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Why Europe's Debt Crisis Will Keep Coming Back
Tweet Share on Facebook July 1, 2011 Comment (14)Thank God that's over. Now we won't have to worry about Greece for … a couple of months or so.
If mounting anxiety over European debt—followed by a flurry of last-minute maneuvering to avert total disaster—is starting to seem like a regular ritual, get used to it. Authorities in Athens and other European capitals seem to have forestalled Greece's insolvency once again, with new austerity measures passed by the Greek government that will allow the struggling nation to get its next installment of bailout money from European governments and the International Monetary Fund. But there could be several replays of the drama over the next several years. "I'm afraid Greece will become like Groundhog Day," says Paresh Upadhyaya of Bank of America Merrill Lynch. "It's not going to disappear."
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Why U.S. Companies Aren't So American Anymore
Tweet Share on Facebook June 30, 2011 Comment (10)"Globalization" has become a dirty word.
Americans associate it with jobs being shipped overseas, falling wages and living standards, and the unsettling rise of China as a world power. But there are upsides to globalization too, even if they're less apparent. The cost of many consumer goods, for example—think most of the stuff at Wal-Mart—has stayed low or gone down in recent years, thanks largely to cheap imports from Asia and other low-cost manufacturing regions.
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How 11 Corporate Titans Profited After Failure
Tweet Share on Facebook June 29, 2011 Comment (6)In this economy, there aren't too many second chances. But if you're a corporate titan, fortune may smile on you more than once, even if you damage your firm or even imperil its existence.
The last several years have been tumultuous in corporate America, as a financial crisis rippled through the economy and other disasters brought shame upon once-admired firms. The recession that coincided with the financial crisis has cost the U.S. economy about seven million jobs and left the whole nation slogging through a weak, unconvincing recovery. Yet a number of disgraced CEOs and other grounded high-flyers have fared surprisingly well, either landing plum jobs with new employers or securing golden parachutes that guarantee a luxurious retirement—or both. That's not always the case. In his 2004 book Why Smart Executives Fail, Dartmouth professor Sydney Finkelstein found that of 51 "failed" CEOs, only two ever got hired again by an existing firm. The rest started their own firms, became consultants, or slunk into retirement. Today, by contrast, companies seem more willing to hire executives with black marks on their resumes.
[In Pictures: 11 Business Leaders Who Profited After Failure.]
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Career Lessons From Conan O'Brien
Tweet Share on Facebook June 23, 2011 Comment (3)It was hardly a typical career disruption last year when Conan O'Brien left the Tonight Show, in the big, tiresome brouhaha over NBC's late-night lineup. O'Brien complained relentlessly about the shabby treatment he felt he got from the honchos at NBC, giving voice to millions of others who felt the same way toward their own bosses (or former bosses). But he also got a $32 million settlement from NBC—the kind of rich severance package most displaced workers can only dream about.
[See 10 industries that will hire the most in 2011.]
O'Brien suddenly had something in common with other out-of-work people, however: He had to figure out what to do next. Now, a lively new documentary, Conan O'Brien Can't Stop, reveals the TV showman's anxiety and manic creativity as he worked with his staff after the NBC flameout to devise his next act. O'Brien ultimately ended up with a new late-night show on TBS, but between his NBC and TBS gigs, he gave live stage performances in 32 cities, dubbed the "Legally Prohibited From Being Funny on Television Tour." The documentary, directed by O'Brien's college pal Rodman Flender, shows how O'Brien and his team came up with the tour idea, developed the material, and tromped grudgingly from city to city.
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How Greece Has Outperformed Washington
Tweet Share on Facebook June 23, 2011 Comment (11)It's fashionable to sneer at Greece. Maybe it shouldn't be.
The seaside nation at the bottom of Europe has become the poster child for unmanageable government debt, with bills so large that it would default on its obligations if not for a three-year bailout from other nations adding up to about $145 billion. That plan, hastily arranged in May 2010, calls for a series of payouts to Greece, each contingent on reforms meant to bring Greece's banana-republic economy closer to European standards. They include steep cuts in pay and benefits for Greece's nepotistic federal workforce, a crackdown on millions of tax cheats, privatization of bloated industries run by the government, and steep cuts in other kinds of government spending.
[See the Top 10 Individual Tax Breaks.]
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How To Ride Out the 'Soft Patch'
Tweet Share on Facebook June 22, 2011 Comment (4)It's been two years since the recession ended and the so-called recovery began. But it doesn't feel like a recovery to a lot of people. The unemployment rate, at 9.1 percent, is still far higher than the worst readings from the last two recessions. Economists have repeatedly been wrong in predicting the end of the never-ending housing bust. The federal government and millions of Americans are still drowning in debt. And nobody in Washington has a plan to do much of anything, except bicker and dicker.
[See 10 industries that will hire the most in 2011.]
When 2011 began, there were signs that the recovery might be picking up steam, the way it was supposed to. But that momentum has faded, producing an economic "soft patch" that's neither recession nor recovery. There are many culprits. The Greek debt crisis continues to fuel fears of a financial panic, similar to what happened in the fall of 2008—except it would be countries, not banks, at risk of insolvency. Inflation in China is heating up. Oil prices are down from earlier peaks, but still uncomfortably high, raising costs for consumers and companies.
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How Pandora Became an Unlikely Hit
Tweet Share on Facebook June 15, 2011 Comment (3)At least one thing is going right in the U.S. economy, and it mostly involves a handful of technology entrepreneurs striking it rich with public offerings reminiscent of the ill-fated dot-com boom of more than a decade ago. LinkedIn raised the curtain on a dot-com redux in May, when it went public and its shares spiked well above the offering price. Investors expect the boom to continue as hot companies like Facebook, Twitter, Groupon, Kayak, Yelp, and Zynga go public over the next year or two, at valuations far higher than some companies with a lot more revenue. Profits at some of those firms are scarce, but no worry: Wall Street is delighted to have some razzle-dazzle to be optimistic about.
[See who will hire the most in 2011.]
This exclusive club of hot IPOs has revived the fanciful idea of a killer app that leads to easy money. But Pandora, the online music service that just went public at a valuation of nearly $3 billion, is hardly an overnight successes. In fact, it's a better example of old-fashioned persistence in the face of daunting odds, a quality many Americans would be wise to rediscover at a time of scarce jobs and a shrinking middle class. Pandora was founded by a musician named Tim Westergren in 2000, at the peak of the first Internet bubble. It promptly ran out of money as the bubble burst and most dot-com startups folded. That was one of several near-death experiences for Pandora, which still warns that there are risks to its business model—such as rising expenses for music royalties—that could push profitability far into the future.
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What Apple Can Learn From the Pentagon
Tweet Share on Facebook June 10, 2011 Comment (11)Apple is known for some of the world's most innovative gizmos, from the original Macintosh computer to the iPhone and the iPad. Now, the tech giant wants to build a hyperspace-age corporate headquarters that will be as groundbreaking as some of its products.
[See where to work if you want a raise.]
Apple CEO Steve Jobs has outlined a plan to build an eye-popping new circular office building in Cupertino, Calif., where Apple is currently based, that will bring together all of its dispersed employees under one shimmery roof. The architectural rendering Jobs released looks like an elevated particle accelerator, with design cues inspired by the spaceship from the 1977 sci-fi flick Close Encounters of the Third Kind. In a way, it's classic Jobs: revolutionary, elegant, and futuristic. He told the Cupertino City Council that the design could end up being "the best office building in the world."
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How to Graduate Into a Great Career
Tweet Share on Facebook May 27, 2011 Comment (5)If you've graduated from college over the last few years, you probably don't need anyone to tell you that your timing sort of sucks.
[See 10 industries that will hire the most in 2011.]
Even now, two years after the recession officially ended, jobs remain scarce. Younger workers have some advantages, since they can work for less and usually don't have families to support. Yet the unemployment rate for workers between ages 25 and 29 is 10.2 percent, and for those between 20 and 24, it's 14.9 percent—significantly higher than the overall unemployment rate of 9 percent. The prospects for college grads are better, but even so, recent research shows that more than half of young workers with a bachelor's degree end up working as cashiers, clerks, waiters, or customer-service reps, jobs that don't even require a degree. Many recent grads have been forced to endure an even worse indignity: moving back in with their parents.
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One Woman's Fight to Rejoin the Middle Class
Tweet Share on Facebook May 24, 2011 Comment (39)A few months after losing her administrative job in the summer of 2008, 23-year-old Brianna Karp got rid of her furniture, a beloved piano, and most of her books so she could move back in with her parents. When that didn't work out, she moved into an old trailer a relative had left her, settling into an informal homeless community in a Wal-Mart parking lot in Brea, Calif. By the summer of 2009, she was living without electricity, regular showers, home-cooked food, and most basic conveniences.
[See who will hire the most in 2011.]
Karp held tight to her laptop, however, and began writing a blog about her experiences. That generated attention that helped her land a part-time magazine internship, and eventually ink a book deal. Although her book, The Girl's Guide to Homelessness, was recently published, Karp still lives in a dilapidated shed that the state of California considers not fit for human habitation. I spoke with her recently about her experiences. Excerpts:
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