Posts by Rick Newman
- Rick Newman at The Exchange12 hrs ago
The new year could kick off with some good news that isn’t really good news — a sharp drop in the unemployment rate that might hurt the economy more than it helps.
The drop would occur if Congress chooses not to renew extended unemployment benefits at the end of the year, which would cost taxpayers about $19 billion in 2014. Given the ongoing scarcity of jobs — especially ones that pay well — those benefits are a lifeline for a lot of people who have been unemployed more than a few months. But the pressure is on in Washington to rein in spending and wind down stimulus measures that date back to 2009. So federal unemployment benefits look endangered.
If those benefits end, it could mean a big change to the numbers that determine the unemployment rate, which is nothing more than the number of people who don’t have jobs and are looking for work, as a percentage of the total labor force. The latest numbers, for instance, show there are 11,272,000 unemployed people, out of a total labor force of 154,839,000. Here’s the equation that determines the unemployment rate: 11,272,000 ÷154,839,000 = 7.3%.
- The Exchange1 day ago
The latest news on U.S. educational attainment is depressing enough, since American kids are falling even further behind their counterparts in other countries. The implications may be more troubling still, because we clearly need an Obamacare-style effort to fix a broken education system.
Before you shout “hell, no!” consider the basic problem. The U.S. education system is similar to the U.S. healthcare system: At the top, it’s terrific, because wealthy people can afford to live in pricey ZIP codes with premier schools, or even send their kids to top-shelf private institutions. Where resources are more scarce, quality deteriorates sharply. For people at the bottom, quality is so poor it’s almost as if they don’t have access to the system at all.
- The Exchange1 day ago
Cubicle culture isn’t just dehumanizing — it might even harm a company's bottom line.
Openness and transparency have dominated the workplace for the past couple of decades, as semi-private workstations and offices with doors have been replaced by communal set-ups in which office staffers, assembly-line workers and even some executives work elbow-to-elbow. The close quarters supposedly aid collaboration, while helping cut costs and allowing managers to keep better tabs on what their employees are up to.
But it may have gone too far. New research by Harvard Business School professor Ethan Bernstein reveals that too much oversight may lead workers to behave by the book when the boss is watching, while improvising more or relying on informal techniques when unsupervised. That means the boss may have a misleading impression of how his underlings really work.
- Rick Newman at Daily Ticker5 days ago
Something’s wrong with the U.S. economy. We all know that. But maybe the real problem is us.
Anybody who follows economic polls is numb by now to the fact that Americans think everything is wrong. The latest reading of the Bloomberg Consumer Comfort Index, for example, is - 34.6, which is a bit worse than the prior reading of -33.9. If you’re wondering why this index is (weirdly) negative, it’s because it nets out the percentage of people who are gloomy about the economy from the percentage who are upbeat. The number was positive in the late 1990s, when there were more optimistic people than pessimistic ones. But it has been negative ever since, except for a brief time during the peak of the housing bubble, in 2005. Gloomy is the new normal.
- The Exchange7 days ago
We get it: Pope Francis cares about the little guy. He speaks passionately about the rights of the dispossessed, and more than that, shows solidarity with them through his own humble lifestyle and rather unpapal rejection of pomp.
The pope has gone a bit overboard, however, in his recent attack on free-market capitalism. In a lengthy “apostolic exhortation,” Pope Francis rails against “an economy of exclusion” and a “ financial system which rules rather than serves.” The pope points out that, in a time of miraculous technological progress, alarming numbers of people still live in misery and desperation.
“The culture of prosperity deadens us,” the pope writes. “We are thrilled if the market offers us something new to purchase; and in the meantime all those lives stunted for lack of opportunity seem a mere spectacle; they fail to move us.”
- The Exchange7 days ago
Since it’s the holiday shopping season, imagine for a moment that Amazon (AMZN) could only fulfill your purchase requests 80% of the time. If their servers were overloaded, you’d get a message inviting you to come back later. Amazon would even offer to send you an alert when peak traffic was over, so you could finish your order with minimal chance of disruption.
What would you do? Log off and try again later? Put your smartphone near the bed so you could get up at 3 am, when the all-clear arrived and the site said it was a good time to finish your order? Right. You’d say so long to Amazon and probably never shop there again, while seeking a competitor able to get it right the first time.
- The Exchange9 days ago
If your elected officials wish you happy holidays this year, don’t assume they mean it.
It’s shaping up as an unusually weak holiday shopping season, and this year’s antics in Washington have a lot to do with it. Retail sales between Thanksgiving and Christmas are likely to rise only about 3% or so from last year’s levels, according to forecasting firm IHS Global Insight. That would be the weakest growth since 2009, when the economy was barely out of recession. Retailers such as Macy’s (M) and Best Buy (BBY) have warned shareholders that fourth-quarter profits could be weak. Soft sales are already forcing retailers to offer sharp discounts — such as Walmart’s famous $98 flat-screen TV— which is great for shoppers but lousy for anybody hoping for a robust economic rebound that will bring back jobs.
- The Exchange9 days ago
If you saw a postal truck pulling away from your house on a Sunday morning, what would be your first thought?
a. The postal carrier was late delivering Friday’s mail.
b. Somebody got the calendar mixed up and thought it was Monday.
c. The mailman had been on a Saturday-night bender and was just now heading home.
d. Somebody stole the mail truck and was joyriding.
One thing that probably wouldn’t occur to you is that the mailman was actually delivering mail. But it may be time to start thinking differently about the postal service.
I got a ring on my doorbell this past Sunday around 10 am, and looked outside to see who it might be. A postal truck was pulling away. At first I thought I was the one who got the day wrong, which meant … I was late for work!
- The Exchange12 days ago
Cars aren’t just for driving any more. We eat, drink, jabber and entertain ourselves in our autos — just like at home — and often create the same kind of mess found on the couch after munching chips and playing Xbox.
Honda has come up with the next ingenious gizmo that allows your car to mimic your living room: a built-in vacuum that runs off the car’s electrical system and eliminates the need to drive to the car wash for a vacuum, or run an extension cord from the house. The HondaVac, which debuts this year as an option on the new Odyssey minivan, was the brainchild of a 10-year-old girl who noticed the detritus in the family minivan one day and said, “You know what we need in here, Dad? A vacuum cleaner.” Her Dad happened to be a Honda engineer, who took the "no-duh" idea to work, allowing Honda to roll out the most clever-but-obvious automotive innovation since the cupholder.
- Rick Newman at The Exchange13 days ago
We’d all like to know what will happen in 2014, and the thoughtful journalists at the Economist magazine have published an intriguing set of predictions that give us some clues, as they do every year.
Some of them are quite a stretch, however. So in the spirit of respectful debate (which the Economist basically encourages with every issue) here are five things the magazine thinks will happen next year that probably won’t: