In terms of the global economy, the alarm bells have stopped ringing. According to Cliff Waldman, senior economist for the Manufacturers Alliance for Productivity and Innovation (MAPI), that’s one of the key takeaways from the U.S. Chamber of Commerce Foundation’s Quarterly Economic Roundtable Series held earlier this month.
“There is a split decision out there,” says Waldman in a recent interview. “There’s less sense of emergency and imminent disaster around things like the Euro disintegrating, or a hard landing in China or Brazil. We’re in a world that’s calmer, but after five years of crisis it’s a chastened world, and almost bereft of dynamism.”
Manufacturing, in that climate, is going to have mixed results, he says. “With all the problems in the world and the fiscal dramas that came out of congress, it really slowed manufacturing down,” said Waldman, who said the picture looked very promising in the beginning of 2012, before closing the year with a little better than a 4% growth rate. Waldman thinks this will slow to 3% in 2013 and maybe return to 3.5% in 2014. “These are growth rates, which is good, but it’s very moderate growth.”
One issue Cliff brought up is the focus on the federal government, with economic questions centered too much around national concerns and national policy. “But economies advance on a regional level, in smaller units,” said Waldman. “So the focus shifts to regional policies toward a national end. That’s where the policy innovation has to happen. Not everything can come from Washington.”
For example, in New Jersey they are working to transform the unemployment system into a re-employment system. “That kind of approach at a national level could be one of the most productive diversions of resources we could do in this economic environment,” said Waldman. “These days, we need some innovative policy thinking in the unemployment insurance area.”
One of the audience members asked whether the persistent extension of unemployment benefits is responsible for high unemployment. “It’s been studied and in the U.S., and all the statistical evidence shows it’s at best a modest effect. In Europe I’m sure that is a problem, but in the U.S. there’s almost none of that.”
Waldman joined Martin Regalia, Ph.D., Senior Vice President and Chief Economist, U.S. Chamber of Commerce; Douglas Holtz-Eakin, President, American Action Forum; and JD Foster, Norman B. Ture Senior Fellow in the Economics of Fiscal Policy, The Heritage Foundation to discuss first quarter GDP data. The wide-ranging 90-minute discussion briefed an audience of about 80 researchers, government agency representatives and others on the economic outlook of the U.S. Economy, global economy and key sectors.
Hosted by the GFI Group and the U.S. Chamber of Commerce Foundation, the briefings offer the business community better insight into the impact of policies on their industries as well as to offer solutions to potentially negative effects.
