Summary:Have the past two years been merely an interruption or the end of the dynamism of the U.S. economy of the 1990s? Diane Swonk and the other panelists agreed that it has only been an interruption. Despite the technology sector′s bubble bursting and the events of September 11, Swonk cited strong consumer confidence, a willingness of people to adapt, and an underlying resilience of the economy to predict a steady re-acceleration of the growth of the mid-1990s.
Robert Bartley attributed the economy′s slow recovery to the relatively mild recession. As Bartley observed, "for a bigger recovery we would have needed a bigger recession." Bartley further stated that the technological infrastructure that has been built in the last few years, while not benefiting the companies that put it in place, will greatly improve the productivity of U.S. companies in the coming years.
Shroer and Silverman took the opportunity to further explain how their respective industries have successfully weathered the recent slowdown. Schroer attributed the American automobile′s industry′s recovery to company′s willingess to "audaciously invest" in innovation. According to Schroer, it is the auto industry that propels the economy through investments in technology and providing jobs.
While Silverman admitted a change in the dynamics of the travel and tourism industry, he, too, was optimistic. Citing greater tourism because of an affluent generation of baby boomers and low airlines prices, Silverman believes his company will succeed. According to Silverman, business travel has declined, and the hotel business is still lagging, but the increased vacationing of Americans is aiding the entire tourism industry and has stabilized the rental car business.
Silverman contends that the strength of Cendant′s real estate services can be attributed to strong government sponsored entities in the U.S. like Freddie Mac and the demographics of increased immigration. According to Silverman, anyone in the U.S. with a reasonable credit history can buy a home, a fact not true in the rest of the world.
Why has Europe seemingly been excluded from the U.S.′s growth? Panelists cited this country′s more flexible labor market and strong work ethic. With France′s recently mandated 35-hour work week, regardless of the size of the company, the panelists believe that the country will continue to be plagued with high unemployement.
Nonetheless, Bartley sees a change emerging in Europe with socialist leaning governments facing the threat of being voted out of office.
While referencing the tragic events of September 11, Swonk′s closing comments described the panelists′ sentiment of the current U.S. economic situation: "We just don′t give up."
