Geoff Colvin
Lucky 2013: A case for economic good times
January 18, 2013: 5:00 AM ETIt's easy to predict gloom and doom for the U.S. economy. But strong growth and job recovery are no pie-in-the-sky fantasies.
By Geoff Colvin, senior editor-at-large
FORTUNE -- In your sleep you can name 10 reasons 2013 will be lousy for business and the economy. So can I. But analyzing only the downside is a bad habit; missing a boom is at least as dangerous as missing a bust. So let's imagine the good-news scenario that absolutely no one is talking about. Is it likely? I dunno. Plausible? Absolutely. Here's what gets us to a 4% growth rate, rising incomes, and low unemployment by year-end:
The revolution in American oil and gas increasingly spreads its benefits through the economy. Our crude-oil production, after declining for the past 20 years, is suddenly rocketing and will keep doing so for the rest of the decade, says the Energy Information Administration's just-released outlook. Natural-gas production will boom for at least the next three decades. A resulting industrial renaissance is already under way. Chemical and plastics makers -- Dow (DOW), Mitsubishi, and others -- are building new plants around the country, a stunning turnaround for an industry that has been shutting U.S. plants for years. The Timken Co. (TKR) is expanding a mill in Ohio to make specialty steels for the oil and gas industry. Railroads are adding cars to haul the rising output of many industries. Best of all, much of the new production will be exported -- shrinking our trade deficit and bringing jobs and GDP growth to the U.S.
MORE: The Fed's big dollar gamble
The 113th Congress, spooked by the loathing rightly heaped on the 112th, finally acts on its three most important priorities: reforming the tax code by lowering rates and closing loopholes, making Medicare sustainable, and fixing immigration laws to attract and keep the world's best and most ambitious.
President Obama, finished with running for office and envying Bill Clinton's extraordinary stature domestically and globally, decides to go for a statesman legacy rather than a progressive-hero legacy. He gets behind tax reform by emphasizing its fairness; stresses that Medicare isn't being cut but saved; and negotiates a procedure for legalizing illegals as part of immigration reform. Photos of him signing landmark legislation with leaders of both parties behind him build his image as a pragmatic doer rather than a far-left class warrior.
MORE: The old Goldman Sachs is back
The Affordable Care Act takes effect mostly glitch-free as the administration realizes that major implementation problems could tank the economy. The law is filled with requirements that seem difficult or impossible for employers to meet; for example, employers must offer "affordable" insurance to workers, but affordability is defined as a percentage of an employee's household income, which employers have no way of knowing. The IRS has announced that for now employers can base calculations on employees' W-2 income and needn't offer affordable insurance for workers' dependents. More such lenient interpretations will ease a hellacious process for employers and workers.
The SEC and other regulators finally stop making excuses on Dodd-Frank rulemaking, clearing the fog that sits over financial markets. The administration has missed 60% of the rulemaking deadlines imposed by the law, says the latest tally by the Davis Polk law firm; 65% of the total required rulemakings still haven't been finalized. Reducing that uncertainty will liberate one of America's greatest economic strengths, its capital markets.
MORE: Sorry, middle class. The VAT may be inevitable
The economy builds steam, and hiring picks up. In response, Washington lets hyperextended unemployment benefits revert to normal duration. Those special 99-week benefits, while helpful to many, also distort labor markets by encouraging nonwork, though it's politically incorrect to say so. Getting back to normal frees up another of our greatest strengths, our flexible labor markets.
The virtuous circle that drives all growing economies gains power. Increased economic activity creates confidence, which spurs more activity. Entrepreneurs, managers, and consumers start to believe again.
It could happen, or part of it. No one knows if it will, but we need to be ready for it. And if you think this whole scenario is nonsense, please remember a lesson of history: When everyone believes it can't possibly happen, that's when it happens.
This story is from the February 4, 2013 issue of Fortune.
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2013: The year we become the health care nation
Forget 'fiscal cliff' and 'debt ceiling.' The words on everyone's lips this year will be 'health care' and just how we're going to pay for it.
By Geoff Colvin, senior editor-at-large
FORTUNE -- The largest issue America will face in 2013 is health care. And it will only get larger. As the national conversation changes, we'll find that by year-end we're talking about it all the time, whether the ostensible topic MORE
Jan 4, 2013 5:00 AM ET -
Wall Street experts: Where to make money in 2013
From China to Europe to the U.S., market uncertainty abounds. Still, says our panel of Wall Street experts, there are plenty of ways to make a bundle.
By Geoff Colvin, senior editor-at-large
FORTUNE -- It's time to remember one of investing's eternal truths: Trouble can be an investor's best friend. America's economy is limping, China's is complicated, Europe's is shrinking -- and the wisest investors say, "Bring it on." They understand MORE
Dec 11, 2012 5:00 AM ETPosted in: bonds, Dan Fuss, David Herro, Geoff Colvin, investing, Justin Leverenz, Savita Subramanian, Stephen Auth, stocks -
We're having the wrong debate about rising health care costs
If we made just a few lifestyle changes, Americans could drastically reduce how much we spend on health care. So why don't we?
By Geoff Colvin, senior editor-at-large
FORTUNE -- The central mystery in America's health care crisis is a simple question: Why don't people take better care of themselves? Like many simple questions, it leads into deep waters. It demands that we confront a profound new reality about health. Most MORE
Apr 25, 2012 5:00 AM ETPosted in: Geoff Colvin, health, Health care, health care costs, health care reform, Health insurance -
Politicians have no cure for the middle-class blues
Obama and Romney each have a plan to lift Middle America from its rut, but election-year promises aren't going to fix an issue that's been brewing for decades.
By Geoff Colvin, senior editor-at-large
FORTUNE -- President Obama likes to say, "The 2012 election is a make-or-break moment for the middle class." He's mistaken -- it isn't. Mitt Romney likes to say, "This President and his policies have made it harder on the American MORE
Mar 30, 2012 5:00 AM ETPosted in: Election 2012, Geoff Colvin, Macro, Middle class, Mitt Romney, President Obama, recession, wealth gap -
The 7 elections that will reshape the global economy
Leaders around the world are facing angry voters who want real change. Can they keep getting by on the same old promises, or is it time to clean house?
By Geoff Colvin, senior editor-at-large
FORTUNE -- Rarely -- maybe never -- has global leadership been more up for grabs in a single year than it is now. Seven major nations are holding presidential elections -- in chronological order, Russia, France, Egypt, Mexico, Venezuela, MORE
Mar 6, 2012 5:00 AM ETPosted in: Egypt, elections, France, Geoff Colvin, global economy, Macro, mexico, Russia, South Korea, Venezuela -
A world in chaos? That may be a good thing.
Outrage is the word for 2012. Hopefully there's enough out there to solve some giant problems that have been festering for far too long.
By Geoff Colvin, senior editor-at-large
FORTUNE -- Too much is happening in the world. Politically, economically, and culturally momentous news is occurring on every continent seemingly every day, and it's overwhelming for the hapless citizen striving to stay on top of it all. If you want to impose MORE
Jan 23, 2012 5:00 AM ETPosted in: debt crisis, emerging markets, European debt crisis, Geoff Colvin, global economies, Gridlock, protests -
Here comes the big profit lie
Wall Street expects corporate miracles in 2012, and that means trouble.
By Geoff Colvin, senior editor-at-large
FORTUNE -- Brace yourself for an increase in stupid, misleading, or illegal action by U.S. companies. The trend is inevitable. In fact, odds are it's already under way.
The problem is an old one, but we haven't seen it in a while, and memories are short. It's profit expectations -- they're insanely optimistic. Companies and the MORE
Jan 6, 2012 5:00 AM ET -
Where to invest in 2012: The experts weigh in
Looking for a place to put your money next year? 5 top money managers share their wisdom.
Interview by Geoff Colvin, senior editor-at-large
FORTUNE -- So volatility is the new normal. We're pretty clear on that after the past few years of market turmoil. But how do we move beyond today's palpitations to make long-term investment decisions with confidence? At a time when few if any asset classes have seen steady MORE
Dec 14, 2011 5:00 AM ET -
Can Wall Street thrive again?
The financial industry is besieged by protestors. It's also facing a slow-growth world and a wave of new regulation. In order to flourish again, the big firms must first change in painful ways.
By Geoff Colvin, senior editor-at-large
FORTUNE -- The brighter side of financial cataclysm wasn't easy to see in late 2008 -- the crisis was at its most acute, and no one knew if Armageddon lay ahead -- but Barney MORE
Dec 12, 2011 5:00 AM ETPosted in: banks, Dodd-Frank, Geoff Colvin, investing, investment banks, Investor's Guide 2012, Volcker Rule, Wall Street
Longtime Fortune editor and columnist Geoff Colvin is one of America's sharpest and most respected commentators on leadership, globalization, wealth creation, and management. As former anchor of Wall Street Week with Fortune on PBS, he spoke each week to the largest audience of any business television program in America. His national bestseller Talent Is Overrated: What Really Separates World-Class Performers From Everybody Else, won the Harold Longman Award as the best business book of 2009.
