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Why Chrysler Still Might Not Survive
Tweet Share on Facebook April 30, 2009 Comment (46)Give President Obama credit for his boldest bailout plan yet. Unlike some of the open-ended bank bailouts, his Chrysler plan makes hard choices, sets public standards and deadlines, and puts some burden on stakeholders besides the U.S. government. By forcing Chrysler into bankruptcy, Obama has committed to a process that will determine winners and losers and force concessions on those unwilling to make them voluntarily.
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Obama’s Economic Hits and Misses
Tweet Share on Facebook April 27, 2009 Comment (13)It’s a bit like getting your first report card after just a week of school, but Barack Obama’s first 100 days in office obviously haven’t been the usual honeymoon period. When Obama became president in January, the economy had been in recession for 13 months, with no end in sight. Huge banks like Citigroup were still foundering, despite the emergency resuscitation rendered during President Bush’s final months. Big companies were announcing four- and five-digit layoffs. The “D” word—depression—was in vogue.
It’s impossible to turn around the world’s biggest economy in 100 days, but Obama has clearly tried. Since January, his administration has put in place a vast economic-recovery program. The question now is whether it will work. Here’s an early assessment of how Obama has tackled the biggest problems facing the economy:
The housing bust. With so many problems these days, it’s easy to forget that the recession began with a massive plunge in housing values—which continues. And most economists feel the economy won’t rebound until housing prices bottom out and stabilize. So far, prices nationwide have fallen nearly 30 percent from their 2006 peak, with further declines likely through most of 2009.
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Why a Chrysler Bankruptcy Won't Faze Car Buyers
Tweet Share on Facebook April 23, 2009 Comment (10)If Chrysler declares bankruptcy or liquidates, it will be a historic corporate failure. But car buyers might not notice that much.
Executives at the No. 3 U.S. automaker have tried practically everything to stay in business, including an attempted marriage with General Motors last fall, begging the government for money, and now, a risky plan to merge with Italian automaker Fiat.
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How the Pulitzers Promote a News Oligopoly
Tweet Share on Facebook April 21, 2009 Comment (5)Good editors exhort their writers to keep it fresh, yet journalism awards these days have a certain repetitive quality: A few big newspaper names get repeated over and over.
This year’s Pulitzer Prizes, for example, represent a kind of sweep for the New York Times, which won 5 out of 15 journalism prizes (two prizes were granted in the single category of local reporting). Last year, the Washington Post won 6 Pulitzers. In other contests, like the Gerald R. Loeb awards for business writing or the Overseas Press Club awards for international reporting, the Wall Street Journal and some of the TV news networks grab a slice of the glory. But less-heralded winners like the Las Vegas Sun or the Post-Star of Glens Falls, New York – which both won Pulitzers this year – are increasingly rare.
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Fuzzy Math at Citigroup and Bank of America
Tweet Share on Facebook April 20, 2009 Comment (4)Is it a new day for the nation’s troubled banks? Or just a false dawn?
Bank of America has given economic optimists reason to celebrate, reporting first quarter earnings of $4.2 billion, or $0.44 per share. That’s a big boost over analyst expectations of about $0.04 per share. It follows Citigroup’s announcement of a $1.6 billion first-quarter profit, also far ahead of analysts’ predictions.
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How the Fortune 500 Will Change Post-Recession
Tweet Share on Facebook April 20, 2009 Comment (195)Fortune magazine’s annual ranking of America’s biggest companies doesn’t change much from year-to-year, but over time it captures the rising and falling fortunes of firms that reflect the evolution of America.
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The Great Economic-Recovery Hunt
Tweet Share on Facebook April 17, 2009 Comment (2)So you think we’re on the verge of a recovery? Let’s see whether President Obama seems to agree:
On April 14, he acknowledged that a recovery is possible, someday. “For the very first time,” he said, “we're beginning to see glimmers of hope.” So when do glimmers of hope become big, broad shafts of economic sunlight? “Way off in the distance,” Obama added, “we can see a vision of America's future that is far different than our troubled economic past.”
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The Other Reason Consumers Have Stopped Spending
Tweet Share on Facebook April 15, 2009 Comment (27)Like many Americans, I’ve cut back on spending. I thought this would be hard. It hasn't been. In fact, I feel a kind of relief, the way you do when an unwelcome guest finally departs.
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5 Bailout Absurdities
Tweet Share on Facebook April 14, 2009 Comment (4)Last fall, it probably made sense to flood the financial system with money, to prevent a panic that could easily have compounded a nasty recession. But that was then. As the bailouts have proliferated, so have the unintended consequences, and the financial system is starting to look like a fun-house version of American capitalism.
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7 American Cars Worth Bailing Out
Tweet Share on Facebook April 14, 2009 Comment (103)Yeah, Detroit’s got problems. But most critics agree with executives at General Motors, Chrysler, and Ford who say they’ve been building much better cars lately. Some are even tops in their class. With GM and Chrysler needing billions in federal loans to avert bankruptcy, and Ford trying to get back on its feet without a bailout, here are some of the cars that will help the Detroit automakers reestablish themselves—if they stay in business:
Chevrolet Camaro (starting price, $22,995). Going, going…. The only thing that could rob GM of a home run on this reincarnation of the classic muscle car is a prolonged recession that completely stifles pent-up car buyers. The low-slung dragsonslayer design stops traffic, and sturdy underpinnings make this a real sports car, not just a show pony. Prior Camaro lineups lost their luster thanks to cheap interiors, dated styling, and anemic low-end versions that were about as muscular as a go-cart. This time around, the entry-level Camaro is a racer with a 304-horsepower V-6 and six-speed transmission—and it also gets decent mileage in the mid-20s. The ferocious SS model evokes the Corvettte—for almost $20,000 less. Purists will quibble over tacky gadgets in the cockpit and certain compromises, like limited rear visibility. Who cares. The Camaro offers looks to linger over and affordable thrills that couldn’t be more timely.
[See what it’s like inside GM’s fight for survival.]
Rick Newman
The global economy is mysterious, even scary. Chief Business Correspondent Rick Newman connects the dots. In addition to his writing for U.S. News, Rick is the co-author of two books: Firefight: Inside the Battle to Save the Pentagon on 9/11, and Bury Us Upside Down: The Misty Pilots and the Secret Battle for the Ho Chi Minh Trail.
Read Rick's latest blog entries here.
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