Morningstar Advisor - April/May 2010 - 47

in Greece, but that really is the tip of the iceberg in terms of the expenses that are coming down the road. They’re not going to have the birthrate to generate workers; they’re going to have to deal with immigration issues, and so on. It’s a big challenge. China is curious in that it’s almost like you’ve got adolescent problems—you’re young and growing and have this stunning potential, but you haven’t figured out in what direction you need to go yet. You mentioned the strong balance sheet. Curiously, the balance sheet may be too strong. I worry about this fiscal imbalance between China and United States, where we’re locked into this relationship where we depend heavily on borrowed capital from China, and that has become recycling export earnings back into the United States. It’s become this dependent relationship where it helps to support export industries in China, and it helps to pay down the debt in the United States. Both parties, in the short run, are benefiting, but they’re both enabling things that probably need to evolve differently in the long run. That relationship has got to mature, hopefully in an economically constructive way, because if it unravels quickly, it actually could be quite devastating. So that’s one of the things I think you’ve got to watch. I know your readers are more interested in the economics of it, but I think there’s a diplomatic angle here. China has clearly emerged on the international scene. The question is, what role will China play in dealing with Iran, for example? Being a big player, how are you going to use that role to be an important contributor to the global community? The answer is still evolving, but it’s going to matter enormously.
PC: Because everybody’s interest is at stake, to some degree. CW: Yes, everybody has their own little,

life, sometimes those little provincial interests can derail the big picture, and that’s very dangerous.

The second is what I’ve come to believe is the essence of political leadership. It’s what I describe as getting people on the treadmill. If you want to get wealthy, if you want to lose weight, there’s going to be some sacrifice between here and there. It’s some of the stuff we’ve talked about. You want to get rich, or comfortably wealthy, you need to educate yourself, you need to work hard, you need to save a lot. Each of those things involves sacrifice at different points. You want to get in shape, you’re going to have to exercise, you’re going to have to not eat some things that taste very good, and so on. But at the end of the day, you’ll be in better shape. Public policy is exactly the same. You want to fix the budget deficit, you’re going to have to cut some of the spending you’ve grown accustomed to, or you’re going to have to raise taxes. Neither of those options is particularly palatable, but that’s how you make the books balance. Our leaders, if they’re going to be successful, have to persuade us to do that. And back to number one, when they do that, when they give us the cold, hard, unpleasant facts, we’ve got to at least be willing to countenance the bad news. I’m not always sure that we are. The last one is that we need to be more proactive. This may be human nature, but I think Americans are particularly bad in terms of being reactive. We mentioned the financial crisis. When the garage catches on fire, we’re great. We run out, get lots of people involved, and throw water on it. The problems I think the country faces— things like the debt, our entitlement problem, the human capital deficit—are like a leak in the foundation of the basement. You can ignore them for a while. I would prefer that we be proactive in fixing the stuff that’s going to do great harm. The

The Role of Citizens
PC: You have studied public policy for a number of years, and you mentioned that there are three things that individuals can do to have an impact on public policy. CW: The first is to be aware, be involved, and pay attention. Everybody seems to hate their politicians. I think only 8% of Americans say that they support the current Congress. That’s their approval rating, despite the fact that we Americans elected that Congress, right? There’s this odd mental disconnect between the politicians we elect and our opinion of them. Everybody claims that they’re not happy with the situation, but, of course, we are the ones who create the situation.

The anecdote I used in my speech is that I ran for Congress a year ago for Rahm Emanuel’s open seat in Chicago. There were 23 candidates, across the political spectrum— Republicans, Democrats, Green Party candidates. So presumably, there’s somebody there for everybody. It was a time of economic turmoil. It was the worst point of the financial crisis. We had just indicted the governor of Illinois, so everybody was particularly angry at our politicians. The last governor had gone to jail. The turnout in our race was 20%. For all the anger, for all the disappointment, four in five registered voters didn’t show up. It’s not a Herculean effort to show up and vote. If you’re going to complain, at a minimum, you need to engage in the process. I would go further and say if you’re really that upset, you ought to be running yourself. If you’re not, then maybe you ought to cut the folks who are doing it some slack. So we, at bottom, are responsible.

narrow interest. Unfortunately, at any level of

MorningstarAdvisor.com 47


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Morningstar Advisor - April/May 2010

Table of Contents for the Digital Edition of Morningstar Advisor - April/May 2010

Morningstar Advisor - April/May 2010
Contents
New On MorningstarAdvisor.com
Contributors
Letter from the Editor
Our Job: Building Better Investors
What’s Your Biggest Long-term Concern for the Economy?
An Early Start
Women’s Work
Investment Briefs
Markowitz 2.0
Asset Allocation Is King
A Decade of Riskier Assets ...
... but with plenty of Silver Linings
Be Prepared
Facing up to the Economy’s Problems
Levelheaded
Surviving on Conviction
Four Picks for the Present
Pharmaceutical Firms Get the Urge to Merge
Funds That Look Cheaper Than the Market
Finding Dividend Leaders
Mutual Fund Analyst Picks
50 Most Popular ETFs
Undervalued Stocks with Wide Moats
VAs: Assets Rise as New Sales Slip
New at Morningstar
When You Wish Upon a Star
Morningstar Advisor - April/May 2010 - Morningstar Advisor - April/May 2010
Morningstar Advisor - April/May 2010 - Cover2
Morningstar Advisor - April/May 2010 - 1
Morningstar Advisor - April/May 2010 - 2
Morningstar Advisor - April/May 2010 - Contents
Morningstar Advisor - April/May 2010 - 4
Morningstar Advisor - April/May 2010 - 5
Morningstar Advisor - April/May 2010 - New On MorningstarAdvisor.com
Morningstar Advisor - April/May 2010 - 7
Morningstar Advisor - April/May 2010 - Contributors
Morningstar Advisor - April/May 2010 - Letter from the Editor
Morningstar Advisor - April/May 2010 - 10
Morningstar Advisor - April/May 2010 - Our Job: Building Better Investors
Morningstar Advisor - April/May 2010 - 12
Morningstar Advisor - April/May 2010 - 13
Morningstar Advisor - April/May 2010 - What’s Your Biggest Long-term Concern for the Economy?
Morningstar Advisor - April/May 2010 - 15
Morningstar Advisor - April/May 2010 - An Early Start
Morningstar Advisor - April/May 2010 - 17
Morningstar Advisor - April/May 2010 - Women’s Work
Morningstar Advisor - April/May 2010 - 19
Morningstar Advisor - April/May 2010 - Investment Briefs
Morningstar Advisor - April/May 2010 - 21
Morningstar Advisor - April/May 2010 - Markowitz 2.0
Morningstar Advisor - April/May 2010 - 23
Morningstar Advisor - April/May 2010 - 24
Morningstar Advisor - April/May 2010 - 25
Morningstar Advisor - April/May 2010 - 26
Morningstar Advisor - April/May 2010 - 27
Morningstar Advisor - April/May 2010 - Asset Allocation Is King
Morningstar Advisor - April/May 2010 - 29
Morningstar Advisor - April/May 2010 - 30
Morningstar Advisor - April/May 2010 - 31
Morningstar Advisor - April/May 2010 - 32
Morningstar Advisor - April/May 2010 - 33
Morningstar Advisor - April/May 2010 - A Decade of Riskier Assets ...
Morningstar Advisor - April/May 2010 - ... but with plenty of Silver Linings
Morningstar Advisor - April/May 2010 - 36
Morningstar Advisor - April/May 2010 - Be Prepared
Morningstar Advisor - April/May 2010 - 38
Morningstar Advisor - April/May 2010 - 39
Morningstar Advisor - April/May 2010 - 40
Morningstar Advisor - April/May 2010 - 41
Morningstar Advisor - April/May 2010 - 42
Morningstar Advisor - April/May 2010 - 43
Morningstar Advisor - April/May 2010 - Facing up to the Economy’s Problems
Morningstar Advisor - April/May 2010 - 45
Morningstar Advisor - April/May 2010 - 46
Morningstar Advisor - April/May 2010 - 47
Morningstar Advisor - April/May 2010 - 48
Morningstar Advisor - April/May 2010 - 49
Morningstar Advisor - April/May 2010 - Levelheaded
Morningstar Advisor - April/May 2010 - 51
Morningstar Advisor - April/May 2010 - 52
Morningstar Advisor - April/May 2010 - 53
Morningstar Advisor - April/May 2010 - Surviving on Conviction
Morningstar Advisor - April/May 2010 - 55
Morningstar Advisor - April/May 2010 - 56
Morningstar Advisor - April/May 2010 - 57
Morningstar Advisor - April/May 2010 - Four Picks for the Present
Morningstar Advisor - April/May 2010 - 59
Morningstar Advisor - April/May 2010 - 60
Morningstar Advisor - April/May 2010 - Pharmaceutical Firms Get the Urge to Merge
Morningstar Advisor - April/May 2010 - 62
Morningstar Advisor - April/May 2010 - 63
Morningstar Advisor - April/May 2010 - Funds That Look Cheaper Than the Market
Morningstar Advisor - April/May 2010 - 65
Morningstar Advisor - April/May 2010 - Finding Dividend Leaders
Morningstar Advisor - April/May 2010 - 67
Morningstar Advisor - April/May 2010 - Mutual Fund Analyst Picks
Morningstar Advisor - April/May 2010 - 69
Morningstar Advisor - April/May 2010 - 70
Morningstar Advisor - April/May 2010 - 71
Morningstar Advisor - April/May 2010 - 50 Most Popular ETFs
Morningstar Advisor - April/May 2010 - 73
Morningstar Advisor - April/May 2010 - Undervalued Stocks with Wide Moats
Morningstar Advisor - April/May 2010 - 75
Morningstar Advisor - April/May 2010 - VAs: Assets Rise as New Sales Slip
Morningstar Advisor - April/May 2010 - 77
Morningstar Advisor - April/May 2010 - 78
Morningstar Advisor - April/May 2010 - New at Morningstar
Morningstar Advisor - April/May 2010 - When You Wish Upon a Star
Morningstar Advisor - April/May 2010 - Cover3
Morningstar Advisor - April/May 2010 - Cover4
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