Chamber’s economic forecast: Nervous but optimistic
By Hank Beckman For The Sun October 25, 2012 1:16PM
John P. Calamos Sr. is chairman, chief executive officer and global co-chief investment officer of Naperville-based Calamos Investments, the firm he founded in 1977. | Submitted
Updated: November 27, 2012 10:52AM
The national economy might be slightly better than it was a year ago, a panel of experts indicated Thursday, but we aren’t out of the woods yet.
Almost 200 people turned out Thursday morning for the Naperville Area Chamber of Commerce’s annual economic forecast at Hotel Arista. The chamber partnered with Calamos Investments again this year for the breakfast.
“People are very nervous about what might happen,” said John Calamos, CEO of Calamos. “There’s a lot of money on the sidelines.”
Michael Miller, DePaul University economics professor, and Ben Taylor, Great Lakes director of the U.S. Chamber, joined Calamos in a panel discussion moderated by Stephan Caliendo, North Central College political science professor.
While Calamos did see some signs of progress, particularly in the strengthening housing sector, Miller is somewhat less optimistic.
“The economy is slowing when it should be growing faster,” he said.
Miller pointed out that many economists and even the Congressional budget office predict that the nation will fall into a double-dip recession if the coming “fiscal cliff,” a combination of slashed revenue and expiring Bush-era tax cuts, was not resolved shortly.
“It’s not looking good,” he said.
Two conditions for strengthening the economy, a growing economy and tax reform, drew agreement from the panelists.
“With no growth, we’re increasing the debt,” Calamos said.
And tax reform is seen as a key to stimulating growth.
“Tax reform should be the first priority (of the new Congress),” Taylor said. “We’re not seeing that in Washington now.”
Miller said that tax reform should include serious consideration of eliminating write-offs, including the home mortgage and state income tax deductions, and stresses that it will take a bipartisan effort to get it done.
“Lower the marginal rates,” he said, “but do away with some deductions.”
Calamos noted that the United States had the highest corporate tax rate in the world and pointed to the success that Canada has enjoyed by lowering its rate to 15 percent. Caliendo asked about a trend toward employers either hiring part-time workers or using contract labor to perform jobs that in another time would have gone to full-time employees.
Calamos stressed the need for regulatory reform and policies to create an environment for small businesses to grow.
“Free markets work,” he said. “Capital goes to where it’s treated best … human capital is the same.”
One audience member asked about perceptions that the Chinese were either devaluing their currency to gain an unfair advantage on the world market, or engaged in intellectual property theft.
Miller said that he wasn’t convinced that the charge of currency manipulation would stand up to close scrutiny, but was all for prosecuting violators of intellectual property rights.
“The Chinese still don’t get that,” he said of the importance of the rule of law.
State House Rep. Darlene Senger (R-Naperville) asked what advice the panel had for Illinois curing its fiscal woes.
“When you’re that pathetic,” Miller said, “I don’t know what you do … I wish I had an answer.”
Interim Naperville chamber President Tami Andrew said that whatever happens in the presidential election, change is on the way. “No matter who gets in office (in the coming election),” she said, “we’re going to see dramatic changes.”
She also said that she has faith in Naperville’s leadership, stressing that the city’s public and private leadership generally serves the best interests of the entire community, not just special interests.
“I’m optimistic,” she said. “We just operate differently.”