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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.
Friday, March 7, 2014 6:24pm
It's not every day that people get fired up over retirement planning, but that's what happened at AOL last month when employees lashed out over the company's move to make year-end, lump-sum contributions to their 401(k) plans instead of matches every pay period.
In the aftermath one state regulator wants to know how many other companies have made that switch. Massachusetts Secretary of State Bill Galvin says most people are less than mindful about saving for retirement. "Especially younger employees. When they get their 401(k) statement they toss it in the heap with everything else. I know I was guilty of that for many years."
That's a big mistake, Galvin adds, because pension plans are a thing of the past. He says American workers are more dependent than ever on their 401(k)s for retirement savings, and they stand to lose money if their company contributes only once a year. "They’re going to suffer the loss of whatever benefit of compounding – that is having that money in their account earning interest for that whole year –would be." Add to that if you leave your job mid-year you can kiss the entire contribution goodbye.
Galvin says people deserve to know in advance when their employers stop making 401(k) matches with every paycheck, and why, so he’s asked two-dozen of the country’s major 401(k) providers to tell him by March 10th how many companies have switched to once a year. The largest of those providers, Fidelity Investments, tells Marketplace: it’s a small number – and mostly large employers.
"You have increased cost of benefits; that has to be covered," says economist Robert Merton, a Nobel Laureate in Economics and a Professor of Finance at MIT. He points out that some of the companies in question could be trying to avoid other, more painful cuts such as health care benefits, but he says they should be transparent about it. "You have to not look at the one act, you have to look at why they did it, or at least why they said they did it. Almost everything is a tradeoff, so being informed about it is helpful."
Massachusetts Secretary of State Galvin says Congress might have to get involved if more companies move to once-a-year matching.
At the Employee Benefits Research Institute, president Dallas Salisbury says the rising cost of health care could drive that trend, and workers should expect changes. "Overall costs in the economy and their overall pay package gets adjusted all the time," he says. "If they think they’re not being treated fairly then go look for a new job."
Salisbury says, bottom line, whether people choose to save enough money on their own is what will determine when and how they can retire.
Friday, March 7, 2014 4:56pm
President Obama and his administration may be keeping their options open publicly, but analysts say that privately they are discussing all options of how to respond to Russian President Vladimir Putin's military presence in Crimea.
"While the United States may be feeling as if it does not want to get into what President Obama called 'a Cold War chessboard', that’s still the way Vladimir Putin thinks about the world and operates in it," says David Sanger, national security correspondent for the New York Times. "Our main weapon is the president's favorite non-combatant unit, which is the Treasury department."
Russia has a greater trade relationship with other members of the global economy than they did during the Cold War. But, says Sanger, that’s a double-edged sword – Russia can also inflict damage on the economies of those they trade with. Namely: Europe.
"The biggest thing [President Obama] has going for him is that the investors the Russians desperately need in their oil sector and other energy sectors, they will all be reluctant to come in," Sanger says.
The Russian and Crimean parliaments keep talking about nationalizing resources as a possible response to sanctions from the West.
Still, Sanger doesn't want to overstate the seriousness of escalating tensions with Russia or even another Cold War: "It may well fall off the high priority list fairly quickly."
"The bigger cost could be that the hope that Russia would help the United States with other conflicts -- Syria, Iran, North Korea -- or President Obama’s vision of driving the U.S. and Russia together...I think those are all pretty well gone at this point," he adds.
Friday, March 7, 2014 4:36pm
Russian president Vladimir Putin's spokesperson said Friday that despite "extremely deep disagreements" with the U.S., he believes that a new Cold War "has not started and I would like to believe it will not start."
Dmitry Peskov, speaking at the opening of the Paralympic Games in Russia, added: "Extremely deep disagreements of a conceptual nature between Russia and the European Union and the United States have already been registered."
"It sure feels like a Cold War at the moment if you listen to the rhetoric on both sides," said Angela Stent, director of Georgetown University's Center for Eurasian, Russian and East European Studies. "But of course this isn't a Cold War. This isn't a fight to the death between socialism and capitalism. We don't have our nuclear weapons targeted at Russia."
And yet, Russia's military has taken control of the Crimean peninsula, and Moscow has threatened to send the military into other parts of Ukraine.
"The interdependence makes it in some ways less likely that you're going to have a Cold War-style indefinite stalemate," added Romesh Ratnesar, deputy editor of Bloomberg Businessweek. "On the other hand, it makes for more vulnerabilities on both sides."
But "interdependence" conjures up visions of the old "mutually-assured destruction" fears of the actual Cold War.
"Because Russia is now part of the global economy, all of these territorial and strategic issues play out very differently than they did at the time when the Soviet Union was isolated from the global economy," said Georgetown's Stent. "Funnily enough, we're now seeing a new theory of deterrence. Economic deterence. Mutually-assured economic destruction."
Friday, March 7, 2014 3:58pm
We're talking about Ukraine, but we're calling our special: "How I Learned to Stop Worrying and Love the Global Economy."
It's not really a Cold War, we know that. Nobody's aiming missiles at anybody, the Doomsday Clock isn't ticking closer to midnight, and that picture I dug out of my garage the other day -- it's just a pretty cool memento.
Which is good. That's the way it ought to be. But the bigger point -- that the global economy has changed so much since the Berlin Wall came down; that the phone in my pocket, was invented here, but built in China, using parts from dozens of different countries -- that's the whole ballgame now, and it's the economic foundation for all the geopolitcs we've been watching for the past week.
So next time somebody tells you the economy is boring, send 'em our way.
Friday, March 7, 2014 3:16pm
From the Marketplace Datebook, here’s an extended look at what's coming up next week:
- Why can't Daylight Saving Time begin on a Friday at 4 p.m.? That’s when I'm ready to spring forward.
- Forty-nine years ago Neil Simon’s "The Odd Couple" bowed on Broadway. Several versions have followed for film and TV and stage. (Because you can't get enough of a bad roommate.)
- On Tuesday, two swell guys celebrate birthdays. Barbie's boyfriend Ken turns 53. And "Jackass" star Johnny Knoxville turns 43. (Meaning they're both Pisces.)
- Midweek we get a look at the nation's balance sheet. The Treasury Department issues its monthly statement for February.
- On Thursday, the Commerce Department reports on retail sales for February.
- On Friday, the Labor Department releases its Producer Price Index.
- And with all the change in our lives it's nice to know that there is a constant. A mathematical constant, that is. 3-14 or March 14 is Pi Day.
You can live the Datebook lifestyle at marketplace.org/Datebook.
September 23, 2013