Several weeks ago the Economist ran a special on the job market for MBA graduates (see the first article in the series). According to the Economist, the job market for MBA graduates from the class of 2010 has been much better than feared.

I, like many others, thought that the job market for MBA grads would be worse in 2010 than 2009 (see Update on the Job Market, Visit to the FT, or Crisis for MBA Grads). But this was before the unprecedented fiscal and monetary stimulus, and the bailout of the banks.

The Economist tagline summarizes the current situation nicely:

Firms are starting to hire again, but the heady days for MBA’s are not yet back.

Viewed through the lens of MBA hiring, the unprecedented level of economic support provided by the Fed/Treasury seems to have been somewhat of a success. Students are getting jobs again, not quite at the rate that they were two years ago, …but certainly better than in 2009.

In the past, consulting and finance firms did by far the most hiring. The recession hit them both, but while recruitment by consultancies is almost back to the pre-recession level, finance positions have dried up.

So MBAs are looking for alternative employers, including unfashionable organisations that were neglected in the past.

This is consistent with my observations of the current job market for MBA grads. Finance jobs are not abundant, but some financial institutions have slowly started hiring again. With the finance industry largely (though not completely) shut, consultancies seem to be the most desired employer in the current environment. And I too have spoken with many students who have been more willing than in years past to expand their search to general management, marketing, accounting, and other non-finance fields. The MBA students I have spoken with have even been entertaining offers from governmental agencies.

And given likely regulatory changes in the finance industry, I expect this trend to continue in the coming years.

Interestingly however, while the job market for MBA grads has improved markedly from last year at this time, the market for college and high school grads remains in crisis (see Teens Suffering Most and College Grads Flood Labor Market).

From the Time article:

The job market is tough for everyone. But this recession has become a jobs disaster for 16-to-19-year-olds. “The numbers are incredible,” says Andrew Sum, head of the Center for Labor Market Studies at Northeastern University and a nationally recognized expert on teen employment. “Proportionally, more kids have lost jobs in the past few years than the entire country lost in the Great Depression.”

The retail and construction sectors, which are usually key employers of young workers, have been among the hardest hit. Manufacturing, another typical job source for those lacking a higher education or even a high school degree, is not the force in the economy it once was. The result: the teen unemployment rate neared 28% in October before falling slightly the next month. That’s the highest ever recorded since the Federal Government began tracking it, and it’s almost triple the 10% rate for all workers. Teens make up a relatively small portion of the 139 million people employed in the U.S., and by most accounts they would be better off staying in school than entering the workforce.

But things only look slightly brighter for those with an undergraduate degree. According to Bloomberg:

Schools…will soon begin sending a wave of more than 1.6 million men and women with bachelor’s degrees into a labor market with a 9.9 percent jobless rate, according to the Education and Labor departments.

The graduates’ plight has been the subject of high-level discussions within President Barack Obama’s administration, which so far has concluded the best response is to focus on reviving overall employment and bolstering assistance for higher education, said Peter Orszag, the White House budget director.

[But] Unemployment among people under 25 years old was 19.6 percent in April, the highest level since the Labor Department began tracking the data in 1948.

Taken together, I think these stylized facts speak to the gulf in economic recovery between Main Street and Wall Street.

Every couple of years, the popular press muses whether the research conducted at Business Schools has any practical relevance. It looks like it’s time again (see Value of B-School Research).

According to the Economist:

Most MBA students will never read an issue of Administrative Science Quarterly, a well-regarded business-research journal…A recent issue included “Forging an Identity: An Insider-Outsider Study of Processes Involved in the Formation of Organisational Identity” and “Socioemotional Wealth and Corporate Responses to Institutional Pressures: Do Family Firms Pollute Less?”

Don’t worry if you can’t make heads or tails of the research from the titles. Truth be told, you’re not supposed to, and sometimes, neither can I. But I’m ok with that.

Anyhow,

If vapid bestsellers like “Who Moved My Cheese?” are at one end of the spectrum of management writing, then the typical ASQ article is resolutely at the other. The task of a business-school professor is to meet students somewhere in the middle. Over the last decade, there has been a chorus of critics proclaiming that they have not done a good enough job.

This year’s Sumantra Ghoshal Conference, held at London Business School, debated whether strategy research has become irrelevant to the practice of management. The late Mr Ghoshal published a paper in 2005 castigating business schools for heaping “bad theory” on their students.

I have attended several of the Ghoshal Conferences and have written about my experiences (see On Managerial Relevance, Initial Thoughts from LBS Conference, and Final Thoughts from LBS Conference). I was unable to attend the conference this year due to scheduling conflicts, but I still think the conference is a wholly worthwhile endeavor, …and I look forward to returning in coming years.

But back to the Economist article:

…Warren Bennis and James O’Toole, both at the University of Southern California, published an article in the Harvard Business Review [similarly] criticising MBA programmes for paying too much attention to “scientific” research and not enough to what current and future managers actually needed. Business schools, they argued, would be better off acting more like their professional counterparts, such as medical or law schools, nurturing skilled practitioners as well as frequent publishers.

But since, according to Bennis and O’Toole, Business Schools don’t act like medical or law schools, the question then becomes:

…should a prospective student worry about a faculty’s research prowess when applying to a school?

I have argued YES (see Should Students Care About Research, Impractically Relevant and On Managerial Relevance).

Although I understand (and even agree with) some of the criticisms of Business School research, I believe current, and future, executives can benefit from being exposed to research emanating from Business Schools.

And it’s not only research exposure that students receive in the classroom. Many professors are imparting critical-thinking skills by applying that research to real-world problems. For example, in Impractically Relevant I wrote:

I believe that we, as professors, …play an important role in bringing current research into the classroom. It is up to us to expose students to state-of-the art research, to discuss the important questions of the field, to synthesize the existing findings, to explain those findings in an accessible way, to impart received wisdom, to identify remaining gaps and unanswered questions, and to honestly acknowledge the shortcomings of our work. If we can do all these things, we (and our students) gain a better appreciation for the complexities of the real world. In fact, I believe so strongly in this charge that I feel that if we are not bringing research into the classroom, then we are failing our students. We owe them the best education possible, and it doesn’t mean spoon-feeding them “the answers”, but rather, engaging them in intellectually stimulating discourse and debate so that they can come to their own (informed) conclusions.

In addition to our function as translators, dissemenators, and synthesizers of scientific knowledge inside the classroom:

We also impact practice in other ways too. For example, hardly a day goes by that I see a newspaper without a quote from business school faculty. We are constantly asked to give our opinions on current events. What’s more, business school faculty are often asked to inform policy – whether  by proffering opinions to politicians or testifying on business practice. In this sense then, we help shape the game and inform the agenda – helping decide which issues are important and which are not.

[Further], ask the folks from the investment community and hedge fund universe if business school professors have had any impact on their practice. Ask government employees at the Justice Department whether business school economists have had any impact on the cases they bring and/or the outcomes of those cases. Ask CPA’s whether accounting faculty have had an impact on how they practice their craft.Although the full impact of our research on practice varies depending upon the business school discipline (accounting, finance, economics, marketing, strategy, organizational behavior, operations management, etc.), I’m sure I could find an example of some profound impact that an academician from each discipline has had on practice.

So my reaction to this article is consistent with that which I’ve expressed in the past: I think the stories of our demise have been greatly exaggerated. I think we do have a profound influence on practice, although not always in ways that are widely recognized, and in ways that are often difficult to quantify.

As I concluded several years ago:

Do I believe that business schools  ought to be relevant? Absolutely. Do I believe that rigorous research serves an important role in our field? Absolutely. Do I think that we are failing in our goals to be both relevant and rigorous?

Not necessarily.

Although I will be the first to acknowledge that there is room for improvement, so far, I continue to believe that research-oriented Business Schools are providing a public good.

Fordham University hosted the W. Edwards Deming Memorial Conference last week at which the participants addressed the future of the MBA degree (see MBA Under Siege: Reimagining Management Education). The speakers who presented were truly impressive scholars who have been among some of the most vocal critics of the MBA degree. Given my interest in the business of Business Schools (see, for example, Op Ed on Business Schools and the Financial Crisis), I was extremely disappointed that I was not able to attend.

Thankfully, one of my colleagues, Seth Freeman, was there. He was kind enough to share his notes from the conference. They can be found below the break.

Seth has asked me to make clear that with the exception of his thoughts that appear in parentheses below, his account of the events describe the panelists’ perspectives as they were conveyed, not his own.

—————————————————————–

The Tragedy of B-Schools and the Danger of Lost Legitimacy

The sense of the conference was that B-schools bear significant responsibility for the 2008 financial crisis by emphasizing a myopic and selfish approach to business crystallized by Agency theory.

This emphasis, and the damage it has done to the economy, has called the very legitimacy of the MBA into question, several panelists argued.

B-Schools Train Loose Individuals; the Tragedy of Toyota

Rakesh Khurana,  Professor of Leadership Development at Harvard Business School, warned that such a perspective, has bred a generation of ‘Loose Individuals’ who do not feel constrained by social norms of fairness or equity; who lack any sense of moral responsibility, and for whom the very idea of a larger duty to community and society seems alien or communistic, a sentiment most panelists (though not all) amplified.

Andrea Garbor, Chair of Business Journalism, Baruch College, noted that Toyota recently admitted the cost of this myopic and self-interested approach. Until recently, it was  a very profitable firm that made great cars led by old-school process experts who applied the systems principles of Edward Deming. But it’s become a troubled, highly criticized firm led by MBAs who myopically focused on finance and quick growth.

A Norm of Wall Street Arrogance?

Several panelists noted that an ‘MBA’ has come to mean a shallow, self-seeking, and arrogant person. Khurana reported that student-led studies at Harvard Business School found that graduating MBAs mostly felt less competent after going through the program, unless they fit into the subculture of white, male, American born New York investment bank financial types.

Kill the MBA

Henry Mintzberg, Professor of Management Studies at McGill, argued that the MBA promises something it simply cannot deliver and that it actually makes business worse by falsely encouraging 25 year-olds to think they can manage anything. Management, he said, is a practice, not a science or profession- a practice you can only nurture once someone is out there doing it.  So teaching inexperienced students is a waste of time, or worse.

Mintzberg also challenged the case method for the pretense that one can speak insightfully about a business after reading facts for a couple of hours, and that it overlooks the point that gathering facts is one of the key tasks of management.

He described a program he leads where managers largely learn by talking with each other around tables in class about how their work interacts with their training.

He argued for reform in several ways:

1. Shift classroom teaching from a ‘sage on stage’ approach to a ‘guide on the side’ approach, and help managers learn from each other mainly
2. Do not attempt to teach 25 year-olds how to manage.
3. Offer different training for 25 year-olds (who know little) than you offer to 40 year-olds (who know a lot and best learn from each other)
4. Replace the MBA with the more truthful ‘Master of Managerial Science’ and ‘Master of Science in Business’ degrees. Or keep it but stop calling it ‘management’ training, since it’s mostly about specialized training in finance and economics and not administration.
5. Look to second tier English business schools for truly exciting, innovative programs and courses.

Authentic Leadership

Michael Jensen, Emeritus professor at HBS,  spoke about his effort to go beyond the Agency theory he championed and to teach Authentic Leadership at Harvard, an approach which emphasizes the centrality of Integrity, Personal Authenticity, and Passionate Commitment.

(Ironically, Prof. Jensen did not respond to the claim by other panelists that his past advocacy for Agency theory may have hurt our society. And he was hard-pressed to offer examples of leaders who rose to the top following the principles he advocates now.)

Beyond Agency Theory- Greater Emphasis on Community, Society, Ethics…Even Theatre Arts

Most emphasized the need to move away from a myopic and self-defeating focus on narrow personal self-interest emphasized by economics and finance, and the need to train students to see the effects of their decisions on other stakeholders. Ed Freeman, a Professor of Business Administration, at Darden, though a self-described libertarian, shared this view with other panelists.

Several emphasized the need for stronger ethics training; others challenged the idea.

Several spoke of other changes to cultivate breadth, depth, and social awareness, arguing for inter-disciplinary training, combinations of design and business, liberal art education, even teaching B-school students to produce and act in plays.

MBA as Value Creator

Though few spoke positively about MBAs and B-Schools, some noted toward the end that B-School can and sometimes does even now cultivate socially aware, value creating leaders.

Change? It Will Likely Come from Outside Pressure

Change, several argued, will have to come from the outside, because even now, schools, deans, and even the AACSB have strong incentives to maintain the status quo.  Look for pressure from for-profit schools, corporate training programs, and recruiters who stop hiring MBAs.

—————————————————————–

Interesting. Thanks for sharing Seth!

According to CNBC (see College Costs Keep Soaring):

The cost of attending a four-year nonprofit private college increased 4.3 percent in the 2009-2010 academic year compared to a year ago, bringing the average annual price to $35,636, according to an educational trade group.

Growing at an even greater rate was the cost of going to a public college. Public in-state college costs rose 5.9 percent, bringing the average cost to $15,213.

MY COMMENT: The cost of tuition at public colleges is currently increasing at a faster rate than at private colleges because public schools are beholden to battered state budgets. Nevertheless, they still represent a significant value (assuming there is little difference in the underlying quality of education across the two).

We certainly can debate the quality/price tradeoff between public and private universities, and I think families would be well served to carefully consider not just the sticker price, but the quality of the education along with the career services that students are likely to receive in exchange for that price. As I mentioned in a previous post (see The Future of U.S. Higher Education):

I agree that the cost of higher education might price some out of the market entirely. However, …the cost of higher education, coupled with what I view as a fundamental shift in consumer behavior as a result of the recession, will more likely usher in a shift in consumption versus an end to consumption.

Gone are the days of taking on exorbitant amounts of debt to send children to private institutions with tuition (not including living expenses) of $40,000 per year, or more. Instead, families will increasingly opt  for public universities with tuition in the $10,000-$15,000 range.

For example, families in Texas might start asking tough questions like, “Is the difference in the price between Harvard and the University of Texas really worth the $120,000 difference?” I am not willing to argue that real differences between being educated at a private university and a public university do not exist; however, I am not sure whether those “benefits” (to the extent that they do, in fact, exist) justify the additional premium in all cases. And those considerations are likely to impact the decisions of consumers.

In addition, as I mentioned in another post (see More on University Enrollment and Affordability, quote from a WSJ article):

Facing shrunken savings and borrowing options, parents and students are making some tough trade-offs in choosing and paying for college, suggesting some shifting attitudes toward higher education may endure beyond the recession.

For me, this is where the action lies. It will be interesting to see whether the financial crisis ushers in a structural shift in consumer attitudes and behavior that ultimately puts a cap on the rate of tuition increases. My guess would be yes.

From Bloomberg (ht Aviad): Princeton and Harvard Raise Prices as Economy Burns

Life on top means not having to lower your prices.

…the cost of a year as an undergraduate at Harvard and Princeton has risen through boom and bust. Tuition and fees at Harvard jumped 67.8 percent over the decade; at Princeton, they increased 43.4 percent.

That hasn’t dented demand. Freshman applications at Harvard…rose by 60.9 percent over the last 10 years. At Princeton…demand rose by 47.7 percent.

“It would appear that an undergraduate degree at a place like Princeton is actually a Giffen good…” [said Jay Diamond]

Well, not exactly. By definition, a Giffen good is one for which consumption rises with rising prices. That’s not really characteristic of the market for a university education. The reality is that the demand for spots at elite universities has exceeded the supply by various multiples for years. Moreover, foreign demand for elite US colleges and universities has exploded over the past few decades. If anything then, the stylized facts presented in the Bloomberg article simply suggest that tuitions have been set at below market-clearing prices. For this reason, elite private universities still enjoy a fair amount of pricing power.

But increasing tuition through the recession is not unique to Harvard and Princeton (see Why College Costs Rise, Even through a Recession).

If you have paid a college tuition bill recently, perhaps the sticker shock has abated and your children have been good enough to friend you on Facebook so you can see what they are doing on your dime.

What probably still lingers, however, is the desire to ask some pointed questions of the people who are doing the educating. Where does all that money go? And why can’t the price tag fall for a change?

Earlier this year, the National Association of Independent Colleges and Universities announced with some pride that the average increase in tuition and fees at private institutions this school year would be the smallest in 37 years — 4.3 percent, just a little higher than inflation.

Is this where we are supposed to stand up and cheer?

As I have argued on this blog, the market for a college education is, without a doubt, subject to the forces of supply and demand (see Enrollment Drops at Private Colleges and More on University Enrollment and Affordability). It’s just that there are anywhere from three to five times as many applicants at the “traditionally” elite universities as there are spots. Because elite private universities are oversubscribed several-fold, they are less likely to feel the impact of the recession on the demand side (although they have certainly felt the haircuts to their endowments).

For private universities without the strong brand recognition (or the endowments) of the more storied programs, the reality is likely to be quite a bit different. Private universities without well-established brand names will be forced to make a stronger case for their value proposition vis-a-vis the public alternative (see The Future of US Higher Education).

I’ll be back from vacation next week, hopefully rested and ready to return to a more regular regimen of posting. In the meantime, I thought I’d share an article that caught my attention during a week otherwise occupied by beach reading, …and playing with my kids.

For those of you who follow this blog, you know that I have an interest in the job market for MBA graduates. As I have argued in the past, as difficult as the job market has been for MBA graduates from the class of 2009, it is my expectation that that the job market will, unfortunately, turn out to be worse for graduates from the class of 2010 (see Visit to the FT and Crisis for MBA Grads). I was therefore not surprised to come across an article in yesterday’s New York Times  detailing the difficulty that Law students have been having on this year’s market (see Downturn Dims Prospects).

This fall, law students are competing for half as many openings at big firms as they were last year in what is shaping up to be the most wrenching job search season in over 50 years.

New York University, Georgetown, Northwestern and other top universities confirm that interviews are down by a third to a half compared with a year ago, while lower-ranked schools are suffering more. What is more, when interviews finish in a few weeks, even fewer offers will be extended, said Howard L. Ellin, the chairman of global hiring at Skadden, Arps, because many firms are interviewing students for slots they may not fill.

We were already in recession at this time last year. So if interviews are down 33-50% from last year’s already depressed level, how bad must the market be this year?? Wow!

Although the New York Times article is specific to the market for attorneys, the job market for Law School grads shares many similarities with the market for MBA grads. Interviews start a bit earlier for law graduates than business graduates; but as with law, the lion’s share of the MBA interview activity takes place in the Fall.

And even if the broader economy is improving (and I am not quite convinced improvement is the word to characterize it, stabilizing is probably more accurate), it will be quite some time before the market for MBA grads picks back up, as many companies do not foresee robust growth. So not only are graduates competing for fewer overall slots, but they are also competing with the unemployed and under-employed (individuals who are working part-time for economic reasons, and similarly-credentialed graduates who took whatever jobs they could find).

So unfortunately, no green shoots for grads thus far…

A hearty hat tip to Muir for sending this along. Hysterical! Enjoy…

If for whatever reason you cannot view the embedded video, you can see the video by clicking through to MBA Ethics Oath.

After my recent posts on university enrollments and affordability (see Enrollment Drops at Private Colleges and The Future of U.S. Higher Education), I received an email from Marc Scheer, author of No Sucker Left Behind: Avoiding the Great College Ripoff. On his site I found a link to a recent Wall Street Journal article (see Weighing Price and Value when Picking a College) that describes some of the very same effects that I anticipated in my earlier posts.

According to the Wall Street Journal:

Facing shrunken savings and borrowing options, parents and students are making some tough trade-offs in choosing and paying for college, suggesting some shifting attitudes toward higher education may endure beyond the recession.

Old dreams of adult children earning degrees from elite, door-opening colleges or “legacy” schools attended by relatives are falling away in some families, in favor of a new pragmatism. Other parents and students are doing a tougher cost-benefit analysis of the true value of a pricey undergraduate degree.

…Joseph Losco, an expert on the history of education, calls “one of the strange things” about the economics of higher education: “Universities and colleges don’t compete on price.” In fact, some college administrators fear lowering their sticker price will hurt their image…

Consumers have been complicit, largely because…“the baby-boomer notion that parents should give it all up for the kids.” In a May 2008 survey of 720 parents of college students by Gallup and Sallie Mae, a student-loan company, 46% said they had never, at any point, ruled out any colleges for their kids based on costs.

But now, “families are much more price-conscious and value-conscious,” Dr. Losco says. A soon-to-be-released Sallie Mae-Gallup study of 1,600 college students and their parents, conducted in March and April, says parents are increasingly anxious about tuition—and students are more skeptical about the value of a degree, compared with the survey from a year earlier.

Such thinking bucks the cultural view that an elite college degree is “the gold standard for both parents and students … validating their worth in society,” Dr. Losco says. Now, more “parents are saying, ‘I don’t have the money to get you where you want to go,’ ” he says.

Even when the economy picks up, some of this new price-consciousness is likely to endure. The engines that have enabled college costs to soar—easy credit, home-equity loans and growth in savings—have stalled. Total college costs are already up 67% in the past decade at private colleges and 84% at public four-year universities, based on College Board data, and graduates’ wages haven’t kept pace.

The percentage of students from middle-income households who are attending state schools is rising, and more lower-income students are enrolling at community colleges, the study shows. “We would expect to see an even greater shift” next year, a Sallie Mae spokeswoman says.

Interesting stuff! Check out the full article.

Given my interest in the history and development of universities and colleges, I found today’s article about private college enrollments interesting, though not entirely unexpected (see Enrollment to Drop at a Third of Private Colleges). According to Bloomberg:

Almost a third of U.S. private colleges expect freshman enrollment to decline in the 2009-2010 school year as families struggle to pay bills and hold down debt, according to a survey.

Fourteen percent of schools surveyed from May 18 to June 19 predicted new undergraduate student enrollment would fall more than 5 percent…Forty-four percent of the schools said tuition deposits for the semester that starts in September declined from a year ago.

…students are struggling to afford college because of the recession…

“This is the most nail-biting season in memory for the admissions staff of some of these places,” Tony Pals, a spokesman for the association [National Association for Independent Colleges and Universities], said in an interview.

These data are consistent with the sentiment that I expressed in December of 2008 (see The Future of U.S. Higher Education). At the time, I suggested that there might be a fundamental structural shift in demand for private university education.

…the cost of higher education, coupled with what I view as a fundamental shift in consumer behavior as a result of the recession, will…usher in a shift in consumption…Gone are the days of taking on exorbitant amounts of debt to send children to private institutions with tuition (not including living expenses) of $40,000 per year, or more. Instead, families will increasingly opt  for public universities with tuition in the $10,000-$15,000 range.

For example, families in Texas might start asking tough questions like, “Is the difference in the price between Harvard and the University of Texas really worth the $120,000 difference?” I am not willing to argue that real differences between being educated at a private university and a public university do not exist; however, I am not sure whether those “benefits” (to the extent that they do, in fact, exist) justify the additional premium in all cases. And those considerations are likely to impact the decisions of consumers.

If frugality represents a fundamental structural shift in consumer mentality and behavior (as I believe it does), individual universities (private universities especially) would be well served to carefully consider what that might mean for their institution in the coming years, and prepare accordingly.

My schedule has kept me on the road for the better part of the past few weeks. I first traveled to Los Angeles, then San Diego, and then on to Cape Cod (with a brief one-night stopover in New York). The bookends of the trip (LA and Cape Cod) were largely recreational. The San Diego leg was strictly business, where I attended the Annual Meeting of the Academy of International Business (AIB).

The AIB meetings were fun, as usual. I got to participate in Academy business, discuss research with colleagues, catch up with friends, and attend some parties (which, not unexpectedly, were subdued compared with years past). In LA and Cape Cod, I spent my time largely with family and friends.

Last summer, while in Cape Cod, I made the following observations (see Musings Après Vacation):

1. “For Sale” signs on homes were abundant
2. There was, uncharacteristically, little traffic on the drive between New York City and Cape Cod
3. Our usual haunts (e.g., Cooke’s, Four Seas) seemed unusually quiet

This year I’ve noticed that “For Sale” signs have stopped growing like weeds. Although there continue to be more homes for sale than I am accustomed to seeing in a usual summer, there are certainly fewer than last year. This stylized fact seems to reflect an improvement in home inventory conditions; however, I am hesitant to characterize it as such for certain, as it could simply be a reflection of a substantial “shadow inventory” of homes (see Calculated Risk for information on shadow inventory and huge shadow inventory).

One thing that I have noticed much more of this summer in and around Cape Cod is a huge increase in “For Sale” and “For Rent” signs for commercial real estate. Many buildings have been abandoned. Many are available for sale/lease. There is an incredible amount of vacancy at the local strip malls, and even at the Cape Cod Mall. This is consistent with commercial real estate as the next shoe to drop in this cycle (see Commercial Real Estate Time Bomb).

Note: I travel to LA quite frequently too, and the trends struck me as similar to those that I described for Cape Cod. I noticed fewer homes for sale on this trip than on previous (the same caveat regarding “shadow inventory” applies). Likewise, there has been a noticeable increase in signs advertising the sale/lease of commercial real estate.

Insofar as getting in and out of NYC on summer weekends (and in and out of Cape Cod), the highways seem slightly more trafficked than last summer. But again, the crowds are far from normal. Ditto for foot traffic at our local haunts. Although business seems a bit better than last year, it is way off from what I would characterize as normal, healthy summer activity.

In concluding last year’s post, I wrote:

Now I realize that the anecdotes that I’ve shared simply represent one person’s observations (an n of 1 as we like to say in the business), but if my experiences thus far this summer are any indication, I think we’re in for a long and difficult slog. I have never seen anything quite like it…

Not much has changed from last year. Economic activity continues at depressed levels. The best I can say is that we may have found a floor. The question remains: Where do we go from here??

As I have suggested in previous posts, the immediate growth engine for the U.S. economy is unclear. I see some potential in alternative energy, nano-technology, and biotech (specifically, genome mapping and its associated applications). However, I am skeptical that those industries will grow fast enough to quickly bring about robust growth. Although the U.S. economy will likely return to growth in 2010, there is a decent probability that the recovery will be a weak one.

Oh yeah, …and I’ll be back from vacation next week.