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October 30, 2018

The Friday Podcast: The Cotton Wars

Category: Green Money,Green Planet – Admin 12:11 pm

Dahlin Hancock
Chana Joffe-Walt/NPR

“They keep coming to the table … always bitching and complaining.” –Dahlin Hancock, Texas cotton farmer, on the Brazilians.

We need four bales of cotton to make the Planet Money t-shirt. On today’s Planet Money, we go shopping in Texas and Brazil — and find a long-running trade war.

We meet a Brazilian who took on the world’s largest superpower, a Texas cotton farmer who’s tired of hearing the Brazilians complain, and a guy named Renato — a.k.a. Retaliation Master.

Subscribe to the podcast. Music: Johnny Cash’s “Cotton Fields.” Find us: Twitter/ Facebook/ Flickr.

October 29, 2018

Average Sticker Price For Private College: $36,993 A Year

Category: Green Money,Green Planet – Admin 10:14 pm

by Jacob Goldstein

Graduation
Christopher Furlong/Getty Images

Expensive hats.

The cost of going to a public college has increased by 24 percent in the past five years. The cost of private school is up 17 percent.

But that’s just the sticker price. The value of grants and scholarships has also gone way up, wiping out the average increase at private schools and blunting it at public schools.

Here are some of the key numbers from a report released today by the College Board.

 

The average cost of tuition, room and board at private schools is $36,993 this year.

But after factoring grants and scholarships — in other words, aid that doesn’t have to be paid back — the average cost this year is $21,020. After adjusting for inflation, that’s a bit cheaper than the average cost in 2005-2006.

The average cost of tuition, room and board for in-state students at four-year public schools is $16,140 this year.

After factoring in grants and scholarships, the cost this year is $10,080 — an inflation-adjusted increase of about 5 percent over the past five years.

In other words, there’s a growing gap at both public and private schools between the sticker price, and what students pay on average.

This is the result of a few factors.

For one thing, many schools are offering more need-based scholarships to low-income students, and more merit scholarships to the students they want most.

On top of that, total government subsidies for students have increased. While states have cut back on their funding for public schools, the federal government has ramped up funding in the past few years. That included stimulus payments to the states to support higher ed., as well as a huge increase in the size of the Pell Grant program.

Still, the rising sticker price isn’t sustainable in the long run, Sandy Baum, one of the authors of the College Board report, told me.

“It seems impossible that it could keep going up as fast as it is,” she said. “I think there will be some dramatic changes. I think we will find ways to educate students at lower cost.”

Lots of colleges are already relying more heavily on lower-paid adjuncts. And schools are trying to figure out how to blend online and classroom teaching, which could ultimately slow the rise in costs, Baum said.



When Buying Flip-Flops Is A Hard Call

Category: Green Money,Green Planet – Admin 10:14 pm

Diogenes Placencia grew up in public housing in New York City. His family was on food stamps, and he lived for a time in a single-room apartment with 20 people.

Diogenes
.

Now he’s 27, and he’s on track to receive a Ph.D. in chemistry next spring from the University of Arizona.

Diogenes wrote to us after listening to our story about Edith Calzado and her 10-year-old son, Sammy, who live in New York on $16,000 a year. “I was that kid back in 1992,” Diogenes said.

We’ve been asking lots of different people questions about how money works in their lives. (Other entries in this series: Arianna Huffington, a nanny, and Stuart Murdoch of Belle & Sebastian.)

We asked Diogenes if he’d be willing to talk about money, and he was good enough to oblige us.

Do you worry about money?

Constantly. I worry mostly about my mother. I worry about providing for her when she gets older, and giving her some good years.

Are there any recent purchases you regret?

I really don’t regret anything, because I put everything through such a rigorous process of whether I should get it or not. I do a cost-benefit analysis.

So what was the last purchase you put through this process?

It was an arm-band for my iPod. I swear it was like $15, and I looked at it for two months.

What’s the next thing you’re going to buy?

A pair of flip-flops.

You’ve lived in Arizona for five years and you don’t have flip-flops?

 

Coming from the Bronx, you’d always get into fights. So when I wear flip-flops, I feel vulnerable. It’s completely irrational.

Have you gone shopping for flip-flops?

I went around the other day and I looked at some. And I was like, “Oh, 20 bucks. That’s a lot.”

Anything where you say, “I wish I had bought that?”

Probably only fine cheeses. That’s the only time — food.

Are you saving up for anything right now?

With our graduate-student salaries, there’s hardly anything I can save.

Are you in debt?

I have student loans, for between $50,000 and $70,000. And I have credit-card debt of a few hundred dollars. I pay that off every month.

What kind of job do you want to get when you finish grad school?

The fallback would be something in the semiconductor industry. I got an offer from Intel. It was a nice offer, but I didn’t take it.

When I told my family that I rejected that job, they were like, “What are you, insane?”

There’s a bunch of government labs around the country that do the type of research that I do. That’s where I want to end up — doing research for the government.

I want to contribute to the same system that I took advantage of. If it wasn’t for the government, I wouldn’t be where I am right now. Because of the government loans, because of the government transfer payments when I was growing up, that allowed me to focus on education.

Tags: money questions

How Brazil Challenged Europe, And Won

Category: Green Money,Green Planet – Admin 10:14 pm

by Chana Joffe-Walt

One morning in 1994, Pedro Camargo decided to take the world’s most powerful countries to court.

Pedro Camargo
Chana Joffe-Walt/NPR

Camargo (that’s him in the picture) was a trade official in Brazil’s agriculture department. He thought the World Trade Organization was stacked against Brazil.

“I had the feeling that we were being cheated,” he says. “The whole WTO rules were developed by rich countries, and we weren’t having a fair play.”

So Camargo began studying thousands of pages of WTO rules. He wanted to find countries — big countries — that were breaking the rules.

 

Europe was the world’s biggest sugar exporter at the time. (Think beets.) And Camargo thought Europe was improperly subsidizing its sugar exports.

So Brazil filed charges against Europe with the WTO. The case went before a WTO jury.

“We won,” Camargo says. “And the day Brazil won, they changed.”

Europe, which had exported sugar for hundreds of years, is now a net importer of sugar. And Brazil is is the world’s number one exporter, by far. When there are floods in Brazil, as there were recently, sugar prices shoot up.

Camargo also complained that the U.S. was breaking WTO rules by subsidizing cotton. It won that case, too — but the U.S. hasn’t rushed to comply.

We’ll have that story next week.

October 27, 2018

How Long Does Foreclosure Take?

Category: Green Money,Green Planet – Admin 10:06 pm

Since the housing market fell apart, the time people spend in foreclosure has gone way up.

As the chart below shows, “judicial foreclosures” — those in states where foreclosures go through the courts — now take an average of 271 days, or about nine months.

Judicial foreclosures are the ones at the center of the “robo-signer” foreclosure mess. So as banks change their practices in response to the scandal, we may see the time to foreclosure rise even more in those states.

Foreclosures that don’t go through the courts move somewhat faster — but still take more than six months, on average:

We saw this long lag time in many of the mortgages in Toxie, our (now deceased) toxic asset. When we looked at Bloomberg data on mortages in toxie, we saw a lot of lines like this:

 

FFFFFFFFF9999999999963CC

That’s the history of a single mortgage. You read it from right to left, and each letter or number represents a single month.

“C” means a month where the person is current. “3″ means 30 days past due, “6″ means 60 days past due, and “9″ means 90 days or more past due. “F” means the house is in foreclosure, but has not yet been resold.

So after 13 months of not paying the person gets a foreclosure notice (that’s the F), and that’s where the clock starts on “days in foreclosure.” And when we got this data the foreclosure was still making its way through the system an additional 9 months later.

Note: GMAC Mortgage, one of the lenders at the center of the foreclosure scandal, is owned by Ally, a Planet Money sponsor.

The Tuesday Podcast: Stealing Our Way To A T-Shirt

Category: Green Money,Green Planet – Admin 10:06 pm
t-shirt
iStockphoto

It turns out it’s really hard for a small team of public radio employees to turn themselves into a cutting-edge apparel company.

This insight may be obvious to you, but it took us a while to figure it out.

Back in May, we announced on the podcast that we’d be making a Planet Money t-shirt. Then we got swamped in the details.

This week, though, we’re back with two podcasts on the t-shirt project.

Today, we look at the economics of design. And we explain why ripping off other people’s fashion ideas is a good — and, for the moment, perfectly legal — strategy for us to pursue.

For more:

* On today’s show, we talk to Kal Raustiala, of UCLA Law School. Read his paper on the odd way intellectual property works in the fashion industry.

* We also talk to Johanna Blakley, an expert on pop culture and fashion. Here’s her Ted Talk, “Lessons from Fashion’s Free Culture.”

* And we discuss a bill that would limit copying of fashion designs. Here’s the text of the bill, and here’s a fashion industry association’s take on the bill.

Subscribe to the podcast. Music: Avett Brothers’ “Kick Drum Heart.” Find us: Twitter/ Facebook/ Flickr.

Why The Economy Hinges On Bernanke’s Miniature Golf Strategy

Category: Green Money,Green Planet – Admin 10:06 pm

by Jacob Goldstein

miniature golf
iStockphoto.com

Congress isn’t going to pass another big stimulus bill anytime soon. So any dramatic effort to push down unemployment is going to come from the Federal Reserve.

The Fed’s been signaling for a while that it’s about to launch another round of “quantitative easing” — fancy talk for creating hundreds of billions of dollars out of thin air to buy long-term bonds. The idea is that buying bonds brings down interest rates, which in turn should encourage people to borrow and spend, and companies to borrow and hire.

The main question lately has been what approach the Fed will take when its policy-making committee meets next week.

Will the Fed come in with some huge shock-and-awe announcement, like it did during the financial crisis, when it bought more than $1 trillion in mortgage-backed bonds?

Or will the Fed take it slow, buying a little bit at a time? (And by a “little bit” I mean a few hundred billion dollars — this is the Fed we’re talking about, after all.)

This morning’s WSJ seems to have the answer:

 

The central bank is likely to unveil a program of U.S. Treasury bond purchases worth a few hundred billion dollars over several months, a measured approach in contrast to purchases of nearly $2 trillion it unveiled during the financial crisis.

This whole quantitative easing thing has only been tried a couple times. So nobody’s exactly sure how it works. That may explain why the Fed’s likely to take a more gradual approach.

The WSJ’s econ blog points to a speech entitled “Gradualism” that Bernanke  made back in 2004.

There, he made the case for taking small steps, in order to lower the risk of overshooting the goal. And he used a round of miniature golf as a metaphor.

Imagine that you are playing in a miniature golf tournament and are leading on the final hole. You expect to win the tournament so long as you can finish the hole in a moderate number of strokes. However, for reasons I won’t try to explain, you find yourself playing with an unfamiliar putter and hence are uncertain about how far a stroke of given force will send the ball. How should you play to maximize your chances of winning the tournament?

Some reflection should convince you that the best strategy in this situation is to be conservative. In particular, your uncertainty about the response of the ball to your putter implies that you should strike the ball less firmly than you would if you knew precisely how the ball would react to the unfamiliar putter. This conservative approach may well lead your first shot to lie short of the hole. However, this cost is offset by the important benefit of guarding against the risk that the putter is livelier than you expect, so lively that your normal stroke could send the ball well past the cup. Since you expect to win the tournament if you avoid a disastrously bad shot, you approach the hole in a series of short putts (what golf aficionados tell me are called lagged putts). Gradualism in action!

With quantitative easing, the Fed wants to bring down unemployment, and push up inflation — but only a little, from roughly 1 percent to about 2 percent.

Hitting the ball too hard in this case would mean putting too much money into the economy at once, which would make inflation shoot up past 2 percent, higher than the Fed is aiming for.

Hitting the ball too softly would mean that unemployment stays high, and inflation stays low — which would allow the Fed to tap the ball again, by creating a few hundred billion more dollars a few months down the line.

$40 Million To Help Homeowners. Only Thing Missing: Homeowners

Category: Green Money,Green Planet – Admin 10:06 pm

by Jacob Goldstein

foreclosure
Marcio Jose Sanchez/AP

The idea is to avoid this.

A Boston nonprofit wants to help homeowners who are in foreclosure stay in their homes.

The strategy: Buy houses in foreclosure at a steep discount, and give the homeowners a new, smaller mortgage that they can afford.

The nonprofit, Boston Community Capital, thought raising the money to buy the houses would be the tough part. Turns out, that was the easy part. The tough part was convincing homeowners that this wasn’t one more foreclosure scam.

 

The group has raised more than $40 million for its Stabilizing Urban Neighborhoods program. And the banks are glad to sell to BCC, because it pays cash and buys houses fair-market value, the CEO, Elyse Cherry, told me.

But the group is spending only half as much as it hoped — $1.4 million per month, instead of $3 million— to buy houses out of foreclosure, according to Cherry.

“The biggest difficulty has really been pulling enough people in who are appropriate candidates for this program,” Cherry told me. “The money came in. The outreach has really been a challenge.”

Once your home goes into foreclosure, it’s listed in public records. You start hearing from lots of people who say they want to help you.

One family in foreclosure had paid more than $8,000 to people who promised to help them with foreclosure, then didn’t, Cherry said.

What’s more, people in foreclosure often have a long history of bad experiences with the finance world, according to the CEO of Opportunity Finance Network, a national network of organizations like Boston Community Capital.

“These people have been sold a lot of bad products for a very long time,” Mark Pinsky, the CEO, told me. “At some point, you’re just not going to trust anybody.”



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