Reading the signs

"R" or "D" or neither Following the Federal Reserve's surprise interest-rate cut last month, some analysts said the Fed had defused a potential recession, but others were still murmuring the dread word depression. Some quoted what American Enterprise Institute scholar John H. Makin had written in AEI's April 2001 Economic Outlook: "There have been two instances in the past century in which a stock market collapse followed an investment-led boom-in the United States after 1929 and in Japan after 1990," he wrote. "Both times, depression resulted.... Why, precisely, do we think that can't happen here?" A March report by global business and defense publisher Jane's Information Group had also hinted at depression, and wondered whether government monetary-massage would be enough to prevent it. Such analyses rest on a domino-line of related triggers that have in the past toppled national economies into protracted ruin: first a lengthy, euphoric boom marked by inflated and unsustainable stock prices; then crumbling equities markets, followed by declines in corporate earnings expectations, as well as consumer confidence and spending. But while some of those dominoes have fallen, others have not. "What we've got is a severe slowdown in the goods-producing sector, but not in the services sector," Dallas Federal Reserve head Robert McTeer said late in April. "Consumer sentiment has plunged but consumer spending has not." Mr. McTeer also warned that recession still looms: "Right now, we're worried about being on the edge of something that starts with 'r,' which I can't name with all these microphones." Optimistic analysts pointed to better-than-expected first-quarter earnings projections from pivotal technology companies such as IBM and Microsoft. In addition, industrial production last month advanced for the first time in five months. Lynn Reaser, chief economist and senior market strategist at Banc of America Capital Management, projects an upswing this month in key economic indicators, such as durable goods orders and new home sales. Should the economy continue its slide, though, Ms. Reaser says the Fed is waiting in the wings: "Look for the Fed to cut interest rates further on May 15 if economic data remain weak." Honesty as hiring policy Corporate managers want job candidates who know how to communicate, interact, and work effectively with others, according to Job Outlook 2001, a survey of nearly 500 firms conducted by the National Association of Colleges and Employers (NACE). But while people skills have long topped corporate-hiring wish lists, a decidedly moral trait has climbed steadily in the NACE survey over the last three years. "Honesty/integrity" this year ranked No. 2 on employers' lists of qualities they seek in new workers. The trait edged out "teamwork," "initiative," and the nebulous "interpersonal skills" in order of employer preference. In 2000, "honesty/integrity" clocked in at No. 9 on the survey; in 1999, it didn't even crack the top 10. Since NACE has asked survey questions in slightly different ways each year, the organization is reluctant to call integrity's seemingly resurgent popularity among employers a "trend." If there is trend, though, it may reflect an assent by business leaders to the philosophy of thinkers like historian Francis Fukuyama: Western values, such as the importance of honesty in both private and public arenas, have fueled the economic expansion of countries that embrace them. A return to honesty might also signal the onset of immorality fatigue among Americans, said Darryl Hart, academic dean at Westminster Seminary in California. Referring to the rubble of public trust left in the wake of Bill Clinton's presidential tenure, he noted that "there is a high degree of moral concern on all sides, including employers. People today are concerned that words mean what they mean." Selling in the dark Just when it seemed the movie business had run out of innovations, Screenvision Cinema Promotions and Unilever have cooked up another cinematic first: The two firms have teamed to become the first-ever to advertise on popcorn bags. Last month Screenvision began affixing packets of Lever 2000 hand wipes to the sides of popcorn bags sold in Loews, United Artists, and Regal movie theaters nationwide. Calling popcorn-bag ads a "very effective means of delivering targeted messages to moviegoers," Screenvision vice president P. J. Ewing pointed out the "uniquely pragmatic correlation" between popcorn consumers and hand wipes. M&Ms candies, Nintendo, and Target Stores also have queued up to advertise on popcorn bags this summer. But the jury's still out on how much brand exposure moviegoers will absorb while snacking in the dark.