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11/29/2012 10:00:00 PM
Financial forum: One economist lauds US, other goes political
Les Stukenberg/The Daily CourierAbout 250 people attend the economic forum sponsored by the National Bank of Arizona at the Prescott Resort Thursday afternoon.
Les Stukenberg/The Daily Courier
About 250 people attend the economic forum sponsored by the National Bank of Arizona at the Prescott Resort Thursday afternoon.
Ken Hedler
The Daily Courier

PRESCOTT - Two economists aired contrasting views Thursday on America's slow recovery from the worst downturn since the Great Depression.

George Feiger, executive vice president of Zions Bancorporation and chief executive officer of Contango Capital Advisors, said America has the "most productive industrial economy in the world."

He cited growth in energy development from Houston to North Dakota and technology in San Francisco, where he lives.

Feiger also talked about growing income disparities in America, economic woes in European Union countries and opportunities for investment in emerging markets that include countries such as China, India, Indonesia and Brazil.

Apart from criticizing government corruption in emerging economies and posturing between the White House and Congress over the looming fiscal cliff, Feiger largely steered clear of expressing his political views.

Feiger and Stephen Happell, professor emeritus of economics at the W.P. Carey School of Business at Arizona State University in Tempe, spoke during a two-hour economic forum that National Bank of Arizona sponsored at the Prescott Resort. An estimated 300 people attended.

Happell, who voted Republican for the past four presidential elections, sharply criticized President Barack Obama's economic policies.

Happell blasted Obama's stimulus package, and called for the firing of Federal Reserve Chairman Ben Bernanke. He also contrasted the job recovery during Ronald Reagan's presidency in the early 1980s versus the sluggish growth during Obama's administration.

Happell's half-hour talk followed Feiger's hourlong presentation.

Feiger, a native of Vienna with an Australian accent who earned a doctorate in economics from Harvard, started by saying he would speak from the point of view of investors.

"We have gone through some tough times," Feiger said. "Things are getting better, but they are not getting better fast enough."

He said the United States "is the least bad place to be in the world economy." He predicted natural gas will become the most important fuel in America with fracking, an environmentally controversial technique for extracting the gas.

Feiger lauded America's banking system as the "soundest in the world."

He also called for investing in replacing aging infrastructure, such as bridges and roads.

Looking overseas to Western Europe, Feiger said the use of the euro as a common currency has been a disaster. He also faulted a "near-insolvent" banking system in Europe and "exploding debt obligations."

Feiger said production is not competitive in Europe, except for in Germany.

"The problem with Europe is not that they do not know what to do," Feiger said. "The problem is they do not trust each other."

Turning to America, Feiger said the main economic problem is income disparities, not unemployment. He referred to low-wage jobs that pay $7.69 to $13.84 an hour.

The growth rate is modest for the gross domestic product - the sum of all goods and services produced in the United States - Happell pointed out. He referred to a handout from Blue Chip Economic Indicators predicting 2.2 percent growth in GNP this year and 2 percent in 2013.

Happell praised Milton Friedman, the University of Chicago economist who advised Reagan.

Referring to Obama, Happell said, "I would like to know what economics classes he has taken."

He said consumer spending was negative in 2008 and 2009, the worst is has been since 1931 and 1932. He also predicted corporate profits would fall in 2013.

Happell said 7.8 million new jobs were created under Reagan 55 months after the recession began in July 1981. By contrast, America has 4 million fewer jobs in the same time lapse since the Great Recession started in December 2007.

A father at age 65 to a teenage son, Happell said the federal government is pandering to a younger generation that expects entitlements.

"You have a tougher younger generation to deal with if you are a Republican," he said.

Happell and Feiger drew praise afterward from two audience members.

"We heard two points of view," said James McDonald, a retired chief financial officer who lives in Sedona. "They were both fact-based - and some opinions, too.

"They laid out facts that should make any thinking person scared of where we are headed in the short term," McDonald continued. "In 25 years, it will be great, but we will be dead."

Unlike Happell, Feiger was apolitical, said Lon Turner, who owns a water systems business in Chino Valley. He said Happell had important things to say because the federal government controls much of the U.S. economy.



Reader Comments

Posted: Saturday, December 01, 2012
Article comment by: Concerned Citizen

I didn't attend the meeting either but the Courier report convinced me that Economics is less than a scientifically based discipline. More like political rhetoric wrapped in a slice or two of green baloney. The current national debate on whether we face a "financial cliff" at the end of this year seems to substantiate this view. Yet there are economic considerations that must be weighed to choose a defendable balance between expenditures, taxes, and how much debt we can manage. My one foray into economics (Economics 101), as I remember, propounded that we could borrow up to six times our Annual Gross Domestic Product and pay it off at 6% borrowing rate. But that was over 50 years ago and may no longer be true (if it ever was) and my memory may be faulty. Any later information out there?

Posted: Friday, November 30, 2012
Article comment by: Yukon Jack

I didn't attend the event.

I can't figure out whether the reporter was biased or if Happell was so political it couldn't be avoided. I'd like to hear from the 250 who were there and what the Topic was supposed to be about.


Posted: Friday, November 30, 2012
Article comment by: Conservative Republican political blather offered to the choir as economics 101.

National Bank of Arizona is owned and controlled by Mormons. Romney was a Mormon... Prof. Happell said (re the President), "I would like to know what economics classes he has taken." Would you really? How pathetically arrogant. Kind of like our uneducated Gov. Brewer poking her pointy finger in the President's face. Certainly did AZ a lot of good, didn't it? I am amazed at the number of classes and presentations and seminars offered in Prescott claiming to be learning experiences objective offerings on the Constitution and on economics on on basic civics. Blatantly transparent right-wing, ultra conservative propaganda. And the naive, gullible local sheep keep attending these pathetic biased presentations. So sad.

Posted: Friday, November 30, 2012
Article comment by: The Reagan Revolution

The unfounded assumption and belief that market ethics would be self enforcing enlightened self interest, such personification of markets underestimated greed, and blindly facilitated the dismantling of financial regulations. A creed-able homology to shill for the wealth, with academic trappings to make supply side appear respectable. That leaves only politics for the Professor, and he made his opinion known.

Posted: Friday, November 30, 2012
Article comment by: An Austrian with an Australian Accent?

That'll put a shrimp on your barbie, mate!



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