An Interview with Mary Caraccioli

Mary Caraccioli serves as CN8’s Director of Business and Consumer News and Host of “Money Matters Today,." Her recent interview with Gov. Ed Rendell will be rebroadcast Monday, August 25 at a special time, 6:30 p.m. Turning the tables, she is the interviewee here.

A 2005 study by Johns Hopkins found that 27% of the jobs in Philadelphia are at non-profit organizations. Some of these are large, like universities or insurance companies; others only employ a few people. Is that percentage a matter of pride or concern? (see also a recent Inquirer article)

I think a city or region always needs to be concerned when a large number of jobs come from one particular sector. You want to have diversity in employment just as you have diversity in a financial portfolio. It helps you weather both the good times and the bad. If tax incentives for charitable giving change or major economic shifts happen you could see a major upset in the nonprofit arena, resulting in major job losses.

However, you also need to look at the quality of the jobs and the quality of the organizations that make up the employment base. In the case of Philadelphia, it is an education hub. Many of the universities, while non-profit, are well endowed and have a solid financial foundation. These are attractive anchors for any city. Education as an employer attracts educated people, not just the students and faculty but the small businesses and large businesses that find it advantageous to be close to educational hubs. Small businesses can benefit from incubation centers at major universities. Larger employers have easy access to a rich talent pool. This part of the non-profit story is attractive and should be leveraged by the region to attract for-profit businesses.

Charitable non-profits are also valuable to communities in other ways. They often meet the social needs of communities more nimbly than government, and they also tend to have a lower failure rate than for-profit start-ups. But too many non-profits in one region, doing similar type work, is inefficient. Fortunately, major foundations that often fund these programs, have very strict rules and standards for non-profits. This helps create a more efficient flow of cash, but it does not work out all the inefficiencies. In time, if a non-profit is not doing its job better than the competition, that non-profit will likely not survive. The internet age has also brought more transparency to this process. I can check the ratings of most charitable organizations now, before I write a check to support it. Philadelphia has a long tradition of volunteerism and charitable giving—it is part of the community’s DNA, which makes it overall an asset to the region.

Pennsylvania is home to a number of community banks. Is this good, bad, or neutral for the state’s economy?

Two years ago I may have given you a different answer to this question. Today, with the credit crisis still gripping the nation, we see a much greater need for community banking. One of the underpinnings of the credit crisis is the mortgage mess created by the securitization of mortgages. Mortgages from unrelated parties were packed together and sold as safe securities to anyone who would buy them. People, pension-funds and governments around the world snapped them up. What became clear about a year ago is that these securities were not safe investments. Companies were giving mortgages to people who clearly would never be able to pay them back. No effort was made to see if information on the loan documents were true, and we now know that fraud was committed all over the country. Community banks, while not having the same access to capital as the larger banks, know who they are lending to. They know their communities. That makes them much better at risk assessment than the big banks.

Do tax abatements really work as an incentive to bring businesses to the area?

I have witnessed tax abatements turn communities around. If you give people financial incentive to rebuild their community, they will take advantage of that and hopefully make a profit. The community benefits because abandoned homes hurt an area due to the danger of fire and crime coming to a street that has a deserted home. When tax abatements are offered, either builders or potential home owners will see the value in buying these types of properties and in the process they breathe new life into the community.

As a television journalist are you concerned about the reduction of print journalists and the smaller newspapers we have now, as opposed to a more robust print media in the past?

I often think about the economic climate that is resulting in more and more layoffs in the print community. I can tell you right now, this will come back to bite everyone. A strong force of print reporters needs to exist—people who don’t have to worry about presenting their reports on the internet or TV, but instead know how to report and know how to write. So many websites get their content from newspapers through links and reprints. Yet the newspapers continue to do worse financially. They have not figured out how to properly monetize their content, and instead of solving that issue, they are laying off good reporters and their content (their lifeblood) is getting weaker.

For some aspects of green jobs, such as solar panel installation and windmill technician, skilled tradesmen are needed. Do you think the area has the resources to provide people with these skills, and how does it fit into the regional labor environment?

I recently visited the Gamesa plant, a wind turbine manufacturing facility in Bucks County, and learned they had 200 job openings. I also did a story not long ago on the unemployment rate of returning veterans, many of whom have excellent skills in the trades. We need to do more to get these two sides together. A program called Helmuts to Hardhats is helping, but it is not enough.

Do you think green jobs will come in the form of established businesses, like Gamesa, or in small business startups?

Green jobs, should not be called green jobs. They are jobs, some technical, some in the trades, marketing, engineering—you name it. They are jobs in the emerging energy sector. I have no doubt that there will be tremendous opportunities in this field. There is no other choice. One day, the world will not have enough oil to fuel all of the global needs, and the sooner the U.S. commits to developing and supporting alternatives to oil, the better for the entire nation. Oil isn’t going away overnight, but the sooner we become more independent, the better. The political will is there and so are investment dollars from the private sector.

You recently interviewed Gov. Rendell. How does he compare as a guest on your show?

Governor Rendell has always been very passionate about the causes he believes in. Energy independence is an area where he has become a national leader. He knows the issue well and knows there are facets to every choice and every investment. He is also a political leader who has made partnerships on both sides of the aisle. He is a leader in his Democratic Party and as a result has access to all the top newsmakers in politics. Being in the loop and being passionate about the issues that affect Pennsylvanians help to make the Governor a terrific guest.

While finance is a predominantly male field there are precedents for having a strong, calm female voice in the media, such as Jane Bryant Quinn and Suze Orman, though they have dealt primarily with personal finance. Maria Bartiromo reports on financial matters more generally. Do you see this as a field that is becoming more open to female reporters and analysts or is it still mostly a boys’ club?

Women have taken a leading role in the last few years when it comes to covering money issues, but they are still taking a back seat to the boys when it comes to running the big money institutions. Wall Street has a few women, but leadership on the street is dominated by men.

You were the first reporter to do live reports from the floor of the Philadelphia Stock Exchange. The exchange was recently purchased by NASDAQ. What does this mean for the region?

Not much, the exchanges make money by the volume and by proprietary products. I think it helps Philadelphia to be part of this bigger exchange organization, but trading floors like New York and Philadelphia are slowly disappearing because of electronic trading. My last visits to the NYSE and to the PHLX were eye opening – it was so quiet. That is because so much is done electronically. The Nasdaq does not have a trading floor because it is all electronic.

Earlier this year, you spoke at the Governor’s Conference for Women on investing and creating long-term wealth. In a nutshell, and in uncertain economic times, what are the top two or three things people need to do to ensure their financial security?

1) Be engaged. When times are tough we often want to put our head in the sand and ignore things hoping they will go away. But if you get involved with your finances early and often, you will be able to react and make appropriate changes to better ride the storm.
2) Get educated. Women especially, love to pawn the financial stuff off on the guys. Don’t do it. Know what is going on in your own household and use the internet and other free tools to help you (like watching Money Matters Today on CN8 or visiting www.CN8.tv :) ).

Thanks to Mary to taking the time to answer questions!