Emory Report
September 14, 2009
Volume 62, Number 3



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September 14, 2009
Goizueta events make history and predictions


Bells rang in the courtyard of the Goizueta Business School on Sept. 2, to close that day’s trading on the New York Stock Exchange — the first time the closing bell had been rung at an institution of higher education.
Earlier in the day, none of the six men on a panel on the current state of the U.S. economy was ready to ring in its recovery at full decibels.

MBA students and others filled the Schwartz Center to hear CNN financial correspondent Susan Lisovicz moderate the event sponsored by Goizueta and NYSE Euronext.

Noting that it was almost exactly a year ago that the collapse of investment bankers Lehman Brothers pushed the U.S. economy over the edge, Lisovicz said, “We’re in a better place now, but where exactly are we?”

CEO of gap insurance giant AFLAC Dan Amos summed up consensus opinion, saying, “We’re off the bottom. I’m not sure we’re back up where we’d like to be yet, but certainly it is recovering from our perspective.“

Amos compared the current feeble recovery to a nagging sports injury. “We’ll get used to it and although I don’t believe all the jobs will recover, I believe we’ll level off at some point and gradually recover to some degree.”

Home Depot CEO Frank Blake garnered a laugh by saying, ”Bad’s not good until worse happens…Where we are now is less bad. That is about the best thing we can say.”

“In all likelihood, we’re in the beginnings of a recovery. Our outlook is that that recovery will be fairly subdued. The signals we have been picking up about the economy are mixed,” said Dennis Lockhart, president & CEO of Federal Reserve Bank of Atlanta.

NYSE Euronext CEO Duncan Niederauer ‘85MBA agreed that talk among businesses “is constructive but measured.”

Looking to the future, Lockhart noted that neither consumer expectations nor economic indices raises the spectre of inflation. “What would signal the Fed to change its policy? Retail sales,” Lockhart answered.

Goizueta Dean Larry Benveniste sees long-term growth “likely to come from outside the United States, and if we’re smart as a country, we’ll embrace globalization even more because those will be our growth engines.”

Federal lawmakers didn’t anticipate the way new financial products would ultimately contribute to the financial crisis, noted Sen. Saxby Chambliss (R-Ga.) but he said, “From here, we have to make sure we don’t have a knee-jerk reaction and put in too many regulatory mechanisms that will stifle the innovation that did take place.”

Lockhart thinks “smarter regulation, not just more” is needed. “The creative genius of the economy is based on relatively free markets and relatively free agents in the economy.”

And while “credit is tight,” Lockhart acknowledged, “there is some indication that credit markets are improving. Banks are eager to loan to good customers but they’re going to interpret that word ‘good’ in the context of today’s economy.”

“If we’re going to get the economy going again, it’s got to get a little less hard [to get credit],” Niederauer said
Benveniste concluded, “It was a go-go time and I think it raises questions about our values and our fundamental ethics. I think we’ve got to get back to a situation where it’s about hard work and entrepreneurial discipline.”