The trip to Hawaii wasn't all vacation. The impetus for the trip was an invitation to make a presentation to a financial audience on "Economic Challenges: What Have We Learned? What Do We Face?" Here are the slides.
In a nutshell:
I identified three challenges to the U.S. economy that I think are fundamental: low and declining saving in all sectors of the economy, a declining labor force, and a dwindling labor income tax base. In all cases, the challenges make us less capable of absorbing additional pressures, whether unforeseen events in the near term or emerging pressures from population aging and the growth of health care costs persistently in excess of the economy's growth (and their interaction through the government's entitlement programs).
Absent more prudent behavior, prices—exchange rates and interest rates—will simply change to equilibrate imbalances. The dollar has started to depreciate, but to me, the biggest mystery in the economy is how the U.S. long-term interest rate can stay so low. I cannot see it remaining that way for long, and its rise will take the stock market and (what's left of) the housing market with it. (This is a fascinating chart that didn't make it into the presentation.)
But I’ve been saying this for a while. As an economist, I’m happy to be right, but usually even happier to be wrong.