Posts tagged “Economics

Misspent Youth

I have one of these.  A misspent youth, that is.  A lot of us would confess to one and that’s ok.  Too late to reconstruct, excuse or otherwise rehabilitate it.

The more pressing question is whether we are ‘misspending’ the youth of today?

This goes beyond the fact that my three children are all twentysomethings.  But they’re having the same struggles that millions of other young people are facing today – finding their way amidst a severe economic crisis, a tectonic demographic shift, sclerotic government, and a fiscal calamity that would make Old Mother Hubbard’s dog feel fortunate.

Our youth are our future.  A trite saying but nonetheless a tautology of the first order.  They are what the world will be.  And they’re not feeling that great.  Tamar Lewin of the New York Times writes about stress levels of college students being at an all time high while an annual survey of college freshman suggests the emotional health of our nation’s youth is at an all time low.  According to the survey:

Campus counselors say the survey results are the latest evidence of what they see every day in their offices — students who are depressed, under stress and using psychiatric medication, prescribed even before they came to college.  The economy has only added to the stress, not just because of financial pressures on their parents but also because the students are worried about their own college debt and job prospects when they graduate.

The anxiety isn’t confined to Americans.  In another New York Times piece, Martin Fackler writes about the plight of Japan’s youth.  They are the next generation who have grown up in ‘the lost decade’.  They don’t see much light at the end of that tunnel.

“There is a feeling among young generations that no matter how hard we try, we can’t get ahead,” said Shigeyuki Jo, 36, co-author of “The Truth of Generational Inequalities.” “Every avenue seems to be blocked, like we’re butting our heads against a wall.”  An aging population is clogging the nation’s economy with the vested interests of older generations, young people and social experts warn, making an already hierarchical society even more rigid and conservative. The result is that Japan is holding back and marginalizing its youth at a time when it actually needs them to help create the new products, companies and industries that a mature economy requires to grow.

This is a global phenomenon.

Look around.  Tunisia.  Egypt.  Around the world we’ve been short-changing the next generation.  We — the boomers and Xers — have made a lot of bad decisions.  The next generation is figuring it out.

We can still change but time is running short.

And whatever changes we refuse to make, our young people will make for us.

The JuiceBar Jobs Program

This morning I read the Washington Post and found out where all our money is.

It is with all those companies that aren’t hiring.

Apparently they are sitting on $1.8 trillion in cash.  In fact, they have 25% more cash on hand today than they had prior to the economic meltdown!

By contrast, I’m sitting on … well … not nearly that much.  In fact, like a lot of people I’m trying to cut back because experts tell me that I should have more cash on hand.  My new found frugality is upsetting a lot of people.  Guess who is most upset?  The same companies that are sitting on $1.8 trillion in cash!

Companies are saying they are not hiring people (despite having $1.8 trillion cash on hand) because there is ‘uncertainty’ in the market.  There is uncertainty because people are nervous.  People are nervous because they are afraid the companies with $1.8 trillion aren’t hiring and in some cases still laying people off.

We need a way out.

So here’s the JuiceBar’s deal with corporate America.

We’ll buy your stuff if you hire our neighbor.

We can even set up a formula.

If we buy an extra 100 cases of Crest, P+G hires back one mid-level manager.  15 gas grills from Home Depot equals an extra cashier.  Five flat screens and LG has to hire back one technician.

And I’ll only refinance at these incredibly low rates if the bank agrees to hire two recent college graduates with English degrees.

The history and English majors need our help.

And with $1.8 trillion you could buy a lot of them.

More human and political insight from my therapist

Let me be clear.  I’m not in therapy.

Maybe I should be.  Nothing wrong with it.  Just not for me right now.

By “my therapist” I refer to my beloved and longsuffering wife the social worker and therapist who explained to me and for all of us the real story behind the Tiger Woods ‘apology’.

obama-carex-inset-communityRecently she enlightened me on another recent event – the President’s health care reform summit.

Did you see it?  Any of it?  I found it fascinating and apparently others did as well.  There was so much interest that it crashed some of the sites that were carrying it live.

If you did see it you may remember the opening by President Obama and his desire to focus on the positive things they can agree on.

Focus on the positive.  Talk about things upon which we all can agree.

It went down hill from there.  Apparently the one thing they couldn’t agree on was to focus on what they agreed on.  What they did seem to agree on was sniping, digs, invectives, and occasional ad hominems – typical political talking points.

As my wife explained it, this was (like the Tiger episode) therapy in motion.  Again, let me paraphrase:

It looked like some of the first sessions you have when you are working with dysfunctional families, spouses, or parents with their children.  You always start with asking them to identify positive things about each other.  It never works.  Never.   Every time they come back with criticisms.   You’re not five minutes into the session and people are screaming at each other, letting loose f-bombs and a host of  “asshole”, “jerk”, “bitch” commentary.  They just have all this pent up anger and hate for each other.  They want — no, they need — to get all that stuff off their chests and on the table for everyone — at least the ‘independent’ therapist — to see.  They can’t help it.  They just have to go negative before they can begin getting to the positive.

The problem with the President is that he didn’t do this sooner and didn’t do it long enough.  You can’t do therapy in one session.  You only get people to move over time, little by little.  You have to wear them down.  If the President had done this twice a week for six months, I bet he’d have gotten folks to open up and talk about those positives.

But like therapy, this stuff takes time.

My therapist!  She’s not only beautiful but absolutely brilliant!

Swine Flu Schizophrenia

Worried that you’re going to die because you CANNOT get the swine flu vaccine?

Worried that you’re going to die because someone is going to MAKE YOU TAKE the swine flu vaccine?

Ready to blame the government, big pharma, the medical-industrial complex for it all?

Welcome to the whacky world of being a human being in America.

On the same day — November 6th — there were two polls that told the story of America’s schizophrenic mindset about vaccinations, swine flu, and modern health.

hdc_0000_0001_0_img0070One was a Harvard poll whose headline read alarmingly that only “one third of those who sought the vaccine were able to get it.”  The poll was part of a swarm of stories flooding the top half of virtually every news outlet citing long lines, soaring complaints, and rising outrage that more vaccine was not available to the American public.  If you follow these stories you’d think that an uprising of cataclysmic proportions was just around the corner.

On the left coast there appeared another poll.  According to it more than half of registered voters in California didn’t want the swine flu vaccine.  Indeed, the “Times/USC poll also found that 59% of people ages 18 to 29, among the most at-risk of any age group, said they had no plans to get the vaccine.”  And there were sizable portions of the public — particularly among African Americans and Latinos — that the vaccine itself was more dangerous than the disease.

So the paranoid will get vaccinated.  The apathetic will not.

And whatever happens, I’m sure the blame won’t be on the paranoid or the apathetic — rather it will be on the poor folks who are actually trying to develop and deliver the vaccine.

Finding Out that Your Professor Was a Spy

The name sounded so familiar.  It was the Walter that threw me off.  I didn’t know any Walter Meyers.

Ever find out something about someone way after you knew them that really threw you for a loop?  More to the point, find out something that was happening to someone way back when and you NEVER knew what he or she was going through?

Welcome Kendall Meyers, the newly discovered Cuban spy.

Kendall was my European Studies professor at Johns Hopkins SAIS.  Now I find out he was a spy.  Not only that, it appears that we was being “turned” – isn’t that what they call it? – right when I was studying and working with him back in the early 1980s.

My, my, my.

spy-vs-spy-without-bombs-775529Here’s how I rememer Kendall.

He had a more-than-slight resemblance of Donald Sutherland.  He was tall and lanky and bearded.  He spoke in well-rounded words with a certain intensity and glee that got young minds excited.  He was extremely curious with a razor-sharp logicians’ reckoning that meant you had better thought a few moves ahead if you were going to make a challenge.  I remember him to be kind, but firm.  He didn’t hide his liberal views (this was the first Reagan Administration) but I didn’t find him militant or bitter — only challenging.  He’d be the guy who’d have that “challenge authority” bumper sticker on his car.

He loved the Zebra Lounge off Mass Ave. which he would constantly remind us has the best pizza / beer combination in Washington DC.

But most of all I remember his curiosity and his emotion.  He was the type of instructor (I can’t remember whether he was working on his PhD or had just finished with David Calleo) that would ask you why you thought something and seemed to really  be interested in the answer you gave.  He would be the one to say “I’m curious why you say that.”  But he’d also be the one who’d as passionately simply say that the conclusion you’ve come to is wrong.  And say that with a zeal and conviction — but no malice! – that betrayed a passion in convictions.

That was the Kendall I knew at SAIS.

I had plenty of professors at SAIS that I suspected as a spy.  But I suspected them all of working for the CIA.

How odd that Kendall would be Castro’s eyes and ears in Washington.

Books and covers.  A reminder of all the secrets we keep.

What Letter is Your Recovery?

Just when you thought you were out of the worst of it … Bam!  Another 200+ point drop.

I’m telling you this economic stuff is driving folks crazy.

One of my favorite subjects of discussion is what “letter” the economy will resemble over the coming months.  This has been the focus of discussion of everyone from AARP to SeekingAlpha to Blogs.com to MutualFundSmarts.

LettersFirst, there is the “V” shaped recovery.  The one we all want.  Straight down and straight up.

Then there is the “U” shaped recovery.  The one more likely.  Straight down, suffer for awhile, and then go back up.

Now comes the really bad letters of the alphabet.

The “W” shaped recovery.  As if we haven’t had enough of Ws already.  Sort of a bipolar recovery.  You go broke.  Make money.  Go broke again.  Make money.  Suffer. Enjoy.  Suffer.  Enjoy.

Finally there is the dreaded “L” shaped recovery.  You decend into hell and stay there.  Hopefully over time you’ll learn to enjoy it.

We need a new monogram.

Buddy, Can You Spare a Car?

For awhile there I thought the word for 2009 was going to be “frugality.”

Frugal.  Being thrifty.  Back to those values that our new president spoke about last Tuesday.  Values that are not new, but old.  Most people who had Depression-era parents (like me) knows “frugal.”

But after looking at the Hyundai commercials, I’m thinking of another word.

“Resigned.”

I mean, really.

Selling someone a car and then saying that if they get fired from their job you’ll take it back?

That doesn’t makes me want to go out and buy a Hyundai!  Sounds more like a death wish.  Oh, and by the way, isn’t it when you’re out of a job that you need a car the most!  To get to the next interview?  Now that’s a campaign.  Lose your job?  We’ll loan you a Hyundai for six weeks to help you find another.  But no.  We’ll take your money first.

I’m thinking of going to clients with “Hyundai campaigns …”

  • Nike will sell you a Sasquatch driver … and if your leg gets cut off in the next six months, they’ll take it back.”
  • Budweiser will sell you six pack of beer … and if you die of sclerosis of the liver in the next year … it’s free!
  • Harvard will put your child through college … and if he/she ends up in jail for a year or more before they turn 25, you’ll get your book money back!”
  • “Come see the movie Revolutionary Road … and if within the next 60 days you become a depressed alcoholic and cheat on your wife … we’ll pay for therapy!”

2009: An opportunity taken … or squandered?

Hi there.

Hope you’re having (or had) a wonderful New Year’s Eve.  There’s a lot of talk about putting 2008 behind us.  Indeed, in the annals of “Auld Lang Syne” (arguably one of the world’s strangest song) our serenade to end 2008 was one of the most sincere in recent memory.

For most normal people — that is, if you are not a high-level senior executive of banks, insurance companies and auto companies making seven figure incomes while bankrupting your respective company —  2008 was a financial train wreck.

Owning a home and having a traditional 401k in 2008 was not quite the equivalent of living in downtown Manhattan on September 2001, nor was it like being on an island in the Indian Ocean on December 2004.  That said, in all three cases a significant portion of lifetime effort was swept away.

You may consider the various Bernie Madoffs of 2008 to be the equivalent of Osama Bin Laden except that that they stole wealth rather than innocent lives.  Or you may consider that 2008 was the violent correction that naturally takes place — just like a tsunami — when the basic forces of mother nature are denied over time.

In either case.  Poof!  There goes $6.9 trillion!  Trillion.  A THOUSAND billion.

Now we have talk of being prudent and frugal.  People discuss the novel idea of spending LESS than they make.  We’re going to increase transparency, enforce regulations, and make things more equitable.  We’re going to come together as a country and fix these seemingly intractable problems that face us.  And who can stop us?  We have Obama now.  Everything will be alright.

After September 11, 2001 we said we’d come together as a nation, put aside partisan differences, and start acting like a responsible, unified nation.  Everyone in the world was an American.

An global opportunity squandered.

Today in 2009 we have another opportunity to begin to get things right, this time with our fiscal and economic policies.  Everyone in the country seems to be behind a new administration’s call for change.

Let’s hope we can do better this time.

Happy New Year.

The Spirit of Christmas

Merry Christmas!

Did you get the “Christmas spirit” this year?  Yes?  Well what kind of spirit was that?  I’m just checking cause a lot of what I see out there doesn’t synch with my idea of the Christmas spirit.  So just for fun I typed in “Christmas” into Google News this morning.  Here’s a sampling of what I found:

The Queen’s annual Christmas talk was one of a “sombre” Christmas that, according to Her Majesty, conjures “feelings of uncertainty.”

“Hallelujah!” “Joy to the World!”

Paris Hilton’s Christmas spirit took the form of a pink Bentley.

“Away in a manger … no crib for a bed ..!”

According to reports, Iranian leader Mahmoud Ahmadinejad, who has called Jews animals will say Jesus, if alive today, would be against bullying, ill-tempered nations.  (Someone needs to tell him that Jesus was a Jew)

“Peace on earth, good will toward men.”

Google, with a gazillion dollars in market cap and sitting on billions in cash, canceled its Christmas bonus and instead will give its employees a cell phone.

“I have no gifts for him pur-um-pa-pum-pum … Me and my drum.”

The annual Disney parade will be hosted by Ryan Secrest and Matt Dallas, star of the television program in which he plays Kyle who has the 2008 version of the “virgin birth” … a boy without an umbilical cord and belly button living inside a chamber, until he woke up in the middle of a forest covered in pink fluid.”

“Oh come, let us adore him.”

There was the guy who dressed up as Santa and massacred people.  There was the WalMart shoppers who trampled to death the poor soul chosen to open the doors to the store.  And indeed, most stories were about shopping, retail, and sales.  So much that one story retold the quote from Bill O’Reilly who said in 2005 that, “Every company in America should be on its knees thanking Jesus for being born.  Without Christmas, most American businesses would be far less profitable.”

Not the spirit of Christmas that I know.

“Fear not, for behold I bring you good tidings of great joy which shall be to all people” … “For unto you a child is born.  Unto you a son is given.”

Have a Merry Christmas.

Money for nothing – CEO compensation

In John, chapter twelve, verse eight, we have the famous quote from Jesus:

“You will always have the poor with you.”

Jesus was rebuking Judas and his criticism of Mary for wasting costly perfume in the washing of Jesus feet.  (For those interested, I suggest Proseorprophet‘s analysis of the text.)   But today Jesus may just as likely have have said the same about the rich.  Specifically, about rich CEOs.  Even more specifically about rich, overpaid CEOs

“You will always have the obscenely overpaid CEOs with you.”

Yup.  Hard to argue with that one.  And in today’s bailout, bankrupt economy the CEO compensation issue is getting a lot more attention.  So it is interesting to read a spate of stories this week about CEO pay.  First, there are the stories about CEOs passing up their “bonuses.” This, reported in the Associated Press:

The chief executives of Morgan Stanley and Merrill Lynch & Co. are going without bonuses for a year that has seen Wall Street ravaged by staggering losses, mass layoffs and the collapse of storied firms.

Morgan Stanley’s CEO John J. Mack is giving up a bonus for the second straight year, while Merrill Lynch & Co. said its CEO John Thain also asked to go without the extra compensation for 2008 after reports surfaced he had sought as much as $10 million.

Notice anything?  They are passing up BONUSES!!  That is what you get when you do something really, really, really super good, right?  Their regular compensation?  $800k and $700k per year respectively plus perks of about half that.  Oh, and they got signing bonuses when they were hired and tens of millions of dollars in earlier bonuses along the way while managing the companies into the ground.

Still not bad for people presiding over failed institutions that nearly killed the global economy and had to be bailed out with billions American taxpayers’ money, much of which will be paid by people now in elementary school who don’t even get an allowance.

Which leads to the auto bailout and CEO compensation of the auto manufacturers.  Jonathan Macey in the Wall Street Journal, writes:

The failure of the General Motors board of directors to fire CEO Richard Wagoner provides a rare glimpse into the inner-workings of big-time corporate boards of directors. The sight is not pretty.

When Mr. Wagoner took the helm eight years ago the stock was trading at around $60 per share. The stock had fallen to around $11 per share before the current financial crisis. It’s now below $5 per share.

In 2007, Mr. Wagoner’s compensation rose 64% to almost $16 million in a year when the company lost billions. The board has been a staunch backer of Mr. Wagoner despite consistent erosion of market share and losses of $10.4 billion in 2005 and $2 billion in 2006. In 2007 GM posted a loss of $68.45 a share, or $38.7 billion — the biggest ever for any auto maker anywhere.

Ouch.  Today there’s a flurry of such chatter.  Check it out.  Go to Google News and type in “executive compensation”.  No shortage of reading material there.

I’m in the spin business.  But I’m hard pressed to see how best to spin this one.   Here’s the Juice Bar’s summary of the executive compensation pro / con argument:

  • If we don’t pay them an outrageous amount of money, they’ll leave.  To that, critics say “Great!”
  • If we don’t pay them millions, we’ll get substandard candidates.  To that, critics say “You can’t do much worse that you’ve already done!”
  • It is a ‘free market’ system and millions is the going rate for executives.  To that, critics say “If it is a free market then don’t ask the government for bailout money.  Fire the management!”

Case closed.