Articles on this Page
- 07/13/14--17:33: _What’s the state of...
- 07/14/14--13:17: _Swiss Lindt buys Ru...
- 07/14/14--13:47: _The Dow may be abov...
- 07/14/14--14:02: _Why John Oliver tak...
- 07/14/14--14:07: _Church of England g...
- 07/14/14--14:34: _Scans of preserved ...
- 07/14/14--15:02: _News Wrap: Boko Har...
- 07/14/14--15:07: _Citigroup to pay $7...
- 07/14/14--15:16: _Israel shoots down ...
- 07/14/14--15:18: _Former U.S. special...
- 07/14/14--15:23: _How Social Security...
- 07/14/14--15:26: _Fighting flares as ...
- 07/14/14--15:33: _Comedian John Olive...
- 07/14/14--15:41: _World Cup is an acc...
- 07/14/14--15:45: _For the young acoly...
- 07/14/14--15:50: _Nadine Gordimer, 90...
- 07/15/14--13:07: _Reynolds American b...
- 07/15/14--13:47: _Twitter Chat: Women...
- 07/15/14--13:59: _Comic series of abs...
- 07/15/14--14:13: _Get a liberal arts ...
- 07/13/14--17:33: What’s the state of Iran’s nuclear program?
- 07/14/14--13:17: Swiss Lindt buys Russell Stover
- 07/14/14--13:47: The Dow may be above 17,000, but not for long
- Quantitative Easing (QE): Under QE, the Federal Reserve buys bonds to stimulate the economy. If bond prices go up because of the Fed’s purchases, mortgage rates go down, and more people might, for example, buy new homes. Since 2007, the Fed has purchased almost $4 trillion in new bonds. Over the past 12 months, the Fed has increased its balance sheet by 24.9 percent, by purchasing an additional $879 billion dollars of Treasury and mortgage bonds.
The increase of $879 billion in the last year is larger than the size of the Fed’s balance sheet in 2007. In other words, it took the Fed almost a century to create as much money as it has in the last year.
- Interest Rates: The Federal Reserve sets short-term interest rates. Since 2009, the Federal Reserve has followed a zero interest rate policy (ZIRP) by keeping rates at almost exactly zero (see chart below). The Fed Funds rate today of 0.09 percent is exactly equal to the rate a year ago.
- Federal Debt: In the last 12 months, total U.S. government debt has increased by $853 billion dollars. This increase in debt in the last year continues a government spending spree that has increased total government debt by almost $10 trillion in a decade; more in the last decade than in the entire prior history of the U.S.
The Federal Reserve and the U.S. government are continuing to run loose monetary and fiscal policy.
The Real Economy Struggles
While monetary and fiscal policy remain incredibly loose, the real economy sputters. Two of the most important measures of the real economy are corporate profits and wages. Profits are the return on invested capital, and wages are the payment for labor.
Over the last 12 months, total U.S. corporate profits declined by 2.2 percent. While this decline of 2.2 percent is the most comprehensive measure of all U.S. corporations, a different measure of profits is cited frequently. That is earnings per share for S&P 500 companies. The S&P 500 companies are among the largest companies, and they obtain about half their revenue from outside the U.S. Over the last year, the average earnings per share for the S&P 500 rose by 5.3 percent.
Total corporate profits and S&P 500 earnings per share diverged in the last year. The current economic environment favors powerful corporate entities such as Apple and Exxon over less powerful organizations such as a family-owned corporation. As a measure of the returns to work and investing, I favor using total corporate profits over narrower S&P 500-based-measures.
Over the past year, the average wage per hour rose from $23.98 to $24.45 per hour. However, this 1.96 percent rise in the average wage failed to keep up with the inflation rate of 2.13 percent over the same period. So the average real wage has fallen over the last year.
The good news is that there are now 2.5 million more jobs than a year ago. Even though real wages per hour have declined, total wages and salary increased by 3.59 percent.
We can estimate the cost of each of these new jobs. If all of the 2.5 million jobs were created by monetary and fiscal policy, then each job cost $690,000. If only some of the jobs were created by these macroeconomic policies, then the cost per job was higher. For example, if half the 2.5 million additional jobs were created by these macroeconomic policies, then the cost per job was $1.38 million.
The economy continues to struggle. Over the last year, the number of jobs increased, while average real wages and corporate profits declined.
The Stock Market Parties Like It’s 1999
Over the last year, the Dow Jones Industrial Average has risen 9.6 percent.
The rise in the stock market has been relentless. There were 52 all-time closing highs for the Dow in 2013, and 13 new all-time closing highs so far in 2014. On July 3, 2014, the Dow Jones Industrial Average closed above 17,000 for the first time in history, up more than 10,000 points from its low of 6,547 in March 2009.
The stock market continues its historic bull market.
We are living through the greatest macroeconomic experiment in the history of the U.S. Never was so much printed and spent by so few.
In future articles, I will use the same economic scorecard to assess the following:
- Macroeconomic Policy
Quantitative Easing: Change in the size of the Fed’s balance sheet
Zero Interest Rate Policy: The fed funds rate
Deficit: Total U.S. government debt
- Real Economy
Average real wages
Total real wages
Dow Jones Industrial Average as a proxy for returns to risky financial assets
Over the past year, this scorecard shows a divergence with the real economy struggling while the stock market powers ahead. This divergence is not likely to persist indefinitely. I continue to believe that the Dow will see 5,000 before it sees 20,000.
Burnham explained his “lizard brain” theory to Paul Solman in a 2005 story about how humans make economic decisions.
- Macroeconomic Policy
- 07/14/14--14:02: Why John Oliver takes ‘Downton Abbey’ personally
- 07/14/14--14:07: Church of England gives green light to women bishops
- 07/14/14--15:16: Israel shoots down Hamas drone amid continued violence
- 07/14/14--15:23: How Social Security should guide when you marry a younger partner
- 07/14/14--15:26: Fighting flares as Ukraine blames Russia for downed military plane
- 07/14/14--15:33: Comedian John Oliver makes fun of serious news
- 07/14/14--15:41: World Cup is an accomplishment for Brazil, despite losses and costs
- 07/14/14--15:45: For the young acolytes of maestro Lorin Maazel, the show goes on
- 07/15/14--13:07: Reynolds American buys rival for $27.4 billion
- 07/15/14--13:47: Twitter Chat: Women in Politics
- 07/15/14--13:59: Comic series of absurd tragedies racks up one final catastrophe
HARI SREENIVASAN: In Vienna today, Secretary of State John Kerry met with the Foreign Minister of Germany as they and other diplomats gathered for another round of talks about Iran’s nuclear program.
Both western and Iranian officials say major disputes remain to be resolved. David Sanger is there covering the story for the New York Times. He joins us now via Skype. So what about the interim agreement that we reached last fall? What did that buy us?
DAVID SANGER: Well, what it bought us, was some time and it reduced the threat that Iran could race for a weapon, something called breakout. Because the Iranians agreed to dilute the fuel that is closest to bomb-grade fuel.
So the United States can claim, and the Europeans can claim they’ve already accomplished a fair bit, even if it was temporary. Now, that agreement called for a final agreement to be put together in six months with a possible extension up to another six months. They are running into the deadline for those first six months by next Sunday.
HARI SREENIVASAN: What about inspections that have occurred during this time?
DAVID SANGER: You know, the Iranians have been very good about letting the inspectors in, but for inspections to work for a much broader permanent agreement they would have to be far, far broader. They would have to allow the inspectors to go virtually any place in the country. That’s one of the most vital issues because Iran has a history of hiding facilities.
HARI SREENIVASAN: This comes in the wake of Ayatollah Allah Humana saying just this week, he wants 10 times the amount of nuclear power generated in Iran n going forward.
DAVID SANGER: What he said was that he wanted 10 times the amount of nuclear fuel produced for future reactors. But remember, they don’t have those reactors built right now. You know how long it takes to build reactors in the United States under ideal conditions.
The Iranians have never really done this before except for one Russian reactor. That gets it fuel from Russia. So the question was he laying out a long term goal the really won’t get in the way of this, or instead was he beginning to describe a set of needs that runs completely contrary to what Iran would have to do if it was to reach an agreement with the west. The west, of course, wants to reduce the amount that Iran produces now, not increase it by tenfold.
HARI SREENIVASAN: Are there any consequences to missing this July 20th deadline?
DAVID SANGER: No, initially Israel was quite concerned that Iran would be able to get far more sanctions relief than the United States agreed to, that more people would break the sanctions. That hasn’t happened so the pressure on the US to conclude the agreement if it’s not exactly what they are looking for by next Sunday is pretty low.
HARI SREENIVASAN: Alright, David Sanger of the New York Times thanks so much.
DAVID SANGER: Thank you.
Swiss chocolate giant Lindt & Spruengli agreed on a billion-dollar deal to buy U.S. candy maker Russell Stover. The partnership makes Lindt the third largest chocolate maker in North America behind Hershey and Mars, owning 7.9 percent of the market.
While the exact price of the deal was not disclosed, the acquisition of the family-owned firm is expected to help exceed sales of $1.5 billion in North America in 2015. The move also places the European company strategically within the growing American market well above the competitor Nestle.
Lindt chairman and chief executive Ernst Tanner told Reuters that Russell Stover’s products, whose prices are slightly below Lindt and Ghirardelli brands, will help serve as a gateway to consumers’ appetite for higher-quality chocolates.
“We see in America, as in other places, that consumers move from the mass market product to higher-value products. We’ve seen that in coffee and bread, in restaurants, and now also with chocolate, there’s an upgrading under way,” he said.
Russell Stover, which sells its products in more than 70,000 drug stores, card and gift shops and grocery stores, was put up for sale earlier this year by the Ward family who acquired the company from the Stovers in 1960. The company is based in Kansas City, Missouri, and boasts annual revenues of $500 million.
Some of the most iconic Russell Stover products include the Whitman’s sampler chocolate box, which was made famous in 1994 in the movie “Forrest Gump.”
Lindt said sales grew 6 percent in the first half to 1 billion Swiss francs (1.34 billion U.S. dollars).
Editor’s Note: A year ago last Friday, Chapman University professor Terry Burnham, formerly of Goldman Sachs and Harvard Business School, presented his vision for a spectacular economic bust. He foresaw the Dow hitting 5,000 before it hit 20,000. We’ve since called it his “Dow 5,000 prediction.” A year later, as the Dow closes above 17,000, he’s sticking by that prediction.
Most famous for his books “Mean Genes” and “Mean Markets and Lizard Brains,” Burnham believes that our “lizard brains” blind us to the signs of collapse. (He explored the concept in a segment with Paul Solman, which you can watch at the bottom of this post.)
Burnham is a long-time market skeptic and critic of the Federal Reserve, comparing America’s dependence on printed money to the Stockholm Syndrome on this page and urging readers to withdraw money from banks. He’s updated us on his prediction since last July, but now that he’s hit the one-year mark, Burnham wanted to deliver a more complete scorecard of where we’ve been, where we are now, and where we’re going.
– Simone Pathe, Making Sen$e Editor
On July 11, 2013, on this page, I predicted that the Dow Jones Industrial Average would hit 5,000 before it hit 20,000. Here is some of what I wrote a year ago:
The Fed has been keeping interest rates at rock bottom lows to supposedly stimulate the economy… The idea that the Fed can save the economy is simply ridiculous. … What about fiscal policy? Can we deficit spend our way to prosperity? This is also ridiculous. Our problem is that we have overspent. If you had a problem of drinking 50 cups of coffee a day, would the solution be to drink 80 cups a day for a while? …
Stocks will decline … I’m not predicting what will happen today, or in the next week or month. I don’t pretend to know the timing. I only think that I see the inevitable.
One year later, we revisit the macroeconomic policies and the impact on jobs and profits, and check in on the Dow Jones Industrial Average. In addition, we develop a scorecard to revisit periodically as the government attempts to end the unusual macroeconomic policy environment.
In the last year, the Federal Reserve has continued an extremely loose monetary policy, and the U.S. federal government has added large amounts of debt. The stated goal of these policies is to stimulate the economy.
While macroeconomic policy remains extremely loose, any positive impact on the real economy has been modest. Over the last year, U.S. corporate profits and average real wages have declined. The good news is that there has been an increase in the total number of jobs and, consequently, in total wages.
While wages and profits have responded modestly, or not at all, to the extreme macroeconomic policy environment, the stock market has continued its powerful rise. In short, Wall Street parties while Main Street struggles.
Macroeconomic Policy: Monetary and Fiscal Throttles Wide Open
We continue to live in an historic macroeconomic environment. All three of the main “stimulative” policies continue at near all-time high rates.
“Last Week Tonight’s” John Oliver, formerly of “The Daily Show,” recently spoke to chief arts and culture correspondent Jeffrey Brown in New York about American fascination with British culture. Oliver shared his (somewhat facetious) take on PBS’ “Downton Abbey,” saying, “I think one of the reasons I can’t watch ‘Downton Abbey’ is probably that I recognize those things in myself now as an outsider from where I actually come from.”
In his new program, “Last Week Tonight with John Oliver,” the former “Daily Show” member is blowing his comic whistle on the media, politicians and even the American public when it is not paying attention the way he thinks it should.
The new half-hour Sunday night show on HBO uses a variety of devices to make its points including stringing together news clips, “slow jamming” to a tune about democracy, fact-checking politicians’ statements and even using a group of cheerleaders set. Some segments, like the one on the troubles with dietary supplements, last more than 16 minutes. The one on “net neutrality,” 13 minutes.
In a recent interview in New York with chief arts and culture correspondent Jeffrey Brown, Oliver said, “I come from the Daily Show, where we have a high standard of getting things right. You don’t want to build a joke on something that you can then just drive a train through. So, no, it’s very, very important to us that we are, we’re solid, that the whole thing is fact checked, we don’t want to get stuff wrong.”
He says as time goes on, he has learned how to meld substantive topics he cares about and humor to get the audience to laugh: “Once you learn how to make people laugh, then you get to choose exactly how you want to make them laugh, and so then you can get to make jokes about things you actually care about, rather than doing anything to make people laugh.”
He’ll have plenty of more time to explore the news of the day. He’s now completed 10 of the two dozen episodes planned for this first season, which wraps in November.
Tune in to Monday’s broadcast of the PBS NewsHour for more of chief arts and culture correspondent Jeffrey Brown’s conversation with John Oliver. You can watch the show on our Ustream channel at 6 p.m. EDT or check your local listings.
The vote was the culmination of a long-running debate between traditionalist lay members, who have seen the change as contradicting the Bible, against those intent on modernizing centuries of tradition.
“Today marks the start of a great adventure of seeking mutual flourishing while still, in some cases, disagreeing,” Archbishop Welby said in a statement issued by Lambeth Palace. “The challenge for us will be for the Church to model good disagreement and to continue to demonstrate love for those who disagree on theological grounds.”
In 2012, the previous vote on women bishops failed to garner the required two-thirds support within the General Synod, the Church’s governing body, despite the backing of the Houses of Bishops and Clergy.
Women bishops already hold office in the U.S., Australia, Canada and New Zealand.
The post Church of England gives green light to women bishops appeared first on PBS NewsHour.
First of their kind scans of preserved infant woolly mammoths have made the insight into the early stages of development for the 40,000 year-old prehistoric animals less fuzzy.
According to a report published July 8 in the Journal of Paleontology, researchers performed a full body CT scan of two mammoth newborns, named Lyuba and Khroma, who died at the ages of 1 and 2 months respectively. The skeletal structures of the infants, which researchers consider to be the most well-preserved baby mammoth specimens found to date, gave the scientists the chance to document the various changes that occurred to the body as the ancient pachyderms grew. They also helped determine whether the mammoth gestation periods may have been shorter than that of modern elephants.
“These two exquisitely preserved baby mammoths are like two snapshots in time,” said co-author Zachary T. Calamari of the American Museum of Natural History in New York. “We can use them to understand how factors like location and age influenced the way mammoths grew into the huge adults that captivate us today.”
The scans also revealed the most likely reason why the babies died so young: they suffocated.
Both animals appeared to be healthy prior to their deaths, affirming researchers to believe that their untimely deaths were due to a “traumatic demise.” Scans of the mammoths revealed different types of mud blocking the air passages, both explained by the two slightly different ways they would have died. The finer sediment obstructing the trunk for Lyuba suggests that she died in a lake, perhaps falling through melting ice while crossing. The coarser sediment in the trunk, mouth and throat of Khroma, alongside fractured vertebrae, suggest that she died from a collapsing riverbank.
The post Scans of preserved mammoth babies thaw details into ancient animals’ development appeared first on PBS NewsHour.
JUDY WOODRUFF: Secretary of State John Kerry and his counterpart from Iran worked in Vienna today, trying to find a breakthrough in talks on Iran’s nuclear program. Kerry met one-on-one with Iranian Foreign Minister Mohammad Javad Zarif twice during the day for several hours. There was no indication of any real progress. The U.S. and five other nations are trying to reach an agreement with Tehran before a July 20 deadline.
A full audit of Afghanistan’s presidential runoff begins this week, under a deal brokered by Secretary Kerry over the weekend. Last month’s election was marred by allegations of fraud. Now the United Nations will oversee the review of some eight million ballots. The rival candidates, Abdullah Abdullah and Ashraf Ghani, have agreed to accept the outcome of the new count.
In Nigeria, a new video surfaced from the leader of the Boko Haram militants, the group that kidnapped 200 schoolgirls in April. In it, the group’s leader claims responsibility for attacks that the government never reported.
ABUBAKAR SHEKAU, Leader, Boko Haram (through interpreter): Refinery, yes, you people try to hide it. A woman sent by Allah bombed the refinery. You said it was an ordinary fire? A bomb exploded in Lagos. I ordered the bomb to be exploded, and you say it’s fire. If you hide it, you cannot hide from Allah.
JUDY WOODRUFF: The militant leader also mocked President Goodluck Jonathan and the outcry over the girls’ kidnapping. He offered again to trade them for fighters who are held in Nigerian jails.
The U.N. Security Council has approved sending humanitarian aid to parts of Syria held by rebels, even if the Syrian government objects. Today’s vote followed increasingly dire reports about the suffering of civilians. Currently, all aid has to go through Damascus, and the great majority winds up in government-controlled areas.
U.S. Army Sergeant Bowe Bergdahl returned to active duty today, after spending nearly five years as a Taliban prisoner in Afghanistan. He was assigned to administrative duties in San Antonio, Texas, where he’s had counseling and treatment for the past month. The Army is still investigating allegations that Bergdahl was captured after he deserted.
The wrecked Italian cruise liner Costa Concordia was painstakingly re-floated today off the Tuscan coast. The daylong operation took place more than two years after the vessel struck rocks and capsized, leaving 32 people dead.
Sally Biddulph of Independent Television News reports on today’s exercise.
SALLY BIDDULPH: With each passing hour, a few more cabins of the Costa Concordia are revealed. Almost imperceptibly, the huge vessel starts to float again in the biggest salvage operation in history.
Today, the ship is being slowly lifted from the manmade steel platform constructed beneath her by pumping air into the huge metal containers welded to her sides. She will then need to be fully checked before being towed by tugs to deeper water. There, under anchor, more air will be pumped into the containers to raise her to a fully floating position.
The luxury cruise liner went down off the coast of Tuscany two-and-a-half years ago. She’d sailed too close to the island of Giglio, where rocks ripped a hole in her hull; 32 people died in the ensuing chaos, as the ship capsized. The Concordia’s captain, Francesco Schettino, is currently on trial for what happened.
Until last September, the vessel rested unmoved on its side until salvage experts righted her in a huge engineering operation. The process to now float her is an even bigger challenge. Her final journey will be to the port of Genoa, where she will be stripped down and scrapped at the end of this month.
JUDY WOODRUFF: The ship’s captain is charged with manslaughter and with being among the first to abandon ship. He is, as you heard, currently on trial.
Breaking Foreign Secretary William Hague is stepping down after four years on the job. He announced this evening that he will become leader of the House of Commons. The surprise move is part of a cabinet reshuffle that conservative Prime Minister David Cameron plans to explain tomorrow.
In the Church of England, lay leaders voted today to let women become bishops. The measure had the support of the archbishop of Canterbury and of British Prime Minister David Cameron. Two years ago, a similar measure failed to get the required two-thirds majority.
Wall Street got the week off to a strong start. The Dow Jones industrial average gained more than 111 points to close at 17,055. The Nasdaq rose nearly 25 points to close at 4,440. And the S&P 500 added nine, to finish at 1,977.
The post News Wrap: Boko Haram leader claims responsibility for unreported attacks appeared first on PBS NewsHour.
JUDY WOODRUFF: “We should start praying. I wouldn’t be surprised if half of these loans went down” — that’s what a trader at Citigroup wrote in an e-mail in 2007, after reviewing thousands of mortgages bought and sold by the bank.
Today, the Justice Department cited those very words as it announced a $7 billion settlement with the bank. The government said Citi committed egregious misconduct in the lead-up to the financial crisis. Of the $7 billion, Citigroup will pay $4 billion to the Justice Department. More than $2.5 billion is set aside for what’s described as consumer relief.
Tony West is associate attorney general. And he was the government’s lead negotiator in this case.
And we welcome you to the program.
TONY WEST, Associate Attorney General, Dept. of Justice: Thank you so much.
JUDY WOODRUFF: So lay out for us, what was this egregious conduct and how many people at Citigroup were engaged in it?
TONY WEST: Well, OK.
In a nutshell, what we were talking about is Citibank packaged securities, packaged loans, mortgage loans into these securities, which they sold to investors. What they didn’t tell investors was what the actual quality of those loans were. And so you had these mortgage bond deals that had quality that was far less than what Citi was representing to investors that they were.
JUDY WOODRUFF: And how many people knew about this, and did the knowledge go all the way to the top?
TONY WEST: Well, a number of bankers certainly knew about it. In fact, we know from the evidence that bankers were warned that the quality of the loans that they were packaging into these securities wasn’t what they were telling investors they were, but they ignored those warning signs. They ignored that due diligence.
In terms of how far up that went, I think that certainly enough people in the country knew and enough bankers knew that we felt that we could demand a very high, in fact, an historically high, penalty from Citibank.
JUDY WOODRUFF: So $7 billion. As we were saying, $4 billion of that goes to justice. What does Justice do with that money?
TONY WEST: Well, that money is a civil penalty and it goes to the United States Treasury.
Part of that money will actually go to fund additional cases in which the government is going to try to recover funds that have been lost to fraud and waste and abuse on behalf of the taxpayers. Of course, there’s another $500 million that will go to states around the country, five states in particular, and that will help to replenish some of the losses that pension funds and other state entities suffered because of this.
JUDY WOODRUFF: And then the $2.5 billion we said set aside for consumer relief, how does that — who does that go to?
TONY WEST: Well, that goes to consumers.
I think that one of the lessons that we have learned from the financial crisis is that it just wasn’t investors who were hurt in this debacle. We know that there are homeowners on Main Street who really suffered because of the conduct that Citi and other financial institutions engaged in.
And so, as part of any resolution, we want to make sure that we’re trying to bring some meaningful relief to those individuals.
JUDY WOODRUFF: I’m sure you know there are consumer advocates out there who are saying this is not enough, it’s — quote — “too little too late.”
We spoke — we saw today Public Citizen. I just want to read one comment. They said no individuals are being held to account. They said, the bank is not being charged with any criminal activity. They said the corporation faces no review of its bank charter, business continues in its offices.
What do you say to those comments?
TONY WEST: Well, I think I would say a couple of things.
I would, first, this is a civil resolution. It’s not a criminal resolution. And, in fact, by the very terms of the settlement agreement, we have not written off any ability to pursue criminal charges, should the evidence merit that.
JUDY WOODRUFF: So that could still come?
TONY WEST: That’s always a possibility out there. And it’s something that was specifically carved out of this resolution.
The second thing I would say is that we know, of course, that no one resolution — this resolution won’t solve all the problems that were created by the financial crisis, but it is an important step to rectifying some of the harm.
I think when you talk about the principal reduction that we have, the rate reduction, refinancing features of this consumer relief, when you talk about the affordable housing that’s a part of this consumer relief, I think the potential here is that there will be hundreds of thousands of homeowners and borrowers who will benefit from these provisions.
JUDY WOODRUFF: But they may not be individuals who were affected in the original instance?
TONY WEST: Well, again, I think that one of the things we have seen is there are a number of individuals who have been affected. You didn’t just have to be an investor in order to be hurt by what happened as a result of the conduct on Wall Street.
And so it’s our belief that a lot of these measures will in fact help victims, often faceless victims, nameless victims, but victims nonetheless of the financial crisis.
JUDY WOODRUFF: Let me read to you another — another critic.
This Dennis Kelleher of the Better Markets Group. He said to us — quote — “That amount is” — the $7 billion — “is meaningless without the disclosure of the key information about how many hundreds of billions of dollars Citigroup made, how many tens of billions investors lost, how many billions in bonuses were pocketed, which executives were involved, what positions they now have with the bank.”
TONY WEST: Well, again, I think that it would be a mistake not to think that these are meaningful resolutions. What we’re talking about is an historically high civil penalty, $4 billion.
In fact, it’s twice as much as J.P. Morgan paid. And, in addition, we’re talking about really compensating a number of investors who were lost if they were state agencies or pension funds, charities and the like.
And I think we really can’t overlook the potential power of the consumer relief provisions, the power that that has to help rectify the harm that has occurred. You know, again, it’s not a panacea, but it is an important component to trying to restore some of the damage that has been caused by not only the conduct that we were talking about here in the Citi case, but other financial institutions as well.
JUDY WOODRUFF: And just quickly again on the possibility of criminal charges, is that something Justice is actively looking at?
TONY WEST: Yes.
And I don’t want to speak in connection with any particular financial institution, so let me just say generally, we are looking at all aspects. Understand the, civil resolution is only one tool, but wherever the evidence leads, wherever the facts lead, we will not hesitate, if that is criminal, to bring those charges.
JUDY WOODRUFF: And let me just bring a comment from the other side of the ledger, and that is the banks.
I know there were several reports that quoted top folks at Citi saying, you know, they really had, as they put it, a relatively smaller share of the market, that they shouldn’t be held as accountable as some other large institutions should have been.
What do you say to that?
TONY WEST: Well, I think the fact that there are some people who are saying we were too tough and others saying we were too soft, I think that probably means we were in the right place right in the middle.
But, look, this market share argument that I know a number of people talked about, Citi had advanced, the fact of the matter is, is that resolutions are driven by the facts and the evidence of any given matter in any given case. It’s the individual conduct. It’s the conduct of an institution that will really determine how we resolve these cases.
And, so, I’m not saying that market share isn’t irrelevant, but the fact of the matter is, it cannot trump the actual evidence of misconduct. And, in this case, given the size of the fine, it did not.
JUDY WOODRUFF: Tony West, associate attorney general, we thank you for talking with us.
TONY WEST: Thank you so much, Judy. Good to be with you.
The post Citigroup to pay $7 billion for ‘egregious misconduct’ leading up to financial crisis appeared first on PBS NewsHour.
JUDY WOODRUFF: Now, as the seven-day-old battle between Israel and Hamas rages on, we turn to a newsmaker interview with a man who tried hard to avert this latest flare-up.NewsHour chief foreign affairs correspondent Margaret Warner spoke today with Martin Indyk, who just resigned as President Obama’s special envoy for Israeli-Palestinian negotiations.
Their conversation came as rockets rained on Israel and the Palestinian death toll from Israeli airstrikes topped 175.
MARGARET WARNER: Gaza shook with airstrikes and smoke smudged the skyline this morning, as Palestinians inspected the latest damage. At the same time, Hamas rockets sliced through the air over Israel, as air raid sirens blared and people ran for cover.
In the past week, Israel’s military has carried out more than 1,300 airstrikes, while Hamas has fired nearly 1,000 rockets. And, today, something new: Hamas launched a drone aircraft over Israel’s southern coastline, and released this video, apparently showing missiles under its wings. Israel’s military shot down the drone, but Hamas said the launch demonstrates its growing power.
MUSHIR AL-MASRI, Hamas leader (through interpreter) Using drones is new in this conflict, and it is another component the Palestinian resistance is using to fight the war against the Israeli occupation. This is an indication that the resistance has only used a limited amount of its military weaponry against the relentless Zionist enemy.
MARGARET WARNER: On Sunday, Israeli Prime Minister Benjamin Netanyahu again defended the assault on Gaza and insisted the blame for what is happening lies squarely with Hamas.
BENJAMIN NETANYAHU, Prime Minister, Israel: You know, here’s the difference between us. We’re using missile defense to protect our civilians, and they’re using their civilians to protect their missiles. That’s basically the difference.
MARGARET WARNER: Meanwhile, three Israeli Jews, including two minors, confessed today to abducting and burning a Palestinian boy alive, an apparent revenge killing for the kidnapping and murder of three Israeli teenagers last month.
Now the two sides are locked in the worst fighting in almost two years, and worldwide calls for a cease-fire have made little headway. It’s a far cry from U.S. hopes during the Obama administration’s nine-month push for a comprehensive peace deal. That broke down at the end of April. This was Secretary of State John Kerry just after the deadline passed.
JOHN KERRY, Secretary of State: We believe the best thing to do right now is pause, take a hard look at these things, and find out what is possible and what is not possible in the days ahead.
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MARGARET WARNER: Martin Indyk, a former ambassador to Israel and State Department official, was the U.S. special envoy for the negotiations. Today, he returned to his job as vice president and director of the Foreign Policy Program at the Brookings Institution in Washington.I spoke with him this morning at Brookings.
Ambassador Indyk, thank you for having us.
MARTIN INDYK, Former U.S. Special Envoy for Israeli-Palestinian Negotiations: Thanks.
MARGARET WARNER: After all these decades of peacemaking efforts, including your own, these eruptions between the Israelis and Palestinians seem to continue more frequently and more ferociously. Why is that?
MARTIN INDYK: Well, I think it’s something that Secretary Kerry was warning about when he started the whole effort to try to change the dynamic to a positive one which could lead to a resolution of the Israeli-Palestinian conflict, precisely that natures abhors a vacuum, particularly in the Israeli-Palestinian arena, and if you’re not moving forward, the vacuum gets filled by a very negative dynamic and extremists, who want to basically pursue the conflict.
And so that’s what we’re witnessing now. And, so, it’s horrendous when it happens, but it’s kind of indication of the chronic nature of the conflict that we were trying to break out of.
MARGARET WARNER: What will it take to end this current conflict?
MARTIN INDYK: Well, a cease-fire is the most important thing. And that has to happen as soon as possible.
And Secretary Kerry and President Obama’s support is now engaged in that effort. And, hopefully, it will be possible to get that in place. I don’t think the Israelis want to go the next step of a ground invasion of Gaza, because the big question then is, who do they withdraw in favor of? They already pulled out unilaterally, but they got the rockets in return.
So they will be willing to stop as soon as Hamas is ready to stop the rocket fire. And that’s the focus of the activity at the moment.
MARGARET WARNER: So why has Israel massed all those tanks on the border and brought all those troops to the border?
MARTIN INDYK: Well, I think, on the one hand, they want Hamas to understand that there are grave consequences if they don’t stop the rocket fire.
That’s the signal that they’re trying to send. But they don’t really want to go in. Prime Minister Netanyahu is very cautious when it comes to launching wars. And I think there’s a general understanding on the part of the public that there’s a whole world of hurt, not just for Palestinians, but for Israelis, if it ends up in a ground invasion.
So it’s really important to try to stop it, stop the rocket fire before that happens.
MARGARET WARNER: So you’re saying it’s a bluff on his part?
MARTIN INDYK: Well, it’s designed as a threat, that, if the bluff is called, then Hamas will pay the consequences.
But the Palestinians in Gaza will as well, and that would be a terrible thing.
MARGARET WARNER: There was a cease-fire negotiated in late 2012, and Egypt and the U.S. were heavily involved. Is that even possible today? Hasn’t the U.S. lost influence with the parties? And, certainly, hasn’t Egypt?
MARTIN INDYK: No.
There are things that Egypt can do here that nobody else can do. And Egypt and Israel and the Palestinian Authority have a common interest in seeing that Hamas not emerge as the victor, and indeed in seeing that the Palestinian Authority eventually take back control of Gaza from Hamas.
MARGARET WARNER: Does the U.S. have the influence it did two years ago?
MARTIN INDYK: Yes.
I don’t think that there’s any lack of influence on the part of the United States when it comes to trying to affect the party that’s on the other side here, which is Israel. But the issue is, how do you influence Hamas? How do you get Hamas to stop?
And that’s where Egypt, Qatar, Turkey can play a role, because they each have influence on Hamas. And so Secretary Kerry is working with all three to try to work — make that happen.
MARGARET WARNER: It seems to me as if you think this will follow the same pattern, that, ultimately, the neighbors will get involved, that a cease-fire will be negotiated. You don’t see a darker scenario unfolding here?
MARTIN INDYK: Well, the darker scenario would be if the rockets don’t stop and if Hamas decides that, for some reason, they want Israel to launch a ground invasion, and then perhaps suck them into a conflict in which Israel will get the blame for these casualties that will inevitably be caused there.
MARGARET WARNER: So, in a nutshell, why did this aggressive push you made for nine months fall apart?
MARTIN INDYK: What we discovered, in nine months of intensive negotiations, was that the United States was the only party that really wanted to change the status quo, that the two sides, for a whole range of different reasons, were not prepared to take the really painful and difficult decisions that would have led to a breakthrough, to ending this conflict.
And so you see that same thing playing itself out, not just in peacemaking, but also in war-making, that everybody wants to kind of return to the status quo, because the costs of changing the status quo are very high. And so that’s, at heart, the difficulty involved here.
MARGARET WARNER: You have spent your entire professional life working on Israel — issues that affect Israel’s security, viability as a Jewish state in that region.
Are you having any doubts now about that future, I mean, if this Israeli-Palestinian conflict is not solved?
MARTIN INDYK: I worry a lot about it.
If there’s no resolution of this conflict, there’s this — this chronic conflict which only becomes more chronic, and these periodic eruptions of violence that just create huge problems for both sides.
So, beyond that, there is the question, as you asked, of, what is the future of Israel as a Jewish democracy, if it doesn’t find a way from separating and making peace with the Palestinians? The demographic dynamic is such that Israel will sooner, rather than later, have to choose between being a Jewish state, because there will be a minority of Jews in the area that Israel controls, and being a democratic state.
And that’s a choice that Israel should never want to have to make.
MARGARET WARNER: So is the Israel that we have known in danger of either disappearing or being destroyed?
MARTIN INDYK: Look, I don’t believe it’s going to disappear or destroyed — be destroyed, either one of those.
I think it’s going to morph into something else over time. And the dilemmas are going to be very difficult to resolve. And they’re only getting more difficult to resolve over time. The window is closing, that the alternative of sticking with the status quo is not sustainable unless both sides are prepared to absorb huge costs and a future that looks like what we’re witnessing on a daily basis today.
But the two sides have to decide that the status quo is not sustainable, it’s not good enough for us to say it. And then, when they’re ready to change, ready to make those gut-wrenching compromises, then the United States will be with them.
MARGARET WARNER: Ambassador Indyk, thank you.
MARTIN INDYK: Thank you.
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Larry Kotlikoff’s Social Security original 34 “secrets”, his additional secrets, his Social Security “mistakes” and his Social Security gotchas have prompted so many of you to write in that we now feature “Ask Larry” every Monday. Find a complete list of his columns here. We are determined to continue it until the queries stop or we run through the particular problems of all 78 million Baby Boomers, whichever comes first. Let us know your Social Security questions. Kotlikoff’s state-of-the-art retirement software is available here, for free, in its “basic” version.
Kenneth — N.J.: How do I maximize survivors benefits for my girlfriend (we will marry in a few years)? I am 63 and do not need to collect Social Security before age 70. My girlfriend/wife-to-be is 52 and is not eligible for any benefits on her own. Do we need to be married for any length of time prior to my death for her to collect survivors benefits? How long would her benefits last?
Larry Kotlikoff: You just need to be married 12 months to permit your wife to receive a spousal benefit based on your earnings record. To enable your wife to collect widows benefits, you just need to be married nine months. Your wife’s spousal benefits would continue until you die or you get divorced, if you get divorced before 10 years. If you make it 10 years, your wife will be able to collect divorcée spousal benefits as long as she doesn’t remarry. If you die, your wife flips to being able to collect your widows benefit. If you die and she remarries, she can still collect a widows benefit if the remarriage occurs after she is 60. If you get divorced after 10 years of marriage and then you die, she can collect a divorced widows benefit even if she remarries, as long as the remarriage occurs after she is age 60.
GOT SOCIAL SECURITY QUESTIONS?
Waiting until 70 won’t raise your wife-to-be’s spousal or divorced spousal benefits (if you stay married 10 years before calling it quits). But it will raise your wife-to-be’s widows benefit once you die.
If you are a widower or were married for 10 years and got divorced, you may want to collect on your former spouse or ex-spouse’s earnings record for a while and then get married. For example, if you are a widower, you can potentially start collecting right now on your former spouse’s work record. If you are divorced after a 10-plus-year marriage, you should wait until full retirement age (66 in your case), file just for your divorced spousal benefit, and then at 70, take your retirement benefit.
You could then marry your girlfriend and still get her full access to your benefits because she’ll be just 59. The risk to her of holding off marrying, though, would be if you die before you do get married. That would leave her unable to collect on your work record.
If you aren’t a widower or a divorcée, whose marriage lasted a decade or more, you should A) file at full retirement age for your own retirement benefit, but suspend its collection, and B) wait until 70 to restart your retirement benefit. This filing and suspending won’t change your age-70 benefit, but it will give you the option of requesting a lump-sum payment of all suspended benefits if you ever decide you need a chunk of money for an emergency. Note, though, that if you take your suspended benefits in a lump sum, your retirement benefit will revert to its full retirement value; in other words, it will no longer include your delayed retirement credits.
Yes, you asked a relatively simple question. But with Social Security, nothing is simple.
Denise — Staten Island, N.Y.: I was married for 15 years to my ex-husband. He started collecting Social Security Disability when he was 40. He is now 67. I am 62 and understand that if I start to collect Social Security now and my ex passes away, I can still collect widowers Social Security. Social Security told me I could collect about $500 more a month collecting off him, but only if he were deceased. Does this sound correct? Right now I am still working, but I do want to retire.
Larry Kotlikoff: Assuming you haven’t filed for your own retirement benefit so far, you can file just for your spousal benefit when you reach full retirement age and collect half of your husband’s full retirement benefit, which equals the disability benefit he collected prior to reaching full retirement age — adjusted for inflation.
At age 70, you can collect your retirement benefit, which will begin at its highest possible level. When your ex-husband dies, you will receive not half, but 100 percent of his retirement benefit as a divorced widows benefit. But if you are taking your own retirement benefit at the time, Social Security will give you the larger of the two. Take note however, that they will describe this as your receiving your retirement benefit plus the excess of your divorced widows benefit, less your own retirement benefit.
So if your ex dies before you are 70 and you haven’t yet filed for your retirement benefit, the best course of action is to file just for your divorced widows benefit and then file for your own retirement benefit at 70. If your retirement benefit starting at 70 exceeds your widows benefit, your excess widow’s benefit will be zero. If that’s not the case, you’ll effectively just get your widows benefit. But filing for your own retirement benefit can’t hurt starting at 70.
Kathie — Mich. My husband died at age 43. I was 44 when he died. I will be 60 this year. Should I apply for widows benefits now? I have been working full time since his death with a salary range of $30,000 to $45,000 and am still working. Can I work and claim benefits? Does my being one year older than he affect when I can claim?
Larry Kotlikoff: You can start collecting your widows benefit at 60, but it will be reduced because you are taking it early. Also, it will be subject to the earnings test. Depending on the size of your widows benefit, the earnings test may wipe out your widows benefit. Social Security will, however, reimburse you for benefits lost due to the earnings test once you reach full retirement age.
But if you flip, say at age 70, from your widows benefit, which was hit by the earnings test, to your own retirement benefit, you won’t fully recoup, from an actuarial basis, the benefits lost due to the earnings test. I recommend you check out highly accurate software to consider what’s best. The software needs to incorporate the recomputation of benefits, delayed retirement credits, the earnings test, the adjustment of the earnings test reduction factor, and retirement and widows benefits. It also needs to properly value your lifetime benefits so you can see which strategy — taking your widow’s benefit before your retirement benefit or vice versa — is best, as well as when it’s best to implement said strategy.
JLT: My husband is 73 and took his Social Security benefit at 62. I am 66 and also took my Social Security benefit at 62. We had no idea there is/was a spousal benefit available to either one of us. Can I still take this benefit instead of my Social Security? If so, would it benefit me to do so? Right now, my husband’s Social Security income is more than double of what mine is.
Larry Kotlikoff: Very sorry, but you are yet another victim of Social Security’s opacity and terribly unfair “gotchas.” Because you filed for your own retirement benefit, even were you to suspend it right now, your spousal benefit will now and forever be calculated as your excess spousal benefit. In your case, it will be the difference between half of your husband’s full retirement benefit (not necessarily what he’s now collecting) and 100 percent of your own full retirement benefit. This difference will likely be negative, in which case Social Security sets your excess spousal benefit to zero. In short, you got cheated when it comes to getting your spousal benefit.
You can, however, suspend your retirement benefit now and restart it at age 70 at a 32 percent higher value (after inflation).
All this said, your excess spousal benefit may actually be positive. So it’s important to check as soon as possible with your local Social Security office to see if you do quality for a non-zero excess spousal benefit. If you do, Social Security will make retroactive payments of your excess spousal benefits, but going back only six months at most, as I understand it. So, again, do check with them right away.
Bob — Ohio: My wife of 30 years passed away a couple of years ago at age 57. I earned substantially more than she throughout my career. Can I retire at 60, and collect a reduced benefit as a surviving spouse and then switch over to my much higher benefit when it maxes out when I am 70?
Larry Kotlikoff: You have this exactly right. And don’t file and suspend your retirement benefit at full retirement age. Doing so will give you the option of taking your suspended benefits later on in a lump sum, while still accumulating delayed retirement credits on your retirement benefit.
The big problem, though, is that if you file and suspend, you’ll plunge into excess benefit hell. In this case, your widows benefit will become your excess widows benefit, not your full widows benefit. And from the sounds of it, your excess widows benefit will be zero. In other words, if you file and suspend at full retirement age, you’ll eliminate your ability to take a full widows benefit through full retirement age while letting your retirement benefit grow.
Karyn — Mich.: My husband, Allen, had a stroke at work in June 2013. He could not return to his job on doctors’ orders, so we applied for disability. After a six months wait, he started receiving his payments for December in January 2014. He just turned 64 in February, and I turned 62 in April.
I was advised to apply for spousal benefits to help get our bills paid. I did not know at the time that I would be locked in at a lower retirement rate. They have suspended my benefits from May until October because I still work. I have never made much money, but I have always worked. Less than $750 per month seems unfair. Should I continue struggling with just my paycheck and not take my benefits? Does Allen have to be receiving retirement benefits before I can get spousal benefits? I really need more income monthly, but I am totally confused on what to do. Any advice from you would be deeply appreciated. I do apologize for sounding like a complete idiot. Thank you in advance.
Larry Kotlikoff: Terribly sorry to hear about Allen’s stroke. I think you should withdraw your retirement benefit by repaying what you’ve received so far and then wait until full retirement age to take just your spousal benefit. At 70, you can collect your highest possible retirement benefit. If Allen were to pass away, you could file just for your retirement benefit right now and then switch to your widow’s benefit at full retirement age — at its highest possible value. There are some other options to consider, including Allen’s suspending his retirement benefit at full retirement age and starting it up again at 70. This would provide you a higher widows benefit were he to die.
The post How Social Security should guide when you marry a younger partner appeared first on PBS NewsHour.
JUDY WOODRUFF: Next to another difficult spot, Ukraine, where tensions are growing again along the border with Russia.In the last 24 hours, the two countries traded new accusations amid Ukraine’s battle to reassert control over regions near that border.
Fighting flared in Eastern Ukraine today, as government forces pressed the offensive against pro-Russian rebels. The rebels have lost half the territory they once controlled, and they have been pushed back into the cities of Donetsk and Luhansk. The military recaptured several more villages today.
In Luhansk, broken glass and debris littered a damaged schoolhouse, and nearby apartments showed floors of shattered windows.
WOMAN (through interpreter): They have been shooting from all the sides. I have small children, so we put them into a bathtub and laid down on the floor, listening to shattered windows falling and people around screaming.
JUDY WOODRUFF: But, as Ukrainian forces advance, tensions with Russia have erupted anew. Kiev blamed the Russians today for shooting down a Ukrainian military transport plane. No one aboard was injured. On Sunday, a cross-border shelling attack reportedly killed a man on the Russian side of the border. Moscow accused Ukrainian forces, but a Ukrainian Defense Ministry spokesman pointed at the rebels.
ANDRIY LYSENKO, Spokesman, Ukraine National and Security Council (through interpreter): The information that the shelling was done by Ukrainian servicemen is a complete lie. We have many examples of terrorists carrying out provocation shootings, including into Russian territory, and then accusing Ukrainian forces of it.
JUDY WOODRUFF: Ukrainian President Petro Poroshenko went further, charging that Russian officers are fighting alongside the rebels. He claimed the Russians and their allies are feeling the heat.
PRESIDENT PETRO POROSHENKO, Ukraine (through interpreter): All incidents on the state border, all, without any exceptions, are caused by us having them by the throat. We now time after time see their columns, intercept their columns, use artillery, aviation to destroy those columns.
JUDY WOODRUFF: In turn, Russia formally asked that outside European monitors visit several border towns affected by the fighting.
For more on Ukraine, we turn to New York Times reporter Sabrina Tavernise, who is in Donetsk. I spoke to her a short while ago via Skype.
Sabrina, thank you for talking with us.
First of all, tell us about the Ukrainian military aircraft that went down.
SABRINA TAVERNISE, The New York Times: So it was kind of middle of the afternoon.
There’s a big dispute about it. Ukraine is accusing basically a very sophisticated anti-aircraft missile of shooting it down from Russian territory. Russia hasn’t responded to that claim, but a number of military analysts are saying that that’s pretty unlikely, that the most likely scenario is that rebels in this Eastern Ukrainian area shot the plane down.
It’s close to the border, sort of in a field. It’s unclear how many people were aboard. It was a cargo plane, but a spokesperson — a spokeswoman, actually, for the rebel government in Luhansk told me this afternoon that they have actually taken five hostages.
JUDY WOODRUFF: But that’s been impossible to verify, right?
SABRINA TAVERNISE: Yes.
The Ukrainians haven’t said anything yet about whether there were hostages or not, but it seems likely, as there aren’t — there weren’t — there wasn’t a high body count at the plane. I had a colleague who actually was at the plane and didn’t see — saw one body, but that was it.
JUDY WOODRUFF: Now, Sabrina, you were also in city of Luhansk today, several hours away. What did you see there?
SABRINA TAVERNISE: So, that is very interesting.
It’s — because the — it’s the scene of a very intense battle between the Ukrainian government and the rebel forces, more intense than the one in Donetsk, which is the city that everyone is focused on because it’s so much bigger. But Luhansk is sort of a poorer, kind of grittier version of Donetsk.
The Ukrainians have been shelling and have been hitting rebel positions in a lot of the areas around the edges of the city. The Ukrainians say that they have made some serious advances and taken territory. But I spent a good 10 hours today going around the edges of the city and some of the neighborhoods they said they controlled, and we didn’t see any evidence of Ukrainian soldiers or tanks or presence.
We did see many, many — you know, a lot of damage from shelling and a lot of people very angry at the Ukrainian military for what they say is imprecise weapons and civilian casualties.
JUDY WOODRUFF: So is it possible to describe the extent of the territory that the rebels are holding on to?
SABRINA TAVERNISE: You know, it is still substantial.
You know, Luhansk, Donetsk and sort of a large suburb of Donetsk called Marinka is nearly two million people, and then a large swathe of territory that takes up a chunk of the Russian border in the southeast of Ukraine. So, you know, the Ukrainian military has said that they have halved the territory that the rebels control. And that might be a little bit of an overstatement, but they have certainly taken some substantial — some substantial ground.
But they still have a very serious fight ahead. And, you know, without the ground troops really that they would need to kind of come in and take control in a more precise fashion, they rely — it’s looking, appearing like, on artillery and shelling that is pretty imprecise and seems to be inflicting some civilian damage.
JUDY WOODRUFF: And what about claims from the Ukrainians that there are Russians who are mixed in with these rebels doing the fighting with them?
SABRINA TAVERNISE: Well, it’s something that we have been following for a long time.
It’s impossible to say whether they’re actually commissioned Russian military officers. So, it’s not a situation like that, it doesn’t seem, but there are certainly many Russian passport holders who are among the fighters. How many is unclear, but quite — quite a number.
JUDY WOODRUFF: Sabrina Tavernise reporting for us from Donetsk, thank you very much.
SABRINA TAVERNISE: You’re welcome.
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JUDY WOODRUFF: Next tonight: a fresh perspective on current news.
Jeffrey Brown talks with comedian John Oliver.
JOHN OLIVER, “Last Week Tonight with John Oliver”: If we let cable companies offer two speeds of service, there won’t be Usain Bolt and Usain Bolt on a motorbike.
JOHN OLIVER: They will be Usain Bolt and Usain bolted to an anchor.
JEFFREY BROWN: The highly divisive debate over who controls Internet speed and access, so-called net neutrality, is hardly standard comic fare.
JOHN OLIVER: The point is, the Internet in its current state is not broken, and the FCC is currently taking steps to fix that.
JEFFREY BROWN: But it’s just the kind of policy and political subject that John Oliver tackles, often in surprising depth, on his new HBO comedy program “Last Week Tonight.”
JOHN OLIVER: We need you to channel that anger.
JEFFREY BROWN: His admonition to viewers to write to the FCC even briefly shut down the agency’s comments section of the Web site. Born in a suburb of Birmingham, England, Oliver studied English and joined a comedy troupe at Cambridge University. He performed stand-up in festivals, pubs and clubs around England, before coming to this country and joining “The Daily Show With Jon Stewart” in 2006, eventually sitting in as host while Stewart took time off.
The new program has probed, poked fun, and raised serious questions around a variety of news topics, from India’s elections to Supreme Court decisions.
JOHN OLIVER: Let’s talk about the death penalty.
JEFFREY BROWN: The weekly format, Oliver says, gives him and his staff, which includes former magazine researchers, as well as comedy writers, the time to develop stories, even if it feels like they’re hanging on by the seat of their pants.
We talked recently at HBO in New York.
JOHN OLIVER: Some weeks, we have been — it’s been controlled drowning, that — it’s just been reacting and desperately trying to get something on TV.
JEFFREY BROWN: Controlled drowning.
JOHN OLIVER: Yes, controlled drowning.
JEFFREY BROWN: Meaning?
JOHN OLIVER: Meaning you eventually drown, but you try and stay above water for as long as possible.
JEFFREY BROWN: Until Sunday night, until the show gets on.
JOHN OLIVER: Exactly. Exactly. You just get to 11:31, and your head disappears below the surface.
JEFFREY BROWN: How do you decide what you’re going to cover, what’s — you know, we sit down every day, think the criteria, most important, most vital, most urgent, something like that. What is it for you?
JOHN OLIVER: Yes. Well, we have been drawn so far to slightly more off-the-beaten tracks, nothing that screams: I’m going to be amazing comic fodder.
Yes, we have been kind of been drawn to making life difficult for ourselves.
JEFFREY BROWN: But these things, India’s election, climate change, net neutrality…
JOHN OLIVER: Yes. Right.
JEFFREY BROWN: And I speak as someone who is experienced at trying to cover those.
JOHN OLIVER: Yes.
JEFFREY BROWN: Serious issues, right?
JOHN OLIVER: They are not funny initially, no.
There’s something about playing with toys that are that difficult that becomes more satisfying for us to kind of break by the end of our week’s process. So, with India’s election, there was some funny elements to that, but the thing that really drew me to it was, this thing is incredible.
JEFFREY BROWN: Well, and the other thing, though, that seemed to come out of that was, you were also struck by, this is a huge thing, and nobody is paying attention.
JOHN OLIVER: Well, it didn’t make any sense. It didn’t make any sense to me that the largest exercise in democracy in the history of humanity wasn’t interesting enough to cover.
JEFFREY BROWN: And what work goes in? Is there a lot a — is it research?
JOHN OLIVER: Yes.
JEFFREY BROWN: Is it reporting in a sense, the way…
JOHN OLIVER: No, it’s reporting in no sense.
JEFFREY BROWN: Reporting in no sense.
JOHN OLIVER: No, it’s — it’s a lot of research. It’s a lot of reading around it.
JEFFREY BROWN: So you are concerned about getting it right?
JOHN OLIVER: Yes, definitely.
JEFFREY BROWN: Yes.
JOHN OLIVER: Oh, absolutely, because you can’t…
JEFFREY BROWN: That got you. I mean, you really care about that.
JOHN OLIVER: For sure.
JEFFREY BROWN: Yes.
JOHN OLIVER: Because you can’t build — if a joke is built on sand, it just doesn’t work, or it like collapses. It’s very, very important to us that we are — it’s — we’re solid.
JEFFREY BROWN: Net neutrality got a lot of attention. Did it surprise you that you had even the power to kind of get people to respond and to write to the FCC?
JOHN OLIVER: Yes, I don’t know if I really have any power, but it was — it was — it was surprising that people paid attention to it.
JEFFREY BROWN: But you do have a certain amount of power.
JOHN OLIVER: A certain amount. That certain amount, I think, is tiny. I have no moral authority. I’m a comedian.
JEFFREY BROWN: It’s always interested me that Jon Stewart has often had to tell people, hey, we’re a comedy show.
JOHN OLIVER: Yes.
JEFFREY BROWN: We’re not a news program.
JOHN OLIVER: Yes. He’s right.
JEFFREY BROWN: Right, but there is this blurring, is there not?
JOHN OLIVER: Not in our minds, no.
JEFFREY BROWN: Not in your minds?
JOHN OLIVER: No, no.
I mean, yes, I can’t speak for him, but, yes, we’re comedians. I think that becomes more a sad commentary on news than it does on us, though.
JEFFREY BROWN: You don’t want that.
JOHN OLIVER: The only responsibility…
JOHN OLIVER: … as a comedian is that I have to make people laugh.
JEFFREY BROWN: Yes.
JOHN OLIVER: If I don’t do that — and I’m sure that I often don’t — then I have failed.
JEFFREY BROWN: When did you first decide that you wanted to focus on current events?
JOHN OLIVER: When you do stand-up, you’re just concerned with trying to leave with some semblance of human dignity at the end of your performance.
JOHN OLIVER: Once you learn how to make people laugh, then you get to choose exactly how you want to make them laugh.
JEFFREY BROWN: Oh.
JOHN OLIVER: And so then you can get to make jokes about things you actually care about.
So, rather than doing anything to make people laugh, you can then select. Oh, well, maybe I’m interested in talking about, you know, my life, or about politics, or about sports. You know, you can direct your comedy. You kind of — you can control it better.
JEFFREY BROWN: Yes. Does being British, an outsider, help you in looking at American politics, and journalism, and culture?
JOHN OLIVER: I think being an outsider in general always helps you in comedy. I think it helps to have an outsider’s eye. And so I have an outsider’s voice. You know, as soon as I start talking, I don’t belong here. And I think that helps in a way.
JEFFREY BROWN: And are you finding yourself more American?
JOHN OLIVER: That is a good question.
I certainly love it here. And I love living here. And I see this as my home, kind of physically and emotionally.
JEFFREY BROWN: Yes.
JOHN OLIVER: So, yes, I guess. I have kind of fallen in love with this country.
I would like — I would really like to vote. No, it — when I got my green card it was a — it was a really emotional moment. And I wasn’t expecting that to be the case. And I nearly cried, again, nearly — I’m British. Nearly crying is — was going, oh, my goodness.
JEFFREY BROWN: But if you get your citizenship, you will be bawling?
JOHN OLIVER: Then I will cry American tears, you know, like the kinds that you guys always cry at the Olympics.
JOHN OLIVER: We’re always — that’s always the British view. No, you talk about Americans watching “Downton Abbey” and thinking, God, what is wrong with you people? British people generally watch Americans during the Olympics and say, oh, for goodness’ sake.
JEFFREY BROWN: Pull yourself together?
JOHN OLIVER: Pull yourself together. You won. All right, for goodness’ sake, sack up.
JEFFREY BROWN: All right, John Oliver, thanks for talking to us.
JOHN OLIVER: Oh, it’s a pleasure. Thanks.
JUDY WOODRUFF: And there’s more online, where John Oliver tells Jeff why “Downton Abbey” reminds him a bit too much about his own childhood. You will find that on Art Beat.
JUDY WOODRUFF: It had to end sometime, and yesterday’s final game of the 2014 World Cup in Brazil provided a thrilling conclusion to what, by all accounts, has been a memorable contest.Overnight, Germany celebrated its 1-0 win over Argentina in extra time, its fourth Cup title overall and first since 1990. The victory came after Mario Gotze knocked the ball down with his chest and then kicked it into the far side of the net.
Meanwhile, Brazil is beginning to come to terms with its team’s devastating losses and the high costs of hosting the Cup. In the U.S., record high TV audiences may signal a new level of interest in the beautiful game.
For these and other takeaways, we’re joined by Tommy Smyth of ESPN, who called the games on radio and Matt Futterman of The Wall Street Journal. He’s still in Brazil.
And we welcome you both to the NewsHour.
So let’s talk first about Germany’s win yesterday.
Matt Futterman, how big an accomplishment for them?
MATTHEW FUTTERMAN, The Wall Street Journal: This is a huge accomplishment for them. It’s something they have been working on for about a decade, now, since Joachim Loew, the current coach, and the former coach, Jurgen Klinsmann, really decided to remake Germany from a very sort of tactical, sort of laboring, defensive-minded team, into this attacking machine that is just absolutely relentless, has some of the greatest athletes in the world playing for it.
And they have been close in the last few big tournaments, and they finally got where they wanted to be last night.
JUDY WOODRUFF: Tommy Smyth, what do you think put Germany on to the top, over the top, and did the other teams even come close?
TOMMY SMYTH, ESPN: No, the other teams didn’t come close.
If you at Brazil, they got the lard knocked out of them by Germany 7-1, and they were the host nation. They were the team that everybody said, let’s just give them the Cup. We won’t even have to play for it because they were the big favorites.
But I think the big change for Germany was when they went back to the conventional play, and Philipp Lahm on one side. Then the German team started to go. And they just kept coming at you and at you and at you.
And, keep in mind, the man who scored the winning goal is only 22 years of age. And to win the World Cup in South America, no European nation has ever done it. And in doing so, they beat Brazil and they beat Argentina, two South American powers. It couldn’t be any better for the Germans.
JUDY WOODRUFF: So, Matt Futterman, you agree; none of the other teams even came close it was all said and done?
MATTHEW FUTTERMAN: Well, I mean, Argentina came pretty close last night. A goal in the 113th minute of extra time, that’s the way these World Cup finals have been going the last eight years, into extra time. That’s pretty close.
At the end of the day, though, if you look at the — you look at the resume of the seven games that Germany played, it was a pretty impressive show they put on. And, obviously, we are going to be talking about it for 50 years, that 7-1 blowout of Brazil on Brazil’s home soil.
JUDY WOODRUFF: Tommy Smyth, what are these games going to be remembered for overall? How good have they been?
TOMMY SMYTH: Well, I would say, in my opinion, this has been the best World Cup that I have ever seen. And, mind you, I have seen a few of them. I have been around for a while for these World Cups.
It had controversy, it had great games, it had great players, it had surprise results. The U.S. got a great run in it. All of us, for 100 years, we will talk about the 7-1 shellacking of Brazil by Germany.
And then the fact they have always said that football is a game where you run around after the ball for 90 minutes, and when it’s over, the Germans have won. In this case, they ran for 120 minutes, but when it was over, the Germans had won again anyhow.
JUDY WOODRUFF: Matt Futterman, what are you going to — what’s your main takeaway from this amazing World Cup?
MATTHEW FUTTERMAN: Well, I think it’s pretty — I think Brazil really proved something to the world in terms of being able to pull this thing off.
I mean, really, up until the last minute, there were these questions about to whether this event was going to be able to happen, whether the stadiums were going to be finished, whether the infrastructure was going to be finished. And I think Brazil surprised a lot of people.
And that is a huge, huge accomplishment for a country that’s going to be hosting the Olympics in two years. There were a lot of questions about that in May. I would say there are a lot fewer questions about whether that Olympics is going to be able to come off now that we’re into July.
JUDY WOODRUFF: From your perspective, Tommy Smyth, how does Brazil come out of this? Clearly, a huge disappointment for them with their loss, but in terms of pulling off the game themselves, does that in some way make up for the loss?
TOMMY SMYTH: Well, in some way, it makes up for the loss, but, you know, the people weren’t feeling very good about this World Cup because of the money it was costing.
And the people are feeling even worse now because, A, the money it cost and, B, how badly their team played, because football, soccer, call it what you want, is everything in Brazil. And they wanted a good result. They didn’t even get a good result in the third-place game.
So I would say that Brazil are feeling pretty bad about it, but to the rest of the world, they can hold their heads high. They did a fantastic job of hosting the World Cup.
JUDY WOODRUFF: Matt Futterman, as we said, you’re still there. What are the Brazilian people saying? I mean, we know there have been — there’s been a whole lot of conversation since the games, during and since the games ended.
MATTHEW FUTTERMAN: Well, the first thing they’re saying is, thank God Argentina didn’t win, because that’s their big rival, and that would have been the ultimate nightmare, if Argentina had won on Brazilian soil.
MATTHEW FUTTERMAN: They are saying they’re upset. They’re disappointed.
I think this big loss to Germany is going to spark a real conversation about what Brazil needs to do to sort of regain that prominence and that confidence in world soccer that it had really for the last 100 years. Nothing happens by accident in sports anymore. Brazil really needs to make an effort to cultivate and develop the talent that it has.
It’s a huge country. People play soccer all the time here, but countries like the Netherlands and Germany are putting a tremendous amount of money into developing their players. That’s really the road that Brazil is going to have to go down. They are going to have to build up their domestic league and they’re going to have to create an environment where they can have these players that are so great and actually bring them together so they’re terrific at 22 as they are at 14.
JUDY WOODRUFF: Tommy Smyth, let’s talk about the United States.
What does the U.S. take away from this? How much — is soccer now more popular in the U.S. than it was before this World Cup?
TOMMY SMYTH: Oh, no question about it.
Everybody’s talking soccer. Everybody’s watching soccer. The viewing numbers have been astronomical for ESPN, even radio and on the Internet. It’s been everywhere. So I think that soccer has come to a different level in the United States now. Now the team has to push itself forward and it has to get itself to the next level.
It got out of a very difficult group this time, but got to the stage where — this round of 16, which was what happened last time, and was knocked out on a goal on extra time, which is what happened last time. So the next time, they have to shoot for at least a quarterfinal berth, or the people in the United States are going to start saying, well, we have interest, but it’s not that big an interest, because you have to be a winner in the U.S.
JUDY WOODRUFF: Tommy Smyth, you watch this sport so closely.
What does it take though to sustain soccer up and down the line, I mean, in terms of young people playing the sport, all the way up to the team that makes it to the World Cup?
TOMMY SMYTH: Yes, you have got to start at a very early age.
You have got to have the academies at a very early age. You have got to get them in there at 12 and 14 years of age. You have got to develop them through high school. You have got to develop them through college. MLS has to step up to another rank. It has to start developing the players.
And I think they have to do a better job at scouting. There are players in this country that are not being seen, but I think they have to scout them and they have got to get them at a young age and get them into a system and have them playing against good players.
It’s fine to go to college. When the United States team gets to the final of the World Cup, it’s always the best educated team at the World Cup, not necessarily the best football team. So, I think somewhere along the way, they are going to have to make the decision. OK, I’m going to play soccer or I’m going to be educated.
There’s nothing wrong with an education, but these guys who are playing soccer in other countries are playing against the best players in the academies, and that’s where they develop their game and that’s how they become so good.
JUDY WOODRUFF: So, finally, Matt Futterman, what would you add to that? What is the U.S. takeaway from this World Cup? How is the legacy of this World Cup seen in this country — in our country?
MATTHEW FUTTERMAN: Well, what usually happens after a World Cup is soccer kind of disappears for the next four years.
I don’t think that’s going to happen these next four years, because you have a unique period coming up here. This is probably going to be the most active sort of interim between World Cups that the U.S. soccer audience has ever seen.
Next summer, you have the women’s World Cup in Canada that’s right next door. The U.S. women are the best team in the world. They are going to capture everybody’s hearts once again. They always do it.
2016, the Copa America is going to be hosted in the U.S. It’s going to be the best South American teams playing against the U.S. on U.S. soil. 2017, you got World Cup qualification and then 2018 you’re going to be in Russia again for the World Cup.
These next four years are going to go very quickly. And for people who got caught on this sport in the last month, there is going to be a lot for them to pay attention to.
JUDY WOODRUFF: Well, it’s been a great World Cup to watch.
Matt Futterman, Tommy Smyth, we thank you you both.
TOMMY SMYTH: Thank you very much, Judy.
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When I was asked to narrate Sergei Prokofiev’s Peter and the Wolf at the Castleton Music Festival this year, I was surprised, flattered — and also a bit nervous. My days of being able to read a musical score are decades past. And famed conductor Lorin Maazel, the impresario who founded the Castleton Festival in rural Rappahannock County, Virginia, would be conducting the orchestra — and me.
If only it had been so. In fact, Maazel, who had battled an autoimmune disorder for years, fell ill early in the festival’s four-week run, and younger guest conductors took his place at rehearsals and performances. Then Sunday morning, just hours before our 2 p.m. matinee, the Maestro died.
General manager Nancy Gustafson announced the news to the darkened theater, to gasps from the many in the audience who had not heard. Then, in an astonishing tribute to Maazel — and the spirit of the Castleton Festival he and his wife created — the show went on.
Backstage afterwards, I collapsed in a folding chair next to young tenor Tyler Nelson from Utah who had sung Ottavio in “Don Giovanni” to rave reviews a week earlier — and offered him my sympathies. “Maestro was so encouraging to me. I’m going to miss him so much,” Tyler whispered back. “He had very exacting standards. He demanded a lot of you. But he never put you down, even when he was telling you that you could do better — not like other big musical figures you get the chance to train with.”
The New York Times obituary noted: “Perhaps because he grew up in the limelight, conducting orchestras from the age of 9, Mr. Maazel was self-assured, headstrong and sometimes arrogant.” Arrogant, perhaps, to the wider professional musical world.
But to the young people who flocked to his eight-week summer program and camp for stars-in-the-making, he was the man who — as he described it himself — had found in young musicians the “labor of love — and labor of joy” of his life. And theirs.
Editor’s note: This article has been corrected to reflect the name of the general manager of the Castleton Festival. It is Nancy Gustafson.
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JUDY WOODRUFF: Finally tonight: remembering the Nobel Prize winning writer and anti-apartheid activist Nadine Gordimer, who died today at her home in Johannesburg.Gordimer used her pen to write damning indictments of South Africa’s rigid system of racial segregation.
In 1987, she talked with the NewsHour’s Charlayne Hunter-Gault about the possibility that the white South African government could decide to ban the book she had just written. Three of her prior novels already had been banned in previous decades.
Here’s an excerpt.
CHARLAYNE HUNTER-GAULT: What is it like to work and create and produce, knowing that the state might say, this will never see the light of day here?
NADINE GORDIMER, Anti-Apartheid Activist: Well, it didn’t quiet it to be writing in a world language.
So all of us who are banned there, who are also published outside, as well as in the country, at least we know that we reach other people. But that’s one thing. And you do want to be read by your own people in your own country.
So it happened to me three times. And I can only say that it’s a ghostly feeling, because you have spent, in this case of this book three-and-a-half years. It’s a long time of your life have gone into that book, and you have been living concurrently obviously with it. Things have been happening to you, to your friends, the society in which you live. And you really want their reactions to this book.
CHARLAYNE HUNTER-GAULT: Under those circumstances in something you do can be banned, what goes through your mind as you create? Do you watch every word, every thought?
NADINE GORDIMER: It doesn’t hang over my head at all. I can only speak for myself. I never think about it, never.
And I think, if one did, that would be very inhibiting. And among the people I know, the writers I know, black and white, they don’t think about it either. You get lost in the work. You do the work. The thinking comes afterwards, when you read the book over. And then you think, oh, my God, you know, this may bring me into trouble or that may.
But I may say, in my case, I have never changed a single word, and I never would.
CHARLAYNE HUNTER-GAULT: You seem to be speaking out more publicly than in the past. What’s motivating that?
NADINE GORDIMER: Living there, realizing that one has a responsibility as a human being, as a white African.
It’s no good just saying, I believe that there’s going to be a post-apartheid South Africa, that there’s going to be justice there. Nothing is going to be perfect, but I believe in the future of South Africa. You have got to put your life on the line and show that you’re in the struggle.
JUDY WOODRUFF: Nadine Gordimer, who died today, was 90 years old.
You can watch Charlayne’s entire interview with her on our web site.
The post Nadine Gordimer, 90, Nobel-winning novelist who spoke out against apartheid appeared first on PBS NewsHour.
Big tobacco just got bigger.
Two of the largest names in tobacco joined forces Tuesday when Reynolds American bought its smaller rival Lorillard to the tune of $27.4 billion. This move unites the No. 2 and No. 3 American cigarette companies in what appears to be a combined effort to win over the lion’s share of the shrinking smoking population.
Reynolds plans to pay $68.88 in cash and stock for each Lorillard share and assumed all of their former competitor’s debt.
Yet two separate companies are also involved in divvying up brands and assets. British American Tobacco, which currently owns 42% of Reynolds, will buy about $4.7 billion worth of new shares to keep their same level of ownership in the company.
The Bristol-based Imperial Tobacco Group has agreed to purchase Reynold’s Salem, Winston, KOOL and Lorillard’s Maverick brands in addition to the widely popular Blu e-cigarette brand. They will pay $7.1 billion and also acquire a former Lorillard manufacturing plant in North Carolina. Many speculate that Reynolds sold these brands to ease the antitrust scrutiny that the deal may face.
The deal gives Reynolds an edge over their competitors especially when it comes to the geographic diversity of the company and their stake in menthols, which is one of the fastest growing products in the industry. Newport menthol cigarettes are the countries most popular menthol and attract 40 percent of new smokers.
Blu’s divestiture surprised a number of analysts since the brand rakes in 40 percent of the American market for e-cigarettes. Yet Reynolds announced plans last month to grow the distribution of its own e-cigarette brand known as Vuse. For the moment, executives remain confident that Vuse can continue to compete with Blu.
In the end, Reynolds expects to increase their revenue to over $11 billion, with about $5 billion in operating income annually.
Thirty years ago this week, Geraldine Ferraro was chosen by Walter Mondale as his running mate on the 1984 Democratic ticket, making history as the first woman to become a major party’s national nominee for office.
According to Rutger’s Center for American Women in Politics, women accounted for only 13.4 percent of Congressional seats at the time of Ferraro’s nomination. Today, women account for 18.5 percent of seats. A women has yet to serve as vice president, let alone occupy the nation’s highest office. Where do women stand in politics today? What was the impact of Ferraro’s nomination, and what is its legacy? How do factors such as media coverage affect women’s bids for office, and the work they do once elected?
@NewsHour invites you to participate in a Twitter chat this Thursday, July 17, from 1 to 2 p.m. EDT on the subject of women in politics. We will be joined by Ms. Ferraro’s daughter, Donna Zaccaro (@DonnaZaccaro), and NewsHour’s political editor and senior producer Domenico Montanaro (@DomenicoPBS). Follow along and chime-in using #NewsHourChats.
For more than three years, Portland illustrator Benjamin Dewey has been working on the Tragedy Series, a Victorian-themed web comic. With the publication of his 500th installment and a book deal, he’s calling it quits. John Rosman at Oregon Public Media spoke to Dewey to find out more.
Since July 2011, almost like clockwork, Portland illustrator Ben Dewey produced three comics a week for his off-beat comic “Tragedy Series.” Over the last three years he has cultivated a modest, loyal following, but that audience is about to get much bigger — the comics will be published in full-length book form in March.
For most artists, a book deal might be just the validation to spur them to produce even more work. Not Dewey. This summer when he completes his 500th tragedy in the series, he is done. He says he’ll never produce another tragedy again.
The Tragedy Series takes place in a Victorian universe. The comics are full of clever wordplay, surrealism and absurdity and many of the seemingly innocuous jokes pack a deeper, cosmic tragedy.
“Tragedy #81” is one part a comment on communal living. But it’s also a look into the sad existence of unclean dishes.
“I’m trying to make things for people to extrapolate, even at the most superficial reading. I pack a lot of information into each drawing,” says Dewey.
If you spend time with any of his drawings, there are deeper meanings to be found.
“The expressive details he brings to the page, most artists work their entire career to achieve,” says David Harper, associate editor of the online publication Multiversity Comics.
“What Ben’s doing is telling these delicious ironies and oddities in one-and-done formats,” says Harper. “It’s perfect for today … singular images you can share anywhere.”
The comics lend themselves to social media, although the overall morose tone may seem daunting for a binge read. But if you ask Dewey why he creates tragedies, he says they are not that different from comedies.
“Carl Sagan is a hero of mine. His perspective on the universe makes it possible to look at things that are both finite but beautiful,” says Dewey. “You can’t really have one without the other. You need both. The experience of joy and optimism is balanced against the face of real loss, real sadness and tragedy,”
“It’s the nature of human experience. It’s finite and fraught with tragedy. But it’s also a unique talent we have. Not just to blunder through a brutal world until it’s over. But to observe along the way ‘what’s funny, what’s beautiful?’”
Dewey loosely follows four rules for creating a successful tragedy.
First, “no genuine tragedies,” says Dewey. “It’s not funny if it’s just like ‘your dog died.’ That’s horrible and nobody likes that.”
Second, “Nothing after 1900. The reason behind that is removal from a situation — comedy is tragedy plus time. You have 100 years between living memory and the experiences happening to people,” says Dewey.
“Also, everybody in that era regardless of whether they’re a fingerless onion peddler or the King of Spain all have some costuming element that makes them seem like a straight man. If everyone is Dean Martin to fate’s Jerry Lewis, you can subvert constantly.”
Third, try not to be longer than 12 words. “I want that bounce between the image and caption to be like ping pong paddles. I want it to happen in a way where you see the picture you connect to the text. You go back, go back, go back.”
Fourth, try to avoid repeats. “Up until ‘Tragedy #400,’ I was like, I don’t want to repeat words. I don’t want to repeat concepts. I don’t want to repeat animals. No repeats.”
When talking about comics it’s easy to draw comparisons to television or sequential movies. They’re both serialized storytelling. If that’s the case, Dewey is ending the Tragedy Series to avoid jumping the shark.
“Why is Breaking Bad so good? Because it’s a great arc from start to finish,” says Dewey.
“Why is Star Wars increasingly problematic? Because they have taken this thing that has a finite quality and the wheels started coming off with ‘Return of the Jedi.’ It barely holds together. That’s heartbreaking for me to say, because I loved it so much as a kid. But now as a 33-year-old watching it I think, ‘Man, those Ewoks were a weird choice.’”
Dewey is killing the series while it’s still fresh and inventive. He wants it to have integrity. He understands that he’s taking a risk ending the series before it’s published on the mass market. That’s the point.
“Steve Jobs creates the iPhone and it’s not 20 minutes until someone asks him: ‘What’s next?’ I think that’s kind of a good place to be. If you’re the same person who’s just making Twinkies, that’s great you’re the Twinkie guy. But you’re not taking risks, real leaps.”
Benjamin Dewey’s complete Tragedy Series will be released March 2015 through Thomas Dunne Books. You can see more of the Tragedy Series below:
Local Beat is a weekly series on Art Beat that features arts and culture stories from PBS member stations around the nation.
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Editor’s Note: In Making Sen$e’s report on “the artisan economy” Tuesday evening on the NewsHour, Paul Solman speaks with two exterminators and a dementia coach. Not what you typically think of as “artisans”? Well, how about operators of a fresh fruit Popsicle company or a line of handmade dog leashes, both crafted in a repurposed Brooklyn factory? Any of those jobs can be artisan says Larry Katz, the Harvard professor who’s coined the term “artisan economy.” What makes them artisan is that they’re not standardized occupations; they involve what he calls “personal flair” in each stage of the job.
But this movement is about a lot more than hipsters bucking a traditional career path. Katz believes the artisan economy can help shore up the American middle class by creating new jobs to replace those mass production and middle management jobs lost to outsourcing or new technology. And he thinks that a firm grounding in the multidisciplinary liberal arts is the best preparation – better even than a business degree – to taking advantage of the artisan economy that he hopes will be a path to upward mobility for the average American. His extended interview with Paul Solman, edited and condensed for clarity, is below.
So what is an artisanal job?
Historically, an artisan is somebody who did the entire work largely by themselves — conceive a project, put it together, make it. Think about Paul Revere as a silversmith in Colonial America.
The potential is almost anywhere — it’s typically not an organizational job where you’re just moving up a ladder, but in principle, you could be an artisan as a wait person or as a baker.
What’s the basic problem that the artisan economy is trying to solve?
The basic problem is the decline of what has been traditional middle class jobs, the hollowing out of the middle of our economy and trying to find a new way to provide upward mobility for the typical American.
Artisans were very important in the colonial economy. But in some sense, mass production in the large industrial economy drove out a lot of artisans. The individual blacksmiths and gunsmiths were replaced with large production processes that made standardized goods much cheaper.
And that’s happening now, every day?
It’s happening every day. In the 19th century, when high-earning artisans were displaced, two groups benefited – the highly educated workers who became the managers and the engineers who designed the technological processes that replaced the artisan. And then there were a lot of frontline workers, who were less skilled than the artisans, on the assembly line.
So a lot of the jobs that became the middle class jobs of the mid to late 20th century – mid-level managers and production workers, for example, are exactly what new information technology is very good at replacing. You don’t need as many middle managers if you can directly monitor with a computer what the frontline worker is doing; a robot can do the production process or it can be outsourced.
We’ve seen growth in jobs for people with abstract creative skills, like designing an auto teller or thinking of new ways to entice consumers to want to make more financial transactions. There used to be people who actually graded every mortgage; now it’s writing a program to grade the mortgage or interpreting how to market them.
There’s the potentially hopeful scenario of, in some sense, being able to bring back the old mass production artisanal work with new technologies of today that allow a lot of customization and creativity in the same way that hand work did in the past.
So that could range from designing an app or being a carpenter who uses technology to customize a kitchen cabinet for the high-end abstract worker. If I’m a carpenter, if I can figure out what idiosyncratic items you would prefer and design them myself, I’m a much more valuable contractor in the same way that someone like Paul Revere could personalize what a silversmith did.
I could be a college graduate who goes out and thinks very seriously about using local produce or I could be someone with community college training and set up my own catering service or restaurant. That might not look like a traditional college job or a middle class job, but that can be very lucrative if I’m doing that in a creative way with flair in a way that a standard fast food restaurant isn’t.
So I think there’s a possibility of an economy emerging in which the ability of people to have their own personal style and flair will be much more valuable than just doing routine things. That’s the case at both high-level jobs, but also in being a home health aide in ways that are very valuable to your patients and that will earn you a higher income eventually. I think that’s potentially where there may be a new middle class.
We speak to a dementia coach in our Making Sen$e story on the NewsHour Tuesday who coaches families on how to deal with a relative with dementia. Is she part of the artisan economy?
Working with the elderly is a huge area. And this is where the growth of what I call the “artisan economy” is beneficial not just to the worker. In the worst case scenario, [working with the elderly] is a minimum wage job where people are effectively babysitting and not really learning, and the elderly are pretty much checked out and sedated in some cases. But it could be done in a way that brings dignity to the patient and their family – that’s a skill that requires some education, but a lot of experience would be much more valuable if we reimburse that in a way that took into account the skill of an artisanal dementia coach or home health aide. We should be doing that in Medicaid and Medicare. That’s the kind of middle class job that’s going to be extremely valuable going forward as opposed to a “McJob” where the person just does a routine.
Human interaction presumably makes a huge difference at some deep level of our brains, right?
Computers are very good at an algorithm, but lots of people might do much better with another human being who has a little empathy.
Well there’s “Her,” the new movie where there’s a computer program that is extraordinarily empathic.
It is true that there are ways of programming and maybe 20, 30 years from now, computers will be telling physical therapists and contractors what to do, but we have a window where I suspect computers will be more tools to enhance your individual flexibility and flair rather than substitutes for you.
That’s the key: can you complement the new computer technology and use it to provide a better experience rather than just be someone who does a routine thing that anyone could replace you in doing? There’s enough human ingenuity out there and enough demand for new experiences that people will be able to take advantage.
But to get there, we need to rethink education – not just to produce people who can do well on standardized tests, but who can also work in collaborative ways with interpersonal skills.
We recently did a story on apprenticeships at BMW’s plant in Spartanburg, South Carolina. Are apprenticeships helping boost the middle class by teaching manufacturing workers how to be more efficient with new, more sophisticated machinery?
Traditional apprenticeship programs have been a valuable way for a small group of individuals, at least in the United States, to gain a set of skills that have been very valuable in the manufacturing sector. The U.S. could expand apprenticeships, but I think it’s unrealistic to believe that that expansion could make a very big dent in the unemployment problem or the skills gap or inequality because the types of jobs apprenticeships train for are exactly the types of things that are likely to be become more and more obsolete.
Where I think there’s a future is less just the traditional apprenticeship and more what you might call “contextual learning,” which gives you a foundation of liberal arts that’s very flexible and combines that with learning a trade that’s valuable in an industry today, but not so narrow that if demand for that particular skill goes away, you’re left with nothing.
We have evidence of this, for example, in a way of doing high school known as Career Academy, which has been evaluated using a gold standard randomized control trial. It tries to provide a very rigorous high school education, but for part of the week, you go work with an employer to try to apply what you’re learning.
So you might work in a hospital part of the week while you’re learning biology and physiology and actually see what you’re doing in practice. The goal isn’t necessarily to make you a health technician — maybe you’ll end up being a physician, maybe you’ll end up being an investment banker who invests in pharmaceuticals stocks — but it’s to connect your knowledge to the real world.
And what did this study show?
The study showed that that type of training, even eight years out, was improving earnings. Even if people weren’t doing the exact same thing that their internship was in, it was valuable; it got them excited about learning; they went further in school and they were much more flexible at moving across jobs over time. We’re seeing similar things with a set of programs known as sectoral employment programs.
There’s a very nice one known as Per Scholas, which operates in the Bronx and provides IT certification, often to people who have dropped out of community college or are from disadvantaged backgrounds. We’re seeing very strong effects several years out; they’re getting life skills, detailed technical knowledge, but also a broader set of skills.
The idea is you finish school with a very marketable current skill, but also with a broad set of knowledge and experiences that allows you to move beyond that. So you could go further in education or if that job disappears, you’re much better prepared; you also have a more positive view of retraining because you know you got turned on by knowledge.
So who do you imagine is going to be capable and interested in taking these jobs?
The hope is that our K-12 education system would generate people with a strong enough background that with some college training and their own ingenuity and interests, the vast majority of Americans would have the possibility of getting a job like this.
Not the ones who aren’t going to college?
Right, I think it’s still going to require some college in most cases — it doesn’t have to be a four-year college.
For anyone who finishes high school, who wants to go on and pick up both a good further education and a set of skills that are valuable in the labor market, this is a potential path. It’s not going be, “Today I just finished my two-year degree and all of a sudden I’m an artisan!” Bopping around through a number of jobs and figuring out your niche is going to be the more typical experience of a lot of American workers — not just entering one job and staying there throughout their lives.
Yes, we’ve been hearing about this, most notably since the Clinton administration, with how many jobs you can have in a lifetime. It’s still the case that about two-thirds of Americans still do not get four-year college degrees, right?
Yes, and this group has been struggling, and this [artisan idea] is just one possibility — it’s not by itself. There will still be a lot of routine, traditional jobs. A higher minimum wage and a more generous earned income tax credit are going to be necessary. Not everyone is going to succeed. If we want people to take risks and move into these types of jobs, we’ll need a reasonable social safety net — especially for health care access since you’re often not going to have it from a traditional employer. This is a part of trying to build a society with more broadly shared prosperity, but it’s not by itself sufficient.
We both encounter a lot of college kids; they’re worried about the future. But if they’re going to Harvard, they don’t really have anything to worry about, so is this broadly applicable to people who are getting four-year degrees even?
Yeah, to some of them. Over the last several decades, college-educated workers have done much better than everyone else in the economy, but even among college-educated workers, there’s been a huge growth of inequality. So kids graduating from Harvard and Williams in computer science, economics, physics and some humanities are doing pretty well in the job market. In today’s weak economy, kids graduating from good state universities are doing pretty well too, but many college graduates today are facing a very tough market. These are the ones who would have gone into being traditional middle managers.
So what you see is that, in some sense, the bottom half of jobs for college graduates has been just as affected by this as the top half of jobs for non-college graduates. … And yet someone who is a college graduate who ends up being a pastry chef looks like they’re in a non-college job, but that can be done in a way that’s very valuable and lucrative.
I know a pair of brothers, both of whom got college degrees, who are now going into their father’s plumbing business. Are they part of what you’re talking about?
In general, yes, they would be able to communicate with clients in ways that someone who only had experience in the plumbing industry wouldn’t. They may bring an outside perspective and a creative engineering of problem solving that could be quite valuable.
You and me, if we were younger, what would we do, do you think? You’ve got a tenured position at Harvard, so you have nothing to worry about, and I’ve been playing this one niche for a very long.
THE LIBERAL ARTS
I think any young person is going to want a strong liberal arts education to give you the basis to move in a lot of different directions. I actually think it may be that a really strong liberal arts education is going to be more valuable in the future as opposed to a very specific thing by itself. A traditional business program may be less valuable in the future than someone who may have been a humanities major but learned a bunch of science and analytics as well. It’s going to be your ability to deal with what can’t be turned into an algorithm; how well do you deal with unstructured problems and how well do you deal with new situations; that’s really key.
But you hear people more and more now saying to college graduates, “Don’t follow your bliss, don’t do what you love because that’s impractical.”
That could turn out to be impractical, but the way to get around that is to combine contextual learning with picking up a marketable set of skills. ideally when you’re young is the time to try to do something. If you look at what many Nobel prize-winners in economics have done, there’s an optimal strategy of doing risky things early and searching around to find a sort of niche. You want to have some insurance that you can fall back on, but you want to try it out at first.
So do you react negatively when you hear people now increasingly say, “Don’t do what you love because that’s impractical” when students graduate college, or high school even?
It’s true that most creative endeavors first fail, but there are many cases where pursuing that might then lead to other opportunities. You don’t want to just do something because it looks like today there’s a safe job in it. It’s the same way when I advise people how to do a dissertation; you don’t get inspired if you just do what someone says is a safe topic. You want to do something that you wake up every morning and feel passionate about — and that doesn’t guarantee that there’ll be a market for it — but in many cases, it’s giving you a good shot.
And what is the dark scenario if artisan jobs don’t come to fruition?
The dark scenario is more of the last several decades: an increase in the concentration of wealth in a small very high-up group, then an increase for the modest group of very educated people who served that group, and everyone else battling out in the world economy for jobs that are driven down to the lowest wages or living off things like disability programs and food stamps with persistently high unemployment. I hope we aren’t there.
In your darkest moments, do you worry that you’re simply trying to make up a solution to a problem that might be intractable?
I always worry. An alternative scenario is one where a small group of individuals owns the robots in the capital stock. That’s a worrisome scenario and we certainly see trends in that direction.
COMPETING WITH ROBOTS
Of course, many of the transitions to new eras are quite disruptive, and the last 30 years have been extremely disruptive, and probably the next decade will still have high inequality. But there was a period in the late 19th and early 20th century where people worried about concentration of wealth and talked about how all people over 40 were going to be technologically unemployed right after the Great Depression. But eventually, with proper investments in education and research, development and human capabilities led to the periods we’ve seen of shared prosperity. We’re very far from being there today, and if we only look at the last 30 years, you should be very worried because you need a longer historical perspective to have the more optimistic view.
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