General Motors, the venerable American auto manufacturer is sitting on the cliff’s edge in North America with a recent 3-month loss of $6 billion. However, GM watched its sales in China skyrocket 50% for the month of April, 2009. Ironically, Toyota, the company many Americans now cheer for, has posted a $7.7 billion loss for the first quarter.
This now proves, without a doubt, that the auto industry – not just in the US – is going through a massive crisis. But it’s clear that American manufacturing has reached a critical, historical turning point. read more »
With the possible exception of health care reform, no major issue presents more political opportunities and potential pitfalls for President Barack Obama than energy. A misstep over energy policy could cause serious economic, social and political consequences that could continue over the next decade. read more »
Cities today have more political clout than at any time in a half century. Not only does an urbanite blessed by the Chicago machine sit in the White House, but Congress is now dominated by Democratic politicians hailing from either cities or inner-ring suburbs.
Perhaps because of this representation, some are calling for the administration and Congress to "bail out" urban America. Yet there's grave danger in heeding this call. Hope that "the urban president" will solve inner-city problems could end up diverting cities from the kind of radical reforms necessary to thrive in the coming decades.
Demographics and economics make self-help a necessity. read more »
Austin has enjoyed healthy growth during its 150-year history. As a rule of thumb, its population doubles every 20 years, and has done so since it was founded. It continues to grow at a healthy clip: from a population of 345,000 in 1980 to 656,000 in 2000; the Census Bureau estimates it had nearly 750,000 residents in 2008.
But if the city of Austin has grown briskly, its suburbs have exploded. Williamson County to its north was the sixth fastest-growing county in the United States between July 1, 2007 and July 1, 2008. Hays County to the south was the tenth. read more »
Back in the 1950s when I was growing up, pundits worried a lot about automation and the problem of leisure in a post-industrial society. What were the American people going to do once machinery had relieved them of the daily burden of routine labor? Would they paint pictures and write poetry? Armchair intellectuals found it hard to imagine.
It was the age of Ozzie and Harriet, when ordinary working and middle-class families could aspire to a house in the suburbs and a full-time Mom who stays at home with the kids. Today, of course, that popular version of the American dream is a thing of the past, especially the part about a full-time Mom who stays at home with the kids. read more »
Like many on Main Street Paul Goodpaster is angry. Paul is my banker friend in Morehead, a retail, medical and education hub on the edge of eastern Kentucky. He observed that his bank was doing quite well – albeit hurt now by rising unemployment and an economy starting to have an impact even on those unglamorous places that had minded their business well. read more »
Back in the 1980s, Citibank CEO John S. Reed looked at the bank’s earnings and said, more or less: This is really a credit card company with six other lines of business. That is, the card portfolio was making lots of dough, and carrying the rest. Commercial lending, real estate lending, clearing, foreign exchange, branch banking — all of them were flat or losing money, while the card business was cooking. read more »
When it comes to the state of the economy, is the worst behind us or still to come? Informed opinion is all over the map. The optimists are citing such factors as accommodative Federal Reserve Bank policy (massively increased liquidity), bank profitability (and yes, banks are lending, but only quality loans), money velocity (trending up), a positive yield curve (long-term vs. short-term rates), housing starts (surging), favorable financial rule changes (abandonment of mark-to-market accounting, reinstatement of the short uptick rule to prevent naked short-selling), retail sales (recovering), commodity prices (rising due to increased industrial demand), used car prices (firming), and new vehicle sales (rising off their sickening lows). read more »
Every downturn comes to an end. Recovery has followed every recession including the Great Depression. In 1932, John D. Rockefeller said, "These are days when many are discouraged. In the 93 years of my life, depressions have come and gone. Prosperity has always returned and will again." The question is not ”IF”, rather it is “WHEN” recovery will begin. The age-old question remains: what can government do to get the nation out of recession?
Government can act wisely. In the past, it used tax legislation (the mortgage interest deduction) to create the highest home ownership rate in the industrialized world. It can also act stupidly by promoting “Sub-Prime” mortgages, “105%” financing and the “No-Doc” loan that got us into this financial mess. As many as 4.4 million more Americans could lose their homes – unless drastic action is taken to stop the process. read more »
General Motors' reorganization and contemplated bankruptcy represents one possible – and dismal – future trajectory for American manufacturing.
Unlike highly favored Wall Street, which now employs fancy financial footwork to report a return to profitability, the nation's industrial core is increasingly marginalized by an administration that appears anxious to embrace a decidedly post-industrial future. read more »