Marketplace - Movin’ right along

Episode Date: September 10, 2024

Since 1970, Amtrak has run U.S. passenger rail service and — per a formal agreement with private railroad companies — those passenger trains get preference over cargo carriers on the tracks. But now, the Department of Justice says freight companies are breaking the rules. Also in this episode, more moving: New pipelines carry excess natural gas out of Permian Basin fields, programs that help families move into affordable housing assist with repairs too, and farmers pressure Congress to budge on the delayed farm bill.

In which the theme of the program is how things move around in this global economy. People and data, freight and fuel. From American public media, this is Marketplace. In Los Angeles, I'm Kyle Riznall. It is Tuesday, today the 10th of September. Good as always to have you along, everybody. At the risk of understating things quite a bit, this has not been a great day for American tech companies doing business in Europe.

The European Union's top court said this morning that Apple owes Ireland better than $14 billion in back taxes. And in a separate decision, the European Court of Justice dispensed with Google's appeal And Apple owes Ireland better than $14 billion in back taxes. And in a separate decision, the European Court of Justice dispensed with Google's appeal of a fine it has been fighting for years. And it comes that Google ruling does, as the company has been fending off a number of antitrust challenges here as well. Marketplace's Stephanie Hughes starts us off.

This fine comes to about $2.7 billion, which might not seem like that much in Google dollars, but it's only one part of how much this all costs. From lawyers to PR to everything else, it's very expensive. Rebecca Ha-Allensworth is a professor of antitrust law at Vanderbilt. And she says it's not just Google that will be affected by this decision. If it's expensive and bad for Google, that means other companies who are looking at it are trying not to be the next Google and therefore acting in ways that are less abusive of their dominance.

Also paying attention, regulators here in the US. Allensworth says there's a kind of regulatory competition going on between the US and EU, which is known for having a tough stance on antitrust matters. Everyone's kind of trying to be the leader in antitrust enforcement. Europe's approach is now shaping the tech policy debate here, says Jennifer Huddleston with the Cato Institute. The kind of question of do we need greater regulation in this area is something that has emerged at times on both the left and the right.

Huddleston is a proponent of a light touch regulatory system, and she worries about the effect a heavier hand could have on innovation in the US. What does that send to the next generation of innovators and to the next generation of entrepreneurs? But some feel the US should create new laws around technology, or at risk being left behind, says former FCC chairman Tom Wheeler. Because the internet means the world is interconnected, the rules that apply in the EU or the UK also end up having an effect in the United States.

Wheeler says the antitrust laws we have are not enough. You need broad policies that deal with the behaviors across a broad segment of the economy. And not, he says, just targeted investigations. I'm Stephanie Hughes for Marketplace. Wall Street today a little up, a little down. Same by the way for Apple and Alphabet shares. Apple down, Google's parent up. We'll have the details when we do the numbers. Let me just say here as the southwest finally starts to cool off from a brutal heat wave that summer is not going quietly this year.

There have been records in Las Vegas and Sacramento, and Phoenix has broken its record for most consecutive days over 100 degrees. That's more than 100 days now and counting. Air-conditioned offices and workspaces are all well and good, but depending on what you do, you're not going to have that option. Think hot kitchens, hot warehouses and factories. You can imagine the rest. Here in California, the state is trying to make sure

workers in those kinds of places stay safe, as Marketplace's Kaylee Wells reports. The Agoura Hills Farmers Market in suburban Western LA County is squarely in the middle of a shadeless parking lot. It's got the oppressive burn your scalp heat from the sun and the radiating warm your shoes heat from the jet black pavement.

Today, the high is hovering around 90 degrees. There are hardly any customers coming through. Hi! How are you? A few who braved the weather are buying drinks from Artie Entezam's food truck. Just one? Two? Cash or money?

He's the founder and owner of Artie's Eats and Sweets, and he brings his truck here every week to sell fancy burgers and fries no matter how hot it gets outside. The grills are temping about 380 degrees Fahrenheit. Inside his truck it's got to be more than a hundred degrees because of that grill. He says he doesn't even turn on the air conditioning because it doesn't help. So the best is to get the windows open, the back door open, and have a screen and then just sort of let air flow." So he keeps a water bottle handy and relies on the strong threshold for pain he says he's built up.

This is part of the food truck game. You know, it's survival and you're working and you've got to make money and you've got to make sure things are getting paid and sometimes it's not about like oh you know today I don't feel like it it's too hot you know sometimes you got to go. But it's not just a test of will and grit heat can be dangerous. If you're working outside you're likely to be sweating more which means releasing more energy your body's working a little bit harder and so your body needs more hydration and more time to be able to cool off. Dr. Kimberly Petrick is a family physician at Kaiser Permanente Santa Monica.

She says people who work in the heat often get rushed in to see her with heat-related symptoms. High heart rate, fast breathing, confusion or loss of consciousness that sometimes happens like people might faint. That's when they tend to come in and seek that care. And those are the kind of symptoms that show up after kitchen workers or gardeners or warehouse workers push through the initial symptoms like dizziness, cramping, and headaches. And if they don't get medical attention, the result can be fatal.

The number of heat-related deaths is going up every year. The Department of Health and Human Services estimates it jumped from 1,600 people nationwide in 2021 to 2,300 last year. And in years to come, the hazards for workers will only get worse. Renee Guerrero de Leon was one of the many advocates to recently testify in front of the state legislature in favor of heat protections for people who work inside. The state already had protections for people working outside. Now, once it gets

above a certain temperature, employers have to allow indoor employees more breaks, provide cool-down areas, and supply personal heat protective equipment. The rules are designed to prevent experiences like that of former line cook turned restaurant industry reform advocate Colleen Kopryk. You know the saying, if you can't stand the heat, get out of the kitchen? I had to. In my last job as a pastry chef. I suffered from heat illness due to extreme indoor heat. I was dry heaving in between taking rounds of pastries out of the oven, and I had to

quit, effectively ending my career. Food truck owner Artie Antezam says he doesn't always take the precautions the state requires for himself, but he makes sure his employees do. I let them go outside, take a little breather. We ordered frappuccinos, iced frappuccinos for them. Yeah, you know, so you do whatever you, I guess, have to do, right? And Tasam says he's lived in LA for decades, so he knows the stakes of working in heat. He started this business last October, right as Southern California cooled off for the year,

which means this is the first summer that he's putting that built-up heat tolerance to the test. In Agoura Hills, California, I'm Kaylee Wells for Marketplace. Late in July, the Department of Justice did something it hadn't done since the late 1970s. It sued a freight railroad for delaying Amtrak trains. DOJ says that on tracks it controlled, Norfolk Southern frequently delays Amtrak passenger trains. The case at issue is Amtrak's route between New York City and New Orleans, but it hits on something that's been a fundamental issue from the very beginning for this economy's main provider of passenger rail.

Amtrak trains run mostly on private freight rail tracks and legally it, Amtrak, is supposed to get preference over freight trains. But that law is honored mostly in the breach. In 2023, Amtrak says, that led to more than 900,000 minutes of delays. It's a year and a half. Marketplace's Henry Epp explains how things got this way. First, a confession. I'm a fully grown adult, but I feel kind of a childlike excitement every time I hear this Amtrak train go through my hometown in Vermont. It heads south to New York City in the morning just before 10am, comes back just before 10pm, most of the time. And as in most of the country, it runs on tracks that Amtrak doesn't

own. To understand why, we have to go way back to before Amtrak was founded, when private freight rail companies in the U.S. were required to offer passenger service. It became clear that the situation that existed then, which was that the freight railroads were losing enormous amounts of money on passenger service, that that was not viable. Lewis Thompson has held many positions in the rail world over the years, including at the U.S. Department of Transportation. He says by the 50s and 60s, passenger rail was losing business to interstate highways and airlines.

So a small team of people, of which I was a member at DOT went through the options for what could be done and That eventually led to the creation of Amtrak. This was in 1970. The plan, Amtrak would take over passenger rail service Freeing the freight companies from this money-losing business, but passenger trains would keep running on the same tracks. It was always passenger trains would keep running on the same tracks. It was always passenger service operating on the tracks they had always operated on, which was the freight railroad tracks. Amtrak would pay the freight companies to use their tracks, and in return, passenger trains would get preference,

meaning in most circumstances, freight companies would have to let Amtrak through before a freight train. Initially, the freight railroads were more than happy with the arrangements because in the 1970s it was kind of the nadir of the rail industry in the United States. Albert Cirella is a history professor at Kennesaw State University in Georgia. A lot of freight rail companies at that time were in or nearing bankruptcy, he says. There was substantial excess capacity.

And so adding even a few Amtrak passenger trains was basically generating a lot of revenue with very little added cost. Then came the wave of deregulation of the 1980s and a law called the Staggers Act. The Staggers Act deregulated the railroads, it incentivized competition, and really saved the railroad industry from collapse. The law allowed railroads to abandon tracks they weren't using much, and eventually they started hauling a lot more freight, so that excess capacity disappeared. Instead, the railroads are capacity strapped, which makes it more difficult for Amtrak trains

to operate in a timely manner. And here's where that issue of preference for Amtrak comes back. There are now fewer tracks with more freight on them, says Elizabeth Deakin, a professor emerita at UC Berkeley. And freight makes a lot more money than Amtrak, pays to the companies for trackage rights, and the result is that they basically ignore the rule and go ahead and give preference to freight trains. The freight industry has argued the law does not mean Amtrak has absolute preference at all times. But Amtrak has complained about delays to federal regulators.

Now the Department of Justice is suing and Deacon says those actions could send a message to the freight industry. Hey, listen, this is this is actually a law in the books and you need to pay attention to this. And in theory, she says, that could lead to better service and potentially more passengers for Amtrak. One of the things Amtrak's trying to do is to grow. Nick Little is director of railway education at Michigan State University. Amtrak got billions of dollars from the 2021 bipartisan infrastructure law, and it's hoping to use that to start up new routes and add more frequent service to others. Little says that means getting more legal clarity around the rules

of the railroad is important. I'm Henry Epp for Marketplace. There's an analogy to be made here about how things move around in this economy. Just as railways get freight and people where they need to be, so too do pipelines get crude oil and natural gas where they need to be, from wherever they're drilled, closer to refineries and power plants and ports. I mention that because there's a new pipeline scheduled to begin service this month to move natural gas out of West Texas, home as we have reported to a glut of natural gas. And as Marketplace's Elizabeth Troval reports, there are actually several Permian pipelines in the pipeline. Where there's crude oil production, there's natural gas.

And in the Permian Basin, there's a lot of both. Tom Sang is with Texas Christian University. As a country, we hit a record high volume of oil production of 13.4 million barrels a day. Nearly half of that recent peak is from the Permian Basin. So for every one of those oil wells, you do have some level of natural gas that's being produced. That growth in crude oil production created a glut of natural gas, says economist Carl Ingham, president of the Texas Alliance of Energy Producers. It's being produced by companies who want the crude oil and they're having to deal with

natural gas as a byproduct. It's been detrimental to prices, says Ed Hers with University of Houston. We've seen many instances over the past half a dozen years where the price has actually gone negative. In other words, the natural gas has really had no place to go. The new pipelines and the works will give all that Hermian natural gas a purpose. Carr Ingham again. They're going to go to the Gulf Coast where they're going to be put to use in plants that utilize that natural gas. It's going to be loaded on boats and LNG facilities and sent somewhere around the world.

These pipelines, which roughly cost $1 million per mile to build, will also level out regional natural gas prices, says Tom Tsang. The physical balancing act of adding more gas and moving it from one side of the state to the other is also going to balance prices out between the west side of Texas and the east side of Texas. Although he says if natural gas production continues to grow, there may be more gluts in the future.

I'm Elizabeth Trowball for Marketplace. Coming up. There's a lot of people who are in homes that are really bad for their health. The actual costs of buying a home. But first, let's do the numbers. Dow Industrial is off 92 points today. Just shy of a quarter percent. Finished at 40,736.

The NASDAQ added 141 points, a little bit more than 8 tenths percent, closed at 17,025. The S&P 500 gained 24 points, you're shy of a half percent, 54 and 95. Just hours after Apple unveiled its latest iPhone, its global rival Huawei, unveiled a triple fold phone.

Starting price, brace yourself, $2,800 American dollars. Apple, as I mentioned, softened just a little bit more than a third of 1%. Huawei? Privately held. Chairs in Oracle accumulated 11.4% a day after the cloud computing services provider announced quarterly results that beat expectations. Bond prices went up. The yield on the 10-year Treasury note thus fell 3.64%.

Is the U.S. benchmark? You're listening to Marketplace. Some of the toughest moments we'll experience in life often come with the hardest financial decisions. Like how much to spend when your pet is dying. Or what to do if you uncover a loved one's financial secrets after they've passed. It's like having this albatross, this monkey on your back that you don't want amongst everything else. I'm Rima Chavez, host of This Is Uncomfortable, a podcast from Marketplace. This season, we've got a wide range of stories about life and how money messes with it, including the unexpected

ways money can shape our journeys through loss and grief. Listen to This Is Uncomfortable wherever you get your podcasts. This is Marketplace. I'm Kai Rizdal. Congress is back in town this week with deadlines aplenty. There is, of course, the biggie funding the entire government of the United States. Got to happen by midnight on the 30th. There's also a deadline for a new farm bill also the end of the month. Extended deadline I should say because lawmakers have punted a couple of times on that massive spending package that covers everything from crop insurance to supplemental nutrition programs. And that explains why House and Senate leaders had a letter waiting for them from some 300-odd

agricultural and trade advocacy groups pointing out, and this is a quote, the worsening conditions in farm country. Marketplace's Savannah Maher is on the ag economy today. Commodity farmers across the country are getting ready to harvest their fall crop and in many cases sell it at a loss. The prices are not so great. Krista Swanson, lead economist at the National Corn Growers Association, says demand for ag commodities has been steady. Problem is there's too much. The story here is that we are really good at growing corn. High yields for that crop

plus soybeans and wheat are driving down prices. Swanson says that makes passing a new farm bill even more urgent. It provides a risk management safety net for farmers. A safety net that hasn't gotten an update since 2018. So much has changed in our market since that time. Amy Hagerman is an ag policy specialist at Oklahoma State University. For one, she says farming has gotten more expensive. Machinery and repair costs have been going up steadily. Chemicals have been very expensive.

Interest rates are higher. The government can provide crop insurance payouts when prices bottom out. But Kristin Owen, an analyst with Oppenheimer, says the Farm Bill's current price thresholds don't reflect higher production costs. It's pretty low bar right now. Prices would have to fall really, really low in order for those payment programs to pay

out. Owen says a new farm bill won't make farmers whole after 2024's losses. And she sees current conditions as more of a normalization anyway, after Ag enjoyed record high prices and government payments during the pandemic. It just feels a little worse because we were coming off of such high levels previously. She says movement on a farm bill could go a long way to boost farmer sentiment, while kicking the can again could tink it even more. I'm Savannah Marr for Marketplace. According to Realtor.com, the median listing price for a home in Aspen, Colorado in July of this year was $3.3 million. Median, of course, is half the home's cost.

More than that, half less. Bigger point being that buying a home in an ultra upscale resort town like Aspen is a privilege reserved for a select few. For the non-Jet Set set, there are affordable housing programs that can help, some that sell homes below market rate for lower income buyers. Aspen has been running one of those for decades. But as Hallie Zander reports now from Aspen Public Radio, the purchase price is really only part of the cost.

Stephen and Ashley Miller have lived in Aspen for more than 10 years, and a few years ago they had twin boys, now four and a half. What's your favorite bath toy? Helicopter. Stephen works at a local school, Ashley a physical therapist. They wanted to set down roots in Aspen, but with their income, it would be tough to buy on the regular housing market. So in 2021, when they won a lottery to buy an affordable condo through the local housing authority, they were thrilled. If we had just had to figure out the rental game and bounced around as costs went up and things changed,

I think it would have pushed us out. They paid $262,000. That year, the median price of a three-bedroom condo was more than $3 million. But when they moved in, they found lots of problems that the home inspection hadn't revealed. Water damage and black mold in the floors, cabinets and a drywall of one bathroom. The repair bill came in at more than $11,000. And after just buying a place, money was tight.

Oh, yeah, I mean, I didn't have the cash period to just like do any of these projects outright. There's not much incentive for homeowners who buy these affordable units to invest in repairs since future sale prices are capped. That's to make sure these homes stay affordable from one owner to the next. So last year, Aspen tried something new. It started offering these homeowners up to $10,000 for essential repairs. The Millers got $8,000 for their bathroom and had to pay about $3,500 out of pocket. Worth it though to make their home safe and healthy for their kids. There's a lot of people

who are in homes that are really bad for their health. That's Todd Swanstrom, a professor at the University of Missouri St. Louis, who co-authored a recent study on nationwide housing deterioration. He says most affordable housing nonprofits or programs don't have the resources to tackle these repairs. It doesn't help that the need is sometimes invisible.

Swanstrom says if you drive by a deteriorating home, you may see a broken window or a collapsing porch. But you don't see the child inside the home suffering from asthma attacks because of mold, and you don't see the elderly couple on the verge of heat stroke because they don't have adequate air conditioning. Aspen's new program is trying to help, but it does have its limits.

First, homeowners must pay for repair costs upfront before they're refunded. They could apply for a home repair loan, but because the value of their home is lower than it would be on the open market, they'd qualify for less money. Some homeowners try to save up and pay for the maintenance themselves. Ryland and Kim French moved into their Aspen condo in 2020. It was built in the 80s and had some problems. We needed to address mold issues. We spent a couple thousand dollars on insulating shades. Because their home is part of the local affordable housing stock, it's not clear if all those

upgrades will be factored into the home price when they eventually sell. We spent $1,000 on this nifty air quality system. And with a kid on the way, they're starting to question how much they want to continue improving the place. Before we start putting even more money in, we want to be in a three-bedroom that we can be in for the next 20 years. But in order to afford their next home in Aspen, they'll also have to purchase it through the same local housing authority.

And who knows how many repairs that place will need. This final note on the way out today in which, hey, have you heard there's a presidential debate tonight? While one cannot, of course, know what is going to be asked or how questions will be answered, put this one in your back pocket should it come up. Crude oil, the U.S. benchmark West Texas Intermediate down more than 3.5% today. $66 and change a barrel. Why, you ask? Lower demand in part.

Also, higher supply in part, led by the United States producing more oil now than any other country on the planet. Our digital and on-demand team includes Carrie Barber, Jordan Mangy, Dylan Mietinen, Janet Nguyen, Olga Oxman, Ellen Rolfus, Virginia K. Smith, and Tony Wagner. Francesca Levy is the executive director of digital and on-demand and I'm Kai Rizdal. We will see you tomorrow everybody. This is APM. Hi this is Emily from Paxton Nebraska. I live in a rural area where the written local news has been outsourced to a bigger city and the local newscast is not very good. I enjoy listening to Marketplace

programs because they are informative and thought provoking. I learn about things, places and people that I would not have found anywhere else. I am so grateful for Marketplace's dedication to bringing the news to the people. Join me in supporting Marketplace with a gift today. Go to marketplace.org slash donate and thank you.