10 ways the new economy will look different
From the rise of the tightwad to the decline of the Sun Belt, American values and industries will be reinvented as the nation comes out of the worst recession since the 1930s.
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Similarly, retirees may have to dip in and out of the work force, especially if their retirement funds were too heavily invested in stocks. Workers 55 and over may have to work longer than they had planned, as they see the date at which they can afford to retire recede before them.Skip to next paragraph
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7 'GREEN NEW DEAL'
The environmental and renewable-energy sector could be the computer industry of the early 21st century: a powerful engine pulling much of the rest of the US economy behind it. According to the Obama administration, the just-passed stimulus bill will fund 5 million new green jobs in wind and solar power, clean coal, and fuel-efficient vehicles, with a $45 billion investment over three years.
One of the most articulate proponents of this sort of revolution is the influential New York Times columnist, Tom Friedman, who insists that perhaps the most important thing the US can do is make itself into the world leader in energy-efficient products and clean power systems.
The huge challenge of trying to build an emissions-free power grid "could be the biggest transformative concept that's come along in a long time," Mr. Friedman says in a video posted on the New York Times website. The effort might equal "a green New Deal to not only reconnect us with the world and to reconnect us at home, but to really propel us forward economically, scientifically, educationally, industrially, into the 21st century," he says.
Not everyone buys this broad vision, however. In particular, critics see problems in the transition to this new plug-in world. Sure, jobs will be created by green industries, but jobs will be destroyed as well, says Michael Levi, director of the Program on Energy Security and Climate Change at the Council on Foreign Relations.
Employment in the wind-farm industry may go up, for instance, while employment at petroleum refineries, or coal mines, goes down. In addition, government subsidies may result in more wearing of the green than on St. Patrick's Day, as all sorts of existing industries try to define themselves as environmentally friendly. "I have trouble seeing how this becomes the central driver of the economy," says Mr. Levi.
8 STODGY IS CHIC
For years prior to the recent crash, Wall Street celebrated complexity. Securitized subprime mortgages and credit default swaps were seen as the quadruple toe loops of finance – fancy jumps that guaranteed success. Now banks just want to skate around upright in a circle. Stodgy is good. Using borrowed money to do stuff nobody really understood turned out to be very, very bad.
There's no better indication of the rise of boring than the move last September by Goldman Sachs and Morgan Stanley to change their status from high-flying investment banks to traditional bank holding companies. That gave the storied pair of Wall Street firms easier access to credit to help them ride out the worst of the financial crisis. But it also subjects them to greater supervision by bank regulators and almost ensures they won't come close to their astounding profits of past years, even after the economy recovers.