Todd G. Buchholz

Todd G. Buchholz is an economist and has served as White House director of economic policy under George H.W. Bush and a managing director of the Tiger hedge fund. He was awarded the Allyn Young Teaching Prize by the Harvard University Department of Economics and was named "One of the Top 21 Speakers of the 21st Century" by Successful Meetings magazine. Businessweek and Bloomberg have reported that Buchholz is on the short-list for a White House appointment to the Federal Reserve Board.[1]

The Wall Street Journal named Buchholz's 2016 book The Price of Prosperity: Why Rich Nations Fail and How to Renew Them, one of eight "must-reads" for the summer of 2016.[2] Buchholz is the inventor of the Math Arrow,[3] a mathematical matrix that makes numbers more intuitive to children. He is the CEO of Sproglit, LLC,[4] which develops software and classroom materials based on the Math Arrow. Martin Cooper (inventor), widely recognized as the inventor of the cellular phone, has called the Math Arrow "ingenious."

Life and career

A founder of the G7 Group consulting firm, Todd Buchholz holds advanced degrees in law from Harvard Law School and in economics from University of Cambridge. He has also served as a Fellow at Cambridge University.

Buchholz frequently contributes commentaries on political economy, financial markets, business and culture to the New York Times, Wall Street Journal and Washington Post, as well as PBS, NPR and major television networks. He hosted his own special on CNBC and is the only person to guest-host CNBC's Squawk Box two days in a row.

His books have been translated into over 15 languages and his first book New Ideas from Dead Economists is listed as a "classic" by the American Economic Association.[5] It has been strongly endorsed by such varied thinkers as Milton Friedman and Lawrence Summers.[6]

Buchholz's newest book, The Price of Prosperity: Why Rich Nations Fail and How to Renew Them was published by HarperCollins in June 2016. The book received endorsements from prominent Democratic and Republican economists, including Lawrence Summers, Alan Blinder, Michael Boskin and Glenn Hubbard. Former Federal Board vice chair Blinder called it a "crackling read...a tour de force." Buchholz's 2011 book Rush: Why You Thrive in the Rat Race was named a top ten book in the social sciences by Publishers Weekly, and a book of the year by the New York Post and Los Angeles Times.[7] Rush is a "synthesis of neuroeconomics and evolutionary psychology." In 2012, Rush was featured on the Charlie Rose television show.[8] Buchholz's other works include New Ideas from Dead CEOs, Lasting Lessons from the Corner Office, From Here to Economy, Market Shock, and Bringing the Jobs Home.

Buchholz resides primarily in San Diego, California and travels the world delivering keynote presentations on economics, finance, and innovation to such companies as Microsoft, IBM and General Electric, as well as to governmental organizations. He has lectured in the U.K. Parliament, as well as at the White House library and the U.S. Treasury.

He is one of the founding producers of the Broadway musical Jersey Boys; is active in entrepreneurial businesses; holds engineering and design patents; and advises investment funds on business and portfolio strategy. In 2011, he co-founded software companySproglit, LLC.

He is also the author of a mystery novel about a boxer and hedge funds, called The Castro Gene, which won a USA Best Books prize.[9] Buchholz is the coauthor of the musical, Glory Ride, which tells the true story of Italians sneaking children out of Fascist Italy on bicycles. Glory Ride was performed in New York in January 2015, starring Tony Award nominee Josh Young, Alison Luff, and Quinn VanAntwerp.[10]

Economic Theories and Policy Proposals

Buchholz has devised a number of economic theories and policy proposals, which have been presented in books, articles, and lectures:

Law of Fertility, Prosperity, and Immigration

In his book The Price of Prosperity, Buchholz shows that when a nation's annual average GDP rate exceeds 2.5 percent for two consecutive 25-year periods (two generations), the fertility rate will drop to just over the replacement level, that is, 2.5 children per female. If GDP continues to grow for a third consecutive generation, the fertility rate will tend to drop below 2.1 children per female and the population will require immigration to maintain a stable working population. As a corollary, if the fertility rate falls below the replacement rate, the nation will find it extraordinarily difficult to pay down accumulated debt.[11]

Locking in Super Low Rates

On the editorial page of the Wall Street Journal [12] in June 2012, Buchholz proposed that the U.S. Treasury lock in record low borrowing rates by issuing 100-year bonds. With the 10-year Treasury yielding just 1.62%, Buchholz called it the "best deal since Pope Julius paid a pittance to have Michelangelo paint his ceiling." Fourteen months after the article appeared, yields had risen by 78 percent to 2.88%.[13]

Competition Breeds Cooperation

In his book Rush, Buchholz argues through neuroscience and history that competitive societies achieve longer life expectancy, less disease, and greater measures of cooperation than societies that try to quash competitiveness.[14]

Turning Unemployment Compensation into Signing Bonuses

In 2011, on the front page of the Washington Post Outlook section, Buchholz proposed turning unemployment compensation into signing bonuses.[15] Instead of collecting 99 weeks of unemployment payments, under Buchholz's proposal, individuals would receive a signing bonus from the government if they accepted a job sooner.

Crime and Interest Rates

The Buchholz Hypothesis holds that crime is strongly correlated with interest rates.[16] This hypothesis helps solve the puzzle of why crime fell during the Great Depression, even though conventional wisdom suggests that a bad economy leads people to commit more crime.

Free-Rider Effect on National GDP

In his book New Ideas from Dead Economists, Buchholz argues that small countries with large social welfare programs may achieve strong GDP gains because they are able to ride on the gains generated by countries that promote a more competitive structure with less governmental intervention.

Sluggish World Growth Temporarily Benefits the U.S. Economy

In a startling 2019 essay reprinted in the South China Morning Post and a variety of global publications, Buchholz explained that sluggish worldwide growth was, in fact, benefitting the U.S. economy. He pointed out that slow GDP growth among U.S. trading partners was keeping interest rates remarkably low and inflation well-contained, which is more important for the U.S. economy than the loss of export growth. This is a rare situation, he stated, that confounds the standard textbook explanations.[17]

Economic Forecasting

In his media and speaking appearances, Buchholz frequently makes forecasts about major economic turns and developments, sometimes with surprising accuracy.

Farmland Price Drop 2014–2015

In January 2014, in an essay entitled "Green Acres Turning Red," Buchholz forecast a sharp decline in farmland prices, following a sharp multi-year rally. Buchholz stated that prices were "teetering on the slope of something ugly and parabolic." Over the next two years, farmland rental rates dropped by almost 20 percent.[18]

Oil Price Collapse 2014–2015

In April 2014, with the price of oil at approximately $100 per barrel, Buchholz appeared on Fox Business Channel with Maria Bartiromo and forecast (correctly) that the price of oil would plunge to $50 per barrel.[19]

U.S. Debt Downgrade 2011

In 2011, in keynote speeches and in television and radio interviews, Buchholz forecast that the Standard and Poor's rating agency (S&P) would downgrade U.S. Treasury debt. On August 5, S&P announced the downgrade of U.S. debt from AAA to AA+[20]

Economic Recovery Forecast 2009

In February 2009, Buchholz was among the first well-known U.S. economists to forecast an economic recovery from the "Great Recession." In a speech to the Americas Lodging Investment Summit, Buchholz forecast that "we're going to have an economic recovery just in time for back-to-school sales in September" and that "lodging and hospitality is going to benefit from this upswing as well." In fact, GDP did turn positive in the third quarter of 2009.[21]

April 2008 Commodities Forecast

In April 2008, on the PBS Nightly Business Report, Buchholz forecast that commodity prices, including oil, would climb higher in the short-term but then tumble during the summer of 2008. On July 13, 2008, addressing the Southern Legislative Conference, when oil prices were $137 per barrel and leading Wall Street analysts were forecasting a move to $200, Buchholz predicted that prices would fall by half over the next six months. His comments were met with criticism from other leading economic analysts, but within the next eight weeks, prices of commodities such as oil, grain, and industrial metals started to crumble, and the price of oil fell significantly.

June 2008 Economic Forecast

In an opening keynote speech at Everything Channel's 2008 VARBusiness 300 Conference in June 2008, Buchholz said he believed that the U.S. economy, while undoubtedly in a slowdown, would avoid two consecutive quarters of negative GDP, the classic definition of a recession. "I'm convinced we're not going to have any quarters of negative GDP", he added. Buchholz cited high employment, lean inventories at manufacturers, and strong exports, spurred by the weaker dollar, as reasons for his beliefs.[22]

Commercial Failure of Airbus A380

In Buchholz’s book New Ideas from Dead CEOs, published in 2007 just before the first commercial launch of the Airbus A380, Buchholz criticized the project for inadequate testing of the engineering, commercial, and financial viability: “Airbus gathered orders for the behemoth A380 before the company knew how to build it.”[23] Faced with inadequate orders and unsustainable operational costs, Airbus announced in 2019 that it would cease production.[24]

Instability of the Eurozone

Buchholz's 1999 book Market Shock warned that the Eurozone was unstable and headed toward political turmoil.[25] In a chapter subtitled "How European Unity Splinters," Buchholz pointed out that eventually the Mediterranean nations and Ireland would stumble because those countries required a different monetary policy than the core countries of Germany and France.

References
  1. "bwdaily/dnflash/jul2005/nf20050721_2381_db038". businessweek.com. Retrieved 2017-12-12.
  2. "Eight Summer Vacation Must-Reads from the Wall Street Journal".
  3. "A picture tells a thousand words and a hundred and one numbers | Alex Bellos | Science". The Guardian. Retrieved 2017-12-12.
  4. "Sproglit: Educational Apps for Kids - Sproglit Educational Games". sproglit.com. Retrieved 2017-12-12.
  5. "American Economic Association books". aeaweb.org. Retrieved 2017-12-12.
  6. Todd G. Buchholz, New Ideas from Dead Economists (New York: Penguin, 2007)
  7. "Spring 2011 Adult Announcements", Publishers Weekly,
  8. Interview Archived 2012-02-19 at the Wayback Machine with Charlie Rose
  9. The USA Best Books 2007 Awards, USA Book News
  10. "Tony Nominee Josh Young to Star in Industry Reading of New Musical Glory Ride". TheaterMania.com. Retrieved 2017-12-12.
  11. Buchholz, Todd (2016). The Price of Prosperity. HarperCollins. p. 36. ISBN 9780062405708.
  12. "Todd Buchholz: Washington Should Lock in Low Rates". WSJ. Retrieved 2017-12-12.
  13. "Treasuries Slump With U.S. Stocks, Metals as Crops Gain". Bloomberg. Retrieved 2017-12-12.
  14. Todd G. Buchholz (2012) Rush: Why You Thrive in the Rat Race. New York: Hudson Street/Penguin.
  15. "Instead of unemployment benefits, offer a 'signing bonus'". The Washington Post. Retrieved 2017-12-12.
  16. Todd G. Buchholz, (2007) New Ideas From Dead Economists. New York: Plume. p. 200
  17. https://www.project-syndicate.org/commentary/american-growth-global-slump-interest-rates-by-todd-g-buchholz-2019-06
  18. "Farmland Values and Credit Conditions" (PDF). Chicagofed.org. Chicago Reserve Bank of Chicago.
  19. "Oil headed for $50 a barrel? | On Air Videos". Fox Business. Retrieved 2017-12-12.
  20. "U.S. may still face debt downgrade: Buchholz". MarketWatch. Retrieved 2017-12-12.
  21. Hospitality Net. "This is No time for Hotels to Cut Back on Sales and Marketing | By David M. Brudney, ISHC, February 2009". Hospitality Net. Retrieved 2017-12-12.
  22. Whiting, Rick (June 2008). "Buchholz: U.S. Will Skirt A Recession". VARBusiness. 28 (6): 18 =.
  23. Buchholz, Todd G. (2007). New Ideas from Dead Ceos (1st ed.). HarperCollins. p. 136. ISBN 978-0-06-143765-6.
  24. https://www.wsj.com/articles/how-airbuss-a380-went-from-wonder-to-blunder-11550599532. Missing or empty |title= (help)
  25. Todd G. Buchholz, (1999) Market Shock. New York: Harper Collins. p.146.
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