Local Currencies Make A Comeback in Recession | Newsweek Scope

Stimulus Overload
8/10/2009 12:00:00 AM
American GDP growth was much better than expected in the second quarter of the year, falling only 1%. Unemployment statistics were surprisingly good as the jobless rate actually improved from 9.5% in June to 9.4% in July. These pieces of good news and other data marking the recession's end have caused a number of experts to forecast that the economy will actually grow modestly during the current quarter. Goldman Sachs expects GDP to grow at 3% in the second half, up from its previous estimate of 1%. UBS predicts third quarter growth will be 2.5% and fourth quarter GDP expansion will be 3%. It would be dangerous to extrapolate these figures into 2010, but if the jobs market grows and there is any reasonable rebound in consumer spending during the year-end holiday season, it would not be unreasonable to believe that GDP improvement in the first half of 2010 will move up to 4%.
The Recession America Needed
8/4/2009 12:00:00 AM
"It is probably well that we had the war when we did. We are better off now than we would have been without it, and have made more rapid progress than we otherwise should have made." –Ulysses S. Grant, writing about the Civil War in his "Personal Memoirs", 1885.
California's Reckoning—and Ours
Robert J. Samuelson 8/3/2009 12:00:00 AM
California's budget debacle holds a lesson for America, but one we will probably ignore. It's easy to attribute the state's protracted budget stalemate, now temporarily resolved with about $26 billion of spending cuts and accounting gimmicks, to the deep recession and California's peculiar politics. Up to a point, that's true. Representing an eighth of the U.S. economy, California has been harder hit than most states. Unemployment, now 11.6 percent (national average: 9.5 percent), could top 13 percent in 2010, says economist Eduardo Martinez of Moody's Economy.com. Meanwhile, the requirement that any tax increase muster a two-thirds vote in the legislature promotes paralysis. Democrats prefer tax hikes to spending cuts, and Republicans can block higher taxes.
GLOBAL ECONOMY
'I Am Dr. Realist'
Lally Weymouth 4/24/2009 12:00:00 AM
Most other economists rolled their eyes when Nouriel Roubini warned in a September 2006 speech to the International Monetary Fund that the global bubble was going to burst. They nicknamed him "Dr. Doom"—and then the hard times hit. As finance ministers and central bankers from the world's major economic powers gather in Washington this weekend, they might consider listening to what Roubini has to say now. The New York University professor told NEWSWEEK's Lally Weymouth why he sees more trouble ahead and what the recovery will look like. Excerpts:
BUSINESS
Don’t Buy the Chirpy Forecasts
3/21/2009 12:00:00 AM
The good news from our historical study of eight centuries of international financial crises is that, so far, they have all ended. And we confidently predict this one will end, too. We are just not quite so sure it will be nearly as soon as the chirpy forecasts coming from policymakers around the globe. The U.S. administration, for example, is now predicting that growth will renew in the latter part of this year and continue at a brisk pace of 4 percent for several years thereafter. Is this a fact-based forecast or wishful thinking?
CRISIS WATCH
Small-Town Currencies
Tony Dokoupil 12/6/2008 12:00:00 AM
Americans may hoard cash as recession fears grow. But in Riverwest, an enclave of Milwaukee, residents have another answer to money trouble: they'll print their own. The proposed River Currency would be used like cash at local businesses, keeping the area economy robust whatever the health of the country at large.