Marketplace on RADIO IQ
Marketplace with host Kai Ryssdal produced and distributed by American Public Media focuses on the latest business news both nationally and internationally, the global economy, and wider events linked to the financial markets.
The only national daily business news program originating from the West Coast, Marketplace is noted for its timely, relevant and accessible coverage of business, economics and personal finance.
Thursday, January 29, 2015 11:19am
Women earn more degrees than men at most levels of education, according to the Census Bureau.
Thursday, January 29, 2015 11:01am
After a confident and sweeping State of the Union address focused on "middle-class economics," President Barack Obama found himself pivoting away from part of it Tuesday.
After an uproar over Obama's proposal to dismantle the college savings plan known as the 529, the President walked it back and abandoned the plan
How did one little program suddenly become so important? Here's what you need to know:
What's a 529 anyway?
Named for the relevant section in the tax code, a 529 college savings plan is similar to a 401k or IRA. It's a a state-offered investment plan, often a mutual fund, set aside to cover college expenses for a set beneficiary.
The account grows tax-deferred, and 529 funds used for tuition, fees, books, supplies and in some cases room and board are tax-free. Some states also let the account holder write off contributions to 529s, so there are tax breaks going in both directions. Nearly every state offers them.
Who uses 529s?
The Obamas, for one, but they're part of a small group. A 2012 Government Accountability Office study found less than 3 percent of families have 529s. Even among households expecting education expenses or prioritizing college saving, 529s were rare. As of last summer, there were fewer than 12 million accounts nationwide, according to the College Savings Plans Network.
The families who use the plan are wealthier than those who don't. The GAO study found median income among families with 529s or the similar Coverdell plan had a median annual income of $142,400, and nearly half of them made more than $150,000 per year. That group was likely to see a median tax savings of $3,132, while families making less than $100,000 saved $561.
Why did Obama want to get rid of it?
It's part of his broader tax proposal laid out in the days leading up to the State of the Union and focused on the middle class. Obama's 2016 budget would get rid of the tax breaks from 529s and use the money to expand the American Opportunity Tax Credit.
That program applies only to households making less than $180,000 per year, and it can cut taxes by up to $2,500 per year or give households that don't make enough to owe taxes up to $1,000 in refunds. Obama's plan would up the refund and make the credit available to part-time and fifth-year college students.
So what's the problem?
Prominent lawmakers on both sides of the aisle spoke out against the change in public and private. Speaker of the House John Boehner said the president was scuttling a plan that already helped middle-class families, and a Republican representative reintroduced bipartisan legislation to expand 529s.
House Minority Leader Nancy Pelosi also urged the White House to drop the 529 proposal, which it did Tuesday, calling the furor a "distraction." An administration official told the New York Times other changes to the tax code would be able to fund the plan instead.
Why does it matter?
The proposal's undoing was, in part, that the definition of "middle class" is fluid. Any benefits to consolidating 529s into other tax credits aren't nearly as clear-cut as, say, as raising taxes on the super-rich and giving everyone else a break.
"The soaring cost of a college education makes even a six-figure income seem small," Russell Berman wrote in the Atlantic, adding that the small group benefiting from 529s might be doing well financially, but they're not all 1-percenters.
That's true for a lot of the little breaks in our complicated tax code, and cutting any of them can easily feel like a blow to the middle class — whoever that is.
None of this bodes well for bipartisan tax reform. Writing for the Brookings Institution, David Wessel said it best: "It turns out that a lot of people prefer complexity to simplicity if simplicity means doing away with a tax break they get."
Thursday, January 29, 2015 7:00am
Over the the last week, 43,000 fewer people had to file for unemployment benefits, which is a good sign. More on that. Plus, the first of the big oil companies to report their latest round of results is Shell. The Anglo-Dutch company managed to increase its profits even with the price of gasoline we've all been seeing. CEO Ben Van Beurden says he's cutting spending by $15 billion dollars over the next three years to adjust. But, in a controversial move, Shell will keep expanding off Alaska. Also later today, Amazon will report its sales and profits. The internet giant's stock has taken a beating from investors frustrated with the company's heavy spending and not so heavy profits.
Thursday, January 29, 2015 7:00am
SMAP stands for Soil Moisture Active Passive – a reference to the sensors on board. The satellite will scan the Earth’s soil for moisture down to about 5cm of depth ... once it gets aloft. Thursday's launch was scrubbed because of poor wind conditions; NASA will try again on Friday.
Bradley Doorn, program manager of NASA’s Water Resources Applied Research Program, says the mission has several primary purposes: “One largely is drought, and understanding drought better but also things like flood forecasting and weather forecasting. The information is unprecedented.”
The $916 million, three year mission has attracted the interest of hundreds of government agencies, private sector companies, environmental groups, and universities — 45 so-called “early adopters” have already started working with NASA to prepare to use the satellite’s data.
The City University of New York and the New York City Department of Environmental Protection want the data for management of the city’s drinking water supply. The World Food Program plans on using the data for flood forecasting. Doorn says John Deere, Environment Canada, and Willis Re, a reinsurance company, are also preparing to use the soil moisture data.
Doorn says it isn’t unusual for NASA to partner with other groups, but NASA has been trying to get organizations involved earlier on in the process. “Soil moisture is such a critical measurement that many users readily see as needed, so they immediately are drawn to it. There are a lot of people hungry for data, and hungry for this type of information,” he says.
SMAP scans the Earth’s surface with microwaves, which can slightly penetrate soil, and interprets the reflected waves for signs of moisture. The observatory also scans the Earth’s natural microwave emissions.
And if you're curious about what SMAP will hear while it's out in the atmosphere, NASA's soundcloud account has you covered:
Thursday, January 29, 2015 6:00am
Despite the positive buzz, 2015 will be another year of challenges for the motor city, as it seeks to continue creating jobs, while also slowly starting the process of rebuilding neighborhoods.
But, if you’re looking for proof that the “Detroit brand” still sells, take a look at Shinola. The epitome of hipster chic, the company makes thousand-dollar watches and high end leather goods.
Shinola moved to Detroit in 2013 with the idea of tapping into a kind of collective pining for America’s blue collar manufacturing past. Its big idea was that “Made in Detroit” would sell better than “Made in America,” and it was right.
"Often it is positioned that Shinola has done something wonderful for Detroit,” says Shinola CEO Steve Bock. “The reality of the situation is that Detroit has done a wonderful job of helping Shinola get off the ground; we are very, very happy with our decision to come here."
Shinola employs 350 people, with 260 actually based in Detroit. The company has plans to add 5 to 6 new stores in 2015. Following the resolution of the city’s Chapter 9 bankruptcy, many investors and corporations now see Detroit as a bargain.
Despite all the positive trends, Detroit’s unemployment rate still is still hovering around 14 percent—roughly twice the state average.
"There's no magic jobs fairy and so someone's got to be able to create jobs and to create jobs you need capital,” says Crain’s Detroit Business Editor Amy Haimerl. Unlike previous “Come to Jesus” moments for the city, this time she says Detroit can’t ignore the need for investment in small and medium-sized businesses.
"In the past, it was always about tax breaks and get the big company to come in from somewhere else,” she says. “That's wonderful, but we're also focusing on the other end of jobs creation which are neighborhood businesses, small businesses which may only hire 3 or 4 people at a time."
Job growth is one thing, but for many Detroiters the first step forward is as simple as streetlights — close to half of which haven’t worked in years. This has been a particular problem for restaurants and shops.
“So a lot of businesses had to cut down their hours, because after a certain time there was no business,” says Esteban Perez. Perez is manager of La Terezza Mexican restaurant in Southwest Detroit.
Detroit is now turning on some 500 new LED streetlights per week. And Perez says other, small but big things are happening, too. Trash is getting picked up, police response times are decreasing, and things he says, just seem better.
“You know we're all coming together as a city,” he says. “So right now, Detroit is the place to be, whether you want to open up a business, whether you want to buy a house."
In terms of housing, blight remains a huge challenge for Detroit. As many as 40,000 properties are slated for demolition. The city’s land bank is auctioning the few that remain salvageable, and it just announced a new program to sell vacant homes to city employees and retirees at half price.