A brief and sharp-witted look at how atrocious the financial advice really is in American business magazines. And, unfortunately, not only are people drowning in terrible advice, they're quite possibly on the verge of being taxed on financial transactions, which will almost undoubtedly fail to have the intended effect (slowing thoughtless trading in things like derivatives) and will almost certainly have terrible unintended consequences (like cheating millions of hard-working investors out a portion of their retirement savings). And, all the while, stockholders will continue to be railroaded by pathetically weak boards of directors and pathologically disinterested mutual-fund managers into overpaying business executives for poor performance, which only further serves to steal from their just earnings.
And at a time when no one is paying attention to the news, of course. The government thinks taxpayers are going to lose $170 billion before all is said and done at the two government-backed mortgage lenders. $170 billion is twice the value of the entire state economy of Iowa. And Iowa's about as close to average-sized a state and a state economy as a person can find, so that ought to put the size of this bailout in perspective.
The personal savings rate stayed at 4.7% in November -- practically a miracle when compared with the savings rates of the last 20 years. One of the key problems with the American economy is that we simply don't save like adults ought to. A savings rate of 10% is really about right for most individuals and households, and that was what we had until the 1980s. But then, savings plunged. Debt is what gets a household -- and a nation -- into trouble, and we've been living off debt for far too long. Anyone who wants to get a jolt of reality about the value of savings and patience ought to read up on some of Whitney Tilson's notes from Berkshire Hathaway shareholder meetings, at which Warren Buffett shares his wisdom for free. Buffett built one of the world's 25 largest companies in a single lifetime, and he didn't get there by inventing anything. Just patience and prudence. Related: Eight consumer brands that bit the dust in 2009.
Should politicians regulate what's on TV? Can city and county governments save money by merging? What's the best way to control big business? These and seven other big answers are answered inside.
