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  • Moneybox: The Barneys Mystery

    Wall Street is going back to the future. This morning, news broke that a bidding war has erupted between a Japanese retailer and Dubai's state investment fund, Istithmar, over posh retailer Barneys. Last week Citigroup's London headquarters, a tower in the mega-complex Canary Wharf, sold for $2 billion.Those of us of a certain age—i.e., if you can remember listening to REM cassette tapes on a Walkman—may recall that Barneys and Canary Wharf were high-flying businesses of the 1980s that turned into major fiascos of the 1990s. History's snap judgment was that the families behind Barneys and Canary Wharf (the Pressmans and Reichmanns, respectively) had destroyed major franchises with their hubris and reckless management. When the firms filed for bankruptcy, the ideas behind their businesses—a nationwide superhigh-end clothing store in the case of Barneys, a new high-rise office center in east London in the case of Canary Wharf—were likewise deemed bankrupt.But the line separating...
  • Moneybox: The Barneys Mystery

    Wall Street is going back to the future. This morning, news broke that a bidding war has erupted between a Japanese retailer and Dubai's state investment fund, Istithmar, over posh retailer Barneys. Last week Citigroup's London headquarters, a tower in the mega-complex Canary Wharf, sold for $2 billion.Those of us of a certain age—i.e., if you can remember listening to REM cassette tapes on a Walkman—may recall that Barneys and Canary Wharf were high-flying businesses of the 1980s that turned into major fiascos of the 1990s. History's snap judgment was that the families behind Barneys and Canary Wharf (the Pressmans and Reichmanns, respectively) had destroyed major franchises with their hubris and reckless management. When the firms filed for bankruptcy, the ideas behind their businesses—a nationwide superhigh-end clothing store in the case of Barneys, a new high-rise office center in east London in the case of Canary Wharf—were likewise deemed bankrupt.But the line separating...
  • Samuelson: Finance Reform Makes for Unfree Speech

    The Fourth of July holiday makes this an apt week to reflect on one of the great underreported stories of our time: the rise of speech regulation. Glance at the First Amendment, but do not think it still applies. Large bodies of political speech are now governed by laws, agency regulations, court decisions and lawyerly interpretations. Speech has become unfree.This does not mean that we don't have vigorous debate or that most points of view aren't represented. But in and around elections, what can be said, by whom and under what circumstances, is now a tangled web of legal qualifications—all justified as campaign-finance "reform."As proof, consider the Supreme Court's recent decision in Federal Election Commission v. Wisconsin Right to Life Inc. Don't try to understand it; you won't. That's the point. What's permissible or impermissible speech is now murky. Plain political speech has mushroomed into many subcategories—"issue speech," "electioneering communications," "express...
  • Dan Gross on Bear Stearns's Hedge Fund Bailout

    Bear Stearns has always been the pesky, streetwise, kid brother in the Wall Street family—smaller, younger (it was founded in 1923), and less polished. Bear lacks Goldman Sachs' tradition of public-minded financiers, the brand name of Merrill Lynch, the proud WASP lineage of Morgan Stanley, or the overwhelming size of Citigroup and Chase. Bear Stearns' market capitalization is a measly $21 billion, less than one-tenth that of Citigroup. CEO Jimmy Cayne isn't a Harvard MBA; he's a former scrap-iron salesman who didn't complete his studies at Purdue. Bear Stearns confirmed its outsider status in 1998 by refusing to participate in the Wall Street-orchestrated bailout of faltering hedge fund Long Term Capital Management.But now Bear Stearns has finally joined the club. Last month, facing a crisis at two large hedge funds run by its asset management unit, Bear Stearns agreed to bail out one of the funds (and its many creditors) by providing a $1.6 billion line of credit. The move,...
  • Franken-tomato!

    Finally, a genetically-modified food for the rest of us....
  • Quinn: Death and Medical Choices

    There's more reason than ever to leave written instructions about the medical care you want if you're unable to speak for yourself. In the wake of the Terri Schiavo case, in which her husband and parents fought over whether to remove her feeding tubes, right-to-life activists have been working on state legislatures. Their objective: requiring doctors and families to keep life support going for patients in a permanently comatose state. If that's not what you want, you need to make it clear. ...
  • Samuelson: The Cashless Society Has Arrived

    It's one of those vast social upheavals that everyone understands but that hardly anyone notices, because it seems too ordinary: the long-predicted "cashless society" has quietly arrived, or nearly so; currency, coins and checks are receding as ways of doing everyday business; we've become Plastic Nation. In the tangled history of American money—from tobacco receipts to gold and silver coins to paper money and checks—this is a seismic shift. Time to pay attention.If you visit the U.S. Bureau of Engraving and Printing (one operation in Washington, the other in Ft. Worth, Texas), you can still see greenbacks being made. They come off the presses in sheets of 32. In fiscal 2007, the government will print about 9.1 billion individual bills. But 95 percent is to replace worn currency, not to expand the supply. THE BUCK STARTS HERE, say signs on some printing presses. In reality, today's buck usually begins (and ends) as a mere data entry.You can use a card almost anywhere. From 1999 to...
  • Read This Really, Really Fast

    It depends on whom you ask. Are high-tech digital billboards that can change their message every few seconds a lively, promising source of ad revenue? Or are they an ugly road distraction?That debate is raging in city halls across the country as the digital-billboard industry starts to take off. In recent months, such municipalities as Atlanta; Concord, N.H.; Eden Prairie, Minn., and Des Moines, Iowa, have banned or limited the use of the signs. The Federal Highway Administration is now studying whether they threaten driver safety on interstate highways.The industry has putup about 500 signs so far, at a cost of $250,000 to $500,000 apiece. By 2017, the number of signs could grow tenfold. The signs are not the interactive, moving pictures (called "spectaculars" in the biz) seen in places like Las Vegas or Times Square. Instead, federal rules require that only static, fixed pictures can be shown on major highways, though the pictures can change every six to eight seconds. The...
  • The Most Self-Indulgent Sailboat Ever Made

    The sultans would've loved Tom Perkins and he would've felt right at home with them, at least until he decided to kick some sand in their faces when they didn't appreciate his sense of humor. It was early last summer in Istanbul. On the left bank of the Bosphorus, before the marbled splendor of the Ciragan Imperial Palace, the government of Turkey was sponsoring a feast. Ciragan was the last palace built in Constantinople by the Ottoman Empire for royal family members. It was a historic location, with a commanding view of the strait that separates Europe from Asia, and the site drew awe from any vessel passing by. On this resplendent evening, all the trappings to sate a sultan's appetite were present, though it's a good bet that Suleiman the Magnificent never saw such an ornate fountain of molten chocolate. The lamb dolma, the grilled sea bass, the chicken galantine, the baklava—washed down with Doluca reds—were to honor an American and his spectacular new sailboat built entirely in...
  • Far, Far Away From Home

    Buying a villa in Tuscany is so cliché. These days, luxury consumers want their holiday refuges to be off the beaten path.
  • Secret Habits of the Super Rich

    There are bespoke suits. And then there are bespoke books. For the mogul who truly has everything, there's something new: a custom-made autobiography. For any where from a few grand to $100,000, Myspecialbook.com, a publishing company started a few years back by wealthy Argentines, will write, design and publish a book all about anyone who can afford it. The glossy pages will be filled with beautiful photos, personal letters and other mementos, artfully laid out to illustrate a life of wealth and privilege. The text will feature quotes and anecdotes from the subject's rich and powerful friends. Milton Pedraza, director of the New York-based research firm the Luxury Institute, recalls a well-known private-equity billionaire who was recently brought to tears after receiving such a birthday gift from his wife. "It's the story of your life, told by the people who love you," he says. "Can you imagine anything more personal? That's real luxury."The luxury industry sure isn't what it used...
  • Searching for the Perfect Cleaning Technology

    Toxic cleaning solvents are being phased out, but it's not clear what will replace them. In the last installment of our small-business series about a San Diego dry cleaner, we follow its proprietor as he searches for the perfect environmentally friendly technology.
  • Poor Dad: The Inequity of Father's Day

    Poor dad. He just can’t get any respect. Many of us throw money around on Mother’s Day like a starlet on a shopping spree at Barney’s. But Father’s Day? Fuggetaboutit. He’s lucky to get a piece of paper with “Hallmark” stamped on the back.In a recent survey by the National Retail Federation (NRF), Americans spent $16 billion on Mother’s Day this year, but only plan on spending $9.9 billion on Father’s Day, which falls on June 17. Fathers and Families Executive Director Don Hogan says the discrepancy is just more proof that dads are overworked and underappreciated. “It seems that society places a greater value on mothers than fathers,” he says. “I think it's because there really is a value placed on the role of nurturing and bringing up children and that role has been assigned to mothers. Although you're seeing dads playing a greater and greater role, I don't think it has been reflected in how society views fathers.”So what exactly does dad get? Americans are expected to spend, on...
  • Exclusive: Michael Moore's Legal Troubles

    Controversy trails Michael Moore like a shadow—or is that the other way around? The lefty filmmaker, whose “Roger & Me,” and “Bowling For Columbine” and “Fahrenheit 9/11,” all put pins in the proverbial cushion of power, is needling people again—this time with “Sicko,” his sardonic attack on the American health-care system. Moore has been playing both offense and defense in the run-up to the film’s partial release this Friday in New York and Los Angeles, promoting his film on the talk circuit, speaking out on health-care issues, and deflecting charges that his documentary violated standards of objectivity and professional conduct.The film’s final section has Moore in the hottest water: he leads about eight rescue workers who became sick after 9/11 on a pilgrimage through old Havana, where they buy prescription drugs cheaply and receive free health care, courtesy of Cuba’s socialized medicine. Moore’s not-subtle message: why can’t these folks afford this kind of treatment back...
  • Samuelson: Is the Low Interest Rate Era Over?

    The most important price in the American economy is not the price of oil, computer chips, wheat or cars. It's the price of money—interest rates. When rates move, they ultimately affect the price of almost everything else. Which poses some intriguing questions. Is the era of low interest rates ending? If so, what's next? The answers will hover over the 2008 election. A shaky economy would help Democrats; a stronger economy, Republicans.The economic expansion, both in America and the rest of the world, has rested on a foundation of abundant credit. Low interest rates famously drove the housing boom. In the 1980s, mortgage interest rates averaged 10.9 percent; after inflation, the "real" rate was a hefty 7.2 percent. During the decade, home prices rose a meager 1 percent beyond overall inflation. Since then, mortgage rates have dropped sharply. From 2000 to 2006, they averaged 6.5 percent, and after inflation only 4.2 percent. Lower rates meant people could afford to pay more. The...
  • Samuelson: The Quagmire of Inequality

    You have never heard of the Treaty of Detroit, which you may connect with the French and Indian War (1756-1763). Guess again. The Treaty of Detroit is a long-lost label describing a series of landmark labor agreements between the United Auto Workers and the Big Three U.S. automakers. Starting with a 1948 contract at General Motors, the agreements guaranteed annual wage increases, job security and generous fringe benefits. As Detroit's present turmoil attests, the treaty is in tatters.Now come economists Frank Levy and Peter Temin of the Massachusetts Institute of Technology, who resurrect the label and say it explains something much greater: the rise of economic inequality. This promises to be a hot issue in the 2008 election. Until now, most economists have blamed the growing pay gap on skill differences caused by the explosion of computer technologies. Levy and Temin contend (correctly) that this is too simple; they also blame a shift in social norms and business practices.First,...
  • Turning Points: Garry Kasparov

    On March 10, 2005, I played my last game of competitive chess after three decades as a professional. The announcement of my retirement was a bit theatrical, delivered without warning at the end of a Spanish tournament in Linares I'd just won for the ninth time. In one day I went from the top of the chess world to a politician in Russia's struggling pro-democracy movement.There was no dramatic moment of judgment, no single incident that told me the time was right. Nor was it a spontaneous move. Every decision we make is the product of our entire life up to that point—all our knowledge, experience, intuition and calculation. I've spent considerable time since my retirement writing a book on exactly this topic: the decision-making process. The result, "How Life Imitates Chess," represents a careful analysis of my own development as a decision maker, and my leap from chess to politics is detailed. The book itself was one of the things I wanted to dedicate myself to after retiring; as a...
  • Level Up

    Peter Moore, Microsoft Corp.'s vice president for entertainment and devices, is responsible for the Xbox 360 gaming platform. While the original Xbox was a distant second to Sony's PlayStation 2, the 360 has jumped ahead of the PS3, but still trails Nintendo's Wii. That's where Moore feels at home—sneaking up on his competitors. ...
  • Bringing NASCAR Into Prime Time

    Today 75 million Americans call themselves NASCAR fans, but I was fortunate to grow up in the sport. My grandfather William H.G. (Big Bill) France organized NASCAR in 1948, and my father, Bill France Jr., ran the sport from 1972 to 2003. So when I was a kid, I spent a lot of weekends at racetracks watching drivers like Richard Petty, David Pearson and Buddy Baker race side by side.Back then, fans had a difficult time enjoying races from the comfort of their living rooms. NASCAR races were broadcast on television only regionally, usually on tape delay, and often high up on the cable dial. About a decade ago, when I was in charge of NASCAR's marketing, I set out to change that—and it became both a turning point in my career and an important moment in NASCAR's evolution.My grandfather had launched a nationwide network of NASCAR radio broadcasts in 1970, but our television broadcasts weren't as centralized. NASCAR has always owned its media rights, but up until 2001 each track was...
  • Circus-Style Fitness at Trapeze School

    Sarah Jessica Parker might have kicked off the trend a few years back when she took trapeze lessons on "Sex and the City." But these days anyone can fly through the air with the greatest of ease—and get a little exercise in the process. "Sex and the City" 's flying antics took place at Trapeze School New York (newyork.trapezeschool.com). Club Cirque at Crunch in the Big Apple offers classes in trapeze skills as well as fusions like aerial yoga, which combines trapeze movements with plain old yoga (crunch.com).The Hangar, a funky circus-training studio in East London, gives lessons in singles and doubles trapeze (hangaruk.com). In Paris, Les Noctambules offers flying classes with trapeze, rope and aerial rings. Daredevils Down Under can get off their feet at Australia's National Institute of Circus Arts in Victoria (nica.com.au). Running away and joining the circus has never been easier.
  • Quinn: Are You Retirement-Ready?

    Ready to retire? Looking for income, safety and growth? You're a sitting duck for a broker selling a fancy new investment product—a variable annuity with "guaranteed minimum withdrawal benefits for life." You put up some money; it's invested in stocks and bonds; you're guaranteed an annual payment of 5 or 6 percent of your initial investment for life (that's $5,000 or $6,000 on a $100,000 investment); if stocks keep rising, your future payments can (supposedly) rise, too, but they'll never fall.What's not to like? Plenty, as I've said before. Recently, I even got a call from an industry insider who knows these products well. He wanted to talk, on background, about how bad they are.
  • Laila Ali: What’s After 'Dancing With the Stars'

    I grew up around boxing, but my father didn't inspire me to become a boxer. Truth be told, he would rather I didn't box. But I wanted to stand on my own and be judged for my own accomplishments, separate from the incredible legacy he created. I had my own salon in college, Laila's Nails: I was an entrepreneur, and I considered going to business school with the thought of expanding my salon into a national chain. It was around then that I saw women's boxing on television for the first time, and I was inspired. A year later, I decided to follow my heart and challenge myself to see if I could become a championship boxer.I made my pro-boxing debut in October 1999. I love the sport, but I knew from the beginning that I wanted to box for only a limited period of time. I was hopeful that I could reach my goal of becoming a world champion in that time frame. I've had some disappointments, though, as far as not being able to get some of the contenders to agree to fight me. Now that I'm...
  • Sol Trujillo on Running Global Companies

    To run global companies, boards often want chief executives with global experience—and few have more of it than Sol Trujillo. In the last decade Trujillo has run telecom companies on three continents: U.S. West in the United States, Orange in the United Kingdom and, since 2005, Australia's Telstra, which he's leading through a transition from being a government-controlled utility to a free-market communications company. In the latest in his series of interviews as part of the NEWSWEEK-Kaplan M.B.A. program, NEWSWEEK Chairman and Editor-in-Chief Richard M. Smith spoke with Trujillo about the lessons of his around-the-world career. Excerpts: ...
  • Samuelson: Can the News Business Survive?

    When I joined The Washington Post as a reporter in 1969, hardly anyone I knew in the news business considered it a business. We belonged to a craft, a calling or maybe a profession. We didn't worry about the industry's "business model," a term we'd never heard. Economic realities occasionally intruded, usually involving salaries (always too low). But mostly we blissfully ignored the proposition that newspapers aimed to make money. We condescendingly thought that the moneymaking people—advertising salesmen, managers—toiled so that we could pursue our higher purpose, which was to inform the public. We were snobs.We've been disabused of our naiveté and arrogance. All our business models (for newspapers, magazines, network news) are now in retreat, if not rout. The Internet is stealing our audiences and our ads. Few of us imagined ourselves as heirs to textile or steelworkers, disemployed by new competition and technology. But we are. From 2000 to 2006, editorial staffs at U.S. daily...
  • My Turn: Business, Charity Learn From Each Other

    Each day when I take my children to school in London, I remind myself how lucky we are. I grew up in a privileged environment, and I've been able to give my family the same. I frequently tell my sons about the unacceptable face of the world around us—children who are sick, orphaned by AIDS, starving, struck by poverty. It is our duty to give back. Five years ago I founded, along with several other leaders in the financial industry, the nonprofit Absolute Return for Kids (ARK). Its programs combat HIV/AIDS in Africa, transform abusive orphanages in Eastern Europe and deliver quality education to children in the U.K. So far, ARK has raised $106 million for such projects.My work with ARK takes me to places far away from the world's financial capitals. My partner, Ian Wace of Marshall Wace Asset Management, and I recently returned from a trip to Bulgaria, which has highest rate of institutionalized children in Europe. As we walked through the door of an orphanage, the children ran to...
  • Quinn: Easy Money, a Click Away

    If you're still picking your bank by whether there's a handy branch nearby, you haven't joined the 21st century. Branches are nice, especially when you've got a good book to read while you're waiting in line. But for real convenience, speed and a simple financial life, the very best bank accounts await online. Even better, they're paying far higher interest rates on savings accounts than you'll find at traditional banks. New online checking accounts are also springing up, with interest rates and terms you can't get anywhere else. To me, that's free money. What are you waiting for?Internet banking first appeared in the 1990s—regular, full-service banks transplanted onto the Web. Back then, however, communications weren't speedy enough, or the advantage clear enough, to collect a crowd. Some banks failed. Others settled for small niche businesses.All that changed in 2000, with the launch of what's known today as "direct" banking. You're offered a limited range of low-cost, do-it...
  • My Life as a Transgender Politician

    There's not much about me that isn't known. I've been involved in politics for many years—from supporting candidates to raising money—but when you file for office, you are no longer a citizen. You are a public figure. That changes the dynamics of everything in your life. I had to accept that once I filed to run for Aurora City Council, I would immediately become not only of local interest, but of international interest too.You can count on two hands now how many transgender people have run for office, but only need to use a couple fingers to represent how many have won. I knew this going in and I had to be ready for just about everything.Still, it's extremely rare that I receive negative comments. Almost never. Yes, there is sensationalism and small groups of people who have a problem accepting things they don't understand, but major changes in attitude have come in the last five or six years. Cable channels like Discovery, MSNBC, HBO, they started getting involved in transgender...
  • California: Covering Local News From Where?

    Offshoring work to India is hardly new. But PasadenaNow.com, until this week an obscure California online community magazine, has made news by taking the concept a step further. Editor and publisher James Macpherson has announced that he’d hired two reporters to cover Pasadena city government—from Mumbai and Bangalore. Starting Tuesday, the pair, including a University of California, Berkeley, journalism grad, will begin cranking out more than 28 stories a week between them. In exchange, one reporter will make $12,000 a year, the other $7,200, for covering budget battles and zoning meetings in a city of 146,000 best known for the Rose Bowl and Caltech.Hiring foreign correspondents in reverse makes good sense to Macpherson, 51, a longtime Pasadena resident. His two-year-old site, which gets 45,000 unique visitors a month, has yet to turn a profit, and until now his news coverage has consisted largely of press releases. But noting the wealth of material available online—city council...
  • Naughton: Obama's Tough Talk Backfires in Motown

    Nine years ago this week, Al Gore warmed up his run for the presidency by making a visit to Motown and speaking to the Detroit Economic Club. I covered that speech and recall that Gore was entering hostile territory. Detroit, an SUV boomtown in those days, was deeply skeptical of the vice president, who famously called for the death of the internal-combustion engine. But Gore, keen on endorsements from Big Labor and contributions from wealthy auto execs, changed his tune in Detroit. "Here in Motor City, we recognize that cars have done more than fuel our commerce," he rhapsodized. "Cars have freed the American spirit, and given us the chance to chase our dreams."My, how times have changed. This week, Sen. Barack Obama attempted to fuel his presidential run with a scalding speech to the Detroit Economic Club, castigating Motown's big wheels for driving our dependence on foreign oil. "For years, while foreign competitors were investing in more fuel-efficient technology for their...
  • TV: An Identity Crisis at the New CW Network

    Teen sleuth Veronica Mars knows how to crack a murder. Now she's fighting for her own life. "Mars" is among five or so series being considered for cancellation by the CW, the network launched this past fall with the merger of Warner Bros.'s WB network and CBS Corp.'s UPN. This week, series creator Rob Thomas will plead with network executives for a stay of execution. Veronica can be rehabilitated, he'll argue. If you don't like her Nancy Drew college act, we can tart her up in a "sexy pantsuit" and make her four years older, with a career as an FBI agent. Thomas hopes this new Veronica will appeal to network bosses who want a cop series as part of their lineup. "I'd be thrilled for her to come back in any incarnation," he says.Veronica's identity crisis mirrors the network's own. The CW borrowed most of its lineup from the WB, home of "Dawson's Creek" and "Felicity," and UPN, which counted African-Americans and women as its core audience. It was supposed to be the best of both...
  • Quinn: Dragged Down by Debt

    Claudie Harris, 54, of Kansas City, Mo., knows about living on the edge. She owes about$5,000 toward her late husband's medical bills. She's paying it, slowly, from the salary she earns as a housekeeper at a facility for the mentally ill. But that leaves her a little short. So, to get by, she's been taking payday loans, which are loans against her future earnings. "It's easy money," Harris says.People with shaky credit can borrow more easily than ever before—against houses, of course, but also against their paychecks and even their cars—whether or not they're in a position to repay. There are now some 24,200 payday-loan storefronts, up from 18,000 three years ago, according to Stephens Inc., a Little Rock investment bank—and more than 300 new payday outlets on the Internet. First American Loan Performance reports that subprime mortgages accounted for 16 percent of the market last year, up from 9 percent in 2000. Leverage like this puts consumers at much greater risk of delinquency...
  • Wolfgang Puck: I Want Animals to Be Happy

    I've been thinking a lot lately about how it's up to chefs like me to help everyone stay healthy. It's not just about reducing obesity and diabetes, though that's obviously a priority. It's about getting every one of us to eat the right foods. That means buying produce from responsible farmers who grow fruits and vegetables that aren't covered with pesticides or genetically modified. It means getting meat from ranchers who not only shun the use of antibiotics and growth hormones, but also raise their animals humanely in a free-roaming environment.I'm not going soft, or, heaven forbid, vegan. I'm just trying to be more accountable to myself, my customers and to those who are farming responsibly. And if it means being nicer to animals along the way, well, that's a big bonus. Why shouldn't cows and pigs feel sunlight on their backs, grass under their feet? Fish shouldn't be jammed into tanks too full for them to even think about swimming. They should be able to exercise their muscles...
  • The Rise of Boutique Hotels

    Boutique hotels are popping up in Asia's more cosmopolitan cities faster than construction cranes. Over the last couple of years, Hong Kong and Singapore have led the trend in the region. Now Shanghai is getting the boutique treatment, meeting the fast-growing demand among design-conscious travelers for a more intimate, personal environment. Within the space of a few months, at least three boutique hotels—generally defined as having fewer than 100 rooms and a hip décor concept—have opened their doors. The 30-room Mansion Hotel is a renovated French-style manor with private-club décor, evoking the swinging Shanghai of the 1920s. M Suites has a sleeker, more contemporary feel, and JIA Shanghai provides home-style luxury incorporating signature furniture pieces. "It's a very niche market, but it's growing tremendously," says Yenn Wong, the owner of JIA Boutique Hotels, which opened Hong Kong's first boutique hotel in 2004 and is now planning its third in Beijing. "For these travelers,...
  • The Club of Competitors

    If the reports are on target, Europe will grow faster than America in 2007—for the first time in six years. European Union countries created 2 million new jobs last year, cutting unemployment to its lowest since 1991. Better, growth is no longer confined to outliers like Britain, Spain or the Baltic mini-states. Europe's resurgence is driven by the behemoth at the continent's heart, Germany. After 15 years of malaise, the EU's traditional locomotive grew at almost 3 percent in 2006, roaring past such laggards as France and Italy. Years of restructuring and smart wage deals with the unions have made German manufacturers, especially exporters, über-competitive.The jury is still out over how much of this faster growth is temporary. But the process by which the German economy has shaped up is Exhibit A for what's going right in the EU these days. It's not a matter of any single smart policy or innovative wage deal. The key to Germany's broader revival is the way the EU has boosted...
  • Samuelson: Seeking Sense on Immigration

    Our stalled immigration debate needs more common sense and more common decency. America's immigration system is unquestionably broken. It encourages illegality, frustrates assimilation and barely aids the economy—exactly the opposite of what it should do. Senators are striving to craft something more sensible. But they will fail unless both liberals and conservatives discard some of their cherished ambitions.From liberals, we need more common sense. Their main position is to perpetuate a policy that guarantees rising U.S. poverty. Consider: From 1990 to 2005, the increase in the number of people living beneath the government's poverty line (now about $20,000 for a family of four) was 3,365,000; the increase in the number of Hispanics living below the poverty line over the same period was 3,362,000. Does anyone doubt that this coincidence stems mostly from immigration?True, much of it was illegal. But many liberals—along with the Bush administration and business groups—favor a...
  • Samuelson: The Upside of Recession?

    It's increasingly clear that much of our standard economic vocabulary needs revising, supplementing or at least explaining. The customary words we use don't, for one reason or another, fully convey what's actually happening in the real world. Let me illustrate with two basic economic terms: inflation and recession. There are also larger lessons.Start with inflation. You may have noticed that last week's release of the March consumer price index—the government's main inflation indicator—inspired much optimism. INFLATION FEARS RELAX, headlined The Wall Street Journal. Stock prices jumped on the supposedly good news. But if you actually examined the CPI report, you found that prices in March rose at their highest rate since September 2005 and that, over the past three months, they've increased at a 4.7 percent annual rate. Doesn't sound like retreating inflation, does it?What explains the discrepancy is "core inflation." That's the CPI minus food and energy prices. In March, core...