Marketplace - American Public Media
Marketplace from American Public Media is the premier business news show on public radio. Hosts Kai Ryssdal, Ben Johnson, Lizzie O'Leary and the Marketplace team deliver news that matters, from your wallet to Wall Street. Online at Marketplace.org.
Updated: 48 min 9 sec ago
Sheelah Kolhatkar from the New Yorker and Kate Davidson from the Wall Street Journal join us to talk about this week’s business and economic news. They touch on the latest numbers out of the Labor Department released this morning and discuss the potential effects of the Republican tax bill on everyday Americans and big business. Kolhatkar and Davidson also talk about the process that the GOP tax bill has gone through and whether the House and the Senate can successfully reconcile their versions of the bill.
Scott Tong's father escaped communist China on the first of two boats. The second boat sank. Thus began his journey to America and better life. He went to college, became an engineer and landed his dream job at IBM. He climbed the "escalator" of globalization and lived what has become the quintessential story of a successful immigrant. Tong himself went on to become a correspondent for Marketplace. But, as he writes in his new book, his father had a brother who wasn't so fortunate. Marketplace host Kai Ryssdal sat down with Tong to talk about his book, "A Village With My Name." Below is an edited transcript of their conversation. Kai Ryssdal: I thought for a while about where to start with this book because there is a whole lot in it. I want you to start with your dad. Tell me about your dad. Scott Tong: Sure. My dad is the great globalization American story. So my dad was 10 years old when he ran. He fled out of China with his father in 1949. So the communists came and he gets out and there were two boats that were taking refugees from China over to Taiwan. And he gets on the boat that didn't sink. The one that did had casualties on the order of the Titanic, you know, more than a thousand people. So every family has one of these miracle stories when you start looking into it, and that's part of it. So he goes to Taiwan, it's part of this American umbrella, and basically takes the ladder, takes the escalator of globalization, comes to the United States. He's an engineer. He goes to graduate school in Minnesota, works for IBM, the only company he ever wanted to work for. We all have heard a lot of those stories, and that's the story that I grew up with, the narrative and the framing. I just didn't have the story of those who didn't make it out. Ryssdal: Which is the next question, because your dad has a brother. Tong: Yeah. Ryssdal: And he is the guy who was left behind. Tong: That's right. Ryssdal: And it's a long convoluted family story. I'm going to ask you to compress it for radio's sake. Tong: Absolutely. But he was the eldest son. My father was the fortunate one to get out. And my uncle was the one left behind. And until I went to China in 2006 for Marketplace and got to know this uncle, I didn't know his story, and it is, for Americans far away, this great under-told story of what happened behind the curtain of China under Mao. His story is one of great suffering, being punished during the Cultural Revolution, and the reason he was punished was because he had overseas relations. This is when it was not OK to be connected to the outside world. Ryssdal: And to be clear, the overseas relations, that's your dad and your grandfather, the ones who left. Tong: That's right. Having relatives overseas in Taiwan, and it was his father who was connected to the previous regime that lost the war. Ryssdal: One of the things you and I have talked about, both when you were in China and since you've come back and when I was over there with you and we were doing our reports there is how intertwined our economic fortunes are, our two countries. It seems in this current moment that there is a will on the part of the leadership of the United States to try to disentangle those futures. Do you think that's possible? Tong: I think it's pretty hard. I think the well-being of people in China is very connected to the United States. When China opened up, a lot of the capital that flowed in was American. The markets that China sold their goods to, a lot of them came to the United States. A lot of the students came here. I mean, you can draw all of these dotted and straight lines I think between China and the United States for the Chinese side of the story and the U.S. side of the story. Free trade has brought, by one measure, a measure of a basket of clothing. The price hasn't gone up since 1986. I mean, we don't really think about how prices have stayed low for a lot of basic kind of commodity things, and part of that is globalization. Part of that is the most efficient countries produce what the world uses. So the story up to now is a pretty interconnected story. It would be hard to disentangle that, although, you know, the United States, the administration is kind of doing what it can to try to do that. Kind of pulling back from these trade deals. You pull back, you're just losing customers, right? You're raising your drawbridge a little bit from the world. Ryssdal: I want to go back to your dad on the way out here, and the book, "A Village With My Name." You found your family's village. Tong: We didn't think it existed. We had old, bad information about whether it still existed along the Grand Canal in eastern China in the middle of nowhere, kind of Jiangsu province. In the end, it took a full day, almost gave up, and we did find it. Everybody there has the same last name. Very surprising. And we got the story of my great-grandfather, who was the first out of the village, kind of the first mover in our family. It was a great story except it was incomplete and parts of it were wrong, which means you always have to go somewhere twice to get the real story. Related Immigrant lending clubs provide capital, at a cost Xi urges stronger Chinese stand again "grim" challenges
A Federal Government shutdown has been averted, for now. So what’s next for Washington after the tax overhaul gets done? Well, according to multiple reports out today, it’s infrastructure. The president is expected to release his long-awaited infrastructure plan in January. But the tax bill has some elements that have infrastructure experts concerned. Click the audio player above to hear the full story.
I turned 35 on Monday. And sure, getting older sucks. But it’s not my hair thinning that gets me, or that thing with my knee. The real existential gut punch of it all is that on Monday, I aged out of the coveted 18-to-34 demographic. For decades, the 18-to-34 age group has been considered especially valuable to advertisers. It’s the biggest cohort, overtaking the baby boomers in 2015, and 18 to 34s are thought to have money to burn on toys and clothes and products, rather than the more staid investments of middle age. “Eighteen to 34 has been regarded for so long as the young demographic,” said Michael Miraflor, global head of futures and innovation at the ad agency Blue 449. “So when you age out of that you’re like, 'OK, now what am I considered?'” Old, Michael! And, even more sadly, irrelevant. See, literally my entire adult life, from the minute I turned 18 until this week, my opinions have not only mattered — they’ve moved markets. For advertisers, Miraflor said, “It’s about the opportunity to kinda convert those 18- to 34-year-olds into brands and products and services they’ll use for the rest of their lives.” Miraflor explains that these big demographic “buckets” were created back in the "Mad Men" days, when age was a proxy for interests. Young people must like fizzy soda and fast cars; old people prefer iced tea and slow cars — sell them stuff accordingly. And if you want to help an old person feel young? Sell him a sports car, of course. This gave me an idea. What if I could use my final days of relevance to sort of pull the culture towards me? Living it up, consuming all the stuff I love, I could signal to advertisers that my taste is what’s hip. Doing so, I could move the needle toward my taste one last time ... before my taste stops mattering. So that’s what I did. For example, I love ambient music; new-agey drones and tones type stuff. Last week I went to see some ambient artists perform. I bought the ticket with my credit card — that’s a data point CapitalOne will sell to advertisers. I also posted all over social media: dozens of tweets and likes and snaps. Together, all those data points make a little data constellation, that, if it’s bright enough, tells advertisers “Hey. Look over here. This stuff must be cool — look at the coveted young person who’s consuming it!” End result, said Lee Maicon, chief strategy officer at ad agency 360i, “You might start to see some of that music in some of the advertising you’re being targeted with.” Maicon, who just so happens to share my same birthday, has brought me the greatest gift I could ask for. “Age is still valuable,” Maicon said. “It’s not the whole story.” In the era of big data, Maicon said age is just one data point. Now, things work almost the opposite of the way they did in the "Mad Men" days. If young people get into iced tea and slow cars — or, say, seltzer, vinyl records, mom jeans — advertisers will learn that from the data, and adjust the demographics accordingly. In addition, Maicon said that “rather than see things by demographic, we’re able to see adjacent passions.” If I really wanted to boost the signal on my music taste, he notes, I might have spent the last week consuming fashion and gadgets and fine dining, too. Then the data would correlate my taste in music with all of that other, coveted consumption. But most importantly, Maicon assuages my biggest fear. That culture-hacking experiment I’ve been performing using my last week in the coveted 18-to-34 demographic to influence advertisers and tastemakers? The new big data paradigm means my age doesn’t matter as much as it used to — I can influence the culture just as much from my new demographic as I did in my old one. “It’ll matter just as much,” Maicon said. Thank god for getting older. Related Education angst is growing among 18 to 34-year-olds Millennials less likely to be brand loyal
Holidays, Brought to You By is our series about all the stuff that’s become part of the culture and of the economy. Where did they come from and who thought of them? In "Christmas: A Biography," author Judith Flanders explores the origin of Christmas and how certain traditions came to be. Here she explains how people have been concerned about excess consumption at Christmas since its inception. We tend to believe that Christmas today is a horrible, terrible commercial corruption of what was a warm, loving family holiday that before that was a purely religious day. In actual fact, Christmas has always been about consumption. For most of Christmas' history, it was about food and drink. Then what happened was in the 19th century with the growth of the middle classes, with lower prices for consumer objects, we began to see the shift into it being a time when people give children presents, you began to buy things for Christmas, and it changed to a different kind of consumption. I think the core of Christmas is the idea that something magical happens, and let's face it, most of life isn't magic. So we like to believe that there was a better time, whether it's our own childhoods when things were simpler. It's like those Norman Rockwell illustrations of the perfect family dinner on Sunday after church. Most people, including, I'm sure, Norman Rockwell himself, did not have childhoods like that. But the most important thing that we have bought about Christmas is the idea that it was better before. The earliest reference I found was 1616, when the playwright Ben Johnson wrote in one of his plays, he has one of the characters saying, "Oh, Christmas today is an awful, horrible thing. It used to be so much better." We have been saying this for half a millennium. Related "A Christmas Carol" was supposed to be Dickens' moneymaker Holiday jobs changing to keep up with online demand
Today, after weeks of often bitter wrangling, the Brits struck a last-minute, breakthrough deal on Brexit with their European Union partners. They agreed to some of the key terms of their departure from the EU. The United Kingdom will likely be told next week that it can now move on to talk about a future trade relationship with the bloc. Why should we care? Well, U.S. businesses have quite a bit of skin in this game. Click the audio player above to hear the full story.
A provision in the tax code that allows employers and their employees to get a tax break on tuition assistance offered by companies is on the chopping block in the House version of the new tax bill. That perk is a useful recruiting tool for employers in a tight job market. Click the audio player above to hear the full story.
In the past few weeks, taxes have been on all of our minds and at the center of the news, as the House and Senate have passed their versions of the Republican tax bill. Tax reform is something that will have an enormous effect on everyone living in the U.S. and on the economy as a whole. It's also something that can cause more than a little confusion. This week, listeners asked some of their most pressing questions on tax reform, and the plans that the House and Senate must now reconcile if Congress is going to pass major tax reform this year. Marketplace Weekend put together a panel of experts to answer those questions: Mark Nash, tax partner at PricewaterhouseCoopers, Michael Simkovic, professor of law and accounting at USC’s Gould School of Law and Jill Schlesinger, certified financial planner, CBS business analyst, and host of "Jill on Money." Here are the questions our panel took on — you can hear the answers in the audio player above. Listener Doug Culver wrote to ask about the income he earns from rental properties — how will it be taxed, and would he benefit more under the new plans if he set himself up as a pass-through business? Rebecca Mettler wanted to know if the health insurance individual mandate would be removed? "Basically, can I stop paying $1,400 a month for health insurance? And a follow on question, would it be wise to fully fund my HSA before Dec. 31, 2017 and perhaps let go of the super expensive health insurance. Would the HSA funding in 2017 be a tax deduction?" A few listeners wanted to know if there are any changes to the capital gains tax rates. Is anything different? Listener Ken Merrell wrote to us about his son – he applied to a PhD program and would get a $35,000 stipend and be taxed on $85,000 of income under the new plan. Ken wants to know how to reconcile that with the idea that this plan is about growth and opportunity. How is education impacted? Several listeners wrote to us with questions about their small businesses. What deductions are small business owners gaining and losing under the proposed plans? Other listeners wanted to know about individual deductions. Some of the changes to individual deductions also apply to people who are self-employed, or who work on freelance contracts. Amy Griffin sent us this question: "A lot of artists/freelancers are freaking out because word is going around that the tax plan ends unreimbursed employee expenses. I assume this is like union dues that your employer doesn't cover. What does it do to Schedule C expenses though?" Marketplace Weekend will be taking more questions and updating this page with answers. If you have something you'd like to ask, get in touch. Bring us your tax stories by emailing us at firstname.lastname@example.org (you can send your voice memo messages here, too). You can also leave a comment on Facebook or Twitter, call the Weekend voicemail 1-800-648-5114 or send your comments and questions using the form below. First Name*
As the House and Senate consider their respective tax bills, both proposals raise questions about 401(k) savings accounts. As we've reported on Marketplace Weekend, one third of Americans have nothing put aside for retirement. Even so, it turns out, millions of dollars are being left unclaimed in abandoned 401(k) accounts. For more on why people are doing this, Lizzie O'Leary spoke with Charles Thorngren, CEO of investment firm Noble Gold. Below is an edited transcript of the conversation, which started with a question about why people are leaving retirement funds behind. Charles Thorngren: It's not that they're just walking away from them. It's not like the housing issue from years ago where they just said I can't afford it I'm walking away. It's really a matter of them changing jobs, moving positions in life and not paying attention to it. The 401(k) plan was so easy to leave behind because you didn't actively put money into it. It was done for you, kind of out of sight out of mind. Lizzie O'Leary: So this might be an issue of somebody whose company is putting money in and they don't even realize it? Thorngren: It starts that way. A lot of companies nowadays match, so that money grows pretty well for you. But once you leave that company they no longer have to keep you up to date with what's going on. They don't contribute anymore and that money sits there. O'Leary: So how much money are we talking about? Thorngren: It's hard to know exactly. The latest estimates are about $250 million sitting there and about 33,000 401(k)s accounts abandoned every year. O'Leary: If there's an account in the back of your mind, what can you do to try and figure that out? Thorngren: A couple of things you can do. The easiest way would be to actually call the old employer if you know how to get in touch with them, and they can get you through the human resources and figure out if you have a plan, where it's at and how to get back in touch with it. You can also call the Department of Labor or go to their website and you can find information there on the bureaus that will help you find those old funds. O'Leary: Often when we talk about personal finance, people have to be on the lookout for scams. How do you know if you're following the right steps and not being taken for a ride by somebody? Thorngren: Great question. If you do some of the homework yourself and you make that initial contact, you're going to be put in touch with one of the larger firms that handled 401(k)s: Fidelity, Prudential, Merrill Lynch. All the names we know and from there you can start the process. Now where you go from there that's where you have to start to look around and say "okay, what am I doing with this money? Am I leaving it in place? Am I just changing the asset allocation? Or am I going to move it to something that gives me more control over it like a self-directed IRA?" O'Leary: Ballpark number, what are we talking about? Is there some average amount of money that's found in these lost 401(k)s? Thorngren: They range typically between $10,000 to $15,000. There are some that are larger some that are a little smaller but that's the median. For more on abandoned 401(k) accounts, listen to the interview using the audio player above.
Everyone has a dream job growing up: doctor, vet, ice cream taste tester. But how do you actually get the gig? Marketplace Weekend is looking into how, with the occasional series, How to be a... NASA astronaut Col. Doug Wheelock is starting off the series with his guide to becoming an astronaut. Wheelock has been an astronaut for 19 years. He's spent 178 days in space as a flight engineer and then a commander, and has completed six space walks totaling over 43 hours. Step 1: Get into STEM. Astronauts are almost all chosen from STEM fields: science, technology, engineering, mathematics. Wheelock recommends pursuing a specialization within STEM in order to stand out — focus and find something you enjoy. Your passion and talent will be more likely to come through. Step 2: Rack up the post-secondary degrees. Most astronauts are chosen between the ages of 30 and 38, which gives them plenty of time to earn master's and even doctorate degrees in their chosen fields. Wheelock said work experience is just as important as the degrees, though — it's crucial that future astronauts demonstrate operational abilities. Step 3: Stay fit. Space is stressful on the body, and astronauts need to be in shape and physically fit in order to meet the demands of the job, which can include difficult manual tasks on top of the stomach-turning space travel. Hand-eye coordination are also important to the physical part of being in space. Astronauts must also be between 5'2" and 6'4" in order to fit into a spacesuit, and need to have vision that is correctable to 20/20 (it's totally OK to wear glasses in space though). Step 4: Study some more. If you're one of the very few chosen for the astronaut corps, you have two years of intense training ahead of you. That includes physical training, learning about spacecrafts and technology, and even learning a new language — current NASA astronauts are learning Russian in preparation for flights aboard Russian Soyuz vehicles. It's hard to be an astronaut. Very few are chosen for this intense job; in June, NASA selected 12 astronauts from more than 18,300 applicants. But Wheelock said that passion and curiosity about science and discovery make hopefuls stand out.
From our partners at the BBC: More clarity on the Brexit transition is needed to stop companies proceeding with contingency plans despite the progress announced on Friday, the Confederation of British Industry has warned. Paul Drechsler, president of the business lobby group, said companies had begun triggering plans months ago. However, more detail could help suspend further action by firms, he said. Sterling was trading higher at just under $1.35 and €1.15 after the announcement in Brussels. European Commission President Jean-Claude Juncker said the "breakthrough" meant Brexit talks could now move on to the next phase. "Milestone" The CBI's Mr. Drechsler also called for "unconditionality" about the status of EU citizens living in the U.K. "It's an important political milestone, but clarity on transition is the most important thing from a business point of view at this stage," he told the BBC's "Today" program. The Institute of Directors echoed the CBI's call for certainty on the rights of EU citizens. Stephen Martin, IoD director-general, said companies urgently needed certainty about the future of EU staff in the U.K. "We have grounds to hope now that our members will be able to send their employees off for the Christmas break feeling more comfortable about their status here," he said. "We look forward to further clarity about what the U.K.'s objectives are for that new relationship, as well as a firm commitment on transition in the very near future." Answers needed Adam Marshall, the director-general of the British Chambers of Commerce, said "clarity and security" for European employees had been the biggest priority for U.K. companies since the referendum vote. "We are delighted that they, as well as U.K. citizens living and working in the EU, now have more clarity and can plan their future with greater confidence," he said. As attention turns to trade negotiations, the BCC said companies wanted "absolute clarity" on the long-term deal being sought. "Businesses want answers on what leaving the EU will mean for regulation, customs, hiring, standards, tariffs and taxes." The Engineering Employers' Federation, which represents manufacturers, said the agreement was one step forward in a complex and long process. EEF chief executive Stephen Phipson said: "We need to pin down the transition arrangements, which will be in place after March 2019, to ensure it's business as usual for companies for as long as it takes until a final deal is reached. "Until we get to that point, many businesses will need to prepare for any and every eventuality." The ADS Group, the trade organisation that represents the aerospace, defense, security and space sectors, called Friday's announcement "an important step." "Continued uncertainty over arrangements for a transition period benefits noone and it is vital that both parties make formal commitments as soon as possible to a transition lasting at least two years, allowing businesses to continue to invest in our economy with confidence," said ADS chief executive Paul Everitt. Related Northern Ireland-Irish Republic border is a hurdle for Brexit Trump and Brexit votes similar, not identical After Brexit vote, luring London businesses to Berlin
The U.S. economy added 228,000 jobs in November, the Labor Department said on Friday. The unemployment rate remained unchanged at 4.1 percent. Friday’s report met expectations. Economists expected job growth of 200,000 and the unemployment rate to remain unchanged. On average, about 174,000 jobs have been added each month this year. That’s down from average monthly gains of 187,000 jobs in 2016. Among the sectors that have added jobs over the last twelve months are manufacturing and construction. Since November of last year, manufacturing employment increased by 189,000 jobs — with about 31,000 jobs added within the last month.Construction added 23,000 jobs in November, bringing a 12 month total to 132,000 jobs. The jobs report was not all good news. The number of long-term unemployed — those who have been out of work for more than 27 weeks — remained unchanged at 1.6 million. The labor participation rate also remained unchanged at 62.7 percent, where it’s been stuck for a couple of years. “I do think that as the economy gets stronger, as more and more jobs are added, people will see opportunities for themselves and they will return,” said Elise Gould, senior economist at the Economic Policy Institute. “And you might actually see the unemployment rate go up a little bit right as the workers return thinking that they're going to find something.” With steady job creation and a declining unemployment rate, the Fed is expected to raise interest rates again next week when it meets from December 12 to December 13. Fed Chair Janet Yellen has previously said that while the U.S. labor market is nearing full employment, she remains concerned with low wage growth. The lack of significant wage growth has often been blamed for the current low inflation rate which has puzzled economists. In October, Yellen said that inflation was “the biggest surprise in the U.S. economy.” Over the past few years, inflation has remained well below the Fed’s 2 percent goal. However, with a tightening labor market, the Fed hopes wages — and inflation — will pick up come 2018. Average hourly earnings went up by just 2.5 percent over the past year. With fewer people looking for work, employers will have to offer higher wages to attract new employees. According to a new survey from the National Federation of Independent Businesses, 52 percent of small business owners were hiring or tried to hire new staff in November, but 44 percent said that they couldn’t find qualified workers. About a quarter, 27 percent, of small business owners said they raised wages and 17 percent said they planned to increase wages in the coming months. Related October: U.S. hiring jumps after hurricanes as employers add 261,000 jobs September: Roughly 1.5 million people were unable to work last month because of the weather
Developing long-lasting, powerful batteries is no easy task. And it takes a lot of money to experiment with energy technology. President Donald Trump's proposed 2018 budget would make major cuts to battery research. Those programs generally enjoy bipartisan support, so the cuts might not go through. But the potential lack of funding could open the door for other countries to create better batteries before the U.S. does. Kristin Persson is developing new battery technology as a staff scientist at Lawrence Berkeley National Laboratory, which is funded by the Department of Energy. She talked with Marketplace Tech host Molly Wood about the key players in the battery industry. Below is an edited portion of their conversation. Molly Wood: Who else is in the battery race? Kristin Persson: It's been led by Asia since Sony commercialized the first lithium-ion battery in the 1990s. I would say that a lot of the material development has been coming from the U.S. And even though the first prototype lithium-ion battery was made here in the U.S., the industry just didn't pick it up fast enough. So I think that's been realized. And there are quite a few startups in the U.S. trying to come up with beyond lithium ion. I just hope they'll get the support they need. Wood: What companies are leading the way? We keep hearing that Tesla is a big leader in battery technology. What's the breakthrough that Tesla has managed to accomplish? Persson: So Tesla is, I think, more about doing the same technology better, faster. When they implemented the first batteries in their cars, they actually bought consumer batteries, commodity batteries from the portable electronics market. And the Gigafactory is about making those batteries faster and better. There are other companies in the world that are trying to come up with new chemistry, new materials. But it's a long road. And you're looking at some of the larger companies like Samsung. But it's going to take some time because even if you have something working in the lab today, the car industry wants something to test for four years before they even think about putting it in a car. Wood: And when you say it's far out, how far are you talking? Persson: Well, it's hard to predict discovery. And we are looking at discovery of new materials. Currently, there really isn't anything that is completely working. There are a good number of prototypes. So if we compare this to the timeline of lithium ion — Stan Whittingham prototyped the first lithium-ion batteries in the 1970s here in the U.S. That was a low-energy density battery but it did work, but it was unsafe. Twenty years later, Sony commercialized the real working lithium-ion battery. So let's say that I have a prototype of a beyond lithium-ion battery working today in the lab, which we do have a few. You're looking at 20 years of optimizations before we're going to see it in the marketplace. Related Lithium-ion batteries are about as good as they can get Big cuts ahead for energy innovation programs
Since President Donald Trump took office, the unemployment rate has slowly edged down to 4.1 percent in October. In the nine months beginning in February, the economy has added 163,000 jobs per month on average. In the three years before Trump took office, job growth was higher (250,000 per month in 2014, 226,000 per month in 2015 and 187,000 per month in 2016). “That’s what we’d expect at this stage of the recovery,” said Jed Kolko, chief economist at Indeed, “with now seven years of job growth” since the recession ended. (Indeed is an underwriter for Marketplace). The Labor Department’s monthly employment reports have been volatile this fall, with hurricanes causing job creation to plummet to 18,000 in September and then rebound to 261,000 in October. But with economic growth steady and unemployment low, it becomes harder for employers to fill jobs and draw workers in from the sidelines to join the labor force. Nonetheless, said Kolko, “The job growth that we’ve seen this year is still impressive, and it’s much faster than what we need to keep up with the relatively low rate of population growth.” Economist Andrew Chamberlain at job site Glassdoor said business confidence has risen since Trump’s election, with expectations of tax cuts and deregulation. “However, in terms of that translating into real economic activity — job gains, big wage growth — it’s very hard to see it in the numbers so far,” Chamberlain said. Average hourly wages were rising at an annual rate of 2.8 percent in February. In October, the annual rate of growth had fallen to 2.4 percent.
Assuming the GOP tax overhaul passes, it's going to take effect in about three weeks. That's not much time to digest a once-in-a-generation change to the tax code, even if you're an expert in this sort of thing. The bill was written at break-neck speed as well, which means that if you've got an enterprising accountant, there may be room to game the system. Marketplace host Kai Ryssdal spoke with Martin Sullivan, the chief economist at Tax Analysts, a nonprofit that — you guessed it — analyzes the tax code, about what the unintended consequences of this speedy tax overhaul could be. The following is an edited transcript of their conversation. Kai Ryssdal: This was a bill that was put together with some degree of haste, Mr. Sullivan, and I guess the question is does that increase the opportunity for unintended consequences — not loopholes — but unintended consequences? Martin Sullivan: Well, I think there has been tremendous haste in this bill. Back in 1986, it took 13 months to do the tax reform bill. We're trying to do it in 13 weeks. And it has created a tremendous number of unintended consequences, some of which are just being unearthed, some of which I'm sure we're going to find in the future. Ryssdal: Do you have a favorite? I mean, there's lots of unintended consequences, lots of things in this bill. What's your favorite? Pick one. Sullivan: Well, I guess if I have to pick one, the one that I think is most interesting is how they're going to divide in a small business the wages which will be subject to a high tax rate from the profits which will be subject to a low tax rate. So in a small business, if I'm the owner, how do I divide what I should be paid as a worker from what I should be paid as a capitalist? And there's no bright line between those. Ryssdal: This is that thing known as pass-through, right? Sullivan: That's correct. Ryssdal: OK. So what is to stop me or anybody else in this economy who is just going to work every day from making themselves into a pass-through corporation — and yes Congress is putting guardrails in there — but come on, we know smart tax lawyers can figure this out for us. And I get the lower rate, right? Sullivan: The bill is still in flux. But it looks like if you're under $500,000 of income, you will be able to incorporate yourself and then make a contract with your employer. The income that you receive instead of wages would be considered a tax-preferred income, and you pay a lower rate. Ryssdal: As we know, this bill is going to pass before Christmas. It's going to pass the House, it's going to pass the Senate, and then the president is going to sign it, and then 1 January 2018 these things go into effect, right? Sullivan: Yes, that's correct. Ryssdal: We're inside a matter of weeks before this takes effect? Sullivan: Yeah. Well, for the large business community, there's going to be a tremendous amount of reshuffling of their financial statements to comply with the new rules. It's going to be a tremendous burden on the tax departments of the Fortune 500 companies because they have to literally rethink everything they do with taxes. And we still don't even know what's final in the bill. Maybe it's a Christmas present for most of America, but it's certainly not a Christmas present for America's accountants. Ryssdal: One of the things that happened with the last really big piece of controversial legislation in this country, the Affordable Care Act, was that a lot was left to regulators to implement the rules for and then figure out. Does the same thing happen in tax land? I mean, we're going to pass this tax bill and then somebody is going to have to figure out the rules, right? Sullivan: Well, always after a major tax bill there are technical corrections that are done by Congress and regulations that are done by the Treasury Department. But for this bill, there is almost certainly going to be a long process of writing regulations and writing another law to fix all the errors in the current law. Related Key differences in the House and Senate tax bills, and who is likely to win What's next for the tax bill? Why the pass through tax is important for business
General Electric Co. announced today it’s cutting 12,000 jobs in its core power business worldwide, as demand for coal and other fossil fuels softens. It’s the latest move by new CEO John Flannery to cut costs and turn things around at the struggling conglomerate, whose stock plunged 44 percent this year. GE Power is the company’s largest division, by both revenue and employee headcount. Flannery says cutting nearly 1 in 5 of those workers globally will save the company a billion dollars next year. Click the audio player above to hear the full story.
Wildfires continue to burn across Southern California, spurred on by high seasonal winds. Those fires and winds have spurred regional authorities to utilize technology as a warning system, sending alerts to millions of phones. The current limitations of the federally regulated Wireless Emergency Alerts system can make such warnings a little vague in messaging. Last night, at around 8:25 p.m. Pacific Standard Time, smartphones across Los Angeles blared with the klaxon sound that typically accompany an Amber Alert. The accompanying message read, “Strong winds over night (sic) creating extreme fire danger. Stay alert. Listen to authorities.” A screenshot of an emergency weather alert. Jed Kim/Marketplace Many of the message’s recipients were not in locations threatened by fire — one of the challenges associated with the alerts, according to emergency notification experts. “It is difficult to target, precisely, who’s going to get those alerts, because it is all based on where people are and which cell towers they’re connected to,” said Imad Mouline, chief technology officer for Everbridge, which makes mass-notification software. Mouline said the alerts system is beneficial in that it allows rapid dissemination of information, but limitations mean authorities have to be strategic in when and how they use it. “Today, you can only send out 90 characters,” Mouline said. “You can’t include links that can be clicked on. You can’t include images or any other information that might be richer.” He said proposals have been made to increase character limits but that in the meantime, agencies should be use multiple methods to share vital information with the public. The alerts could lose their impact if they are used too often, according to PJ Lamberson, an assistant professor at UCLA’s Department of Communications. Lamberson said authorities also have to weigh the risks of spreading false information or reinforcing rumors. “When we try to correct misinformation by restating that information and then saying, ‘This fact is not true,” such as, ‘There’s not a fire near you,’ or ‘There’s not an active shooter near you,’ people forget the word ‘not,’ and it actually makes us believe those facts more,” Lamberson said. The Wireless Emergency Alerts system has its roots in Reverse 911 dialing, a system that allowed emergency managers to call homes in specific areas and play recorded warnings, said Thomas Henkey, director of emergency management for Titan Security Group. Recent technological advances have made that option less reliable, however. “Fewer and fewer people have landlines, so you can’t just draw a nice geographical square, per se, and reach every single person in that area,” Henkey said. “So as the technology evolves, we’re looking at pushing that message digitally via smartphones, tablets, the internet — any way that we can to get that messaging out to those that may be in danger.” Henkey said the system is improving, but that even now, it’s a vital tool for emergency managers who would otherwise have to rely on door-to-door visits to spread evacuation orders. “The last thing you want is a sheriff’s deputy or a firefighter pulled off the front lines of providing public safety and going out and performing a function that hopefully technology could step up and do as efficiently or more efficiently,” he said.
German Chancellor Angela Merkel looks a little more secure in her job today. The country’s left-leaning Social Democratic Party, or SPD, has agreed to talk with Merkel’s conservative Christian Democratic Union about forming a coalition government or, at least, supporting Merkel’s party if it were to continue to govern as a minority party. The SPD’s move surprised many. Ever since elections back in September, the SPD had ruled out such a possibility. Today’s decision by the SPD will please many Germans, who warm to Merkel’s measured, pragmatic style. Among European Union politicians, Merkel’s critics say her dithering prolonged the bloc’s recent debt crisis and that her “open door” refugee policy imperiled the EU’s integrity. Supporters were delighted to see her political prospects improve. They say Merkel is one of the few national leaders able to help coax the fractious members of the European Union into a semblance of unity. Merkel isn’t out of the woods yet. There’s still much to be hammered out between the SPD and CDU. The months of doubt over whether the chancellor could secure a political deal and stay in office have left some feeling that Merkel’s domestic political woes have hurt the EU as a whole. “It’s not good for the EU,” declared Christian Sauer, a Berlin-based internet entrepreneur. “The union needs more political and economic integration between the member states, and it definitely doesn’t help when the biggest European country is at a standstill.” Sauer is so worried about the growing disenchantment with the EU that he has helped launch a new website to promote the bloc as a haven of peace and prosperity. Jurgen Steitz, a co-founder of the site, agreed that Merkel’s domestic political difficulties pose a problem for the EU. “Everybody believed her to be very clearly the leader of Europe, and now she has a problem to stay the leader of Europe, so of course there’s a distraction,” Steitz told Marketplace. Merkel’s political vulnerability coincides with a call from the bloc’s second-most powerful politician for a radical overhaul of the EU. The dynamic young French President Emmanuel Macron, who was elected last May, has proposed much closer cooperation between the bloc’s member states. In order to protect the euro and stave off further crises, he’s suggested creating a eurozone finance ministry and a budget to serve the needs of all the 19 countries that use the single currency. But that’s a highly contentious proposal. It’s widely seen as a call to pump more German cash into troubled countries like Greece, and the idea is very unpopular in Germany. John Springford of the Centre for European Reform said, given the political cloud still hanging over Merkel, she’s less likely to respond positively to Macron’s plan. “If she doesn’t have a stable coalition, it would be very difficult for her to give Macron very much at all,” he said. Macron can hardly press on with his proposed reforms without Merkel’s backing. “Key issues such as reforming the eurozone to give its own budget or eurozone minister are basically impossible without German support,” observed Leopold Traugott, an analyst with the Open Europe think tank in London. “And Macron will not receive an answer from Berlin in the near term on his reform ideas.” Traugott added, however: “Even if Germany had a stable government right now, it’s unlikely Macron would get everything he wants.” Merkel’s political troubles could have another intriguing and indirect effect. This has to do with Brexit. Some German politicians believe Britain’s expected departure from the EU will be a disaster. German member of the European Parliament and former industrialist Hans-Olaf Henkel has launched a project called “Exit Brexit.” “It has become obvious that this is a lose-lose situation for Britain and Germany and the whole of Europe. The loss of such an important and sensible ally economically would be very damaging, and I think it is irresponsible not to try to stop it,” Henkel told Marketplace. Henkel’s plan is for the European Union to bend over backward to persuade the Brits to stay in the bloc, offering them more control over their own affairs. But if Merkel does now enter a coalition with the SPD, that’s unlikely. The party is led by Martin Schulz, a committed EU supporter, who’s likely to insist on taking a very hard line with the Brits. “Mr. Schulz is an absolute advocate of the United States of Europe. And I think if he plays a part in the next coalition, the German government will allow the European Commission to continue treating Britain with arrogance and make Brexit a certainty,” he said. Merkel’s political challenges could lead to various negative outcomes for the EU: from paralysis and stagnation to the turmoil of a no-deal Brexit. Related Germany won't have a government anytime soon Will Merkel go along with Macron's EU reform plan?
Vanity Fair has not always been the iconic, pop culture and current affairs magazine we know today. Thirty-five years ago, Vanity Fair was a floundering reboot of a magazine from the 1920s and '30s, trying to find its voice, trying to get advertisers and trying to be profitable. Condé Nast, Vanity Fair’s parent company, found all three in Tina Brown. She was the editor-in-chief of Tatler, a British magazine, before she was hired to lead Vanity Fair in 1983. She wrote about her time at Vanity Fair in a diary, and she has published those entries. Marketplace host Kai Ryssdal talked with Tina Brown about her book, “The Vanity Fair Diaries: 1983-1992.” The following is an edited transcript of their conversation. Kai Ryssdal: There is a lot in this book to hash over, which we will do in due course. But I want to talk about an idea that ran through this book, at least as I read it. And it was the idea of America. You like this country and you liked it long before you came. Tina Brown: I did. I always had this big daydream when I was living in London working as a young editor at Tatler, I took over at 25, but to me America was always the big time. You know, I always thought this is where the action is. And I wanted to be here, badly, because, you know, I'm a girl of the arena. I want to be out there with the action. Ryssdal: You brought up your age, so I don't feel bad jumping off that question. You were, like, 30 years old when you took over this magazine. I mean, you were a child! Brown: You know, now it just seems very young. At the time, I felt more than ready having spent that time in London editing Tatler. But when I took over Vanity Fair, it was so enthralling, it's such an extraordinary time because not only was I just turned 30, but, you know, I really didn't know many people in America. And, you know, it was the time of the Reagan '80s, when it was all "Miami Vice" and Madonna, and, you know, "Dynasty" — and at the same time, that crazy black-tie world of the Reagan White House, that, you know,, at a certain echelon of society, which was Vanity Fair's meat, was throbbing away at the same time. Ryssdal: Well, you know, it's funny, you fess up early in the book that this was — well, here's what you say: "These were years spent amid the moneyed elite of Manhattan and L.A. and the Hamptons in the overheated bubble of the world’s glitziest, most glamour-focused magazine publishing company, Condé Nast, during the Reagan era." You were having a good time. Brown: Well, you know, I was always an observer at the feast — Ryssdal: Oh, no, no, no. Come on, you were at the feast. There are more dinner parties and cocktail parties and drinks and you name it in this book than I can count. Brown: Oh, I was totally at the feast. I was totally at the feast. But I always kept my beady eye going. Very often when I went out, amazing things happened. Like one night, I went to a fundraiser to raise money for suicide survivors. And William Styron, the writer, got up and started talking about his depression. And I went over, and I asked him to write a piece for Vanity Fair. And he did, he agreed. And he wrote this amazing piece that we called "Darkness Visible" about his chronic depression, which caused the most enormous reaction and it's hugely helpful to people who've suffered. And he went on to write a best-selling book about it, so very often going out was the way I got material. Ryssdal: It takes until about 300-ish pages into this thing until you talk about being a woman in New York publishing in the 1980s. Why’d you wait so long? Brown: Well, actually, that's not so. I mean, the theme throughout really is of a young woman, sort of, learning how to be a boss. Ryssdal: Oh, that’s true. Brown: A lot of what that book is about is learning how to run things, learning how to be a boss, learning how to persuade people to do things. And I think another thing really is getting the management to kind of take me seriously from my strategies because I did many things for Vanity Fair, like turning it around, making it a success, and, for instance, launching a British edition. All of these things were really business strategy, which never was quite understood as that. The management tended to say, oh, kind of, the equivalent of "Don't worry your pretty head about the business side and just focus on the editorial side," but actually, a good editor has to be a part of all of that. And I did do all of that at Vanity Fair and sometimes felt that, you know, one had to fight to get heard. Ryssdal: A word here, actually, about women and something you said earlier. You know, this idea of being a woman in the working world in New York City in the 1980s. And now what you're doing with your conferences and then, of course, the moment we find ourselves now in this country. You must have seen that coming? Brown: Well I did. And my feeling is it's not rocket science to make this whole thing go away with sexual harassment. The answer is more women in power. You know, I was a boss lady from the age of 25 and running things. Therefore, I wasn't subject to classic sexual harassment, which is somebody wanting to extract from you sexual favors and you feel your career is in peril if you don't somehow oblige. That doesn't happen to you when you are the one in power making the decisions. More women in power equals less sexual harassment. And, you know, the Weinstein Co. had 10 men on the board. OK? No women, no women on that board. So it's all about having more women in power, whether it's the Supreme Court or whether it's the Senate or whether it's media. You need more women in power. Related Rep. Jackie Speier: When it comes to sexual harassment, "we need to clean up our collective act" Examining women and confidence in the workplace "SNL's" Claire from HR nails workplace harassment, but she won't be part of your training
Facebook has been ranked the best place to work for the third year in a row, according to Glassdoor reviews
The career website Glassdoor has released its annual list of the best places to work in the U.S. Over the last 10 years, the survey has ranked companies based on employee feedback anonymously submitted on the Glassdoor website. The top place goes to a certain social media giant that's received criticism this year for how it's handled the proliferation of "fake news." Glassdoor's CEO, Robert Hohman, joined us to talk about Facebook's public perception versus the way its employees perceive it, and the issue of sexual harassment in the workplace. Below is an edited transcript of the conversation. Sabri Ben-Achour: What makes a company a good place to work at? Robert Hohman: What we hear this year is mission and purpose. People want to work at a company where they know that the work that they're doing 40, 60, 80 hours a week is aligned to something bigger than themselves. Ben-Achour: So cue the drum roll: what is the best place to work? Hohman: So the 2018 best place to work, as chosen by their employees, is Facebook. Now what's really interesting about that is it is the third time that Facebook has been in the No. 1 spot, which makes them the only tech company to have ever done that. Ben-Achour: It's kind of interesting because Facebook comes under a lot of criticism. A lot of companies that are on this list have drawn public criticism for various reasons, but the data seem to suggest there is a difference between a company's external versus internal reputation. Hohman: Yeah, that's right. If you look at the reviews of Facebook from their employees, what they'll talk about is they love knowing that their work is impacting literally 2 billion people around the world. I think we're working through the rough spots of social media, obviously. I was just joking with a colleague of mine — I think the printing press probably had a similar tectonic impact on society as we figured out how to use it. But the employees absolutely love knowing that they're changing the world that way. Ben-Achour: Given how much sexual harassment is in the news these days, I wonder if that comes through in your company, in your employee reviews, and whether you have given some thought to looking at HR policies when you sort of figure out where the best places to work are? Hohman: While Glassdoor is not a whistleblower platform, we do look at everything through the lens of, "Would this information be helpful to a job seeker making a decision on where to go to work?" And to that end, we actually do allow job seekers to discuss if there is sexual harassment in the workplace. We have not seen a particular increase in the number of of discussions of that over the last decade, which is consistent with the idea that this has probably always been going on to some degree, it's just becoming more visible now. Secondly, and this is the biggest one, it's really hard to be racist, homophobic, you know, harass people in a world that has a really bright light shone on it. And we view that that's our contribution. Part of our responsibility is helping to bring that transparency to the workplace.