The Economy: What We Need Is Leadership | Newsweek Business

Chicken Feet and Chump Change
Daniel Gross 10/5/2009 12:00:00 AM
Has a mini-trade war has broken out between the United States and China? On Sept. 12, the Obama administration imposed a 35 percent tariff on tires imported from China. In response, China said it would look into the prices of chicken feet sent from the United States to China. Last week, the New York Times reported that tariffs have been slapped on U.S. imports of Chinese solar panels. Free-traders have begun to worry that President Obama might be back-pedaling on his commitment to open markets. (Click here to follow Daniel Gross)
China’s Independence Fantasy
Zachary Karabell 6/27/2009 12:00:00 AM
China is not happy. That's the title of the bestselling book in China. The five nationalist authors say it is time for China to "split from the West," particularly the United States and the Treasury bonds that Beijing holds to the tune of $1 trillion. This desire for greater distance from America is growing: in a May poll conducted by China's Global Times, 87 percent said they were against buying more U.S. debt. Shortly before U.S. Treasury Secretary Timothy Geithner arrived in Beijing in early June, a survey of leading Chinese economists showed that 17 of 23 think U.S. bonds are "risky," that U.S. stocks pose a potential threat to the Chinese economy, and that the Chinese government should diversify its assets away from U.S. markets and toward energy and mineral resources. When Geithner assured a group at Beijing University that American bonds are a "safe" investment, they erupted in loud laughter—a rare outbreak of rudeness from an elite crowd in China.
GLOBAL INVESTOR
Between a Bull and a Bear
Ruchir Sharma 5/2/2009 12:00:00 AM
Is it a bird? Is it a plane? Is it superman? Investors can't seem to figure out whether the recent leaps in stock prices represent a brief uptick in a falling market or something more meaningful, even the start of a brand-new bull run. The Pavlovian impulse is to dismiss the rally as just another head fake. After all, there have been five other countertrend moves since the bear market began in October 2007, and they all petered out within a couple of months as the fundamental
The Great Clash of '09
Michael Hirsh 12/24/2008 12:00:00 AM
Amid the economic chaos of 2008, Arthur Levitt Jr. stands out. He's one of the very few regulators of the Clinton and Bush eras to take responsibility for the current financial disaster—to admit that he botched things, big time. "All tragedies in life are preceded by warnings," the former chairman of the Securities and Exchange Commission told me in an interview Tuesday. "We had a warning. It was from Brooksley Born. We didn't listen to that." Brooksley Born was the head of Commodity Futures Trading Commission (CFTC) under Clinton. Beginning in the spring of 1998, she pushed for the regulation of derivatives trading. She warned of the dangers of a vast global financial market that was going unchecked by governments. But she was silenced by the then all-powerful team of Federal Reserve Chairman Alan Greenspan and Treasury Secretary Robert Rubin. Levitt, who along with Greenspan, Rubin and Born was part of the four-person President's Working Group on Financial Markets, opposed her efforts as well. Today, Levitt says he was wrong. "It may well have been that the proposal was ill thought-out," says Levitt, who served as SEC chairman longer than anyone, from 1993 to 2001. "But we could have taken that opportunity to refine it, to make it forward-looking. I think that the explosive growth of a product that was unlisted and unregulated should have occasioned greater reaction."
JUDGMENT CALLS
Bernanke's Burden
Robert J. Samuelson 12/8/2008 12:00:00 AM
Amid the hoopla over Barack Obama's economic team, it's worth remembering that Federal Reserve Chairman Ben Bernanke is America's most powerful economic policymaker and will probably remain so after Obama's inauguration. The decisions he makes—or doesn't make—will decisively influence the outcome of the present economic crisis. Will it surpass the brutal 1981-82 recession (peak unemployment: 10.8 percent) as the worst since World War II? Might it lapse into a more savage global collapse justifying comparisons with the Great Depression?
SOCIETY & THE ARTS
Riding Out The Crisis With A Few Good Books
Andrew Bast 11/22/2008 12:00:00 AM
Nobody asks a doctor for a diagnosis in the middle of surgery. Likewise, it seems unreasonable to expect that the current global economic crisis can be understood or explained now, as we struggle to grasp its full magnitude. Back in March, U.S. Treasury Secretary Henry Paulson proposed his own early overhaul with a qualification: "This blueprint addresses complex, long-term issues that should not be decided in the midst of stressful situations." Now comes a spate of timely new books offering their own creative blueprints for understanding—and fixing—the mess.