Marketplace - Don’t touch that AM dial!

Episode Date: November 5, 2024

There are only a few bills with strong bipartisan support in the soon-to-be lame duck Congress. Requiring AM radio in new cars is one of them. Proponents say AM radio is a vital part of the Emergency Alert System and still broadcasts news in rural communities. Carmakers aren’t buying it. Plus, the Dow’s got some newcomers, OPEC (once again) postpones increasing oil production, and farmers stress about tariffs ahead of the election.

A touch on the politics of this economy. We'll do some oil and then a day at the beach. From American Public Media, this is Marketplace. In Los Angeles, I'm Scott Rizdal. Monday, today, November the 4th. Good as always to have you along, everybody. Well here we are. Almost made it. Gonna be a big deal.

I speak, of course, of the Fed meeting Wednesday and Thursday. Pushed back a day because there's something else on the calendar for tomorrow, I guess. Among the many things hanging in the political balance in this election is American trade policy. Just today, the Republican nominee threatened to impose tariffs of up to 100 percent on everything we import from Mexico, which last year was, not for nothing, our biggest trading partner. But tariffs like that, or the 20 percent tariffs on all imports across the board that the Republican

nominee has also proposed don't hit only traditional consumer and wholesale goods. American farmers are going to feel them too. Marketplace's Sabri Benishore starts us off. Josh Gackel is a third generation farmer in North Dakota. I farm with my dad and my brother. Farm about 5 about 5000 acres of soybeans, corn and barley. Gackle is also president of the

American Soybean Association. The harvest is wrapping up now, not wrapped up, is his anxiety around tariffs. Just look back to what happened in 2018, the first round of the trade war and the tariffs with China.

China, one of the top importers of US agricultural products, retaliated with tariffs of its own and bought corn and soybeans from elsewhere. There was almost overnight a drop in the Chicago market for soybeans. US soybean prices fell almost 20 percent, and competitors like Brazil and Argentina gained market share. We haven't completely seen it come back yet. Competitors to US agriculture not only gained customers, they increased their land devoted to farming.

And when that land area comes into production, we've seen it continue to stay in production. Krista Swanson is lead economist for the National Corn Growers Association. More production in other countries means more competition and possible price-killing gluts in the future. So it becomes a long-term impact. With the new 60 percent tariffs former President Trump is proposing for China, Swanson estimates that if China retaliates, corn and soybean exports would crash. Corn exports to China could decrease by about 2.2 million metric tons annually or 83 percent. But Trump's new proposed tariffs would go far beyond just China, extending to most trading

partners. And U.S. farm exports in particular are a favorite target for retaliation. Because they hit sensitive political constituencies. Jeffrey Schott is a senior fellow at the Peterson Institute, so sensitive that the Trump administration spent an estimated $25 to $28 billion in support payments insulating farmers from the consequences of the trade war, Schott says, another hidden cost of tariffs. In New York, I'm Sabri Benishor for Marketplace. OPEC has once again put off its plans to increase production. End of the year now

is the new timeline, the cartel says. That drove oil futures higher today. $71.50 a barrel for the U.S. benchmark West Texas Intermediate, should you be keeping track. Supply and demand basically, right? Marketplace's Elizabeth Troval has more now on what's happening in the global oil market to keep OPEC in this holding pattern for so long. OPEC is in a bit of a damned if you do damned if you don't situation when it comes to oil production. Jim Crane is with Rice University. They've got a lot of oil capacity being held back. Millions of barrels a day.

And even though some OPEC countries are tired of side lining production. The market's just not cooperating, right? Oil prices have just been weak and demand has been weak. But because OPEC has been holding back so much supply, oil prices are still higher than they would be if that oil hit the market. And that's actually encouraged more oil production in countries like Brazil, Canada, Guyana. So a lot of new non-OPEC production that, you know, they don't take

orders from OPEC secretary general. All the while Demand has been very weak in China, weakish in the United States. Joe DeLora with Rabobank says next year he expects more new supply to come online than demand, even without the additional barrels OPEC is holding back. If they start bringing back a lot of that supply, we're going to be in an extremely oversupplied market and we could even see like $50 a barrel crude. Which would not be good for any oil producers, OPEC or not. In the US, it could especially cause problems

for companies in the Permian Basin, where it's more expensive to produce oil, says Ed Hers with the University of Houston. If oil drops down to $50 a barrel, they're going to be having some difficult times continuing production and meeting their financial obligations. On the other hand, if OPEC decides to ramp up production, that would drive down prices for U.S. consumers.

I'm Elizabeth Troval for Marketplace. Wall Street today, a word to the wise. If you are looking for political indicators from the markets, stop. They're long for the ride just like the rest of us. Elsewise equities fell to start the week. We'll have the details when we do the numbers. the the dow jones industrial average the blue chips as they are sometimes called, is 30 companies in this economy, most of which are household names. Before trading starts on Friday, though, two of those household names are going to be shown the door.

Two others are going to be ushered in. Intel, the chip company, and Dow, Inc. That's a material science company, no relationship with Dow Jones, a publishing company and it of the index. Anyway, those two are being replaced, respectively, by NVIDIA and Sherwin-Williams. Marketplace's Stephanie Hughes looks at why NVIDIA and Sherwin-Williams are part of the in-crowd now. Just like with the cool kids back in high school,

you've heard of who's in the Dow. These are name-brand companies, everything from Walmart to Goldman Sachs to United Health Care. James Angel is a finance professor at Georgetown University. He says the Dow is meant to reflect the U.S. stock market and how it's doing at a glance. The Dow is what's called a price-weighted index. That means the higher the price of a stock, the more it can swing the index, or not. Intel's stock price, for example, has fallen significantly over the past few years.

And it wasn't representing the semiconductor group the way the index is supposed to represent it. Howard Silverblatt is with S&P Dow Jones Indices. That's the administrator of the Dow. He says a committee decides which companies are in the index and that it chose to swap in the AI powerhouse NVIDIA with its higher stock price because it wants the semiconductor industry to have a stronger presence. Similarly, he says Sherwin-Williams better represents how the materials industry is doing than Dow Inc., which it's replacing. Mike Harrison is an analyst at Seaport Research Partners.

He says Sherwin-Williams stock price has been on something of a tear recently. So we're looking at a company that's basically grown about 25 times in the last 20 years which is a really really impressive track record right? Sherwin-Williams main business is paint and Harrison says its presence in many brick and mortar stores have helped it make inroads lately with the pro-contractor market. While success like this can put you in the in-crowd, in this case the Dow, the companies there don't change that often. And if you're out, it is possible to get back in.

Howard Silverblatt with S&P Dow Jones Indices says General Electric has been in and out three different times. I'm Stephanie Hughes from Marketplaces. Lost in everything. It's easy to forget that after tomorrow's election, there is still going to be a lame duck session at Congress to get through. At the top of lawmakers' agenda, one assumes, is funding the federal government. The current spending bill expires December 20th. They might also take up the AM Radio for Every Vehicle Act, which, it turns out, has a whole

bunch of bipartisan support. It would do just what its title suggests, require carmakers include AM radio receivers in all new vehicles made in this country. As Marketplace's Henriette reports, the bill has put two big industries at odds, car makers versus broadcasters. Temperatures outside are 57 degrees in Burlington, 55 in Platsburg, and we have winds blowing into the 20s or so. Ginny McGee is live every weekday morning, 6 to 10 a.m.

on WJOY, a tiny a.m. station near Burlington, Vermont. Her studio is lined with pictures and mementos from her 40 year career. And from here, she gives updates on weather, traffic, news and plays pretty much any music she feels like. She also takes calls from listeners, many of whom she knows by name. I bet this is going to be Ginette. Good morning, WJY.

Hi, Jeanette, how are you? You're OK, you're not, but you're not crappy. This kind of show is an endangered species in the radio world, especially on AM, which is now dominated by a few formats. If you're interested in political talk, if you're interested in sports talk, if you're interested in religious radio, then that's often where you're going to find people who are really interested in AM. Michael Stam is a professor of history at Michigan State University. AM radio was once the dominant medium for everything.

Before FM and TV came around, it was broadcasting. And despite the plethora of other media options out there, AM still has a dedicated audience. According to Nielsen, the ratings company, 82 million people listen to it at least once a month. 82 million Americans are telling you they continue to value AM radio, and that's not even accounting for the enhanced need in those times of public emergency. Curtis LeJette is president of the National Association of Broadcasters. His group is lobbying for the bipartisan bill in Congress, which has support from Republican

Senator Ted Cruz of Texas and Independent Senator Bernie Sanders of Vermont. LeJette says AM stations are a crucial link in the emergency alert system and after a disaster, they're often on the air when cell service and power go out. Consumers principally access radio in the automobile, so without that connectivity, you're leaving consumers in the dark, literally. The automotive and tech industries don't buy this. Gary Shapiro is CEO of the Consumer Technology Association. This is nothing but a bailout for panicked AM radio broadcasters who are seeing their

declining audiences as people shift to streaming audio, to other things that they really value. Shapiro and others also say electric vehicles interfere with AM signals, though an independent study found that issue could be fixed for about $70 per vehicle. Opponents of the bill argue there are plenty of ways for people to get emergency alerts, including FM radio. And Shapiro says the bill would interfere with the free market. Forcing it on everyone is unprecedented

in the history of consumer electronics. Beyond the special interest fight, Matthew Jordan, a professor of media studies at Penn State, sees an opportunity. If Congress mandates AM in cars, he says, lawmakers could, at the same time, push stations to get back to a principle he says many have strayed from, serving the public interest. In the early days, those were the justifications for radio, that it was a medium where you

could get farm reports, rather reports, all these things that were of public interest. That kind of programming isn't completely gone from AM. A little after eight in the morning at Ginny McGee's WJOY studio, a colleague pops in from the FM studio across the hall to tell her about an accident on the local interstate. A couple minutes later, McGee is on the air with the news. Just got word from my buddy John across the hall that there's been a tractor trailer and two cars crashing on the interstate southbound on I-89 and that the bridge is closed. It's still possible for now that some listeners heard about the crash from McGee on their

car AM radios. I'm Henry App for Marketplace. Coming up... Is putting something on the waterfront sustainable? Magic 8 Ball says...doubtful? But first, let's do the numbers. Dow Industrial is off 257 points today, 6 tenths percent, 41,794 on the blue chips. The Nasdaq down 59 points, about a third of one percent, 18,179. The S&P 500 dipped 16 points, three tenths percent, 57 and 12.

Heard from Elizabeth Troval about OPEC news. So Houston, Texas based Chevron added six tenths of one percent today. Total Energies, headquartered just west of Paris, gained eight-tenths percent. BP, based in London, surged one and seven-tenths of one percent. On this day in 1960, Dr. Jane Goodall observed chimps using tools for the first time. So some tool companies, shall we? Snap-on, which makes tools specialized for the marine, automotive, railroad, and other industries up two-tenths percent. Stanley Black and

Decker, which makes not only tools but fasteners and storage ratcheted up one and a tenth percent today. Lincoln Electric Holdings, which makes welding tools and equipment drop one and a half percent today. Bonds rose yield on the ten-year T-note down to 4.29 percent. You're listening to MarketFlash. 4.29% you're listening to MarketFlash. I'm Kyle Rizdal, and on How We Survive, we've embedded on the front lines of a fight between the US military and climate change. But that fight's not happening on traditional battlefields.

Instead, it's at places like the edge of the Arctic Ocean. Oh my God! It's a little windier out here. Just a little. On changing terrain. And sea level rises, storms like that will do more and more damage. And in state of the art military facilities

where I became a lab rat. We're gonna drop it from 110 degrees Fahrenheit down to 34 degrees Fahrenheit. I can feel my muscles tensing, right? Discover how the U.S. military might shape our climate future. Listen to How We Survive, wherever you get your podcasts. This is Marketplace. I'm Kai Rizdal. Turns out even on the beach, right away really matters. Should I let these guys go? Yeah.

These guys crossing in front of us are a group of Navy SEALs. They're having a way worse day than we are. Yes, they are. Research yields for special forces. They're lugging jet skis out into the surf, some of them in fatigues and white t-shirts, some in black wetsuits. Okay, what are they making in the Navy SEALs? I don't know. Special warfare is no joke. A lot of times it's in the ocean with full gear and boots on.

Yeah, and it's 59 degrees, cloudy, wet, and these guys are getting in and out of the water. We made a visit to Naval Amphibious Base Coronado last spring, down near San Diego. It's one of two such bases in the whole country. It's on a narrow strip of land that separates San Diego Bay and the Pacific Ocean. So Navy SEALs get more than 5,000 yards of coastline to train on. Besides them, the beach is pretty wide and pretty empty. The sand is wet and packed down. We get into a white pickup truck, along with two people from the Scripps Institution of

Oceanographyography which works with the Navy researching sea level rise and what coastal changes are going to mean for Navy bases. So literally we're just driving along the beach? Yeah so we're gonna we're gonna head up to the northern end of this stretch here and then we'll do... That's Lucian Perry he's a marine technician he's also driving today our truck has big red letters on the side that say survey in progress Scripps has been using trucks like this one also ATVs airplanes Even jet skis to map the coast from the Mexican border about 50 or so miles north up to Oceanside They do this survey every month to see how the coastline has been changing how beaches are narrowing and cliffs are eroding in the face of climate change and sea level rise.

There's a metal roof rack on the truck with what looks like a little gray robot, think R2-D2, sitting on it. So that thing on the roof is spinning. Yeah. And what's it telling us? The laser is sending out like 500,000 pulses per second and a lot of those bounce off of the sand and the surroundings and they're recorded.

And so at the end of the survey we will have maybe 15 gigabytes of data. And it's like sand elevation and location and stuff like that, right? Yeah, it's like sand elevation and location and stuff like that, right? Yeah, it's pretty detailed. You can make out a person's features. That's how detailed it is. So we'll be able to, like when we go back into the lab, we'll be able to see all these birds and the seaweed. This survey gets repeated over and over again and with other data can help create a climate prediction model which

in this case can help Scripps warn the Navy ahead of coastal flooding. And then what do you do with the models? Do you take them to the policymakers and say hey this is what it's going to be like in 15 years or if you do nothing it will you know Coronado will fall into the ocean or what? Well for this particular project that we were working with with the Navy we we built them into long-term projections. That's Mark Merrifield a professor of oceanography at Scripps and UC San Diego. He's in the passenger seat. So what's gonna happen in 2050, 2070 going out to 2100? Looking at like not just how high is the water gonna get but details like how much of the beach is

gonna be gone like when the operations we just saw with the SEALs, how does that affect the mission of the training mission, how often is the beach wide enough to actually use. So we're trying to give them as much detail as we can of a time horizon of potential problems so you can get out in front of them in a proactive way. Scripps gets some funding from the Army Corps of Engineers to do this work, and obviously they work closely with Coronado Amphibious Base too. So this, you can see on the left here,

this berm that's built in. Basically sand barriers built on the beach by CBs, Navy Construction Battalions, to keep the water back. Every year, CBs come out here and just scrape the sand from the beach toward the shore, and that beach toward the shore and that little bit of berm is pretty critical for protecting the base there. It's a pretty low-lying area. It's not much. It's like what, four, five feet high?

Yeah, but you can already see it high tide. Yep, it already hits. It's already hits. And the big trouble here is El Nino events So El Nino comes the water levels higher waves are bigger And it wasn't this El Nino, but the one in 2015 16 that the beach was actually I mean that that berm was breached and led to flooding in the back area there This was kind of a big deal Navy buildings and a a parking lot were flooded about $100 million in emergency repairs.

Extrapolate for me up and down the coast of California and up and down the west coast of the United States. Same thing is happening, right? It is. So let's see, since there's been sea level measurements here since the early 1900s, last century sea level went up about eight inches or so. Between 2000 and 2050, it's predicted to go up another foot. So that's what everyone is dealing with.

It's not just San Diego, it's the whole coast. The whole time we're driving, we're collecting data that is used to track changes over time. There's a section at the south end of this survey. I think you guys are going gonna exit before we get there but it's an area where over the years it's changed a lot and now we can't drive past that section anymore. It's that change over time that's the thing. More than a decade ago a stretch of beach a little bit farther south than where we are went through sand replenishment adding sand dredged up from offshore to the eroding beach,

which years later, combined with El Nino, blocked an estuary. And it has some unexpected consequences, like closing off the mouth of the Tijuana River, and there was a die-off of animals like leopard sharks. It's a complicated issue, because one of the things you can do for beach protection is put a bunch of sand on the beach.

Right, right, and that's not new. We've been doing that for a very long time. That's right, and they do it because it's basically effective. It gives you five or six years of a wide beach. They had a little trouble here because when they put the sand out, the sand grain wasn't quite the native grain size and really some unusual buildup of a kind of a moat almost of water that was at a high high. That's wild. Such a small detail.

Yeah. Such big problems. Yeah. Toward the end of the drive down the beach, I see a building off to the left. It's new, shiny brick, lots of glass. Yeah, that's actually really interesting, right? Here's the Navy building a new special warfare center just over the berm so after the drive we asked the Navy about tell me who you are and what you do around here sure my name is Jason Golumsky Jones I am the Navy

region southwest fleet environmental director you get the data you get the input from scripts and and others and then you guys have to make policy decisions right correct correct so we have to take that data, work with our headquarters, work with DOD, and kind of figure out how we look at buildings, how we look at infrastructure, where we look at building. You'll see about three miles down the road the brand new Coastal Campus.

We just drove by. Beautiful, brand new facility. But to do that, we really had to study on is putting something on the waterfront sustainable? That's literally what we were asking ourselves as we drove by and clearly the Navy's made the investment. Gotta be multi-million dollar and you guys said okay. Yes, yes we did.

We looked at and studied and analyzed that ad nauseum planning Determining that it's about a hundred year flood or a hundred years worth of use before We could be impacted by that This is way above your pay grade, but there's gonna come a point where somebody's gonna say you know what we have to move The amphibase coronado we have to move the SEAL school. We have to move the whole smash We just we can know we have to move the sealed school we have to move the whole smash which we can't be here anymore might be a hundred years now but it's coming

that may come at a certain point yes uh... but i don't think the navy is going to shy away from the waterfront our mission is here our focuses here and we need to complete that mission. Where that happens, it will always be near the water, unfortunately, which makes the

challenges coming towards us a little bit more exciting to kind of work on. Exciting is doing a lot of work there. Yes. There's the military's mission and then there's preparing for climate change. That's the tension we kept coming across in our series about American national security and the shape-shifting threat of climate change. It's on our podcast, How We Survive. You can download or follow or subscribe on the way out today, a not great, kind of troubling actually, piece of

data on home ownership in this economy. It comes to us from the National Association of Realtors, their annual State of the Market report out today. The average age of home buyers in the United States is now 56 years old. That's up from 49 just last year. Reading between the lines here, it means younger would-be home buyers are just being priced out.

Our daily production team includes Andy Corbin, Lizzie Hassen, Maria Hollenhorst, Sarah Leeson, Sean McHenry, and Sophia Terenzio. I'm Kyle Rizdal. We will see you tomorrow, everybody. This is APM. Hey everyone. I'm Rima Grace, host of This Is Uncomfortable, a podcast from Marketplace about life and

how money messes with it. It's hard to believe, but we are somehow in our 10th season of the show. To celebrate, I sat down with the founding producer and we chatted about everything from the early days of the show and the terrible titles, we almost named it, to what we've learned making This Is Uncomfortable. You'll also hear our favorite money tips from expert guests and how the show has helped some listeners make dramatic changes in their lives. You can hear this special episode of This Is Uncomfortable wherever you get your podcasts.