Is That an Economic Light at the End of the Tunnel or an Oncoming Train?

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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 »

Mr. Cloghessy Deserves Better – And So Do the Rest of Us

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The role of politicians in the corruption of our civic spirit – a national problem that has led us to the current economic mess – has me thinking a lot about Joe Cloghessy.

Mr. Cloghessy lived in my childhood neighborhood. He was big and strong and worked hard for a living, like most of the men in the neighborhood. He might have had more money than his neighbors, but that never came up. He did have a pool in his backyard – he built it himself – and that made his house a rarity in those parts.  read more »

Playing With Trains

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The Obama administration appears to have established the development of high speed rail (HSR) as the most important plank of its transportation strategy. The effort may be popular with the media and planners, but it’s being promoted largely on the basis of overstatement and even misinformation.  read more »

Can Eddie Mac Solve the Housing Crisis?

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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 »

Solving the Economic Crisis: Fix the Banks

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Economic forecasts today reflect a remarkable variation. Some economists are predicting a rapid increase in economic activity within just a few months. Some are forecasting an economic decline that persists for years.

At the root of the debate lies the question: where is the heart of darkness? Primarily, forecasters are focusing on the impact of the fiscal stimulus and the efficacy of monetary policy. Yet they have been less forthcoming to center on the real problem, which is fixing the banks.  read more »

Entrepreneurs Overlooked in Recovery Plans

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As most recently spelled out in The Economist , one of America’s most potent advantages – even in the current economic crisis – lies in its entrepreneurialism. America’s entrepreneurs are the proverbial wellspring of innovation and creators of most of the country’s new economic opportunities. Entrepreneurs, or global heroes as The Economist calls them, are not only important here in this country but are the best hope for creating the innovations that will get sufficient traction to resuscitate the world economy.  read more »

We Must Remember Manufacturing

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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 »

Big Movers – Up and Down the 2009 Best Cities Rankings

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In a year when modest – if not negligible – growth could nudge a city toward the top of the Best Cities for Jobs rankings you would suspect there to be little opportunity for big leaps up the scale. On the other hand, one could easily expect that there would be some places whose economic fortunes would resemble a vertigo-inducing fall.

A look at the 2009 rankings confirms that there are many cities whose job-creating engines have sputtered.  read more »

Why Today's Green Era May Fail

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Much of the debate about ways to create a landscape of green homes today has focused on the new tax credits for residential energy efficient windows, solar panels and geothermal options. Passive solar and other design methods which make more sense have yet to qualify for tax credits. If history is any guide, this is an error that may take us down the wrong path.

Yesterday And Today  read more »

Sydney: From World City to “Sick Man” of Australia

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Americans have their “American Dream” of home ownership. Australians go one step further. They have a “Great Australian Dream” of home ownership. This was all part of a culture that celebrated its egalitarian ethos. Yet, to an even greater degree than in the United States, the “Dream” is in the process of being extinguished. It all started and is the worst in Sydney.

Sydney is Australia’s largest urban area, having passed Melbourne in the last half of the 19th century. With an urban area population of approximately 3.6 million, Sydney leads Melbourne by nearly 300,000.  read more »