- but don't click! You'll lose your rights. – but don’t click! You’ll lose your rights.

Cheerios, Betty Crocker and Pillsbury might sound like the most American of American brands, but it sure sounds like Betty and friends hate America.

Perhaps you spotted a New York Times story today about consumers giving away their right to sue Big Brand companies if they do something as simple as download a coupon or like a page. In this case, the Big Brand company is General Mills, and it has now joined the long list of firms that are cajoling consumers into surrendering their right to sue by sneaking oppressive legal terms into every last corner of fine print. The good folks at the American Association of Justice alerted me to this on Monday, and I didn’t jump on the story right away because — well, what company hasn’t snuck binding abitration/class action prohibition language into standard form contracts?  I thought everybody knew you can’t really sue big corporations any more. The Supreme Court made that law of the land in 2011 with its chilling 5-4 ‘AT&T vs. Concepcion’ decision. 

Here’s how bad things are. Contracts, as you know them, require some basic things, including consent of the parties, right? WRONG!  After all, even the most sinister, cynical lawyer couldn’t argue that clicking like on a Facebook page signifies consent. So lawyers in this field have changed the word “consent” to “assent.” I’m not even sure I know what the word assent means. But I know it means you are screwed.

I spoke at a conference at Georgetown Law School two weeks ago devoted to this very topic.  The list of big brains in the room was remarkable, including Deepak Gupta, the fine lawyer who argued for consumers (and lost) on the Concepcion case.  Ralph Nader spoke, too.  He suggested lawyers who have designed fine print that literally takes away citizens’ right to their day in court should be disbarred.  Others were more measured, though several lawyers repeatedly referred to the Supreme Court as “The Death Star.” Consumer lawyers who still find narrow topics in limited venues to file lawsuits are compared to the Rebel Alliance, hopping from planet to planet (state court to state court) to survive.

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I’ve resisted getting into the nitty gritty of this discussion in this piece because the details really don’t matter much. Before, if a company wronged you, you could sue, now you can’t.  There are some exceptions and qualifiers, but that’s all you really need to know.

Just in case, for quick review: Concepcion made it permissible for companies to include language in “contracts” that ban consumers from filing class-action lawsuits against them, and generally forces them into an outside-the-court process called binding mandatory arbitration (or in some cases, small claims court).  This is important because when companies misbehave $30 at a time, there is really no way to get justice now. When large corporations misbehave in large-scale ways, only large-scale lawsuits involving groups of consumers can stop them.  Today, such class action lawsuits are all but illegal.

Some additional details about General Mills situation from the folks at AAJ:

“General Mills has quietly updated its electronic terms of service to include a forced arbitration clause that will eliminate many of its customers’ rights to hold General Mills accountable in court. The April 2 change means that people who purchase General Mills products with coupons, turn in box tops or even just visit their website won’t be able to bring the corporation to court – parents can’t hold anyone accountable if their child has an allergic reaction to a mislabeled product; individuals will be denied access to justice for chipping their tooth on a rock in the cereal; and if you find a dead mouse in the box and get any reimbursement from the corporation, you are prohibited from ever telling anyone about this disgusting discovery.”

Here’s what consumer lawyer Brad Shear thinks of this:

“General Mills new terms of service are very troubling.  It is suspect that a consumer may waive their legal rights by utilizing a digital platform that is not owned or controlled by General Mills.  I doubt a court of law would uphold these new terms of service in regards to platforms that General Mills does not own.  If these new terms of service were deemed legal every single company in the world would incorporate them and nobody would be able sue a company for negligence or bad acts.”

General Mills refused to talk to the New York Times about it — hey, General Mills doesn’t have to anything, right? — and instead emailed a reporter a blah-blah-blah statement about how efficient arbitration is.  Hey, if arbitration were so great, why don’t corporations make it voluntary instead of mandatory?

OK, back out of the weeds.  This is classic divide and conquer strategy.  While you weren’t paying attention, American corporations have invented an extra-legal process and eliminated your due process.  With the Supreme Court squarely on the side of corporations, there isn’t an easy fix. A new federal law banning mandatory arbitration would be nice, but it’s probably not happening. Laws banning specific unconscionable terms, such as requiring consumers to fly long distances to argue their cases,  would be nice.

At a bare minimum, our legal system has to invent a new word for what’s going on here, and it’s not “assent.”  When companies puts some words on a paper in an unreadable small font, that shouldn’t constitute a contract. It’s a lot more like a no parking sign you didn’t notice before you got a ticket.   Now ask yourself: When did General Mills, or AT&T, or any of these corporations become equal to your town government?

If you aren’t angry about this, you aren’t paying attention.  If you want to learn more, you can watch a webcast of the seminar, “Making the Fine Print Fair,” at Georgetown’s website.  I speak at the 7:44 mark of the video. In this case, I compare the shock of fine print that robs you of money or your rights to the Windows Blue Screen of Death. Our legal system has crashed. We need a new operating system.

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Consumers Union

Consumers Union

Smart phone theft is exploding nationally, but carriers this week promised to deploy a simple new technology that could soon render stolen phones useless.

Consumer Reports said Thursday 3.1 million consumers had their smartphones lifted during 2013, double the number of victims in 2012, according to its annual State of the Net survey. Another 1.4 million phones were lost and not recovered, the survey found.

All that theft has had state and federal legislators sniffing around the problem for some time, urging cell phone makers and carriers to implement a “kill switch” that would render a lost or stolen phone useless. That would  theoretically dry up the now-thriving market for stolen phones.   Carriers have resisted the solution for some time. Why would they do that? If you value each smartphone at $600, the market opportunity presented by 4.5 million lost and stolen phones is $2.7 billion.  That might have something to do with it.  There are also legitimate concerns about hackers wiping out phones as pranks, and about the customer service headache that will no doubt accompany implementation.

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But in part under threat from a state law that could be passed as soon as next week in Minnesota,on Tuesday the industry announced the “Smartphone Anti-theft Voluntary Commitment.”  Carriers promise to implement a kill switch and remote data wiping for new phones manufactured after July  2015.

Meanwhile, we certainly shouldn’t blame carriers for the whole problem.  Consumers still don’t seem to realize how serious loss of a cell phone can be — at least until after they lose the phone. (And if you’ve ever been with someone who’s just lost a phone, you know about the hyperventilation, etc.) How do I know this? Look at this data on what consumers do (and don’t do) to protect their phones:

  • Set a screen lock with a 4-digit pin (36 percent) NOTE: Those who don’t are CRAZY
  • Backed up data to a computer or online (29 percent)
  • Installed software that can locate the phone (22 percent)
  • Installed an antivirus app (14 percent)
  • Used a PIN longer than 4 digits, a password, or unlock pattern (11 percent)
  • Installed software that can erase the contents of the smart phone (8 percent)
  • Used security features other than screen lock (e.g. encryption) (7 percent)
  • Took none of these security measures (34 percent)

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self-employment taxIf you are paying more than 20 percent of your income in federal taxes, you are doing it wrong.  That’s roughly what the Obamas pay every year — hey, at least it’s more than Mitt Romney. As you should know by now, Obama pays a lower real tax rate than his secretary, which is also true for Warren Buffett and most likely most affluent Americans.  When you use an electronic product to compute your taxes, you always have the change to see your effective tax rate.  If it’s higher than 20 percent, you should feel cheated, no? Particularly if you work for yourself, and your financial advisor has been warning you to put away 30 percent of all your earnings for taxes. In fact, Nancy Humphreys argues that self-employed people pay 25-43 percent tax rates!

(For a fun piece analyzing the IRS top 400 taxpayers, read this slightly dated post by tax truth-teller David Kay Johnston). Spoiler — one-quarter of the top 400 paid 15 percent or less in taxes).

This piece is not a whine, however: It’s a warning. Major changes are coming in the way Americans work, and pay taxes, and without sweeping reform, this new workforce is going to get crushed.

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The numbers are a little squishy, but the trend is not: Tens of millions of Americans will begin working for themselves during this decade.  In a landmark report, Intuit guestimated that 40 percent of all U.S. workers will be classified as “contingent” workers by 2020. To you and me, that means freelancers — sole proprietors — or as I like to call them, onetrepreneurs.  And they are going to have a hell of a shock once they start paying taxes, because it’s not unfair to say onetrepreneurs pay double the taxes of traditional corporate workers.

Some of this trend is the result of opportunities born of the Internet (I put myself and my adventure into this category). Costs of all kinds are down, and economies of scale once limited to large corporations — such as distribution of news — are now available to individuals. Hooray!  This decade will see a surge in creativity among this group.

But that’s putting a brave face on it. The phrase “contingent workers” is really borne from the idea that many (U.S.) companies now enjoy the spoils of maintaining a flexible workforce. In other words, they don’t hire employees, they buy units of time, on an as-needed basis, from freelancers.  In many cases, workers wish they had full-time positions and the benefits that come with them, but only piece work is available. It’s certainly not like the dock work doled out daily to longshoremen, as depicted in the movie On the Waterfront, but it can be a stressful way to earn a living.

Then, there’s the taxes.

For starters, contingent workers paid via 1099s must pay estimated taxes during the year.  It’s the solo worker’s version of withholding. The IRS wants your money all year long, not just at the end of the year, so every quarter, freelancers must guess at their year’s tax liability and pay 25 percent to Uncle Sam. (The easiest way to do this is to set yourself up with an electronic account at the IRS. It’s a bit tedious, but worth it.)  States (and city) tax rules vary, but that may be a separate quarterly pain.

Financial advisers tell freelances to set aside 30 cents of every dollar earned to make sure they have enough these quarterly payments.  Wait: 30 percent?  Why? Self-employment tax.

Anyone who’s ever received a 1099 report for extra income knows about self-employment tax, which can feel like double taxation. But with millions of folks entering these ranks, it can’t be repeated enough: When you work for any employer, that firm pays Social Security and Medicare taxes right along with you.  When you work for yourself, you have to pay both halves of this tax, which can work out to about 15 percent. That’s 15 percent ABOVE your federal income tax rate.

One can certainly make the case that this is fair — each worker is responsible for contributing the same to these two services, which most people will receive benefits from at some point.  I’m not arguing that self-employment tax is unfair here.  But it is:

a) A shock, and will be a huge shock to contingent workers newly struggling to get by

b) A hassle and a burden, and a potential barrier to people who are considering the onetrepreneur life

If 40 percent of Americans are going to be freelancers by 2020, you don’t want to be in the 40th percentile.  The sooner you embrace the onetrepreneur reality, and the quicker you beat other workers to the space, the better off you will be.

Congress and the White House could do a lot to make this embrace easier.  Health care reform is a big step: Workers cite obtaining health care as a key barrier to starting their own small business.  But tax reform is a close second. Making life easier for sole proprietors to pay their fair share of taxes would be a big help. My suggestions:

*Set up a withholding scheme that feels like traditional withholding for workers paid via 1099.  Force companies that pay vendors to make withholding an option.  This would “feel” much better than paying quarterly estimated taxes.

*Self-employment tax should be graduated so lower and middle class workers pay less. Right now, the scale is actually tipped in favor of the rich. Because Social Security and Medicare taxes are income capped, sole proprietors (or those who earn substantial salaries in addition to freelance income) sometimes end up avoiding self-employment tax at all because they have already reached the cap. That’s backwards.

*Self-employment tax could come with amnesty, or a ramp-up feature, to make things easier on folks who set out on their own for the first few years.

Some analysts predict a coming  ”barbell economy,” with workers either sliding towards employment at huge corporations, like Walmart, or working for very small or solo companies. Few companies in the middle will remain.

Most of the good jobs will be on one side of that barbell, and I promise you, most of the innovation will be, too. If Congress wants to help the middle class and the future of America, it will consider reforming the self-employment tax — at least to make sure that contingent workers aren’t paying high tax rates than the president of the United States.

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Credit score releaseAmericans would gain free access to their credit scores and new rights to challenge errors that keep scores low under a bill introduced in the U.S. Senate on Wednesday.

The “Stop Errors in Credit Use and Reporting (SECURE) Act” is sponsored by Sens. Brian Schatz (D-Hawaii) and Sherrod Brown (D-Ohio). The legislation would force the credit industry to supply consumers with “access to meaningful credit scores free of charge annually.” It also would establish a national registry of credit reporting agents so that consumers know which companies are collecting and disseminating information about them; enhance consumer rights to fix credit report errors that lead to artificially low scores; and give consumers new legal rights to get redress from credit bureaus and banks that deny them credit based on errors.

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“Errors in a credit report can make the difference between whether someone can live the American Dream and buy a home or even get a job,” Schatz said.  “Whether you have good credit or not is determined by a dark ecosystem of companies that are not accountable to consumers. When the stakes are this high and your credit can affect whether you get a job or house, consumers deserve to be on a level playing field with banks.”

Consumers Union, which recently issued a report on the difficulty consumers face dealing with credit score and credit report errors, hailed the legislation.

Read the original version on this story on

“Maintaining an accurate credit report is absolutely critical for consumers in today’s economy,” said Pamela Banks, policy counsel for Consumers Union.  “But too often, credit reports contain errors and those mistakes can mean higher interest rates on loans, pricier insurance premiums, and even missed job opportunities.  The SECURE Act provides a good framework for holding credit reporting agencies and creditors accountable for making sure credit reports are fair and accurate. Giving consumers free access to their credit score will help consumers know where they stand with lenders and others when it comes to their credit record.”

There is a new focus in Washington D.C. on credit scores and the possibility of giving consumers free access to them. In February, the Consumer Financial Protection Bureau called on the credit industry to voluntarily offer scores to consumers. The banking industry reaction to that suggestion was initially negative.

“There are a variety of ways banks work to educate their customers and help them make the right choices,” Ken Clayton, the American Bankers Association’s chief counsel, said at the time. “It seems inappropriate for a government agency to endorse one ‘good idea’ as a best practice and seek to impose it on everyone. … Attempts to dictate one result once again opens the bureau to criticism that it is picking winners and losers, and is overreaching in its efforts to micromanage the marketplace.”

The SECURE Act ratchets up the rhetoric on the idea considerably. The proposal leaves numerous questions unanswered, however. Chief among them: what credit scores would be free to consumers, how would they be delivered, and who would pay the cost?

Most consumers don’t have a single credit score, but rather dozens of proprietary scoresmaintained by various financial institutions. All are based on information in a consumer’s credit report, and many are based on the traditional FICO score invented by Fair Isaac. But providing any single credit score annually might not give consumers an accurate picture of their real ability to borrow in any given marketplace.

The CFPB called on credit card issuers to send credit scores to consumers through monthly bills. Consumers Union recommended that score be provided via the free annual credit report that consumers can now obtain at, but only a fraction of Americans use the site today.  With either notion, there is a cost for companies involved.  They’d certainly face an increase in customer service calls, for example, from consumers with questions about the scores.

Still, there is considerable appetite among consumers to see their scores, and Consumers Union argues that access should be required by federal law.

“Consumers shouldn’t have such a hard time obtaining a reliable credit score,” said Maureen Mahoney, public policy fellow for Consumers Union.  “Congress should give all consumers the right to get the same credit scores used by lenders at no cost every year.  Free credit scores are especially important for those without bank accounts or credit cards who don’t qualify for current voluntary programs.”

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Guess which airlines attract the most complaints!

by Bob Sullivan on April 11, 2014

U.S. PIRG (click for report

U.S. PIRG (click for report

Surprise!  Spirit Airlines is the undisputed champion of airline passenger complaints. In fact, it’s quite literally in a different league than other airlines — so much so that graphic artists making a chart of complaints had to omit Spirit (see above).  Surprise No. 2, he said sarcastically: Among all other airlines, United is champion of negativity.

Meanwhile, Alaska and Southwest attract the fewest moans and groans, according to a new report by the Public Interest Research Group covering five years of consumer complaints filed with the federal Department of Transportation. About 10,000 fliers bother to fill out the paperwork to file complaints annually, says the report, titled “The Unfriendly Skies.”

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I’ll tell you what’s wrong with airlines. Let me use United as an example. The airline does research and discovers that passengers really want WiFi on flights, and it is losing to competitors like Alaska that offer WiFi more consistently. So what does United do? It starts advertising that it has WiFi on flights. It doesn’t spend money racing to outfit all its planes with WiFi, it merely spends money on ads. Saying your skies are friendly doesn’t make it so.

Of note from the report:

  • Spirit Airlines is three times more likely to attract complaints than all other airlines. And that’s normalized data.
  • Frontier Airlines saw a huge increase in complaints last year, setting it on a very bad trajectory
  • Mega-merged airlines tend to beget more complaints. However…


Delta is an interesting case.  Complaints against the airline, which absorbed Northwest in 2010, has seen complaints drop pleasantly in recent years. There might be a very good reason for this.  The Wall Street Journal recently reported that the airline is doing some really creative and sometimes expensive — things to avoid canceling flights. These include having more spare planes ready to fly and save passengers stranded by mechanical issues.  Hooray for Delta, and other airlines better take note. 

The chart basically speaks for itself, but just to make you feel bad, I’d like to march you down memory lane, to recall some of the rights you lost through airline deregulation back in 1978.

  • Passengers who were delayed to use their tickets free of charge on other airlines
  • Airlines had to honor tickets purchased from airlines that went bankrupt
  • Airlines had to have minimum reserve equipment and staff available to avoid delays

Sure, prices went down after 1978, for a while — until airlines invented baggage and pillow fees.  Meanwhile, the real promise of deregulation — which was supposed to increase competition — has been an abysmal failure. Rather than competition, we have mega-airlines. And by the way, how many new airports and airport hubs have you noticed lately? Every flight I take stop in New York, Atlanta, Houston, or San Francisco.

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Heartbleed is the latest guts-of-the-Internet calamity that you should know about, but can’t really do much about. In short, the very thing that was designed to keep Internet communications secure — part of the system that puts that little lock next to your web addresses on top of your browser pages — was badly broken. The flaw allows bad guys to steal names, passwords, credit cards, even encryption keys. The faulty software is used to some extent in nearly two-thirds of all websites, though a number far less than that is actually vulnerable. It’s also a flaw with a cool name, which means big media folks are jumping on the story.

It’s quite real, however. Bruce Schneier, a geek’s geek, calls the Heartbleed problem an “11 on a scale of 1 to 10.” Still, as a consumer, there’s really only one thing to do: Watch all your critical accounts carefully during the next few weeks, just as you did after the Target leak. Report suspicious activity immediately.

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About those passwords: It’s probably a good idea to change your passwords, as it always is, but there are conflicting opinions about whether to do that now or a few weeks from now, as criminals might still be using the flaw to steal your data at various websites. You can’t go wrong by changing it now and again a month from now if you are nervous, but you will probably be fine if you wait a month.

Here’s some things you might not have seen in all the coverage.

* Folks are taking this *very* seriously. In Canada, they’ve shut down online tax payments in reaction to the bug
* The whole impacts two-thirds of the Internet thing is a misstatement. Two thirds of websites use open source products that use OpenSSL — the flawed software — but many of them don’t implement it in a way that leaves this vulnerability open. The Washington Post actually says only 50 of the top 1,000 sites are vulnerable. It’s likely that researchers will discover other implementations that are vulnerable, however, so it’s still a little hard to say how widespread the actual vulnerability is.
* There is a huge difference between a flaw discovered (Heartbleed) and a crime in progress (Target). It’s quite possible no one’s data has been stolen when the flaw was announced (though folks assume the NSA was stealing everyone’s data using this flaw) UPDATE 4/11 at 3:45 p.m. ET. Bloomberg now reporting that the NSA did know about the flaw and was exploiting it, leaving us all at risk.
* On the other hand, as Brian Krebs points out, the moment this flaw WAS announced, bad guys created a tool to exploit it, and you can bet they are rampaging around the Internet right now, gathering up as much digital booty as they can before all flawed software is updated.
*This is a HUGE headache for tech guys. Not only can bad guys steal credit card info, they can steal security keys that make SSL work. So all affected have to trash their keys and start over. Major bummer. Every time one of these Internet guts flaw stories come out, IT folks get more gray hair. Be nice to them this week.
* You didn’t think that little lock was keeping you safe anyway, did you? As a reminder, SSL (that little lock) only protect data in transit across the Net. It does nothing to keep huge databases of info stored on hard drives safe.
* And a couple of useful links: Mashable has a tidy list of sites impacted (and not impacted) by Heartbleed. Worth a look. And maybe it’s time to think about using password management tools? LastPass has a neat feature which reminds you when you last changed your password. (thanks, Lifehacker)

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Richard Cordray (Bob Sullivan photo)

Richard Cordray (Bob Sullivan photo)

Ever call a company for help and get faced with an aggressive and unwanted sale pitch instead?  At least one company has finally been slapped on the wrist for that.

Bank of America will have to refund $700 million to consumers to settled charges that it deceived customers through ad-on credit card products, the Consumer Financial Protection Bureau announced today.

The firm used Gotcha tactics to sign consumers up for so-called credit protection services that would allegedly forgive account holders’ debts under certain circumstances. The bank routinely transferred typical consumer service calls — important security-related calls, such as to activate a credit card — to a sales department that was trained to use misleading scripts and upsell products.

Security and sales should NEVER be intermingled this way. It teaches consumers to avoid making these kinds of security-related calls, which can be dangerous for us all.

Generally, credit protection services protect the bank more than the consumer — that is, they pay for a kind of insurance that pays outstanding credit card debts when a cardholder dies, for example.

The CFPB also says Bank of America took payment for credit monitoring-related services with names like “Privacy Guard,” “Privacy Source,” and “Privacy Assist” before the services were delivered.

Roughly 1.5 million consumers have received either account credit or a check in the mail from Bank of America.

“We have consistently warned companies about illegal practices related to credit card add-on products,” said CFPB Director Richard Cordray in a statement issued with the announcement. “Bank of America both deceived consumers and unfairly billed consumers for services not performed. We will not tolerate such practices and will continue to be vigilant in our pursuit of companies who wrong consumers in this market.”

Here’s what Cordray said about what Bank of America was doing:

“Consumers were most often misled during inbound and outbound telemarketing calls.  When customers called Bank of America, whether to activate a card or to inquire about a balance transfer, they would often reach a telemarketer who would try to sell them payment protection products.  Payment protection products would theoretically allow customers to cancel some amount of credit card debt in the event of certain hardships like involuntary unemployment or disability, or for certain life events like marriage or graduation.

“Problems frequently arose when telemarketers discussed the benefits of these products – because Bank of America’s scripts contained false statements about these benefits.  For example, one script we reviewed stated that with “Credit Protection Plus,” Bank of America would cancel up to 18 months of the consumer’s minimum balance if the consumer was admitted to the hospital for as little as one night.  In reality, a single night’s hospital stay would only entitle consumers who successfully navigated Bank of America’s claims process to one month of benefits – not the 18 months claimed in the scripts.”

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Bert Medley and Cheryl Gould

Bert Medley and Cheryl Gould

Nearly everyone I know is busy to the point of being frantic, but being busy isn’t only a matter of having a full schedule.  Often, I feel like the weight of the things on your schedule matters even more. My biggest worry isn’t having a full schedule — I love being busy — but rather not having the time to process important things.  You can’t rush past the profound. Or at least, you shouldn’t. More and more, I feel like I have to, and that bothers me.

I lead a charmed life, and yesterday I had the high honor to attend two beautiful events.  Both involved major life changes for titans of journalism, and the list of dignitaries was incredible. Towards the end of the night, I looked around and realized I was in a small room with Tom Brokaw, Brian Williams, Matt Lauer, and a host of other folks with names and faces you know.  It was one of those moments when you try to click the video recorder in your mind into HD mode so you can remember every little detail.

And all I really wanted to do was sit down with a cup of coffee, stare out the window, and think for a little while.

The first event was a memorial service for Bert Medley, held at the famous St. Bart’s Episcopal church on Park  Avenue. Bert was a beautiful man with an outsized smile who helped invent journalism online back in the 1990s. He died of cancer, too young at 69, but lived a life much fuller than most. His produced one of NBC’s most important and empathetic series ever, called “In Pursuit of the American Dream” with Bob Dotson. One of the stories he did, on a Philly cop’s efforts to grant wishes for kids dying of cancer, eventually helped pave the way for the Make a Wish Foundation.  He blazed trails not only in digital journalist, but also as one of the first successful African American TV pioneers. After journalism, Katie Couric made sure he served on the vestries of Trinity Wall Street and St. Bart’s.  

He walked with stars. But when I met him in 1995, he treated me — an intern — like I was an executive.  Always encouraging, always asking questions, always trying to be helpful. Bert didn’t just make me feel like his equal, he made me feel like I could be as great as him some day.

The memorial service, which he “produced” before he died from his hospice bed, was breathtaking. Bert knew music.  If any other song can make you sad and happy at the same time as “Will the Circle Be Unbroken,” sung Johnny Cash style by John Malino, I don’t know what it is.  Diane Medley Smith sang “If I Can Help Somebody,” commanding that we all look inside to see if we are doing our part on the planet, with Bert as a measuring stick. 

“If I can help somebody as I pass along/If I can cheer somebody with a word or a song/If I can show somebody how they’re traveling wrong/than my living shall not be in vain.” 

Fittingly, Bert spent his last days comforted by an outpouring of messages left by friends from all over the world at a Facebook page called Loving Bert. Even if you have no idea who I’m writing about, a browse of the page will cheer you that such men still walk our earth, and such love endures.

Stumbling out of the church , I had only a few minutes to get to my next event, which was more of a coronation, but equally profound.  But before I got there, having been offline for nearly three hours, I had to check my email. There were editors looking for story ideas, book publicists needing answers, all doing their jobs as they should.

And I just wanted to sit.

Instead, I scurried on to Rockefeller for the nicest farewell party I have ever attended — and I have attended many recently. Cheryl Gould worked at NBC for 37 years. She was the first women executive producer of Nightly News, and smashed glass ceilings nearly every year of her life.  But, like Bert, she did it all — she swam with the sharks — while somehow staying the kindest, most approachable and caring person in the building.  Like Bert, Cheryl talked to me as if I were Tom Brokaw from the very first time we met. If she was ever busy, I never noticed.  Her son sent along a letter that was read, chronicling the endless stream of visitors who arrived at Cheryl’s apartment for wine and late-night conversations, both famous and invisible. 

Last night, Tom Brokaw spoke and said that Cheryl had set the foundation for what he believes will be the “women’s century.”  And if by that he means an America where executives can be great leaders AND great sources of empathy and kindness, I hope he’s right. 

I was incredibly lucky to be there, in a room full of famous TV personalities, all treating Cheryl Gould like gold. If you ever get the chance to attend a farewell party for someone in TV, please do so. The blooper reels alone are worth it.  As I heard of her career, including stories of the Berlin Wall collapse, the opening of China, I thought about all that Cheryl has left to share.

I just wanted to sit.

If my parents taught me one thing, it was this: Listen to your elders.  Don’t be foolish and ignore all the great lessons learned by the people around you. I fear, as any rational observer should, that our culture and our economy is making it increasingly hard to listen to our elders.  But that is a column for another day.

Today, I just want to sit and think about all these things.   And as I try to carve out the time to….to what? I’m not sure. To process, I guess….I’m thinking about the hidden consequences of our always-on, 24/7/365 lives.  You can’t really put time to think on your Outlook calender. Cheating a profound experience out of the time it takes to let it settle in your heart is bad for your soul, I believe.

You can’t rush the profound.

Read other stories in my series on Restless Americans

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Wow - $7,500 off!! Not exactly.

Wow – $7,500 off!! Not exactly.

NOTE: This is the third in an ongoing series of stories that explain complex behavioral economics ideas in simple was, and use them to your advantage in everyday life. READ there entire Everyday Econ series.

There’s a car dealer outside New York City who aggressively advertises $7,500 discounts for buyers who show up for a “sale.” The sale is, of course, temporarily permanent, and offered for every Hallmark holiday. How can he do it?

Listen carefully to the ad, and you’ll hear the phrase discounted … from the posted dealer price. Unless you were born yesterday, you know exactly what’s going on.  The dealer increases the price, then offers the $7,500 discount on that higher price.  So if we all know what’s going on, does that old saw really work?

You bet it does.  The phenomenon is called “anchoring.”  And we fall for it all the time. But understand how anchoring works, and you can at least save yourself a lot of wasted time the next time you negotiate to buy a car. And you might even save some money.

Behaviorists use the word anchoring to describe the basic human tendency to attribute out-weighted importance to the first piece of information you receive in a situation. Anchoring happens in many aspects of life, but let’s stick with money. If a car dealer tells you the price of a car is $20,000, but then offers to sell it to you for $15,000, you will be convinced you are getting a much better deal than if he straight-up offered to sell it for $15,000.  That first number thrown out there, the $20,000, serves as an anchor — a first reference point. Every other price becomes an adjustment of that price.  Buyers can’t help but see the $15,000 offer as a $5,000 discount — hence the New York City salesman’s tactic.

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Right about now, you are probably thinking this is hogwash, and that you know better. Everybody knows that a typical car dealer move is to negotiate from a high price. And if you know that, you are immune from the tactic, right?


Not only are you mistaken, but it’s this level of overconfidence that salespeople prey on most. The only thing more dangerous than an under-informed consumer is an arrogant one.

Numerous studies show anchoring at work. Behavioral economics legend Daniel Kahneman conducted some of the first research into anchoring back in the 1970s. He asked subjects to quickly guess at the solution for one of two math problems — 8x7x6x5x4x3x2x1 or 1x2x3x4x5x6x7x8.  Those given the series of numbers starting from 8 guessed, on average, 2,250. Those who started from 1 guessed 512. (The right answer is at the end of this column).

Now if you think you are above anchoring, here’s a key result for you.  Even when subjects are told about anchoring, and warned not to let it influence their opinions on the price of things, it does. One study asked participants when Gandhi died – they were then told he might have died at either 9 years old or 140 years old. The group initially told 140 guessed nearly 20 years older (57) than the other group (40).

Back to negotiation.  Real estate agents sometimes have outsized confidence in their ability to “price” homes that are put on the market, or to assess whether a price is too high or too low.  In his great book “The Two-Headed Quarter: How to see through deceptive numbers,” Loyola professor Joseph Ganem described a study which proved that. Real estate agents were asked to appraise a home based on a 10-page packet of information where the only variance was the list price. When it was $119,000, the average appraisal was $114,000. When the list price was $149,000, the average appraisal was $128,700. In other words, simply by changing the first price suggestion made agents raise their perceived value of a home by $35,000.

Worse yet, the agents were blissfully unaware of the influence the list price had on their appraisal.

“Only 10 percent of the agents mentioned listing price as one of their top three considerations,” Ganem writes. “It is interesting that anchoring effects influence experts without their being aware of, or at the very least, willing to admit the influence.”

The only thing more dangerous than an uninformed consumer is an arrogant one.

So, how can you use the anchoring effect to your advantage?  Believe it or not, despite what many negotiators say, it’s often smart to be the first person to name a dollar figure when negotiating a price or a salary.  And you might as well be a little like the car dealer at the beginning of this story.  If you want a $1,000 raise, ask for $1,500 … or even $2,000. If you want to buy a car for $20,000, offer $16,000.  The dealer will probably laugh, but that’s OK — you laughed at the advertisement, didn’t you?

(The correct answer is 40,320).

READ there entire Everyday Econ series.

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Starbucks after dark

Date night fun!

The sign near the door

The sign near the door

All those first dates you have at Starbucks can turn into second dates now.  The coffee chain and site of many, many awkward encounters has begun an offering called “Starbucks Evenings,” with liquor and small plate on the menu.  So meet me for coffee can turn into meet me for a glass of wine.

My local Starbucks in Woodinville Wash., about 30 minutes outside Seattle, is hawking its new happy hour pretty hard, as you can see from the pictures.  Businessweek says the coffee giant has already tested the idea in select locations around the country, including Los Angeles, Portland, and even Washington D.C.

As a coffee shop worker….I mean independent journalist…I love the idea of drinking coffee all day and slipping into wine at the end of the night.  Still, I fear this really means Starbucks has done some market research and found out that the number of places where people can go an enjoy a glass of wine or a cold beer with friends — bars — are slipping away. That’s certainly true in Woodinville.

Would you get wine — or bacon-wrapped dates, or truffle mac & cheese, or artichoke and goat cheese flatbread — at Starbucks?

The food menu

The food menu










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