February 13, 2009
Your Money
What’s in the Bill for You By RON LIEBER
All the talk the last couple of days about the stimulus bill was about compromise and slimming down. What is left, though, is a huge spending bill, with well over $100 billion in tax breaks and handouts for individuals.
And most of us will be able to use at least one of them, though it will be difficult to get much money immediately, unlike the stimulus checks that went out last year.
What follows is a list of some of the biggest provisions in the bill that will hit you directly in the wallet. Keep in mind that the language in the measure isn’t quite final and the Senate and House still have to vote to approve it.
INCOME TAX In 2009 and 2010, there is a tax credit of up to $400 for individuals and $800 for married couples filing their taxes jointly. You calculate your credit, subtracted from other federal taxes you owe, by taking 6.2 percent of your earned income.
Your eligibility for this credit begins to phase out if you’re an individual with an adjusted gross income over $75,000 or a couple with income higher than $150,000.
Employers may end up adjusting tax withholdings on paychecks so that this credit trickles into your bank account over the course of the year. People who are self-employed can adjust their quarterly tax filings to account for the credit.
This credit is refundable, according to a summary of the stimulus bill that the Senate Finance and House Ways and Means committees released Thursday. That means that even if you have no federal income tax liability, you will still get the money.
UNEMPLOYMENT Normally, you pay federal income taxes on federal unemployment benefits. In 2009, however, you won’t have to pay taxes on the first $2,400 in benefits you receive.
HEALTH INSURANCE If you get fired, your company is required, thanks to a law known as Cobra, to allow you to pay to keep your health insurance, generally for up to 18 months.
The problem is, it can cost you $1,000 a month or more to keep the coverage.
Now, the federal government will subsidize 65 percent of the premium for up to nine months. To be eligible, you need to have been forced out of your job between Sept. 1, 2008, and Dec. 31, 2009. Also, your income in the year you receive the subsidy cannot be more than $125,000 for individuals or $250,000 for married couples filing their taxes jointly.
If you lost your job after Sept. 1, 2008, and declined Cobra coverage, you’ll now get another chance. Call your former company in the next two months to find out how this will work.
You need not keep an eye on the mail for a subsidy check from the government, according Kathryn Bakich, senior vice president in Washington of the Segal Company, a benefits consulting firm. Instead, your former employer will collect the money from the government.
SOCIAL SECURITY In 2009 a number of retirees and disabled people, including Social Security recipients, will receive a $250 refundable tax credit. The money would arrive within 120 days of the bill’s signing.
CAR BUYER TAX DEDUCTION For the rest of 2009, you’ll be able to deduct the state and local sales and excise taxes you pay on the purchase of a new (not used) car, light truck, recreational vehicle or motorcycle.
This will be an “above-the-line deduction,” according to Clint Stretch, the managing principal of tax policy at Deloitte L.L.C. in Washington. That means that you can take it regardless of whether you itemize other deductions on your tax return.
Mark Luscombe, principal tax analyst for CCH, a tax information service, notes that state sales taxes alone can run 6 to 7 percent, before any county or local tax kicks in. That said, if you trade in a vehicle, your taxable purchase price may be lower.
Eligibility for this tax break begins to phase out for single people with adjusted gross income over $125,000 or $250,000 for married couples filing jointly. And the deduction does not apply on spending above $49,500.
PELL GRANT According to a summary from the office of House Speaker Nancy Pelosi, the maximum Pell Grant will increase by $500, to $5,350 in 2009 and $5,550 in 2010. The grants are generally for low-income students.
HIGHER EDUCATION TAX CREDIT This credit covers up to $2,500 of the cost of college tuition and other related expenses in 2009 and 2010. You’ll need to spend at least $4,000 in a single year to get the full credit. The credit begins to phase out for individual taxpayers with adjusted gross incomes over $80,000 or $160,000 for married couples filing jointly.
Forty percent of the credit is refundable, which benefits low-income students paying their way through school (who may owe no federal income taxes).
529 PLAN EXPANSION When you withdraw money from a 529 college savings plan, you can use it for tuition, room, board, books and other college expenses. In 2009 and 2010, families can also use the money for computers and computer technology, which could include educational software and Internet service for students living at home.
FIRST-TIME HOME BUYER CREDIT First-time home buyers are eligible for a refundable tax credit equal to 10 percent of the purchase price of their home, up to $8,000, if they made the purchase after Jan. 1, 2009, but before Dec. 1, 2009.
Unlike a similar credit that Congress provided last year, you don’t have to pay this one back over 15 years. The new credit, however, does phase out for individuals with incomes over $75,000 or married couples with incomes over $150,000 who file their taxes jointly. Also, you forfeit the credit if you sell the house within three years.
TRANSIT ACCOUNTS If you commute to work via public transportation, your employer may allow you to set aside pretax money from your paycheck to pay for the bus, train or parking. Currently, you can put aside only $120 a month for mass transit while those who drive and park can save $230. This year and next, those who take mass transit will also be able to put aside $230 each month.
A.M.T. PATCH Each year, Congress creates a temporary fix to keep millions of people from paying the alternative minimum tax. This year, the patch is part of the stimulus bill. “If you didn’t pay the A.M.T. last year, you probably won’t this year,” said Mr. Stretch of Deloitte. “For most people, this is a nonevent. They didn’t even realize they were in danger of being shot in the head by the A.M.T.”
Friday, February 13, 2009
In Japan's Stagnant Decade, Cautionary Tales for America By HIROKO TABUCHI
February 13, 2009
In Japan's Stagnant Decade, Cautionary Tales for America By HIROKO TABUCHI
TOKYO — The Obama administration is committing huge sums of money to rescuing banks, but the veterans of Japan's banking crisis have three words for the Americans: more money, faster.
The Japanese have been here before. They endured a "lost decade" of economic stagnation in the 1990s as their banks labored under crippling debt, and successive governments wasted trillions of yen on half-measures.
Only in 2003 did the government finally take the actions that helped lead to a recovery: forcing major banks to submit to merciless audits and declare bad debts; spending two trillion yen to effectively nationalize a major bank, wiping out its shareholders; and allowing weaker banks to fail.
By then, Tokyo's main Nikkei stock index had lost almost three-quarters of its value. The country's public debt had grown to exceed its gross domestic product, and deflation stalked the land. In the end, real estate prices fell for 15 consecutive years.
More alarming? Some students of the Japanese debacle say they see a similar train wreck heading for the United States.
"I thought America had studied Japan's failures," said Hirofumi Gomi, a top official at Japan's Financial Services Agency during the crisis. "Why is it making the same mistakes?"
Many American critics of the plan unveiled Tuesday by Treasury Secretary Timothy F. Geithner said the plan lacked details. Experts on Japan found it timid — especially given the size of the banking crisis the administration faces.
"I think they know how big it is, but they don't want to say how big it is. It's so big they can't acknowledge it," said John H. Makin, an economist at the American Enterprise Institute, referring to administration officials. "The lesson from Japan in the 1990s was that they should have stepped up and nationalized the banks."
Instead, the Japanese first tried many of the same remedies that the Bush administration tried and the Obama administration is trying — ultra-low interest rates, fiscal stimulus and ineffective cash infusions, among other things. The Japanese even tried to tap private capital to buy some of the bad assets from banks, as Mr. Geithner proposed.
One reason Japan's leaders were so ineffectual for so long was their fear of stoking public outrage. With each act of the bailout, anger grew, making politicians more reluctant to force real reform, which only delayed the day of reckoning and increased the ultimate price tag. Japanese taxpayers are estimated to have recouped less than half what it cost the government to bail out the banks.
A further lesson from Japan is that the bank rescue will determine the fate of the wider economy. While President Obama has prioritized his stimulus plan, no stimulus is likely to succeed unless the banking sector is repaired.
The Japanese crisis of the 1990s and early 2000s had roots similar to the American crisis: a real estate bubble that collapsed, leaving banks holding trillions of yen in loans that were virtually worthless.
Initially, Japan's leaders underestimated how badly the real estate collapse would hurt the country's banks. As in the United States, a policy of easy money had fueled both stock and real estate speculation, as well as reckless lending by banks.
Many in Japan thought that low interest rates and economic stimulus measures would help banks recover on their own. In late 1997, however, a string of bank failures set off a crippling credit crisis.
Prodded into action, the government injected 1.8 trillion yen into Japan's main banks. But the injections — too small, poorly planned and based on little understanding of the extent of the banking sector's woes — failed to stem the growing crisis.
Fearing more bad news if banks were forced to disclose their real losses, Japan's leaders allowed banks to keep loans to "zombie" companies on their balance sheets.
Japan, instead, experimented with a series of funds, in part privately financed, to relieve banks of their bad assets.
The funds brought limited results at best, says Takeo Hoshi, economics professor at the University of California, San Diego. For one thing, the funds were too small to make an impact. The depository for bad loans had no orderly way to sell them off. And the purchases that did take place failed to recapitalize banks because the bad assets were priced so low.
So far, the Obama administration's plan avoids the hardest decisions, like nationalizing banks, wiping out shareholders or allowing banks to collapse under the weight of their own bad debts. In the end, Japan had to do all those things.
Economists say these blunders meant Japan's financial system did not start to recover until late 2002, six years after the crisis broke. That year, the government of the reformist leader Junichiro Koizumi ordered a tough audit of the country's top banks.
Called the Takenaka Plan after Heizo Takenaka, who headed the government's financial reform efforts, the move finally brought the full extent of bad loans to light. Initially, banks lashed out at Mr. Takenaka. "The government can't order bank management to do this and that," Yoshifumi Nishikawa, president of the Sumitomo Mitsui Financial Group, complained to the press in October 2002. "It's absolutely absurd."
But Mr. Takenaka stood firm. His rallying cry, he said in an interview on Wednesday, was, "Don't cover up. Don't distort principles. Follow the rules."
"I told the banks clearly, 'I am in a position to supervise you,' " Mr. Takenaka said. "I told them I am not open to negotiation."
It took three more years to finally get the majority of bad loans off the banks' books. Resona Bank, which was found to have insufficient capital, was effectively nationalized.
From 1992 to 2005, Japanese banks wrote off about 96 trillion yen, or about 19 percent of the country's annual G.D.P. But Mr. Takenaka's toughness restored faith in the banks.
"That was a turning point in the banking crisis," said Mr. Gomi of the Financial Services Agency, who worked with Mr. Takenaka on the audits.
By then, other factors had fallen into place that aided economic recovery, including a boom in exports to the United States and China.
(Those very share holdings would come back to haunt banks, as the recent market sell-off batters their balance sheets. And as the economy worsens, bad loans are again on the rise, the Financial Services Agency said Tuesday.)
The United States will probably not be able to count on growing demand for its products, since the global economy is worsening.
"The way things are going right now," said Mr. Hoshi, "the U.S. taxpayers' burden will keep going up and up."
http://www.nytimes.com/2009/02/13/business/economy/13yen.html?sq=Tabuchi%20Hiroko&st=cse&scp=1&pagewanted=print
http://snipurl.com/by272
In Japan's Stagnant Decade, Cautionary Tales for America By HIROKO TABUCHI
TOKYO — The Obama administration is committing huge sums of money to rescuing banks, but the veterans of Japan's banking crisis have three words for the Americans: more money, faster.
The Japanese have been here before. They endured a "lost decade" of economic stagnation in the 1990s as their banks labored under crippling debt, and successive governments wasted trillions of yen on half-measures.
Only in 2003 did the government finally take the actions that helped lead to a recovery: forcing major banks to submit to merciless audits and declare bad debts; spending two trillion yen to effectively nationalize a major bank, wiping out its shareholders; and allowing weaker banks to fail.
By then, Tokyo's main Nikkei stock index had lost almost three-quarters of its value. The country's public debt had grown to exceed its gross domestic product, and deflation stalked the land. In the end, real estate prices fell for 15 consecutive years.
More alarming? Some students of the Japanese debacle say they see a similar train wreck heading for the United States.
"I thought America had studied Japan's failures," said Hirofumi Gomi, a top official at Japan's Financial Services Agency during the crisis. "Why is it making the same mistakes?"
Many American critics of the plan unveiled Tuesday by Treasury Secretary Timothy F. Geithner said the plan lacked details. Experts on Japan found it timid — especially given the size of the banking crisis the administration faces.
"I think they know how big it is, but they don't want to say how big it is. It's so big they can't acknowledge it," said John H. Makin, an economist at the American Enterprise Institute, referring to administration officials. "The lesson from Japan in the 1990s was that they should have stepped up and nationalized the banks."
Instead, the Japanese first tried many of the same remedies that the Bush administration tried and the Obama administration is trying — ultra-low interest rates, fiscal stimulus and ineffective cash infusions, among other things. The Japanese even tried to tap private capital to buy some of the bad assets from banks, as Mr. Geithner proposed.
One reason Japan's leaders were so ineffectual for so long was their fear of stoking public outrage. With each act of the bailout, anger grew, making politicians more reluctant to force real reform, which only delayed the day of reckoning and increased the ultimate price tag. Japanese taxpayers are estimated to have recouped less than half what it cost the government to bail out the banks.
A further lesson from Japan is that the bank rescue will determine the fate of the wider economy. While President Obama has prioritized his stimulus plan, no stimulus is likely to succeed unless the banking sector is repaired.
The Japanese crisis of the 1990s and early 2000s had roots similar to the American crisis: a real estate bubble that collapsed, leaving banks holding trillions of yen in loans that were virtually worthless.
Initially, Japan's leaders underestimated how badly the real estate collapse would hurt the country's banks. As in the United States, a policy of easy money had fueled both stock and real estate speculation, as well as reckless lending by banks.
Many in Japan thought that low interest rates and economic stimulus measures would help banks recover on their own. In late 1997, however, a string of bank failures set off a crippling credit crisis.
Prodded into action, the government injected 1.8 trillion yen into Japan's main banks. But the injections — too small, poorly planned and based on little understanding of the extent of the banking sector's woes — failed to stem the growing crisis.
Fearing more bad news if banks were forced to disclose their real losses, Japan's leaders allowed banks to keep loans to "zombie" companies on their balance sheets.
Japan, instead, experimented with a series of funds, in part privately financed, to relieve banks of their bad assets.
The funds brought limited results at best, says Takeo Hoshi, economics professor at the University of California, San Diego. For one thing, the funds were too small to make an impact. The depository for bad loans had no orderly way to sell them off. And the purchases that did take place failed to recapitalize banks because the bad assets were priced so low.
So far, the Obama administration's plan avoids the hardest decisions, like nationalizing banks, wiping out shareholders or allowing banks to collapse under the weight of their own bad debts. In the end, Japan had to do all those things.
Economists say these blunders meant Japan's financial system did not start to recover until late 2002, six years after the crisis broke. That year, the government of the reformist leader Junichiro Koizumi ordered a tough audit of the country's top banks.
Called the Takenaka Plan after Heizo Takenaka, who headed the government's financial reform efforts, the move finally brought the full extent of bad loans to light. Initially, banks lashed out at Mr. Takenaka. "The government can't order bank management to do this and that," Yoshifumi Nishikawa, president of the Sumitomo Mitsui Financial Group, complained to the press in October 2002. "It's absolutely absurd."
But Mr. Takenaka stood firm. His rallying cry, he said in an interview on Wednesday, was, "Don't cover up. Don't distort principles. Follow the rules."
"I told the banks clearly, 'I am in a position to supervise you,' " Mr. Takenaka said. "I told them I am not open to negotiation."
It took three more years to finally get the majority of bad loans off the banks' books. Resona Bank, which was found to have insufficient capital, was effectively nationalized.
From 1992 to 2005, Japanese banks wrote off about 96 trillion yen, or about 19 percent of the country's annual G.D.P. But Mr. Takenaka's toughness restored faith in the banks.
"That was a turning point in the banking crisis," said Mr. Gomi of the Financial Services Agency, who worked with Mr. Takenaka on the audits.
By then, other factors had fallen into place that aided economic recovery, including a boom in exports to the United States and China.
(Those very share holdings would come back to haunt banks, as the recent market sell-off batters their balance sheets. And as the economy worsens, bad loans are again on the rise, the Financial Services Agency said Tuesday.)
The United States will probably not be able to count on growing demand for its products, since the global economy is worsening.
"The way things are going right now," said Mr. Hoshi, "the U.S. taxpayers' burden will keep going up and up."
http://www.nytimes.com/2009/02/13/business/economy/13yen.html?sq=Tabuchi%20Hiroko&st=cse&scp=1&pagewanted=print
http://snipurl.com/by272
Failure to Rise By PAUL KRUGMAN
February 13, 2009
Op-Ed Columnist
Failure to Rise By PAUL KRUGMAN
By any normal political standards, this week's Congressional agreement on an economic stimulus package was a great victory for President Obama. He got more or less what he asked for: almost $800 billion to rescue the economy, with most of the money allocated to spending rather than tax cuts. Break out the Champagne!
Or maybe not. These aren't normal times, so normal political standards don't apply: Mr. Obama's victory feels more than a bit like defeat. The stimulus bill looks helpful but inadequate, especially when combined with a disappointing plan for rescuing the banks. And the politics of the stimulus fight have made nonsense of Mr. Obama's postpartisan dreams.
Let's start with the politics.
One might have expected Republicans to act at least slightly chastened in these early days of the Obama administration, given both their drubbing in the last two elections and the economic debacle of the past eight years.
But it's now clear that the party's commitment to deep voodoo — enforced, in part, by pressure groups that stand ready to run primary challengers against heretics — is as strong as ever. In both the House and the Senate, the vast majority of Republicans rallied behind the idea that the appropriate response to the abject failure of the Bush administration's tax cuts is more Bush-style tax cuts.
And the rhetorical response of conservatives to the stimulus plan — which will, it's worth bearing in mind, cost substantially less than either the Bush administration's $2 trillion in tax cuts or the $1 trillion and counting spent in Iraq — has bordered on the deranged.
It's "generational theft," said Senator John McCain, just a few days after voting for tax cuts that would, over the next decade, have cost about four times as much.
It's "destroying my daughters' future. It is like sitting there watching my house ransacked by a gang of thugs," said Arnold Kling of the Cato Institute.
And the ugliness of the political debate matters because it raises doubts about the Obama administration's ability to come back for more if, as seems likely, the stimulus bill proves inadequate.
For while Mr. Obama got more or less what he asked for, he almost certainly didn't ask for enough. We're probably facing the worst slump since the Great Depression. The Congressional Budget Office, not usually given to hyperbole, predicts that over the next three years there will be a $2.9 trillion gap between what the economy could produce and what it will actually produce. And $800 billion, while it sounds like a lot of money, isn't nearly enough to bridge that chasm.
Officially, the administration insists that the plan is adequate to the economy's need. But few economists agree. And it's widely believed that political considerations led to a plan that was weaker and contains more tax cuts than it should have — that Mr. Obama compromised in advance in the hope of gaining broad bipartisan support. We've just seen how well that worked.
Now, the chances that the fiscal stimulus will prove adequate would be higher if it were accompanied by an effective financial rescue, one that would unfreeze the credit markets and get money moving again. But the long-awaited announcement of the Obama administration's plans on that front, which also came this week, landed with a dull thud.
The plan sketched out by Tim Geithner, the Treasury secretary, wasn't bad, exactly. What it was, instead, was vague. It left everyone trying to figure out where the administration was really going. Will those public-private partnerships end up being a covert way to bail out bankers at taxpayers' expense? Or will the required "stress test" act as a back-door route to temporary bank nationalization (the solution favored by a growing number of economists, myself included)? Nobody knows.
Over all, the effect was to kick the can down the road. And that's not good enough. So far the Obama administration's response to the economic crisis is all too reminiscent of Japan in the 1990s: a fiscal expansion large enough to avert the worst, but not enough to kick-start recovery; support for the banking system, but a reluctance to force banks to face up to their losses. It's early days yet, but we're falling behind the curve.
And I don't know about you, but I've got a sick feeling in the pit of my stomach — a feeling that America just isn't rising to the greatest economic challenge in 70 years. The best may not lack all conviction, but they seem alarmingly willing to settle for half-measures. And the worst are, as ever, full of passionate intensity, oblivious to the grotesque failure of their doctrine in practice.
There's still time to turn this around. But Mr. Obama has to be stronger looking forward. Otherwise, the verdict on this crisis might be that no, we can't.
http://www.nytimes.com/2009/02/13/opinion/13krugman.html?sq=&st=cse&%2334;Failure%20to%20Rise=&scp=1&%2334;%20Krugman=&pagewanted=print
http://snipurl.com/by22r
Op-Ed Columnist
Failure to Rise By PAUL KRUGMAN
By any normal political standards, this week's Congressional agreement on an economic stimulus package was a great victory for President Obama. He got more or less what he asked for: almost $800 billion to rescue the economy, with most of the money allocated to spending rather than tax cuts. Break out the Champagne!
Or maybe not. These aren't normal times, so normal political standards don't apply: Mr. Obama's victory feels more than a bit like defeat. The stimulus bill looks helpful but inadequate, especially when combined with a disappointing plan for rescuing the banks. And the politics of the stimulus fight have made nonsense of Mr. Obama's postpartisan dreams.
Let's start with the politics.
One might have expected Republicans to act at least slightly chastened in these early days of the Obama administration, given both their drubbing in the last two elections and the economic debacle of the past eight years.
But it's now clear that the party's commitment to deep voodoo — enforced, in part, by pressure groups that stand ready to run primary challengers against heretics — is as strong as ever. In both the House and the Senate, the vast majority of Republicans rallied behind the idea that the appropriate response to the abject failure of the Bush administration's tax cuts is more Bush-style tax cuts.
And the rhetorical response of conservatives to the stimulus plan — which will, it's worth bearing in mind, cost substantially less than either the Bush administration's $2 trillion in tax cuts or the $1 trillion and counting spent in Iraq — has bordered on the deranged.
It's "generational theft," said Senator John McCain, just a few days after voting for tax cuts that would, over the next decade, have cost about four times as much.
It's "destroying my daughters' future. It is like sitting there watching my house ransacked by a gang of thugs," said Arnold Kling of the Cato Institute.
And the ugliness of the political debate matters because it raises doubts about the Obama administration's ability to come back for more if, as seems likely, the stimulus bill proves inadequate.
For while Mr. Obama got more or less what he asked for, he almost certainly didn't ask for enough. We're probably facing the worst slump since the Great Depression. The Congressional Budget Office, not usually given to hyperbole, predicts that over the next three years there will be a $2.9 trillion gap between what the economy could produce and what it will actually produce. And $800 billion, while it sounds like a lot of money, isn't nearly enough to bridge that chasm.
Officially, the administration insists that the plan is adequate to the economy's need. But few economists agree. And it's widely believed that political considerations led to a plan that was weaker and contains more tax cuts than it should have — that Mr. Obama compromised in advance in the hope of gaining broad bipartisan support. We've just seen how well that worked.
Now, the chances that the fiscal stimulus will prove adequate would be higher if it were accompanied by an effective financial rescue, one that would unfreeze the credit markets and get money moving again. But the long-awaited announcement of the Obama administration's plans on that front, which also came this week, landed with a dull thud.
The plan sketched out by Tim Geithner, the Treasury secretary, wasn't bad, exactly. What it was, instead, was vague. It left everyone trying to figure out where the administration was really going. Will those public-private partnerships end up being a covert way to bail out bankers at taxpayers' expense? Or will the required "stress test" act as a back-door route to temporary bank nationalization (the solution favored by a growing number of economists, myself included)? Nobody knows.
Over all, the effect was to kick the can down the road. And that's not good enough. So far the Obama administration's response to the economic crisis is all too reminiscent of Japan in the 1990s: a fiscal expansion large enough to avert the worst, but not enough to kick-start recovery; support for the banking system, but a reluctance to force banks to face up to their losses. It's early days yet, but we're falling behind the curve.
And I don't know about you, but I've got a sick feeling in the pit of my stomach — a feeling that America just isn't rising to the greatest economic challenge in 70 years. The best may not lack all conviction, but they seem alarmingly willing to settle for half-measures. And the worst are, as ever, full of passionate intensity, oblivious to the grotesque failure of their doctrine in practice.
There's still time to turn this around. But Mr. Obama has to be stronger looking forward. Otherwise, the verdict on this crisis might be that no, we can't.
http://www.nytimes.com/2009/02/13/opinion/13krugman.html?sq=&st=cse&%2334;Failure%20to%20Rise=&scp=1&%2334;%20Krugman=&pagewanted=print
http://snipurl.com/by22r
The Worst-Case Scenario By DAVID BROOKS
February 13, 2009
Op-Ed Columnist
The Worst-Case Scenario By DAVID BROOKS
Between 1990 and 2007, the total mortgage debt held by Americans rose from $2.5 trillion to $10.5 trillion. This rise was part of a societal credit bubble that burst in 2008. To cushion the pain of that collapse, federal authorities decided to replace private debt with public debt.
In 2008, the Bush administration increased spending by about $1.7 trillion, and guaranteed loans, investments and deposits worth about $8 trillion. In 2009, the Obama administration spent $800 billion on a stimulus package, $1 trillion on a second round of bank bailouts and committed another trillion on health care reform and other bailout plans.
Americans generally welcomed the burst of public activism. In “Democracy in America,” Alexis de Tocqueville wrote about what happens to a people beset by anxiety: “The taste for public tranquility then becomes a blind passion, and the citizens are liable to conceive a most inordinate devotion to order.”
In normal times, Americans would have been skeptical of proposals to double or triple the size of federal programs, but amid the economic fear, that skepticism fell away. Wall Street traders hungered for a huge federal bailout replete with strings. Economists produced models that assumed that government could efficiently spend huge amounts of money, and these models were accepted.
The Obama administration was staffed with moderates who found that there was no reward for moderation. Liberals attacked them for being tepid. Republicans attacked them because it was enjoyable to see Democrats attacked. Over time, the administration drifted left and created what you might call Split Level Technocratic Liberalism.
President Obama defended spending initiatives in broad terms. He had enormous faith in the power of highly trained experts and based his arguments on models and projections. The actual legislation was cobbled together by Democratic committee chairmen, often acting beyond the administration’s control.
During 2010, the economic decline abated, but the recovery did not arrive. There were a few false dawns, and stagnation. The problem was this: The policy makers knew how to pull economic levers, but they did not know how to use those levers to affect social psychology.
The crisis was labeled an economic crisis, but it was really a psychological crisis. It was caused by a mood of fear and uncertainty, which led consumers to not spend, bankers to not lend and entrepreneurs to not risk. No amount of federal spending could change this psychology because uncertainty about the future remained acute.
Essentially, Americans had migrated from one society to another — from a society of high trust to a society of low trust, from a society of optimism to a society of foreboding, from a society in which certain financial habits applied to a society in which they did not. In the new world, investors had no basis from which to calculate risk. Families slowly deleveraged. Bankers had no way to measure the future value of assets.
Cognitive scientists distinguish between normal risk-assessment decisions, which activate the reward-prediction regions of the brain, and decisions made amid extreme uncertainty, which generate activity in the amygdala. These are different mental processes using different strategies and producing different results. Americans were suddenly forced to cope with this second category, extreme uncertainty.
Economists and policy makers had no way to peer into this darkness. Their methods were largely based on the assumption that people are rational, predictable and pretty much the same. Their models work best in times of equilibrium. But in this moment of disequilibrium, behavior was nonlinear, unpredictable, emergent and stubbornly resistant to Keynesian rationalism.
The failure to generate a recovery led to a collapse of public confidence. President Obama’s promises of 3.5 million jobs now seemed a sham and his former certainty a delusion. The political climate grew more polarized. That meant it was impossible to tackle entitlement debt. That and the economic climate meant it was impossible to raise taxes or cut spending or do anything to reduce the yawning deficits. Federal deficits were 15 percent of G.D.P. and growing.
Far from easing uncertainty, the exploding deficits led to more fear. The U.S. could not afford to respond to new emergencies, like hurricanes or foreign crises. Other nations sensed American overextension. Foreign debt-holders grew nervous. Interest rates rose. Congress indulged its worst instincts, erecting trade barriers, propping up doomed companies. Scholars began to talk about the American Disease, akin to the British Disease of the 1970s.
The nation had essentially bet its future on economic models with primitive views of human behavior. The government had tried to change social psychology using the equivalent of leeches and bleeding. Rather than blame themselves, Americans directed their anger toward policy makers and experts who based estimates of human psychology on mathematical equations.
Op-Ed Columnist
The Worst-Case Scenario By DAVID BROOKS
Between 1990 and 2007, the total mortgage debt held by Americans rose from $2.5 trillion to $10.5 trillion. This rise was part of a societal credit bubble that burst in 2008. To cushion the pain of that collapse, federal authorities decided to replace private debt with public debt.
In 2008, the Bush administration increased spending by about $1.7 trillion, and guaranteed loans, investments and deposits worth about $8 trillion. In 2009, the Obama administration spent $800 billion on a stimulus package, $1 trillion on a second round of bank bailouts and committed another trillion on health care reform and other bailout plans.
Americans generally welcomed the burst of public activism. In “Democracy in America,” Alexis de Tocqueville wrote about what happens to a people beset by anxiety: “The taste for public tranquility then becomes a blind passion, and the citizens are liable to conceive a most inordinate devotion to order.”
In normal times, Americans would have been skeptical of proposals to double or triple the size of federal programs, but amid the economic fear, that skepticism fell away. Wall Street traders hungered for a huge federal bailout replete with strings. Economists produced models that assumed that government could efficiently spend huge amounts of money, and these models were accepted.
The Obama administration was staffed with moderates who found that there was no reward for moderation. Liberals attacked them for being tepid. Republicans attacked them because it was enjoyable to see Democrats attacked. Over time, the administration drifted left and created what you might call Split Level Technocratic Liberalism.
President Obama defended spending initiatives in broad terms. He had enormous faith in the power of highly trained experts and based his arguments on models and projections. The actual legislation was cobbled together by Democratic committee chairmen, often acting beyond the administration’s control.
During 2010, the economic decline abated, but the recovery did not arrive. There were a few false dawns, and stagnation. The problem was this: The policy makers knew how to pull economic levers, but they did not know how to use those levers to affect social psychology.
The crisis was labeled an economic crisis, but it was really a psychological crisis. It was caused by a mood of fear and uncertainty, which led consumers to not spend, bankers to not lend and entrepreneurs to not risk. No amount of federal spending could change this psychology because uncertainty about the future remained acute.
Essentially, Americans had migrated from one society to another — from a society of high trust to a society of low trust, from a society of optimism to a society of foreboding, from a society in which certain financial habits applied to a society in which they did not. In the new world, investors had no basis from which to calculate risk. Families slowly deleveraged. Bankers had no way to measure the future value of assets.
Cognitive scientists distinguish between normal risk-assessment decisions, which activate the reward-prediction regions of the brain, and decisions made amid extreme uncertainty, which generate activity in the amygdala. These are different mental processes using different strategies and producing different results. Americans were suddenly forced to cope with this second category, extreme uncertainty.
Economists and policy makers had no way to peer into this darkness. Their methods were largely based on the assumption that people are rational, predictable and pretty much the same. Their models work best in times of equilibrium. But in this moment of disequilibrium, behavior was nonlinear, unpredictable, emergent and stubbornly resistant to Keynesian rationalism.
The failure to generate a recovery led to a collapse of public confidence. President Obama’s promises of 3.5 million jobs now seemed a sham and his former certainty a delusion. The political climate grew more polarized. That meant it was impossible to tackle entitlement debt. That and the economic climate meant it was impossible to raise taxes or cut spending or do anything to reduce the yawning deficits. Federal deficits were 15 percent of G.D.P. and growing.
Far from easing uncertainty, the exploding deficits led to more fear. The U.S. could not afford to respond to new emergencies, like hurricanes or foreign crises. Other nations sensed American overextension. Foreign debt-holders grew nervous. Interest rates rose. Congress indulged its worst instincts, erecting trade barriers, propping up doomed companies. Scholars began to talk about the American Disease, akin to the British Disease of the 1970s.
The nation had essentially bet its future on economic models with primitive views of human behavior. The government had tried to change social psychology using the equivalent of leeches and bleeding. Rather than blame themselves, Americans directed their anger toward policy makers and experts who based estimates of human psychology on mathematical equations.
Sunday, February 08, 2009
36 Hours in Dallas By LUISITA LOPEZ TORREGROSA
February 8, 2009
36 Hours in Dallas By LUISITA LOPEZ TORREGROSA
DALLAS may not be a world-class city, but it's pulling out all the stops to get there. This oil-rich city is pumping millions of dollars into a new Dallas Center for the Performing Arts in the Arts District. When completed, the district will rank among the largest urban arts centers in the nation. Meanwhile, glamorous subterranean bars and edgy Asian restaurants are giving the city a cosmopolitan aura. But when it comes to entertainment, its No. 1 attraction is still the Cowboys, especially when the new, $1.2 billion football stadium opens this year, featuring one of the largest retractable roofs and high-definition televisions in the world.
Friday
4 p.m.
1) ARCHITECTURE PARK
See what the buzz is all about. Go on a walking tour of the Dallas Arts District (www.artsdistrict.org), a 19-block area straddling downtown office skyscrapers and uptown luxury hotels. Highlights include the new Dallas Center for the Performing Arts (2100 Ross Avenue, Suite 650; 214-954-9925; www.dallasperformingarts.org), a four-venue complex for music, opera, theater and dance in a parklike setting that's scheduled for a fall opening. The center will include a drum-shaped opera house designed by Norman Foster and a cube-shaped theater designed by Rem Koolhaas. To take it all in, find a bench at the Nasher Sculpture Center (2001 Flora Street; 214-242-5100; www.nashersculpturecenter.org), a museum designed by Renzo Piano with a lush garden that features works from a collection that includes Rodin, Henry Moore and George Segal.
7 p.m.
2) CHEERLEADING COCKTAILS
Size up the city's trend setters and assorted poseurs in their alligator boots and butter-soft tailored jackets at the Rattlesnake Bar, a plush lounge with mahogany-paneled walls and chocolate-brown leather sofas at the new Ritz-Carlton, Dallas (2121 McKinney Avenue; 214-922-4848; www.ritzcarlton.com/dallas). Order the Dean's Margarita with organic agave nectar ($12), nibble on spring rolls with achiote pulled pork ($14), and watch heads turn whenever a posse of lanky blondes in skinny jeans and designer heels sidles up to the bar.
8 p.m.
3) SOUTHWEST SUPREME
Not so long ago, Dallas was a culinary wasteland, save for its famous barbecue. But in recent years, celebrity chefs like Nobu Matsuhisa, Tom Colicchio and Charlie Palmer have planted their flags in Dallas, joining a fresh crop of hometown talent. At the top is Fearing's (2121 McKinney Avenue; 214-922-4848; www.fearingsrestaurant.com), a casual but chic restaurant that serves imaginative Southwest-rooted cuisine at the Ritz-Carlton. Opened in 2007, Fearing's already enjoys national acclaim: Zagat named it No. 1 in domestic hotel dining, and Frank Bruni, the restaurant critic for The New York Times, called it one of the country's top 10 new restaurants outside of New York last year. The current menu includes lobster coconut bisque ($14) and wood-grilled Australian lamb chops on pecorino polenta ($44). Dinner for two, about $200.
10:30 p.m.
4) PARTY HIGH
There are still men's clubs, honky-tonks and jukebox joints in Dallas, but the city's night life has gotten decidedly sleeker and flashier, with velvet-roped discos and bottle-service lounges. If you want a stellar view of the stars and the city's bright lights, go to the rooftop bar of the Joule hotel (1530 Main Street; 214-748-1300; www.luxurycollection.com/joule). It features bedlike sofas and cocoonlike chairs arrayed along a slender, cantilevered swimming pool that juts out 10 stories above the sidewalk. Or, for an even better view, go to Five-Sixty, Wolfgang Puck's new Asian-style restaurant in the glowing ball atop the 560-feet-high Reunion Tower (300 Reunion Boulevard; 214-741-5560). The rotating bar, which serves a dozen kinds of sake, offers magnificent views of a skyline edged in colorful lights and the suburban sprawl beyond.
Saturday
9:30 a.m.
5) MORNING GLORY
Need a breath of fresh air after a late night out? Head to Katy Trail (entrance at Knox Street at Abbott Avenue; 214-303-1180; www.katytraildallas.org), a 3.5-mile greenway that winds through the city's wooded parks and urban neighborhoods. Built along old railroad tracks, the trail is a favorite of young and old, bikers and runners, strollers and dog walkers.
11 a.m.
6) DIGGING FOR ART
From the air, Dallas might look like a forest of faceless skyscrapers, but there are pockets of bohemia. The talk this season centers on Dragon Street in the Design District, where warehouses are becoming cool galleries, and boxy apartments and studios are being built. The street may still feel a tad empty on weekends, but the top draws include the Gerald Peters Gallery (1019 Dragon Street; 214-969-9410; www.gpgallery.com), with its sleek spaces and smart mix of paintings and sculptures, and the Holly Johnson Gallery (1411 Dragon Street; 214-369-0169; www.hollyjohnsongallery.com), a gleaming space devoted to contemporary artists.
1 p.m.
7) SLOWER FOOD
Chicken-fried everything may be a staple in Texas, but in Dallas organic salads and other light fare is just as popular. A trendy spot is Rise No. 1 (5360 West Lovers Lane; 214-366-9900; www.risesouffle.com), a charming bistro with a grass-green facade that serves up wonderful soufflés — a slow-paced antidote to Dallas's manic drive-and-shop lifestyle. Try the truffle-infused mushroom soufflé ($15) with a glass of dry white.
3 p.m.
8) RETAIL OVERLOAD
Shopping is a local sport here, but there's more to Dallas than Neiman Marcus. For slow-paced window shopping, stroll around Inwood Village (West Lovers Lane and Inwood Road; www.inwoodvillage.com), a landmark 1949 shopping center with an eclectic range of signature stores. Retail highlights include Rich Hippie (5350 West Lovers Lane No. 127; 214-358-1968; www.richhippie.com) for retro and avant-garde clothing like a finely tooled pink leather jacket ($728). Next door is Haute Baby (5350 West Lovers Lane No. 128; 214-357-3068) for cute toddler wear, like a yellow slicker with hoodie ($110). But perhaps the chicest boutique is Forty Five Ten (4510 McKinney Avenue; 214-559-4510; www.fortyfiveten.com). The prices are shocking but it's worth a visit. Recent finds included a vintage trolley case by Globe-Trotter ($1,175) and an iron vase by the Texan artist Jan Barboglio ($550).
8:30 p.m.
9) MEX-MEX
This is the land of Tex-Mex. And while cheesy tacos and greasy nachos are the standard fare, more authentic Mexican cuisine has roots in Dallas as well. One of the most popular spots for original Mexican fare is La Duni Latin Cafe (4620 McKinney Avenue; 214-520-7300; www.laduni.com), which offers a terrific dish called tacos de picanha (beef loin strips on tortillas, $19.75). But for more inventive cuisine, try Trece: Mexican Kitchen & Tequila Lounge (4513 Travis Street; 214-780-1900; www.trecerestaurant.com). The formal dining room, dressed in cream, cacao and sepia colors, invites celebration. Kick things off with a jalapeño caipirinha ($11) or a blueberry mojito ($11) before tucking into the braised short ribs in cabernet and chile molasses ($21).
11:30 p.m.
10) COOL KIDS
Once a ramshackle district, the historic Cedar Springs neighborhood has a new energy, with gay-friendly discos, curio shops, burger bars, boutiques and galleries. To mingle with the neighborhood's varied stripes, bop over to J. R.'s Bar & Grill (3923 Cedar Springs Road; 214-528-1004; www.partyattheblock.com), a cavernous club with brick walls, a tin-ceiling and a scuffed dance floor that draws gays, straights, middle-aged couples, midnight cowboys, frat boys and Amy Winehouse lookalikes. Nothing gets going before midnight, when the pub crawlers and night lizards come out to play.
Sunday
11:30 p.m.
11) SPORTS MADNESS
If it's Sunday in Dallas, do as the locals do and hit a sports bar. There are dozens in town, if not hundreds, but a favorite is the McKinney Avenue Tavern (2822 McKinney Avenue; 214-969-1984; www.mckinneyavenuetavern.com), affectionately nicknamed the Mat. There is a carved-wood bar with two dozen or so rickety tables fronting the 30-odd television screens that show nothing but sports, day and night. When the Cowboys play, the joint is bedlam. Rule No. 1: Go early, stay late.
THE BASICS
American, Delta, Continental and other major airlines serve the Dallas-Fort Worth International Airport. A recent Web search turned up a nonstop American flight from La Guardia starting at $269 for travel in February. A car rental is optional; there are plenty of taxis in the city.
Dallas has plenty of luxury hotels. The Ritz-Carlton, Dallas (2121 McKinney Avenue; 214-922-0200; www.ritzcarlton.com/dallas) ranks near the top, with one of the finest restaurants (Fearing's), a spa and other amenities. Rooms start at $299 and go much higher.
The Joule (1530 Main Street; 214-748-1300; www.luxurycollection.com/joule) is a new and trendy hotel in downtown Dallas, and features a Charlie Palmer restaurant, a jazzy basement nightclub called PM, and a rooftop bar with a pool. Rooms start at about $325.
The Belmont (901 Fort Worth Avenue; 866-870-8010; www.belmontdallas.com) brings back 1940s charm with modern amenities. Set across the Trinity River, this recently restored hotel has a terrace bar and inviting midcentury-style rooms done in vibrant colors. Rooms start at $125.
http://events.nytimes.com/2009/02/08/travel/08hours.html?pagewanted=print
http://snipurl.com/bigi6
36 Hours in Dallas By LUISITA LOPEZ TORREGROSA
DALLAS may not be a world-class city, but it's pulling out all the stops to get there. This oil-rich city is pumping millions of dollars into a new Dallas Center for the Performing Arts in the Arts District. When completed, the district will rank among the largest urban arts centers in the nation. Meanwhile, glamorous subterranean bars and edgy Asian restaurants are giving the city a cosmopolitan aura. But when it comes to entertainment, its No. 1 attraction is still the Cowboys, especially when the new, $1.2 billion football stadium opens this year, featuring one of the largest retractable roofs and high-definition televisions in the world.
Friday
4 p.m.
1) ARCHITECTURE PARK
See what the buzz is all about. Go on a walking tour of the Dallas Arts District (www.artsdistrict.org), a 19-block area straddling downtown office skyscrapers and uptown luxury hotels. Highlights include the new Dallas Center for the Performing Arts (2100 Ross Avenue, Suite 650; 214-954-9925; www.dallasperformingarts.org), a four-venue complex for music, opera, theater and dance in a parklike setting that's scheduled for a fall opening. The center will include a drum-shaped opera house designed by Norman Foster and a cube-shaped theater designed by Rem Koolhaas. To take it all in, find a bench at the Nasher Sculpture Center (2001 Flora Street; 214-242-5100; www.nashersculpturecenter.org), a museum designed by Renzo Piano with a lush garden that features works from a collection that includes Rodin, Henry Moore and George Segal.
7 p.m.
2) CHEERLEADING COCKTAILS
Size up the city's trend setters and assorted poseurs in their alligator boots and butter-soft tailored jackets at the Rattlesnake Bar, a plush lounge with mahogany-paneled walls and chocolate-brown leather sofas at the new Ritz-Carlton, Dallas (2121 McKinney Avenue; 214-922-4848; www.ritzcarlton.com/dallas). Order the Dean's Margarita with organic agave nectar ($12), nibble on spring rolls with achiote pulled pork ($14), and watch heads turn whenever a posse of lanky blondes in skinny jeans and designer heels sidles up to the bar.
8 p.m.
3) SOUTHWEST SUPREME
Not so long ago, Dallas was a culinary wasteland, save for its famous barbecue. But in recent years, celebrity chefs like Nobu Matsuhisa, Tom Colicchio and Charlie Palmer have planted their flags in Dallas, joining a fresh crop of hometown talent. At the top is Fearing's (2121 McKinney Avenue; 214-922-4848; www.fearingsrestaurant.com), a casual but chic restaurant that serves imaginative Southwest-rooted cuisine at the Ritz-Carlton. Opened in 2007, Fearing's already enjoys national acclaim: Zagat named it No. 1 in domestic hotel dining, and Frank Bruni, the restaurant critic for The New York Times, called it one of the country's top 10 new restaurants outside of New York last year. The current menu includes lobster coconut bisque ($14) and wood-grilled Australian lamb chops on pecorino polenta ($44). Dinner for two, about $200.
10:30 p.m.
4) PARTY HIGH
There are still men's clubs, honky-tonks and jukebox joints in Dallas, but the city's night life has gotten decidedly sleeker and flashier, with velvet-roped discos and bottle-service lounges. If you want a stellar view of the stars and the city's bright lights, go to the rooftop bar of the Joule hotel (1530 Main Street; 214-748-1300; www.luxurycollection.com/joule). It features bedlike sofas and cocoonlike chairs arrayed along a slender, cantilevered swimming pool that juts out 10 stories above the sidewalk. Or, for an even better view, go to Five-Sixty, Wolfgang Puck's new Asian-style restaurant in the glowing ball atop the 560-feet-high Reunion Tower (300 Reunion Boulevard; 214-741-5560). The rotating bar, which serves a dozen kinds of sake, offers magnificent views of a skyline edged in colorful lights and the suburban sprawl beyond.
Saturday
9:30 a.m.
5) MORNING GLORY
Need a breath of fresh air after a late night out? Head to Katy Trail (entrance at Knox Street at Abbott Avenue; 214-303-1180; www.katytraildallas.org), a 3.5-mile greenway that winds through the city's wooded parks and urban neighborhoods. Built along old railroad tracks, the trail is a favorite of young and old, bikers and runners, strollers and dog walkers.
11 a.m.
6) DIGGING FOR ART
From the air, Dallas might look like a forest of faceless skyscrapers, but there are pockets of bohemia. The talk this season centers on Dragon Street in the Design District, where warehouses are becoming cool galleries, and boxy apartments and studios are being built. The street may still feel a tad empty on weekends, but the top draws include the Gerald Peters Gallery (1019 Dragon Street; 214-969-9410; www.gpgallery.com), with its sleek spaces and smart mix of paintings and sculptures, and the Holly Johnson Gallery (1411 Dragon Street; 214-369-0169; www.hollyjohnsongallery.com), a gleaming space devoted to contemporary artists.
1 p.m.
7) SLOWER FOOD
Chicken-fried everything may be a staple in Texas, but in Dallas organic salads and other light fare is just as popular. A trendy spot is Rise No. 1 (5360 West Lovers Lane; 214-366-9900; www.risesouffle.com), a charming bistro with a grass-green facade that serves up wonderful soufflés — a slow-paced antidote to Dallas's manic drive-and-shop lifestyle. Try the truffle-infused mushroom soufflé ($15) with a glass of dry white.
3 p.m.
8) RETAIL OVERLOAD
Shopping is a local sport here, but there's more to Dallas than Neiman Marcus. For slow-paced window shopping, stroll around Inwood Village (West Lovers Lane and Inwood Road; www.inwoodvillage.com), a landmark 1949 shopping center with an eclectic range of signature stores. Retail highlights include Rich Hippie (5350 West Lovers Lane No. 127; 214-358-1968; www.richhippie.com) for retro and avant-garde clothing like a finely tooled pink leather jacket ($728). Next door is Haute Baby (5350 West Lovers Lane No. 128; 214-357-3068) for cute toddler wear, like a yellow slicker with hoodie ($110). But perhaps the chicest boutique is Forty Five Ten (4510 McKinney Avenue; 214-559-4510; www.fortyfiveten.com). The prices are shocking but it's worth a visit. Recent finds included a vintage trolley case by Globe-Trotter ($1,175) and an iron vase by the Texan artist Jan Barboglio ($550).
8:30 p.m.
9) MEX-MEX
This is the land of Tex-Mex. And while cheesy tacos and greasy nachos are the standard fare, more authentic Mexican cuisine has roots in Dallas as well. One of the most popular spots for original Mexican fare is La Duni Latin Cafe (4620 McKinney Avenue; 214-520-7300; www.laduni.com), which offers a terrific dish called tacos de picanha (beef loin strips on tortillas, $19.75). But for more inventive cuisine, try Trece: Mexican Kitchen & Tequila Lounge (4513 Travis Street; 214-780-1900; www.trecerestaurant.com). The formal dining room, dressed in cream, cacao and sepia colors, invites celebration. Kick things off with a jalapeño caipirinha ($11) or a blueberry mojito ($11) before tucking into the braised short ribs in cabernet and chile molasses ($21).
11:30 p.m.
10) COOL KIDS
Once a ramshackle district, the historic Cedar Springs neighborhood has a new energy, with gay-friendly discos, curio shops, burger bars, boutiques and galleries. To mingle with the neighborhood's varied stripes, bop over to J. R.'s Bar & Grill (3923 Cedar Springs Road; 214-528-1004; www.partyattheblock.com), a cavernous club with brick walls, a tin-ceiling and a scuffed dance floor that draws gays, straights, middle-aged couples, midnight cowboys, frat boys and Amy Winehouse lookalikes. Nothing gets going before midnight, when the pub crawlers and night lizards come out to play.
Sunday
11:30 p.m.
11) SPORTS MADNESS
If it's Sunday in Dallas, do as the locals do and hit a sports bar. There are dozens in town, if not hundreds, but a favorite is the McKinney Avenue Tavern (2822 McKinney Avenue; 214-969-1984; www.mckinneyavenuetavern.com), affectionately nicknamed the Mat. There is a carved-wood bar with two dozen or so rickety tables fronting the 30-odd television screens that show nothing but sports, day and night. When the Cowboys play, the joint is bedlam. Rule No. 1: Go early, stay late.
THE BASICS
American, Delta, Continental and other major airlines serve the Dallas-Fort Worth International Airport. A recent Web search turned up a nonstop American flight from La Guardia starting at $269 for travel in February. A car rental is optional; there are plenty of taxis in the city.
Dallas has plenty of luxury hotels. The Ritz-Carlton, Dallas (2121 McKinney Avenue; 214-922-0200; www.ritzcarlton.com/dallas) ranks near the top, with one of the finest restaurants (Fearing's), a spa and other amenities. Rooms start at $299 and go much higher.
The Joule (1530 Main Street; 214-748-1300; www.luxurycollection.com/joule) is a new and trendy hotel in downtown Dallas, and features a Charlie Palmer restaurant, a jazzy basement nightclub called PM, and a rooftop bar with a pool. Rooms start at about $325.
The Belmont (901 Fort Worth Avenue; 866-870-8010; www.belmontdallas.com) brings back 1940s charm with modern amenities. Set across the Trinity River, this recently restored hotel has a terrace bar and inviting midcentury-style rooms done in vibrant colors. Rooms start at $125.
http://events.nytimes.com/2009/02/08/travel/08hours.html?pagewanted=print
http://snipurl.com/bigi6
A 10-Year Stretch That's Worse Than It Looks By FLOYD NORRIS
February 7, 2009
Off the Charts
A 10-Year Stretch That's Worse Than It Looks By FLOYD NORRIS
IN the last 82 years — the history of the Standard & Poor's 500 — the stock market has been through one Great Depression and numerous recessions. It has experienced bubbles and busts, bull markets and bear markets.
But it has never seen a 10-year stretch as bad as the one that ended last month.
Over the 10 years through January, an investor holding the stocks in the S.& P.'s 500-stock index, and reinvesting the dividends, would have lost about 5.1 percent a year after adjusting for inflation, as is shown in the accompanying chart.
Until now, the worst 10-year period, by that measure, was the period that ended September 1974, with a compound annual decline of 4.3 percent.
That decline was strongly influenced by inflation. Ignoring inflation, stocks over that decade returned half a percent a year, not a very good showing but not a loss. But with inflation taking off, the real, inflation-adjusted return was negative.
For the current period, the total return was negative, at minus 2.6 percent a year, even before factoring in inflation.
Perhaps surprisingly, the 10 years after the 1929 crash were not that bad by this measure — which may say as much about the measure as it does about the performance of the stock market. The deflation of the 1930s helped the after-inflation of the stock market to look better.
For the 10 years after the crash, through Sept. 30, 1939, the compound annual decline of the stock market, with dividends reinvested, was 5 percent a year before considering inflation. That remains the worst 10-year period. But after factoring in deflation, the loss was 2.8 percent a year, which is still bad but not horrid.
Compounding interest rates over a 10-year period can magnify differences that look small. For example, over the 10 years through January, the total losses in nominal dollars from the S.& P. 500, with dividends reinvested, was 23.5 percent. But with inflation added in, the decline was 40.4 percent.
The numbers in the chart assume that the Consumer Price Index was unchanged in January from December. But the accuracy of that assumption does not matter. Even if consumer prices rose or fell sharply during the month, the decade would still have been the worst one.
The decade was not a smooth one. It started with the market nearing the peak it would reach in early 2000, as the technology stock bubble expanded. Prices tumbled through late 2002, then doubled from those depressed levels by late 2007. Since then, a rapid decline has brought them back close to the lows of 2002 before considering dividends and inflation.
Taking inflation and dividends into account, an investor who put money into the market any time after the end of 1996, and held on, now has less value than when he or she started.
Many things influence stock prices, of course, and there is no guarantee that continued economic and financial woes will not drive the market down from here. But long-term investors may be able to take comfort from the fact that bad decades are often followed by 10-year periods that are better than the long-term average, which shows a gain of 6.2 percent a year.
Off the Charts
A 10-Year Stretch That's Worse Than It Looks By FLOYD NORRIS
IN the last 82 years — the history of the Standard & Poor's 500 — the stock market has been through one Great Depression and numerous recessions. It has experienced bubbles and busts, bull markets and bear markets.
But it has never seen a 10-year stretch as bad as the one that ended last month.
Over the 10 years through January, an investor holding the stocks in the S.& P.'s 500-stock index, and reinvesting the dividends, would have lost about 5.1 percent a year after adjusting for inflation, as is shown in the accompanying chart.
Until now, the worst 10-year period, by that measure, was the period that ended September 1974, with a compound annual decline of 4.3 percent.
That decline was strongly influenced by inflation. Ignoring inflation, stocks over that decade returned half a percent a year, not a very good showing but not a loss. But with inflation taking off, the real, inflation-adjusted return was negative.
For the current period, the total return was negative, at minus 2.6 percent a year, even before factoring in inflation.
Perhaps surprisingly, the 10 years after the 1929 crash were not that bad by this measure — which may say as much about the measure as it does about the performance of the stock market. The deflation of the 1930s helped the after-inflation of the stock market to look better.
For the 10 years after the crash, through Sept. 30, 1939, the compound annual decline of the stock market, with dividends reinvested, was 5 percent a year before considering inflation. That remains the worst 10-year period. But after factoring in deflation, the loss was 2.8 percent a year, which is still bad but not horrid.
Compounding interest rates over a 10-year period can magnify differences that look small. For example, over the 10 years through January, the total losses in nominal dollars from the S.& P. 500, with dividends reinvested, was 23.5 percent. But with inflation added in, the decline was 40.4 percent.
The numbers in the chart assume that the Consumer Price Index was unchanged in January from December. But the accuracy of that assumption does not matter. Even if consumer prices rose or fell sharply during the month, the decade would still have been the worst one.
The decade was not a smooth one. It started with the market nearing the peak it would reach in early 2000, as the technology stock bubble expanded. Prices tumbled through late 2002, then doubled from those depressed levels by late 2007. Since then, a rapid decline has brought them back close to the lows of 2002 before considering dividends and inflation.
Taking inflation and dividends into account, an investor who put money into the market any time after the end of 1996, and held on, now has less value than when he or she started.
Many things influence stock prices, of course, and there is no guarantee that continued economic and financial woes will not drive the market down from here. But long-term investors may be able to take comfort from the fact that bad decades are often followed by 10-year periods that are better than the long-term average, which shows a gain of 6.2 percent a year.
Wednesday, February 04, 2009
Time to Steer 'Forceful Course' for Stimulus By DAVID LEONHARDT
Economic Scene
Time to Steer 'Forceful Course' for Stimulus By DAVID LEONHARDT
The most serious charge against the stimulus package is that it does not pack enough punch. Two different camps have been making this argument over the last few weeks. Publicly, the Obama administration hasn't really answered either one.
The first camp says that the stimulus is simply too small. The recession is likely to idle almost $2 trillion of resources — buildings, equipment and people — this year and next, yet the current stimulus will fill only $700 billion of the hole. Several liberal economists, the forecasters at Goldman Sachs and Mark Zandi (an economist whose forecasts the administration has used) all argue for a bill of at least $1 trillion.
The second camp says that, dollar for dollar, the current package is not as effective as it should be. The public face of this group is Martin Feldstein, a longtime adviser to Republicans. Rather than across-the-board tax cuts, he is calling for targeted tax cuts that people will receive only by spending money, on a new house or other items.
The administration has responded to its critics mostly by repeating its original arguments that the economy desperately needs help — which is true, but doesn't address the criticisms. So I spent much of the last few days asking Team Obama to be more specific.
Why isn't it pushing for a bigger package? Didn't Timothy Geithner, the Treasury secretary, recently say, "In a crisis of this magnitude, the most prudent course is the most forceful course." What about targeted incentives to get people to go shopping? Or why not devote more of the stimulus to the military — another idea of Mr. Feldstein's — and other programs that spend money more quickly than, say, railroad construction?
The answers, I think, allow for some clearer judgments about the bill. Remember, the deadline set by President Obama is still nine days away. He and Congress have time to improve the package.
•
One administration official began his explanation for why the package wasn't bigger by quoting a line from a Gates Foundation executive: Giving money away is not as easy as it may seem.
Shortly after the election, even advocates of an aggressive stimulus plan were calling for one that would cost only $600 billion. But the economy has continued to deteriorate. So the number has kept rising. The bill passed by the House last week cost about $800 billion. The price tag of the version being debated by the Senate is closer to $900 billion (about $700 billion of which would be spent this year or next year).
Either one would be the largest stimulus in history, as Lawrence Summers, Mr. Obama's top economic adviser, says. At these sizes, finding ways to spend the money can actually become a problem.
High-speed rail cannot be built quickly. States and cities can build only so many highways. As for the military, administration officials say they asked the Pentagon for a list of temporary projects that could begin soon. But the $10 billion of spending in the current bill covers them. Military barracks can be built quickly. Fighter jets cannot, especially when defense contractors are already operating at nearly full capacity, says Gordon Adams, a national security expert who was part of Mr. Obama's transition team.
Agencies rarely say no to more permanent financing, of course, but that's not what the White House is offering. It is looking for programs that can get off the ground quickly and that, for the sake of the budget deficit, won't be politically difficult to end once the economy starts growing again. That point is especially important, administration officials say, for winning the support of moderate Democrats and Republicans.
Even some of the administration's critics buy these arguments. "It's very difficult to spend the money quickly," Mr. Zandi says. "There are diminishing returns." That's why Mr. Zandi and Mr. Feldstein are emphasizing tax cuts.
And Obama aides say they are open to adding some tax cuts that specifically encourage spending. They looked into the possibility of sending debit cards to all 150 million American households, but decided it was not yet logistically feasible. Instead, the final package may include some smaller programs, like a home-buying subsidy the Senate began discussing on Tuesday.
But targeted tax cuts — in effect, a bribe for households to spend more money — bring their own problems, officials say. One of the economy's big weak spots right now is consumer indebtedness. Additional spending will help the economy this year, but it could also lead to more credit card and mortgage defaults — which would undermine the Treasury Department's efforts to revive the financial system.
The core of the administration's case comes down to four points. First, some of its critics' suggestions don't stand up to scrutiny. Second, the bill is, once again, getting larger and will make a major difference. "The goal was three million jobs," Rahm Emanuel, the chief of staff, told me, referring to Mr. Obama's promise that the stimulus would save or create three million jobs. "It achieves that goal."
Third, as Mr. Summers said, "Fiscal measures are only one prong — one component — of our overall approach." The response also "includes financial rescue, support for housing and global economic cooperation," he said.
Fourth, aides say this bill is not their only bite at the apple. Mr. Obama is willing to do more in the future. Congress, facing midterm elections, may also want to pass another small stimulus package next year.
•
What are we to make of these arguments?
It is certainly true that a much larger stimulus package would create problems of its own. It's also true, as administration officials acknowledge, that nobody can know for sure what the right size is.
Already, if you include the additional spending that will result from the jobs that the stimulus bill creates — the so-called multiplier effect — the Senate version of the bill might close about half of the $2 trillion output gap. The yet-to-be-announced programs to get credit flowing and reduce foreclosures will shrink the gap further. So if the current bill is the wrong size, it is probably not off by much.
Yet I keep coming back to Mr. Geithner's point about force and prudence. Credit crises are terrifically nasty beasts. They have a habit of making economists look foolishly optimistic.
The odds that, a year from now, Mr. Obama and Congress will regret not having been more aggressive seem bigger than the odds that they'll think they overdid it. Why not redouble efforts to find a few other ways to spend money quickly? More than 50 mass transit agencies across the country are cutting services or raising fares, and the stimulus bill does nothing for them.
Today, the Obama administration can still blame the Bush administration for the economy's condition. Next year, fairly or not, that won't be so easy.
E-mail: Leonhardt@nytimes.com
http://www.nytimes.com/2009/02/04/business/04leonhardt.html?sq=&st=cse&%2334;%20Leonhardt=&scp=1&%2334;Time%20to%20Steer=&pagewanted=print
http://snipurl.com/by2iq
Time to Steer 'Forceful Course' for Stimulus By DAVID LEONHARDT
The most serious charge against the stimulus package is that it does not pack enough punch. Two different camps have been making this argument over the last few weeks. Publicly, the Obama administration hasn't really answered either one.
The first camp says that the stimulus is simply too small. The recession is likely to idle almost $2 trillion of resources — buildings, equipment and people — this year and next, yet the current stimulus will fill only $700 billion of the hole. Several liberal economists, the forecasters at Goldman Sachs and Mark Zandi (an economist whose forecasts the administration has used) all argue for a bill of at least $1 trillion.
The second camp says that, dollar for dollar, the current package is not as effective as it should be. The public face of this group is Martin Feldstein, a longtime adviser to Republicans. Rather than across-the-board tax cuts, he is calling for targeted tax cuts that people will receive only by spending money, on a new house or other items.
The administration has responded to its critics mostly by repeating its original arguments that the economy desperately needs help — which is true, but doesn't address the criticisms. So I spent much of the last few days asking Team Obama to be more specific.
Why isn't it pushing for a bigger package? Didn't Timothy Geithner, the Treasury secretary, recently say, "In a crisis of this magnitude, the most prudent course is the most forceful course." What about targeted incentives to get people to go shopping? Or why not devote more of the stimulus to the military — another idea of Mr. Feldstein's — and other programs that spend money more quickly than, say, railroad construction?
The answers, I think, allow for some clearer judgments about the bill. Remember, the deadline set by President Obama is still nine days away. He and Congress have time to improve the package.
•
One administration official began his explanation for why the package wasn't bigger by quoting a line from a Gates Foundation executive: Giving money away is not as easy as it may seem.
Shortly after the election, even advocates of an aggressive stimulus plan were calling for one that would cost only $600 billion. But the economy has continued to deteriorate. So the number has kept rising. The bill passed by the House last week cost about $800 billion. The price tag of the version being debated by the Senate is closer to $900 billion (about $700 billion of which would be spent this year or next year).
Either one would be the largest stimulus in history, as Lawrence Summers, Mr. Obama's top economic adviser, says. At these sizes, finding ways to spend the money can actually become a problem.
High-speed rail cannot be built quickly. States and cities can build only so many highways. As for the military, administration officials say they asked the Pentagon for a list of temporary projects that could begin soon. But the $10 billion of spending in the current bill covers them. Military barracks can be built quickly. Fighter jets cannot, especially when defense contractors are already operating at nearly full capacity, says Gordon Adams, a national security expert who was part of Mr. Obama's transition team.
Agencies rarely say no to more permanent financing, of course, but that's not what the White House is offering. It is looking for programs that can get off the ground quickly and that, for the sake of the budget deficit, won't be politically difficult to end once the economy starts growing again. That point is especially important, administration officials say, for winning the support of moderate Democrats and Republicans.
Even some of the administration's critics buy these arguments. "It's very difficult to spend the money quickly," Mr. Zandi says. "There are diminishing returns." That's why Mr. Zandi and Mr. Feldstein are emphasizing tax cuts.
And Obama aides say they are open to adding some tax cuts that specifically encourage spending. They looked into the possibility of sending debit cards to all 150 million American households, but decided it was not yet logistically feasible. Instead, the final package may include some smaller programs, like a home-buying subsidy the Senate began discussing on Tuesday.
But targeted tax cuts — in effect, a bribe for households to spend more money — bring their own problems, officials say. One of the economy's big weak spots right now is consumer indebtedness. Additional spending will help the economy this year, but it could also lead to more credit card and mortgage defaults — which would undermine the Treasury Department's efforts to revive the financial system.
The core of the administration's case comes down to four points. First, some of its critics' suggestions don't stand up to scrutiny. Second, the bill is, once again, getting larger and will make a major difference. "The goal was three million jobs," Rahm Emanuel, the chief of staff, told me, referring to Mr. Obama's promise that the stimulus would save or create three million jobs. "It achieves that goal."
Third, as Mr. Summers said, "Fiscal measures are only one prong — one component — of our overall approach." The response also "includes financial rescue, support for housing and global economic cooperation," he said.
Fourth, aides say this bill is not their only bite at the apple. Mr. Obama is willing to do more in the future. Congress, facing midterm elections, may also want to pass another small stimulus package next year.
•
What are we to make of these arguments?
It is certainly true that a much larger stimulus package would create problems of its own. It's also true, as administration officials acknowledge, that nobody can know for sure what the right size is.
Already, if you include the additional spending that will result from the jobs that the stimulus bill creates — the so-called multiplier effect — the Senate version of the bill might close about half of the $2 trillion output gap. The yet-to-be-announced programs to get credit flowing and reduce foreclosures will shrink the gap further. So if the current bill is the wrong size, it is probably not off by much.
Yet I keep coming back to Mr. Geithner's point about force and prudence. Credit crises are terrifically nasty beasts. They have a habit of making economists look foolishly optimistic.
The odds that, a year from now, Mr. Obama and Congress will regret not having been more aggressive seem bigger than the odds that they'll think they overdid it. Why not redouble efforts to find a few other ways to spend money quickly? More than 50 mass transit agencies across the country are cutting services or raising fares, and the stimulus bill does nothing for them.
Today, the Obama administration can still blame the Bush administration for the economy's condition. Next year, fairly or not, that won't be so easy.
E-mail: Leonhardt@nytimes.com
http://www.nytimes.com/2009/02/04/business/04leonhardt.html?sq=&st=cse&%2334;%20Leonhardt=&scp=1&%2334;Time%20to%20Steer=&pagewanted=print
http://snipurl.com/by2iq
Restaurants Stop Playing Hard to Get By FRANK BRUNI
February 4, 2009
Critic’s Notebook
Restaurants Stop Playing Hard to Get By FRANK BRUNI
HAS a restaurant hugged you lately?
Has it insisted that you can have it more cheaply than you thought possible and whenever you want, not just at 5:45 p.m., when your desire isn’t close to peaking, or at 9:30, when you almost can’t be bothered anymore?
Has it dropped its usual guard? Surrendered its typical reserve?
I’m betting that the answer is “yes” — and that if you eat out regularly in New York, you’ve noticed a different reception, an altered mood: extreme solicitousness tinged with outright desperation.
Battered hard already by the recession and petrified of what’s to come, restaurants are talking sweet and reaching out in ways they didn’t six or even three months ago. They’re cutting special deals, adding little perks, relaxing demands and making an extra effort to be accessible.
They’ve seldom wanted you so bad, so they’ve rarely treated you so good. If you can still afford to dine out, you’re likely finding yourself enfolded in what the restaurateur Stephen Hanson— who recently closed two Manhattan restaurants, including Fiamma — describes as a big, tight embrace.
Predicting that “the consumer will just shut down” and that 2009 would be “a very, very tough year,” Mr. Hanson told peers at a conference in Manhattan last month, “You need to hug the customer.”
Trust me: the hugging had already begun.
I was feeling it regularly in restaurants where I was certain I hadn’t been recognized as a critic and where the “hello” from the host station sounded more like a “thank God.” I was feeling it on the telephone, as reservationists who couldn’t accommodate me one night veritably pleaded that I book another, or beseeched me for a callback number just in case a table suddenly opened.
And I wasn’t the only one.
Joan Rappoport, a Manhattan event planner who lives in the West Village and eats out regularly, said that she sensed a climatic shift as early as six months ago.
“The attitude that a number of places used to have, they don’t have that anymore,” Ms. Rappoport said, her tone of voice communicating equal measures bewilderment and relief. “That attitude of ‘we’re doing you a favor,’ that frosty condescending attitude — I don’t find that anymore. And I’ve experienced that change over and over again.”
Servers, she said, make double- and triple-sure that her table has everything it needs. Managers circle back to the table more often than ever to ask, with new urgency, if everything’s O.K.
They have the time. Fewer restaurants are filling up every night and more tables are going empty. According to Technomic, a Chicago-based research and consulting firm, fine-dining revenues could fall by 12 to 15 percent in 2009.
That may not sound cataclysmic, but restaurateurs say that for many restaurants, it is the difference between making and losing money.
“People need to understand how tight the margins are in the restaurant business,” said Alfred Portale, the chef and one of the owners of Gotham Bar and Grill, which opened 25 years ago.
Mr. Portale said that Gotham’s revenues are down by about 15 percent from a year ago, adding, “This is the toughest January I’ve ever seen.”
I asked if the restaurant was still eking out a profit. After hesitating for several seconds, he said, in a staggered cluster of short sentences: “I hope so. Yes. We will. A small one.”
Fabio Trabocchi, the chef at Fiamma, sounded even more dire in a recent telephone conversation, saying that some restaurants with prices as steep and standards as high as Fiamma’s and Gotham’s were seeing declines of up to 40 percent.
You get an immediate sense of that when hunting for reservations. While getting into a select cadre of perpetually mobbed restaurants can be as hellish and humbling as ever, getting into others isn’t nearly as tough as it once was.
“I’m a big fan of Chanterelle,” said Niko Canner, a management consultant who lives in Chelsea. “You can go to Chanterelle at the last minute now, in a way that you couldn’t nine months ago.”
As Mr. Canner spoke to me on the telephone last Wednesday around noon, he began surfing the Web site of Open Table, an online reservation system, and found that several highly acclaimed, steadfastly popular restaurants — including Chanterelle — could take a twosome that very night at the prime time of 7:30.
About two hours after our phone conversation, I tried my own Open Table experiment. I looked in the area round Union Square for a table for four at — or within a half hour of — 8 p.m. I had many options, including Gotham, Irving Mill and 15 East.
I looked in TriBeCa. I could dine in a foursome around that time at many of the neighborhood’s all-stars, including Chanterelle, the Harrison, Mai House and Matsugen.
Then I called Karen Waltuck, one of the owners of Chanterelle, who said that in the nearly 30 years since she and her husband opened the restaurant, she has never felt so unsettled.
“There’s a tenuous quality to everything that doesn’t give you a feeling of standing on solid ground,” she said, referring to herself and other restaurateurs. “We’re all looking around and saying: ‘What is going on here? What can we do to make it better for ourselves and for our clients?’ We all have to be clever in our ways.”
Chanterelle hasn’t instituted bargain menus or price reductions because, Ms. Waltuck said, the restaurant has always operated on a slim profit margin and tried to keep prices in check.
But so many other restaurants have fashioned so many special deals that two of the city’s most prominent dining-related Web sites — Eater and Grub Street, which is owned by New York magazine — have invented cheeky tags and new features to keep track of them.
Almost daily on Eater, about a half dozen new items pop up under the header “Dealfeed,” and the Web site has also unveiled a “recession specials map.” The flag that Grub Street uses for its ever-growing tally of price reductions: “The Recession Is Your Friend.”
At the avant-garde restaurant wd-50, on the Lower East Side, anyone who orders a 12-course $140 tasting menu can get any bottle of wine on the restaurant’s excellent list for half price. The promotion, begun in December, was initially supposed to last three months. Now it has no definite end date.
Wine discounts, waived corkage fees or wine lists showcasing less expensive bottles can be found in Midtown at Alto and the Modern, where bottles under $50 appear in the Bar Room as “wines for our times”; in TriBeCa at Capsouto Frères; and in Greenwich Village at Perry St., owned by Jean-Georges Vongerichten.
Mr. Vongerichten, many of whose restaurants have always offered price reductions at lunch, is being particularly aggressive (by which I mean huggy). In October Perry St. instituted the option of a $35 three-course dinner menu during the slow hours of 5:30 to 6:30 p.m. and 9:30 to 11 p.m. In December, his restaurant Nougatine, a casual adjunct of his Columbus Circle flagship, Jean Georges, instituted its own $35 three-course menu, every night but Saturday from 5:30 to 6:30 and 10 to 11 p.m.
That same month he began to offer a $35 seven-course omakase dinner at Matsugen, of which he is a principal owner. There are no restrictions on the hours when it can be ordered.
Not even the best-known chefs and most acclaimed restaurants are immune from the pressure to give diners more for less, and wild spending for extreme luxury is rapidly falling out of fashion.
At Del Posto in Chelsea, whose owners include Mario Batali, Lidia Bastianich and Joseph Bastianich, the price for the most extravagant, 20-course meal was reduced last month to $175 from $250. The price for a nine-course tasting menu fell to $125 from $175.
Daniel recently began offering, for people with reservations between 5:30 and 6:30 p.m. on Monday through Thursday, an early-bird special: three courses, including wine, for $98 as opposed to the usual $105 without wine. The restaurant Cru’s early-bird special, available every day up to 6:30 p.m., is three courses for $49.
Compass, on the Upper West Side, is promoting a “lobster sample sale,” until Feb. 15, that includes a whole three-pound grilled lobster for $39 and a lobster salad for $13.
Craft, which in October opened its private room twice a month for 10-course, $150 dinners cooked by Tom Colicchio — called Tom: Tuesday Dinner — reached out in the other direction, to bargain hunters, last month. It opened that room once a week for Damon: Frugal Fridays, with a range of dishes cooked by Craft’s executive chef, Damon Wise, for $10 apiece.
Dozens of prominent New York restaurants are extending the $24.07 lunch menus and $35 dinner menus of Winter Restaurant Week, well past when they were set to end last weekend. Le Cirque is prolonging them through February, something its owner, Sirio Maccioni, said he had never done.
Lever House has a $35 three-course dinner menu that it has said it will keep through March. Other restaurants have said that similar specials will last until the end of the year. At the rate things are going, Restaurant Week could become Restaurant Millennium.
And all sorts of rules and rigidities could crumble. The 21 Club recently abandoned requirements — in place for more than 75 years — that men wear neckties at dinner.
While its manager, Bryan McGuire, said the change wasn’t directly linked to the recession, he conceded in an interview with Glenn Collins of The New York Times that it “could help the restaurant greatly in a time of difficulty.”
So could the restaurant’s relatively new offer of free parking at any time of the night for diners, a bit of hugging that pales next to what one Chicago restaurant, Everest, is doing. Customers traveling 15 miles or less to the restaurant can get a luxury car service for $15.
Restaurants in New York and elsewhere are working harder than ever to make sure that no diner who has expressed an interest in them slips away.
David Barber, one of the owners of Blue Hill, in Greenwich Village, and Blue Hill at Stone Barns, in Westchester County, said that reservationists at those restaurants are newly assiduous about taking careful notes on any reservation request that couldn’t be met and are getting detailed contact information for whoever made the request. That way, a cancellation can be quickly replaced, and interested customers are more likely to be accommodated.
“There’s no assumption anymore that those cancellations are going to refill automatically, like in the days of two years ago,” Mr. Barber said.
And they’re showing their regulars even more love than usual.
Mr. Canner said: “If I walk into Craftsteak in my neighborhood without a reservation and they see me, the degree of palpable warmth around the ‘Oh, Mr. Canner, happy to see you!’ — the body language and the physicality around that — feels different.”
“Not that they wouldn’t be nice anytime,” he added, “but there’s more emotion around it.”
And at another of his regular haunts, Blue Ribbon Sushi in SoHo, a server brought him a free plate of fluke sashimi he hadn’t requested, as a thank-you.
“That’s something they generally don’t do,” he said. “And at that moment, I remember thinking, ‘If this restaurant, one of the most financially successful in New York, feels it’s so important to have that extra touch, what does it mean about the restaurant economy in New York?’ ”
It means tough going — and alms of a sort for the diners who help restaurants get through it.
Critic’s Notebook
Restaurants Stop Playing Hard to Get By FRANK BRUNI
HAS a restaurant hugged you lately?
Has it insisted that you can have it more cheaply than you thought possible and whenever you want, not just at 5:45 p.m., when your desire isn’t close to peaking, or at 9:30, when you almost can’t be bothered anymore?
Has it dropped its usual guard? Surrendered its typical reserve?
I’m betting that the answer is “yes” — and that if you eat out regularly in New York, you’ve noticed a different reception, an altered mood: extreme solicitousness tinged with outright desperation.
Battered hard already by the recession and petrified of what’s to come, restaurants are talking sweet and reaching out in ways they didn’t six or even three months ago. They’re cutting special deals, adding little perks, relaxing demands and making an extra effort to be accessible.
They’ve seldom wanted you so bad, so they’ve rarely treated you so good. If you can still afford to dine out, you’re likely finding yourself enfolded in what the restaurateur Stephen Hanson— who recently closed two Manhattan restaurants, including Fiamma — describes as a big, tight embrace.
Predicting that “the consumer will just shut down” and that 2009 would be “a very, very tough year,” Mr. Hanson told peers at a conference in Manhattan last month, “You need to hug the customer.”
Trust me: the hugging had already begun.
I was feeling it regularly in restaurants where I was certain I hadn’t been recognized as a critic and where the “hello” from the host station sounded more like a “thank God.” I was feeling it on the telephone, as reservationists who couldn’t accommodate me one night veritably pleaded that I book another, or beseeched me for a callback number just in case a table suddenly opened.
And I wasn’t the only one.
Joan Rappoport, a Manhattan event planner who lives in the West Village and eats out regularly, said that she sensed a climatic shift as early as six months ago.
“The attitude that a number of places used to have, they don’t have that anymore,” Ms. Rappoport said, her tone of voice communicating equal measures bewilderment and relief. “That attitude of ‘we’re doing you a favor,’ that frosty condescending attitude — I don’t find that anymore. And I’ve experienced that change over and over again.”
Servers, she said, make double- and triple-sure that her table has everything it needs. Managers circle back to the table more often than ever to ask, with new urgency, if everything’s O.K.
They have the time. Fewer restaurants are filling up every night and more tables are going empty. According to Technomic, a Chicago-based research and consulting firm, fine-dining revenues could fall by 12 to 15 percent in 2009.
That may not sound cataclysmic, but restaurateurs say that for many restaurants, it is the difference between making and losing money.
“People need to understand how tight the margins are in the restaurant business,” said Alfred Portale, the chef and one of the owners of Gotham Bar and Grill, which opened 25 years ago.
Mr. Portale said that Gotham’s revenues are down by about 15 percent from a year ago, adding, “This is the toughest January I’ve ever seen.”
I asked if the restaurant was still eking out a profit. After hesitating for several seconds, he said, in a staggered cluster of short sentences: “I hope so. Yes. We will. A small one.”
Fabio Trabocchi, the chef at Fiamma, sounded even more dire in a recent telephone conversation, saying that some restaurants with prices as steep and standards as high as Fiamma’s and Gotham’s were seeing declines of up to 40 percent.
You get an immediate sense of that when hunting for reservations. While getting into a select cadre of perpetually mobbed restaurants can be as hellish and humbling as ever, getting into others isn’t nearly as tough as it once was.
“I’m a big fan of Chanterelle,” said Niko Canner, a management consultant who lives in Chelsea. “You can go to Chanterelle at the last minute now, in a way that you couldn’t nine months ago.”
As Mr. Canner spoke to me on the telephone last Wednesday around noon, he began surfing the Web site of Open Table, an online reservation system, and found that several highly acclaimed, steadfastly popular restaurants — including Chanterelle — could take a twosome that very night at the prime time of 7:30.
About two hours after our phone conversation, I tried my own Open Table experiment. I looked in the area round Union Square for a table for four at — or within a half hour of — 8 p.m. I had many options, including Gotham, Irving Mill and 15 East.
I looked in TriBeCa. I could dine in a foursome around that time at many of the neighborhood’s all-stars, including Chanterelle, the Harrison, Mai House and Matsugen.
Then I called Karen Waltuck, one of the owners of Chanterelle, who said that in the nearly 30 years since she and her husband opened the restaurant, she has never felt so unsettled.
“There’s a tenuous quality to everything that doesn’t give you a feeling of standing on solid ground,” she said, referring to herself and other restaurateurs. “We’re all looking around and saying: ‘What is going on here? What can we do to make it better for ourselves and for our clients?’ We all have to be clever in our ways.”
Chanterelle hasn’t instituted bargain menus or price reductions because, Ms. Waltuck said, the restaurant has always operated on a slim profit margin and tried to keep prices in check.
But so many other restaurants have fashioned so many special deals that two of the city’s most prominent dining-related Web sites — Eater and Grub Street, which is owned by New York magazine — have invented cheeky tags and new features to keep track of them.
Almost daily on Eater, about a half dozen new items pop up under the header “Dealfeed,” and the Web site has also unveiled a “recession specials map.” The flag that Grub Street uses for its ever-growing tally of price reductions: “The Recession Is Your Friend.”
At the avant-garde restaurant wd-50, on the Lower East Side, anyone who orders a 12-course $140 tasting menu can get any bottle of wine on the restaurant’s excellent list for half price. The promotion, begun in December, was initially supposed to last three months. Now it has no definite end date.
Wine discounts, waived corkage fees or wine lists showcasing less expensive bottles can be found in Midtown at Alto and the Modern, where bottles under $50 appear in the Bar Room as “wines for our times”; in TriBeCa at Capsouto Frères; and in Greenwich Village at Perry St., owned by Jean-Georges Vongerichten.
Mr. Vongerichten, many of whose restaurants have always offered price reductions at lunch, is being particularly aggressive (by which I mean huggy). In October Perry St. instituted the option of a $35 three-course dinner menu during the slow hours of 5:30 to 6:30 p.m. and 9:30 to 11 p.m. In December, his restaurant Nougatine, a casual adjunct of his Columbus Circle flagship, Jean Georges, instituted its own $35 three-course menu, every night but Saturday from 5:30 to 6:30 and 10 to 11 p.m.
That same month he began to offer a $35 seven-course omakase dinner at Matsugen, of which he is a principal owner. There are no restrictions on the hours when it can be ordered.
Not even the best-known chefs and most acclaimed restaurants are immune from the pressure to give diners more for less, and wild spending for extreme luxury is rapidly falling out of fashion.
At Del Posto in Chelsea, whose owners include Mario Batali, Lidia Bastianich and Joseph Bastianich, the price for the most extravagant, 20-course meal was reduced last month to $175 from $250. The price for a nine-course tasting menu fell to $125 from $175.
Daniel recently began offering, for people with reservations between 5:30 and 6:30 p.m. on Monday through Thursday, an early-bird special: three courses, including wine, for $98 as opposed to the usual $105 without wine. The restaurant Cru’s early-bird special, available every day up to 6:30 p.m., is three courses for $49.
Compass, on the Upper West Side, is promoting a “lobster sample sale,” until Feb. 15, that includes a whole three-pound grilled lobster for $39 and a lobster salad for $13.
Craft, which in October opened its private room twice a month for 10-course, $150 dinners cooked by Tom Colicchio — called Tom: Tuesday Dinner — reached out in the other direction, to bargain hunters, last month. It opened that room once a week for Damon: Frugal Fridays, with a range of dishes cooked by Craft’s executive chef, Damon Wise, for $10 apiece.
Dozens of prominent New York restaurants are extending the $24.07 lunch menus and $35 dinner menus of Winter Restaurant Week, well past when they were set to end last weekend. Le Cirque is prolonging them through February, something its owner, Sirio Maccioni, said he had never done.
Lever House has a $35 three-course dinner menu that it has said it will keep through March. Other restaurants have said that similar specials will last until the end of the year. At the rate things are going, Restaurant Week could become Restaurant Millennium.
And all sorts of rules and rigidities could crumble. The 21 Club recently abandoned requirements — in place for more than 75 years — that men wear neckties at dinner.
While its manager, Bryan McGuire, said the change wasn’t directly linked to the recession, he conceded in an interview with Glenn Collins of The New York Times that it “could help the restaurant greatly in a time of difficulty.”
So could the restaurant’s relatively new offer of free parking at any time of the night for diners, a bit of hugging that pales next to what one Chicago restaurant, Everest, is doing. Customers traveling 15 miles or less to the restaurant can get a luxury car service for $15.
Restaurants in New York and elsewhere are working harder than ever to make sure that no diner who has expressed an interest in them slips away.
David Barber, one of the owners of Blue Hill, in Greenwich Village, and Blue Hill at Stone Barns, in Westchester County, said that reservationists at those restaurants are newly assiduous about taking careful notes on any reservation request that couldn’t be met and are getting detailed contact information for whoever made the request. That way, a cancellation can be quickly replaced, and interested customers are more likely to be accommodated.
“There’s no assumption anymore that those cancellations are going to refill automatically, like in the days of two years ago,” Mr. Barber said.
And they’re showing their regulars even more love than usual.
Mr. Canner said: “If I walk into Craftsteak in my neighborhood without a reservation and they see me, the degree of palpable warmth around the ‘Oh, Mr. Canner, happy to see you!’ — the body language and the physicality around that — feels different.”
“Not that they wouldn’t be nice anytime,” he added, “but there’s more emotion around it.”
And at another of his regular haunts, Blue Ribbon Sushi in SoHo, a server brought him a free plate of fluke sashimi he hadn’t requested, as a thank-you.
“That’s something they generally don’t do,” he said. “And at that moment, I remember thinking, ‘If this restaurant, one of the most financially successful in New York, feels it’s so important to have that extra touch, what does it mean about the restaurant economy in New York?’ ”
It means tough going — and alms of a sort for the diners who help restaurants get through it.
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