(on newsstands Monday, March 16)
COVER: I Want You to Start Spending! (p. 26). Senior Editor Daniel Gross writes that it's time for we as consumers, investors and businesses to start taking risks again in the economy. Not spending anything now could mean bigger problems in the future. "The rush to hoard cash and pinch pennies is understandable, given that some $13 trillion in net worth evaporated between mid-2007 and the end of 2008," Gross writes. "But while it makes complete microeconomic sense for families and individual businesses, the spending freeze and collective shunning of nonguaranteed investments is macroeconomically troubling. Especially if it persists once the credit crisis passes." In our economy, in which 70 percent of activity is derived from consumers, we do need our neighbors to spend. We also need to start investing again -- not necessarily in the stocks of Citigroup or in condos in Miami. "But rather to build skills, to create the new companies that are so vital to growth, and to fund the discovery and development of new technologies."
http://www.newsweek.com/id/189232
(Photo: http://www.newscom.com/cgi-bin/prnh/20090315/NYSU004 )
JONATHAN ALTER: "A Plan That Obama Can Bank On" (p. 30). Senior Editor and Columnist Jonathan Alter looks at some options that President Obama can consider for trying to fix the banking crisis. He writes that the "transitional banks" plan, first outlined by asset manager Max Holmes, deserves a second look. The plan would create four new federal entities for the four megabanks. These new transitional banks would take possession of the toxic assets but not write a huge check for them from the taxpayers. This is key. "The original 'bad banks' idea of last fall foundered because it would have required large-scale purchases at distressed prices," he writes. "Overnight, the balance sheets would be clean and the banks -- returned to health -- would attract investors and begin lending again. For accounting purposes, the assets would be priced at the audited book value at the end of 2008." The tough part, Alter writes, "is placing a proper value on the assets. With transitional banks, there would be more time to do so."
http://www.newsweek.com/id/189249
MONEY: "Cracking the Vault" (p. 32). Investigative Correspondent Mark Hosenball reports on a U.S. Senate investigation into Americans who have accounts in Swiss banks. One single bank -- UBS -- holds the secret bank accounts of 46,000 Americans, worth an estimated $18 billion. Lately, the Feds have tried to crack down on these rich Americans as tax evaders. The Swiss are resisting. At a time when the rich are coming under close and unsympathetic scrutiny, the details starting to come out about the way the Swiss banking game is played are eye-popping, if not infuriating. Judging from documents and testimony examined by Newsweek, Swiss bankers, like spies, practice what is known in the espionage business as tradecraft -- elaborate and often clever steps to evade detection.
http://www.newsweek.com/id/189248
CRIME: "The Enemy Within" (p. 36). Washington Correspondent Eve Conant and Miami Bureau Chief Arian Campo-Flores report that Mexican drug-cartel related activity is on the rise in American cities far removed from the U.S./Mexico border. Phoenix has become America's kidnapping capital, with 368 abductions reported last year, compared to 117 in 2000. Though in the past most of the nabbings stemmed from domestic-violence incidents, now the majority are linked to drug-trafficking and human-smuggling operations that pervade the Arizona corridor. It's still unclear to what extent the snatchings are being directly ordered by Mexican cartels, but authorities say they're undoubtedly a byproduct of the mayhem.
http://www.newsweek.com/id/189246
IRAQ: "The Myth Of Kurdistan" (p. 46). Special Correspondent Lennox Samuels reports that Kurdistan, the northern enclave of Iraq that was once touted as the model for a democratic Iraq, now seems more and more like a stagnant, feudal principality. Temperate and stable, pro-Western, mostly secular and gleefully capitalist, it was a haven from the chaos and bloodshed that engulfed the rest of the country. Most Kurds could live with its flaws as long as the regional government defended their hard-won autonomy and kept away the suicide bombers. But as the rest of Iraq keeps growing more open and democratic, the enclave remains stuck in its old ways.
http://www.newsweek.com/id/189239
HEALTH MATTERS: "I Can't Believe I'm Still a Vegan" (p. 16). Senior Editor David Noonan writes that he's learned to live with the aches and pains and eroding senses that come with getting older. But he will not accept getting fat, which would also mean increasing his risk for health problems associated with obesity. So in January he became a vegan. "Much to my surprise, more than two months later I am still a vegan. I am also 12 pounds lighter and I have substantially more energy than I did when I was a flesh eater." He found that radically revamping his eating habits wasn't as hard as he expected it to be. In fact, the toughest thing about being a vegan so far, aside from eating PBJs, which he swore off 40 years ago after eating about 2 million of them as a kid, is having to think about food so much.
http://www.newsweek.com/id/189291
SOCIETY: "No Harry And Louise" (p. 49). Washington Correspondent Katie Connolly reports that this time around health-care reform might actually happen and one person who may help President Obama's plan is Chip Kahn, a Washington lobbyist who created the iconic "Harry and Louise" ads that scared ordinary Americans and won much credit for killing "Hillarycare." Kahn says things are different today and he worries that soaring health costs are reaching unmanageable levels, hurting hospitals, insurers and patients alike.
http://www.newsweek.com/id/189297
BOOKS: "The Surprising Dark Side of the Very Hungry Caterpillar" (p. 52). General Editor Ramin Setoodeh reports that Eric Carle, the author of the most successful children's picture book, which celebrates its 40th anniversary this year and has sold 29 million copies, actually had a dark childhood in World War II Germany. When the war broke out, Carle's father was drafted into the German army and his family was engulfed in the chaos of war. "We spent many hours in our cellar," says Carle. "It was scary at times. The nearest bomb was maybe 20 feet away, and it shook the house." It took two and half more years after the German surrender for his father to return home after serving in a Russian prison camp. Carle returned to America in 1952, with only $40 and dreams of a brighter future.
http://www.newsweek.com/id/189230
TIP SHEET: "How Do You Mend A Broken Heart?" (p. 60) Health Reporter Jeneen Interlandi reports on the dilemma patients face when choosing the best treatment for coronary-artery disease. Americans now average nearly 500,000 bypass surgeries and more than 1 million angioplasty procedures annually, totaling more than $100 billion in medical costs. Yet, as those numbers climb, doctors and patients worry that the decision to pursue one treatment over another is based more on professional bias and patients' misperceptions than it is on sound science. Experts say that while many patients believe that surgery or angioplasty will help them live longer, numerous studies have failed to show any such benefit.
http://www.newsweek.com/id/189238
/PRNewswire -- March 15/
