MOUNT VERNON — Customers and guests of First-Knox National Bank were treated to a business forum Wednesday afternoon at The Dan Emmett Conference Center with guest speaker Dr. Edmond Seifried.
Gordon Yance, president of First-Knox, welcomed those attending and introduced Seifried, whose topic was “The Economy in 2010: Continued Recovery or a Backward Slide?”
Professor Emeritus of Economics and Business at Lafayette College, Seifried serves as executive director of the Sheshunoff CEO Affiliation Programs. He received a doctorate degree in economics and business from West Virginia University. He frequently appears as a guest speaker at regional and national conferences, and has delivered over 2,000 presentations to various groups in the United States and abroad. He also serves as the Dean of the Virginia and West Virginia Banking Schools.
Seifried’s presentation focused on four themes — our light economy; the fragility of our economy; the Fed’s inability to do more for the economy and long-term unemployment.
“The recession is over; it ended in June 2009,” said Seifried in referring to our current economy. “We are in a recovery process. It’s a very weak recovery, almost to the point of a non-recovery.”
Four reasons he cited for our recession recovery are an $800 billion stimulus; interest rates are extremely low; deficit spending and automatic stabilizers.
“Permanent recovery is only possible if private spending increases,” said Seifried. “The government created 431,000 jobs in May and 20,000 jobs in June. Unfortunately, most of these were temporary census jobs. We do need jobs ... and we need then now.
“As interest rates drop and mortgage refinancings rise, unintended tightening occurs. This passive tightening is viewed as perverted policy in a recovery ... so the Fed has announced,” he said.
So why were we in such a recession? Seifried cites blame in four areas: Professional economists of which he said, “we are getting better”; unscrupulous mortgage bankers who use poor tactics of a payor option Adjustable Rate Mortgage or a negative amortization ARM; greedy home buyers; rating agencies; and the Fed.
And the U.S. is the richest country by far, according to Seifried, who noted that the U.S. gross production is more than twice that of the nearest competing country, China.
When asked about the practice of raising taxes, Seifried’s response was, “No, we should not be raising taxes in a time of recession recovery.
“We are recovering, albeit very slowly,” said Seifried. “People are making changes ... enough to make a difference. Interest rates are very low, and they could go even lower. One key to total recovery is when the consumer gets to a pre-recession spending level.”