Top Five Business Stories of 2009
Because this is the last week of the year and, admittedly, a slow week for news, we in the media like to use this time to gin up what some call "listicles:" a combination list and article suitable for Web consumption and discussion among readers. I'll do one listicle each day this week (except Friday). Feel free to comment below, telling me what I've left off or should not have been included.
I'll start with the Top Five Business Stories of 2009, in my estimation. Here we go:
(1) The White House fires General Motors chief executive Rick Wagoner: The only thing more shocking to me than this story was how little shock it generated. Once upon a time in a place called America, chief executives were hired and fired by the boards of directors of their companies. Obviously, these directors listened to shareholder feedback -- especially shareholders with preferred stakes -- but they were able to act independently of government intervention. Apparently, not anymore. The White House forced Wagoner out even before the government took a 61 percent stake in GM following the government-backed automaker's bankruptcy. You can say, "Well, the government is now the majority shareholder, so it gets a say in the CEO." Maybe. (Except for the fact that the government has only $2.1 billion in preferred GM shares, which are the ones that come with voting rights.) But make no mistake: The head of a major U.S. corporation was fired by the president. Talk about setting a precedent. (Footnote: Wagoner's government-approved successor, Fritz Henderson, worked out so well he was fired by the GM board after only eight months on the job.)
(2) Stock markets hit bottom in early March: Everyone hoped that the markets had hit their bottom in late November 2008, when the Dow -- plunging from its historic high of more than 14,000 in October 2007 -- dropped to 7500. The markets even staged a Santa rally, popping back up above 9000 around New Year's Day. But then the bottom dropped out. I remember thinking at the time, "Okay. This drop scares me." The Dow and the S&P 500 each plunged more than 25 percent between Jan. 9 and what has proved to be the bottom, March 8. Once the dust settled, the Dow had lost 55 percent of its value since October 2007, and the S&P 500 had lost even more. In October of this year, the Dow crossed back above 10,000 for the first time in a year.
(3) Unemployment hits its highest rate since 1982: The official U.S. unemployment rate hit 10.2 percent in October, its highest rate since December 1982, when it hit 10.8 percent. The truer number -- if you include people so discouraged they've given up looking for work and those who are forced from full-time to part-time work -- hit a staggering 17.5 percent in October. The official U.S. November number ticked back down to 10 percent, but forecasters are expecting the December rate to rise back to 10.2 when the numbers are released next week. This has now become a political problem facing Democrats -- and, indeed, all incumbent members of Congress -- in the 2010 midterm elections.
(4) The $787 billion debt-building stimulus plan: Because so much of the stimulus money was back-loaded on purpose, and won't be fully paid out until 2011, it's far too early to judge whether President Obama's national bailout plan is working. One thing is clear, however: It added massively and possibly dangerously to the overall national debt and will create trillion-dollar budget deficits for "years to come." (Obama's words.)
(5) Ben Bernanke: How a somnolent college professor became the most powerful hand on the world's biggest economy is a story in itself; how he, as Federal Reserve chairman, became the most-watched man on the planet (after Tiger Woods, of course) is what made him Time magazine's person of the year and put him on my list of Top Five Business Stories of 2009.
Not quite making the list: The health-care system overhaul, because the costs are unknown so far; the Dubai-Greece-Spain debt problems, because we don't know yet if this is a debt wildfire or just spot fires; the government's Cash for Clunkers subsidy because, despite its novelty, its impact was limited; and Time Warner's spin-off of AOL, one decade after the most disastrous merger in U.S. history, if only because, well, it's old news.
What are your thoughts on this list? What should have made it?
-- Frank Ahrens
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December 28, 2009; 3:19 PM ET
Categories: The Ticker | Tags: AOL, Ben Bernanke, Dow Jones, GM, General Motors, Obama, Rick Wagoner, Time Warner, cash for clunkers, s&p 500
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