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Paul B. Farrell
June 8, 2010, 12:01 a.m. EDT · Recommend (3) · Post:
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American investors: predictably stupid losers
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Apple still manages to wow with new iPhone 4
By Paul B. Farrell, MarketWatch
ARROYO GRANDE, Calif. (MarketWatch) -- What do we do now, oh great Zen master? "When you get to a fork in the road, take it," replies the wise one, Yogi Berra, greatest Yankee catcher of all time.
His sage advice to economists, politicians and investors everywhere: "The future ain't what it used to be. We made too many wrong mistakes. You've got to be very careful if you don't know where you're going, because you might not get there."
Millions of destitute Indian families don't qualify for food subsidies or housing assistance because they are not officially considered poor. Now the government is reassessing it's poverty levels. WSJ Amol Sharma reports.
At the crossroads: Growth! Capitalism's most sacred commandment -- "grow or die" -- may itself be on death row. With us since 1776, it's being challenged by a new reality that's flashing relentless warnings of an emerging new command from critics, contrarians and eco-economists: "Grow and die." Yes, you heard right.
"Grow or die." Traditional economists say we need 3% GDP growth to support 100 million new Americans in the 21st century. Drill, baby, drill. New jobs to fuel slow recovery. Worse, exploding growth demands as the rest of the world adds 2.9 billion new humans all chasing their unique American Dream.
"Grow and die." New eco-economists see Big Oil's destruction of our coastal economies, the rape of West Virginia's coal mountains, the unintended consequences of uncontrolled carbon emissions, and they ask: "When will economists, politicians and corporate leaders stop pretending world's resources are infinitely renewable?" Unfortunately, even the new eco-economists fail to factor population growth, the big 800-pound gorilla, into the equation.
Yes, we are all at a crossroads, all facing a dilemma, all confronting the ultimate no-win scenario: Growth is essential to support the global population explosion. Growth is also killing our world, wasting our planet's non-renewable natural resources. As a result, the "growth" mantra will eventually destroy civilization.
Put a face on this dilemma: Governor Bobby Jindal. Louisiana's greatest economic and ecological assets -- marshlands, coastal fisheries -- are being destroyed by capitalism run amok, Big Oil's greed. Yet Jindal's already telling the President to forget the oil drilling moratorium, forget new studies, forget regulations, forget restraining the Big Oil greed machine that got us here. Drill baby drill, now!
Yes, we're at the crossroads. This politician's a perfect example of the no-win scenario confronting all politicians, economists and citizens. He's on the horns of a very sharp no-win dilemma: We're damned if we grow. Damned if we don't.
"When you get to a fork in the road ... take it." But which fork? Flip a coin? Same result either way: Heads you lose, tails you lose. A no-win situation. Not just Jindal, Obama and America, but Greece, Brazil and China. All politicians, all economies, all trapped in capitalism's most sacred, rarely challenged, commandment: Growth or die. Growth has achieved biblical reverence, blinding us to its toxic collateral damage.
The difference between the mindset of traditional economists and the new eco-economists is actually simple: Traditional economists think short-term, react short-term, pursue short-term goals. New eco-economists think long-term. Initially this may seem overly simplistic, but it fits perfectly. Here's why:
Short-term thinkers: Traditional economists are highly-paid employees and consultants in organizations with short-term horizons -- banks, institutional investors, big corporations, think-tanks, government. Quarterly earnings, tax season, election cycles are more important than what happens a decade in the future. If they can't survive the next budget cycle, "long term" is irrelevant.
Long-term thinkers: New eco-economists see, think and plan for the long-term. They understand Yogi: "If you don't know where you're going, you might not get there." They know short-term thinkers are setting America up for more and bigger catastrophes than the gulf oil spill. The hit film Avatar is a perfect metaphor: By 2154, Earth's resources are exhausted forcing us to invade distant planets searching for new energy resources. Critics warn it'll happen earlier: United Nations and Pentagon studies predict population increases that will create unsustainable new natural resources demands by 2050.
The decision is yours. So sit back for a few minutes, take this little test. Read each of the following 11 news items from my clip files, edited for length. Several are hot off the press. A couple are from the winter months. The rest from earlier reports about growth, the 800-pound gorilla hiding in every nation's living room in every quarterly economic report, in the expectations that will make-or-break your own retirement plans.
Here's how to keep score: If you think the message of one of these edited news items supports long-term growth, give it three points. Two points if it's neutral. And if it favors short-term growth plus has faith that technology and the American Spirit will take care of the long-term, add one point. Your total score will be between 33 and 11.
1. "Most new jobs temporary ... unemployment high," Peter Morici report, June 2010
"The economy added 431,000 jobs in May but 411,000 were temporary Census jobs. ... Forecasters had expected 540,000 new jobs ... the big challenge is to keep GDP growing at least 3% to pull down unemployment."
Paul Farrell writes the column on behavioral economics. He's the author of nine books on personal finance, economics and psychology, including "The Millionaire Code," "The Winning Portfolio," "The Lazy Person's Guide to Investing." Farrell was an investment banker with Morgan Stanley; executive vice president of the Financial News Network; executive vice president of Mercury Entertainment Corp; and associate editor of the Los Angeles Herald Examiner. He has a Juris Doctor and a Doctorate in Psychology.
Apple Inc. Chief Executive Steve Jobs still managed to wow his fans with the widely anticipated new iPhone, called iPhone 4, despite a demo glitch on stage, writes Therese Poletti.
3:34 p.m. June 7, 2010 | Comments: 32
- BearFund | 1:32 a.m. Today1:32 a.m. June 8, 2010
"GDP growth fetish is bad for your money http://on.mktw.net/c0aXYt" 11:17 p.m. EDT, June 7, 2010 from MKTWFarrell
"American investors: predictably stupid losers http://on.mktw.net/bFle4F" 11:37 p.m. EDT, May 31, 2010 from MKTWFarrell
"Crash is dead ahead. Sell. Get liquid. Now http://on.mktw.net/949KT9" 11:49 p.m. EDT, May 24, 2010 from MKTWFarrell
"12 ways to cash in on the 'collapse of Eaarth' http://on.mktw.net/9pLdEs" 11:15 p.m. EDT, May 17, 2010 from MKTWFarrell
"Buffett defends Goldman, joins greed Conspiracy http://on.mktw.net/cz7uf0" 11:37 p.m. EDT, May 10, 2010 from MKTWFarrell
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