Economist forecasts strong recovery for U.S.

jrust

Dr. Edmond Seifried began a presentation Wednesday on "The Economic Impact of Sept. 11, 2001: Can We Recover?" by offering context on America's place in the world. One of his barometers was life in Russia, where he once consulted on the reorganization of the banking system. His central point in talking about Russia was that, economically, "Life is incalculably better in the U.S. compared to most of the rest of the world."

While I squirmed a bit about some of his Russian generalizations, his overall point about the country was on target. In effect, even when there is an economic downturn in the States, life here is still materially better than what others -- even the elite -- know most everywhere else.

Seifried's executive business briefing, which took place at the university's Dempster Hall, was sponsored by The First National Bank and focused on economic trends. To make his point that the U.S. economy is in the midst of a recovery, he led the audience through an exercise of charting various economic indicators: industrial production index, U.S. unemployment, capacity utilization rate, the stock price average.

A professor of economics and business at Lafayette College in Easton, Pa., and a highly regarded economic forecaster, Seifried used the trend analysis -- and U.S. demographics -- to make a compelling argument that the U.S. economy is not only recovering but is poised for considerable growth.

Seifried's perspective was reinforced Friday when the government announced that the economy had surged in the first quarter of 2002 at the fastest pace in more than two years. The 5.8 percent increase in gross domestic product -- the broadest measure of the economy's health -- was driven by consumer spending and a slowing down of business inventory cutbacks, according to the commerce department.

The economic news is good news for local businesses. And it is good politically for the president of the United States, who can take credit for leading the country out of recession. Professor Seifried, however, warned of a looming specter: Past recessions underlined the crippling effect of oil price increases. The ongoing tumult in the Middle East, therefore, remains a significant concern to the American economy, he pointed out.

(In related news, President Bush extended his meeting with Saudi Crown Prince Abdullah into the weekend. Since much of the immediate media coverage focused on the tension between the nations, an important point was obscured. Early in the meeting, President Bush received the assurance that Saudi Arabia would not use oil prices to threaten American interests. This is good news, which shouldn't be diminished.)

Questions after Seifried's talk touched upon oil, Russia, war and the Middle East. Russian oil, Seifried acknowledged, could be an important counterbalance to the influence of the Middle East. But getting the oil out of the country is a problem because of the lack of infrastructure, he said.

Seifried's presentation was a provocative one. And it offered The First National Bank a subtle way to talk about its growth in the area. Bank president Jim Limbaugh accomplished that goal with a slick introduction challenging those in the audience to think about growth plans, business strategy, brand development, service mission, value proposition, cost of capital, risk-taking, changing demographics and the importance of employees. All in all, it was an interesting night.

Jon K. Rust is co-president of Rust Communications.