It’s fascinating to run a chart on each of these.<\/p>\n
There has to be new ones lurking in the closet. For now, I prefer AAPL, gold and solid corporate bonds. More on them tomorrow.<\/p>\n
Do not go near GM. I’ve been reading The Report Independent Registered Public Accounting\u00a0 Firm<\/em> in GM’s prospectus. The report will make you puke.<\/p>\n Shopping our way out of this mess.<\/strong><\/span> This piece is from the New York Times. I found it seriously interesting.<\/p>\n Some Very Creative Economic Fix-Its<\/strong><\/span> We are not going to shop our way out of this mess.<\/p>\n It\u2019s a cheerless truth about the post-Thanksgiving start of the Christmas season, traditionally the bell lap in America\u2019s year-long steeplechase of buying. There has been a rebound in consumption since the grimmest days of the Great Recession, but that has not been joined by an uptick in hiring or a robust expansion.<\/p>\n So the question of our anxious age: What will return our economy to full-throttled life? We\u2019re not talking about tactical measures that will ease fears of a double-dip recession, or maintain some upward momentum in the stock market, or even add another 151,000 new jobs, as the economy did in October.<\/p>\n What\u2019s needed is a path to sustained growth. That means a strategy for the millions who have lost their jobs in recent years and some hope for the more than 125,000 new entrants to the United States labor market each month.<\/p>\n Got any ideas?<\/p>\n Many academics do, though fair warning: some of their concepts are a little out there, a reflection, perhaps, of the severity of our problems. Also, canvassing these people is depressing. If you are planning a holiday party and would like a bit of merriment with your tinsel and egg nog, a few of these big thinkers should be left off your list. Several preface their thoughts with brace-yourself sighs and even the ideas that excite them have a pretty grim cast.<\/p>\n \u201cAge and disease will be our next engine of growth,\u201d says Teresa Ghilarducci, a professor of economics at the New School. \u201cThat\u2019s the really good news.\u201d<\/p>\n As millions of baby boomers retire, she says, they will segue from their accumulation years into their spend-down years.<\/p>\n \u201cThey\u2019re going to be spending a lot on health care,\u201d Professor Ghilarducci said, \u201cto forestall disease, to make themselves look younger. Low-end services, high-end services. CT scans, face lifts, bionic knees. We all think that health care is a high percent of gross domestic product now, but we ain\u2019t seen nothing yet.\u201d<\/p>\n But is it a good idea to nip, tuck and CT scan our way to prosperity?<\/p>\n \u201cIf I were predicting a huge new demand for straw brooms,\u201d she said, \u201cthat would not be a reason for optimism, because there isn\u2019t room for technological breakthroughs when it comes to straw brooms, or a lot of high-paying jobs. But spending on health care yields all sorts of breakthroughs and jobs at every skill level, from very low to very high.\u201d<\/p>\n The aging of America presents a different sort of opportunity to James K. Galbraith, a professor at the University of Texas, who opened an interview with this very succinct expression of pessimism:<\/p>\n \u201cWe\u2019re likely to see a situation that makes people angry and miserable for years.\u201d<\/p>\n But Professor Galbraith said he saw a way to alleviate the misery of one large group of Americans: the jobless elderly. Instead of sending them unemployment checks, the government should temporarily allow workers who are, say, 62 years old, to retire with full Social Security benefits. In essence, he said, the government would continue providing these people with assistance, but through retirement benefits instead of unemployment insurance.<\/p>\n Not only would they no longer be forced to compete for jobs they are unlikely to get, they would have 22.5 percent more purchasing power than they would have if forced to wait until 65, the age when full Social Security benefits kick in. Collectively, that added purchasing power would drive demand for a variety of health and home care services \u2014 also known as jobs.<\/p>\n To economists from the conservative, free-market wing of the discipline this will sound like more of the medicine that put us in the hospital. Their main worry is that the government will intervene and make matters worse.<\/p>\n \u201cGrowth doesn\u2019t come from big federal programs,\u201d says John H. Cochrane of the University of Chicago. \u201cThe government didn\u2019t tell us\u201d to create the vast variety of profitable businesses on the Internet, but \u201cit did tell us to buy houses and look what that got us.\u201d<\/p>\n Professor Cochrane said he was not a forecaster. He is, however, an optimist.<\/p>\n \u201cThe fundamentals are there. We have had a financial panic, but in the long run, growth is determined by businesses with great ideas, and we still have plenty of those. Now, it\u2019s perfectly possible we\u2019re in for a miserable decade but only if the government screws it all up, with high tax rates, chaotic tax rates, or if we suffer as a result of the overhang of government debt.\u201d<\/p>\n Professor Cochrane and others counseled against a search for quick fixes. Mark A. Calabria of the Cato Institute went further, emphasizing that time was a key ingredient to a recovery.<\/p>\n It could take years for the millions of people once employed by the housing industry \u2014 from construction workers to real estate agents \u2014 to find new careers or return to their former careers when and if a strong housing market returns.<\/p>\n \u201cI think we also have a bubble in the labor market for state and local government employees,\u201d he said, \u201cand over the next two years we might see as many as one million of these employees lose their jobs.\u201d<\/p>\n So don\u2019t expect a speedy return to 7 percent unemployment, he said. For silver linings, he pointed to exports, which he thinks will be a source of growth, given the weaker dollar. And he sees an upside in an unlikely place: inflation, which he says might go from 2 percent today to 3 or 4 percent in the coming years.<\/p>\n \u201cIf you have a house worth $200,000 and a mortgage of $250,000, inflation is going to raise the nominal value of your home,\u201d he said. \u201cBut your mortgage will stay the same. For borrowers who are underwater, inflation will get their heads closer to above water.\u201d<\/p>\n Before we start rooting for higher inflation, or re-jiggering Social Security, or scaling back government, let\u2019s ask a more basic question: Is there no technological marvel on the horizon that could create an unexpected bounty in jobs? The way the railroads did in the 19th century or the way the Internet and computer industries did starting in the early \u201980s?<\/p>\n Green-energy initiatives like solar power, wind power and fuel cells are often described as jobs machines just waiting for ignition. True?<\/p>\n \u201cI think the potential is there but the question is when and the question is how,\u201d said Christian Menegatti of Roubini Global Economics. \u201cInvestments like that are risky and they won\u2019t pay off for a number of years, and probably even longer. Those kind of projects will need public incentives.\u201d<\/p>\n Public incentives, he noted, aren\u2019t likely to emerge from a Republican-dominated House.<\/p>\n How about a cheap technology that our mortal minds can\u2019t currently fathom? A decade ago, who could have imagined that more than a million people would pay $1 for a portable phone video game in which you slash watermelons with a Japanese sword? Who, in other words, could have envisioned the Fruit Ninja app?<\/p>\n \u201cThat\u2019s a pretty wispy hope,\u201d said Gar Alperovitz, a professor at the University of Maryland.<\/p>\n For hope that is a little more tangible, Professor Alperovitz pointed to local co-operatives that are sprouting up around the country. They tend to be employee owned, and get off the ground with private and foundation funding. Many of his favorite examples are found in Cleveland, of all places \u2014 like the Evergreen Cooperative Laundry, an employee-owned firm that provides laundry services to hospitals, which started in 2009.<\/p>\n Professor Alperovitz tracks and catalogues enterprises like the cooperative laundry on a Web site, community-wealth.org. He says he sees in these companies the stirrings of a movement animated by the cold reality that neither the government nor private enterprise is on the verge of large-scale hiring.<\/p>\n \u201cIf the economy and the government don\u2019t have an answer to a problem,\u201d he says, \u201cpeople are forced to try social enterprise.\u201d<\/p>\n Perhaps we are entering the era of the self-starter. Prof. Andrew Caplin of New York University thinks so. He begins with the premise that in the coming global economy some people will succeed and others will not, and income inequality will grow. While it\u2019s noble to focus on how to spread wealth around, he says that it might be wiser to think of ways the poor and middle class could cater to the economy\u2019s biggest winners.<\/p>\n \u201cUnfortunately, there will be income inequality,\u201d he says, \u201cbut enough people will make money that those who don\u2019t would do well, in as much as they understand the needs of that group.\u201d<\/p>\n He says he expects a rise in what he call \u201cartisanal services,\u201d like cooks, nutritionists, small-scale farmers. He sees services emerging that aid the wealthy at the intersection of health and genetic science. He imagines a rise in technology services, too \u2014 experts who keep clients current about technology which can advance their interests in business, in the media, on search engines and so on.<\/p>\n Professor Caplin worries that this concept might be caricatured as \u201ccater to the rich.\u201d But he suggested that this country could use a lot more non-judgmental thinking about the future of the United States economy. Any argument on that subject that starts with the word \u201cshould,\u201d he said, is not nearly as useful as one that starts with \u201ccould\u201d and has a firm grasp on \u201cis.\u201d<\/p>\n \u201cIf you start with \u2018should\u2019 you get arguments where nobody makes any sense and where you can claim that some people are good and other people are bad,\u201d he said, referring to recent skirmishes over Fed policy, deficits and other contentious topics. \u201cWith that sleight of hand you\u2019ve ensured that you will not discuss anything of substance. You\u2019ve just lined up two camps to fire at one another.\u201d In the spirit of the coming holidays, it seems downright unseasonal to end with an image that sounds lifted from the Battle of the Somme. So, a little solace.<\/p>\n Many interviewees made the point that America\u2019s higher education system is still drawing the greatest minds from around the world. That insures a regular influx of the innovative, motivated thinkers, a resource of enormous value, though one that is impossible to quantify.<\/p>\n And that\u2019s not all. When asked for something uplifting, Mr. Menegatti deadpanned:<\/p>\n \u201cThings could be much worse.\u201d<\/p>\n Retail is weak. <\/strong>There’s no store that won’t bargain. Remember the old joke. <\/span><\/span><\/p>\n Question: “Why did God invent Christians?”<\/span><\/p>\n Answer: “Because someone has to pay retail.”<\/span><\/span><\/p>\n Bricks and mortar stores will reduce their prices. If the salesman hesitates, ask them “to look in the drawer for coupons and upcoming promotions.” Apply them now.<\/span><\/span><\/p>\n Online stores will reduce their prices — if you phone their 800-line and speak to a salesman. Shipping goes first. Then there’s the 15% promotion. <\/span><\/span><\/p>\n You get the idea. Susan thinks bargaining is demeaning, especially if you do it with brain surgeons. But lately she’s been paying her 94-year old father’s medical bills. And there bargaining is the name of the game. Wonderful clips from funny movies.<\/strong><\/span> You’ll die laughing. Click here.<\/strong><\/a><\/p>\n
\nBy DAVID SEGAL<\/p>\n
\n<\/span><\/span><\/p>\n
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