Financial Crisis

Will the Bubble Burst Aspen?

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Aspen is a great town. Its uniqueness extends beyond its spectacular geography to its amenities, people and community spirit. It’s a world-class, year-round Rocky Mountain resort offering great food, music, skiing, shopping – great everything – right in the middle of a real, functioning, small American community.

It’s no surprise people like it, want to keep it going. And not just the good, smart people who live in Aspen full-time and those who own second homes there (including some of the wealthiest people on Earth), but the thousands of good, smart people who visit every year to address big issues at the Aspen Institute and numerous other forums. These include elites of American arts, sciences, politics and economics with amazing amounts of brainpower and money at their disposal.

But geographic realities plus inexorable economic, demographic, and social trends are conspiring against the best of intentions. The future of Aspen – playground to the smart, rich and famous – may soon become untenable.  read more »

How To Save The Industrial Heartland

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You would think an economic development official in Michigan these days would be contemplating either early retirement or seppuku. Yet the feisty Ron Kitchens, who runs Southwest Michigan First out of Kalamazoo, sounds almost giddy with the future prospects for his region.

How can that be? Where most of America sees a dysfunctional state tied down by a dismal industry, Kitchens points to the growth of jobs in his region in a host of fields, from business services to engineering and medical manufacturing. Indeed, as most Michigan communities have lost jobs this decade, the Kalamazoo region, with roughly 300,000 residents, has posted modest but consistent gains.  read more »

Bailing out California, Again

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If many of the nation’s governors have their way, the next agenda item for the spendthrift federal government could be a bailout of state budgets. According to a report issued on December 10 by the Center on Budget and Policy Priorities, 37 states face mid-year 2009 budget deficits, totaling $31.7 billion. As would be expected from its size, California leads the pack at $8.4 billion.  read more »

Financial Crisis: Who will Bailout the State and Local Governments?

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The continual Illinois corruption scandals have created not only ignominy to the Land of Lincoln, but have now placed a negative ranking from Standard and Poor on its credit. If Illinois vies with other states for the title of most corrupt, it has plenty of company when it comes to financial disaster.

Although building for years, the impending collapse of state and municipal finance has been hastened by the growing financial crisis.  read more »

Make Sure All That Infrastructure Spending Is Well Supported

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It's the new buzzword: infrastructure.

President-elect Barack Obama has promised billions in infrastructure spending as part of a public works program bigger than any since the interstate highway system was built in the 1950s. Though it was greeted with hosannas, his proposal is only tapping into a clamor for such spending that's been rising ever since Hurricane Katrina hit New Orleans in 2005 and a major bridge collapsed in Minneapolis last year. With the economy now officially in recession, the rage for new brick and mortar is reaching a fever pitch.

But before we commit hundreds of billions to new construction projects, we should focus on just what kind of infrastructure investment we should – and shouldn't – be making.  read more »

Rethinking Risk During a Financial Crisis: Learning from Mexico

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Last month I visited a small town in southern Mexico. It is a quiet and modestly prosperous place. Outside some of the homes are older Suburbans, Jeeps and Explorers; the license plates show that their owners have recently returned from the US, driven out by the collapsing economy and heightened nativist anxieties. Almost every family, it seems, has some member who has spent time up north; only a very few of them are still hanging on through the recession.  read more »

Former Insider on the Auto Bailout: Never Underestimate Brainpower in Detroit

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In all the many (how many) years I worked as an engineer in and around the auto industry, I got to compare conditions in Europe, Japan and America. Yet in many ways the American situation was perhaps the most tragic – the most potential, most eagerly squandered. It’s not Americans who are flawed, but the business model imposed from the top.

For example, I do not believe American engineers are inferior to those working elsewhere. It’s just the way their inputs are handled. Toyota and Honda have long-term viable plans that forecast many years down the road. This gives engineers a clear direction.  read more »

Is the U.S. Capitalist, Socialist or Something In-between?

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During the Presidential campaign, then-Democratic candidate Barack Obama inartfully described his proposed federal income tax cuts for the middle class as “sharing the wealth.” His more strident right-wing opponents – including Vice Presidential candidate Sarah Palin – almost immediately labeled Obama “a socialist,” adding to a litany of alleged infirmities as a presidential candidate that included lacking executive experience; being a closet Muslim; and “someone who pals around with terrorists.”  read more »

Auto Bailout: Help Mississippi, Not Michigan

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We should be getting used to the depressing spectacle of once-great corporations begging for assistance from Washington. Yet perhaps nothing is more painful than to see General Motors and other big U.S.-based car companies – once exemplars of both American economic supremacy and middle-class aspirations – fall to such an appalling state.

Yet if GM represents all that is bad about the American economy, particularly manufacturing, it does not represent the breadth of our industrial landscape. Indeed, even as the dull-witted leviathan sinks, many nimble companies have shown remarkable resiliency.  read more »

Can Millennials Turn around the Housing Bust?

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Many of the nation’s youth (and a few of their elders) are expecting a magical turnaround of America’s economic fortunes as soon as their candidate for President, Barack Obama, is sworn in on January 20th 2009. But the Millennial Generation, born between 1982 and 2003, may be more the source of the country’s economic salvation as any initiative the new President might propose.

Millennials are the largest generation in American history, more than 91 million strong. They are coming of age just in time to join the workforce, enter the housing market, stabilize home prices, and buy the nation's expanding inventory of durable goods to furnish their new homes.  read more »