The Neverending Story

American consumers are facing continuing high debt and barely improving unemployment. Will they be able to support the burgeoning economic recovery?  Consumer debt has fallen in the last 2.5 years but it has primarily been due to defaults.  In this recovery, it is reasonable to expect consumers to be more wary about accruing debt.  It is unlikely that consumers will provide enough demand to stimulate a recovery in and of themselves.  The consumer debt situation seems unlikely to improve for the time being.

An answer would seem to lie in individuals finding their own solutions to unemployment.  There continues to be a need for innovative services an products. Exploring entrepreneurial opportunities is a way of supporting growth in the long-term rather than the short-term effects of consumerism.  Over time entrepreneurs provide job growth and demand for services and products.  The added benefit of empowered and engaged individuals is transformative.


Number of the Week: Household Debt May Be Accelerating Again - http://pulsene.ws/15BVk

Related articles

• U.S. Consumers Cut Credit Debt for Seventh Straight Month (dailyfinance.com)
• Household Debt Falls for 9th Quarter (economix.blogs.nytimes.com)
• Consumer Debt Rises, but Credit-Card Use Falls (blogs.wsj.com)

Trompe L'Oeil Budgets

Image via Wikipedia
There is no doubt that there is a need for our country to manage our budget and trade deficits more prudently. The problem with election agendas is that, inevitably, we end up with policy changes that are more for show than substance.  The current budget proposals are in essence "more of the same."  There is a great will for change but no one, including "we the people," is prepared to have the difficult conversations.  We cannot make the difficult decisions until we talk about the important issues. The economist article below has an excellent discussion of the details.

It's a New Day

 Image by Getty Images via @daylifeThe burgeoning freedom and democracy in the Middle East/North Africa is truly an opportunity to shake out much of the corrupt infrastructure in developing countries in their natural resources industries. This is a new day for multinational corporations and their involvement in the oil rich region. There will be a new set of players and many more voices and interests at the negotiating table. Corruption and collusion cannot hide for long in the light and transparency of openness.

Labor Flux

The global economy is moving, more rapidly than most of us could have imagined 10 or 20 years ago, towards a true competitive advantage model. But these falling barriers to labor flows create other dislocations. Even at first glance, it is clear that labor as an input to production has radically different characteristics than natural resources. We typically think of the issues of structural rigidity because of individuals attachment to their countries and families, as well as, language barriers. In this post EU environment, barriers to labor flows have been rapidly declining, but there have been significant social costs to these freedoms.