In the past 40 years, the U.S. economy has seen five different recessions. In most of those recessions, we lost about 2 percent of our workforce (including 2001). It then took about 2-3 years for the subsequent economic growth to regrow those jobs back to the pre-recession level. With the 2001 recession, it actually took about 3.5 years to regrow the jobs. Then, the 2008 economic disaster came along — we lost 8 million jobs (6 percent of the workforce) and we are not yet back to the number of pre-recession jobs (we’re now at 60 months and counting). So, broadly, what we’re seeing is that, when recessions occur, the job losses come more quickly. They are sharper (i.e. we see deeper job cuts), and it takes longer for the U.S. economy to grow enough to get back to pre-recession levels. Read more
Posts tagged ‘Larry Zimpleman’
$2.4 trillion. That’s what U.S. households spent on credit cards in 2012 – more than 10 times the amount employees contributed to 401(k)s and other private defined contribution retirement (DC) plans. While some of that spend was clearly for necessities, more than 100 million flat screen televisions shipped to the United States between 2010 and 2012. Seems that in the battle to build nest eggs, purchases like big screen TV’s often edge out savings. Read more
“An object at rest or in uniform motion will remain in that state unless an external force acts upon it.”
Newton’s First Law of Motion, 1687, translated from Latin
Isaac Newton was experimenting with inanimate objects when he discovered the laws of motion. But we in the retirement industry know only too well that these laws also apply to human nature. In an age when it is up to employees to take action in order to build retirement security, inertia has been a major impediment.
Fortunately, the leading behavioral economists of our time are showing us how to harness the power of inertia to work for retirement savers instead of against them. Read more
To the rest of the country it may seem like strange bedfellows: a state in the heartland of America on a first name basis with the world’s second largest economy. But for the past 30 years that has been the case between Iowa and China.
Since 1983, Iowa has been in a formal Sister State relationship with Hebei province, China.
While vastly different in language, culture and size—Hebei is 24 times bigger than Iowa in terms of population (72 million vs. 3 million)— over the years the cooperative agreement has fostered friendship, understanding and trust as well as exchanges in education, culture and, importantly, trade. Read more
Okay, I didn’t exactly go toe-to-toe with Earvin (Magic) Johnson on the court, but I did face-off against him at the 2013 Milken Institute Global Conference. Let me explain…
It’s spring in Los Angeles and that can only mean one thing–it’s time for the much anticipated Global Conference. That’s how the Wall Street Journal described the event today–with 3500 people attending 140 sessions spread over 4 days. There are more than 600 speakers ranging from Al Gore to Tony Blair; Rupert Murdoch to Carlos Slim and Magic Johnson to Joe Torre. And the range of topics is just as broad–public policy topics like immigration reform and tax reform; healthcare issues and AIDS improvements to the future of Africa.
This was the tenth year for The Principal at the conference, although it was my first. The range of topics, the quality of the speakers and the encouragement for spirited discussion all serve to make this an eye-opening and educational event. Talk about getting out of your comfort zone!
This week, in my capacity as a part of the strategy team for Principal Global Investors, I have the opportunity of attending the Milken Institute Global Conference in Los Angeles. The conference is a program that includes 140 sessions involving a total of 620 speakers and panelists. This year’s record attendance of over 3,000 brings together participants from 40 countries. By any measure, it’s an incredible range of experiences and disciplines. For the next couple days, I’ll be sharing a few insights from some of the presenters and panels, starting with this post about some of Monday’s sessions.
First, a general observation. Experiencing this conference brings home the fact that, at its core, investing is about people and ideas. In a forum like Milken, you really see the power of bringing senior business leaders and investment professionals together with clients and guests for three days packed with thought-provoking discussions. Read more
I would be the first to agree the U.S. retirement system is not perfect. More Americans need access to retirement plans and those who have plans, need to save more. There is no question improvements should be made. But that doesn’t mean we need to throw the baby out with the bath water.
Far too often, critics ignore the benefits of the current system. They instead point to losses during the financial crisis when equity values plunged; overlooking the fact that account values for the majority of those who have continued to contribute now exceed the highest balances prior to the market downturn.
Some critics argue the answer is to do away with defined contribution plans and go back to defined benefit pension plans—but that oversimplified and unrealistic answer ignores the fact that global competition puts great pressures on most employers today regardless of size. In this environment, defined benefit pension plans create financial obligations on employers that, for many, are just not sustainable. Read more