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The Biz Roundup April 4 & 5

Obama unveils a radical new direction for the world economy called “common sense.”

On Wednesday, I wrote about the undervalued role that trade imbalances, and the resulting capital flows, played in causing the current financial crisis. President Obama had raised the issue in a press conference Wednesday, catching some of his own advisers off guard. On Friday, Jon Ward of the Washington Times followed up with a necessary question at a press conference . . .

“As we emerge from the crisis, though, we’re going to have to take a look at how do we ensure — a term that Chancellor Merkel spoke quite a bit about at the summit, and that is sustainable economic growth. And in order for growth to be sustainable it can’t be based on speculation, it can’t be based on overheated financial markets or overheated housing markets, or U.S. consumers maxing out on their credit cards, or us sustaining nonstop deficit spending as far as the eye can see.

So once we stabilize the economy, we’re going to have to start bringing these huge deficits that our government is running, we’re going to have to start bringing those down.

Families are going to have to start making more prudent decisions about spending, and increasing their savings rate. Businesses are going to be making investments, and we want to spur as much investment as possible, but the whole point is to move from a borrow-and-spend economy to a save-and-invest economy.”

(“Obama Jumps on the Elephant, Speaks Out About The Giant Pool,” Time, April 3) “Save-and-invest.” Isn’t that a socialist idea? (Glen Beck will probably say so.) And, just to get off the sarcasm here, don’t you think, dear reader, that the best way to become a “save-and-invest” economy is for the government to do everything it can to empower and enable entrepreneurs?


I told you — here in this blog — that the next incarnation of Tim Geithner would be Blood-Axe Tim. It’s about time, too.

“When in the future — or I would say, if in the future — banks need exceptional assistance in order to get through this, then we’ll make sure that assistance comes with conditions, not just to protect the taxpayer, but to make sure this is the kind of restructuring necessary for them to emerge stronger,” Mr. Geithner said on CBS’s “Face the Nation.” “Where that requires a change of management and the board, we will do that.”

(“Geithner Says Government Would Remove Bank Chiefs if Needed,” Wall Street Journal, April 5) Another one of those craaaazy socialist ideas coming out of the Obama administration: if you’ve done your job badly and expect taxpayers to invest in your company, then expect to lose your job.


The rapidly increasing empty spots in malls spell o-p-p-o-r-t-u-n-i-t-y

Downscale chains that landlords once kept out of shopping centers are suddenly being shown the welcome mat. Temporary stores are popping up. Once-small retailers are being invited to take over big spaces, while the strongest national chains are seizing the moment to move into new cities at low rents. And vast mall spaces formerly occupied by department stores may soon be carved up or turned into community colleges and dance studios. . . .

As more stores have closed, mall vacancies are at their highest point in almost a decade, according to Reis, a research company, which said the vacancy rate at the end of 2008 was 7.1 percent, compared with 5.8 percent at the end of 2007.

(“Malls Test Experimental Waters to Fill Vacancies,” New York Times, April 4) Everytime I go to the local mall here in L.A., I feel like I’ve been dropped into the retailer’s equivalent of The Neverending Story as the Nothing continues to eat away into the stores. At the same time, like the Internet in the 90′s, we’re at a revolutionary crossroads in which mall retail space can rapidly evolve into something very, very different. The opportunities for thinking about the commercial use of mall space is wide open right now with frightened mall owners willing to take lower rents . . . or pay someone to generate traffic. The current model: retail stores, food, a dash of video gaming, and maybe a whopping dollop of cinema — is failing.

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