Free trade will pull us out |

Free trade will pull us out

Our economy is experiencing an avalanche, said Theodore Roosevelt IV, formerly of Lehman Brothers and now managing director at Barclay’s Capital Corporation.

All asset values are deflated and financial institutions in a system based on trust don’t trust each other.

"As is true of an avalanche, once it’s started, there’s not much you can do about it," he said.

Regulation of the financial markets must be reinstated, boards of directors must learn to check themselves, a financial stimulus package is needed, energy sources must be diversified, an exit strategy for the government from the bail-outs must be devised, American workers need access to the best technology and primary education for children must be improved.

This is the problem and the solutions as Roosevelt sees them, and this type of analysis is what the Park City Center for Public Policy’s Post-Election Economic Summit was all about.

The two-day event held at The Canyons Nov. 17 and 18 featured local and national political and economic experts discussing the state of the nation.

Roosevelt participated in a panel discussion Monday on the economy’s prospects for recovery. The other three panel members agreed with him: it’s likely to get worse before it gets better.

"For those of you sitting here trying to figure out what’s going on, welcome to the club," joked W. James Tozer, managing director of Vectra Management.

The panel largely agreed that housing, which caused the current crisis, is not going to recover enough to pull us out of it. Free trade is the answer.

Tozer suggested stronger ties with growing economies like Brazil, a resurgence of the nuclear energy industry and more marketing to consumers in the middle classes of developing countries are possible answers.

The panel was also largely pessimistic about a bail-out of the automotive industry.

"Don’t subsidize losing suits," he said.

Panelist Kristen Fletcher, CEO of ABN AMRO North America Wholesale Client Services, said the discussions of Joe the Plumber should give everyone pause. Regardless of the controversy surrounding the actual person, the issue brought up concerns over America’s supposed meritocracy.

Do the poor have what they need to overcome the disadvantages they were born into? Are the country’s wealthiest citizens becoming entrenched in their wealth? These are questions that must be pondered as the country moves forward, she said.

Panelist Bill Shiebler, chairman of the Park City Center for Public Policy, said in his lifetime he’s seen no policy be more effective in helping the poor than China’s democratization of its economy. He said Americans need to be able to make money, and then they must be better at saving it.

The panel largely agreed that a lack of saving contributed to the current crisis, and even though saving money now will hurt the efficacy of stimulus packages, it’s something needed for the long-term good of the county.

Shiebler referred to mandatory savings plans instituted in Australia, New Zealand and Chile. In Australia, it’s resulted in an excess of capital that is now being lent out to other countries the reverse trend of what’s happened in the U.S.

Home equity took the place of a savings plan in recent years. The long-term harm of this pattern is that the elderly were and are largely unprepared for retirement. Shiebler said over 75 percent of people in nursing homes are funded through Medicaid.

Americans will need to live within their means to come out of this crisis stronger, they said.

A fairly complicated issue broached by the panel was president-elect Barack Obama’s tax plan. The panelists all agreed raising taxes on incomes over $250,000 would harm recovery. That said, they expressed a belief in Obama’s competence and intelligence and said they think he’ll make wise plans for recovery.

Attendee Lynn Fey, a Park City resident, said she enjoyed the event because a lot of the points made reinforced what she’s come to believe from her reading.

She said she always wonders how skewed reports in the New York Times and Wall Street Journal are, but the panelists represented views typical of both news sources and they largely agreed on Monday.

Attendee Bill Gorton, formerly with the USSA and retired Air Force general, said the session was "splendid" and "first rate." He said he hopes more events like this can be held.

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