Oct. 3, 2011
Economic Outlook Conference Offers Global Perspectives
MURFREESBORO—Mark A. Emkes grabbed the attention of the partisan audience at Friday’s MTSU’s 19th annual Economic Outlook Conference when he said he knew firsthand of two MTSU graduates who were making a positive difference in their jobs—one at Bridgestone-Firestone and the other in state government.
“This is where universities like MTSU play such a significant role,” he said. “We must make sure that the youth of today are adequately prepared for the working world.”
Emkes, state commissioner of finance and administration, told the 250 business and industry leaders that Tennessee has been blessed with great fiscal leadership over the years. Tennessee sits in an enviable position with strong cash flow, a solid, budgeted pension program and a “Rainy Day Fund” that is gradually returning to good health, he observed.
“August was the 13th consecutive month that revenues have exceeded budget estimates,” Emkes noted. “Relatively speaking we’re in pretty good shape.
“If we run state government more like a business, the chance for better operation will be enhanced,” he stated.
Tenncare is doing well, he said, because it remains affordable, utilizes generic-drug programs (81 percent) and still gets high marks in quality service and customer satisfaction. He cautioned, however, that the program ($8.2 billion in 2010) will need to be constantly monitored.
“Tennessee’s fiscal house is in order. Unfortunately our federal government can’t say the same thing.”
The federal government throws money at a problem or slaps on regulations in hopes that it will fix itself, he said. Instead, it should look at its current processes and systems and see how to improve them.
“That’s an exercise companies go through on an annual basis,” he noted. “We need to get real.”
Emkes said Tennessee still ranks behind the national average (30 percent) of adult citizens over the age of 25 with a college degree. Tennessee stands at 21 percent. “Even in a factory, most jobs require significant computer skills, along with a strong knowledge of processes and systems.
Dr. David Penn, director of MTSU’s Business and Research Center, provided a local economic outlook and said the economy was like a bus stuck on an embankment.
“What will it take for the bus to get moving again? He posed.
Penn said unemployment remains virtually unchanged at 8.5 percent for Nashville MSA. Nonfarm employment growth is growing modestly, and housing construction is low by historical standards. However, areas that are stable and gradually climbing include manufacturing, construction jobs, retail sales, jobs across several industries and personal income. Unemployment remains stable.
Nashville growth will depend on growth in the U.S. economy. “It will help if Washington agreed on something—anything,” he said.
Dr. Don Ratajczak, professor emeritus in economics at Georgia State University and nationally known forecaster, told the luncheon audience that as Europe goes, so goes the United States. Some governments such as Spain, Italy and Portugal are too large and are incurring huge debt.
“Why are we concerned? Because if European banks go down, we do have some investment instruments there—and there will be a ripple effect in the financial community. But they’re not doing to us what we did to them during our mortgage crisis,” he added.
“What can we do to stymy you? That’s the game we’re playing here … so that one party can bulldoze the other.” Referring to some members of the Tea Party, Ratajczak commented, “The problem is that some probably don’t have the skills and are still following their campaign slogans. A pledge not to deliberate is a mistake,” to which there was some applause.
The inflation rate should decrease somewhat next year to 2.5 down from 3.5, and there should be some moderation in food prices. Unemployment will hover around 8 percent.
“What Congress needs to do is take a two-week holiday and do strategic planning,” he advised as a solution to the current gridlock. “Government should do what are the best practices in private enterprise.”