The Week: Most Recent us-economy

Wall Street's rough year: 5 ways banks have shamed themselves

The Week — Fri, 25 May 2012 14:33:00 -0400

Once known as the Masters of the Universe, Wall Street's high-powered financiers were laid low by the financial crisis of 2008 and slammed for reckless risk-taking that pushed the economy into a wearying recession. Since then, the banking industry hasn't done much to persuade ordinary Americans that it's repentant, even if its profits are at a five-year high. It seems as if a new controversy flares up every few weeks to remind everyone that Wall Street isn't exactly made of the toughest moral fiber. Here, 5 ways banks have shamed themselves over the past year:

1. Rigging the game
Morgan Stanley...

A day in the life of a warehouse wage slave

The Week — Fri, 18 May 2012 10:32:00 -0400

THE PLACE IS immense. Cold, cavernous. Silent, despite thousands of people quietly picking items, or standing along the conveyors quietly packing or box-taping, nothing noisy but the occasional whir of a passing forklift. I have just been hired as a picker, which means my job is to find, scan, place in a plastic tote, and send away via conveyor whatever item within the multiple stories of this several-hundred-thousand-square-foot warehouse my scanner tells me to.

My scanner tells me in what exact section — there are nine merchandise sections, so sprawling that there's a map attached...

JPMorgan's billion-dollar loss: Time to break up the big banks?

The Week — Wed, 16 May 2012 14:04:00 -0400

In the aftermath of JPMorgan's $2 billion loss, which could bloat to as much as $4 billion in the coming weeks, critics of Wall Street have pressed the government to strengthen its oversight of the financial industry. But would that be enough to prevent a repetition of the financial crisis? Some say the very existence of JPMorgan and other too-big-to-fail banks represents a constant threat to the global economy — as well as the taxpayers who will have to rescue them if they collapse. Is the best solution to cut big banks down to size?

Yes. Regulation alone can't save the banks from themselves...

Did JPMorgan CEO Jamie Dimon break the law?

The Week — Tue, 15 May 2012 15:00:00 -0400

JPMorgan Chase, the country's largest bank, continues to reel from its $2 billion trading loss last week, which critics are touting as evidence that Wall Street is still making the types of dangerous bets that caused the financial crisis in 2008. JPMorgan Chase's stock plunged by nearly 10 percent the day after CEO Jamie Dimon disclosed the loss, erasing $13 billion from the company's value. Dimon, one of the loudest voices against government regulation of Wall Street, has been pilloried in the press for what he has described as a "terrible, egregious mistake." And now the Justice Department is...

California's financial apocalypse: A concise guide

The Week — Tue, 15 May 2012 09:45:00 -0400

California Gov. Jerry Brown (D) has some bad news: His cash-strapped state isn't $9.2 billion in the hole, as projected in January; the Golden State is actually facing a yawning $15.7 billion shortfall. And after years of aggressive budget-slashing and gridlock over increasing tax revenue, Brown doesn't have a lot of options on the table. "The fact is, California has been living beyond its means," he told reporters on Monday. "This is a day of reckoning, and we have to take the medicine." Here, a look at California's bitter pill:

Why did the budget gap grow?
Tax revenue came in $4.3 billion lower...

The 'Anger Room': The new way to blow off steam after work

The Week — Mon, 14 May 2012 12:40:00 -0400

While stress is an unfortunate and unhealthy part of modern life, going on a destructive rampage isn't usually a socially acceptable way of dealing with it. Enter the Anger Room, an inconspicuous storefront in a Dallas strip mall where fed-up Americans can act out. Inside, proprietor and founder Donna Alexander and her staff offer up rooms of stuff — TVs, office furniture, glassware — for patrons to smash. (Watch a therapeutic session below.) Here, a brief guide:

How does the Anger Room work?
The rooms are filled with donated or found items from garage sales or dumpsters. When...

JPMorgan's $2 billion loss: Time to fire CEO Jamie Dimon?

The Week — Mon, 14 May 2012 12:01:00 -0400

Reeling from a massive $2 billion loss on a risky bet, JPMorgan Chase CEO Jamie Dimon has launched a campaign of contrition to contain the damage. "We made a terrible, egregious mistake and there's almost no excuse for it," he told NBC's Meet the Press. The country's biggest bank has also parted ways with three executives, including Chief Investment Officer Ina Drew, a veteran at the company and reportedly one of Dimon's most trusted allies. However, condemnation is still raining down on Dimon, who's vociferously opposed the sort of strong government regulation of Wall Street that critics...

JPMorgan's shocking $2 billion loss: Proof we need stronger financial reform?

The Week — Fri, 11 May 2012 13:00:00 -0400

On Thursday, JPMorgan Chase CEO Jamie Dimon revealed that the banking giant lost a whopping $2 billion due to a massive trade that went sour, and that the losses could climb by another $1 billion in the coming days. Dimon attributed the loss to "errors, sloppiness, and bad judgment," and asserted that "we will fix it and move on." But critics of the financial industry say the loss is more than a mere error, and that JPMorgan is engaging in precisely the type of risky behavior that brought the financial system crashing down in the fall of 2008. Specifically, the loss stemmed from a complex...

5 reasons new graduates face a grim economic future

The Week — Tue, 08 May 2012 18:00:00 -0400

While many college graduates aren't exactly eager to give up a life of beer pong and afternoon classes for the daily drudgery of 9-to-5 office life, this year's batch of newly minted adults faces an even greater problem: The possibility of no job at all. The unemployment rate remains above 8 percent nationwide, and young graduates are entering a market that's more competitive than ever. "Truly, this is a terrible time to be young," says Nobel-prize winning economist Paul Krugman. Here, five reasons new graduates might wish they could put off graduation:

1. The job market isn't growing fast enough...

April's disappointing jobs report: 6 takeaways

The Week — Fri, 04 May 2012 11:08:00 -0400

The jobless rate in April fell to 8.1 percent, its lowest level since President Obama took office in 2009... but don't expect the White House to start whipping up champagne cocktails. The stubborn economy added a worse-than-expected 115,000 jobs last month, not nearly enough for the labor market to claw its way out of its deep hole. Indeed, many analysts now fear that we're living through a rerun of what happened to the economy in early 2010 and early 2011, when the recovery appeared to be accelerating only to stumble and lurch. Here, six takeaways from the latest jobs report:

1. Labor force participation...

Has Obama been too tough on Wall Street?

The Week — Fri, 04 May 2012 08:00:00 -0400

President Obama's 2008 run was successful, in part, because of grassroots support, with millions of backers chipping in whatever they could — even as little as a $1 — to fuel his historic campaign. But Obama also raked in millions from titans on Wall Street, outraising John McCain $16 million to $9 million, says Nicholas Confessore at The New York Times Magazine. Four years later, Wall Street is pouring money into super PACs that support Mitt Romney, after Obama boosted government oversight of the financial system and called for higher taxes on the rich. Former donors are saying Obama...

America's first tourism ad campaign: Will it bring back visitors?

The Week — Thu, 03 May 2012 14:08:00 -0400

This week, America launched its first-ever tourism ad campaign in Japan, Canada, and Britain, and is planning on expanding the feel-good media blitz in the coming months to Brazil, China, France, Germany, India, and South Korea. In one ad, a guitar-strumming Roseanne Cash, backed by an almost-too-diverse-to-be-believed band of musicians, beckons tourists to "come and find your land of dreams" over burnished shots of vintage Cadillacs, elderly dominoes players, and wedding celebrations — largely in lieu of classically tourist-friendly activities. (Watch the clip below.) The campaign, including...

Time to cap the workweek at 40 hours?

The Week — Mon, 30 Apr 2012 13:09:00 -0400

Sheryl Sandberg, the second-in-command at social networking giant Facebook, admitted this month that she leaves work at 5:30 on the dot, and has done so ever since she had children. "It's not until the last year, two years, that I'm brave enough to talk about it publicly," she said. Her work habits stand in stark contrast to the all-consuming efforts of other high-powered executives, particularly in the hyper-competitive tech industry, where people often work 50, 60, or 70 — or more — hours a week. Should there be a 40-hour limit?

Yes. Working more than 40 hours hurts productivity...

Are government spending cuts slowing the recovery?

The Week — Mon, 30 Apr 2012 10:51:00 -0400

Last week, the government reported that gross domestic product (GDP) — the broadest gauge of American economic activity — grew at a tepid pace of 2.2 percent in the first quarter. While the data seems to confirm that the recovery is trudging along, its progress is too sluggish to make a significant dent in the unemployment rate. So what's holding the economy back? The Obama administration says the private-sector economy actually grew at a rate of 3.5 percent, and argued that government budget cuts — largely in the form of reduced spending — are hampering the overall recovery...

Paul Krugman vs. Ben Bernanke: Is there a dangerous 'hive-mind' at the Fed?

The Week — Fri, 27 Apr 2012 09:30:00 -0400

The economy-focused corner of the web was enthralled this week by the "Battle of the Beards": Paul Krugman vs. Ben Bernanke, says Paul La Monica at CNNMoney. The first salvo came Sunday, when Nobel-winning economist Krugman took Federal Reserve chairman Bernanke to task in The New York Times Magazine for being more timid in juicing the economy as Fed chief than he'd advised as an academic, leading to unnecessarily high unemployment. Krugman then "geeked out," hypothesizing that his former Princeton colleague had been "assimilated by the Fed Borg, like Capt. Jean-Luc Picard in a famous Star Trek...

Can Obama revive America's manufacturing industry?

The Week — Tue, 24 Apr 2012 08:00:00 -0400

In his State of the Union address this year, President Obama promised to create "an economy built on American manufacturing," and he has spent a lot of time touring factories across the country to underscore his commitment to the industry. Administration officials are now rolling out proposals to "put some analytic meat on the bones" of Obama's manufacturing goals, says Matthew Yglesias at Slate, to convey that the White House's focus on manufacturing is more than a feel-good campaign slogan. But with China and other Asian countries offering cheaper labor costs, can America really resurrect the...