As featured in The Wall Street Journal, Money Magazine, and more!

May 2012


Editor’s Note: Thank you for your interest, this offer expired and is no longer available.

If you’ve spent any time on a plane in the past few years, you’ve probably noticed the growing gap between business travelers and the folks riding in the “back of the plane.” Business owners face a choice: standardize travel on a single airline network, or scour bargain booking websites for cheap fares. Under those conditions, American Airlines and Citibank have doubled down on a strategy win back business travelers. With the CitiBusiness®/ AAdvantage® World MasterCard®, the partners have combined a revamped rewards program with bonus miles for many business purchases.

How to earn more than you spend with AA’s business rewards card

Because Citibank also offers some compelling business credit cards attached to its ThankYou Rewards network, selecting this card really comes down to your company’s travel plans and spending patterns. Like most airline credit cards, the CitiBusiness/ AAdvantage World MasterCard racks up American Airlines AAdvantage miles for every dollar you spend. You’ll double your American Airlines AAdvantage® miles whenever you pay for an American Airlines itinerary with the card.

You’ll get the biggest return on investment from this account when you use this credit card on featured merchant partners, including certain office supply stores, telecommunications and car rental merchants. Citi and AA will double your American Airlines AAdvantage® miles on each of those eligible purchases, turning your accounts payable process into a travel generator for your company.

How to earn more than you spend with AA’s business rewards card

CitibankWith a $95 annual fee, waived for the first 12 months, this Citi/AA card clocks in on the expensive end of the airline credit card spectrum. However, if you use all your cardholder benefits, the card can pay for itself a few times over:

  • Waived baggage fees. AA normally charges $25 per checked bag each way in the United States. Book your itinerary with this card, and your first eligible checked bag flies free. So will the first eligible checked bags for each of up to 4 travel companions.
  • Annual companion certificate. Renew your cardmembership and spend $30,000 or more in purchases on the card in a calendar year, and you’ll earn a certificate that will let you bring a companion on a domestic economy round-trip flight. Note that when redeeming the companion certificate you will be responsible for ticketing fee, government taxes and fees that apply.

Best of all, the new primary cardholder can earn a signup bonus of 30,000 American Airlines AAdvantage® bonus miles after spending $1,000 in purchases on the card in the first 3 months of card membership. Use that toward a domestic round trip ticket under the new MileSAAver program, or toward a one-way coach ticket under the classic fare structure. And when you use your card receive a 25% savings on on in-flight food and beverage purchases.

Maximizing your rewards on AA’s global network

Choosing American Airlines as your company’s preferred airline makes the most sense when you travel often through any of the company’s “cornerstone” cities: Dallas, Chicago, Miami, Los Angeles, and New York. Despite AA’s recent financial reorganization, the airline remains part of the “one world” airline alliance, opening up opportunities for reward travel on more than a dozen partner carriers. With AA codeshare flights operating nearly everywhere, it’s not hard for you to rack up AAdvantage miles. While AA can be more expensive than discount airlines, their specialization in business travel means more flexibility for visiting clients and attending conferences.

Industry speculators have suggested that AA may end up merging with another legacy airline, like US Airways. As we learned from Delta and Northwest, and from United and Continental, it can take years for merged airlines to link up their rewards programs and their network partnerships. In the meantime, the CitiBusiness®/ AAdvantage® World MasterCard® could be right for your business if you’re an AA fan and you’re ready to cash in on some money-saving perks. So take a look at the online application for additional information and terms and conditions.

Photo: Kien Wai
CBS News

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November’s Black Friday has been has been around for decades, but it’s only recently that it became the crazed shopping event resulting in deaths due to shopper stampedes. Online retailers invented Cyber Monday to bring some of the hype associated with brick-and-mortar retail locations to the internet. Don’t get me wrong; both “holidays” provide opportunities for discounts, but I can do without the ever-increasing marketing.

Teen Vogue wants to take advantage of the shopping holiday trend. Advertisers who pay more money to Teen Vogue for advertising will be allowed to participate in “Back-to-School Saturday” on August 11. Participating stores will on this day offer free samples and events, but there is no indication that the day will include any bargains. The retailers participating include many of the most popular brands among this demographic, like Aéropostale, American Eagle Outfitters, Cover Girl, and Tampax. Like all other spending holidays, this will be great for retailers, but not very worthwhile for consumers from a money management perspective.

Aeropostale - Teen ShoppingIf a sales tax holiday is a temporary reprieve from paying sales tax, a shopping holiday should be a temporary reprieve from buying products. Instead, there’s an increasing number of special events centered around spending money. That’s a great benefit to retailers, not to customers, despite occasional good deals.

For instance, American Express launched its Small Business Saturday campaign last year. On the surface, it seems geared towards helping “Main Street” recover by drawing focus to local stores rather than national branches. The deals, however, are restricted only to people who use their American Express credit cards. Many retailers don’t accept American Express cards because the fees for processing have traditionally been higher than standard MasterCard and Visa fees. By requiring the use of its own cards, American Express forces retailers to pay the AmEx interchange fees, resulting in a nice profit for American Express.

From a retailer’s perspective, the idea is groundbreaking. Take the popular idea of event-based shopping and bring it to one of the most powerful consumer demographics: teenagers and parents of teenagers who want their children to have everything all of their children’s peers have in the fear that not to have the same things would deem their children an outcast. Retailers need to pay a cover charge to Teen Vogue to participate, but the fee will likely prove to be worthwhile.

From a consumer perspective, there’s nothing to this even other than yet another opportunity to spend more money than necessary. Will you participate in Back-to-School Saturday?

Here’s some video insight into marketing the “extruded plastic dingus” to children.

Photo: GabrielaP93
New York Times

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What do you do when you think you want to leave your job? Job dissatisfaction is a worldwide experience, and the occasional desire to quit is universal. When unemployment is high, however, employees of all types can be wary about leaving one job. Employers have all the power in the relationship, and people often feel that staying in a mediocre job or career is a better option than taking a risk with a new position — or with unemployment.

Great employees do not need to fear the unknown, as they tend to thrive in any situation. Even during periods of competitive job markets, a person for whom excellence is a thread woven into his or her psyche will find employers willing to open doors. Because individuals who strive for excellence outperform in all situations, self-evaluation can be difficult. This set of ten questions can help the best employees determine if the time is right to pursue other opportunities.

8 Questions Before You Quit Your JobThe high-performing employees addressed herein are not necessarily those who are the best team players or those who follow the company rules, but those who have the desire and skills to strive for excellence in all endeavors they pursue. This is a rare quality, and it’s a type of work ethic that needs to be instilled early in someone’s life. It’s difficult to put your best effort into everything you do, and unless your life is physically, emotionally, and mentally draining, you are operating at less than your full capacity. Extreme efforts can cloud vision of less than optimal situations, however.

Ask yourself the following questions as you, as a high-functioning individual, are considering whether to leave your work behind in favor of new opportunities.

1. Is the company rewarding me for my work?

Reward takes a variety of forms, and the best situation is where your desires match what the company has available. For example, if your only sense of reward comes from financial compensation, working for a non-profit organization with a tight budget could be problematic. Look at the whole picture. If you are passionate about the work you do, your reward may be intrinsic in the work itself. If you are working at your position more out of a necessity than a desire, your reward should take other forms, as something that is meaningful to you.

You need to let your company know what types of rewards are acceptable, as long as your performance warrants. If the company can find no way to reward you for excellent work, you should look to move on. Employees who seek excellence will almost always be in demand. Mediocre employees, on the other hand, are more susceptible to market forces.

2. Do I have good relationships with co-workers and managers?

Mutual respect is an important aspect of a fulfilling lifetime experience. You may spend eight hours a day or more with people you work with. If you don’t believe them to be good people or if they don’t believe you to be worthy of respect, the time you spend working with your colleagues and managers will be unfulfilling.

Beyond respect, you should expect to feel comfortable and at ease. That doesn’t mean there can’t be a sense of urgency, if necessary, within your workplace environment. Respect is the base, and above that, good relationships contain trust. You should expect your co-workers to be just as reliable as you. You shouldn’t need to micromanage others, and they shouldn’t be micromanaging you.

You can’t expect that everyone in your office will be your friend, but you can expect an environment in which there isn’t a pervasive sense of negativity.

3. Is there enough variety in my day?

While excellent performers can certainly function well in daily, repetitive tasks, this isn’t the best use of someone’s time and efforts. Most employees feel under-utilized with their set of responsibilities and authority, but this can be a significant problem for people who strive to excel. Great employees might be willing to put up with limited activities for a while, but it might be better to leave than stick around if there’s no sign of this improving.

The best position for a high-functioning employee is one where you have the opportunity to use as much as your skill set as possible. This is one reason excellence-focused individuals pursue starting their own businesses; this type of start-up work requires use of all mental faculties.

4. Can I continue to learn from my managers?

Education is a life-long endeavor, particularly if you work in, are interested about, or are passionate about an industry that continuously evolves. Excellent employees know that they should rarely be the smartest person in the room. Constant self-improvement is a need, not just for career advancement but more importantly for the sense of worth and value. If you are going to spend eight hours or more of your day working with people, you want to ensure there are opportunities available for you to continue building your skills, not just from a technical perspective but from a philosophical perspective as well.

Large companies with resources generally understand that employees have a need to continue learning but struggle to learn anything from managers. Taking the place of these learning opportunities, you may find mentoring programs, tuition benefits, company-sponsored seminars, and other programs designed to allow employees to expand their minds. These are not good replacements for having a manager who is interested or able to provide the insight you need to improve.

5. If I resolve my dissatisfaction, will I be happy?

Imagine yourself continuing to work at your current company but with all of the above concerns resolved. If this scenario still leaves you wanting more from your employment, it’s a great indication that it’s time to seek other opportunities. Even if you can’t put your finger on the cause of your dissatisfaction, you deserve to be happy. The danger is chasing an unrealistic dream.

The solution is to realize that happiness is a choice. You can simply choose to be happy with what you have. This isn’t “settling,” it’s analyzing your situation and concluding that your needs are being met. If your company is doing a good job of listening to your concerns and willing to place you in the best working scenarios, there is little more you can ask. If you can’t be happy with this, consider whether you would be happy anywhere. If so, consider moving on, but if not, choose to be happy.

6. Do I have another opportunity lined up?

A standard piece of advice is never to quit one job until you have another opportunity ready to go. People who strive for excellence might have some trouble with this concept. Someone for whom excellence is an important personal virtue will likely work hard until the day they quit, leaving little time for aggressive job hunting or soul searching. Excellence transcends job market conditions, though, so demand for you will still be high.

As a valuable contributor to your organization, you might not need to be concerned about your company knowing you’re seeking other opportunities. If you’re considering leaving, you should probably have had discussions with your managers during which you’ve made them aware of your disappointment, so this should not come as a surprise. The organization is not going to fire you if you are still a great asset, and they might be willing to help you find your next opportunity.

You will need to dedicate some time to self-marketing. Many people who strive for excellence don’t need external acknowledgment of their virtues for self-satisfaction. To find a job, however, you’ll need to be less humble and more willing to sell yourself as a desirable product. If, however, you are interested in making your own opportunities, you don’t need to wait for a job offer. There’s no time better than now to start your own endeavor.

7. Is my emergency fund ready?

People often stay in jobs they don’t like because they don’t want to risk losing the income. Households have debt to pay, whether from student loans, the expansion of a household, or overspending. Debt traps people into a situation where a strong percentage of every paycheck is destined elsewhere. This isn’t much different than indentured servitude. Even people who strive for excellence can be unprepared financially.

An emergency fund is the answer. Take some time to build an emergency fund from the ground up. Start by taking a small percentage of every paycheck and automatically transferring the amount into a high-yield savings account. You’ll want this account to be able to cover your living expenses for several months to prepare for a potential loss of income. Since you strive for excellence, consider expanding your emergency fund into a multi-layered emergency plan, which offers more flexibility and possibly less time to put into effect.

An emergency fund lets you take more career risks without hurting your family’s finances. You could take a more interesting and rewarding job for less pay, or you can start a new business without worrying about the immediate loss of income.

8. Will my decision affect my family’s stability?

Single people have more flexibility. They can take chances, move from location to location, and put up with less stability than people who have the added responsibilities of caring for a family. With a spouse and children, every decision you make affects more than just yourself, and it’s important to keep this in mind. The emergency fund mentioned above can help smooth financial rough patches when you make your decision to quit your unfulfilling job, but you need to worry about more than just the financial concerns.

If your dream requires you to move away from Kansas and set yourself up in California, you can’t make such a decision without considering the needs and desires of the rest of your family.

The reality of the economy is that most people cannot afford to consider quitting a job without a solid plan in place for replacing the income immediately. Job satisfaction is a luxury at a time when most people feel that they’re lucky just to have a job. If you are someone who strives for excellence in all that you do, you have more options open because you’ve done quite a bit to improve your measure of human capital. Regardless, it’s always a good idea to seek out solutions for improving your current situation before making a significant career move by quitting.

Photo: Guillaume Paumier

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In my article earlier today about the recession era bail-out programs, I touched on the idea that sometimes, there are methods to judge a decision outside of its immediate profitability. The bail-outs may have provided a return on investment for taxpayers or they might not have. The idea that the programs could earn money was certainly used as a selling point when the programs were initially up for discussion in Congress, but the idea of preventing a full economic collapse trumps the possibility of walking away with “more” at the end than the money that was put into the efforts.

I recently read in the news about the U.S. Postal Service cutting its workforce by 150,000 workers between now and 2015. The Postal Service has announced the first round, offering buyouts of $15,000 to 45,000 mail handlers. This first round of buyouts would total $675 million but would help stave off the organization’s growing losses in the billions. Last year, I discussed the complete elimination of the Postal Service in favor of private companies that may do the job of delivering mail better — though at a higher price. A lively discussion ensued, with participants offering well-reasoned arguments in favor and against eliminating the U.S. Postal Service.

The final comment was from John, who added the following.

You people watch too much news, and learn too little real truth. You need to worry about your own lives, and stop thinking you can fix the world by balancing its books. Some things are not meant to make money.

Cash in handThis thought is worrisome. An enterprise that does not make money is not sustainable by itself. If we don’t proactively address the problems of mounting losses for the U.S. Postal Service, it will disappear on its own. The Postal Service does not receive any taxpayer funding, so it must pay for its own operations through its own declining revenue. Unless the organization finds a way to adapt to changing consumer demands, such as the declining need for mailing and delivery of letters, it will collapse under the weight of its own operating expenses. Reducing those expenses by cutting back its workforce and perhaps eliminating a day or two of service will provide some temporary aid. It’ll take a significant change in the business model to make the U.S. Postal Service viable over a longer period of time.

John’s point is interesting, though, because it points to an assumption that is easy to skip past without looking: that something is only worth doing if it makes money.

American society is built on this idea. Money is what we use to afford the things we need to survive first, such as food, water, and shelter, followed by everything else we would like to have that goes above and beyond the basic life needs. Without money, we would need to turn to bartering or indenture to survive. We could work for someone else who directly provides what we need to survive in return for that work, or use our skills in exchange for food and shelter. These are inefficient, so the use of money makes life infinitely more bearable and opens the opportunity for people to build wealth over time.

Sometimes, however, the things worth doing are not very profitable. People often work for non-profit organizations when they believe in the missions of those organizations, even if their skills could attract a higher salary working for a for-profit company. Investors don’t simply put their money into the investments with the highest possible returns, they invest in what’s relevant to their lives.

In my own life, I am looking to my future and attempting to decide on a number of possible paths in terms of my career. On the one hand, it would be nice to take what I’ve earned from investments and find new opportunities that allow me to make the best use of the skills I’ve developed to, I hope, provide a continuation of income. I’m openly looking for business opportunities and forming new partnerships. I’ve already been in several discussions with potential partners about ideas that could prove to be profitable, though some touch on my need for creativity a little more than others.

The impetus is to make money, whether by creating a product or service for which customers are willing to pay or by creating something of value for investors. Serial entrepreneurs start businesses with the intent of selling those businesses later on for a profit, and expert serial entrepreneurs are able to repeat this pattern several times. You almost have to lack a passion about your businesses in order to change directions frequently and to come to terms with putting your hard work behind you. I like to consider myself passionate about the work that I do when I have the flexibility to be in control of it, so the detachment that serial entrepreneurship requires might make it unattractive to me.

I’ve also considered other opportunities, not as much focused on the potential to sell either products, services, or the business itself. Having built up an emergency fund and safety net is essential in order to have the luxury of contemplating spending significant amounts of time, energy, and possibly money, on ventures whose path to profitability is murky or even impossible. I’m passionate about the arts, and I’d like to spend more time exploring that area of my brain.

One part of me would like to find an opportunity that has a path to profitability, but that isn’t going to be easy. The more I focus on determining how I can have a lucrative life involved in the arts, the less time I’m spending being involved doing something. My desire to find this balance probably started when I worked for an arts-related non-profit out of college, not earning any money and being very frustrated with my situation.

The market defines which activities are worthwhile, and a pure economic view makes that easy. The salaries for engineers are higher than the salaries for teachers, so from an economist’s perspective, the market has determined that engineers are more important to society than teachers. Supply and demand is at work, too. It may be harder to become an engineer than it is to become a teacher. If everyone placed the highest priority on earning money, more people would forget about teaching entirely and strive to become engineers (assuming I’ve simplified the economy so much that engineering and teaching are the only options for careers).

That might drive up supply and eventually force engineering salaries down, but obviously, society would not be able to function in the condition where earning money is the sole driver for life’s biggest choices. Yet that is exactly how a lot of advice-givers and gurus see the world. We must invest in the stock market for the long term to provide the highest chance of retiring with enough money. We must choose a career that doesn’t leave us moving back in with our parents. We must do the work as required of us by our bosses and exceed expectations in order to plead our cases for a minuscule raise that doesn’t have that much relevance over the course of our lifetime. We must negotiate with our credit card company to lower our APRs, avoid debt whenever possible, and cut out daily lattes.

This is a world that is focused primarily on money rather than on satisfaction with one’s life. Once you have enough money to survive your life in an acceptable condition, you can move beyond the limitation of needing income and can start to tackle problems and questions without the concern about whether it is profitable to do so.

Photo: stevendepolo

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Were the Recession Era Bail-Outs Worthwhile?

by Luke Landes
AIG

The Treasury Department of the United States has released its latest analysis of the various bail-outs enacted during this and the previous Presidential Administration, and not surprisingly, the outlook is good. The government frames the analysis of its own policies in terms of investment return. The Troubled Asset Relief Program (TARP) housing programs and the ... Continue reading this article…

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One Million Dollars Isn’t What It Used to Be

by Luke Landes
Scrooge McDuck

There was a time the word “millionaire” carried cachet. According to the Oxford English Dictionary, the word was first used in French in the early eighteenth century and in English nearly a century later. Regardless of your station in French society in 1719, you would recognize a net worth of one million livres being notable. ... Continue reading this article…

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Podcast 162: TOPGUN on Wall Street

by Luke Landes

Today on the Consumerism Commentary Podcast, Jay speaks with LT Commander Jeffery Lay, author of TOPGUN on Wall Street: Why US Military Should Run Corporate America. They talk about the leadership qualities missing from Corporate America and what investors should look at to make the right decisions. Consumerism Commentary Podcast TOPGUN on Wall Street: S07E06 ... Continue reading this article…

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The Latte Factor: Your Spending Reflects Your Priorities

by Luke Landes
Latte Factor Coffee

The concept of the Latte Factor is one of the most divisive issues in personal finance. Money gurus get so worked up over whether the Latte Factor is a valuable lesson in money management that one might think the issue were as important as war, the national debt, or capital punishment. Most of the time, ... Continue reading this article…

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CitiBusiness ThankYou Card Review

by Joe Taylor Jr.
Citibank

Editor’s Note: Thank you for your interest, this offer expired and is no longer available. Citibank wants to lure more business owners away from American Express and Chase with a credit card that cribs from its competitors’ playbooks. Like the original Platinum Card, the CitiBusiness ThankYou® Card streamlines expense reporting and adds significant purchase protection ... Continue reading this article…

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Investing for Dividend Income: Not All That Passive

by Luke Landes
Money

Passive income is the Holy Grail of financial independence. Although modern Western society and capitalism relies on the Puritan work ethic, the idea that labor is a value to society and hard work is the path to a spiritual and successful life, most people would prefer not to trade their time and effort for an ... Continue reading this article…

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A Financial Literacy Program for Kids, With Corporate Sponsorship

by Luke Landes
Eighth grade

The best place to learn solid financial behavior is at home. Although a kid’s environment at school and among peers is important in his or her development, the biggest influence on a growing child’s set of values is the behavior of the parents. Parents are role models, so in a perfect world, they are best ... Continue reading this article…

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Debt Reduction Methods and Philosophies: Snowball, Avalanche and More

by Luke Landes
snowball3

When someone who has accumulated debt across a number of credit cards embarks on the journey to rid himself or herself of this debt, and when that person is generating enough monthly income to cover all expenses and the minimum payments due on all cards with additional funds left over, there are two main philosophies ... Continue reading this article…

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Podcast 161: My Mother Was a Mail Order Bride

by Luke Landes

Today on the Consumerism Commentary Podcast, Tom Dziubek speaks with Aloysa, founder of the personal finance website My Broken Coin about how her mother came to America by becoming a mail order bride. She talks about the decision to find an overseas husband, what the search process was like, the risks involved and how the ... Continue reading this article…

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Reader Question: Should I Invest in My Non-Matching 401(k)?

by Luke Landes

Occasionally, Consumerism Commentary readers send in questions about handling their finances. I am not a financial planner, so I have no certification claiming I’m qualified to give financial advice. I am not an investment adviser, so I certainly won’t be recommending stocks. I like the opportunity to address financial questions that other readers may be ... Continue reading this article…

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Young Americans Likely to Be Unbanked Regardless of Income Level

by Luke Landes
Check Cashing

In discussing unbanked and underbanked American consumers, we tend to focus on low socioeconomic status communities. The mainstream opinion is that building wealth and long-term financial stability relies on the use of traditional banking and investing products and the knowledge to use these products effectively. The financial industry tends to avoid low socioeconomic status communities ... Continue reading this article…

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The College Education Bubble and Crash

by Luke Landes
Graduation

A new survey takes a look at the critical state of today’s recent college graduates. The survey questioned a nationally-representative sample of 444 recent college graduates between the ages of 22 and 29, about their employment situation and experiences. The questions also lightly touched upon these graduates’ financial condition. I’ve included a link to the ... Continue reading this article…

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Repair Cafe: Bring Your Broken Doodads and Gadgets

by Luke Landes
Broken Toaster

We live in an era of cheap, disposable goods. My closet full of clothing, much of it rarely worn, even though I sort through my wardrobe about once a year to eliminate items I no longer need, is a good indicator of this situation. For a good period when I was a kid, I wore ... Continue reading this article…

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Half of All Americans Are Not Saving for Retirement

by Luke Landes
Wall Street

In April, LIMRA, a think-tank for the financial industry, completed a survey intended to focus on the savings and investment preferences of those living and working in the United States. After receiving responses from 2,697 Americans, a representative sample of the country, LIMRA was able to determine that 49 percent of the country is not ... Continue reading this article…

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Podcast 160: The Rich and the Rest of Us

by Luke Landes

Today on the Consumerism Commentary Podcast, Jay Frosting and Luke Landes talk with Tavis Smiley, host of Tavis Smiley on PBS. With Dr. Cornel West, Tavis Smiley is the co-author of The Rich and the Rest of Us: A Poverty Manifesto. The interview in today’s podcast was scheduled to include Cornel West as well, but ... Continue reading this article…

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Tavis Smiley: Poverty Is a Threat to Democracy

by Luke Landes
Tavis Smiley

Tavis Smiley and Dr. Cornel West have been working hard to bring the issue of poverty into the consciousness of the citizens and political discourse of the United States. As a team, Smiley and West have been touring city to city, speaking to audiences concerned about the increasing wealth gap in this country. Their book, ... Continue reading this article…

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