America Is Bankrupt (But Not the Way You Think)

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Harvard Business Review

Healthcare, schools, police, tax breaks: which would you keep, slash, or cut? The axe has to swing, so where, if you were the lumberjack, would you aim it? It's the central, polarizing question in this age of austerity.

Or is it? Maybe relying on cuts to reboot prosperity is a bit like starting a diet to treat Alzheimer's: probably not going to work.

Consider an allegory: a household racking up debt not just because they have easy credit, but because they're a dysfunctional family to begin with. Meet the new Joneses: they're a little less Cleaver and little more Soprano.

Dad Jones is the CEO of Toxico, a major, blue-chip energy corporation. He's an imperious millionaire, but he's stingier than Scrooge McDuck. Though he rakes it in, he flat-out refuses to contribute much, if anything, towards basic household costs--and when the family sets up rules to make him, he quickly finds loopholes. In fact, last year, instead of contributing to the household purse, he managed to find a way get a net contribution from it.

The Realization is Now

Seth Godin

New polling out this week shows that Americans are frustrated with the world and pessimistic about the future. They're losing patience with the economy, with their prospects, with their leaders (of both parties).

What's actually happening is this: we're realizing that the industrial revolution is fading. The 80 year long run that brought ever-increasing productivity (and along with it, well-paying jobs for an ever-expanding middle class) is ending.

It's one thing to read about the changes the internet brought, it's another to experience them. People who thought they had a valuable skill or degree have discovered that being an anonymous middleman doesn't guarantee job security. Individuals who were trained to comply and follow instructions have discovered that the deal is over... and it isn't their fault, because they've always done what they were told.

Economic Bright Spot: Dying communities see salvation in new prisons

Kathy Mccormack
Associated Press

BERLIN, N.H. — Mike Secinore is pinning his hopes on prison.

Fresh with a criminal justice degree from the local community college, the 20-year-old Berlin native plans to apply for a corrections officer job at the federal prison expected to open in the city next summer.

There aren't many options in this northern region of New Hampshire, where major employers have closed their doors in recent years and further unemployment woes beckon if the last surviving paper mill shuts down this week, letting 240 workers go.

"I'm really wanting to have a career, not just a job," said Secinore, who recently lost a counter position at an auto parts store. He worked there for five years, coping with a wage freeze and a cut in hours. "I really need something where I'm going to make money."


Although rural communities have successfully lobbied for – and built – prisons for years, not many studies have been done on their economic impact. Some studies indicate slight economic gains for some prison towns, according to a Congressional Research Service report in April. Others that have become prison anchors might have not grown as fast as those without prisons.

Florence, Colo., where a federal prison complex went up in 1994, was once a major oil producer and gold-smelting center and now has some new businesses. New federal prisons have recently started hiring in West Virginia, which has seen a decline in coal jobs, and in an impoverished farming community in California. Others are being built in Mississippi and Alabama.

The population of Berlin, once above 22,000 during the 1920s when the paper industry was at its peak, is down to under 10,000 as mills shut down and people leave in search of new opportunities, including many of Secinore's peers. The population is aging; the median age in the county is 44.

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