Economy Hits Bottom

http://online.wsj.com/article_email/SB10001424052970203946904574300290585964718-lMyQjAxMDA5MDIwNDEyNDQyWj.html

Best selling business author Jim Collins ("Good to Great", "How the Mighty Fall", etc.), as well as others whose opinions are well respected (Jeffrey Sonnenfeld, Associate Dean of the Yale School of Management, comes to mind), generally agree that the single most important trait to possess for success in business is: "humility" (especially for CEOs). That advice applies to most professions.

Alan S. Blinder is a Princeton University economist, a former Federal Reserve Board vice chairman, and an advisor to Democratic presidential candidates among other things. His change of position on free trade in 2007 became known as "Blinder's Shift" because he stepped back from the blanket endorsement of "free trade" associated with most economists (especially those who, like Blinder, have authored textbooks on the subject) to basically question Ricardo's "Theory of Comparative Advantage". One of the primary influences in changing his thinking (as with many of the rest of us) was Thomas L. Friedman and his 2005 book, "The World is Flat". Blinder's painstaking rankings of 817 Bureau of Labor Statistics occupations caused him to conclude that between 30 and 40 million U.S. jobs are "offshorable". Blinder now strongly advocates for retooling America's educational system so it trains young people for jobs likely to remain in the U.S.

So, Blinder had the humility to change his position on an important issue and to advocate for something that is much needed for the U.S. to compete in the world. Which brings us to today: Blinder's article in the WSJ ("The Economy Has Hit Bottom", 7/23/09, attached) gives us the good news in the bad news. He feels that we've hit bottom and that there's some good news in that. He sees the possibility that the third quarter could "surprise" on the up side (it will be up anyway, but Blinder means surprisingly up). Because of the extent of unemployment, there will be no "V Shaped Recovery", but there will be positive numbers coming in housing, auto, overall business investment, etc.

I respect Blinder for his skill and his humility. His article is worthy of note.