It may be time to move beyond pessimism. Ever since the financial crisis, Americans have wallowed in fear and anxiety. Understandably. Although a recovery — as defined by academic economists — started about two years ago, it hasn’t felt like one.
When House Speaker John Boehner calls for trillions of dollars of spending cuts, the message is clear. Any deal to raise the federal debt ceiling must include significant savings in Social Security and Medicare benefits. Subsidizing the elderly is the biggest piece of federal spending (more than two-fifths of the total), but trimming benefits for well-off seniors isn’t just budget arithmetic. It’s also the right thing to do.
Almost everyone considers the housing collapse a disaster, and it is. Since 2007, roughly 8 million homes have gone into foreclosure. If you’re a homeowner, the steep fall in prices is calamitous. But if you’re a future buyer, it’s a godsend. What we’re seeing is a massive wealth transfer from today’s older homeowners to tomorrow’s younger homeowners.
If you’ve wondered why it’s so hard to subdue budget deficits, you should consult a new study from the Congressional Budget Office called “Reducing the Deficit: Spending and Revenue Options” (free at www.cbo.gov). You’ll learn from its 240 pages that the deficits definitely can be curbed. The CBO presents 105 policies (it doesn’t endorse them) that would shrink deficits by trillions of dollars over the next decade. You’ll also learn — surprise! — that most choices are political poison....
Philanthropist, triumphant entrepreneur, government servant and steward of journalism, Sidney Harman, executive chairman of The Newsweek Daily Beast Co., died last night. Jonathan Alter on the remarkable 92 years of a true polymath who built one of America's great companies. Plus, the Harman family statement.
Almost everyone loves to hate TARP. It’s a favorite political sport of liberals, conservatives, Republicans, Democrats—and the public. A Bloomberg poll last October asked how TARP had affected the economy. Forty-three percent of respondents said it weakened the economy; 21 percent said it made no difference; only 24 percent said it helped, with 12 percent unsure one way or another. Commentators in newspapers from The Wall Street Journal to The New York Times disparage TARP. ...
After years of remarkable growth, the iconic coffee chain started to look bad. Even smell bad. In an excerpt from his new book, CEO Howard Schultz tells how he reinvented the company from the coffee bean up.
For me, the most symbolic representation of how Starbucks in 2007 was losing
its magic was the warm breakfast sandwich. I’d resisted the idea of serving sandwiches in our stores from the start, though I understood why they made financial sense. Our warm sandwiches gained a loyal following and drove up sales and profits. The more popular they became, the more our baristas had to heat them in warming ovens. And when they did, the sandwiches would inevitably drip and sizzle in the ovens, releasing a pungent smell. The rich, hearty coffee aroma in the stores was overwhelmed by singed Monterey Jack, mozzarella, and, most offensively, cheddar. Where was the magic in burnt cheese?
What we are witnessing in Wisconsin and elsewhere is the death knell of Big Labor. Once upon a time, most Americans could identify the head of the AFL-CIO. He was George Meany, the cigar-chomping ex-plumber who ran the union federation from 1955 to 1979. He was one of the nation's great power brokers, much quoted and wooed by presidents. It's doubtful that as many Americans can name Meany's present successor. (Answer: Richard Trumka, former head of the mine workers' union.) ...
Sonja Kohn never had trouble reaching Bernie Madoff, whether by phone or in person. “I would always put her in to Bernie, because he always wanted to talk to her,” recalls Eleanor Squillari, Madoff’s personal secretary for 20 years. When Kohn ventured from Europe to visit Bernard L. Madoff Investment Securities, a warm welcome always awaited her at his 19th-floor office in the high-rise known as the Lipstick Building on Manhattan’s East Side.
In a much-watched Wall Street ritual, Warren Buffett will release his yearly letter to shareholders of Berkshire Hathaway this weekend, marking the informal kickoff of annual-report season. The task shouldn’t be hard: Berkshire stock returned 21.4 percent in 2010. Other letter-writers aren’t so fortunate, such as BP CEO Bob Dudley, who will have to explain away the Gulf of Mexico oil disaster. NEWSWEEK turned to annual-report consultants for suggestions on spinning some of the thorniest corporate issues.
When Mary Barra was a senior manufacturing executive a few years ago at General Motors, she spotted another maker’s car decked out in a rich metallic black color. It was unlike anything GM was offering, so she suggested the color be added to the company’s palette—and was promptly rebuffed by fellow engineers, who fretted about potential quality-control difficulties. But Barra wouldn’t take no for an answer, and before long buyers were able to get their Cadillac Escalades and Chevy Malibus in elegant “Carbon Flash.”
In my favorite spaghetti Western, "The Good, the Bad, and the Ugly," there is a memorable scene that sums up the world economy today. Blondie (Clint Eastwood) and Tuco (Eli Wallach) have finally found the cemetery where they know the gold is buried.
Consumers are getting the short end of the stick in their dealings with banks. But the pain isn’t felt equally across the country, and the rates you get on your certificates of deposit and home loans differ depending on where you live. We’ve pored through the data to determine which cities offer their residents the best rates.