Matt Kramer's Library tagged economics →  View Popular

Teaching the Entitled Young the Financial Facts of Life
By PAUL SULLIVAN

This is the summer of reviling the rich. The financiers at Goldman Sachs got a populist drubbing after the bank reported record quarterly earnings and analysts began predicting average bonuses of $700,000 an employee at the firm this year. Now, Congress is debating whether high earners should be hit with a surtax to pay for health care reform. In states like New York and California, that could mean that top earners are paying more than 50 percent of their income in taxes.

But the rich and the not-so-rich do have something in common this summer: worrying about their children’s financial future. This may come as a shock to those middle-class Americans who imagine wealthy parents sunning themselves by their infinity pools, confident that their children, having been given every opportunity, are on their way to productive lives.

In truth, the image is fairly rare at this point. What is more common among the wealthy is their fear that the lives their children have known, and the futures they expected, may be gone.

“The notion that you’re entitled to goodies has to be dispelled,” said Fredda Herz Brown, a partner at Relative Solutions, a consultant who works with family businesses. “They really do think life is going to continue as it has. But most of them are not getting jobs, no matter what their parents do.”

While the wealthy are in a better position to help their children financially, having money doesn’t guarantee that their child will be responsible and productive.

So that leads to the question: How can parents help children with a healthy sense of entitlement adjust to the new economic reality?

EMOTIONAL REASSURANCE The first thought that pops into many parents’ heads when they worry about their children is bailing them out. But the best thing many parents can do, particularly those with children who are not asking for money, is to set the right example.

While children may be idle this summer, many parents are out of work, too, and c

www.nytimes.com/...25wealth.html - Preview

parenting economics

A Boot Camp to Prepare for Retirement
By TARA SIEGEL BERNARD

Marcia Tillotson and Joy Kenefick aren’t your typical drill sergeants.

They run what they call a retirement boot camp, aimed at making sure their investment clients who are contemplating retirement know exactly what they’re getting into. The exercise focuses primarily on finances — after all, the two women are partners in a financial advisory practice that is part of Wells Fargo Advisors in Charlotte, N.C.

But the women also make sure their clients understand what retirement feels like. They point out that retirees suddenly have no place to be each day, which may not be as blissful as it seemed beforehand. The paychecks stop coming. And after years of dutifully putting money into savings, retirees have to get used to watching their accounts dwindle.

The boot camp — an extended version of its military namesake — is generally aimed at people a year or two from retirement. While the exercises may be especially rigorous, they offer broad lessons for those who think they may be ready to stop working.

“It’s really a way to simulate retirement,” said Ms. Kenefick, who, with Ms. Tillotson, has been using the boot camp for about a decade. “It’s a way for people to really wrap their arms around something that is so abstract, and scary and permanent.”

The two advisers require pre-retirees to complete a checklist of exercises, including taking a hard look at where their money is going and making sure they’re on track, for instance, to pay off the mortgage. (That’s a nonnegotiable must-do before retirement, the two women say.)

Naturally, participants can’t quit their day jobs. But they’re required to save a disproportionate amount of money in tax-deferred accounts like 401(k)’s. That helps mimic what retirement will feel like: the increased savings lowers the amount of money the pre-retirees have to live on, while also reducing the taxes they pay (retirees generally tend to fall into lower tax brackets). Since they’re saving so much, the participants need to

www.nytimes.com/...25money.html - Preview

finance economics

Frugal before it was fashionable
Art of living cheaply spares Maine worst of downturn

By Jenna Russell, Globe Staff | July 16, 2009

WATERVILLE, Maine - Across the country, masses of worried consumers are taking lessons in getting by with less, turning to websites like suddenlyfrugal.com and thenewfrugalmom.com, and signing up for classes in car care and cooking. But in Maine, where Yankee thrift has been a way of life for generations, and the unofficial motto is the proverb “use it up, wear it out, make it do, or do without,’’ the notion of a “new’’ frugality is met with blank stares.

Take Martha Wolford, who makes do in Chester, north of Bangor, with two modest Social Security checks every month. She is 71, has no computer and no cellphone, and drives a 13-year-old Ford Aerostar van, which she calls, enthusiastically, “a great car!’’ She cans fiddleheads in spring and tomatoes in the fall, wears T-shirts - she buys five for $10 on sale - and raised six children on her husband’s paper mill salary.

“The only time I might go a little overboard is the time of the month when we get our Social Security checks,’’ she confessed. “Then I might buy extra paper products.’’

Across much of this sprawling, rural state, the art of living cheap is hard-wired into the regional DNA, a skill proudly passed down through the generations. Here, where hardened farmers and fishermen have been long battered by economic squalls, and incomes have lagged well behind the rest of New England, bargain-hunting and bartering are practices widely embraced. In their relentless pursuit of a good deal, Mainers scour yard sales that go on for days, scavenge the streets during local cleanup weeks, and pore over dog-eared copies of their beloved Uncle Henry’s Swap or Sell It Guide.

“It’s ingrained in people here to plan for tough times. That’s the fabric of Maine,’’ said Mary Webber of Yarmouth, a longtime family thrift counselor at Maine Savings Bank and the author of The Frugal Family’s Kitchen Book. “Everybody now is into shopping thrift sh

www.boston.com/...spares_maine_worst_of_downturn - Preview

economics

In Summer Hideaway for the Rich, Slump Is Visiting, Too
Jodi Hilton for The New York Times

The sparsely filled boat basin on Nantucket on June 30. Reservations were around 80 percent for July and August for the marina, giving some hope to the island’s struggling businesses. More Photos >

* Sign in to Recommend
*
E-Mail
* Send To Phone
* Print
* Reprints
* ShareClose
o Linkedin
o Digg
o Facebook
o Mixx
o MySpace
o Yahoo! Buzz
o Permalink
o

Article Tools Sponsored By
By GERALDINE FABRIKANT
Published: July 7, 2009

NANTUCKET, Mass. — On a winding road, down a white shell driveway, sits a rambling gray-shingled home with a view of the harbor, where beige lounge chairs ring an amoeba-shaped swimming pool and the living room is filled with pristinely white sofas, plumped, pillowed — ready for the next owners.
Skip to next paragraph
Multimedia
The Pinch in NantucketSlide Show
The Pinch in Nantucket
Enlarge This Image
Jodi Hilton for The New York Times

This 7,500-square-foot Nantucket home will be sold at auction by its owner, Paul C. Steinfurth, who put it up for sale a year ago. More Photos »
Enlarge This Image
by Jodi Hilton for The New York Times

The RopeWalk, a restaurant owned by Joe Pantorno, is serving breakfast for the first time to try to lure more customers. More Photos >

The 7,500-square-foot house has been on the market for a year with no takers. “We had some good offers,” said the owner, Paul C. Steinfurth, who runs a Miami real estate business and bought the house for $5.4 million in 2004. “Then Lehman happened and they put their hands in their pockets.”

So Mr. Steinfurth is resorting to a risky tactic new to the real estate market here: next Tuesday he’ll offer the house at an “absolute auction.” The highest bidder wins, no matter how low the bid.

The sale is testimony to just how drastically the market has turned and how severely the economy has hurt even the country’s most exclusive enclaves.

Abo

www.nytimes.com/...08nantucket.html - Preview

travel economics

A Good Time to Remember the Fundamentals

* Sign in to Recommend
*
E-Mail
* Send To Phone
* Print
* Reprints
* ShareClose
o Linkedin
o Digg
o Facebook
o Mixx
o MySpace
o Yahoo! Buzz
o Permalink
o

Article Tools Sponsored By
By PAUL B. BROWN
Published: July 11, 2009

THE Green Bay Packers had just suffered a devastating loss and, as the story goes, Vince Lombardi, then the head coach, decided that it was time to remind his team of the fundamentals.
Skip to next paragraph

“Gentlemen,” he began, “this is a football.”

The story comes to mind as investors try to come to grips with a stock market that may finally be starting to sort itself out after its devastating drop in 2008, in which the Dow fell by more than a third and the Nasdaq — off more than 40 percent — fared even worse.

So it is not a bad time, as Coach Lombardi suggested, to get back to basics, and that’s where “The New Coffee House Investor” (Portfolio, $22.95) fits in.

Its author, Bill Schultheis, a financial planner in Washington State, makes clear with his subtitle exactly what his objective is in this relatively short book — fewer than 200 pages, with lots of white space. He wants to explain how you can “build wealth, ignore Wall Street, and get on with your life.”

To do all that, he says, requires investors to master only three simple rules:

•

“Don’t put all your eggs in one basket. The key to building a successful portfolio is to diversify your assets so that you maximize your chances of reaching your goals with a minimum amount of risk.” More specifically, through your investment choices, you want to “eliminate the risk you can control and reduce the risk you can’t,” the book says. That means having a mix of stocks, bonds and cash, so that you are not beholden to one asset class. And within the categories of stocks and bonds you also want to be well diversified.

•

Don’t become greedy. A majority of actively managed mutual funds that charge y

www.nytimes.com/...12shelf.html - Preview

economics

Discounts Have Restaurants Eating Own Lunch
By WILLIAM NEUMAN

Consumers brave enough to pull out their wallets in this economy have grown accustomed to fire sales on every kind of merchandise, from fancy dresses to gas-guzzling cars. Now, add another item to the list: the casual restaurant meal.

The informal, sit-down restaurant chains that blanket the nation are fighting their most intense price war in years. Applebee’s is offering dinner for two for $20. Ruby Tuesday is handing out coupons for two entrees for the price of one. Chili’s, not to be outdone, is promoting some entrees for $7 or less.

“It’s a tit-for-tat pricing war right now,” said Steve West, an analyst with Stifel Nicolaus, a brokerage firm in St. Louis. “Each one’s trying to outdo the other in a battle for consumers.”

The sit-down casual segment of the restaurant industry has traditionally competed more on advertising and location than price, but these days, the chains appear to have little choice. Consumers hurt by the recession are eating out less. So the restaurants are fighting one another for that shrinking pool of diners, using deep discounts, heavily advertised on television, to attract them.

The customers who do venture forth are delighted. “This is really an incentive for us to go out,” said Norma Rosado Blake, 38, an archivist, as she stood outside a T.G.I. Friday’s restaurant in Clifton, N.J., with her husband the other night, for an offer entitling her to $8 off.

But even as the chains compete to come up with the best deal, some of the analysts who follow them are worried. They fear that, as was the case with merchandise retailers that sold luxury goods for 80 percent off, the restaurants are hurting their long-term prospects by training customers to eat out only when they are offered a bargain.

“The problem with that is once you start dealing, you’ve got to deal forever,” said Harry Balzer, the chief food industry analyst for the NPD Group, a consumer marketing research company.

The heavy discounting is leading to tensions be

www.nytimes.com/...24casual.html - Preview

food economics

The New Chicken Economy
By PETE WELLS

On Mother’s Day, my 4-year-old son, Dexter, dreamed up a list of six breakfast items for my wife to choose from and had me write them down. She ordered half the menu. And why not? At this restaurant, Dexter proclaimed, “you can have anything you want, and you don’t need to pay anything!”

Sounded like quite a deal, except that my wife had bought most of the ingredients on one of her Wednesday-afternoon grocery expeditions, which have grown more and more painful. Like most everybody else, we don’t feel as prosperous as we did a year ago. Now we treat our mutual-fund statements like junk mail and let them pile up unopened. I was prepared to believe that the radical write-downs in the value of our retirement accounts and our apartment didn’t actually mean we had less money. Then came the pay cut. Hello, recession, make yourself at home.

I was taking it all in stride, gliding through a life of diminished means, until I paid $35 for a chicken. A raw chicken.

Chicken always struck me as a relatively economical purchase. We can roast a chicken with some potatoes and herbs and eat like Russian oil barons for a night, then pull together a chicken salad for lunch the next day. Leftovers were on my mind when I rummaged through the cooler chest at the farmers’ market on a recent Saturday, looking for a fat, round hen. I dug up a five-pounder, big enough to feed the four of us for two or three meals. If I’d been paying attention, I would have read the sign warning that this farmer expected $7 a pound for his pasture-raised poultry. He’s a nice man, so I refrained from asking him the obvious question: “Are you insane?” I counted out the cash, wandered away and knew that I was the crazy one.

Alain Ducasse, the French chef and restaurateur who has never been known for discount pricing, has a roast chicken on the menu of his Manhattan restaurant Benoit. It costs $42, but it serves two and comes with fries. Best of all, the restaurant cooks it for you. I haven’t tried it, but I hear it’s p

www.nytimes.com/...14food-t-000.html - Preview

food economics

G.M. Chairman’s Task: Bring Fresh Perspective
By BILL VLASIC

DETROIT — Edward E. Whitacre Jr., the architect of AT&T’s rebirth as the nation’s largest telecommunications company, will now try to restore glory to another faded American institution, General Motors.

G.M. said Tuesday that Mr. Whitacre, a charismatic 67-year-old Texan, will become the new chairman when it emerges from bankruptcy, fulfilling the Obama administration’s goal of installing new leadership at the troubled automaker.

The selection of Mr. Whitacre is the first step in an overhaul of G.M.’s board, which presided over the company’s decline that forced it to seek government assistance last year.

The selection of Mr. Whitacre, who retired as chairman and chief executive of AT&T in 2007, was heavily influenced by Steven Rattner, one of President Obama’s senior automotive advisers.

It follows the choice of another prominent executive from outside the auto industry — C. Robert Kidder, the former chairman of Duracell — to take over as chairman of Chrysler after it reorganizes in bankruptcy court.

Mr. Whitacre was not available for comment Tuesday. But the automaker’s interim chairman, Kent Kresa, said the appointment was a critical step in helping G.M. restructure its operations and regain credibility with consumers.

“We need to bring back the confidence of the American public in this company,” Mr. Kresa said. “Having a strong board is a big piece of that.”

The reshaping of G.M.’s board was expected after Mr. Obama asked for, and received, the resignation in March of Rick Wagoner, G.M.’s longtime chairman and chief executive.

Mr. Wagoner was replaced as chief executive by his top deputy, Fritz Henderson. However, Mr. Kresa took over as chairman on an interim basis until an outside candidate was identified.

The selection process was helped by the executive search firm Spencer Stuart. But it was Mr. Rattner who first brought up Mr. Whitacre as a candidate.

“He was someone who Steve Rattner knew, or knew of,” Mr. Kresa said. “I started talki

www.nytimes.com/...10auto.html - Preview

economics

Michigan Works to Remake Itself Without King Auto
By BILL VLASIC and NICK BUNKLEY

DETROIT — The former General Motors Centerpoint truck plant in Pontiac, Mich., is another empty building that served for years as a reminder of the declining fortunes of American automakers.

But the day after G.M. filed for bankruptcy, it was bustling with activity.

Ed Montgomery, the Obama administration’s director of recovery for auto communities and workers, was touring the building with camera crews in tow.

Amid all the grim auto news, it was as good a photo op as he could have hoped for — the building was the future home of the Motown Motion Picture Studio.

The state, with the help of incentives, lured 25 film crews to Michigan last year to shoot movies like “The Day the Earth Stood Still” and “Gran Torino,” from Clint Eastwood, and officials are hopeful about a new growth industry.

“I’m very optimistic about the project,” said Mr. Montgomery, adding that the studio could create 3,000 new jobs. “That’s an excellent start.”

But any promising starts in Michigan are overshadowed by the brutal reality of the state’s economic plight. Just across the street from the building Mr. Montgomery was touring, workers at a huge G.M. truck plant learned the day before that their factory would be closing, one of seven more Michigan plants the automaker plans to shut down.

G.M. has promised to use its tour through bankruptcy to become a more nimble and competitive company, but Michigan faces an even tougher task in reinventing itself.

For all the talk of California’s economic woes, the distress in Michigan is greater. About 800,000 jobs have been lost in the state — about one in every six — since 2000, and its unemployment rate has reached 12.7 percent, higher than any other state.

The fallout has been even worse in heavily populated southeastern Michigan. Manufacturing jobs in the seven-county region that includes Detroit have fallen 51 percent since the beginning of the decade, and auto-related positions have fallen 65 percent.

The

www.nytimes.com/...10michigan.html - Preview

economics

Where the frugal mommy bloggers are

By The Associated Press | June 2, 2009

The recession is clearly fueling the popularity of mother-oriented blogs that focus on penny pinching. But it's difficult to estimate how many there are because many female bloggers who used to limit themselves to such areas as gardening and weddings now include money-saving tips.

Jessica Hogue, research director of Nielsen Online, which has studied more than 10,000 parenting and mother-oriented blogs, believes about two dozen mother-oriented blogs that focus on frugality are influential. She ranks them based on how much chatter they garner, their volume of followers on Twitter.com and the number of times consumers link to them from other blogs, among other criteria.

Here are the top five mom-oriented blogs with a frugal focus Nielsen found most influential.

1. http://www.commonsensewithmoney.com:

Founder: Mercedes Levy, 34, mother of two boys, ages 4, 18 months.

Based: Sheboygan, Wis.

Background: Certified Public Accountant, holds an MBA. Stay-at-home mother. Started blog October 2007.

Focus: Rock-bottom deals.

Philosophy:"I wanted people to see that you can not only make it on one income but you can thrive on one."

2. http://www.5dollardinners.com

Founder: Erin Chase, 31, mother of two boys, ages 4 and 2.

Based: Dayton, Ohio

Background: Former high school math and science teacher. Started blog summer 2008.

Focus: Cooking and planning nutritious family dinners for less than $5.

Philosophy: "I buy EVERYTHING on sale and most non-produce/meat items with a coupon."

3. http://www.couponmom.com

Founder: Stephanie Nelson, 45, mother of two boys ages, 13 and 16.

Based: Atlanta

Background: Bachelor's degree in finance, 10 years' experience in sales and marketing with Procter & Gamble Co. and Marriott International Inc. Left corporate world 1995. Started blog 2001.

Focus: Slashing your grocery bill in half.

Philosophy: "Strategic shopping is not about changing the way you eat; it is about changing the way you buy the food y

www.boston.com/..._the_frugal_mommy_bloggers_are - Preview

consumer economics

The high cost of cheap credit

By Ellen Ruppel Shell | June 7, 2009

THE NEW credit card law has been widely hailed as a David vs. Goliath victory of hapless consumers over venal lenders. "People can feel a lot more comfortable about the rules of the game," Adam Levin, chairman and founder of Credit.com, told the Associated Press. "But there will be some fallout, and it might be a short-term negative."

Among the negatives Levin cites are higher introductory rates and fees. But when it comes to credit cards, is raising the price of entry and ownership really such a bad thing? You don't need a credit history or even a job to get a credit card. Kids typically get their first solicitations in high school - one out of three high school seniors use them, and half of those carry cards in their own name. Seventy-eight percent of college students have credit cards, and, according to student loan maker Nellie Mae, typically carry a balance of $3,200. One out of 10 college students is more than $7,800 in the hole to at least one credit card company, and only 19 percent manage to graduate free of credit card debt. Yes, students and easy credit can be a dangerous combination, but not necessarily the most dangerous. That would be easy credit and the bankrupt.

In a shocking study titled "Bankrupt Profits: The Credit Industry's Business Model for Postbankruptcy Lending," Katherine Porter of the University of Iowa found that 96 percent of those polled were offered new credit in the first year after they declared bankruptcy. Porter concludes: "The modern credit industry sees bankrupt families as lucrative targets for high-yield lending, a reality that has important implications for developing optimal consumer credit policy and bankruptcy law."

Lucrative targets, yes, but whose fault is that? Surely some of the blame must fall on consumers willing to take lenders up on these "unbeatable" offers. Over the past 18 months or so, thousands of foreclosures and bankruptcies have made clear that what seems like cheap credit is anythi

www.boston.com/...the_high_cost_of_cheap_credit - Preview

books economics

The Self-Employed Depression
By EMILY BAZELON

On a rainy morning in April, Lisa Feuer took the subway to the Brooklyn Dojo, a martial-arts studio where she was scheduled to teach a mommy-baby yoga class. Outside, streams of water poured from awnings into the collars of passers-by. When she got to the studio, Feuer shook out her umbrella and picked out music from her iPhone to play for the class. But in the next 20 minutes, no one else showed up.

Feuer called Karma Kids Yoga, which rents out the dojo and pays her $40 to teach the hour-long class. If no students come, teachers get paid half their fee as long as they stand outside for 15 minutes and hand out postcards advertising Karma Kids. Feuer asked to postpone the postcarding because of the rain. On the wet walk to the subway, she tried to reassure herself that her students would be back next week, even though attendance had been sliding for a while.

When Feuer started teaching yoga four and a half years ago, when she was 38, it seemed like the perfect entree to a life of free agency. Feuer spent most of her 30s working for her husband’s goth record label doing publicity and promotion. When they divorced in 2005, she wanted a job that gave her some of the same independence that he had. “I’d watched my husband go into business for himself, and I felt like I could do it, too,” she said.

Yoga gave her the same pure, elated feeling as dance, which she had done professionally in her 20s. She spent $4,000 on a 200-hour yoga training course — paid for with a home-equity loan — and then more to specialize in prenatal, mommy-baby and kids classes. Many of her prenatal students came back to thank her after giving birth. She could pick up classes from a half-dozen studios, gyms and schools, and she could arrange her schedule around the needs of her son, Sasha, who is almost 7. Since Feuer did not work full time for any employer, no one gave her health insurance or other benefits. But she earned between $35 and $65 a class, and students paid more for private sessions.

www.nytimes.com/...07unemployed-t.html - Preview

economics

The Nation
The Recession, Wal-Mart Style
By STEPHANIE ROSENBLOOM

With the recession in its 18th month and unemployment now topping 9 percent, even semi-conspicuous consumption is a distant memory. Consumers are hunkered down. But when they do venture out, chances are they’re on their way to places like Wal-Mart and other big discount chains.

“Our sales — it’s like holding up a mirror to our society,” said John E. Fleming, the chief merchandising officer for Wal-Mart, the nation’s largest retailer.

So what are Wal-Mart, with 4,100 stores across the country, and other major retailers seeing?

Less browsing in the aisles, for one thing. Consumers now are “very disciplined in terms of making sure that they don’t go beyond what they have on their lists,” Kathryn A. Tesija, Target’s executive vice president of merchandising, told investors recently.

Food, of course, is high on those lists (discretionary items like clothes and furniture are not). But consumers are cracking their wallets only so far. Many are trading down to private label groceries. At Wal-Mart, sales of refrigerated pizza were up last month compared with a year ago. Lower grades of meat are outselling the higher-grade, pricier cuts. A recession protein hierarchy has emerged, with ground beef trumping steak, and chicken trumping beef. Some consumers are forgoing protein altogether, opting for pasta.

“We’re seeing a movement away from protein into carbohydrates,” Mr. Fleming said. “It stretches the dollar a lot further.”

Retailers generally don’t divulge details of their sales by category of goods. But they were willing to discuss trends. One stood out: consumers are discovering there’s no place like home.

“This whole idea of staying home and entertaining at home, we’re seeing that everywhere,” Mr. Fleming said, “from the ‘take and bake’ pizza to the $5 movies.” Ms. Tesija noted that “sales of popcorn poppers and microwave poppers are very strong.”

Retailers say consumers are trying to make being cooped up as painless as possible. Mr. Fleming said

www.nytimes.com/...07rosenbloom.html - Preview

economics

Finding Financial Advice in an Age of Bad Behavior
By RON LIEBER

The reports about crooked behavior in the world of financial planning just keep getting worse.

On May 20, the Securities and Exchange Commission filed an emergency civil action accusing James Putman and another employee of Wealth Management in Appleton, Wis., of taking $1.24 million each in kickbacks related to certain investments they were making for clients.

The S.E.C. also accused the pair of fraudulent conduct relating to how they allocated $102 million in client funds, much of which now appears to be gone.

Given the unfortunate prevalence of this sort of behavior, the charges would not be headline news were it not that Mr. Putman is a past president of the National Association of Personal Financial Advisors. Napfa is an organization of financial advisers that make money only through fees that clients pay directly to them.

For some time now, Napfa and its leadership have loudly criticized other financial professionals who accept commissions and fees from insurance companies and mutual fund firms. Napfa’s thinking is that those professionals are more beholden to the companies that pay them than they are to the individual investors whom they are supposed to be serving. The association has also promoted its adherence to a “fiduciary” standard, where members act only in a client’s best interests. Other financial professionals often only agree to do what is “suitable.”

That Mr. Putman is in trouble is embarrassing enough for the group, given its high and mighty stance on most consumer and regulatory issues. But it also comes right on the heels of charges against two other members, Matt Weitzman and Julie Jarvis.

My wife and I were clients of Mr. Weitzman, and I wrote about my discovery of the accusations against him in an April column. (It’s linked from the version of this story at nytimes.com/yourmoney.) After the article ran, a number of people wrote in or posted comments online criticizing my judgment, opinions and qualifications to write t

www.nytimes.com/...06money.html - Preview

economics

THE gentleman’s profession of the law is becoming a vestige of the past, removed enough from reality to be remembered, like phone booths or fedoras.

Philip K. Howard, a senior partner at Covington & Burling, another multinational firm, may be the closest thing to a gentleman lawyer that one is likely to find these days. He is courtly, white-haired, civic-minded and blessed with an aristocratic pair of arching eyebrows. While he declined to speak directly about White & Case (“I’m not really interested in the business of the law”), he touched on the firm’s current troubles by suggesting that as the bottom line increases in importance, the traditional role of the lawyer as a trusted counselor slips away.

“To the extent that lawyers are simply churning out the same problems one after the other and are treated as factors of production to be laid off or not because of market forces or marginal declines in profitability,” he said, “the emotional and professional commitment that goes along with being an adviser and a solver of problems begins to diminish.”

This bottom-line focus was in evidence at a recent meeting of the New York State Bar Association’s beefed-up Committee for Lawyers in Transition. It was a grim affair: a few dozen laid-off lawyers trading business cards and eating the catered chicken at a Midtown firm while another few hundred chimed in virtually, via the Internet. The talk was of “regrettable losses,” “reduced-hour arrangements” and contract assignments in which one might contribute in “a nonbillable” (read “no pay”) way.

The classic New York law firm is a highly developed ecosystem populated by certain native species: there is the brash, aggressive partner leveraged by lifestyle and, rising from below, like a creature out of Darwin, the ambitious associate who pulls all-nighters doing scut work in hopes of one day taking the chair.

But the natural order of this world has been set on end by the economic crisis and the possible disappearance of fixtures like the pyramid system (under which associa

www.nytimes.com/...07law.html - Preview

psychology economics

Obama makes his big move on GM
Automaker to seek protection today; President to lay out turnaround scenario

By David E. Sanger and Jeff Zeleny, New York Times | June 1, 2009

WASHINGTON - President Obama will send General Motors into bankruptcy protection today, making a risky economic and political bet that by nationalizing for a period of years the onetime icon of American capitalism, he can save at least a diminished automaker that is competitive.

The bankruptcy case, to be filed in New York, marks a significant turning point for an industry that was once at the heart of the US economy. It is the culmination of a remarkable four months of confrontation between Washington and Detroit that is expected to result in a dramatic downsizing of the company. It also places the government in uncharted territory, as a business owner.

Reflecting the government's extraordinary intervention in industry, aides say, Obama plans to tell the nation that he believes GM can be brought back from the brink of insolvency, even if the company looks almost nothing like the titan of old.

He will spell out a strategy in which the shrunken GM can make money even if new car sales remain at a sluggish 10 million a year in the United States and even if GM, once the giant of the industry, holds only a 13 percent share of sales.

But to get there, American taxpayers will invest $30 billion more in the company, atop the $20 billion already spent to keep it solvent.

The company will also have to shed 21,000 union workers and close 12 to 20 factories, steps that most analysts thought could never be pushed through by a Democratic president allied with organized labor.

Forty percent of the company's 6,000 dealers will close; the workers' union will be forced to finance half of its $20 billion healthcare fund with stock of uncertain value in the restructured GM; and bondholders, including many retirees, will be forced to take stock worth 10 cents for every dollar they lent the company.

The company's last steps toward bankruptcy took place

www.boston.com/...obama_makes_his_big_move_on_gm - Preview

economics cars

For an icon of America, a sudden reversal

By Micheline Maynard, New York Times | June 1, 2009

It is a company that helped lift hundreds of thousands of American workers into the middle class.

It transformed Detroit into a symbol of the industrial prowess of the United States. It built iconic cars, like Cadillacs, that became synonymous with luxury.

And now it is filing for bankruptcy protection, something that would have been unfathomable even a few months ago, much less decades ago, when it was a dominant force in the US economy.

Rarely has a company fallen so far and so fast as General Motors.

"I never ever could have believed that one day this thing would go that way," said Jim Wangers, a retired GM executive who was part of the team that developed the Pontiac GTO and the author of "Glory Days," about Pontiac's heyday in the muscle-car era of the 1960s. "We were so successful."

Founded in 1908, GM ruled the car industry for more than half a century, promising "a car for every purse and purpose."

The expression "What's good for General Motors is good for the country" entered the lexicon, even though it was a slight misquote of Charles E. Wilson, GM's president in the early 1950s.

But then GM began a long and slow process of undermining itself. Its strengths, like the rigid structure that provided discipline early on, became weaknesses, and it lost its ability for reading the market it helped create, as Japanese automakers lured away even its most loyal buyers.

Only eight months ago, Rick Wagoner, then its chief executive, stood before employees to celebrate the company's 100th anniversary. "We're a company that's ready to lead for 100 years to come," Wagoner said.

Instead of leading, GM will be following other failed companies on a well-worn path into bankruptcy court.

GM factories sprang up all around the country, from Massachusetts to California, from Wisconsin to Louisiana. They churned out family cars, pickup trucks, and memorable muscle cars that were rolling displays of American DNA.

A GM p

www.boston.com/...n_of_america_a_sudden_reversal - Preview

economics cars

Bankers' hours expand to Sundays
Branches cater to time-pinched customers

By Todd Wallack, Globe Staff | June 1, 2009

Six days a week, Brad Rowe works as a carpenter. On Sundays, he heads to the bank.

Rowe used to have to scurry to the bank during his lunch hour, he said. But then TD Bank expanded its hours, a huge convenience for people like Rowe with hectic schedules.

"Sunday is my day to cash my checks and pay my bills," said Rowe, 25, after doing just that at a TD Bank branch in Seabrook, N.H., just across the Massachusetts border.

So much for bankers' hours. Some of the region's biggest financial institutions are expanding hours on Sundays to cater to busy customers who, even in the era of online-all-the-time, still want to be able to walk into a bank, whenever and wherever.

TD Bank, for example, plans to open 155 of its 161 branches in Massachusetts on Sundays, beginning Oct. 4, up from five branches today.

And Citizens Bank, which started opening seven-day-a-week branches in grocery stores a decade ago, said that nearly half of its 251 Massachusetts outlets are now open every day, and it is considering adding more.

Even federal holidays are no longer sacred. TD Bank, for instance, said it plans to observe just four holidays a year at the branches: New Year's, Easter, Thanksgiving, and Christmas.

Several factors are driving the moves. Some customers work long hours or have grueling commutes, leaving little time for errands. Others like the convenience of being able to bank on their own schedule, not the bank's, and are used to being able to do everything else on Sundays. And some business owners say they can't wait until the next weekday to make change or to de posit a pile of checks.

"I would not bank at a bank if it was not open on Sunday. Period. End of sentence," said Mike Becker, a real estate agent and landlord who stopped by a Citizens outlet in the Danvers Stop & Shop last Sunday to withdraw money on his way to the beach.

Sunday banking hours would have been unthinkable several decades

www.boston.com/...xpand_hours_to_open_on_sundays - Preview

economics consumer

General Motors files for bankruptcy protection

By Dan Strumpf and Kimberly S. Johnson, AP Auto Writers | June 1, 2009

NEW YORK --General Motors filed for Chapter 11 bankruptcy protection Monday as part of the Obama administration's plan to shrink the automaker to a sustainable size and give a majority ownership stake to the federal government.

GM's bankruptcy filing is the fourth-largest in U.S. history and the largest for an industrial company. The company said it has $172.81 billion in debt and $82.29 billion in assets.

"The General Motors board of directors authorized the filing of a Chapter 11 case with regret that this path proved necessary despite the best efforts of so many," GM Chairman Kent Kresa said in a written statement. "Today marks a new beginning for General Motors. ... The board is confident that this New GM can operate successfully in the intensely competitive U.S. market and around the world."

As it reorganizes, the fallen icon of American industry will rely on $30 billion of additional financial assistance from the Treasury Department and $9.5 billion from Canada. That's on top of about $20 billion in taxpayer money GM already has received in the form of low-interest loans.

The Detroit automaker said warranty coverage, service and customer support will continue uninterrupted, and employees and essential suppliers will continue to be paid. GMAC Financial Services said in a statement that it will continues to provide automotive financing to GM and Chrysler dealers and customers.

GM will follow a similar course taken by smaller rival Chrysler LLC, which filed for Chapter 11 protection in April. A judge gave Chrysler approval to sell most of its assets to Italy's Fiat, moving the U.S. automaker closer to a quick exit from court protection, possibly this week.

The plan is for the federal government to take a 60 percent ownership stake in the new GM. The Canadian government would take 12.5 percent, with the United Auto Workers getting a 17.5 percent share and unsecured bondholders receivin

www.boston.com/..._motors_to_file_for_bankruptcy - Preview

cars economics

www.thomaslfriedman.com - Preview

politics economics environment society