The Big Money: Banking Your Money Hurts the Economy

Get Out the Wallets
Fareed Zakaria 8/1/2009 12:00:00 AM
If I were told by the economic gods that I could have the answer to one question about the fate of the global economy, I know what I would ask. "When will the American consumer start spending again?" I know that doesn't sound as sophisticated as a question about industrial production, interest-rate fluctuations, or the Chinese stimulus plan, but it's the key to understanding when we will get out of this recession—and what the recovery is likely to look like. The rise of emerging powers like China, India, and Brazil is real. But for now, there is still just one 800-pound gorilla. The American consumer is the single largest factor at play in the global economy. Our spending is currently equal to the entire economies of China and India added together and then doubled.
How the Mighty Have Fallen
Robert J. Samuelson 7/11/2009 12:00:00 AM
Just who is "rich" in America is a matter of considerable disagreement. No one disputes that Bill Gates (No. 1 on last year's Forbes 400 list with a net worth of $57 billion) and Warren Buffett (No. 2 at $50 billion) are wealthy or, indeed, that everyone on the Forbes list qualifies (the poorest had a net worth of $1.3 billion). But as you move from billions in net worth to the mere hundreds or many tens of millions, and then to annual incomes of the mere hundreds of thousands, the arguing begins.
INSIDE BUSINESS
Yes, It’s A Wreck, But We Can Fix It
10/11/2008 12:00:00 AM
Where are our investments for the 21st century? Why can't we get a permanent research-and-development tax credit or fund the America Competes Act, which increases the basic research funding of the National Science Foundation and top universities? I'm afraid the bailout is typical of the current attitude of Washington—prop up old industries and forget about tomorrow. Sure we get great promises in campaigns, but in practice we starve the new ideas. Joseph Schumpeter and Adam Smith, our great free-market theorists, must be rolling over in their graves. Instead of allowing creative destruction we are propping up failures. We need to invest in smart new ideas. I think it goes without saying that the $700 billion bailout is doing exactly the opposite.
Hiccup? Or Global Meltdown?

PERHAPS YOU HAD TO BE AT THE epicenter to understand the force of the earthquake. In Bangkok last August, a young American, the manager of the Thailand office of a major U.S. bank, sat in his high-rise office in the city's center. Lining its walls was a row of clocks displaying the time around the globe: Tokyo, London, New York. He eyed the two that read KO SAMUI and PHUKET--tempting beach resorts an easy flight away from the urban horror Bangkok had become. Outside it was about 100 degrees, and Thailand's financial markets were melting down.
THE ASIAN CONTAGION
Hiccup? Or Global Meltdown?

There was an unmistakably shellshocked quality about him, suggesting that, years from now, he might hear the name of a failed Thai bank and scramble under his desk for cover. Sure, he had been in Tokyo in the early 1990s, when Japan's bubble economy began to collapse. But he'd ridden through that and had come to Thailand young, confident and competent. Southeast Asia was a place to make both your money and your name. No one, the young man said, had seen the debacle coming--certainly not in Thailand, with its growth rates and go-go attitude, nor anyone living anywhere else.
Peace And Prosperity?

The prospect of peace alone won't be enough to keep the current bull market going. Nor will it restart the U.S. economy, which continues to decline at a rapid clip. Retail sales in January were 1.4 percent lower than the same month a year ago, while industrial production fell for the fourth consecutive month. Some economists see light at the end of the tunnel, but the recession's end is several months away at best. Says Paul Boltz, economist for the T. Rowe Price mutual funds, "Saddam Hussein may have started it, but rising unemployment and declining personal income are keeping it going."