by Norman Horowitz
I joined CBS in 1968. Shortly after I arrived, the corporation decided to reduce its headcount by 7.5%. Management assigned me to be the enterprise’s representative at the “division” to discuss how we would go about accomplishing the task.
There were about 20 people in the meeting. Because I was “new,” I was asked for my opinion. I said that, if it were up to me, I would first fire the managers who allowed the overhead to get to a point that we could cut 7.5% of the staff without hurting our operation.
(Actually, we could’ve reduced our head count by 50% without hurting our business, but that’s for another time.)
Of course, I was never invited back to another such meeting. CBS was making so much money that the reductions mattered very little.
Congressman Paul Ryan has been in Congress for more than a decade, yet he talks about cutting the budget as though it were the first time in his “historical context” that we’re spending more than we take in. Cuts must be made…what a discovery! Continue reading “Just Another Demagogue?”
Reconsidering Japan and Reconsidering Paul Krugman — Steven Hill
Throughout the 1990s, the Japanese unemployment rate was – ready for this? – about three percent. Not 30 percent, that’s three percent: about half the US unemployment rate at the time. During that allegedly “lost decade,” the Japanese also had universal health care, less inequality, the highest life expectancy and low rates of infant mortality, crime and incarceration. Americans should be so lucky as to experience a Japanese-style lost decade.
The Japan Myth — Daniel Gros
The best measure is not overall GDP growth, but the growth of income per head of the working-age population (not per capita). This last element is important because only the working-age population represents an economy’s productive potential.
When one looks at GDP/WAP (defined as population aged 20-60), one gets a surprising result: Japan has actually done better than the US or most European countries over the last decade.
This is why I’m so skeptical of people who say that all the Fed has to do is target higher nominal GDP growth — in liquidity trap conditions, the Fed doesn’t even control money, so how can you blithely assume that it controls GDP?
— Paul Krugman (Princeton University)
I want to write an investment newsletter, but I don’t like the pay-and-email model. I want it to be transparent, and like everything I write, I want the information and analysis to reach as many people as possible. So here it is. I wrote this first edition last Monday, but it took a week to get some feedback and rejigger the format. If any of it is out-of-date, now you know why. I most regret that I didn’t post it in time for you to take advantage of this. — AWO
It’s a stupid time to start an investment newsletter.
Economists are worried about a “double-dip” recession, public and private debt are at record levels, the world has just escaped two financial crises in three years, and the Chairman of the Fed says the future is “unusually uncertain.” With record-breaking temperatures outside, a smart person would work on their tan until the economy returns to normal.
Trouble is, I don’t know what “normal” looks like. Continue reading “The Ethical Investor: August 2010”