Current Events in January 2020

The Federal Aviation Administration (FAA), along with Southwest Airlines, is coming in for some Department of Transportation (DOT) criticism for how it handled safety, according to a report by The Wall Street Journal.

The Journal says it has reviewed a draft of the report scheduled to be released in early February. The draft report allegedly claims that the airline failed to prioritize safety and that the FAA failed to hold it accountable.

According to the draft, Southwest transported passengers on jets with unconfirmed maintenance records during a two year period. As an example, the report documents an incident in which a Southwest jet smashed the tips of both wings while repeatedly trying to land during gale force winds.

The Journal claims the report also calls the FAA’s oversight of the airline “lax, ineffective and inconsistent.” The report suggests Southwest was never subject to FAA enforcement actions in relation to safety issues, and it goes so far as to suggest the FAA’s stance toward Southwest served to “justify continued noncompliance with safety regulations.”

The Inspector General’s investigation reportedly found that the FAA allowed Southwest “to fly aircraft with unresolved safety concerns.” Further, the audit found that a majority of the FAA employees it interviewed about the matter “raised concerns about the culture at Southwest.”

Engine explosion

U.S.-based airlines have been remarkably safe during the last 20 years, largely due to better training, better equipment, and enhanced safety policies. 

Fatal accidents have been rare, but one of the most recent involved Southwest. The accident occurred when an engine exploded and pieces of metal broke a window. The passenger sitting next to the window was killed when the depressurization of the cabin sucked her halfway out of the aircraft.

The resulting investigation focused on the engine’s metal fatigue, and Southwest announced an acceleration of its program to inspect CFM56-7B engines used on its Boeing 737 aircraft.

The Journal report says that an 18-month government investigation concluded that the FAA management in the Dallas office, where Southwest is based, allowed the airline to fly planes “with unresolved safety concerns.”

Government officials have declined to comment, but Southwest, which has reportedly reviewed the draft, took issue with its findings. A spokeswoman told The Journal that the company strongly disagrees with “unsubstantiated references to Southwest’s safety culture.”

With several reports highlighting the benefits associated with consumers being more active in their daily lives, many people are opting to use a bikeshare service in order to get around.

But researchers from Cornell University have found that despite the countless benefits that come with biking, and how easy it is for those living in big cities to use bikeshare programs, consumers are likely to pass over using these systems if they have to walk to get to a station or hub.

“If a docking station is more than two or three blocks away, they just won’t go there,” said researcher Karen Girotra. “And if they encounter a station without bikes, it’s very unlikely they will go to the next station.” 

Getting to the bikes

To understand consumers’ bikeshare habits, the researchers created a model that would mimic how often potential riders were utilizing the bikeshare system, including tracking how far they were riding, popular locations to ride to, and perhaps most importantly, how far away they were from the closest station. 

The researchers chose a system in Paris to model, analyzing photo snapshots of the highly active system every two minutes for four months. During the time of the study, this particular station had over 4.4 million trips around the city. 

The researchers learned that most consumers are unwilling to walk even a few blocks to get to their nearest bikesharing station. Similarly, not having enough bikes at a site was enough to discourage consumers from trying to get to the next station. 

The study revealed that being just 1,000 feet away from a bike station was enough for 60 percent of potential riders to choose another form of transportation, and the further away they were from a station, the less likely they were to choose a bikeshare. 

“It’s no surprise that people want stations close to them, but it’s much closer than most planners and bike-share systems thought they needed,” said researcher Elena Belavina. “Most systems are nowhere close to their optimal density.” 

Better access

To get more people to use bikeshares, the researchers recommend increasing the availability of the the bikes and making them more accessible, especially in major cities.

One recent study found that more federal funding is needed to get more consumers on board with walking or biking on a regular basis. The researchers from this study would agree with that sentiment, as the current system makes it difficult for bikeshare programs to be as effective and widespread as they could be. 

“Make bikes and stations more available,” said Girotra. “People don’t like walking to access a bike-share system.” 

“It’s not my fault, officer. I didn’t rob the bank -- I just drove the getaway car.” 

Sounds like a pretty flimsy defense, don’t you think? Well, the Federal Trade Commission (FTC) thinks so too. The agency has sent warning letters to 19 Voice over Internet Protocol (VoIP) providers for allegedly “assisting and facilitating” illegal telemarketing and robocalling operations.

Although they haven’t named the companies yet, FTC officials say they will be forced to take legal action if these businesses knowingly help a telemarketer or seller violate the Telemarketing Sales Rule (TSR). The companies could also face action if they actively avoid knowing whether the TSR is being violated by a client.

“VoIP service providers play a unique role in the robocall ecosystem, allowing fraudsters and abusive telemarketers to call consumers at a fraction of a penny per minute,” said Andrew Smith, the FTC’s director of the Bureau of Consumer Protection. “These warning letters put VoIP providers on notice that we will take action when they knowingly facilitate illegal robocalls.

Violating TSR

There are several statutes of TSR that all companies need to comply with if they make calls to consumers. Some of the things that companies can NOT do include:

• Making a false or misleading statement to induce a consumer to buy something or contribute to a charity;

• Misrepresenting a seller or telemarketer’s affiliation with any government agency;

• Transmitting false or deceptive caller ID numbers; 

• Initiating pre-recorded telemarketing robocalls, unless the seller has express written permission to call; and 

• Initiating telemarketing calls to consumers whose phone numbers are on the National Do Not Call Registry, with certain exceptions.

If the FTC finds out that any company has violated the above provisions, it can pursue civil penalties and court injunctions to punish and stop these actions. 

If you believe you have been illegally contacted by a telemarketer or scammer, the the agency asks that you file a complaint online or call its help number at 1-877-FTC-HELP to report the abuse. 

A report from a couple of weeks ago suggesting that General Motors is reviving the Hummer has turned out to be true. GM has confirmed it is bringing back the Hummer, but in name only.

The original Hummer was a consumer adaptation of a rugged military vehicle called the humvee, a vehicle that received wide exposure during the 1991 Gulf War. GM bought the brand in 1998 and began turning out the gas-guzzling behemoths at a time of plunging gas prices and a booming dot-com economy.

But the vehicles weighed more than 6,000 pounds and rarely got better than 10 miles per gallon. They were largely viewed as wasteful at a time when it was believed the world was running out of oil. Sales peaked in 2006, and the surge in gas prices in 2008 delivered the death knell.

‘Beautiful irony’

The Hummer is being reborn as a pickup truck powered by a battery engine. It will be a GMC model called the Hummer EV. GM says it will be the most powerful consumer vehicle it has ever produced.

America will get its first glimpse of the all-electric Hummer when GM airs a commercial for it, featuring NBA star LeBron James, on Sunday night’s broadcast of the Super Bowl.

“There’s a beautiful irony in the return of Hummer,” said Karl Brauer, executive publisher at Kelley Blue Book and Autotrader. “In 2010, as gas prices spiked, the Dow plunged and environmentalists vandalized the vehicles on dealer lots it seemed Hummer was a brand well behind the times.”

Fast-forward 10 years and gasoline is now relatively cheap, the stock market is hitting new records, and 70 percent of new vehicle sales are trucks and SUVs. 

“Even better, the ongoing evolution of battery and electric motor technology is making high-torque, emissions-free drivetrains easier and cheaper,” Brauer said. “Apparently, Hummer was a brand ahead of its time.”

Lots of power

GM says the new Hummer will have an all-wheel-drive electric powertrain with 1,000 horsepower and more than 11,000 lb-ft of torque. It will be able to go from 0 to 60 mph in three seconds, putting it on par with Tesla’s yet-to-be-released Cybertruck.

Brauer says Sunday’s commercial for the Hummer is likely just the first in what he expects to be a wave of ads for electric vehicles that will soon saturate the airwaves. He says the next three years will bring multiple EV launches. 

Ford is already buying expensive ad space for the Mustang Mach-E more than a year before any customer can reasonably buy one. Last year, there were 16 EVs for sale in the U.S. By the end of 2022, a Cox Automotive analysis predicts there will be 55.

In an earnings call with investors this week, Tesla CEO Elon Musk said that the company is continuing to innovate and improve on the batteries used in its vehicles. In fact, he says it won’t be long until the Tesla Model S reaches an elusive 400-mile range on a single charge. 

The vehicles currently use 18650 battery cells, which are an older model that may soon be replaced by 2170 cells. However, Musk says that Tesla has improved on the batteries over the years so that they can hold a longer charge. 

The improvements have come so quickly that Musk says that Tesla hasn’t even updated the current mileage ranges on Tesla’s website.

“The Model S and X actually have more range than we are currently stating on the website. We just haven’t gotten around to updating the EPA-certified number, but the actual range of the Model S and X are above what the website says they are,” he said.

Official ranges for the Model S currently stand between 348 and 373 miles, so it’s not too far of a stretch to imagine that a 400-mile range is within reach. 

High earnings cost detractors 

The rest of the earnings call was also positive for Tesla. CNBC reports that the company’s stock increased due to higher-than-expected values of the company’s shares.

Of course, good news for one person (or company) sometimes spells bad news for others. Tesla short sellers who invested money against the company lost a total of $1.5 billion on Thursday due to the company’s stronger financial position. The company’s stock finished up 10.3 percent at $640.81 per share.

Tesla will certainly hope to ride that wave as it moves forward in 2020. However, it may have a steep hill to climb when it comes to convincing consumers to go electric. Other carmakers, such as Subaru, have derided American consumers for simply not being interested in electric vehicles. 

Increasing supplies of gasoline are benefiting consumers as gasoline wholesalers lose some pricing power. As a result, the decline in gas prices picked up speed this week.

The AAA Fuel Gauge Survey shows the national average price of regular gas is $2.48 a gallon, down six cents a gallon from last Friday. Gas is 10 cents cheaper than a month ago but 23 cents a gallon more than a year ago. The average price of premium is $3.09 a gallon, down four cents in the last week. The average price of diesel fuel is $2.95, three cents cheaper than last week.

“Increased total domestic stocks of gasoline have helped to ease pump prices,” said Jeanette Casselano, AAA spokesperson. “Typically, we see lower demand during this time of year. When combined with higher stock levels, pump prices usually decrease in response.”

In a Twitter post, Patrick DeHaan, head of petroleum analysis at GasBuddy, notes that gas prices are at their lowest point since last March. He predicts the average price could fall to $2.39 a gallon over the next couple of weeks.

Several states led the average price lower. The statewide average dropped seven cents a gallon in South Carolina over the last week. It’s down six cents in Louisiana and five cents a gallon in Mississippi and Virginia.

The states with the most expensive regular gas

These states currently have the highest prices for regular gas, according to the AAA Fuel Gauge Survey:

• Hawaii ($3.64)

• California ($3.52)

• Washington ($3.09)

• Nevada ($2.96)

• Oregon ($2.97) 

• Alaska ($2.97)

• Arizona ($2.81)

• Pennsylvania ($2.69)

• New York ($2.67)

• Connecticut ($2.62) 

The states with the cheapest regular gas

The survey found these states currently have the lowest prices for regular gas:

• Missouri ($2.13)

• Texas ($2.18)

• Mississippi ($2.19)

• Louisiana ($2.20)

• South Carolina ($2.20)

• Oklahoma ($2.21)

• Arkansas ($2.22)

• Kansas ($2.22)

• Alabama ($2.24)

• Tennessee ($2.26)

Pier 1 Imports of Fort Worth, Texas, is recalling about 6,300 desk chairs sold in the U.S., and Canada.

The chair’s legs can break, posing fall and injury hazards.

The firm has received 29 reports of chair legs breaking, resulting in one minor back injury.

This recall involves five collections of Pier 1 upholstered swivel desk chairs. The adjustable chairs have a base with five wheels and were sold in various colors.

Pier 1, China, the model number and the manufacture date code in MMYYYY format are printed on a label located on the underside of the seats. They were manufactured from April 2019, through September 2019.

The following chair collections and model numbers are included in the recall:

The chairs, manufactured in China, were sold at Pier 1 stores nationwide and online at www.Pier1.com from May 2019, through November 2019, for between $260 and $450.

What to do

Consumers should stop using the recalled desk chairs immediately and contact Pier 1 to receive a free repair kit, including shipping.

Consumers may contact Pier 1 toll-free at (855) 513-5140 from 8 a.m. to 7 p.m. (CT) Monday – Friday, Saturday from 9 a.m. to 5 p.m. and Sunday from 10 a.m. to 6 p.m. or online at www.pier1.com and click on "Product Notes & Recalls" at the bottom of the page for more information.

An outbreak of coronavirus is continuing to spread throughout the global community -- to devastating effect. Health officials have reported nearly 8,000 cases of infection in China, which has resulted in 170 deaths. 

Cases across the U.S. are also on the rise. The Centers for Disease Control and Prevention (CDC) reported the first instance of person-to-person transmission of the virus earlier this week. The patient was the husband of a woman who had visited Wuhan, China -- the area where the outbreak originated.

In its latest update, the agency said that there have been a total of 165 potential cases of coronavirus in the U.S. Sixty-eight of those reports were negative, and 92 more are still being investigated. Five positive cases have been reported covering four states -- Washington, Illinois, California, and Arizona.

Public health concern

While infections of any virus are a cause for concern, the CDC says that the severity of this outbreak makes it a serious public health threat. 

“The fact that this virus has caused severe illness and sustained person-to-person spread in China is concerning, but it’s unclear how the situation in the United States will unfold at this time,” the agency said. “The goal of the ongoing U.S. public health response is to contain this outbreak and prevent sustained spread of 2019-nCov in this country.”

Because this outbreak is taking place during flu season, the CDC recommends that all consumers get vaccinated, take everyday actions to stop the spread of germs (such as washing hands), and take antivirals if prescribed. 

For more information and resources, consumers can visit the agency’s site here.

Waymo, the self-driving technology developer, has announced that it’s partnering with UPS to start delivering parcels.

Taking the opportunity to broaden its alliance with UPS, the company will start the beta test in Phoenix, AZ where its self-driving vehicles are already on the streets, much to the chagrin of the locals.

No involvement with consumers

Consumers aren’t likely to notice anything different, as Waymo’s Chrysler minivans will simply take packages from UPS store locations to a local UPS sorting facility. Once there, the packages will be processed and then shipped to consumers in one of UPS’ big brown trucks. The Waymo vehicles will drive autonomously from point-to-point, but there will be a “trained operator” on board to make sure everything goes smoothly. 

Ten years after Waymo began life as the Google Self-Driving Car Project, it’s starting to find that autonomous business delivery, and not transporting consumers point-to-point, may be the way to go. 

“We’ve built the Waymo Driver so that it can be deployed across a variety of vehicle platforms, as well as business applications that encompass not only transporting people, but also transporting goods,” Tekedra Mawakana, Waymo’s Chief Operating Officer wrote in the company’s announcement, referencing the company’s two-year old partnership with AutoNation to deliver car parts.

“At Waymo, our mission is to make it safe and easy for people and things to get where they’re going so it’s important that we focus on creating a safer driving experience for all types of vehicles, including those that deliver goods to our homes and businesses each day. The Waymo Driver can power a range of use cases from ride-hailing to trucking and logistics, to delivery, to public transportation and even personal cars (down the road!).”

There have been a lot of “disrupter” businesses in the last decade that threatened to shake up the status quo. MoviePass is one that just didn’t work out.

MoviePass presented itself as a subscription service that allowed consumers to see an unlimited number of movies in theaters for a monthly subscription fee. The company filed for bankruptcy this week and said it would liquidate its assets.

In the end, MoviePass faced some headwinds that other disrupters like Uber and AirBnb didn’t. It didn’t help that the Hollywood box office went into a nosedive over the last couple of years. There just weren’t that many movies that consumers wanted to see.

At the same time, Nexflix was spending billions of dollars on content. For the same subscription fee, consumers could stay at home and watch great content, usually on big-screen 4k TV sets.

Not much of a surprise

The bankruptcy did not come as much of a surprise. In September, MoviePass lowered the curtain, suspending operations and not saying when, or if, it would resume. In July, the service informed its subscribers that it would be temporarily interrupting service while it worked on improving its app. Prior to that, it had been forced to change its business model numerous times in an effort to overcome financial struggles. 

At its peak, MoviePass was able to sign up nearly 3 million subscribers who paid $9.95 a month. But as there was less and less to see at movie theaters, subscribers dwindled to a low of 225,000 in April of last year.

When it filed for bankruptcy this week, the company listed, by name, 12,000 subscribers it said were creditors -- who had paid in advance and were owed refunds. According to CNN, that list took up 174 pages of the filing.

MoviePass’ problems gained momentum in 2018 when it suffered severe cash flow issues. In early 2019, the parent company was delisted on the NASDAQ stock exchange. 

A new study conducted by researchers from Johns Hopkins University called into question the way most consumers’ drinking water is kept clean. 

According to the researchers, chlorine is typically added to drinking water to kill bacteria, but experts worry about the effectiveness of this process, as too much chlorine can actually counteract the benefits of the chemical. The study revealed that chlorinating drinking water can actually create more toxins that make it dangerous for consumers. 

“There’s no doubt that chlorine is beneficial; chlorination has saved millions of lives worldwide from diseases such as typhoid and cholera since its arrival in the early 20th century,” said researcher Carsten Prasse. “But that process of killing potentially fatal bacteria and viruses comes with unintended consequences. The discovery of these previously unknown, highly toxic byproducts raises the question [of] how much chlorination is really necessary.” 

Keeping water clean

To test the efficacy of the current disinfectant system, the researchers conducted an experiment that allowed them to determine what effect chlorinated water has on the body. 

To test their hypothesis, the researchers added an amino acid to the chlorinated water to see how the chlorine would respond to amino acids and proteins in the body. After the water and amino acid mixture sat overnight, the researchers analyzed the changes that occurred on the sample. They discovered 2-butene-1,4-dial (BDA), a known carcinogen, had formed. 

This was a surprising finding for the researchers. While chemical byproducts have been found in water samples after the disinfection process, this was the first time that BDA was found in what was considered to be clean water. 

The results have led Prasse to call the current water cleaning process into question. While clean water is the ultimate goal, experts need to be mindful of how much chlorine is too much. The researchers say other detoxifying options could help ensure that consumers are getting clean water with no risks attached. 

“In other countries, especially Europe, chlorination is not used as frequently, and the water is still safe from waterborne illnesses,” Prasse said. “In my opinion, we need to evaluate when chlorination is really necessary for the protection of human health and when alternative approaches might be better.” 

The opioid crisis knows no bounds when it comes to its negative effects on consumers. But a team of researchers say that even pets might be inadvertently harmed by these drugs.

Study findings show that pets in areas that have more opioid prescriptions are at a higher risk of being accidentally poisoned. The researchers say it’s important that consumers know about these risks so that lives can be saved.

“Based on our multilevel statistical analyses, it appears in U.S. counties where there were more opioids prescribed per capita, there were higher odds of dog opioid poisonings being reported to an animal poison control center compared to other types of poisoning reports,” the team explained. “This might suggest a possible ‘spillover’ effect on human opioid use on pet dogs, but alternative hypotheses concerning pet owner reporting behaviour need to be considered.” 

What to look for

The researchers analyzed data from the American Society for the Prevention of Cruelty to Animals’ Animal Poison Control Center (APCC). Between 2006 and 2014, the organization received nearly 190,000 phone calls from pet owners, and the researchers were able to cross-reference those calls with information about opioids, including related deaths and prescriptions. 

While certain trends emerged when it came to pets being accidentally poisoned, one positive finding of this study was that these calls started declining in 2008 and continued declining until the study ended in 2014. However, it’s important for consumers to know potential risk factors so they can prevent their pets from being harmed. 

In addition to happening in areas with more opioid prescriptions, the study also revealed that calls about opioid poisonings were more likely when the dog hadn’t been neutered, as well as for dogs that were younger or smaller. 

While the researchers could speculate about how the relationships formed between these risk factors, they explained that further research is needed to really pin down the specifics. However, they do hope that pet owners take these findings seriously, as staying informed is the best way to help prevent a fatal accident.

After dipping in November, consumer confidence has increased for two straight months. The Conference Board’s Consumer Confidence Index rose nearly three points to 131.6 in January after a smaller increase in December.

The biggest boost to confidence came from consumers’ feelings about their present situations.  Lynn Franco, the senior director of Economic Indicators at The Conference Board, says the back-to-back increases in confidence are the result of a robust job market.

"Optimism about the labor market should continue to support confidence in the short-term and, as a result, consumers will continue driving growth and prevent the economy from slowing in early 2020," she said.

Consumers who say jobs are "plentiful" increased from 46.5 percent to 49.0 percent in January. At the same time, those who believe jobs are "hard to get" declined from 13.0 percent to 11.6 percent.

Optimism on the part of consumers has driven the economy over the last year as business investment has declined. Consumers came through for the nation’s retailers during the recent holiday shopping season after businesses feared a drop in sales because of the shorter shopping period.

But much of the increase came online. A late December report by Mastercard showed that U.S. online sales finished at record-high levels, growing by 18.8 percent over 2018. 

Optimistic start to 2020

Consumers' optimism has carried into 2020, as the latest Conference Board report shows an increasing number of consumers believe business conditions are improving. Those saying business conditions are "good" increased from 39.0 percent to 40.8 percent, while those claiming business conditions are "bad" decreased from 11.0 percent to 10.4 percent. 

There’s no doubt that a low unemployment rate and rising average hourly earnings make consumers feel a little more secure in the short term, but what about the months ahead? The Conference Board survey suggests the good feelings could last a while longer.

The survey shows the proportion of consumers expecting more jobs in the months ahead increased from 15.5 percent to 17.2 percent. Those who expect fewer jobs declined from 13.9 percent to 13.4 percent. 

Regarding their short-term income prospects, the percentage of consumers expecting an improvement declined from 22.7 percent to 22.0 percent, while the proportion expecting a decrease was virtually unchanged at 7.7 percent.

Living with HIV can be a daily struggle, as those with the condition often have to contend with fatigue, weakness, and host of other symptoms. But regulators are taking steps to make it easier to find drugs that can help manage the disease. 

The U.S. Food and Drug Administration (FDA) has announced the launch of a new database that houses information on what it calls “life-saving HIV drugs.” The new, interactive database falls under the President’s Emergency Plan for AIDS Relief Database, or PEPFAR for short. 

“This launch is an important step in our ongoing commitment to address the global HIV epidemic and is consistent with our efforts to modernize and improve access to information and unleash the power of data,” said Dr. Stephen Hahn, the FDA’s commissioner of Food and Drugs.

Getting drugs to those who need them

PEPFAR was first launched in 2003, and its aim has always been to fight against HIV and AIDS on a global scale. The new interactive section provides users with information on antiretrovirals (ARVs) that are offered through PEPFAR.

At the regulatory level, the FDA is able to use PEPFAR to expedite reviews of ARVs so that they can be more quickly available to the consumers who need them.

“Since PEPFAR was launched 17 years ago, low-cost, quality-assured, life-saving ARVs have been provided to more than 15 million people worldwide, and PEPFAR remains the largest commitment by any nation to combat a single disease,” Hahn said. “I saw first-hand how essential it is to have access to low-cost, life-saving treatments for those impacted by HIV, regardless of where a patient may reside. The PEPFAR program is designed to meet this critical need.”

The FDA notes that the new version of the database will help improve the quality and amount of information on each ARV that becomes available. That includes prescribing information and safety instructions that could be invaluable to consumers and health care professionals alike. 

“The launch of this interactive database marks another step in the agency’s commitments to ensuring information regarding these life-saving ARVs are available to the public and is part of the agency’s continued dedication to fighting the HIV epidemic,” Hahn concluded.

For more information, and to access the database, consumers can visit the FDA’s site here.