Word: accountant
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Dates: during 1990-1999
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...better economic times in Europe and Asia prompt an orderly departure of foreign money for promising opportunities at home. But this would still reverse the wealth effect and stanch U.S. consumption. No board member dissented from the view expressed by Lipp that debt-fueled consumption and big current account deficits were "a sword of Damocles." Though that danger may not be immediate, Hormats noted, it is probably behind efforts by U.S. Treasury Secretary Robert Rubin and Deputy Secretary Lawrence Summers to push for Europe and Japan to do more for global economic growth: "I think they see this vulnerability coming...
...most worrisome problem is the trade deficit, now running in excess of $150 billion annually. The humming U.S. economy is sucking in imports, while struggling economies in Asia and Latin America have cut their purchases of American goods and services. The result is a current account deficit--the measure of net dollars owed to other countries--of some $226 billion in 1998. Courtis says if the U.S. runs a current account deficit of 2.5% of GDP--lower than his 1999 estimate--for the next four years, "the U.S. net external debt in 2003 will be over $2 trillion, which...
...most serious threat to world financial and economic health is a collapse of the U.S. dollar, which could come when foreign investors finally deem the current account deficit to be out of hand. That would make the U.S. less attractive to foreign investors and depress the stock market, turning the wealth effect that has made Americans so willing to buy on credit into a bad hangover. And if Americans curtail their buying, that will kill the main engine of recent U.S. expansion, which in turn will stunt other economies, particularly Asian and Latin American countries that aim to build their...
There are no easy answers to the mounting U.S. current account imbalance. The normal strategy would be for Washington to raise interest rates, but that would create a vicious circle: depress the stock market, diminish consumer spending and drive foreign money away. Lipp hopes the threat of a recession would provoke quick agreement among the G-7 countries to cut interest rates and taxes. But Hormats cautioned that in the U.S. there's no prospect of easy accord between Clinton and the Republican Congress on cutting taxes or, even harder, deficit spending. Expect a lot of Washington jawboning this year...
...personal life after years of declaring that the personal is political, Republicans who deplored Clinton's lies or affairs but then were confronted with lies or affairs of their own, presidential spinners who condemned the politics of personal destruction even as they practiced them--all were called to account. If there is a lesson for future candidates, it may be not that only saints need apply or that rising markets erase all sins, but rather that honesty is worth more than practiced perfection--there will be no secrets anyway, and you can trust the people to judge wisely...