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May 21, 2012
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May 17, 2012
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The Kosher Gourmet by Faith Duran : Cheesy Potato Breakfast Casserole with Cheddar and Sun-Dried Tomatoes
May 16, 2012
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The Kosher Gourmet by Joyce White : GOODNESS GRACIOUS: GREENS! 4 winning recipes that are no longer just for down-home folks (Includes expert tips & techniques)
May 15, 2012
Kristen Chick: Obama administration resumes arms sales to Bahrain despite serious unresolved human rights issues. Activists feel abandoned
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May 14, 2012
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May 11, 2012
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The Kosher Gourmet by Chef Mario Batali: The famed chef's vegetable dish that tastes true to the season: FAVAS AND SUGAR SNAP PEAS WITH POTATOES AND TARRAGON
May 10, 2012
Sergei L. Loiko: Putin sends warning to U.S., NATO in Victory Day speech at Red Square
Mary Rourke: How being a 'mentch' got Vidal Sasoon his start and fighting in Israel's War of Independence provided him with confidence and a strong sense of his own identity
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May 9, 2012
Sharon Palmer, R.D. How you can reduce your risk -- or delay -- chronic diseases associated with aging
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Jewish World Review
January 4, 2010
/ 17 Teves 5770
In the aftermath of the Great Recession
By
Robert J. Samuelson
http://www.JewishWorldReview.com |
One insistent question at the start of a new decade involves the lingering effects of the old: What scars will the Great Recession leave? We are already seeing some. Americans are moving less than at any time since World War II, reports demographer William Frey of the Brookings Institution. People are tied to existing homes, can't get loans for new ones and won't move without job commitments, Frey says. Only 1.6 percent of Americans are now moving across state lines, half the rate of a decade ago.
With a grim job market, the young also seem more cautious. A new survey by Fidelity Investments found that a quarter of workers ages 22 to 33 want to stay with their present employer until retirement; in 2008, that was only 14 percent. John Irons of the liberal Economic Policy Institute worries that many young Americans, lacking tuition funding, will delay or abandon attending college, lowering their long-term earning power.
So the Great Recession's nastiest scar could be an era of economic frustration, characterized by slower growth and contentious competition for scarce resources. Stunned by huge wealth losses in stocks and real estate, Americans save more and spend less. Businesses suffer from weak demand. Hiring remains sluggish. Worse, the slowdown coincides with an aging population, which could compound the effect. In 2020, the projected number of Americans 55 and older will reach almost 100 million, 29 percent of the total population. That's up from 59 million, or 21 percent, in 2000.
"Younger people . . . tend to be more innovative, more willing to take risks, more willing to do things differently," Stanford University economist Paul Romer says in an interview for the book "From Poverty to Prosperity" by Arnold Kling and Nick Schulz. As noted, today's turmoil could make even the young more risk-averse. Or older and middle-aged people could increasingly dominate corporate hierarchies and university research grants, as Romer worries. An aging society could become a stand-pat society, protective of the status quo and resistant to change.
Against this glum prospect, the standard rebuttal evokes history. The U.S. economy is amazingly resilient, the argument goes. It has been a consistent job creator: 21 million in the 1970s, 18 million in the 1980s, 17 million in the 1990s, 12 million in the past decade through 2007. (Lower gains reflect slower labor-force growth, not less dynamism.)
A "can-do" culture -- combining intense ambition with a flexibility to adapt and an instinct for innovation -- ensures that the economy will ultimately rebound strongly. The harsh recession may have actually improved the long-term outlook by purging high-cost firms and forcing efficiencies. Productivity (output per hour worked) has risen 4 percent in the past year. Profits are already up 21 percent from their low; surviving firms will soon expand.
Which vision will prevail?
The answer may hinge on two things: trade and entrepreneurship. Most economists see stronger exports as a substitute for weaker consumer spending. Unfortunately, that depends heavily on economic growth and trade policies abroad. By contrast, entrepreneurship is a sleeper issue that depends on what Americans do.
If you doubt its importance, consider this: All net job creation from 1980 to 2005 came from firms that were five years old or less, according to a study by economists John Haltiwanger of the University of Maryland and Ron Jarmin and Javier Miranda of the Census Bureau. In any one year, that may not be true; but over time, mature firms lose more jobs than they create. "It's not small firms but young firms that count," says economist Robert Litan of the Kauffman Foundation, which sponsored the study.
If Americans don't continue to create firms -- not just high-tech start-ups such as Facebook but construction companies, florists, restaurants, dry cleaners, engineering firms -- the economy may languish. Beginning a business is a risky, exhausting, chaotic process. Every year, there are roughly 500,000 to 600,000 company "births" and almost as many "deaths." Half of new firms don't make it to year five, says Litan.
Some harbingers of growth look unpromising. In 2009, disbursements by "venture capital" firms -- investors in start-ups -- to first-time recipients hit an all-time low since statistics were begun in 1995. True, VCs support only a tiny fraction of new firms, mostly high-tech start-ups. But "angel investors" -- friends and family of entrepreneurs who support many more -- have also suffered huge losses in stocks and homes. They, too, have less to invest.
There's a warning here for the Obama administration: Complex regulations or high taxes may discourage start-ups and job creation. As for broader questions, the answers may remain murky for years. Has the mix of economic trauma and aging made us prudent -- or merely fearful? Has economic resilience survived -- or given way to a stand-pat society?
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Comment on Robert J. Samuelson's column by clicking here.
12/29/09: Democracy's demolition derby
11/30/09: Bipartisan threats against the institution that saved America from depression
09/14/09: Give It to Us Straight
09/07/09: Bad Future for Jobs?
08/24/09: A Rail Boondoggle, Moving at High
08/10/09: Championing the Status Quo
08/03/09: We'll remain in denial, prisoners of wishful thinking, until the fateful reckoning arrives in the unimagined future
07/27/09: Obama's misleading medicine
07/13/09: Americans' self-indulgence hurts us
07/06/09: Economists out to lunch
06/29/09: Panics R Us!
06/08/09: Flirting with deflation or inflation? Now the economy might be at risk of both
05/25/09: A crisis America needs
05/18/09: Will somebody finally say that Obama is irresponsibly mortgaging our future?
05/04/09: The Bias Against Oil And Gas
04/27/09: Environmentalists maximize the dangers of global warming while pretending we can conquer it at virtually no cost
04/20/09: Our Depression Obsession
03/23/09: Geithner treads a line between financial paralysis and populist resentment
03/23/09: American Capitalism Besieged
01/06/09: The limits of pump priming
12/29/08: Humbled By Our Ignorance
07/31/08: The homeownership obsession
07/24/08: A Depression? Hardly
07/17/08: Why isn't globalization making the interconnected world more stable?
© 2009, WPWG
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