Republicans, moderate Democrats, and even members of President Obama’s economic advisory board say raising taxes on the rich will slow the economic recovery. But that’s only if you don’t do something smarter with the money.
Meet the millionaire cofounder of Seventh Generation who is part of a growing movement of wealthy people urging Congress to let the Bush tax cuts expire. For them, it isn’t just a moral question; they say financially the government cannot afford to let them pocket that money.
A growing number of big banks and private-wealth-management firms are offering seminars for rich people to teach them how to handle their money following the global financial collapse and the Bernie Madoff scandal.
The Japanese are doing it again. The Koreans prefer to do it when nobody’s watching. The Chinese are at it brazenly and, like everything else they do, on an enormous scale. The Swiss tried it, without much success.
There has never been a better moment for America to rebuild. An unlikely and unwelcome array of forces has converged to match our needs and the economy’s bargains almost perfectly. The only question is if we’ll run our government like a business, alert to good opportunities, or if we’ll run it as we have been, squabbling among ourselves while things get worse.
Ian Robertson, a member of BMW’s board of trustees and chairman of Rolls-Royce, is pleased with how the Ghost turned out. “What we didn’t want to do was have anyone say that this Rolls-Royce was just a rebadged BMW in a different form,” he says. “This is one of the greatest brands the world has ever seen, and it deserves to have its own personality and style.”
Nothing inspires a gold rush quite like, well, gold. Since July the precious metal has spiked to more than $1,300 an ounce—a rally on top of a longer rally dating to 2002, when the price was below $300.
Is it possible to do good and do well? Businesspeople with a goal to better society—known as social entrepreneurs—think so. Unlike traditional nonprofits, these do-gooder companies turn a buck while pushing for environmental and social goals, like helping people out of poverty or reducing the use of harmful pesticides. And the idea seems to have caught on; the sector is currently pumping out millions of dollars in revenue each year. So how can aspiring social entrepreneurs get in on the success? Newsweek spoke to Blake Mycoskie, founder of TOMS Shoes, a company that gives away a pair for every pair it sells, and to George Siemon, a founding farmer of Organic Valley, a dairy co-op, to find out. Their advice:
t’s complicated. Deflation and inflation are defined as cycles of falling and rising prices, respectively. Experts disagree on which force is more likely to overtake the economy, but either way, not every good or service will move in the same direction—creating confusing exceptions that make it hard to plan a family budget. To help make sense of it all, here are economists’ predictions—for both scenarios—about prices in five everyday areas:
No one familiar with the Smoot-Hawley tariff of 1930 should relish the prospect of a trade war with China—but that seems to be where we're headed and probably should be where we're headed. Although the Smoot-Hawley tariff did not cause the Great Depression, it contributed to its severity by provoking widespread retaliation. Confronting China's export subsidies risks a similar tit-for-tat cycle at a time when the global economic recovery is weak. This is a risk, unfortunately, that we need to take.
In a decade, China has gone from a huge, poor nation to an economic colossus. Although its per capita income ($6,600 in 2009) is only one seventh that of the United States ($46,400), the sheer size of its economy gives it a growing global influence. China passed Japan this year as the second-largest national economy. In 2009, it displaced Germany as the biggest exporter and also became the world's largest energy user.
Can all of a bank’s many operations be boiled down to a single measure of overall risk? And—given the ripple effect that a bank failure has on the economy—can that measure be corrected if it gets too high? The FDIC wants to find out by the end of the year. The agency is examining 105 banks with assets of more than $10 billion and creating for each a scorecard based on categories like earnings and heavy exposure to credit. The plan is to charge each institution based on the threat it poses to the global financial system—in theory, deterring future crashes. It’s a tricky task—one the American Bankers Association calls too new and subjective. “It was rolled out amid troubles in the industry. There hasn’t been a long-enough period to know what would work,” says James Chessen, the industry group’s chief economist. Then there’s the perennial question of how government regulators can ever keep up with private bankers’ complex inventions. “We all thought mortgage-backed securities were fine...
The most terrifying moment in modern economic history occurred two years ago this month. For several long days after the fall of Lehman Brothers on Sept. 15, 2008, the financial system was in danger of total collapse, and the United States seemed on the precipice of another Great Depression.
Who says America doesn’t make things anymore? The U.S. market for smart-phone applications has soared past $1.5 billion, thanks to ingenious developers who pit vengeful birds against thieving green pigs, or help bowlers overanalyze their scores. Apple’s store currently offers about 225,000 iPhone apps, while Google’s Android Marketplace has 70,000 apps for handsets that run on the Android operating system.
It's been two years since Lehman Brothers failed (Sept. 15, 2008), and we still can't conclusively answer this question: what if the government had saved Lehman? Its bankruptcy was pivotal. Until then, deteriorating housing and mortgage markets had triggered what seemed a serious—but not unprecedented—recession. Once Lehman failed, the economy went into a frenzied free fall. It's hard not to wonder whether some of the ensuing turmoil could have been avoided.
Consider what happened after Lehman:
Software maker Adobe Systems Inc. is responsible for many of the big-name products in Web publishing, including Flash, Photoshop, and Acrobat. NEWSWEEK chairman Richard M. Smith spoke with Adobe's CEO, Shantanu Narayen.
Welcome to the lowball culture. In a world of sluggish growth, excess capacity, and depressed expectations, buyers of goods and services—labor, houses, and restaurant meals, among others—have come to believe that desperate sellers should take any offer they make. But that kind of systemic bargain hunting can create a dangerous spiral: employers short-change workers, workers buy fewer goods—and the overall economy suffers.
One byproduct of the recession has been a change in the investing habits of 18- to 34-year-olds, according to a new study by Merrill Lynch. Can you blame a generation whose financial coming-of-age was bookended by the dotcom bubble and the subprime-mortgage meltdown?
New businesses are often tiny, of course, at least at first. But the distinction between them and small, mature firms is hardly semantic, says economist John Haltiwanger, who coauthored the study. His research suggests that the policy focus should skew young, nurturing the next big firms—which actually employ the most people—rather than tending an old crop of small ones.
With Ford's restructuring, and the bankruptcies of General Motors and Chrysler, the U.S. auto industry has shrunk and cut costs to the point at which it can make money on a smaller, more realistic number of sales. Is this a new normal?
It had all the trappings of a globally significant confab: big-deal appearances (by Google, the BBC), a weighty theme (“the digital age”), and speechifying by international pooh-bahs. Rupert Murdoch, the CEO of News Corp., even delivered a peppery keynote, vowing war on “content kleptomaniacs.”
It seemed so reasonable at first—just a fee for checking more than the standard two bags. But like a slowly expanding epidemic, the charges started mounting to include everything from legroom to water.
The newly passed financial-reform bill requires CEOs of public companies to measure and report the ratio of their pay to that of their workers. Blackstone Group CEO Stephen Schwarzman is complaining that the Obama administration is like Hitler invading Poland. With government and the media making life so difficult for CEOs, it must be nearly impossible to turn a profit. Right? Um, not really.
It is not a truth universally acknowledged, but a single man in possession of no fortune may still be in want of a wife. At least that was the case for Gary Kremen, the founder of the online dating service Match.com.
The logic of the economic recovery isn't working—or, at any rate, not well. By that logic, over-borrowed Americans would repay loans and replenish depleted savings, creating a temporary drop in consumer spending and economic activity. But once savings increased and debt declined, consumer buying would strengthen. It would replace the Obama stimulus program. Hiring would improve; the recovery would become self-sustaining. ...
The number of people filing new unemployment claims dropped this week, but the four-week average remains the highest it has been since November 2009. On the heels of other bad economic data, what does this mean for the economy?
With a national unemployment rate of 9.5 percent, many recent college graduates may have to suck it up and take jobs answering phones or opening people’s mail. A writer offers tips on making it at that first gig.
The question of what to do about Fannie Mae and Freddie Mac—the two government-created enterprises that have backed massive loans to the housing market—involves much more than finance or real estate. It marks the end of an era. The relentless promotion of homeownership as the embodiment of the American dream has outlived its usefulness.
The stock market can be downright superstitious when it comes to symbolic numbers. The latest bad figures for Wall Street came yesterday, after the Labor Department announced that new unemployment numbers for last week reached 500,000. We look at the fine print.
China's stride past Japan as the world's second-largest economy may draw more attention to trade-imbalance questions, with the prospect of U.S. politicians seeking to raise tariffs against the Asian powerhouse.
With the consumer price index flatlining, economists are watching warily for signs of deflation. The Fed said on Aug. 10 it would buy Treasury bonds to ward off fears that the recovery is stalling, which could bring falling wages and prices.