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Wealth of Nations

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  • Advice for AIG Executives

    Barrett Sheridan | Apr 10, 2009 05:03 PM

    It's Friday afternoon and there's little chance you're interested in another probing, insightful blog post, so how about a little satire from McSweeney's instead?

    To: AIG Executives
    From: AIG Corporate Security
    Subject: Updated Security Notification

    Due to a growing sense of public attention fueled by increased media scrutiny, AIG Corporate Security would like to highlight certain protective measures all employees can take in order to increase their overall safety and security. This memorandum is specifically tailored toward our top-level executives, and contains information unavailable to regular AIG employees.

    • Be mindful at all times of your surroundings, especially if you are surrounded by a large group of very angry people you do not recognize. These are taxpayers.
    • Be smart! In a "fight or flight" situation, it is almost always best to retreat. Do not take unnecessary risks. For many of you, this will be impossible.

    Read the rest here.

     


  • If Jobs Are Being Cut, Why Aren't Paychecks, Too?

    Rana Foroohar | Apr 10, 2009 08:51 AM

    As anyone who works in New York media or finance can tell you, mandatory staff pay cuts are becoming as common as layoffs (though we here at the WON blog are pleased to say that we've faced neither during the course of this financial crisis -- at least not yet!). Yet, these industries are actually exceptional -- one of the mysteries of this recession is that overall average hourly earnings in the U.S. have continued to grow, even as jobs are disappearing right and left. Looking back historically at the 18 recessions we've come through since the first World War, worker's earnings have always fallen hard and fast. Except this time around. Employers may be rushing to cut headcount and the number of hours worked, but labor statistics show that they are still paying their people 3.4 percent more this year than last.

    What's going on? Nothing very good, according to economists Julian Jessop and Paul Ashworth at Capital Economics in London. In a research note out this week, Capital pointed out that while rising inflation prior to the onset of the crisis has kept American wages from collapsing, that same inflation has also cut the value of the dollar, and so decreased workers' spending power. In any case, there may be bad news ahead. Earnings growth tends to be a lagging indicator of economic activity -- meaning, unemployment has to rise a bit more before we see paychecks really start to shrink. Historically, when unemployment reaches 10 percent, wage growth falls to zero. So far, we're only at 8.5 percent -- here's hoping all that stimulus kicks in soon...


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  • Breakfast Buffet, TGIF, April 10

    Katie Paul | Apr 10, 2009 07:57 AM

    All Dug Up and Nowhere to Go: U.S. farm exports are feeling the recession's squeeze this year, a big shift for farmers who benefited from the rest of the world's perfect storm last year. While agricultural land prices in the States have remained solid (as we learned here a couple of weeks ago), the dollar's rise and world demand's slump have cut both the volume and the price of food exports--prompting worries that 45,000 jobs could be lost.

    Untouchable Engines of Growth: India's legions of Mushahar, or untouchables, may be the very folks keeping the country's economy from falling into the global recession pit, the WSJ says. Investments in rural states in recent years have equipped "Old India" to buoy stalling growth in new sectors like information technology and securities trade.

    Nukes and Terrorism, So 2008: Pentagon officials held the first-ever war game to prep for economic warfare, the Politico reports. Rather than bullets and bombs, the military brass--and their guests from the finance world--played out scenarios involving dollar dumps and gas prices. Think you can guess which country came out on top...?

    It's Not Me, It's You: New data on the ongoing export slump in China has reopened debate over how much the slowdown is externally driven versus homegrown. According to researchers at the Hong Kong Monetary Authority, the effects of the export sector are even bigger than they appear, and growing over time.