Stories by Rana Foroohar

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    The G20's Global Blame Game

    Even as the United States is busy pouring money into its own system, China has ponied up almost a billion dollars to prop up its stock market since the financial crisis. As we saw last week, we’re just beginning to see the repercussions, at home and abroad.
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    The Stars of the Recession

    Unlike the last recession, which was characterized by the dotcom bust, technology is booming this time around, in part because U.S. multinationals flush with cash are spending so much money on new software and services to make their businesses more efficient.
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    New Jobs Aren't Where the Workers Are

    Economics is a science that is not just dismal but frequently late, meaning that even as it took more than a year to figure out that the recession was over, it will now take many more to discover definitively what caused it and, more important, to ferret out why unemployment still remains at historic highs even as the economy is growing once more.
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    Why Do CEOs Make So Much Money?

    One of the most startling things about the post-crisis landscape is how tone-deaf the wealthiest Americans remain to outrage over their Croesus-like pay packages.
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    How We Ranked the World

    Forget the world cup, the Olympics, even the miss universe pageant. These are the globe’s true national champions.
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    A 'Recovery' Won't Help the American Worker

    According to the Obama administration, this is the Summer of Recovery: the global recession is over, factories across America are ramping up production, and corporate balance sheets are dripping black ink. So why does it still feel more like a Winter of Discontent?
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    How Innovation Breeds Success in Manufacturing

    In the U.S. and the U.K. in particular, there’s a sense that overreliance on dodgy financial services is no way to create decent jobs for the masses or to build a more stable economy. In these and many other countries, like France and Germany, influential voices are calling for a return to the business of producing real goods.
  • Grameen Bank Expands Into America

    It’s pretty safe to say that three years ago no one could have predicted that one of the few financial institutions to be opening new branches and expanding lending in America would be a Bangladeshi bank that specialized in loans to people below the poverty line (the vast majority of them women). But that’s just what has happened.
  • Commerce Secretary Locke on Manufacturing

    NEWSWEEK’s Rana Foroohar spoke to U.S. Commerce Secretary Gary Locke about why factories are hot again, and about America’s relationship to the world’s No. 1 manufacturer (China).
  • China Labor Protests and Wages

    Because the rise of China is the greatest story of our time, news events in the Middle Kingdom—good or bad—tend to take on epic proportions in the public consciousness. It’s worth keeping that in mind when thinking about the recent stories of labor strife in China. Strikes in the south, at a Honda components plant, and suicides at Foxconn, one of the world’s largest electronics manufacturers, have been followed by double-digit pay raises, further unrest at other factories, and speculation that wages may rise exponentially in China, threatening the country’s—and the world’s—prosperity.
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    Companies Had Better Cater to Women

    Even before the financial crisis, the spending power of women was increasing in both rich and poor countries. The downturn has accelerated the trend, particularly in the United States. American men lost more jobs (they worked in the hardest-hit areas like financial services and manufacturing), whereas women started more companies.
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    China Needs Cleaner, Greener Growth

    There's no doubt that if the government decrees that Chinese citizens and provincial governments should use more sustainable technologies at home, it will happen. But capitalism may ultimately encourage the process just as much.
  • Cosmopolitan Elite Bullish On Global Economy

    The more cosmopolitan you are, the more optimistic you are about economic prospects, or so it seems, according to a new study by HSBC. The bank surveyed more than 2,000 “global citizens” (a.k.a., people who are affluent, well educated, traveled, and often multilingual) in 10 major world cities and found that they were much more bullish on the state of their own personal finances, as well as the health of the global economy, than the average Joe. Seventy-two percent reported no change in personal spending over the last three years, and few fretted about losing a job.
  • Cosmocrats Bullish on Global Economy

    The more cosmopolitan you are, the more optimistic you are about economic prospects, or so it seems, according to a new study by HSBC. The bank surveyed more than 2,000 "global citizens" (a.k.a., people who are affluent, well educated, traveled, and often multilingual) in 10 major world cities and found that they were much more bullish on the state of their own personal finances, as well as the health of the global economy, than the average Joe....
  • Beijing Moves to Cool Housing Bubble

    If dramatic new measures to cool China's property markets are any indication, it seems that the top Communist Party brass in Beijing watch Charlie Rose, too. A little more than two weeks ago, well-known hedge-fund manager James Chanos went on the popular TV show and said that China was on a "treadmill to hell" thanks to the bubble brewing in its property markets. "They can't afford to get off this heroin of property development; it's the only thing that keeps the economic growth numbers going," said Chanos. While it's not the only thing, it's a pretty important thing. At least a tenth of China's GDP comes from real-estate investment, and by some more-liberal estimates, real-estate and construction-related activities represent 60 percent of GDP.Chanos, one of the first investors to see Enron coming, isn't the only one who's worried that Chinese property prices have been rising at their fastest rate in two years despite...
  • How to Stop Risky Trading

    Investors have always looked for ways to reduce risk. But in the wake of the financial crisis, some rather extreme methods are being used, with mixed results. Top traders, long at the apex of the finance food chain, are now being kept on tighter leashes at most banks and hedge funds. At BlueCrest, a top European hedge fund that's based on the isle of Guernsey, traders who lose 3 percent now have their capital base cut in half. Another 3 percent loss, and they're yanked off the trading floor. While this would seem a clever way to limit risky behavior (traders can get more volatile when they're down), it can also lock in losses. One veteran New York hedge funder says such loss limits actually hurt results because traders can become so risk-averse that they're too nervous to make any money at all.Then there are the increasingly bizarre methods investment funds are using to tell if CEOs are lying—like bringing in former intelligence operatives to analyze executives' body language, and...
  • Threat of Inflation Is Overblown

    One of the most common bits of post-recessionary wisdom is that the world is on its way to a prolonged period of high inflation. With all that public stimulus money sloshing around the world, it's only a matter of time before prices start to go up. And indeed, that's exactly what's happening in China and India, mostly because they didn't experience much of the recession. But in the rest of the world, where economies really did nosedive, inflation worries may be overblown.A recent Bank of America/Merrill Lynch report notes that in 18 of the world's 30 richest developed economies, core inflation (not including food and energy) is down from its peak in 2008, and continues to fall. High unemployment, empty offices, and shuttered factories have put extra slack in developed economies, meaning there's little pricing power for anyone, and thus little chance of inflation in the near term. "It's a myth that we're following a straight line from disaster to inflation," says BOA/ML economist...
  • West's Credit Crunch Still Harming Recovery

    One of the great ironies of the economic crisis is that although too much credit is what got us into trouble, it's a credit shortage that's hurting us today. A new report from the European Central Bank notes that while the major European economies have emerged from recession, euro-zone banks are continuing to tighten lending, particularly to small firms, which could hurt job growth. And things could get worse for big firms, too, because rising government deficits will likely crowd bond markets, leaving little room for corporate (rather than sovereign) bond issues....
  • A Hippocratic Oath for Davos Man

    As the world economic forum in Davos concluded late last week, people were left wondering, Did it matter? It's a question Davos raises every year, when the great and the good trek three hours up a Swiss mountain to spend four days in mediocre hotels drinking lots of espresso and talking about the state of the world. In some ways, the answer is always no. Sure, the event offers minor thrills to the consultants, bankers, and corporate types who get a chance to bump into Niall Ferguson in the bathroom or share a shuttle-bus ride with Sergey Brin. But it's not like anything concrete gets done there. It's just a bunch of VIPs chatting among—and largely, about—themselves.But, though it might sound odd, this is exactly why Davos does matter. The confab acts as a weather vane for the global economy—whatever the pervasive feeling there is, it tends to reflect the mood of the year to come and to shape how people think about the issues. "Davos is the Frankfurt Book Fair of economics," says...
  • Davos Dispatches: Why Davos Matters

    Does Davos matter? It’s a question that gets asked every year at the World Economic Forum, an event that involves the global good and great (think Bill Gates, Nicholas Sarkozy, Larry Summers, etc.) trekking three hours up a Swiss mountain to spend four days in mediocre hotels and a Stalin-esque conference center talking about the state of the world. In some ways, the clear answer is no. Sure, it’s a minor league thrill for all the consultants, bankers, and corporate types in attendance to run into Niall Ferguson in the bathroom, or a more major one to share a shuttle bus with Sergey Brin, but really, it’s not like anything concrete gets done here. It’s just a bunch of VIPs chatting amongst themselves.Which is exactly why it matters. Davos is a weathervane for the global economy – whatever the pervasive feeling is there, it tends to become the mood for the entire year ahead, shaping how people think about the issues. “Davos is the Frankfurt Book Fair of economics,” says Canadian...

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