TIME Technology & Media

Here’s Why Your Netflix Is Slowing Down

Cast member Robin Wright poses at the premiere for the second season of the television series "House of Cards" at the Directors Guild of America in Los Angeles, California February 13, 2014. Season 2 premieres on Netflix on February 14.
Cast member Robin Wright poses at the premiere for the second season of the television series "House of Cards" at the Directors Guild of America in Los Angeles, California February 13, 2014. Season 2 premieres on Netflix on February 14. Mario Anzuoni—Reuters

Financial disputes over peering are threatening the video service

An escalating battle between Netflix and the largest Internet service providers is degrading service for the streaming video company’s customers, according to multiple reports. The dispute, which involves secret negotiations about how Internet traffic is routed, has spilled into public view as the relationship between giant broadband providers like Verizon and online content companies like Netflix continues to deteriorate.

Most consumers don’t care how Netflix videos arrive on their computer or TV — they just want the service to work. Behind the scenes, those videos must often pass through several bandwidth companies to get to the user. In order to ensure the reliable flow of traffic on the Internet, broadband companies strike so-called “peering” agreements in which they agree to carry each other’s traffic.

The actual transfer of data takes place at a handful of “interconnection” hubs around the globe. These are large facilities — sometimes called “telecom carrier hotels” — where companies like Verizon and AT&T can physically share space with other bandwidth providers and Internet companies to exchange traffic under one roof. One of the most famous is 111 Eighth Ave. in New York City, which was purchased by Google in 2010 for almost $2 billion.

(MORE: Comcast Set to Buy Time Warner Cable for $45 Billion)

Traditionally, these peering agreements were straightforward deals between bandwidth companies that operated on a principle of symmetry. Telecom companies would agree to exchange delivery services in order to ensure that data like phone calls were routed across the country. These pacts helped ensure that calls from New York to Los Angeles could be completed, even if it took a few networks to actually complete the call. You connect my phone calls, I’ll connect yours.

But with the explosion of high-bandwidth services like Netflix, which accounts for a massive amount of Internet traffic, the traditionally amicable peering relationship between bandwidth providers is starting to break down. Consumer broadband companies like Verizon and Time Warner Cable are increasingly demanding payment from intermediaries like Level 3 and Cogent in order to carry high bandwidth traffic in excess of peering agreements from other service providers. This feud is now harming Netflix service for consumers, according to the Wall Street Journal. (Time Warner Cable was spun off from TIME parent Time Warner in 2009.)

This is a scenario that open Internet advocates have been warning about for years. It’s no secret that the big telecom and cable companies resent the fact that they are obliged to deliver high bandwidth content like Netflix — which competes against their own video offerings — in addition to less bandwidth-intensive traffic like emails and chats. In 2005, incoming AT&T CEO Ed Whitacre famously remarked that upstarts like Google would like to “use my pipes free, but I ain’t going to let them do that because we have spent this capital and we have to have a return on it.”

(MORE: Massive Cable Deal Means Your Bill May Jump)

The FCC’s 2010 Open Internet order prohibited broadband companies like Comcast, AT&T and Verizon from blocking or discriminating against rival services on their networks. But last month, a federal court struck down most of the FCC’s order, because the agency had earlier failed to classify broadband as a “telecommunications” service, which would have allowed it to establish “common carrier” regulations prohibiting the broadband giants from discriminating against rival services.

In the wake of that ruling, the nation’s largest broadband companies insisted that they remain committed to open Internet principles. But the FCC’s order specifically exempts “existing arrangements for network interconnection, including existing paid peering arrangements.” That means that peering deals aren’t covered by the rules. Now, it appears that the big broadband companies are shifting the battle over net neutrality from the so-called “last mile” consumer connection to private peering deals that weren’t covered by the FCC’s order in the first place.

“The dominant broadband companies have been working to favor their own services for years,” says Lauren Weinstein, a tech policy expert who supports net neutrality and is a consultant to Google. “These broadband companies have absolute control of access to subscribers, which gives them enormous leverage in commercial peering agreements to the detriment of all competitors, and consumers are unaware because these agreements are typically not public.”

(MORE: Net Neutrality Ruling Paves the Way For Internet Fast Lanes)

It’s worth noting that Google anticipated how important peering agreements would become. In 2006, just as Google was finalizing its blockbuster deal to buy YouTube, which now ranks second to Netflix in bandwidth usage, the Silicon Valley tech giant moved into New York City’s 111 Eighth Ave., one of the one of the world’s most important telecom peering points. Google would later buy the building outright for $1.9 billion in 2010’s largest U.S. real estate transaction.

One way for the big broadband companies to improve service for Netflix users would be to work with the video service’s caching technology — using what’s known as a content delivery network (CDN) — so that the content is closer to the end user. That way, Netflix could peer directly with the likes of Verizon and Time Warner Cable, without having to go through intermediaries like Level 3 or Cogent. Such a move could improve Netflix performance for subscribers, but Time Warner Cable, the nation’s second largest cable company, has balked.

Time Warner Cable had been in talks with Netflix about making the video service available for consumers on the cable giant’s set-top boxes. But those discussions have now broken down, according to Bloomberg, after Comcast’s announcement that it intends to purchase Time Warner Cable in one of the largest media buyouts in history. Consumer advocates and public interest groups warn that the proposed deal, which will take a year to be approved by regulators, could limit consumer choice and raise prices. Comcast has dismissed such fears as “hysteria.”

Now that the Open Internet rules have been struck down, the FCC faces a tough choice about whether to reclassify broadband as a “telecommunications” service. The big broadband companies aren’t waiting for an answer. The FCC’s now-defunct Open Internet order paved the way for commercial interconnection agreements, which is why private peering deals are the new front in the war between the broadband giants and Internet content companies.

Update: Feb. 19 — 3 p.m. ET. Shortly after this post was published, the FCC announced that it would not seek to reclassify broadband as a telecommunications service. The agency plans to move ahead with new open Internet rules using its existing authority.

TIME Media

9 Depressing Facts From the Latest Women in Media Report

Promotional poster for "The Hunger Games: Catching Fire"
Promotional poster for "The Hunger Games: Catching Fire" The Hunger Games: Catching Fire

Jennifer Lawrence makes $11 million less than Adam Sandler

Women are inching towards media equality, but it’s slow going. That’s what we learned from the Women’s Media Center’s annual report on the status of women in TV, news, movies, and even social media. Some things are unsurprising, like the fact that women are vastly underrepresented in sports journalism. Other things are more interesting, like the fact that the Melissa Harris-Perry Show has more diversity than all the other Sunday political talk shows combined.

  1. The highest-paid female movie star, Angelina Jolie, makes about the same per movie as the two lowest-paid male stars, Denzel Washington and Liam Neeson. Her $33 million paycheck is dwarfed by the $75 million Robert Downey Jr. rakes in as the highest-paid movie star for the Iron Man movies.
  2. Female representation in newsrooms has budged very little since 1999: back then, women made up 36.9% of the newsroom staff– now, it’s 36.3%. The gender disparity is widest among white men and women, and there is slightly more gender equality among different races in newsrooms.
  3. Women are vastly underrepresented in sports journalism: Of the 183 sports talk radio hosts on Talkers magazine’s “Heavy Hundred,” only two were women. The 2012 Associated Press Race and Gender Report Card gave most of the sports journalism industry straight Fs when it came to gender diversity.
  4. Women were quoted in only 19% of news articles in January and February of 2013. This follows a pattern of men being 3.4 times more likely to be quoted on the front page of The New York Times, 4.6 times more likely to be quoted in political stories, and 5.4 times more likely to be quoted in international stories.
  5. Women are faring worse at making movies in 2013 than they were in 1998. Of all the top-grossing movies of 2013, women accounted for only 16% of the writers, directors, producers, executive producers, editors, and cinematographers.
  6. Women had fewer speaking roles in movies in 2012 than in any year since 2007–only 28.4% of speaking roles in the top 100 films went to women. But on TV, 43% of speaking parts are played by women. Of the women who who did get speaking roles in movies, 34.6% were black, 33.9% were Hispanic, and 28.8% were white. And of all the speaking characters, Latina women were most likely to be depicted semi-nude.
  7. The Melissa Harris-Perry Show on MSNBC has more diversity than all other Sunday news talk shows combined, with 67% non-white guests, compared to the 16% of guests on NBC, ABC, CBS and Fox combined. The gender breakdown of almost all the Sunday political talk shows hovers around 75% male, 25% female.
  8. Only 33 directors of the 500 top-grossing movies from 2007 to 2012 were black, and only 2 of those were black women. In 2013, women directed 50% of the competition films at Sundance, but only 1.9% of the top-grossing movies.
  9. Our columnists are still overwhelmingly old white men. There are four times as many male columnists as female columnists at the three biggest newspapers and four newspaper syndicates. (The Washington Post has 25 men to 7 women, and The New York Times has 10 men to 2 women.) The median columnist age is 60, while the median age for the American population is only 37.
TIME Personal Finance

Capital One Wants To Visit You At Home

Bank's new credit card contract reserves the right to pay a "personal visit" to cardholders

“Hello, it’s Capital One, can I come in? I brought lemonade!”

That’s something credit card customers of the Capital One bank are worrying they might hear on their front doorsteps. The credit card issuer said in a recent contract update to cardholders that it can contact customers “in any manner we choose.”

That includes calls, emails, texts, faxes or a “personal visit,” reports the Los Angeles Times. The company has also reserved the right to suppress its caller ID and identify itself however it wants, a tactic known as spoof calling.

Capital One said that, despite the legal language, it doesn’t typically pay home visits to its customers. “Capital One does not visit our cardholders, nor do we send debt collectors to their homes or work,” the company spokeswoman said.

The bank told the L.A. Times it might occasionally “as a last resort” visit a customer’s home to repossess costly goods involved in credit promotions. But the spokesperson added that Capital One is “reviewing this language” in its contracts.


TIME Economics

Japan’s Big Economics Experiment Needs More Experimenting

Japan's PM Abe makes policy speech during start of ordinary session at lower house of parliament in Tokyo
Japan's Prime Minister Shinzo Abe makes a policy speech during the start of an ordinary session at the lower house of parliament in Tokyo on Jan. 24, 2014 Yuya Shino—Reuters

Abenomics hasn’t gone far enough to fix what ails the world’s third largest economy

Japan is often in the crosshairs of economists for all the wrong reasons. Its two decades of malaise since a property-and-stock bubble collapsed in the early 1990s has been studied again and again by experts looking to understand the causes and effects of financial crises. Now, however, economists are watching Japan extra closely for another reason: Can a batch of unorthodox economic policies revive the moribund economy once and for all?

The strategy, dubbed Abenomics after Prime Minister Shinzo Abe, who inspired it, is aimed at restarting Japanese growth with a massive infusion of cash from the central bank and spending by the central government. The idea is to reverse Japan’s perennial and crippling deflation, which acts as a disincentive to spend and invest, causing companies and consumers to loosen their purse strings and boost growth.

(MORE: The Limits of Abenomics)

Supporters have argued that Abenomics will finally give the economy the jolt it has long needed to break free of its never-ending crisis. Critics fear that the program could only worsen the already feeble state of the nation’s finances — government debt is the highest in the developed world relative to GDP, at more than 240% — without lasting economic benefits. Either way, the results of Abenomics will influence the way policymakers around the world use monetary and fiscal policies to tackle downturns and pursue growth.

Abenomics has had a few successes. Prices are rising, as its drafters had hoped, and employment has improved. But recent data gives ammunition to the skeptics. On Monday, the Japanese government announced that GDP accelerated a measly 1% (on an annualized basis) in the fourth quarter of 2013, well below consensus forecasts. Though consumers did spend more and companies boosted investment, the increases were lackluster. Most of all, exports, the bread and butter of Japan’s economy, disappointed as well, despite a weak yen and recovering global growth. The outlook doesn’t look much brighter. In April, a hike in the consumption tax — instituted to help close the government’s yawning budget deficit — will kick in, likely further dampening consumer spending.

(MORE: ‘You Mean Women Deserve Careers?’ Patriarchal Japan Has Breakthrough Moment)

These latest figures bolster the argument (made by myself and many others) that Abenomics has so far failed to go far enough in changing Japan. What Japan needs is more than just a deluge of cash; it needs a fundamental overhaul of the very structure and workings of the economy to increase its potential for growth. Though Abe fully realizes this and has announced plans for further reforms, they have come slowly. The flagship project — special economic zones in which companies would have greater freedom from Japan’s often entangling regulation — is still being devised, and skeptics fear the measures won’t be bold enough to eliminate the bureaucratic meddling and red tape that hamper competition and investment. An overly controlled labor market is pushing workers into marginal, part-time jobs, while Japan desperately needs to boost immigration and encourage more women to join the workforce to compensate for its aging population. Corporate Japan, meanwhile, requires its own reforms, to free up innovation, encourage more risk taking on new businesses and open up clubby management suites to outside influences.

Whether or not Abe can achieve any of this is an open question. Though he is in firm control of Japanese politics right now, opposition to many such reforms remains entrenched in Japan, even within Abe’s own ruling party. Yet the lesson from Abenomics to this point is that monetary stimulus alone can only take a struggling economy so far. If Abe can’t manage to press ahead with bigger and more drastic reforms, his experiment in economics, and all of the hopes that came with it, will likely be dashed.

MORE: A Hawkish Japan Rediscovers Its Samurai Spirit

TIME Advertising

Groupon Admits to Alexander Hamilton Presidents Day Gag

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The online deals service says it intentionally said Alexander Hamilton was 'undeniably one of our greatest presidents,' a pseudo-mistake stunt that got the company extensive press coverage over President's Day Weekend

Groupon revealed on Monday that a Presidents Day gaffe that raised eyebrows over the weekend was completely intentional.

In honor of Presidents Day, the Chicago-based e-coupon company offered $10 off any $40 deal for local businesses. “The $10 bill, as everyone knows, features President Alexander Hamilton — undeniably one of our greatest presidents and most widely recognized for establishing the country’s financial system,” reads a statement on the company’s website.

The only problem: Alexander Hamilton, who served as the Secretary of the Treasury under George Washington, was never President. A spokesperson for the company told the Chicago Tribune Monday evening that it was all a gag. “Most Presidents Day promotions make people fall asleep, so we wanted to do something different that was in line with our brand and sense of humor that got people talking and writing about Groupon,” the spokesman wrote in an email to the Tribune.

Whether you consider the stunt dubious or genius, according to the company spokesman the spoof was “an overwhelming success.”

[Chicago Tribune]

TIME Technology & Media

Apple’s Top Dealmaker Met With Tesla CEO, Report Says

The Apple logo is pictured at its flagship retail store in San Francisco
Robert Galbraith—Reuters

The San Francisco Chronicle suggests that Apple was "very much interested" in buying the electric-car pioneer

Apple, the world’s most valuable technology firm, should buy Tesla, the pioneering electric-car company that’s defied the skeptics and become a new icon of Silicon Valley innovation. That was the idea floated late last year by a financial analyst who made headlines by suggesting that Apple “could reignite the U.S. auto industry” by helping to “accelerate” the global shift toward hybrid and electric vehicles.

It’s a notion that’s back in the news after the San Francisco Chronicle reported on Sunday that Apple’s top dealmaker, Adrian Perica, met with Tesla CEO Elon Musk at the Apple headquarters last year. There’s no indication that an Apple deal to buy Tesla is in the works, but the prospect of a merger between the two companies has caught the interest of many tech watchers at a time of intense speculation about Apple’s next big move.

Talk about a new product category.

If the idea of Apple buying Tesla sounds far-fetched, that’s because it is. Apple has historically avoided doing large acquistions, preferring to grow from within and husband its cash. Unlike other tech giants such as Google, Microsoft and Yahoo, Apple has never done a $1 billion deal. It simply hasn’t needed to. Apple has grown into the world’s most famous tech company on the strength of its groundbreaking product vision, design, marketing and legions of die-hard fans willing to snap up the company’s latest gadgets.

But Apple is now in the midst of a multiyear transition as it enters its fourth decade. Apple’s growth rate is slowing, the company faces increased competition in the mobile market, and it hasn’t launched an entirely new product since the 2010 introduction of the iPad. It’s been 2½ years since Apple’s revered co-founder Steve Jobs died, and Wall Street analysts and consumers alike are eagerly awaiting Apple’s next breakthrough. Tim Cook, the company’s CEO, has been typically coy, but speculation has focused on a “smartwatch” device or next-generation TV product.

(MORE: The 6 Most Important Tech Bombshells Coming This Year)

In his letter to Cook and Apple board chairman Art Levinson, London-based financial analyst Adnaan Ahmad, who works for German investment bank Berenberg, suggested that Apple should set its sights on the car business. “The auto industry is going through a technological discontinuity in its shift to hybrid and electric vehicles,” Ahmad wrote. “This is still in its very early innings. Apple needs know-how (technology, platform strategy and dealer network) in this space and hence I propose that you should buy Tesla.”

Ahmad said by acquiring Tesla, Apple could be “the catalyst to accelerate this shift as it has been in other industries that you have disrupted in the past” such as the mobile-phone and tablet markets. “Apple could reignite the U.S. auto industry and give it a competitive edge vs. the current Asian and European leaders, similar to what you have done in the smartphone and wireless space where the U.S. is now at the forefront of technological leadership after having been a laggard for over two decades,” he wrote.

Ahmad acknowledged that his proposal “is likely to be ridiculed by many, and even by you” but said “the problem I see with your stock is that in the absence of any ‘out of the box’ move to a sizable new vertical market, the key debate will always be about your ability to sustain these ‘abnormal’ margins in your iPhone business — and let’s not forget, the consumer-technology industry has been the graveyard for many historically great brands (Sony and Nokia spring to mind).”

(MORE: Google Is Making Itself a Lot Leaner and Meaner)

An Apple acquisition of Tesla is a long shot — to say the least — and it’s easy to write off Ahmad’s letter as an attention-seeking stunt. But the fact that industry observers are even discussing the possibility underscores the growing sense of uncertainty on Wall Street about the company’s future direction. Should Apple continue to focus primarily on refining its signature iPhone and iPad devices? Should the company branch out and try to disrupt a category like televisions, digital payments or wearable devices? What will drive Apple’s growth over the next five years and beyond?

It’s hard to imagine that an Apple union with Tesla could have been possible when Jobs was still alive. The intensely demanding and mercurial Apple co-founder did not have a reputation as a person who was eager to share the spotlight, which he would have had to do with Tesla’s Musk. As for Musk, it’s difficult to believe he would be willing to give up control of the electric-car pioneer that he’s built against such long odds. As a public company, Tesla has ample access to the Wall Street funds it needs to continue to grow, and the company’s stock price is soaring ahead of this week’s earnings report.

One thing’s for sure. Tesla may have a market capitalization of $24 billion, but that’s a price that Apple, which is currently worth $485 billion, could easily afford. “We have no problem spending 10 figures for the right company that’s in the best interest of Apple in the long term,” Cook recently told the Wall Street Journal. “But we’re not going to go out and buy something for the purposes of just being big. Something that makes more fantastic products, something that’s very strategic — all these things are of interest, and we’re always looking regardless of size.”

TIME Career Strategies

7 Signs It’s Time to Quit Your Job

desk office
Getty Images

When it comes to their jobs, more Americans these days are quitters — which can be a good thing. The Wall Street Journal last week said the “quit rate” — the percentage of people leaving jobs voluntarily — rose to 1.8% in November, the highest it’s been since the recession ended. In numeric terms, this means 2.4 million people quit jobs. Some probably retired or otherwise dropped out of the workforce, but most quit so they could move onto new jobs.

Quitting can be good for individual workers as well as for the economy as a whole, economists say. A higher quit rate can prompt wage growth, something that’s been lacking lately. “When times are good, people quit more because they are more optimistic about their prospects. And often when a worker quits, it creates an opportunity for someone else—a new graduate, say, or a person who lost their job—to find work,” the Journal says.

Should you quit? It’s generally not a good idea to quit without another job lined up, career experts say, but here are the red flags you should watch for that say, “Time to go.”

(MORE: 5 Reasons Your Job Is Making You Miserable)

You hate the work. “Some jobs – especially when you’re new to the workforce – are necessary stepping stones towards your dream job,” says Amanda Augustine, job search expert at job website TheLadders. Keeping an eye on your long-term plan might mean sticking out some unpleasant tasks, but if everything about the work rubs you the wrong way, you’re not going to be motivated to advance. “Take a look at what the person two rungs up the ladder is doing. If you find the job your manager’s boss performs to be appealing, then you’re on the right track,” Augustine says. “If not, then it’s time to start searching for other work.”

It’s stressful enough to make you sick. If the stress of the job is affecting your mental or physical health, your relationships with your spouse or family members, the job isn’t worth the toll it’s taking on your life, says Elene Cafasso, founder and president of executive coaching firm Enerpace. “It’s time to quit when you wake up dreading the day. When you’re depressed every Sunday at the thought of the week ahead or when your health is suffering.”

You don’t fit in. “You could have the best skill set in the world, but if you don’t mesh well with the organization, then you won’t be successful,” Augustine says. Assimilating into a corporate culture generally happens in the first few months on the job. If you’ve been there for six months or a year and you still feel like an outsider, odds are, you always will.

(MORE: Bad News for Anybody’s Who Has Messed Up at a New Job)

You have the boss from hell. “The majority of people quit bosses, they don’t quit jobs,” says Merideth Ferguson, assistant professor of management at Utah State University. If you’ve gone over your abusive boss’s head or to HR and the situation either hasn’t improved or has continued to worsen, it’s time to jump ship.

You’re overqualified. When the work has become so routine that you could do it in your sleep – and still do it well – it’s time to explore other opportunities,” Augustine says. First, she suggests seeing if there’s a path up the corporate ladder at your current employer, but if you’re stuck in a dead end with no path to advancement forward, it’s time to head for the exit.

You’re asked to do something unethical or illegal. Even if you don’t get caught doing anything wrong, there could still be psychological repercussions: Over time, it’s common for workers to adopt their company’s ethics (or lack thereof) as their own. “Employees often model their supervisors’ behaviors… and use these behaviors as a standard for their own actions,” University of New Hampshire management professor Paul Harvey writes. When you do eventually change jobs, you could find yourself getting in hot water for actions or tactics that were par for the course in your less ethical workplace.

The company— or your department— is on shaky financial footing. If you’re worried that you’re company is headed toward a downhill spiral and your position no longer seems secure, it’s time to begin your job hunt,” Augustine says.

Cafasso says mergers and acquisitions are key times to evaluate your role at the company and whether or not they still need you. “If you work in corporate finance and your firm is acquired by a massive conglomerate that already has a huge corporate finance group, odds are good you need to start looking,” she says.

TIME Economy

5 Years After Stimulus, Obama Says It Worked

U.S. President Barack Obama delivers his State of the Union speech on Capitol Hill in Washington
U.S. President Barack Obama delivers his State of the Union speech on Capitol Hill in Washington, D.C., on Jan. 28, 2014. Larry Downing—Corbis

Five years ago Monday, President Barack Obama visited the Denver Museum of Nature and Science to sign the American Recovery and Reinvestment Act, his $800 billion stimulus bill. At the time, the U.S. economy was losing 800,000 jobs a month. In the fourth quarter of 2008, it had contracted at an 8% annual rate, a Depression-level free fall.

“Today does not mark the end of our economic problems,” Obama said on Feb. 17, 2009. “But it does mark the beginning of the end.”

And so it did. The stimulus quickly became a national joke, mocked by the right as a massive boondoggle and by the left as a pathetic pittance. A year after it passed, the percentage of Americans who believed it had created jobs was lower than the percentage of Americans who believed Elvis was alive. But after an epic financial crisis, the Recovery Act did launch a recovery. The economy started growing again in summer 2009. It started adding jobs again in spring 2010.

This week, the White House will release a report documenting how the stimulus spelled the difference between contraction and growth for much of Obama’s first term. Politically, the White House lost the argument over the stimulus long ago, but for Recovery Act obsessives — O.K., maybe I’m the only one — it’s still nice to see the facts in black and white.

Q2Quarterly Effect of theRecovery Act and Subsequent Fiscal Measures on GDP, 2009–2012
Bureau of Economic Analysis, National Income and Product Accounts / Congressional Budget Office / CEA calculations

The main conclusion of the 70-page report — the White House gave me an advance draft — is that the Recovery Act increased U.S. GDP by roughly 2 to 2.5 percentage points from late 2009 through mid-2011, keeping us out of a double-dip recession. It added about 6 million “job years” (a full-time job for a full year) through the end of 2012. If you combine the Recovery Act with a series of follow-up measures, including unemployment-insurance extensions, small-business tax cuts and payroll tax cuts, the Administration’s fiscal stimulus produced a 2% to 3% increase in GDP in every quarter from late 2009 through 2012, and 9 million extra job years, according to the report.

The White House, of course, is not an objective source — Council of Economic Advisers chair Jason Furman, who oversaw the report, helped assemble the Recovery Act — but its estimates are in line with work by the nonpartisan Congressional Budget Office and a variety of private-sector analysts. Before Obama took office, it would have been a truism to assert that stimulus packages stimulate the economy: every 2008 presidential candidate proposed a stimulus, and Mitt Romney’s proposal was the most aggressive. In January 2009, House Republicans (including Paul Ryan) voted for a $715 billion stimulus bill that was almost as expansive as Obama’s. But even though the stimulus has been a partisan political football for the past five years, that truism still holds.

The report also estimates that the Recovery Act’s aid to victims of the Great Recession — in the form of expanded food stamps, earned-income tax credits, unemployment benefits and much more — directly prevented 5.3 million people from slipping below the poverty line. It also improved nearly 42,000 miles of roads, repaired over 2,700 bridges, funded 12,220 transit vehicles, improved more than 3,000 water projects and provided tax cuts to 160 million American workers.

My obsession with the stimulus has focused less on its short-term economic jolt than its long-term policy revolution: I wrote an article about it for TIME titled “How the Stimulus Is Changing America” and a book about it called The New New Deal. The Recovery Act jump-started clean energy in America, financing unprecedented investments in wind, solar, geothermal and other renewable sources of electricity. It advanced biofuels, electric vehicles and energy efficiency in every imaginable form. It helped fund the factories to build all that green stuff in the U.S., and research into the green technologies of tomorrow. It’s the reason U.S. wind production has increased 145% since 2008 and solar installations have increased more than 1,200%. The stimulus is also the reason the use of electronic medical records has more than doubled in doctors’ offices and almost quintupled in hospitals. It improved more than 110,000 miles of broadband infrastructure. It launched Race to the Top, the most ambitious national education reform in decades.

At a ceremony Thursday in the Mojave Desert, Energy Secretary Ernest Moniz dedicated the world’s largest solar plant, a billion-dollar stimulus project funded by the same loan program that financed the notorious Solyndra factory. It will be providing clean energy to 94,000 homes long after Solyndra has been forgotten. Unfortunately, the only long-term effect of the Recovery Act that’s gotten much attention has been its long-term effect on national deficits and debts. As the White House report makes clear, that effect is negligible. The overwhelming majority of the Recovery Act’s dollars have gone out the door; it’s no longer adding to the deficit. It did add about 0.1% to our 75-year debt projections, but allowing the economy to slip into a depression would have added a lot more debt.

The real long-term danger is that the Recovery Act became so unpopular so quickly that future politicians might shy away from stimulus packages. Europe quickly embraced austerity, which is one reason the unemployment rate in the euro zone is almost twice as high as ours. Historically, recoveries in the U.S. have been much stronger and faster, and from much less damaging financial crises. This time it hasn’t been as strong as it should have been, partly because of austerity fever among Republicans, stimulus discomfort among Democrats, and deep budget cuts at the state and local level. The political pendulum has swung back toward austerity, producing the “sequester” and other anti-stimulus.

But the report is a reminder that the Recovery Act succeeded in creating jobs, boosting growth and saving us from a much worse fate. We’re still healing from the worst crisis in 80 years, but we’re well past the beginning of the end.

TIME Technology & Media

Kickstarter Victim of Data Theft By Hackers

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The crowdfunding site said on Saturday that it was attacked by hackers this week, compromising usernames, passwords, mailing addresses, e-mail addresses -- but customer credit card info was not affected

The popular crowdfunding site Kickstarter admitted Saturday it was attacked by hackers this week, compromising usernames, passwords, mailing addresses, e-mail addresses and phone numbers, but leaving credit card information untouched.

Law enforcement officials contacted the company last Wednesday and said hackers gained unauthorized access to some of Kickstarter’s customers’ data, the company said in its statement. Kickstarter recommended its users create new passwords for their accounts.

“We’re incredibly sorry that this happened,” said CEO Yancey Strickler in a blog post on the Kickstarter website. “We set a very high bar for how we serve our community, and this incident is frustrating and upsetting. We have since improved our security procedures and systems in numerous ways, and we will continue to do so in the weeks and months to come.”

Kickstarter didn’t say how many accounts were affected, but did say it immediately closed the hackers’ security breach.

Kickstarter allows individuals to raise money for personal projects through crowd-funding. Since the company was launched in 2009, 5.6 million people have pledged a total of $981 million for 56,000 projects, says the company on its website.

TIME Labor

Crippling Blow for Labor Union at Volkswagen Plant

In this June 12, 2013, photo, workers assemble Volkswagen Passat sedans at the German automaker's plant in Chattanooga, Tenn.
In this June 12, 2013, photo, workers assemble Volkswagen Passat sedans at the German automaker's plant in Chattanooga, Tenn. Erik Schelzig—AP

Workers at a Volkswagen plant in Tennessee voted against United Autoworker representation by a margin of 87 votes Friday night, in a painful defeat for the U.S. labor movement seeking to gain a foothold in the traditionally labor-hostile South

Workers at a Volkswagen plant in Tennessee voted against United Autoworker representation by a margin of 87 votes Friday night, in a painful defeat for the U.S. labor movement seeking to gain a foothold in the traditionally labor-hostile South.

The UAW, which had placed a high stake on its push to expand labor representation to the South, was defeated in a 712-626 vote at the Chattanooga plant, the Associated Press reports.

The UAW has pushed hard to expand into the South, where foreign auto companies have 14 assembly plants and have expanded in the region in recent years. The vote leaves the union confined to the Midwest and Northeast.

Outside groups had joined the fight, with the vociferous union opponent Sen. Bob Corker (R—Tenn.) claiming Volkswagen would probably not build a new SUV at the plant if workers allowed the the union to represent workers.

Volkswagen later denied Corker’s statement that expansion at the plant was dependent on a no-union vote. Other state lawmakers threatened to cut off tax incentives for the plant if workers unionized.

UAW president Bob King, who has said that organizing a plant in the South is crucial to the future of the labor movement, said he was outraged by “outside influence” at the plant.

“It’s never happened in this country before that the U.S. senator, the governor, the leader of the House, the legislature here, threatened the company with no incentives, threatened workers with a loss of product,” King said.

Volkswagen, which has a strong union structure at home in Germany, gave the UAW tacit support, allowing organizers to pitch the union to workers in the plant and endorsing a unionized workforce. The plant may have been the union’s best shot to organize in the South, analysts have said.


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