Episode 442: Into The Future

Mar 8, 2013

On today's show: Three stories about the tricky path from the present to the future.

Sales Are Like Drugs. What Happens When A Store Wants Customers To Quit? J.C. Penney's new CEO came in with a bold strategy: No more sales or coupons. It didn't work.

Should The U.S. Import More Doctors? "We should think of doctors the same way we think of shirts," an economist says. "If we can get doctors at a lower cost from elsewhere in the world then we could save enormous amounts of money."

If A Driverless Car Crashes, Who's Liable? Technology isn't the only hurdle for computer-driven cars.

Music: Steve Miller Band's "Fly Like an Eagle", Pet Shop Boys "Shopping", Paramore's "Now", and The Black Eyed Peas "Boom Boom Pow," Find us: Twitter/ Facebook/ Spotify/ Tumblr. Download the Planet MoneyiPhone App.

Copyright 2018 NPR. To see more, visit http://www.npr.org/.


Hello and welcome to PLANET MONEY. I'm Zoe Chace.


And I'm Caitlin Kenney. Today on the show, the road to the future is paved with many mistakes.

CHACE: People jumping the gun, thinking we're sort of further along than we really are.

KENNEY: We have three stories today that take this on - the messy, complicated path to the future.


STEVE MILLER BAND: (Singing) Time keeps on slippin', slippin', slippin' into the future.

KENNEY: First up, Zoe, what do we got?

CHACE: A store. So the store that we're going to talk about today is a famous place. It is J.C. Penney.

KENNEY: J.C. Penney - I bought my first prom dress there.

CHACE: First prom dress?


CHACE: So many proms, Caitlin Kenney.

KENNEY: Everyone has two proms. You have a junior prom and a senior prom.

CHACE: Not everyone.

KENNEY: Oh, sorry.


KENNEY: But I used to go to Penney's a lot with my mom. She had all the coupons. Like, when there was a crazy sale, we would cut them out of the catalog and bring them with us to the store and - yeah.

CHACE: Yeah. I mean, that's what J.C. Penney was famous for, the coupons. But in the past year, J.C. Penney has been going through this dramatic change this, huge makeover that they've been trying to do. And it has not been very pretty because every couple of months they have to come out and do their earnings reports and whatever, and they keep reporting this huge sales drop every few months. And then last week, they had to come out and talk about the Christmas season, and sales were down more than 30 percent from a year ago. It's really bad.

KENNEY: But of course it's not just J.C. Penney that's hurting. You know, we've heard a lot about these other big-box retailers, other stores really struggling to sell things. You know, I think of Barnes and Nobles and Borders and all these businesses. People are just doing a lot more shopping on the Internet these days. They're just not going into stores like they used to. But J.C. Penney, they were worried about this. They saw that this could come down the road, and they thought they had a plan for dealing with it. They brought in this brand-new CEO.

CHACE: Yeah, so that's Ron Johnson. And Ron Johnson is a really well-known guy in retail because he had already done what is starting to seem impossible which is making going to the store an event, like the store itself is the destination. He was part of the team that designed the Apple Store, which is probably the best example of a premium retail shopping experience, right? And he revamped Target and he had this whole new big strategy for J.C. Penney. So I talked to this pricing strategist about it this guy Rafi Mohammed.

RAFI MOHAMMED: His pitch to customers is like, look, we're going to lower prices across the board. You don't have to wait for our crazy sales. You can come in any time and you'll get a good price. I'm not saying it's going to be the lowest price, but it's a good price and, you know, that's fair to you and us.

KENNEY: I have to say it does sound fair, right? Because coupons, they're kind of a pain in the neck. Like, I remember when I used to go to J.C. Penney's and even, you know, the grocery store with my mom. It's like you have to clip them out and save them in a special envelope and remember to set them aside. You know, this way you wouldn't have to deal with that. You're not just watching the calendar for when deals happen. You can just shop whenever you feel like shopping without thinking, oh, if I waited till next week, maybe I would get 50 percent off.

CHACE: That was exactly the pitch. And Ron Johnson also had this philosophy about the coupon clippers.

MOHAMMED: He sort of said that sales were akin to drugs, and he was trying to wean customers off of drugs.

CAROL VICARY: When it first happened, I was traumatized and I'd come home and I'd cry over it. My husband's like, what's wrong? I said Penney's don't have no sales no more. I need my store back.

CHACE: So this is Carol Vicary (ph). She is an avid J.C. Penney shopper, and she had this ritual of shopping at her J.C. Penney in Tallahassee, Fla. And the ritual included something that Ron Johnson, the new CEO, had just taken away, which is bargain hunting. And there were a lot of Carol Vicary's out there.

VICARY: On Saturdays, you would go in at 9 and shop until 1 and you get coupons. You got 50 percent off $10. And the store would be so packed. You would always be bumping into people getting through your stuff. It was crazy. It was great though.

KENNEY: I don't know. It kind of sounds like a nightmare to me. But if that is your thing, if you love coupons and deals, I'm sure it was a lot of fun. So, Zoe, you went to check out the new J.C. Penney to see what's going on, what's happened with this transformation and let's pick up your story here.

CHACE: I went to check out what's different in J.C. Penney today at the mall on Staten Island with a guide.

HELENE ABIOLA: I grew up in Staten Island and, you know, the Staten Island mall was like the hangout spot.

CHACE: Helene Abiola, 28 years old, a fashion blogger - she grew up going to J.C. Penney but not so much as an adult. And she's exactly the kind of person J.C. Penney wants. In fact, they've redesigned the stores to appeal less to the coupon clippers and more to slim, young fashion bloggers.

So right off the bat, does anything look different?

ABIOLA: It definitely feels a bit more airy, spacious. They're trying to do more with the visuals like what we're walking past right now obviously. That wouldn't have been there before.

CHACE: It's a bright, skinny mannequin. It's stylish. The idea is make J.C. Penney a destination, some place that a younger, hipper crowd will actually want to go, like, say, the Apple store. There are these boutiques, these special sections of the store dedicated to just one designer.

ABIOLA: OK, this is the Liz Claiborne boutique. They have, like, interesting light. It's like very modern. They have these couches here that you would never have found before. It's kind of like a loungy feeling.

CHACE: Yeah.

ABIOLA: And since when would J.C. Penney have a lounge in the middle of the shop and the stores?

CHACE: Do you like it though?

ABIOLA: It's definitely a lot nicer.

VICARY: Have you ever been to a store when you walk in you go, oh, God, they're probably going to check my credit rating?

CHACE: Carol Vicary in Tallahassee, she does not like boutiques.

VICARY: The boutique stores now inside of Penney's - they put some clothes in now that's like what? I mean, it's not - it's not normal shopping for normal people.

CHACE: And here's J.C. Penney's sales problem in a nutshell. Their old customers like Carol feel unwelcome, but the people like Helene, who they hope become their new customers, are so far just lukewarm. They kicked the old customers out before making sure new customers would arrive. Lately, things have gotten so bad they're backing off the bold strategy of a year ago a bit, reintroduced sales, coupons, though they're calling them gifts right now. But the new J.C. Penney is still very different from the old. Back in New York, I saw them lose two more customers.

MARGARET RUSSO: There's nothing here. There's nothing here.

CHACE: Margaret Russo (ph) and her daughter, Teresa (ph).

TERESA RUSSO: They did away with the catalogs and she used to shop through the catalogs.

M. RUSSO: That's the thing, a million times I did it.

T. RUSSO: They said everybody goes on the computers, but she doesn't know how to operate a computer so we take her to the store.

M. RUSSO: Well, what are we going to do? I guess...

T. RUSSO: All good things come to an end, right?

M. RUSSO: Yeah.

CHACE: It's hard to move into the future when the customers you have just don't want to go there.


THE PETSHOP BOYS: (Singing) We're S-H-O-P-P-I-N-G. We're shopping. It's easy when you've got all the information.

KENNEY: OK. Next step on our journey into the future - doctors, specifically foreign doctors. There's been a lot of talk right now about immigration reform, how we need to modernize our immigration policy, our immigration system.

CHACE: Right. It's a mess. There's a lot of randomness like the rule that we heard about in the podcast a few weeks ago with you have a set number of people coming in from each country no matter how big the country is. It's just not an efficient system.

KENNEY: Right. And the issue of immigration is bigger though than just getting into the country because it's also about, you know, what can you do when you get here, what jobs are open to you. And, you know, there's a shortage of primary care doctors in some parts of the U.S. right now, and a lot of foreign doctors, they want to come over here and practice medicine.

CHACE: But it's complicated. Robert Smith has the story.

ROBERT SMITH, BYLINE: People around the world want the same thing from their doctors. First, do no harm. Second, could you take a look at this bump on my neck? I don't know. It kind of feels funny. See, the job is the same everywhere, but the pay is much higher in the United States.

DEAN BAKER: Our median pay for doctors is somewhere around $250,000 a year.

R. SMITH: Dean Baker is an economist with the Center for Economic and Policy Research.

BAKER: If you look to west Europe, median pay would be a bit over $100,000 a year, and you're very hard pressed to say why our doctors should get so much more than doctors elsewhere in the world.

R. SMITH: Now, if we were talking about a product - if, say, T-shirts in America cost twice as much as in the rest of the world, we would just import more T-shirts, right? We would get them cheaper.

BAKER: Same thing with doctors. We should think of doctors the same way we think of the shirts, that, you know, if we can get doctors for lower cost from elsewhere in the world, then we could save enormous amounts of money.

R. SMITH: Now, the big difference of course is that a bad T-shirt won't kill you. A poorly trained doctor can. There are tests and training that we require before an international doctor can practice here, but these barriers can end up being pretty onerous. Take this guy.

JOSHUA LANDY: My name is Joshua Landy and I live in Toronto, Canada. I'm a physician.

R. SMITH: He's a critical care doc. If you go into the emergency room in Toronto and you can't breathe, Landy's the guy who can save you. So last year, Landy and his wife had to spend a year in the Bay Area and Dr. Landy was thinking while I'm there, I should get my license in the U.S. in California. You know, save some lives while I'm there.

LANDY: I thought the process would take about a month because that's similar to what I experienced in Canada.

R. SMITH: He was way off. There were tests and letters and a background check, fingerprinting. He had to pry his diplomas out of their frames in order to send in copies. After nine months of the California application process, Landy just gave up. His year in California was almost over.

LANDY: And we drove home.

R. SMITH: And doctors from Canada have it relatively easy. If you're a physician from other countries in the world, that process is guaranteed to take years even if you're already a doctor.

ALI FADHIL: It is tough. You have to go back like you're going backward.

R. SMITH: Ali Fadhil is a first-year resident in Atlanta. He practiced medicine in Baghdad and it's been grueling to start again in the United States. It took a year and $6,000 to prepare for a set of extensive exams, thousands of dollars more to apply for his residency training and that training will take years more - more training in fact than a U.S. educated doctor would be required to do.

FADHIL: Believe me, it's not easy. If I had a chance to do something else other than medicine, I would have done it. It's a better life.

R. SMITH: Making international doctors jump through hoops is something of a tradition here. Now the more stringent requirements are justified by safety concerns. Dr. Humayun Chaudhry is the president of the Federation of State Medical Boards, and he says there's just no way to judge the quality of medical training around the world.

HUMAYUN CHAUDHRY: The process may be seen as perhaps cumbersome to practicing physicians, but once it's completed, the goal is at the end of the day to protect the public, and that is absolutely the reason why all these safeguards are in place.

R. SMITH: The process is tough and it can be confusing. Each state sets its own rules and standards. Dr. Chaudhry, though, says it doesn't deter doctors from coming here. Twenty-two percent of all the licensed doctors in the U.S. went to medical school outside the country. But economist Dean Baker argues just because there are a lot of foreign doctors doesn't mean that there shouldn't be even more. A lot of poor and rural areas in the U.S. have a doctor shortage while qualified international doctors are waiting years to redo their training. Baker says that perhaps we can save some time here. Go to the medical schools in Mexico and Pakistan and India and make sure the training is good enough the first time, say to young, wannabe doctors...

BAKER: Here's what you have to do. Here are the courses you have to take. Here's the test you have to pass. We could let them take them in India. You pass those tests, you get to come to the United States and work as a doctor just like anyone who was trained in the United States.

R. SMITH: And Baker says the benefit isn't just for the foreign doctors. Imagine all the competition, doctors opening offices on every corner, driving the price of health care down. As they might say about T-shirts, if you can make sure the quality is the same, why pay more?


PARAMORE: (Singing) If there's a future, we want it. If there's a future, we want it.

CHACE: And finally - and this really is the future, which is cars driving themselves. So Google's done it, and other carmakers are working on it.

KENNEY: I personally cannot wait for the driverless car. I have to admit I am not the best behind the wheel and so the idea of some robot or some super smart computer driving for me seems a lot safer for me and probably for the rest of you out there on the road.

CHACE: I love driving and I'm not that excited about this, but the thing is it's coming whether or not I want it to. And it does raise this interesting question, which is if you're driving a driverless car and there's an accident, who's at fault? Who is actually the driver?

KENNEY: Cory Turner - he works for All Things Considered, but he's been hanging out with us here at PLANET MONEY for a couple of weeks, and he's got this story about the challenge of driverless cars, specifically one word that makes things difficult.

CORY TURNER, BYLINE: Liability. To explain, here's a movie analogy.


KEIR DULLEA: (As Dr. Dave Bowman) Open the pod bay doors, HAL.

DOUGLAS RAIN: (As HAL 9000) I'm sorry, Dave. I'm afraid I can't do that.

RAIN: In the movie "2001: A Space Odyssey," HAL is an intelligent machine that controls the spaceship. In this scene, HAL is malfunctioning and trying to kill Dave, an astronaut - a classic scene from film history and a lesson from the brave new world of product liability. In the future, we may all have our own version of HAL in our cars driving for us. And that raises a question. Right now, when we are in an accident, by and large we're liable. But if HAL is driving, what then?

DAN GAGE: For us, it's clear. We have great exposure as an industry in terms of product liability.

TURNER: That's Dan Gage. He works for the Alliance of Automobile Manufacturers. It makes sense. Automakers would be much more exposed to liability if they're not just making your car but driving it too, with a human still in the driver's seat, it's easier for automakers to argue in case of an accident that their technology didn't fail, the human did. And this tension is likely to continue.

GAGE: And I think as an industry, while there isn't full consensus on this, I think most of us suspect that there will always be someone in that driver seat.

TURNER: Still, we're already seeing cases of the human in that driver seat arguing in court I didn't do it; my car did. Bryant Walker Smith is a trained engineer and lawyer. He's at Stanford where he's spent a lot of time studying automated cars. And he says my car did it could become more and more persuasive.

BRYANT WALKER SMITH: Where more of the decisions are being made by software than by humans in real time behind the wheel, manufacturers will probably face an increasing share of liability costs.

TURNER: Robert Hartwig is president of the Insurance Information Institute.

ROBERT HARTWIG: It's absolutely the case that after the first accident involving an automated vehicle there will be an automated ambulance chaser following.

TURNER: And this fight over who should be liable makes it hard to write laws for a driverless future.

JEFF DIAL: After I introduced the bill, then suddenly all the insurance companies started approaching me with the questions of the liability.

TURNER: Jeff Dial is one of those state legislators working on an automated car bill. He's in Arizona, and to be clear, he's a big fan of the technology. Even so, that bill he introduced last year, it's still in committee.

DIAL: And it seems like the more you deal with this issue, the more the issue grows and grows and the number of people that you're working with trying to figure this out.

TURNER: It's important to figure out because the faster we can get ourselves out of the driver's seat likely the better. In 2011, more than 32,000 people in the U.S. died as a result of motor vehicle crashes. And roughly 90 percent of crashes involve some kind of human error - 90 percent. Experts who study this say automation has vastly improved safety in the airline industry and that it could do the same for driving. But who's liable could complicate things.

B. SMITH: We may have a technology that would be societally very lucrative but for individual companies may be very unattractive because of liability reasons.

TURNER: Bryant Walker Smith of Stanford says it's way too early to know if this will happen with automated cars. But we have seen it before in the 1980s when liability suits were on the rise against vaccine manufacturers.

B. SMITH: Companies producing the vaccines that decided that because of the threat of lawsuits and the relatively low-profit potential of these vaccines just wasn't - didn't pay to make them anymore.

TURNER: So Congress stepped in and created a fund to compensate the injured and protect vaccine makers. One possible answer to a problem that doesn't even exist yet. Truly automated cars are years away and, good or bad, that means humans are still very much in the driver's seat.


THE BLACK EYED PEAS: (Singing) I'm so 3008. You're so 2000 and late. I got that boom boom boom. That future boom, boom, boom. Let me get it now. Boom, boom, boom. Got to get that boom, boom, boom. Got to get that boom, boom, boom.

KENNEY: As always, we want to know what you thought of today's show. You can email us - planetmoney@npr.org. You can also find us on the blog at npr.org/money. Facebook, Twitter, Spotify - reach out.

CHACE: And before we go, I would like to raise a glass to the future generation, specifically Max Kagan Kestenbaum (ph). He is the second baby of our own David Kestenbaum. He was just born on February 25. We're very excited. Welcome.

KENNEY: I'm Caitlin Kenney.

CHACE: I'm Zoe Chace. Thanks for listening.


THE BLACK EYED PEAS: (Singing) The boom boom in your town. People in the place, if you want to get down, put your hands in the air. will.i.am drop the beat now.

WILL.I.AM: (Singing) I be rockin' them beats, yeah, yeah, I be rockin' them beats. Transcript provided by NPR, Copyright NPR.