End of the line for Amtrak?
Amtrak is warning that if it doesn't get a bank loan to the tune of $200 million, the railroad will come to a screeching halt in July. Amtrak President David Gunn also presented to the Amtrak board a reorganization plan that would include a "traditional" railroad management structure, and clip its bureaucracy: The number of vice-presidential slots would be cut from 84 to about 20. TeamBush proposes leaving the Amtrak budget at $521 million this year, but Amtrak suggests it absolutely needs a $1.2 billion budget. Sen. Ernest Hollings, chairman of the Senate Commerce, Science, and Transportation Committee, introduced a bill that would give billions in loans and grants to Amtrak for improvements, with very little reform required. Passenger rail service accounts for about half of 1 percent of America's intercity trips, but every Amtrak rider costs taxpayers nearly $100. Subsidies on some long-distance routes reach $300 a passenger. "It would be cheaper for taxpayers to get these folks roundtrip tickets on Southwest Airlines," quips economist Steve Moore. Will Washington consider a privatized Amtrak? In January, the congressionally appointed Amtrak Reform Council voted 9-1 for introducing private competition, but many members of Congress relish the 41 routes that send trains through their home districts, and aren't likely to support a tough-love solution. | Tim Graham
Survey says: Terror fears high
- 33% of Americans favor making it easier for authorities to access private e-mail and telephone conversations
- 39% worry that they or someone in their family will become victims of a terrorist attack in the United States
- 40% fear that terrorists will harm them or their family
- 70% favor requiring U.S. citizens to carry identification cards with fingerprints
- 77% believe all Americans should have smallpox vaccinations
Free to a good home
Want your own lighthouse? Try government surplus. The Coast Guard has about 300 too many and wants to unload them. The Interior Department has the task of unburdening these structures. Officials say they will give them away to practically anyone. The law authorizes the no-cost transfer of historic lighthouses and stations to federal, local, and nonprofit groups. Individuals can take those that go unclaimed. Locations range from California to Maine to Minnesota to Rhode Island. But obtaining your own lighthouse is no easy task. The new owner may spend millions of dollars keeping its lights and fixtures working, not to mention following federal standards. The transfer deed includes a clause that says the government can reclaim the lighthouse if it is not kept up. When the lighthouse giveaway is complete, only one lighthouse in the country will be required by federal law to have a lightkeeper: the Boston Harbor Light, the nation's first one, established in 1716 on Little Brewster Island. The British blew it up in 1776; it was rebuilt in 1783 and its light has been burning ever since.
Making a killing on KI
Thanks to terrorism threats, potassium iodide is flying off the shelves. The pills protect the thyroid gland from one type of radioactive fallout. It isn't a cure-all, but it's still a big seller. Potassium iodide (chemical symbol KI) is the only medication for internal radiation exposure. Yet it only protects the thyroid from cancer-and no other body parts. It also would only help people close to the explosion and only if a bomb used radioactive iodine instead of other substances. The rush to buy KI is similar to last year's Cipro craze, except this drug is available without a prescription. A day's dose, one pill, costs about $1. People who live near nuclear reactors have been stocking up for months. One Internet site, NukePills.com, reported orders for 10,000 packs of the pills in just one day. But dirty bomb panic has increased demand. The government also spurred some of the stockpiling when the Nuclear Regulatory Commission began offering states enough KI to treat every resident within 10 miles of a reactor. Officials reason that radioactive iodine is likely to be released during a serious reactor accident or attack.
Trans Union may be headed for disunion. The credit-reporting agency collects data on how millions of Americans manage their money, but a tide of lawsuits over the release of such data could force the company into bankruptcy. Trans Union lost a court battle last week when the Supreme Court refused to hear an appeal of a lower-court ruling against the company. At stake is the use of target marketing lists. Trans Union compiled these lists of selected consumers for banks, insurance companies, and even political groups, which could then contact people with certain levels of income, credit card debt, or bank loans. The Fair Credit Reporting Act limits how credit agencies may release consumer credit information. A bank considering someone for a mortgage may see such data, for example, but catalog sellers may not. Trans Union argued that its use of lists constitutes free speech and is protected by the First Amendment, a claim that the Federal Trade Commission and now the courts have rejected.
The debate over Major League Baseball contraction is entering its own seventh-inning stretch. The sport is still buzzing about plans to cut two teams, but the issue remains tied up in legal wrangling. On June 6, baseball owners, who favor contraction, and players' union officials, who oppose the idea, made their final arguments before arbiter Shyam Das. Mr. Das says he will make a decision by July 15. Baseball owners voted on Nov. 6 to eliminate two teams for 2002, targeting the Minnesota Twins and the Montreal Expos. But the plan was blocked when the Twins' landlord gained an injunction to enforce the team's lease, sparing the team at least through 2003.
Counting on accountants
The recent economic crunch may be hurting college graduates, but number crunchers seem to be exempt. Surveys indicate that U.S. employers overall expect to hire 36 percent fewer new college graduates this year, but the scandal surrounding Enron and the auditing practices of several other companies hasn't put a dent in the demand for new accountants. Nearly all newly minted accountants likely will find jobs, with starting salaries in the $45,000 range, according to placement counselors. (The job market also looks strong for graduates in pharmacy and nursing.) But the new accounting hires are likely to face new policies intended to reform the auditing business. The New York Stock Exchange and Nasdaq Stock Market are trying to calm investors with new rules for companies listed on their exchanges. The biggest concern: conflicts of interest between outside auditors and corporate boards. The proposed rules, for example, would forbid directors who serve on audit committees from holding shares in the company's stock. "We still have the strongest equity markets in the world," said Nasdaq official Ed Knight. "If we're going to continue to enjoy that benefit, we have to take steps to ensure the markets are fair and efficient and there's no reason to doubt their integrity."
Believe it or not, there's one market in which Microsoft is an underdog. Palm rules the handheld market, and the company is looking to rebuild itself and protect its market dominance-and Palm OS 5 is part of the plan. It boasts more speed, better security, and richer audio and graphics. Most consumers will see the changes when they buy a new PDA device. One difference may be striking: the ability to run two programs at once. The Palm OS runs on numerous PDAs from Palm, Handspring, and Sony, as well as new smartphones from Samsung and Kyocera. Palm plans to split into two companies by year's end: one for hardware and another called PalmSource for software. "This is just the beginning of a very aggressive roadmap-a new era of innovation for the platform," said Dave Nagel, chief executive of PalmSource. "Now we could do things that would have been impossible or a lousy user experience before." Many observers complain that Palm's products stagnated for two years-and the new operating system is a needed change. Palm-enabled gadgets represented 53 percent of worldwide handheld device shipments last year, according to market researcher International Data Corp., but the economic slump hit the company hard. Palm's stock has tumbled about 80 percent from a year ago.
Still thinking different
Apple Computer says it wants to convert the "other 95 percent." That would be the 95 percent of computer users who use Windows machines instead of Macs. The company has launched the largest campaign since the "Think Different" blitz of 1998 to woo PC owners. Apple remains the sole mass-market holdout that doesn't support the Intel/Microsoft-dominated platform. It has been praised for design elements, but has found most support in niche markets like education and professional artists. The company still boasts that it "ignited the personal computer revolution" with the old Apple II in the 1970s-and wants to reclaim the general public. The Mac has its share of critics. Veteran Associated Press tech writer Larry Blasco called the new iMac "cute and powerful, but more expensive than a trophy wife." The faster, high-end model sells for $1,899, far more than almost all consumer PCs, and it contains no floppy drive. Apple may have noticed that the design-over-function principle has limits. Not long ago, the company all but declared the traditional TV-like monitor dead and hailed the flat screen. Now the good old CRT monitor is coming back with a new computer that was originally intended only for schools. It's dubbed the eMac, and it sells for as low as $999.
MP3 files aren't the music industry's only high-tech headache. Old-fashioned piracy, in which bootleggers sell illegally copied music CDs, is booming as well. Worldwide sales of pirated CDs nearly doubled last year to a record 950 million units, according to an industry trade group. America's major record labels are fighting back with lower prices. The Los Angeles Times reported that Universal Music Group plans to sell albums for $9.99 and singles for 99 cents. The hope is that selling music at such a low price will convince fans not to steal. Digital downloads have overshadowed bootleg CDs, but their numbers are still huge. Sales of pirated materials around the world amounted to $4.3 billion. Americans aren't the worst culprits. China, Russia, and Brazil lead the world in piracy, fully pirated CDs accounting for 90 percent of all music sold in China, according to the group. A recent embarrassment came when music fans found they could beat one anti-copying scheme with a simple felt marker. A line drawn on a specific place on a Sony CD beats the company's copy-protection scheme for discs released in Europe.
Is Medicare a sinkhole of government waste? The welfare program that subsidizes health care for even the wealthiest American seniors also blows hundreds of millions of dollars on overpriced medical supplies.
The Department of Health and Human Services found that the Medicare system pays more than other insurers for walkers, blood glucose strips, and other items. The study looked at 16 medical supplies and compared the prices paid by Medicare with those paid by others: veterans' and state Medicaid agencies, federal employer health plans, and retail suppliers.
Were Medicare paying the same amounts as the Department of Veterans Affairs pays, the report concludes that the program would save $958 million. The report follows another embarrassing account of Medicare waste. The White House Office of Management and Budget calculated that Medicare overspent by $12.1 billion overall last year, or 6.3 percent of its total budget. It called for Congress to cut fat from the budget to help ease the financial strain of the war on terrorism.
"We must maximize the use of every taxpayer dollar," said Mark Everson, controller and chairman of the President's Management Council. "This is especially critical to a nation at war."