H A R B I N G E R S
HARBINGERS is the “what’s new”
or content section of this web site and
focuses on economic and other information and indicators. It is updated
periodically for your information with current business
cycle related economic events at
the top. The beginning of each trend is designated
bold red. Your feedback is earnestly solicited.
It is important to include the usual warning that the following summaries of
trends, data, and analysis are for your information.
These summaries are based on reports from many sources and are not
specific advice on anything. These summaries are based on
what was and may still be occurring. These summaries are not
guarantees of future performance. Regardless, it is hoped that you find this
THE PANIC OF 2008--From the late 1830s through the early 1900s,
there were numerous banking panics in the U.S. Typically these occurred
when word spread that one or more banks in a community did not have enough reserves, that is cash or
other assets such as gold or silver, on hand to meet demand. The banks'
customers, depositors, rushed to the bank(s) in a panic to withdraw their funds,
then rushed away from the banks until confidence returned.
Many of these panics spread around the country and there was no Federal
Reserve to intercede. Sometimes the results were rather abrupt declines in
GDP lasting a year or more.
TODAY'S ROLE REVERSAL--In 2008 the banks, with new
reserves supplied by the Federal government's Troubled Asset Relief Program (TARP), appear to be almost rushing in a
panic away from their prospective customers...all the businesses and people who
want to borrow. Panic or near-panic aptly describes the mood in Washington and on
Wall Street in trying to deal with this financial crisis.
ECONOMY--Normally economics determines politics and when the two conflict,
economics usually prevails. The Panic of 2008 appears to be different in that
political decisions are going to impact the economy for sometime to come.
Among the main concerns are:
1) The enormous amount of debt being created and how it
will be managed including future inflation. As the downturn accelerated during
the last few months of 2008, tax revenues for the federal government started
declining. Reports in March, 2009, show a significant decline in tax receipts
for the U.S. Government. Two possible implications of this are: A) This
downturn may be deeper than "officially" anticipated; and B) The federal deficit may remain larger for a longer time than originally
anticipated. This suggests the possibility of another cycle of inflation
followed by a Fed "induced" recession to "cure" the inflation (a la' late
1970s-early 1980s). Such inflation could start from an excessive expansion of
the money supply to combat the Panic of 2008 and its aftermath. That could
resurrect the commodity bull market that appears to have ended in late 2008. (See COMMODITIES near the bottom of this link.)
2) Whether the social safety nets, bailouts,
and other measures decided upon by the political process will actually do
the economic jobs those measures are intended to do. This includes both the
timeliness and quantity of these measures. For instance, banks have been
reluctant to lend their bailout (TARP) reserves. Yet a major purpose of those funds
is to promote borrowing (spending) by consumers and small businesses as well
as to help prevent foreclosures.
3) Whether U.S. politicians opt for what
perceived by the U.S.'s trading partners as protectionism.
4) The increasing role
of the Federal Government in the private sector. This portends a form of
5) Will the public
works or infrastructure improvements being planned, and which virtually all
observers agree is needed, have effective quality
controls in place for both the finished products (workmanship, materials,
etc.) and the management of these projects (bidding process, etc.).
6) That some of
the stimulus spending is not set to start for many months or more. This
suggests that either the delayed portion of the bill is not "true stimulus"
(infrastructure spending and tax breaks being examples of "true stimulus"),
that the stimulus package will not be sufficiently self-sustaining to keep a
recovery going so a boost will be needed later, or there is not yet publicized thinking that this downturn is going to continue
into 2010. There is also the risk--noted below under "Stimulus, etc."--that
recessions have a habit of ending while efforts are still being made to fight
them. This can have inflationary consequences.
WHAT'S NEXT--Long before the
was made in late 2008, and even before the Panic of 2008 began, many if not most Americans
realized the country was in a significant economic downturn. However, this recession is different than any
in at least 25 years (the recession of 1982) in that this one, like 1982's, is consumer led. The likelihood
is pretty high that until a large part of the inventory of unsold homes are
purchased, residential construction is going to remain very slow and that will keep a damper on overall
WHERE DID ALL THE MONEY GO?--This was a common question during the
Great Depression and is being asked again today. Part of the answer
is to distinguish between MONEY, INCOME, & ASSETS--
MONEY consists of
cash and checks though for many purposes near monies such as savings accounts
are also included. Loans are a major source of checking account balances.
THUS, when banks do not lend for whatever reason(s), money supply does not
grow as fast it would have otherwise.
INCOME is the
amount of all earnings.
ASSETS other than
money are items of value that are not money or near money and can be tangible,
such as real estate, or intangible, such as stocks and bonds.
In most conversations as
well as in some of the media, these three terms are used interchangeably.
Generally, money disappears when checking and similar accounts are reduced.
The reluctance of banks to lend can significantly reduce the growth in the money supply.
Simply put, the values of
these non-money assets (see mortgages just below) are their market prices. When rising asset values (e.g.; the
expected increase in the price of homes) are
used in lieu of money, this is a form of leverage.
Excessive leverage leads to financial bubbles. Usually bubbles burst with
incredible speed and ferocity and the process of
deleveraging abruptly begins. In essence, that is what
precipitated the Panic of 2008 and it will take some time for people,
businesses, and financial institutions to adjust to the realities of
deleveraging. After that, though probably not "right after," a recovery should begin.
MORTGAGES can be fine as
assets. However, like anything else, when a lot of them are sold in bulk there are going to be some bad ones. A simplified analogy that comes
to mind is that there are a few rotten apples near the bottom of every barrel
that no one sees when they buy the barrel. A prospective buyer tries
an apple off the top, discovers how good it is, buys the barrel, takes a few for
himself then sells the remainder of the barrel at a profit to another apple
lover. This process repeats while the rotting ones are spreading their rot.
Suddenly someone realizes the barrel is full of rotting apples and refuses to
buy it for anywhere near what the last buyer paid, so the price collapses and
with it the value of the last apple lover's asset. Word of this spreads
and soon all those who have barrels of apples discover the same problem with
their barrels. In short order many people find themselves with declining asset values
and realize they each have a loss on their apple investments.
year bull market
for commodity prices taken as an average appears to have ended. The Panic of
2008 and the accompanying worldwide recession have depressed demand for most
commodities. However prices of some commodities are likely to remain volatile
and not necessarily depressed by recent historic standards, as these prices
continue responding to economic and other news.
for instance, has a centuries long tradition of being a hedge against fear,
uncertainty, and inflation, so will not necessarily follow other commodities down.
more discussion of commodities, please see point 1B) above on the Panic of
2008 and also below several paragraphs on commodity price cycles.)
WEIGHTY RECESSION?--Many health experts fear that
this recession will trigger even more obesity in Americans. As personal income
declines, people look for ways to spend less
foods relatively high in fat and refined carbohydrates tend to be less
expensive than healthier foods. McDonald's, for instance, appears to be
continuing its "recession-proof" history. HOWEVER, health experts say
are some healthier solutions but those require consumers to do some research
to take into account their individual circumstances.
GENDER BENDER--One of the consequences of the
current recession is that both absolutely and proportionately men are bearing
the vast majority of the brunt of the job layoffs. Enough of the brunt so that
the number of women in the U.S. workforce may exceed the number of men for the
first time in our country's history. This appears to be less a function of EEO
than of where most of the layoffs are occurring. Manufacturing and
construction are being hit very hard by layoffs. Both sectors account for lots
of jobs and both are male dominated industries.
social consequences of a majority of family breadwinners being women is
unclear for at least a couple of reasons. One reason is that no one knows how
long this trend will continue. How long this role reversal lasts will be very
important in determining what the social consequences are. A second reason for
the uncertainty is that assuming the recession deepens or spreads, layoffs
will start occurring in other sectors of the economy where there are a lot
more women who may be laid-off and that may have an offsetting impact.
UPTURN IN EDUCATION, TRAINING,
and LIBRARIES--Evidence suggests that in at least
one respect the current downturn is like
every downturn the U.S. economy has experienced starting at least as far back
as the 1973-1975 downturn. That similarity is the large number of people
engaging in constructive downtime management by furthering their education and
training. Many study towards or achieve their GEDs (General Education
Development), enroll in community colleges which tend to be more applied than
academic, work towards other degrees or diplomas, or take other steps to
assure that when employment picks up, they are prepared and qualified for new
Libraries, too, are
noticing a significant increase in business. Americans continue looking for
ways to pare costs without adding to the sacrifices they are already making.
"Being there" for reading, information, and even computer usage will probably
help libraries when they ask for tax increases after recovery begins.
MALLED--One likely casualty of
the recession and also of excessive expansion is shopping malls.
A total of three new malls were opened in the U.S. since the beginning of
2005, and none of those were opened in 2007 or 2008.
So 2009 begins with something over 19 square feet of shopping space for each
American. Some experts figure this number needs to drop by a third for the
amount of mall square footage to be sustainable. This is independent of the
big box retailers with their freestanding stores. Regardless, if those experts
are generally correct, retailing in the U.S. is about to undergo some
DIFM--Many people are familiar with the acronym
DIY for Do-It-Yourself. As the impact of the downturn continues, one would
expect an increase in DIYers or at least in people trying to make repairs and
improvements for themselves. Repairs are often cost effective ways of extending
the useful life of objects from houses and cars on down the complexity
scale. HOWEVER, for various reasons many of the repairs needed to extend the
useful life of these objects are beyond DIY for the owners or users of those
objects. These people realize that even though they can not make the needed
repairs themselves, having a professional make the repairs is worth while. So a new acronym has cropped up for a growing group of customers who
are helping the repair industry thrive in these difficult economic times:
DIFM or Do It For Me.
A variation on DIY is
GIY or Grow it Yourself. Gardening retailers that sell seeds for foods
easy to grow at home (tomatoes are a favorite) are experiencing
growing sales and profits. In April, 2009, many of these retailers are reordering the
favorite fruits and vegetables of their customers. Some customers are even
buying more flowers to help their gardens look better.
STIMULUS, ETC--The '73-'75 and "81-'82 recessions have so far been the
longest in the U.S's post World War II history, each at 16 months
(respectively: Nov.,1973-Mar.,1975 and Jul.,1981-Nov., 1982). As the current
downturn concludes its 15th month and shows no sign of ending, Congress passed
and the President signed the much discussed stimulus bill (more formally known
as H.R.1 or The American Recovery and Reinvestment Act of 2009).
One interesting note on
recessions showing no sign of abating is that in his 1983 State of the Union
address, President Reagan (long the opponent of more government action) made
the following comment "We who are in government must take the lead in
restoring the economy." At that point, the recession had been over for about
two months but apparently there was not yet any evidence of that. (Please also see point 6, above, under Political Economy.)
STIMULUS guidelines are
emerging on how state and local governments can spend their shares of the
stimulus monies: The six rather broad categories of spending are:
ENERGY & ENVIRONMENTAL
Apparently each project must follow the
infrastructure model or analogy and be "shovel ready" within 180 days of
a project's application being submitted to the appropriate department.
Please check here regularly as this historic economic saga continues unfolding
and also as new, other unrelated trends are added below. Current business
cycle developments will be added above this paragraph and non-business cycle
developments will be added below this paragraph with the most recent first. Thank you.
RCHES ON--Many business consultants and textbooks
advice that firms should continue marketing during recessions. Two recent
examples of this are:
TROPICANA--This division of PepsiCo repackage its Pure Premium products
in January, 2009. Now in March after intense and negative consumer feedback,
Tropicana is reverting back to its previous packaging.
MARS CANDIES--Starting in late 2008 or early 2009, Mars candies
will phase in new packaging for its products including M&M's and Skittles. The
new packaging will show nutritional information, which is something Mars says
it regards as important. Other Mars brands include Uncle Ben's Rice, though
that new packaging may not take effect until sometime in 2010.
Quite. BUT the assumption of continued high costs for fuel and other
transportation expenses does have American importers rethinking their supply
chains. This is particularly true for products with long or multi-stop routes
from their manufacturing site(s) to the U.S. Similar concerns are also
occurring for strictly domestic products within the U.S.
SOUTHWEST: AN EXAMPLE OF THE IMPORTANCE OF COMMODITIES AND HEDGING--The
importance of all the space in this section of this web site devoted to market
mechanisms and commodities might best be seen by Southwest Airlines. In
mid-2008, virtually every commercial airline in this country was operating in
the red despite many cost saving measures, great inconvenience to their
customers, and various surcharges. Southwest may be the lone exception.
Southwest was paying approximately $51 a barrel for petroleum when market
prices were well over twice that. Southwest accomplished this by
hedging (see just below). Southwest
saved over $500 million in the second quarter of 2008 and as a result reported
an income (net of special items) of approximately $120 Million. The fuel
hedging made the difference between profit and loss.
HEDGING is basically buying contracts
to purchase (or sell) something at a given price within a given time frame.
The cost of that flexibility is relatively small.
CERRRADO & EMBRAPA--The Cerrado is an area of Brazil that is larger
than Alaska. Ten years ago the area was basically wilderness and its soil
unsuited for agriculture. Then EMBRAPA, which might be called Brazil's
Department of Agriculture, with some American help found ways to make the Cerrado's soil fertile. That agronomy plus a great growing climate has turned
the Cerrado into a major supplier of corn, soybeans, and wheat. Many American
family farmers operate farms in the Cerrado as well as their original family
farms in the U.S. Their farms in the Cerrado are a few times or more larger
than their America farms and generally more profitable. Some of the Cerrado's
bountiful corn will be turned into ethanol. Of course the real
profitability test will come when the commodity bull market runs its course
and world grain prices drop.
SLINKY--Over 300 Millions Slinky's have been produced since the
first ones in late 1945. Yet the manufacturing process is essentially
HOW ECONOMIC THINGS WORK--"Out On The Farms," was an
expression used by politicians, economists, and others who wanted to
focus attention on what was happening in rural America. That was back
when America had a significant but declining farm population. As America
became less and less
that expression gradually disappeared. HOWEVER, what's happening out on the
farms is very appropriate for much of what we see in the U.S. and other parts
of the world in 2008:
The current commodity
bull market (please see several paragraphs below) is being fueled in part by
higher petroleum prices. Petroleum is essential to
so many products, such as virtually all synthetic materials, in addition to
fueling both transportation and equipment including farm machinery. This
higher price for petroleum which is driven by worldwide demand for petroleum creates incentives for substitutes such as ethanol.
Ethanol is--for now--made from corn. Corn is not only a basic grain for human
consumption, it is also a very important ingredient in other foods, for
instance feed for animals raised for slaughter. As the price of corn rises
because of the greater demand for ethanol, farmers are encouraged to plant more corn and less of
other products such as soybeans, which has numerous uses including bio-diesel. However, the
worldwide demand for corn is rising faster than the global increase in the
supply of corn. This results not only in the rising price of corn but also
rising prices for the now
lesser produced but still very important other crops. The cost of raising the
animals is also increasing as is the cost of transporting everything. Foods
seemingly not in this loop are also more expensive. One example is anything
sweetened by "high fructose corn syrup." The result is inflation at the
supermarkets as well as for everything made from a petroleum base. These cost
get passed on generally and the result is the inflation Americans are now
This kind of
cycle typically ends when markets self-correct imbalances in supply
and demand. That process often involves many temporary corrections in both
directions. Some of those can be very abrupt and steep in both direction before a
somewhat longer lasting correction occurs. For example, if the price of
petroleum products, such as gasoline, rises too much or too fast, people and businesses
will change their consumption habits to reduce their demand for petroleum
products (e.g.; drive slower). Consequently, the price of petroleum and
its derivative products will drop. As noted further below in the section on commodities,
many of these price drops are temporary and higher prices may follow.
Depending on how numerous
critical details play out, technology may prompt the end to this commodity
bull market. Cellulose based ethanol will probably start becoming commercially
available in the next ten years as will numerous other non-OPEC sources of
petroleum and non-hydrocarbon fuels. Development of those alternatives is
being accelerated because of the incentive provided by the higher petroleum
An additional factor is
China, the world's second largest consumer of petroleum. When the intense
preparations for the 2008 Olympics are over, China's demand for petroleum may
drop significantly at least for sometime. If rebuilding from the natural
disasters in China and other parts of Asia gets moving, that could offset the
decline in demand for petroleum caused by what will likely be the rather
abrupt end of Olympic construction.
NOTE: This analysis does not include the influence of
either U.S. government policies, such as price supports for farmers to keep
producing corn or the declining value of the dollar relative to other
advocates complain about "payday" loans and also about "instant money" loans
from tax preparation services, to name just two well-publicized sources. Yet
pawn shops which serve a similar purpose and charge very high interest rates
have been around since ancient times. WHY? Because almost since the invention
of money, people have had liquidity problems and have been willing to sell
assets at deep discounts and go into debt to get through trying times.
ENGLISH--According to some reports, India has over 350 Million
people who speak English. That's about 50 Million more people than live in the
U.S., which is generally regarded as the world's largest English speaking
experts agree that for the U.S., Baby Boomers are those Americans born between
1946 and 1964. THE REASON FOR INCLUDING THIS IS BECAUSE
experts differ on the range of birth years for Generation X and
Generation Y (Gen X and Gen
Y). AS USED HERE Gen Xers are those born between 1965 and 1982; Gen
Yers are those born between 1983 and 1998. Millennials are those born
from 1999 to some point not yet determined but very likely to be in the first
decade of the 2000s. NOTE: Because the term millennial revolves around a
specific point in time, the millennial generation will likely
wind-up being closer to half the traditional
nearly 20 year time span for a generation.
LEASING VANCE PACKARD--The
Status Seekers by Vance Packard (1961) explored a
nation thought to be obsessed with “Keeping up with the Joneses.”*
Today a trend is for the more affluent--especially Gen Yers and younger Gen
Xers--to not just keep up with the proverbial Jonses but to try to stay ahead
of the Jonses.
To help people achieve
this goal, some companies are now specializing in leasing products such as
prestigious cars and designer clothes and accessories. The leases are
typically fairly short-term. For instance, a lessee may have a few cars during
a year; a woman may have a different designer purse and jewelry for each of
several events. The leased products are usually not new except to the lessee.
However, for a premium one can lease products that actually are new—-not just
new to the lessee.
* FYI: The expression
”Keeping up with the Jonses” dates back nearly a hundred years. HOWEVER, the
recognized behavior pattern dates back at least to the 1700s, and probably
much farther back than that.
above-noted Gen Yers and Gen Xers also have an increasing bent towards
entrepreneurship. So far, an unusually high percent tend to be successful as
entrepreneurs. This entrepreneurial
trend is seen in both the large number of:
► Colleges and even some high schools offering courses in entrepreneurship
College and pre-college students profitably replicating the garage and dorm
room start-up success stories of the past 25 years. While
it is unreasonable to assume there are many Microsofts
now being formed,
there are a significant number of new firms
making enough profit to
provide (risk-adjusted) their founders with enough security
that they do not seek what used to be perceived of as the security
provided by large corporations.
consequence of this trend towards entrepreneurship is that larger American
businesses have a smaller pool of qualified Americans from which to fill
critical positions. A common GenY view is that loyalty is a thing of the past
so do not become dependent on a large corporation...be self-sufficient
even with the risk that implies.
TWO NEW YORK CITIES--Imagine two New York
Cities popping up every year. Approximately one percent of China's population
moves from rural areas to urban areas each year. One percent of 1.3 Billion is
13 Million, roughly twice the population of New York City. With this kind of
pressure and dynamic demographics, China is likely to be in for a lot of
changes in how they "do things."
the country most Americans think of when "off-shoring" is mentioned is
off-shoring some of its off-shoring jobs. There is evidence that India has
reached a point of where it is not necessarily the low cost provider of
services outsourced to it. To stay competitive with countries such as Vietnam,
Indian firms outsource the work outsourced to them. As American firms discover
this, they are pulling some of their contracts, primarily because the American
firms fear loss of control.
DOPPLEGANERING—-A form of CULTURE JAMMING. Usually
this is characterized by converting an ad or logo to some negative message
about the item being advertised or represented. One actual example: A picture
of a sickly Joe Camel in a hospital bed and the caption “Joe Chemo.” On the
positive side, a brand is usually doppelganged
only if it is strong.
FARM SHORING (aka
that less than a decade ago were big on off-shoring or outsourcing to foreign countries are having
second thoughts about those practices. For a combination of reasons including
especially customers' dissatisfaction which leads to cost-ineffectiveness,
companies are finding that some rural American communities do indeed have
trainable, reasonably-priced work forces.
TRANSPORTAION—-Companies are rethinking the cost
effectiveness of commercial air travel. Increased security measures add costs
in terms of both time and money. Examples of such costs include not only the
obvious periodically very pricey fuel, but also security surcharges (by
whatever label is used). Alternatives for business travelers include:
1) For those whose
employers can afford it, private jets. Leased private jets are a growing
2) A change in the
break-even point where air travel is less cost-effective than ground
3) Increased use of high-tech telecommunications for
conferences, seminars, etc. that would formerly have been attended in person.
Depending on fuel costs, this choice may face the slowest growth of the three.
Simply put, it is very difficult to
replace the critical human factor of private, face-to-face conversations.
NURSING BOOMERS—-2006 is marking the first year Baby Boomers hit 60. So
increasing demand for nursing homes and comparable facilities is an obvious
trend to expect to continue for some years. HOWEVER, there is surprising
evidence that instead of going to nursing homes, Boomers are turning their own homes into their nursing homes.
1) Health care
providers, such as nurses, may have to be increasingly mobile.
2) Demand for home health care products should
continue to grow.
3) Demand for
nursing home capacity may diminish in favor of modifying existing homes
occupied by their Boomer owners. Modifications may include adding a
groundfloor master bedroom and bathroom, closet space, and widening doorways
to accommodate mobility aids, such as wheelchairs.
LIVING APART TOGETHER
has been a growing demographic trend among both singles in
a monogamous relationship and married couples is. The
relationship continues but the partners live in their own dwelling units.
This trend may start to reverse or at least diminish if there is a
downturn--at least a severe one--in the economy.
ARTIFICIAL SUN--During 2006, China
is expected to start its experiment with an artificial sun. This is basically
a self-sustaining fusion reactor. The reactor generates more tritium (a
naturally occurring form of heavy hydrogen) than it consumes, thus becoming
COMMODITIES--Usually when commodities
experience bull markets, equity markets go the other way. To
be sure, commodity prices in commodity bull markets are subject to
both individual variances from the overall trend and very
substantial drops that may make it appear as though that
overall bull market is over.
It is also
important to remember that both the supply of and demand for commodities are
determined by global factors.
Individual commodities have their own factors determining
the supply of and demand for each commodity. Thus, each commodity operates as
its own market within the overall commodity market. This is comparable to
stocks tending to move as "sectors," and not necessarily as a single stock
market. Often all are more or less in unison but many times that is not the
case. For instance, just because a commodity price index is rising and the
price of corn is rising, that does not mean the price of lead will rise.
Historically, about the time most commodity investors believe
the overall bull market for commodities is over, the bull market surges
up and prices approach or surpass their previous highs.
The confusion occurs primarily because commodity price indices, like stock
price indices, tend to move in patterns and there can be long declines and
plateaus before another spike up.
Almost concurrently with such commodity price behavior,
equity markets may experience substantial increases that wind-up
becoming “bear market traps.” A
bear market trap occurs when equity assets look like they are in a new bull
market but are actually still in a longer term bear
There are explanations for
all this which are not included here.
HOWEVER CONSIDER THE PAST
The last three commodity bull markets (shown in green below in
Exhibit 1) have lasted 14-20 years. The current bull market
(also in green) began in the late 1990s. So by this approach, it should
last until at least through 2012.
year commodity bull market
It was approximately 10 years from the 1923 commodity price
peak to next commodity price trough
year commodity bull market
It was approximately 15 years from the 1953 commodity price
peak to the next commodity price trough
year commodity bull market
It was 16 years from the last
commodity price peak to the
commodity price trough preceding the current commodity bull market.
year commodity bull market?...
For commodity prices taken as
an average, the Panic of 2008 (see above) and
accompanying worldwide recession appear to have ended this commodity bull
market. This is similar to the recessions of 1982 and 1923 ending those
commodity bull markets.
HOWEVER, there are two caveats to consider: 1) Prices of some commodities are likely to remain
volatile by responding to economic and other news. Precious
metals and gems, especially gold, have a centuries old tradition of
being wealth's safe haven in times of trouble, uncertainty, or inflation.
Such troubles and uncertainties do exist now and likely will for at
least the short-term. and
Referring to the discussion of the
Panic of 2008 (above, near the beginning of this link) if inflation resumes,
perhaps as a result of official policy, this commodity bull market will be
seen as merely taken a respite and not as having ended. The respite and
continuation of this commodity bull market would--from a statistical
perspective--be more consistent with previous commodity bull markets than
would be an end to this bull market after only 10 years.
EXURBS—-are populated areas located beyond the
traditional suburbs. Exurbs do not have the traditional center or focal
point, so typically do not sprawl out from a center city. Demographically
speaking, exurbs are the fastest growing areas of the U.S. This
growth is regarded as important enough that in 2003, the U.S. Census Bureau
designated some exurbs as Micropolitan
This trend is already having more of an impact
than is commonly realized on: where people live, where businesses locate,
telecommunications, and politics.
PEDAGOGICAL PENDULUM--Remember the "free speech
movement" from the Sixties? A number of the students involved in that
movement became significant players in American academia, and their views
have had a major influential on academic output. Now approximately 40 years
later, many of those persons are retiring. Will they be replaced by
individuals of similar or different persuasions? The answer will likely have
a significant impact on the coming generation or more of American college
students and how those students view both this country and the world.
McPEACE--According to Thomas Friedman in his book The
Lexus and The Olive Tree, no two countries that have McDonald's have been
to war with each other after a McDonald's franchise was established in each
country (civil wars and border conflicts excluded). Friedman's thesis,
greatly compressed, is that by the time opposing nations have large enough
middle classes to support McDonald's franchises, the "opportunity cost"
of going to war is too high in each of those nations.
INTERNET GAMBLING--According to various sources, including Barron's
and The New York Times, in 2004 Internet gaming worldwide was
estimated at over $7 Billion, with approximately half coming from Americans.
Yet Internet gambling remains illegal in the U.S. Thinking back to
Prohibition, one might wonder for how long that pretty much unenforceable ban
will continue. Since 1996, the number of web sites, all located outside the U.S.,
offering Internet gambling grew from 30 to roughly 1,800. Card games, such as
poker and blackjack are currently the dominant
type of Internet
gambling. HOWEVER, just as technology played a major role in breaking down
other barriers, so it is also making Internet gambling attractive to more
than just card players. Slot machines are a prime example of that. When the
objective is gambling, as opposed to the entertainment atmosphere of a
casino, people will realize they have more money with which to gamble if they
don't have to pay for gas, food, parking, and sometimes lodging. That could
spell serious competition and diminished revenues for state lotteries as well