ABCDE Business sunday, october 17, 2010 CARPAGES
A modern idea: Modest After a generation of Jettas that stretched with luxury touches, the SEL sedan is a graceful ride back down to earth. l Plus thousands of car ads
KIPLINGER'S
Promise and peril As investors pile in, high-yield master limited partnerships could falter because of their popularity. G3
FASTFORWARD
An expensive bet Microsoft and its customers have much riding on the Windows Phone 7. G2
MARKETS
Stocks climb on hint of Fed action Fast response from markets as Bernanke signals move to fight low inflation and jobless rate. G6
YTD: Dow NASDAQ S&P 500 +6.09% +8.80% +5.48%
MICHELLESINGLETARY The Color of Money
An easy fix: Lenders must put people first
R
eally, should any of us be surprised at the recent events surrounding home
foreclosures? Bank of America has said it
will halt foreclosure sales nationwide after reports that mortgage loan servicers signed thousands of foreclosure documents without verifying the information. A spokesman for J.P.Morgan
Chase said the company has stopped seeking judgments in 41 states while it reviews all paperwork.GMACMortgage is conducting independent reviews of its foreclosure procedures in all of the states. TomMiller, the attorney
general of Iowa, is leading a 50- state coordinated reviewof the practice within the mortgage servicing industry known as “robo-signing.” The task force, which also includes state banking and mortgage regulators, will investigate whether mortgage servicers improperly submitted documents in support of foreclosures. “This is not simply about a
glitch in paperwork,”Miller said. No, this is not a glitch. The foreclosure crisis reminds us again that there is a fundamental problem in the mortgage industry. As a society, we claim we value homeownership. But that does not appear to be true anymore for many lenders since
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No fast economic fix from Washington is going to make Americans feel better overnight. But you won’t hear the powerful people in suits saying that.
BY ALLAN SLOAN, TORY NEWMYER AND DORIS BURKE Fortune
EZRAKLEIN Economic & Domestic Policy
Five Obama should hire
F
irst, Peter Orszag turned in his ID card. Then Christina Romer went. In short
order, Larry Summers and RahmEmanuel announced their exits. JimJones is gone, too. A lot of people are leaving the White House these days. But I’mmore interested in
who shouldmove in. President Obama has filled the open slots by promoting others in his administration. That’s a sign he’s happy with the advice and service he’s received over the past two years. And inmany ways, he’s right to be. This administration entered office with the economy teetering on the edge of the abyss. His team has successfully pulled us onto firmer ground. The next two years, however,
will require new thinking. The problems of an acute crisis have given way to the frustrations of a slow recovery. The large Democraticmajorities in the House and Senate are likely to be wiped out by a resurgent Republican Party. Concerns about the deficit won’t allow for much in the way of new spending. The Obama administration
needs an agenda suited to these circumstances, and to help them think one up, it needs fresh eyes and new voices. Here are five suggestions.
(Disclaimer: I didn’t tell these people I’d bementioning them, and I’mnot personally close
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et us tellyouanUgly Truth about theeconomy,a truth thatnooneinpowerorwhoaspires topowerwants to share with you, at least until after the midterm elections are over. It’s this: There is nothing that the U.S. government or the Federal Reserve or tax cutters can do to make our economic pain vanish overnight. There are no all-powerful, all-knowing superheroes or supervillainswhocan rescue or tank theeconomyall by themselves.¶Fromlistening to what passes for public debate in our country, you’d never know that. You’d think that the federal government could revive the economy quickly if only Congress
would let it be more aggressive with stimulus spending. Or that the Fed could fix it if only it weren’t overly worried about touching off inflation. Or that the free market could fix it if only we made deep and permanent tax cuts. ¶ Watch enough cable TV, listen to enough talk radio, read enough blogs and columns, and you’d think that they—the bad guys—are forcing the country to suffer needlessly whena simpleandpainless solution to our problems is at hand. But if you look at things rationally rather than politically, you’ll see that Washington has far less power over the economy, and far less maneuvering room, than people think.
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This trouble’s too tall for a single bound.
G EZ
STEVE BRODNER FOR THE WASHINGTON POST
In defense of middle management
Why bureaucracy and paperwork really matter
BY RAY FISMAN Slate
I
magine a world without mid- dle managers. If you’ve done time in a cubicle, you might
picture a paradise where workers are unshackled by pointless bu- reaucracy, meaningless paper- work and incompetent bosses. A place where stuff actually gets done.
Despite a proliferation of man-
agement gurus, management consultants and management schools, it remains murky to many of us what managers actu-
ally do and why we need them in the first place. A new World Bank-Stanford study titled “Does Management Matter?” provides an answer.Working in collabora- tion with the consulting firm Accenture, the researchers ran- domly selected a set of textile factories in India to receive a complimentary five-month man- agement makeover and com- pared the profitability and effi- ciency of these revamped facto- ries with a control group of facto- ries that continued doing business as usual. It turns out that management does matter: The consultants boosted produc- tivity by about 10 percent by improving quality, managing in- ventory and speeding up produc- tion. The study’s authors enumerate
PHOTOS BY GETTY IMAGES AND BIGSTOCKPHOTO.COM/WASHINGTON POST PHOTO ILLUSTRATION
38 practices that define good management. These include rou- tines to record and analyze quali- ty defects, production and inven- tory tracking systems, and clear assignment of job roles and re- sponsibilities. While all this sounds reason-
able enough, keep in mind that this is also a set of practices that has the potential to create a Dilbert-esque world of unwieldy reporting requirements, Big Brotherly monitoring and rigid protocols that blunt creativity and innovation. (If you doubt any of this, just think about the last time you filed an expense report.) To assess whether good man-
agement thus defined was good for business, the World Bank
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