about one-third of all online job ads in the country. (Even for economists who are paid to worry about it, industry consolidation sometimes has its upsides.) The team looked at the number of companies advertising jobs in more than two dozen different occupations, from nurses to accountants to telemarketers, in each of the country’s different metro and nonmetro areas between 2010 and 2013. They then calculated local labor market concentration using the awkwardly named Herfindahl-Hirschman Index, or HHI, which antitrust regulators use to analyze the effects of mergers on competition.

What they found was a bit startling. The Department of Justice and Federal Trade Commission consider a market with an HHI score of 2,500 or more to be highly concentrated—if a merger between two wireless companies left that little competition for cell services, for instance, there’s a good chance the government’s lawyers would challenge it. In their paper, the authors find that America’s local labor markets had a whopping average HHI score of 3,157. Employers also tended to advertise lower pay in cities and towns where fewer businesses were posting jobs—suggesting that the lack of competition among companies was letting them suppress pay. According to one of their calculations, moving from the 25^th percentile of labor market concentration to the 75^th percentile would lower pay in a metro area by 17 percent.

The degree of concentration, and the effect on wages, tended to be worse in smaller towns than major cities. Places like Alpena, Michigan, and Butte, Montana, had the least competition among employers, while New York, Chicago, and Philadelphia had the most. It also varied by occupation. Equipment mechanics, legal secretaries, telemarketers, and those delivery drivers faced some of the most highly concentrated job markets; registered nurses, corporate salesmen, and customer service representatives had some of the least. But overall, the problem looks pervasive.

If the U.S. really does have the sort of widespread monopsony problem this paper documents, it would be one more important point on the constellation of reasons workers have fallen so far behind this century. It would also change the way we need to think about certain public policy issues.

Take the minimum wage. The classic argument against increasing the pay floor is that it will kill jobs by making hiring more costly than it’s worth. But in a monopsony-afflicted world where companies can artificially depress wages, a higher minimum shouldn’t hurt employment, because it will just force employers to pay workers more in line with the value they produce.

The same goes for collective bargaining. In the perfectly competitive labor markets of economics textbooks, labor unions are basically dead weight that make companies less efficient. In a world where a small clutch of businesses do most of the hiring, unions may actually fix a broken market by giving workers more sway.

Then there’s antitrust. Today, when regulators are evaluating a large merger, they tend to think about how it will affect the prices consumers pay. If two health insurers merge, will Americans end up paying higher premiums? If a wireless company eats its rival, will our cellphone bills shoot up? In principle, the government’s lawyers can also consider what corporate consolidation will do to workers, but that tends to be a backburner issue. This paper’s findings suggest that Washington needs to think more carefully about how mergers can impact the job market, not just on the national level, but in specific cities and towns, where the marriage of two, smaller companies could have a big local impact.

Of course, this is just one, early study, and like most economics research, there are questions to raise about its technique. It’s possible, for instance, that nurses or accountants are offered lower pay in cities where few companies are hiring because the economy isn’t very good there. That’s an especially big concern, since the paper draws its data from the early years of the post-recession recovery, when unemployment was still quite high. Its authors take various approaches to try to account for this, but they may not be fool-proof. Harvard University labor economist Lawrence Katz told me that he suspected the findings about market concentration and wages were directionally correct but that they may be a bit “overstated,” because it’s simply hard to control for the health of the labor market.

“They are getting at what is an important and underexplored topic … using a creative approach of using really rich data,” he said. “I don’t know if I would take perfectly seriously the exact  quantitative estimates.”

Still, even if the study is only gesturing in the direction of a real problem, it’s a deeply worrisome one. We’re living in an era of industry consolidation. That’s not going away in the foreseeable future. And workers can’t ask for fair pay if there aren’t enough businesses out there competing to hire.

No, Apple Is Not Creating 20,000 Jobs Because of the Tax Bill

by Jordan Weissmann @ Slate Articles

Wed Jan 17 14:26:44 PST 2018

On Wednesday afternoon, Apple posted a press release. The primary purpose of this statement, it seems, was to tell investors exactly how much money the company would have to pay in taxes on the profits it’s now repatriating from overseas, thanks to the Republican tax reform bill, while also announcing that it plans to build a new campus for tech support workers. But instead of simply reporting this information, Tim Cook’s media team decided to drop it in the middle of a long missive titled “Apple Accelerates U.S. Investment and Job Creation.” The iPhone maker promised to “contribute” $350 billion to the U.S. economy over the next five years while hiring 20,000 additional workers.

This has, of course, been catnip for conservative fans of the GOP bill. Fox Business predictably tweeted that Apple would create 20,000 jobs “due to tax reform.”

“This is huge folks. This is another big company. One of the biggest companies in America. Saying big time jobs, a lot of jobs coming back to America,” Fox Business anchor Charles Payne told his viewers, deploying some remarkably Trumpian syntax. “And they say it’s all because of tax reform.” CNBC also reported that Apple was increasing its U.S. investment “in part because of the new tax law,” which gave Nevada Senator Dean Heller an opportunity to gloat.

The punchline here is that Apple did not actually say that it is investing any additional money in the U.S. because of the tax law. That idea appears nowhere in the press release.

Here’s what’s actually going on. As part of its transition to a new system of International taxation, the Republican tax bill included a big, one-timed levy on all the profits U.S. corporations have been hoarding abroad for years. (This is known as a deemed repatriation.) Apple has been sitting on a giant overseas money hoard worth $252 billion. Today, we learned it would pay $38 billion to the IRS as the cost of bringing that cash home.

And what else did we learn? Not a ton. The press release predicts that between its “current pace of spending with domestic suppliers and manufacturers—an estimated $55 billion for 2018—Apple’s direct contribution to the US economy will be more than $350 billion over the next five years.” In other words, Apple will keep buying stuff from other U.S. companies. This is not a patriotic act of charity. Apple is literally saying it will continue business as usual. That alone accounts for $275 billion of its $350 billion forecast.

As for the rest of that total? In a mystifying bit of self-aggrandizement, the company is counting its $38 billion repatriation payment as another “direct contribution” to the U.S. economy. This is money they are required to pay by law. “A payment of that size would likely be the largest of its kind ever made,” the company helpfully notes. This is only true because Apple spent years making money hand-over-fist while doing everything in its power to avoid taxes.

Finally, we get to the company’s actual plans to invest in the U.S. Here, we learn that “Apple expects to invest over $30 billion in capital expenditures in the US over the next five years and create over 20,000 new jobs through hiring at existing campuses and opening a new one,” which will initially “house technical support for customers.”

The 20,000 jobs are nice. (Apple says it currently employs 84,000 U.S.) But there’s no evidence, contra Fox’s talking heads, that they’re coming “back to America” from anywhere. Meanwhile, it’s hard to tell if the $30 billion the company plans to spend would actually be a meaningful increase in its domestic U.S. investment. According to its annual reports, Apple has devoted $56.9 billion to capital expenditures worldwide over the past five years. Presumably, a good chunk of that was spent stateside, building out its retail network and its gleaming new Cupertino campus, for instance. But it’s hard to know how much. “The company has not given guidance in the past regarding where and how capital spending was allocated. This is the first I heard of a specific allocation,” Asymco analyst Horace Dediu told me in an email. So, maybe Apple really is “accelerating” it’s U.S. investment. Maybe it’s not. There’s no actual way to tell based on the information it’s shared publicly.

That brings us to the separate question of whether this spending has anything at all to do with Trump’s tax bill. The answer is almost surely not. Apple has long paid an extremely low tax rate, and it is only really bringing its overseas profits “home” on paper. In reality, the company has always been able to access that money by borrowing against it at dirt cheap rates, which it’s previously done to fund dividends and buybacks for its investors. The specific investments Apple announced today, such as the more than $10 billion it plans to spend on new data centers to support its growing cloud-based businesses like Apple Music, are things it likely would have needed to do not matter what happened in Washington.

“These are probably many capital expenditure initiatives and new site build-outs that Apple was already planning on doing regardless of repatriation,” Michael Olson, an analyst at Piper Jaffray, told Bloomberg.

Apple did not announce a $350 billion investment in the U.S. economy today. It’s not even clear Apple announced it was actually increasing its domestic investment. It certainly did not announce that it was creating jobs because of Trump’s economic magic. The company announced its tax bill and, in the same breath, made some promises about capital expenditures in the states. Then it let the press and conservatives fill in the blank. I guess it’s a clever strategy, if you’re quietly trying to pander to this White House.

The Week JFK Airport Stood Still

by Henry Grabar @ Slate Articles

Tue Jan 16 11:21:41 PST 2018

On Thursday, Jan. 4, the “bomb cyclone” descended on John F. Kennedy International Airport, smothering Queens, New York, with 8 inches of snow and disrupting America’s largest point of entry. Hundreds of flights were canceled before the first flakes fell; delays fanned out across the globe. Thousands of travelers were stranded in nearby hotels, some for days on end, or at the airport itself, where blankets and meal tickets were rationed and police had to step in to keep peace. Passengers compared the scene at Kennedy to a refugee camp and a bomb shelter. Thousands of bags remained at JFK well into last week, and others still have not been reunited with their owners.

Mistakes were made. But in other ways, it’s not surprising that the disruption was severe. For one, snow and airplanes don’t mix. Thanks to JFK’s role as a crucial node in American air travel, any delays ripple across the globe. And an airport like JFK, which must manage an average of 1,100 flights a day, is a finely tuned and highly sensitive operation. Commercial aviation is an industry managed down to the minute, conscious of the cost of an olive and the fuel savings from a thinner in-flight magazine. There is no slack; its very efficiency makes it vulnerable to disruptions that are both predictable and, given the way the industry chooses to operate, unpreventable.

The Port Authority of New York and New Jersey, which runs JFK, has commissioned former Obama Department of Transportation Secretary Ray LaHood to conduct an investigation into the events of the weekend. But LaHood would not need to dig very deep to understand what triggered such a cascading failure. I interviewed people who work at, have worked at, and watch Kennedy Airport, as well as travelers who were caught in the worst of it (their responses have been lightly edited for clarity). The common theme: Under pressure to run smoothly, the system overpromised its ability to do so at every turn, transforming one very snowy day into a chain of failures that would ensnare some travelers for an entire week.

* * *

A SERIES OF BAD DECISIONS

Thursday, Jan. 4

8:42 a.m.: The New York office of the National Weather Service issues a blizzard warning for the JFK area—frequent gusts of more than 35 mph, heavy snowfall, visibility under a quarter-mile. The last planes to land at Kennedy Airport for 24 hours touch down. Holds and diversions begin.

10:17 a.m.: Norwegian 7013 flying from London’s Gatwick to JFK lands in Albany, 140 miles north. The 304 passengers of the Boeing Dreamliner 787 are bused four hours to JFK. Albany’s Times Union reports that the airport “doesn’t have the equipment to unload [787 luggage] containers.”

10:45 a.m.: The Port Authority closes all JFK runways “temporarily”; flights head to smaller airports in Albany and Newburgh, as well as to Baltimore and Washington. The AirTrain shuts down. The airport is expected to reopen at 3 p.m., says the Federal Aviation Administration.

Robert Mann, former charter-airline executive officer at JFK: “The turning point was probably when the Port Authority decided to close JFK to start cleaning up. They had what appeared at the time to be a pretty optimistic goal to returning it to service. Their estimate would have had implications for somebody dispatching a flight scheduled to arrive after 3 p.m.”

Greg Lindsay, co-author, Aerotropolis: “It all went wrong, obviously, when the Port Authority  announces they’re going to close it for less than a full day. I thought that was crazy when I read it. Once that happened the die was cast.”

1 p.m.: Baltimore–Washington International Airport declares it can’t accept any more wide-body planes (the kind with two aisles); eventually two dozen flights from JFK, Newark, and Philadelphia will end up at Dulles in Washington. Passengers are told they will be bused to New York. Flights from London are diverted as far west as Chicago, 800 miles off course, where O’Hare is jammed with diverted planes. Meanwhile, dozens of international flights continue toward JFK under the assumption it will reopen at 3 p.m.

2 p.m.: JFK announces the airport will reopen at 8 p.m.

3:35 p.m.: Iberia 6253 en route from Madrid to Kennedy makes a U-turn west of the Azores and returns to Madrid. Total flight time: 8 hours, 15 minutes.

Consuelo Arias, director of communications for Iberia, via email: “The closure of JFK Airport due to snow had been extended twice. … Our flight hadn’t reached the point of no return yet.”

Robert Mann, former charter-airline executive officer at JFK: “If you took the bait [by believing the airport would reopen that day], you got screwed. You as the airline got screwed, you as the customer got screwed. And I suspect it managed to also screw anybody trying to get out. I don’t think I’ve ever seen that number of flights just turn around mid-Atlantic and head back.”

6 p.m.: JFK announces flights will resume on Friday at 7 a.m. More trans-Atlantic flights turn around: Norwegian 7019 loops back to Paris. Virgin 25 makes its pivot to conclude a seven-hour round trip from London. Royal Air Maroc 202 circles back to Casablanca.

* * *

DOMINOS FALL

Friday, Jan. 5

5:26 a.m.: Delta 467 from Tel Aviv lands in Detroit instead of New York, one of 13 diversions for international Delta flights that departed for Kennedy on Thursday. On the flight is a group of more than 100 young Americans returning to the U.S. from a Birthright trip to Israel, some of whom would not reach their final destinations for another 30 hours.

Jared Simon, passenger, Delta 467: “We get to Detroit. None of us paid for any of our tickets and the counter lady goes: ‘Because you’re a group you have to go back to JFK,’ and I said, ‘I have a connecting flight to West Palm Beach.’ And she said, ‘Not our problem, you’re going to JFK.’ ”

6 a.m.: Crews scramble to plow paths for planes and operations vehicles.

2 p.m.: Delta 467 from Tel Aviv arrives in New York via Detroit. At least 12 international flights are waiting for gates at JFK. Waits grow to two to four hours. Snowplows damage runway lights. Disorder grows on the tarmac and inside the terminals, where stranded passengers have been since the previous day. Outside, snowbanks and the unplowed tarmac reduce space for parked airplanes and hamper the mobility of support vehicles. Some workers have slept at the airport; many tarmac operations are short-handed. Workers like the men “on the ramp”—the low-paid staff that unload bags from cramped airplane holds—try to play catch-up in frigid conditions, relying on hand warmers inside their gloves. Norwegian 7013, the plane that was marooned in Albany, leaves for London with everyone’s baggage onboard.

Robert Mann, former charter-airline executive officer at JFK: “Where could you have warehoused these airplanes? Sometimes you warehouse planes by telling them to take a lap around the inner and outer taxiways. In the process of warehousing you create further congestion.”

Jared Simon, passenger, Delta 467: “We go to get our bags, and we see hundreds of people screaming. So I’m like, ‘What the heck’s going on?’ I’m a small guy, so I start wiggling around the crowd, and I hear these people had been waiting there since 5 a.m. in the morning.”

Adam Newman, passenger, Delta 426 (New York to Los Angeles): “Where you come off the AirTrain and walk into the terminal, there were just people sitting against the wall, arms around their knees and the arms around the luggage. They looked like refugees.”

3 p.m.: Dulles Airport, inundated with diverted flights, turns a runway into a parking lot for wide-body planes.

7:48 p.m.: Kuwait Airways 117 lands at JFK from Ireland; passengers won’t get off the plane until 1:30 a.m., likely because there are no gates available at Terminal 4. Big domestic carriers with hubs and terminals at JFK, like JetBlue and American, can afford to hold or cancel flights in an attempt to manage their gates, planes, and customers systemwide. For international airlines, however, which share space in terminals with dozens of rivals, a kind of prisoner’s dilemma ensues: Everyone might have been better off holding more flights, but no one wants to be the carrier to cancel. The relatively low price of jet fuel—barely half what it was six years ago—reduces the cost of doing everything but canceling: diverting, flying in circles, turning back halfway across the Atlantic. Even luxury airlines like Emirates are unlikely to have a spare plane sitting around in New York. One cancellation can cause a ripple effect that lasts for days.

Adam Newman, passenger, Delta 426: “My flight [to L.A.] was supposed to be at 3:30 p.m. It got delayed, delayed, delayed until 10:30, and then we boarded. We went out on the tarmac for hours, third in line to take off, and then we had to go back to the gate because the crew had worked too many hours. They got this poor kid, probably 20 years old … and they put him at the gate with about 200 people in a semicircle around him asking what to do. He was just about to cry the whole time. He kept apologizing and I said: ‘Nobody wants an apology, we just want to know what to do.’ And everybody started cheering.”

Réal Hamilton-Romeo, senior public relations manager, Norwegian USA: “For the average person looking at it, ‘The nose [of the plane] is clear; just get us on the next flight.’ It’s not that easy. Flights are booked 90 to 100 percent to capacity. A lot of these aircrafts are scheduled extremely tightly. You do that to get the most efficiency out of your staff as well as the multimillion-dollar aircraft.”

Stan Boyer, vice president, Sabre Airline Solutions consultancy: “Load factors on the flights are probably 15 percentage points higher than they were 12 years ago. There are more flights and less capacity to deal with it.”

Jared Simon, passenger, Delta 467: “At 9 p.m. on Friday [after a Delta connection to West Palm Beach is canceled], I took a $100 Uber from JFK to Newark. I spent $115 on a Holiday Inn and woke up at 4 a.m. The plane is supposed to take off at 6 a.m. But at 5:45, they told us our crew had not arrived yet. People were screaming, ‘Give me the application, I’ll become a flight attendant!’ ”

Sam Horowitz, passenger, XL Airways 51 (New York to Paris): “Everything was fine until I got past security. The flight was delayed from 9:25 p.m. to 11, to midnight. At 12:30 a.m.
[Saturday morning] it was canceled completely. Someone said we had to go back and talk to a representative to help us with rebooking a flight. But there was no XL representative in the building. All the XL passengers had to sleep on the floor that night in Terminal 4. We were promised a hotel, nothing ever came of that. They said they couldn’t book a hotel. At around 5 in the morning someone started sending around a piece of paper to get everyone’s contact info to start a class-action lawsuit.”

Midnight: Shortly after midnight, an empty China Southern 777, while being towed, clips wings with a Kuwait Airways 777 waiting for takeoff. The passengers en route to Kuwait City are taken to hotels.

* * *

BREAKING POINT

Saturday, Jan. 6

7:19 a.m.: At sunrise, JFK is sliding toward an eventual record low of 7 degrees and a wind chill of minus 13. The winter storm has “severely disabled equipment,” the Port Authority will say later in the day, in its first extended comment on the state of things at JFK. The storm “created a cascading series of issues for airlines and terminal operators,” the PA explained. Additional international flights bound for JFK are redirected. Just west of Ireland, Lufthansa 400 turns back for Munich.

7:25 a.m.: At Kennedy, passengers deplane Air China 989 from Beijing via air stairs after sitting for more than seven hours on the tarmac. Gusts of more than 30 mph bring the wind chill to minus 12.

Robert Mann, former charter-airline executive officer at JFK: “When hydraulics get cold, bad things happen. A scissor lift works fine under normal temperature ranges, but it’s sometimes really finicky at low temperatures. If you’ve worked out on a ramp in 30-knot winds when it’s 5 degrees, you don’t want to do it for more than 10 minutes at a time. It’s a life-safety issue to have thousands of people outside in that weather.

9:45 a.m.: Austrian Airlines 87 lands in Vienna, five hours after departing Vienna.

Jason Rabinowitz, aviation journalist: “I buy [the equipment explanation] to a degree, but then how does Toronto do it? It was also a manpower issue—some of them had worked so long they had to go home.”

Natalie Eagle, passenger, Norwegian 7016: “We got to the airport at 8 in the morning [following a Friday night cancellation] and we didn’t leave until 7 p.m. There were people sleeping on the floor and there was no one from Norwegian airlines there at all. We didn’t get told our flight was delayed until probably 6 p.m. when it was meant to be at 3:20. There were passengers sitting on the luggage conveyor belts. There was one bloke sitting behind the check-in desk, every time we’d ask him he’d say, ‘I don’t know.’ He told one passenger at one point—who had pretended to go on the computer trying to keep everyone’s spirits up—that was almost as bad as pulling out a policeman’s gun and he could have him arrested.

Réal Hamilton-Romeo, senior public relations manager, Norwegian USA: “These airplanes don’t fly themselves. We have pilots and flight attendants with mandatory work requirements. There were people working 40 hours nonstop to ensure that our passengers were getting home on time. The first break they took was on Saturday afternoon.”

Sam Horowitz, passenger, XL Airways 51: “We had blanket rations, a food voucher we couldn’t use because all the food was inside security. We moved into the back of the airport. We started lying [down] outside the chapels.”

Natalie Eagle, passenger, Norwegian 7016: “The bathrooms were disgusting. There were seven bathrooms for hundreds of people, none of the soap worked, and none of the hand driers worked either—and that was in the whole airport.”

2:15 p.m.: JFK records a high temperature of 14 degrees, a record for the lowest high temperature on this day. The Port Authority issues a NOTAM, or “notice to airmen,” requesting that all incoming international flights call their dispatchers to see if they should continue to JFK. Later that afternoon, the Port Authority will issue a second NOTAM closing Terminal 1 to all arriving aircraft. Low-cost carriers like Norwegian and XL Airways are particularly affected. Among other things, they are less likely to have so-called interline agreements that make it easy to put passengers on other carriers’ planes.

Robert Mann, former charter-airline executive officer at JFK: “It’s like saying, ‘Stop the conveyor belt, all the candy is falling off.’ For most foreign carriers at Kennedy, you don’t necessarily have your own people working there, you might have contractors or airline partners. And you don’t have much flexibility in terms of using the facilities in that station because they’re heavily scheduled and you’re sharing terminal, check-in, and gate positions with a host of other carriers. It becomes a real food fight.”

Nicholas Dagen Bloom, author, The Metropolitan Airport: “The Terminal City model of decentralized terminals [from the 1950s] was a pioneering ‘public/private’ partnership of the Port Authority. … The decentralized system as a whole is, however, more fragile. … You will notice that the Terminal City model was not widely imitated outside New York.”

5:32 p.m.: Just west of Iceland, Aeroflot 122 begins its U-turn to head back to Moscow. A couple of hours later, Norwegian 7015, which is carrying the bags of the Norwegian 7013 passengers who landed in Albany on Thursday, is diverted to Stewart Airport, 60 miles north of New York City, where the luggage is finally unloaded. Back at JFK’s Terminal 4, French travelers are so overjoyed at being permitted to check in for their canceled Thursday flight they chant “La Marseillaise.” The flight will not depart until noon the next day.

Natalie Eagle, passenger, Norwegian 7016: “We were lucky to get put up at the Marriot in Downtown Manhattan. One man said it was nice to see the Statue of Liberty through the windows of the coach on the way to the Marriot.”

Devani Ramoutar, front-desk agent, Best Western–JFK Airport: “The most they stay is two or three nights [usually]. Some of them were just tired, aggravated. Just wanted to get out of here. People are usually a little more calm. But we’re used to it.”

Sam Horowitz, passenger, XL Airways 51: “We’re waiting for the buses, maybe about 10 p.m., and then it’s 11, 11:30, nothing was happening. Then I saw the unaccompanied minors go back upstairs. And I thought: ‘Oh my God, they’re going to cancel the flight again.’ After that, all hell broke loose. People were screaming, families sobbing, I starting crying. People started storming the podium area where the JFK people were. I turned around and there was NYPD corralling us again. They had to break up a few minor scuffles between passengers and workers. Everyone was shouting in French so I had no idea what they were saying. The last thing the XL passengers saw was another flight boarding. And that just increased tension even more.”

* * *

THE FLOOD

Sunday, Jan. 7

8 a.m.: By the fourth day of the crisis at JFK, tens of thousands of bags are reportedly separated from their owners.

Stan Boyer, vice president, Sabre Airline Solutions: “At JFK, because there are so many terminals and bags need to go from terminal to terminal, you run into not just an automation issue but an equipment issue where you may not have enough equipment to tug those bags around.”

Sam Horowitz, passenger, XL Airways 51: “I took a three-hour power nap at the Day’s Inn and then went back to baggage claim until 2 p.m. The woman there knew me by name at that point, and she said, ‘Your bag is not coming today.’ ”

Natalie Eagle, passenger, Norwegian 7016: “We were walking around asking people, gate to gate, ‘Are you Norwegian? Are you Norwegian?’ At the airport on Sunday they were giving out mattresses, like a bed that you’d have around a poolside.”

3 p.m.: A water main breaks in Terminal 4, forcing a partial evacuation and flooding hundreds of bags in inches of water.

Gary Carey, passenger, Emirates 395 and 201 (Hanoi to Dubai to New York): “[After arriving Saturday] we didn’t have our bags, and then on Sunday there was news that the baggage terminal had flooded. And some of my medications are in my bag. And I bought some custom suits!”

Chris Piasta, Roman Catholic chaplain at JFK: “After the pipe incident, everything changed and we really got busy—not as much with passengers but with employees. Airline people were facing a lot of angry people, and they were basically taking the heat. … Don’t forget: These people have their own life. They need sometimes a few moments to relief the stress, vent, so that’s what we provide for them.”

Natalie Eagle, passenger, Norwegian 7016: “They were waiting for airport staff to bring on bottles of water [aboard the replacement flight] because we had to flush the toilet with bottled water. We were delayed on the plane for an hour and half because there was a mechanical problem. They said the engine was frozen, though we’d just seen it land. Then they told us the flight was canceled. There were people crying. I think it was just pure shock and devastation. People were trying to call their children, worried about losing their jobs.”

Chuck Schumer, U.S. senator, at a news conference: “When it’s cold, as cold as it was, you cut the airport a little slack. But what happened at JFK was way beyond cutting a little slack. It seemed almost everything broke down; it seemed like a disaster. Whether it’s runways not being plowed, whether it’s the baggage machines that transport the baggage freezing, whether it’s not notifying people what’s going on. … It seems almost everything that could go wrong went wrong, including two planes actually colliding. They should have been way better prepared, plain and simple JFK has to follow the Boy Scouts’ motto: ‘Be prepared.’ They weren’t.”

Rick Cotton, executive director, Port Authority, to reporters: “What broke down—and it broke down badly—was the coordination between terminal operators and the airlines to assure that there were gates available for the arriving airplanes. … What happened at JFK Airport is unacceptable and travelers expect and deserve better.”

* * *

AN END IN SIGHT

Monday, Jan. 8

2:35 a.m.: Sam Horowitz arrives in Paris via a La Compagnie flight out of Newark after abandoning her XL Airways flight and her bag, which will eventually arrive at Roissy–Charles de Gaulle Airport on Wednesday.

8:48 a.m.: After the airline denies his request for a flight voucher, Adam Newman of Friday’s Delta 426 uses Facebook Live to broadcast his phone call with Delta HQ in Atlanta. Delta gives Newman a $200 voucher.

8:23 p.m.: The Norwegian 787 that had left Albany for London with the passengers’ baggage still in its hold returns to Stewart Airport, in Newburgh, New York, where the bags are unloaded and shipped to JFK.

Natalie Eagle, passenger, Norwegian 7016: “The WhatsApp group was started between me and my husband and a couple other passengers, and we added everyone. People at other hotels, people who are already home. Probably a hundred people. You’d pass your phone onto someone else, everyone just trying to get through to someone. [My husband’s] phone bill is an extra 100 pounds just from [Sunday] night.”

Réal Hamilton-Romeo, senior public relations manager, Norwegian USA: “There are things that could have been done differently, but it’s hard to single out any one particular thing, and I’m not going to say anything that could be misconstrued as negative against our partner, the Port Authority.”

Sam Horowitz, passenger, XL Airways 51: “Frustration and terrible circumstances really lead to making good friends. Now I feel like I have contacts in Paris because I know girls in Paris, and we talked about them coming to visit me in Copenhagen. Now I can reflect that and think, I met these girls because we were all suffering together. I met some really good people that I hope I’ll get to see again.”

Christopher Schaberg, author, Airportness: “The conundrum of flight that airlines don’t typically want to acknowledge openly, but it might serve them well to be more direct about: This whole thing is always on the verge of being such a total mess. … Perhaps we’d all be a bit better off (psychologically, at least) if we went in expecting, well, if not the worst, at least expecting something to go wrong at some point. … Airlines want to promote images of perfection and idealism. But that’s just not the reality of mortal air travel.

* * *

CODA

Wednesday, Jan. 10

11:20 a.m.: Six days after the snowstorm, more than 5,000 bags remain at JFK Airport.

1 p.m.: After being rebooked on Iceland Air, with a seven-hour layover in Reykjavik, Natalie Eagle and her husband land on Wednesday evening at Heathrow Airport, more than 100 hours after first arriving at JFK for their flight, and with still one more hour to go: Their car is parked on the other side of London, at Gatwick Airport.

The Port Authority did not respond to repeated requests for comment. Terminal 4 did not respond to repeated requests for comment. Terminal 1’s “contact us” link leads to a 404 error page.

Donald Trump Says the Stock Market Made a “Big Mistake” by Falling

by Jordan Weissmann @ Slate Articles

Wed Feb 07 10:03:13 PST 2018

After a few days of silence, our president finally decided to weigh in on the choppy state of the stock market this morning.

It’s easy to read this as just another example of Trump being Trump. The man has spent much of his time in office taking credit for rising stock prices. Now that they have suffered a light setback, he feels compelled to deflect blame—as is his wont—and redirect it onto misguided traders, targeting the entire equities market the way he does Head Clown Chuck Schumer or Sleazy Adam Schiff.

But there is a glimmer of truth to the tweet. Trump is right that the stock market’s fluctuations are pretty counterintuitive these days. There really was a time when good news about the economy would have sent the Dow Jones and S&P 500 higher. No longer! Now, the faintest hint that the economy could be heating up is apparently enough to spook investors into a sell-off. After all, the most recent tumult started after the government reported some mildly positive news about wage growth.

This is a big conceptual leap forward for the president, though he still has some ways to go: The market’s initial reaction wasn’t necessarily a “mistake,” at least from the perspective of a money manager. If wage increases accelerate, it could theoretically lead to higher inflation, which may encourage the Federal Reserve to raise interest rates sooner rather than later, which would probably be bad for stock prices. But eventually, the market started swinging wildly for reasons that ostensibly had nothing to do with economic fundamentals. Much of the selling may have been an overreaction that seems to be partly reversing itself now.

In other words, stocks have been weird, and the president is grokking that. So maybe this tweet is an inchoate acknowledgment that the market is not, actually, always an accurate reflection the wider economy.

Or maybe our nation’s angry grandpa is just shouting at clouds again. I don’t know.

Carl Icahn Perfectly Timed $30 Million Stock Dump Before Trump’s Tariff Announcement

by Henry Grabar @ Slate Articles

Fri Mar 02 11:30:21 PST 2018

Onetime Trump adviser Carl Icahn sold more than $30 million in steel-sensitive crane stock in the weeks before the president announced his intention to slap a 25 percent tax on steel imports, according to an SEC filing flagged by ThinkProgress.

Various partnerships under Icahn’s control sold off almost a million shares of the Manitowoc Co. starting with big sales on Feb. 12 and 13. On Feb. 16, Commerce Secretary Wilbur Ross published a report calling for a 24 percent tariff on steel imports to the United States.* On Feb. 21 and 22, Icahn dumped another several hundred thousand shares, dropping his ownership stake below 5 percent and releasing him from the responsibility to disclose further sales. Then, on Thursday, Trump announced he would be signing steel tariffs next week, despite vocal opposition from business interests.

Trump has been rumbling about steel tariffs since the campaign trail, of course, but Icahn’s timing was remarkable: Manitowoc’s stock has fallen by about 20 percent since Icahn began dumping it, punctuated by big losses after the Ross report and Trump’s announcement on Thursday. Icahn saved several million dollars by unloading his stock between $32 and $34 a share. (It was $27 at the time of publication.)

Icahn, who was an early supporter of Trump’s campaign, was named by the president-elect in late 2016 as a special adviser on regulatory reform, gaining direct access to the president without relinquishing any of his massive holdings. He resigned that position last summer after an article in the New Yorker revealed how he attempted to use his influence to adjust an obscure Environmental Protection Agency rule to boost the value of refineries in which he had invested.

At the time, Trump appraised Icahn as “someone who is innately able to predict the future, especially having to do with finances and economies.” Consider it predicted.

Correction, March 2, 2018: This post originally misspelled Wilbur Ross’ first name.

Starbucks UK starts selling Duffins -- two years after a small chain introduced them

by Jim Romenesko @ Starbucks Gossip

Wed Oct 09 12:36:03 PDT 2013

A small London bakery chain has been selling Duffins -- a combo muffin/donut -- since 2011. "Happy customers have been blogging about it, instagramming it, and tweeting about it ever since," reports Channel 4 news. But now Starbucks UK has...

Synchrony Bank CD Rates: 1.00% 6-Month, 2.05% 12-Month, 2.50% 60-Month APY [Nationwide]

by Danny Nguyen @ Bank Deal Guy

Tue Mar 27 12:43:10 PDT 2018

Available nationwide, you can earn 0.75% up to 2.50% APY CD Rates when you open up a new Synchrony Bank Certificate of Deposit Account! Below is all the information and details you need to open your Synchrony Bank CD Account to earn 0.75% up to 2.50% APY CD Rates! Synchrony Bank Certificate of Deposit Account... Read More →

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Let Ben Carson Keep His Table

by Henry Grabar @ Slate Articles

Thu Mar 01 15:59:56 PST 2018

Administrators at Ben Carson’s Department of Housing and Urban Development have been on a yearlong quest to replace the housing secretary’s dining room furniture inside the agency’s headquarters, a Washington building designed by legendary brutalist architect Marcel Breuer. A series of news reports revealed that HUD officials (as well as the secretary’s wife, Candy Carson) had pressured staffers to get around spending limits in order to spend more than $31,000 on a mahogany table, 10 chairs, and a handful of sideboards, including a three-piece set “crafted of crotch mahogany, satin wood and quartered mahogany borders, [with] carved teardrop and dentil molding on crown, ” according to CNN.

Whether or not Carson’s executive suite was in need of a new look, HUD responded with a series of obfuscations and excuses. The department spokesperson lied to the Guardian about the purchase of the set, which was supposed to arrive this coming May. Carson said the current table had been characterized as “dangerous,” while the interior designer who sold it to HUD said the office’s existing furniture was said to be “raggedy.” Former HUD Secretary Julian Castro chimed in to say he had never had any problems with the table. Finally, on Thursday, Carson said he had requested that the order be canceled and that he was not happy about the price tag.

Is a $31,000 dining set appropriate for the leader of an 8,000-person federal department where he has preached about the moral rewards of abstemiousness? It just may be, according to Michael Rock, the creative director at design consultancy 2x4 and a professor at the Yale School of Art, who has followed the controversy closely. Our conversation has been lightly edited and condensed for clarity.

Henry Grabar: The first thing that caught everyone’s eye about this was the price tag. As someone who works with this kind of stuff, did that seem abnormal or in line with what an executive would pay to furnish a suite?

Michael Rock: An interesting phenomenon in America is that billions and billions of dollars are spent on things that no one has any reaction to, but something that’s just so tangible, everyone reacts to, because everyone has to buy a table and chairs. Whereas if that space shuttle costs $15 billion, should it be $14 or $17 billion, who knows? But when a chair is $5,000, [people say], “Well, I just bought a chair for $100.”

Is the Regency style popular among corporate clients? I associate corporate culture with high modernism, and this looks like something from a house museum. 

What is the look of an executive in America now? There’s all different variations on that. In one sense it’s kind of futuristic, like a Bond villain, you go into the office and it’s like the deck of a spaceship. And then there’s classic modernist, familiar from movies, the Mad Men style. That executive had modern furniture typified by Stoller or Knoll. But there’s also a kind of traditional style. You may very well find on Wall Street, in a completely modernist skyscraper, a wood-paneled Edwardian office that looks like it was taken directly out of a country home in Britain and reassembled piece by piece. It’s a different kind of symbol of executive power, I think, which is traditional, baronial, classic. There was the recent thing with the congressman who decorated his whole office in Downton Abbey style.

Aaron Schock!

And that was adopting the style of the landed aristocracy, and I think he was run out of office ultimately. [Editor’s note: Yes, he was.] So there’s all these different signifiers of power, and that’s where this contrast between this high modernist building and this ersatz historicism as a symbol of fanciness is interesting.

This building is designed by Marcel Breuer, one of the icons of modern architecture. But what you’re saying is there’s not necessarily a custom of having furniture match the architecture, and that there’s probably a number of low-design objects stuffed inside this iconic building.

It speaks to the unlovable quality of brutalist architecture. It’s been almost universally unloved and seen as anti-human, uncomfortable, hard. There’s a parallel at HUD. That same criticism is applied to modernist housing projects. These projects are so dehumanizing and uncomfortable, so you get this way of decorating these building in this quaint or historical way to try to humanize them somehow. The classic instance is these Bauhaus buildings in Germany with lace curtains in the window.

Which Walter Gropius would have hated.

Yeah, but it was seen as a way for people to fight back against the security of the architecture, so you get all these funny decorating moments, where high modernist buildings have this almost kitschy Americana. That was always an attempt of the common man fighting against this intellectualized high modern appeal of these buildings. And the HUD building in particular, there was a sense in Breuer of trying to democratize the spaces—everyone had equal access to sunlight. [Former HUD Secretary] Jack Kemp famously said it’s 10 stories of basements.

Is it important to make the distinction that even though this is an office, Carson was furnishing a dining space, and we should expect something different from furniture for a fancy business luncheon than for office work?

It’s a sideboard, a lowboard, eight chairs [plus two armchairs. —ed.]—there’s a whole bunch of stuff there, and when you start to break it down by piece the cost goes down a lot. It’s not, like, this one gold-plated table. How many people work in HUD? It’s huge. It’s not at all surprising that an executive would have a suite with a table where he might have lunch or an informal meeting, that would be very typical of a corporate office suite. All of those pieces would be quite typical in any office suite.

I wonder if there’s a racial component to this criticism. If it had been Steve Mnuchin at Treasury, would people have had the same reaction as they did to Ben Carson at HUD, which is seen as this inner-city organization tucked away in this horrible building? And he’s a black guy going to try to buy all this fancy furniture? If that were Alan Greenspan or Steve Mnuchin or Gary Cohn, would there be the same outcry? I’m not sure.

The blue chairs might have made him particularly susceptible to that racially tinged criticism of being a parvenu.

Oh, the blue velvet on the chairs? I wouldn’t do it myself, but within the style of 19^th-century Regency it wouldn’t be out of line. What did Reagan say about Cadillac welfare moms? Cadillac, to me, is a type of gauche car in a way that this strikes me as a gauche furnishing choice. The fact that it’s a black guy at HUD splurging on this fancy furniture for himself, it strikes me that those tie together somehow to portray him as undeserving.

I don’t support Trump, I don’t support Carson, I think he’s a terrible choice. But the controversy over the furniture reveals all these different things: ambivalence about how much we spend on government, ambivalence over how someone dealing with inner cities should be treated, ambivalence over rising above your station—a perfect storm of all these stories.

An implication being that because HUD deals with primarily anti-poverty programs, it’s somehow less deserving of having a proper set of furniture than Treasury would be?

That’s right. So much coverage already was like, “They’re slashing for money for housing at the same time as spending money on furniture.” I completely object to the cutting of HUD’s budget, but this furniture has nothing to do with that. It’s a drop in the bucket. It’s played as, “Here’s someone in charge of creating housing for poor people and creating a palatial setting for themselves.” If the table and chairs had cost $20,000? If they had cost $10,000? What would have been the number people would have accepted? At what point does outrage become ignited? A person’s sofa is the fourth-biggest expense they make in their lifetime—a house, a car, a diamond ring, a sofa.

Part of the outrage stems from how they’ve handled it. The initial reports have the acting director, under Candy Carson’s instruction, saying you can’t get a decent chair for $5,000. Then the subsequent attempts to cover up the expense and not submit it for congressional approval. I think if they had been more forthright about the idea that HUD is no less deserving of a set of C-suite furniture than any other department, the reception might have been different.

For sure, it was terribly handled, and I think the involvement of Candy is significant somehow. There have been several of these wife stories recently. Mnuchin’s wife was involved in chartering that airplane to see the eclipse. The avaricious wife is a plotline in all these things, the husband driven by this wife trying to get everything she can.

A Lady Macbeth subplot.

It’s the third or fourth wife story in this administration already, playing the system. Like most things the Trump administration does, it has been terribly handled in the press response, and probably illegally handled at the beginning, because there’s a $5,000 limit which they tried to circumvent by saying it wasn’t really for his office, it was for the whole building. There are two different stories. One: Should there be a $30,000 furniture makeover in the director of HUD’s office? That’s a question that could be debated. The question of whether the wife of the director should be trying to manipulate the system to get to buy it, that’s maybe a different story.

One thing he said in the letter was that this furniture was 30 to 50 years old and was characterized as unsafe. At what point does a dining room table become unsafe?

I highly doubt the reason they’re replacing it was really a safety concern. Again, a new executive coming into a corporation—most would remodel their office. But the series of overlapping and ridiculous stories to justify this is really out of control.

In Carson’s case, whether or not you think the chair of HUD should have a new set of furniture, his rhetoric has been all about efficiency, cutting corners, public housing should not be too comfy.

Yeah, that’s where the story completely falls apart, because he’s such an inept director. It’s absurd that someone so unversed in the subject would be heading an agency like that that’s so technical. And coming after Shaun Donovan, who had many years of experience, was an architect, trained at Harvard, ran New York City’s Department of Housing, Preservation and Development, really knew something about cities.

And Julian Castro after that, who came out of San Antonio.

Now you’ve got someone who is a neophyte, with this harsh rhetoric about not making public housing too comfortable because we want people to get out of it. … The real frisson of the story is that he needed to be able to flaunt all rules to go and aggrandize himself while taking things away from the needy. You can’t escape that image. I think it wouldn’t really matter how much the table and chairs cost as long it was a number large enough to pique anyone’s attention.

Now we hear Carson wants the order canceled. So rather than trying to make a defense of properly furnishing HUD, if not properly managing its programs, he seems to have agreed this was an unnecessary expenditure.

Which completely undermines the whole thing. It’s not about efficiency, it’s not about safety, he just got caught. So it’s the worst possible outcome. He doesn’t even stick by the original argument, he just says, “OK, never mind, I won’t do it.”

They seem to have made a wrong turn at every single juncture.

You couldn’t have crafted a worse trajectory for this story. The reason I’ve been following it so closely is that there’s so many things tied up in it, and in a way, the denouement that you’re describing is fitting too. After you get your hand in the cookie jar, you say, “Oh, you caught me, never mind,” and skulk away. It’s horrible.

There Is Not a Single Good Reason to Deregulate Banks Right Now. Democrats Are Helping It Happen Anyway.

by Jordan Weissmann @ Slate Articles

Wed Mar 07 16:14:00 PST 2018

Just ten years after the financial crisis, Congress has decided that it’s time to start deregulating the banking industry again.

On Tuesday, a coalition of Republicans and moderate Democrats voted 67 to 32 to move along a bill loosening some of the key regulations Congress passed in 2010 to prevent another financial crisis. The bill’s Democratic supporters, such Virginia’s Mark Warner and Montana’s Jon Tester, claim they are simply trying to make “commonsense fixes” to the Dodd-Frank Act in order to free up credit unions and smaller banks from burdensome rules designed to prevent a Lehman Brothers-style collapse. But while that may be their goal, the legislation—which has been exhaustively and excellently covered by journalist David Dayen—would make it easier for community banks to hide wrongdoing like discriminatory lending, while leaving the financial system at least slightly more vulnerable to a disaster by freeing large regional banks from regulatory scrutiny. As written, there is also a chance it could end up easing restrictions on a pair of too-big-to fail giants, JPMorgan and Citibank—restrictions that were designed to keep them from leveraging up with too much debt.

But you don’t need to wade into the details of this bill to understand why it’s so infuriating. The bottom line is that there just isn’t any good reason to be deregulating finance in 2018.

The legislation’s Democratic backers have argued that Dodd-Frank went too far when it came to regulating community and regional banks, and that easing some rules will free up credit for rural areas and small businesses. As Warner put it in a statement, “The goal is simple: to help Main Street by rolling back unnecessary and burdensome regulations on credit unions and small community banks.” If Dodd-Frank was truly throttling the banking system with red tape, though, you would expect to see some signs that Americans were having trouble borrowing. But there simply aren’t any. There is no sign of a credit shortage in the United States—on Main Street or any other street.

Let’s start with the big picture. Interest rates have been extremely low, suggesting that there’s more than enough credit available to meet demand. Meanwhile, business lending has been healthy; the value of outstanding commercial and industrial loans has risen 79 percent since 2010.

Total mortgage debt has roughly returned to its pre-crisis peak.

As a percentage of the economy, credit to the private sector is hovering right around where it was in 2005, before the final manic stages of the nation’s mid-oughts borrowing binge.

Credit doesn’t seem to be scarce in rural America, either. Farm lending, for instance, pretty much shot up like a corn stalk after 2010.

And small businesses owners? They appear to have more credit available than they know what to do with. Here’s how the Federal Reserve summed up the situation its most recent report on small business credit:

Overall, between 2012 and 2017, credit conditions for small businesses were largely stable. Favorable supply conditions prevailed throughout most of the period, coupled with weak loan demand from small business owners. By 2017, credit flows to small businesses had improved, though they remained below their pre-crisis levels.

In other words, money was still plentiful and cheap after Dodd-Frank. The problem was that not enough small business owners wanted to borrow.

What about the supposed plight of community banks, which lobbyists claim are being throttled by all of Dodd-Frank’s red tape? There’s really not much to worry about. For starters, these plucky local financial institutions are perfectly profitable. According to the Federal Deposit Insurance Corporation, community banks averaged an 8.67 percent return on equity in 2017, about the same as the banking industry overall. And while lending recovered more slowly at small banks than large ones following the financial crisis, business has been brisk lately; loan balances at community banks rose 7.7 percent last year, compared to just 1.7 percent across all banks.

Banking lobbyists try to elide all of this, pointing out that while small banks may be earning money, their numbers are shrinking. This is true. Over the years, droves of community banks having chosen—some would say have been forced—to merge with bigger rivals. And after the recession, bank startups pretty much ground to a halt. From 1976 to 2009, more than 130 banks were chartered each year, on average. From 2010 to 2015, just four were chartered in total. The industry likes to blame Obama’s regulations, which forced small banks to spend more on regulatory compliance. “While community banks remain resilient in the face of regulatory and economic pressures, it defies reason to suggest that their growth and ability to serve customers has been unhurt by Dodd-Frank and the massive regulatory burden it represents,” American Bankers Association President Rob Nichols wrote in 2016.

This argument is not especially convincing. Independent community banks have been disappearing for decades, as they’ve merged with or sold themselves off to larger rivals. Much of the industry’s consolidation has been driven by regulatory changes in the 1990s, which allowed large banks to more easily set up shop across state lines. But the trend dates back at least to the Reagan era. There’s also an obvious reason for why new banks stopped popping up after the recession: The economy was terrible and interest rates were near zero, making it nearly impossible for newly chartered financial institutions to make any money. When a pair of Federal Reserve economists looked at the issue in 2016, they concluded that at least 75 percent of the decline in bank startups after 2010 could be explained by factors other than regulatory issues. “The standalone effect of regulation,” they added, “is more difficult to quantify.”

But let’s step back for a moment. Why do people care about community banks in the first place? In theory, it’s because those banks are more focused on small business lending than big financial institutions like Wells Fargo or Bank of America. If small, local banks disappear, lobbyists argue, it will be harder for small-town entrepreneurs and mom and pop shops to get loans. In fact, there’s little evidence that’s true. As the Federal Reserve explains in its small business credit report: “Numerous research studies directly analyze the relationship between consolidation activity and the availability of credit to small firms. Although mergers and acquisitions sever existing bank–firm relationships and may introduce some short-term uncertainty, the results of the research generally suggest that, overall, they have not materially reduced credit availability.” Consolidation doesn’t even seem to reduce local competition all that much. Despite the massive increase in overall industry concentration over time, the average number of banks in large metro areas, small towns, and rural areas has barely budged since the year 2000.

Despite all of this, a dozen Democrats and one independent who caucuses with the party have decided that now is the time to loosen the banking industry’s leash. The politics aren’t hard to fathom. Community banks are a sympathetic constituency that wield a great deal of lobbying power in Washington. Meanwhile, many red state Democrats are coming up for re-election this year and—foolishly or not—they’re desperate to prove their bipartisan bonafides by voting with the President. So, this bill is sailing through, even if it might make the financial system a bit less stable. And moderates Dems are asking us all to suspend our disbelief, to act as if their sop to the industry is about anything other than a crass campaign calculation. “This election has nothing to do with this,” said Tester said recently. “This has everything to do with access to capital.” If that’s true, it has everything to do with a problem that doesn’t exist.

Focus Credit Union Referral Bonus: $50 Promotion (Oklahoma only)

by John Catral @ Bank Checking Savings

Tue Mar 27 14:00:27 PDT 2018

Are you interested in putting more money in your pockets? Focus Credit Union is offering residents of Oklahoma a $50 bonus for you and a friend or family member when you refer them for a Checking Account with direct deposit. To get started, be sure to fill out the online referral coupon. After your friend has met... Keep Reading↠

The post Focus Credit Union Referral Bonus: $50 Promotion (Oklahoma only) appeared first on Bank Checking Savings.

How Memphis Toppled Its Confederate Statues

by Henry Grabar @ Slate Articles

Thu Dec 28 13:06:42 PST 2017

The statue of Confederate Gen. Nathan Bedford Forrest had stood in Memphis for more than a century—and inspired protest for decades—when Bruce McMullen, the city attorney who has sought for two years to find a legal way to rid the city of this monument to the first grand wizard of the Ku Klux Klan, began to feel a sense of urgency.

In the fall, as Memphis pressed the case for removal with the Tennessee Historical Commission, a state group that must approve any changes to public monuments, McMullen felt a drop-dead date inching closer. April 4, 2018, is the 50^th anniversary of the assassination of Dr. Martin Luther King Jr. at the Lorraine Motel in Memphis, and the occasion for a citywide commemoration. Forrest, and a nearby statue of Confederate president Jefferson Davis—erected in 1964, the same year as the passage of the Civil Rights Act—had to be gone by then.

That reason for haste was joined by another: the January return of the Tennessee state Legislature, a mostly white body that for the past five years has successfully outflanked this mostly black city’s drive to unseat Davis and Forrest. In the new year, McMullen worried, Nashville would tighten the language to make it all but illegal to take down the statues. Its most recent effort, the Tennessee Heritage Protection Act of 2016, modified an eponymous 2013 law to prohibit the unauthorized “removal, renaming, relocation, alteration, rededication, or otherwise disturbing or alteration” of any historic monument located on public property.

Public being the operative word.

On Dec. 20, Memphis sold for a token sum the two parks containing the two statues to a newly created nonprofit called Greenspace, headed by Van Turner, a county commissioner of Shelby County, which includes Memphis. The statues were removed that night. The city footed the bill for security; Greenspace paid for their careful removal and storage, in an undisclosed location. “You can’t drop one,” McMullen said. “There will be a war if you drop one.”

And so Memphis joined a list of cities, including Baltimore and New Orleans, that have removed confederate monuments since the deadly rally of white nationalists in Charlottesville, Virginia, once again drew attention to their racist symbolism.

The wrangling over the statues in Memphis, though, also illustrates the more common plight that cities seeking to dismantle Confederate tributes undergo: a race to outmaneuver conservative state governments dedicated to preserving them.

In some ways, this reflects a broader trend: Progressive cities whose ambitions, from plastic bag bans to minimum wage hikes, have been overruled by their states. In most cases, those statehouses say they are pursuing a “uniform regulatory environment.” When it comes to statues, though, there is no such pretense to disguise a conflict that is simply over power, in which gestures of white supremacy, some made as recently as the 1960s, are defended as inviolable historical artifacts. (Nate DiMeo’s “Notes on an Imagined Plaque” on the podcast 99% Invisible movingly debunks this claim.)

Charlottesville, for example, has wound up in a standoff with Confederate heritage groups who have sued to ensure the city does not remove its statue of Confederate Gen. Robert E. Lee, which is protected by a 1998 state law on war memorials. Birmingham, Alabama—which previously sued the state over legislative pre-emption of its minimum wage law—was forbidden by a similar state statute to take down an enormous Confederate-memorial obelisk. When Mayor William Bell instead obscured it behind a black plywood fence, the Alabama attorney general filed suit. (The situation is unresolved.) Similar pre-emption laws barring the removal of these monuments are in place in North Carolina, South Carolina, Georgia, and Mississippi. Several of the laws have been passed in the past five years.

Memphis first sparred with the state over the names of Confederate, Jefferson Davis, and Nathan Bedford Forrest parks, which were rechristened in 2013 as Memphis, Mississippi River, and Health Sciences parks, respectively. In that instance, the City Council rushed to approve the name changes just as the state was considering a bill to pre-empt them, one that made reference to the “War Between the States,” a popular Southern term for the Civil War. After the 2015 massacre of nine black worshippers at a church in Charleston, South Carolina, the Memphis City Council voted unanimously to move the Forrest statue. The Tennessee Historic Commission overruled it.

Even as Memphis continued to seek a waiver from the THC to take the statues down, the city put a plan into motion. In October, the council passed an innocuous-looking bill that permitted the sale of parkland to a nonprofit for less than market value, provided the space was maintained as a park. Shortly afterward, the nonprofit Greenspace was incorporated and began raising money. By December, Greenspace had collected $250,000 in private donations, Turner said. This reflected both the support of activists and of the Memphis business elite, whose anonymous donations helped cover the $88,000 needed to safely remove, transport, and store Davis and Forrest last week, as well as the efforts of its five-person board, which is made up of locals.

The opposition was furious. A flurry of nasty comments greeted the mayor’s Merry Christmas Facebook post. Doug Jones, the lawyer for the Sons of Confederate Veterans, said Greenspace was a “sham” and the whole scheme “bordered on anarchy.” A Tennessee leader of that group criticized the city for an illegal “behind the scenes plan.” Tennessee House Majority Leader Glen Casada and caucus Chairman Ryan Williams, both Republicans, said they would launch an investigation. The decision, they said in a statement, “completely violates both the spirit and intent of state law in protecting Tennessee history.”

McMullen, the city attorney, said it had all been open and public. “The details of my legal strategy, I didn’t broadcast that to everyone,” he noted. “But I was honest in the press that we’re going to pursue every legal channel to get this removed. Did I sit down and say, ‘Here’s a lawful way to do it that hasn’t been closed off by the Legislature?’ No, I did not say that to the press. But I was in charge of getting these statues down legally, and I was going to look at every legal method to do it.”

Privatizing two prominent parks seemed like kooky recourse, but there was some poetic justice in the act. Private actors have long been intertwined with the fate of the city’s public spaces; the statues themselves were funded or fundraised by private Confederate heritage groups. Additionally, city governments often used eminent domain or privatization to circumvent civil rights law and maintain segregation. In the 1950s, as the historian Kevin Kruse recounts in White Flight, cities sometimes privatized parks to preserve segregated spaces. At the same time, planners used eminent domain to racist ends, seizing private land to prevent integration. In his book The Color of Law, Richard Rothstein tells the story of a developer in the Chicago suburb of Deerfield, Illinois, who tried to build an integrated housing project. The park district condemned the plots for parkland.

In Memphis, the issue has more resonance still: In 1963, two thirds of the city’s playgrounds, community centers, and golf courses were whites-only (a number then proportional to the city’s white population, to fulfill a perverted idea of Jim Crow justice). Nine years after Brown v. Board, a black plaintiff challenged this policy—the city had said it would integrate the facilities by 1971—and the Supreme Court had to order the immediate desegregation of the city’s parks. The next year, donors raised enough money to erect the Davis statue on the bluffs overlooking the Mississippi River.

For Greenspace, which will now maintain the two parks on the city’s behalf, one thorny issue remains: Forrest and his wife are still buried at Health Sciences Park, where their bodies were transferred from nearby Elmwood Cemetery in 1905 to accompany the new statue. “It was to make a statement, and it was to make a racist statement,” Turner, the Greenspace director and county commissioner, said of the 1905 dedication. “To be historically accurate? Honoring the wishes of Mr. Forrest and his wife to be buried at Elmwood Cemetery would be historically accurate.”

How to make a Starbucks-like Pumpkin Spice Latte at home

by Jim Romenesko @ Starbucks Gossip

Sun Oct 06 10:40:51 PDT 2013

I have never tried a Pumpkin Spice Latte -- only brewed coffee for me, thank you -- but I certainly know about the Cult of PSL. That's why I'm posting this copycat recipe; let us know in comments how it...

Top 18-Month CD Rates – April 2018

by Danny Nguyen @ Bank Deal Guy

Mon Mar 26 13:59:00 PDT 2018

Below is our guide to help you, our readers, find the best or top 18-month CD rates. In summary, certificate of deposits, otherwise known as CDs, will offer you the best secure return on your money when you invest it with your bank or credit union of choice. The best route to take if you want to... Read More →

The post Top 18-Month CD Rates – April 2018 appeared first on Bank Deal Guy.

Docks Off

by Henry Grabar @ Slate Articles

Mon Dec 18 10:32:51 PST 2017

In March, Seattle shut down its bike-share system. The decision capped a perplexing, embarrassing saga for a major city that consistently ranks near the top for bicycle commuters per capita. Seattle’s Pronto launched in March amid bike-share systems’ ascent from urban novelty to legitimate transportation technology, one that last year served up 28 million U.S. rides in more than 50 cities. But Pronto, with its small coverage area and fleet of just 500 bikes, never outgrew its training wheels. The system underperformed even for its size, recording less than one ride per bike per day. Scapegoats included the city’s rainy weather, its hills, and its mandatory-helmet law—who carries a helmet around? Now the docks have been removed; the bikes are being sold.

Then, in July, Seattle took a gamble on an innovation that has transformed China’s largest cities: dock-less bike share. Seattle permitted three private companies to deploy nearly 9,000 bikes on its streets, sidewalks, parks, and … everywhere else you could conceivably imagine a bike. The city suddenly has the second-largest fleet of shared bicycles in the United States, after New York. Riders make tens of thousands of trips daily. And it didn’t cost the city a dime.

These bikes—bright, light, and a little dinky—have swarmed U.S. cities from the Puget Sound to Biscayne Bay. They threaten to fill every inch of urban public space with hundreds of thousands of plastic bikes. But they also promise to permanently alter the way people move around the American city. And it might take a bit of that guaranteed civic clutter to get the job done.

Just look at China. Perhaps it was only a matter of time before the country’s unprecedented pace of urbanization produced something revolutionary. For the past twelve months, Chinese cities have been in the midst of a spectacular and sometimes messy experiment: Millions of privately funded bicycles that can be ridden for a song and left anywhere at all. Most bike-share systems have docks where the bikes are stored. The docks tell you where you’ll find a bike and keep the bikes locked up when you’re done. In China, by contrast, the bikes are simply everywhere, secured by locks and GPS chips.

“Dock-less is as important to transportation as cellular was to telephony,” said Horace Dediu, an analyst at Asymco who studies the mode. It is the one place in the field, he said, where “change is happening at a blinding speed.”

More than 30 companies have delivered approximately 15 million bicycles to the streets of China’s cities. There are 1.5 million shared bikes in Shanghai alone, or about 1 bike for every 16 residents. If New York City—whose Citi Bike program is the largest bike share in the United States—were to match that ratio, it would need to multiply the number of blue for-hire bicycles by 50. In Xiamen, a city nearly the size of Los Angeles where the first major dock-less operator, Mobike, launched in December 2016, the ratio is even higher: 1 bike for every 11 people. That would be like if L.A. suddenly put 360,000 bicycles on the street.

These bikes are changing the way China commutes. Mobike claimed in May that its bikes had doubled the percentage of Chinese biking to work in selected cities, taking the share of bicycle commuters to more than 11 percent. The other major operator, Ofo, has drawn investments from e-commerce giant Alibaba and Didi, China’s version of Uber, as the company’s 2 billion 2017 bike-share trips started to eat into the short-distance ride-hailing market. Each company is valued at more than a billion dollars; each claims to be the biggest.

A backlash has already begun. In November, the country’s third-largest operator, Bluegogo, declared bankruptcy, prompting speculation that a bike-share bubble was bursting. Cities began to threaten companies for sowing disorder, or to simply impound bikes. Viral photos of bicycle graveyards, sites where hundreds of bicycles have piled up, seemed to announce a marriage of cheap cash and short-term thinking.

Of course, it is easier to take a photo of 1,000 discarded bicycles than 60 million rides a day. I asked David Levinson, a professor of transportation at the University of Sydney, whether dock-less bike share was a VC-funded bubble or the future of short-distance transportation.

“Yes,” he wrote back. “It’s like the internet in 1999.”

The industry shows no signs of slowing its expansion. Ofo reportedly secured another billion dollars in funding this month, joining Mobike and a handful of smaller startups on a push into cities in Southeast Asia, Europe, and the United States. Until this summer, Dallas was America’s largest city with no bike-share system; the arrival of several thousand bicycles operated by a handful of private companies has given it, overnight, one of the country’s largest fleets of shared bikes.

The most exciting thing for U.S. transportation planners? How cheap these bikes are to ride. Most services work out to around a dollar a ride. “Our job is to provide transportation options, and it costs a lot less to roll out,” Gabe Klein, who oversaw bike-share systems as transportation chief in Washington and Chicago, and now serves as an adviser to the dock-less company Spin.* “We saw this huge growth in D.C., I think we more than doubled bike mode share. Now we’re going to see that on steroids.”

In the U.S., bike-share systems tend to be a composed of a hodgepodge of different funders, vendors, and operators. No city has made a greater investment in old-fashioned bike share than Washington. But even there, planners have cautiously welcomed the competition. A handful of private dock-less companies have been permitted to deploy small fleets as a pilot program. In an ideal world, said District planner Sam Zimbabwe, “we’d have multiple operators reaching different market segments because of their pricing models.” On Friday, New York issued a call for its own dock-less expansion.

Why challenge the home team? In part because planners think mode share—the percentage of commuters who use bicycles—could be much, much higher. They don’t see multiple bike-share systems competing for the same pot of people. Rather, different systems can serve different markets. In spite of prices that can be a fraction of Capital Bikeshare, dock-less company LimeBike says all it needs to make its business model work is one ride per bike per day—a mark that most functioning bike-share systems fly by. (Capital Bikeshare clocked 5.6 rides per bike per day in October.)

A city blanketed in bicycles would address one persistent critique of bike-share systems: that the docks tend to be concentrated in central or otherwise well-off parts of town. “We don’t need to redline in a way that the dock systems redline cities,” said Chris Taylor, Ofo’s vice president of U.S. operations, referring to the midcentury practice of denying loans to black neighborhoods.

But in D.C., Taylor—who comes to Ofo from Uber—has been frustrated by the city’s regulatory approach for the pilot program, which has capped each company’s fleet at 400.* One reason Chinese systems are so popular is that there are bikes wherever you need them. But this has also been a source of friction. “The Chinese model depends on one huge subsidy, an invisible subsidy, and that’s the parking subsidy,” Dediu said. “The city is essentially granting free parking to all these bikes. If you add it all up as urban land, the amount of subsidy is in the trillions of dollars.”

In American cities, only private automobiles are entitled to that kind of real estate. (San Francisco, to take a city that is neither large nor particularly famous for driving, has 280,000 on-street parking spaces.) The bikes have already raised hackles. “Dallas can’t handle bike share. It’s turning our city into a bicycle junk yard,” one of the city’s morning-show hosts griped in October. (The city says there have not actually been many complaints.) To counter that problem, Mobike uses a scoring system in which riders rate previous riders’ parking jobs—leave a bike in a lake and your next ride will cost more. Nevertheless, Chinese cities are moving toward creating parking zones for the things.

The dock-less phenomenon has drawn comparisons to the arrival of Uber and Lyft, whose radical impact on urban transportation is difficult to separate from a consumer-friendly price war enabled by a massive venture capital subsidy. Like the ride-hail startups, they are also gathering valuable data about user behavior. But the similarities end there. Mobike and Ofo manufacture, own, and manage massive fleets, which (theoretically, at least) requires attention to maintenance, geography, and customer service.

Critics aren’t sure that the model can work, unadulterated, in U.S.
cities. In addition to the burbling outrage about misplaced bicycles, there are geographic challenges. American cities sprawl. While most automobile trips are short, driving and parking remain cheap and easy; there are few transit commuters to whom the “last-mile” problem means anything.

And then there’s that awkward question: Do dock-less bikes render the systems that U.S. cities have built out—working with nonprofits, sponsors, and grants—obsolete? Most experts say yes. Most American transit officials aren’t so sure.

In Minneapolis, Nice Ride Minnesota—a nonprofit bike-share system with 200 stations—put out a request for proposals to bring dock-less bike share to the city. “We did not see this coming at all,” Bill Dossett, the executive director, says of the dock-less bike explosion. After the past year, the potential cost savings—particularly on the electronic components of docks, from touch screens to key pads to lock motors—was too promising to ignore.

And so Nice Ride will hedge. The docks and bikes are coming back out in the spring, but the organization isn’t spending money on new stations. Instead it’s choosing between LimeBike and Motivate, the operator of the country’s largest docked bike-share systems, to undertake an expansion of several thousand free-floating bikes.

“Working to protect an old business model is a dead-end street,” Dossett explained. “But we want to keep out system going until we’re really sure that what’s going to replace it is going to stick around.” Even if the free-floating bikes could rival established systems for reliability, Dossett said, he foresaw a coming use for those docks: securing and charging electric bicycles, which many bicycle professionals believe are—after dock-less bikes—the next big thing.

*Update, Dec. 18, 2017: This article has been updated to reflect Klein’s affiliation with Spin. 

*Correction, Dec. 19, 2017: This article initially misstated the District of Columbia’s fleet limit was 300; it is 400.

States Need to Step In and Save Their Health Care Markets From Donald Trump

by Jordan Weissmann @ Slate Articles

Tue Feb 27 16:39:29 PST 2018

Since failing to repeal-and-replace Obamacare in its entirety, Donald Trump and the Republican Party have undertaken a marginally quieter, piece-by-piece dismantling of the law that’s weakened and removed some of its core features. According to a new analysis released this week by the Urban Institute, those changes could leave millions more uninsured and send premiums almost 20 percent higher across the country by 2019.

The good news is that states still have the power to keep their health insurance markets from becoming casualties of Trump’s attack. Lawmakers just need to show a little political courage.

After John McCain gave Trumpcare a fatal thumbs down last year, the White House and the GOP took several steps to undermine the Affordable Care Act. Most importantly, the tax bill the Republican Congress passed in December repealed the law’s individual mandate. The requirement that all Americans buy health insurance or pay a fine was long considered a linchpin of Obamacare, intended to keep premiums affordable by balancing the market between sick and healthy customers. While there were legitimate questions about the mandate’s effectiveness at forcing people to buy health plans in recent years, it’s widely believed that its demise will push up the price of coverage and result in more people being uninsured, either by choice or because they won’t be able to afford a plan.

Trump has also taken some steps to sabotage Obamacare all on his own. Right before this year’s open-enrollment period, he directed the government to stop making payments to health carriers that were meant to reimburse them for offering lower-income Americans discounted insurance. The move didn’t break Obamacare’s markets, as some feared it might, but it did warp insurance prices in strange ways. More recently, the administration proposed new rules that would make it easier for Americans to enroll in short-term insurance plans that don’t adhere to the Affordable Care Act’s consumer protection rules. These extremely cheap policies, which typically offer minimal benefits, are technically designed to fill temporary gaps in people’s coverage, such as when they’re between jobs, and are medically underwritten, meaning the insurers can reject applicants because of pre-existing conditions or charge much higher premiums to older customers.

The last White House became concerned about how short-term plans were distorting the insurance market when it realized that some younger Americans were choosing to buy them instead of the more comprehensive coverage offered on Obamacare’s exchanges, even though it meant they’d have to pay the individual mandate’s tax penalty. So in late 2016, the Obama administration enacted a new regulation limiting temporary insurance policies to just 90 days. The Trump administration would now like to extend that limit back to a year. Once the individual mandate finally disappears in 2019, it seems likely that many young people will go back to cheaper short-term coverage, siphoning healthy customers from the Obamacare market and driving up premiums for those remain on it.

How much damage could all of this do? Quite a bit, according to the Urban Institute’s analysis. Overall, it estimates that the steps Trump and the Republicans have taken will leave 8.95 million additional Americans without comprehensive health coverage as of 2019—a 3.3 percent drop in coverage compared to if the laws hadn’t changed. Of that group, 4.75 million would be entirely uninsured; the rest would buy short-term coverage. The overall size of the Obamacare-compliant individual market would drop by a whopping 39 percent, while premiums would rise by 18.2 percent, since the remaining customers would have higher health costs.

Some states will feel the effects of Trump’s sabotage more than others. There are six states—Massachusetts, New York, New Jersey, Vermont, Oregon, and Washington—that ban short-term insurance policies. In those places, Urban expects premiums to rise by 8 percent on average, compared to 18.2 percent in states that place no limits on such plans. In Massachusetts, which has its own version of the individual mandate in place thanks to Romneycare, Urban doesn’t believe the GOP’s moves will increase premiums at all. The think tank also predicts the state’s uninsured rate will rise by a relatively small percentage.

More states should follow Massachusetts’ example. Pass a mandate, pass a short-term insurance ban if they don’t have one already, and Trump-proof their insurance markets. Of course, requiring people to buy coverage is politically unpopular. But just banning short-term insurance while letting the mandate disappear would be a double-edged sword. According to the Urban Institute’s analysis, it would probably keep premiums on the Obamacare market lower. But it would also leave more people entirely uninsured. The better choice is to simply reinstate the system that Trump has wrecked.

Even if just a few large states went the Bay State’s route, it would make a profound difference. As of now, Urban thinks the number of Californians without comprehensive health coverage could rise by more than 2 million, or 70 percent, thanks to the demise of the mandate and new rules about short-term insurance. There’s no good reason for lawmakers in Sacramento to just stand by and watch that play out.

But they might. As the San Francisco Chronicle editorial board wrote in December, a statewide insurance mandate is unlikely to muster the two-thirds majority needed to pass California’s legislature. Lawmakers have talked about creating a re-insurance fund instead, which would potentially keep premiums lower by picking up the cost when insurers get stuck with especially expensive patients. But Urban thinks states that already have reinsurance funds, such as Minnesota and Alaska, would still see large price spikes.

It’s worth pausing to appreciate just how much of Obamacare’s achievement Trump is poised to undo. The law is credited with getting an additional 20 million Americans insured. Trump’s attempts to disassemble the law one bit at a time could reverse up to almost half that progress. It’s now up to the states to not let that happen.

Mick Mulvaney Says the Consumer Financial Protection Bureau Works for Payday Lenders, Too

by Jordan Weissmann @ Slate Articles

Tue Jan 23 18:58:48 PST 2018

When the White House appointed Mick Mulvaney as interim director of the Consumer Financial Protection Bureau, many feared it meant trouble for the watchdog’s basic mission of shielding ordinary Americans from the banks, payday lenders, and debt collectors who prey on their pocket books. After all, Mulvaney—a renowned anti-regulatory zealot—had said in no uncertain terms that he did not think the CFPB should even exist. As a congressman from South Carolina, he was also a major recipient of campaign contributions from payday lenders; during his final election cycle, he raked in more than $31,000 from the industry, ninth among all members of Congress. (After Trump appointed him to the CBPB, Mulvaney claimed the donations wouldn’t pose a conflict of interest because, “I am not in elected office anymore.”)

So far, Mulvaney seems to be doing his best to confirm critics’ worst fears. Last week, the CFPB dropped a lawsuit in Kansas against four payday lenders without any explanation, other than a weak assurance that it would continue investigating the case. Meanwhile, International Business Times reports today that Mulvaney stealthily closed an investigation into a South Carolina-based payday lender, World Acceptance Corporation, which had previously donated to his campaigns.

While all of this was going on, Mulvaney decided to send out a memo to CFPB staff outlining the regulator’s new direction. The letter, obtained by Pro Publica’s Jesse Eisinger, castigates the agency’s previous leaders for saying that they wanted to “push the envelope” on consumer protection enforcement.

Simply put: that is what is going to be different. In fact, that entire governing philosophy of pushing the envelope frightens me a little. I would hope it would bother you as well.

We are government employees. We don’t just work for the government, we work for the people. And that means everyone: those who use credit cards, and those who provide those cards; those who take loans, and those who make them; those who buy cars, and those who sell them. All of those people are part of what makes this country great. And all of them deserve to be treated fairly by their government. There is a reason that Lady Justice wears a blindfold and carries a balance, along with her sword.

The mind reels. It should go without saying that the Consumer Financial Protection Bureau was designed to protect consumers. It’s in the friggin’ name. The agency exists in order to aggressively crack down on wrongdoing by financial institutions that were left to bilk ordinary households more or less freely for years. Its whole institutional structure is designed to insulate the agency from the interference of political hacks in Congress who would try to make it go easy on industry lawbreakers. Unfortunately, one of those hacks now runs it.

Regulators do not work for the companies they regulate any more than police work for the suspects they investigate; they owe businesses their rights, and nothing more. When a former CFPB official told Politico that regulators at the agency tried to “push the envelope,” he wasn’t talking about stretching the law or targeting innocent lenders. He was referring to the bureau’s decision to fine major Wall Street banks as its first major action, in order to show that it wasn’t afraid to tangle with powerful opponents. That is exactly what the agency was created to do. And it’s what Mulvaney very obviously will not.

What Should You Do if a Flight Attendant Tells You to Put Your Dog in an Overhead Bin?

by Jeff Friedrich @ Slate Articles

Thu Mar 15 10:49:58 PDT 2018

After a dog died in an appalling debacle aboard a United Airlines flight Monday night, the internet assembled to pose “what ifs” and render ex post facto judgement. If, as several eyewitnesses have claimed, a flight attendant “insisted” that the dog’s owner, Catalina Robledo, needed to store the pet in an overhead bin, why didn’t the passenger object more fervently or get off the plane? And couldn’t the eyewitnesses have done more? Why didn’t they rise in mutiny upon hearing this plainly incorrect instruction?

First of all, consider the complexities of Robledo’s situation: Reporting has indicated that she does not speak English fluently, and she was traveling alone with an 11-year-old, a newborn, and her dog.

But even holding those challenges aside, much of the second-guessing presupposes that you can get what you want on an airplane using the same tactics you’d deploy to resolve a dispute with Amazon, Walmart, or Olive Garden. This expectation makes sense, because outwardly the airlines greet you with a smile and emphasize a similar commitment to customer service. But complaining on an airplane is fundamentally different, because the inside of a cabin is ultimately governed by a set of inflexible laws that prioritize safety and anticipate worst-case scenario disasters. Most of the time these regulations are just background noise, but at the heart of most passenger horror stories lies some rule that transformed an ordinary service interaction into something more akin to a police stop. These dynamics are the special sauce that makes airplanes uniquely terrible venues for conflict mediation.

So what should you do if you need to win an argument on a plane, as if your dog’s life were on the line? As a former flight attendant, here’s the advice I’d offer.

Speak Up, but Beware the Limits of Speaking Up

Even though the flight attendant aboard United Flight 1284 had it wrong, Robledo still could have been thrown off the plane had she refused to store her dog in the overhead bin. This is because of regulations that in effect criminalize insubordination on planes. Federal regulations require, for instance, that passengers follow all crew instructions. (“Crew” includes flight attendants, who are required on planes because the Federal Aviation Administration wants someone present to command an evacuation during an emergency.) If you refuse to follow directions, airlines can take advantage of the broad permissions they are granted to refuse transportation to any passenger they deem a safety risk.

But you should still speak up—as Robledo did. The key is to remain calm and to avoid monopolizing the flight attendant’s attention. “You’re allowed to disagree with flight crew,” says Justin T. Green, a partner at Kreindler, a large plaintiff-side aviation law firm, “but you must do so without interfering with the flight crew’s duties.”

If you can’t convince the flight attendant to reconsider the decision, ask to speak with the lead flight attendant. Don’t ask to speak to the pilot, because pilots are trained to prioritize cockpit duties and usually defer to their in-flight crew’s judgement when a cabin issue is reported. As one pilot explained to me, not backing them up “would cause massive issues for the lines of communication among the crew and diminishes the already fragile authority flight attendants have over passengers.”

Finally, it’s always better to speak up while your plane is still at the gate. This allows you access to the conflict-resolution specialists airlines employ in airports, who are versed in all matter of regulatory arcana.

Avoid Confrontation. Just Give In.

If your dog’s life is not on the line, consider whether your problem truly requires an immediate resolution. The rules are stacked against you inside a plane. And even where an airline is later shown to have kicked off a passenger for bad reasons, the law provides the industry with unique liability protections.

If it can wait, your problem will get a fairer assessment once you’ve deplaned. “My best advice is to try to avoid confrontations on airplanes, even when the flight crew is in the wrong,” Green told me.

Emphasize Safety

But if your dog’s life is on the line, you can flip the script. Instead of arguing, simply tell the crew why you feel unsafe. Crews are trained to make safety their first priority and encouraged to proactively report any conditions that could be unsafe. Your report would probably get relayed to another crew member, which could lead another staffer to get involved, hopefully one who’s better versed in procedure.

Pets are counted as passengers, so their safety matters, too. And you can report all safety issues, not only ones that directly impact you.

Ask to Deplane

If the crew persists in their request after you’ve told them you feel unsafe, ask if you can deplane. It should be no problem if the plane is still at the gate, and the airport employees are likely to be more responsive to your needs once you’re not holding up a plane.

Asking could work in your favor even after the plane has pulled away from the gate. That’s because it takes time to drop you back at the gate, and pilots want to get home as much as you do. As one pilot explained to me, “No one wants to return to the gate for any reason. I’m 99 percent sure that, once the captain got word of what was going on in the back, both he and the flight attendants would be either scouring the policy manual or calling company to find out what the proper procedure really is.”

For financial and logistical reasons, getting off the plane can be scary. You could be stuck buying a new round of tickets for everyone traveling in your group if the airline doesn’t help. But if you’re right, the company will almost certainly assist.

Document the Event

Airlines now find themselves in a similar position as police departments. Everyone has access to a camera and Twitter, and these are powerful tools for redressing wrongs.

File a Complaint

Once you do get home, explore the work of consumer rights organizations like Flyers Rights and Travelers United, and consider filing a formal complaint. (The Department of Transportation told me that it’s looking into Robledo’s experience, working in cooperation with the Department of Agriculture, the agency that enforces the Animal Welfare Act.)

For its part, United Airlines says that it has refunded Robledo and her family’s tickets—including the pet fee.

Thanks to the pilots who provided guidance for this piece, whose identities I’ve withheld to allow them to speak candidly and without the permission of their employers. If you work in the airline industry and have additional tips, please email me at jeff.friedrich@slate.com!

The Cannabis Industry Is Well-Armed to Fight Jeff Sessions

by Alex Halperin @ Slate Articles

Fri Jan 05 12:31:02 PST 2018

On Thursday, marijuana-hating Attorney General Jeff Sessions invalidated a document that has served as the legal scaffolding for the state-level pushes to legalize recreational use of marijuana. There are, as Mark Joseph Stern writes in Slate, many reasons to believe that some kind of federal crackdown on marijuana could be in the works. But there are also plenty of reasons the legal marijuana industry no longer needs to fear a prohibitionist like Sessions.

Despite the initial surprise, the industry appeared to absorb the news with an appropriate sense of proportion. “This is not a sky-is-falling moment,” Kris Krane, president of 4Front, a company that operates medical cannabis businesses in four states, told me. “It may wind up being nothing.”

In his missive, Sessions rescinded the Cole memo, an August 2013 document named for its author, then–Deputy Attorney General James M. Cole. The Cole memo guided federal prosecutors not to expend resources prosecuting state-legal marijuana businesses unless a case met one of eight law enforcement priorities, such as distributing pot to minors or trafficking product across state lines. Within the industry, and in legal practice, it was widely interpreted to mean working or investing in this federally illegal industry did not put people at risk of federal prosecution.

With this protection in place, legal cannabis became one of the fastest-growing industries in the country. Sales jumped from $1.5 billion in 2013 (U.S.) to an estimated $10 billion (for North America) in 2017, according to Arcview Market Research. The industry now employs more than 150,000 Americans and has become more deeply entrenched in every quantifiable way.

With Thursday’s reversal, Sessions is alerting state-legal cannabis businesses that once again they are fair game for federal prosecutors. But the legal climate has changed so much it probably doesn’t matter. When the memo first came out, Colorado and Washington state had voted to legalize recreational marijuana the previous November, but neither market had opened. No one knew if it would be a disaster. Today, industries operate in several states and have given alarmists almost no fodder for complaint.

And legalization is popular. An October 2017 Gallup poll found an all-time high of 64 percent of Americans support full legalization. The same poll was also the first time Gallup recorded a majority of Republicans, 51 percent, favoring full legalization.

As for medical marijuana, public support now hovers at about 90 percent. Veterans, a traditionally right-leaning demographic, are now among the most vocal advocates for medical-marijuana research. In particular, they want to see it studied as a therapy for PTSD and traumatic brain injury. There is also growing, and increasingly credible, interest in cannabis as an “exit drug” from opiate addiction. (FiveThirtyEight considers legalization is among the least polarizing issues in the country.)

Sessions has sat out this remarkable shift in public opinion. In 2016, he said, “Good people don’t smoke marijuana.” By November 2017, his views had evolved slightly to acknowledge that marijuana is not as destructive as heroin. However, he remains skeptical about the plant’s medical uses and has not shown any outward interest in how much the politics of pot, and the facts on the ground, have changed since the “Just Say No” era.

Instead, during his first year as attorney general, Sessions has repeatedly tried to clear a path to crack down on the federally illegal drug.
This has been more difficult than you might think for the nation’s top law enforcement official.

The Cole memo provided “guidance” for federal prosecutors, but since December 2014, a law has been in effect that blocks the Justice Department from spending resources prosecuting state-legal medical-marijuana businesses. Now known as the Rohrabacher–Blumenauer amendment, for two of legalization’s strongest supporters in Congress, it was renewed annually until November 2017, despite Sessions’ efforts to kill it. The next question is whether it will be renewed again with the spending bill that needs to pass by Jan. 19 to avoid a government shutdown.

On a conference call with reporters Thursday, a bipartisan group of pro-legalization members of Congress suggested Sessions’ move may backfire. Sessions, they said, may have galvanized legalization supporters there to attempt to include recreational as well as medical cannabis businesses in the law. In 2015, such a provision fell slightly short in a 222–206 House vote. If it passed this time, it would cancel out Sessions’ decision to rescind the memo.

If Sessions thought killing the Cole memo would be easy, the past 24 hours have been a rough correction. Colorado Republican Sen. Cory Gardner, who has a robust marijuana industry in his state to worry about, tweeted that ending the Cole memo “directly contradicts what Attorney General Sessions told me prior to his confirmation.” Gardner threatened to hold up Justice Department nominees “until the Attorney General lives up to the commitment he made to me.”

By killing the Cole memo, Sessions may have accidentally underscored that the industry no longer needs the protections the document offered.

Gardner, who’s up for re-election in 2020 in a state Hillary Clinton comfortably won, doesn’t want to be the guy voters remember for taking away their weed. Neither, it seems, does anyone else. Sessions critics on Thursday included Republicans from Alaska, Massachusetts, Nevada, California, Florida, Virginia, and Kentucky. Freedom Partners, a group linked to the Koch Brothers, who support criminal justice reform from the right, said, “When it comes to marijuana laws, we agree with President Trump that it’s ‘up to the states.’ ” (Press secretary Sarah Huckabee Sanders said Thursday that Trump “believes in enforcing federal law.”)

Aside from tepid support from one congressman, Maryland Republican Rep. Andy Harris, it appears that virtually no politician or entity in Washington shares Sessions’ fixation on marijuana. Kevin Sabet, the country’s most prominent anti-legalization activist, and the head of a group called Smart Approaches to Marijuana, told me he favored Sessions’ decision because it might make it harder for weed companies to raise money but said he didn’t expect it to lead to a substantial crackdown, at least in the short term. A few U.S. attorneys even made statements saying the end of the Cole memo would have little to no effect on deciding which cases to prosecute.

There may be good reasons to oppose legalization, but with medical marijuana now legal in 30 states, including big swing states like Ohio, Pennsylvania, Michigan, and Florida, it’s hard to see any political upside to opposing legalization. The exception might be within the states themselves. In part to keep Sessions away, some legal states have made a point of stepping up enforcement of state cannabis laws. (For example, recently in Colorado, 10 low-level employees at the dispensary chain Sweet Leaf have been charged with felonies and misdemeanors associated with “looping,” allowing shoppers to make repeat visits to exceed legal purchasing limits. The charges stemmed from a yearlong police investigation.)

There is a way Sessions could succeed in catalyzing some kind of crackdown. He has given greater discretion over federal marijuana cases to 93 U.S. attorneys, among whom there’s bound to be some who want to see more marijuana prosecutions, especially as more are Trump appointees.

Sessions also supports a controversial practice known as civil asset forfeiture that gives law enforcement broad leeway to seize and keep assets when they believe there’s probable cause of a crime being committed. On the conference call, Rep. Dana Rohrabacher, a California Republican, said asset forfeiture can create “perverse incentives” to prosecute crimes that shouldn’t be prosecuted. And cannabis companies that now operate expensive factories and often have to keep large amounts of cash on hand make tempting targets for law enforcement keen on using this tactic.

For prosecutors, though, it may look like a mixed bag. After the Cole memo came out in 2013, then–U.S. Attorney Melinda Haag continued prosecutions against Harborside Health Center, a prominent dispensary in Oakland, California, and two other Bay Area dispensaries. None of her prosecutions were successful. In May 2016, when the federal government abandoned the case, Harborside co-founder Steve DeAngelo, one of the industry’s most prominent executives, said “the dismissal signals the beginning of the end of federal prohibition.” Krane, of the cannabis company 4Front, suggested prosecutors may now be wary of repeating such a boondoggle.

This Monday, California’s recreational market officially came online, and Harborside opened its doors at 6 a.m. The lawyer who defended Harborside made the first legal purchase.

Are you surprised there's no pumpkin in Starbucks' Pumpkin Spice Latte?

by Jim Romenesko @ Starbucks Gossip

Tue Oct 08 15:10:28 PDT 2013

* Is there a conspiracy to discredit Starbucks' Pumpkin Spice Latte?