Things are looking up for the local economy.
That was the message from a panel of experts gathered by the Naperville Chamber of Commerce Thursday.
Growth will be modest but steady, and inflation should be low, they said.
“It does seem to be improving,” John Calamos Sr. said of the U.S. economy.
The founder of Calamos Investments joined U.S. Chamber Economist J.D. Foster and Blu Putnam, chief economist of the CME group, in a panel discussion on the prospects for the regional economy in the immediate future.
The panel was moderated by syndicated columnist and media personality Terry Savage.
Prompted by Savage, the group made predictions for future growth in GDP and the direction of short-term interest rates.
Calamos predicted 2 to 2.5 percent GDP growth and 3.5 to 4 percent for short-term interest rates, Foster had 2.75 for growth and 3.5 for interest rates and Putnam’s numbers were 2 to 3 percent growth and 2 percent for interest rates.
None of the experts thought that the economy would be plagued by either hyper-inflation or deflation, runaway inflation being the fear of so many with the Federal Reserve Bank’s easy monetary policy of recent years.
All three seemed “cautiously optimistic,” in Calamos’ words, but none seemed to think that the economy would approach growth levels attained before the 2008 crash. All of them said that the current situation had continuing problems that kept the economy from realizing its growth potential.
Putnam said that the country’s aging population was a factor in holding the economy back, noting that Baby Boomers were worried about their retirement. But he also found a bright spot in the boom in natural gas production of the last several years, saying that the energy revolution “is going to change the world.”
All three agreed that the private sector of the economy was over-regulated.
“Every time you turn around there’s a new regulation,” Calamos said.
Foster said the government needed to take a page from the playbook of the first President Bush, who issued a regulatory freeze during the 1990 recession.
Savage asked them all to comment on the possibility of another showdown over the U.S. budget in the near future and if they all thought that the politicians in Washington would remember the pain of the recent government shutdown.
The panelists thought another shutdown unlikely, but when Savage asked the audience if they thought another crisis was possible, almost everybody raise their hand.
“We don’t think they remember anything,” she said.
Foster said that the budget process in Washington was a complicated process, saying “there’s a risk there,” but noted that the debt ceiling was the only thing that ensured Congress would pay attention to the debt.
Putnam said that he would do away with the debt ceiling and Calamos said the focus should be on how to grow the economy.
Ray Kinney, president of Minuteman Press, asked the panel about the prospects for the local economy, and Calamos pointed to the recent arrival of Navistar as a plus.
All three of the panelists were concerned about the growth of government and the negative effects on the private sector.
Calamos said that 70 percent of the growth of some European economies were in the public sector.
“How’s that working out,” he asked rhetorically.
Calamos said that one entitlement that needed to be reformed was the nation’s retirement system, noting that Australia had a defined contribution system rather than a defined benefit and didn’t suffer from the same funding problems as did the United States.
“Illinois and D.C. have to learn from the private sector,” he said.
Naperville Chamber CEO Mike Evans said after the panel discussion that confidence in the market was essential for business success and economic growth.
He also pointed out that regardless of conditions, there was always an element of risk in undertaking a new commercial enterprise.
“You need to take calculated risks,” he said.
One of those Naperville business people that took a risk recently was Nick Ryan, CEO of Marquette Companies, and the driving force behind the Water Street development.
He took some comfort from the discussion sponsored by the Chamber.
“It sounds a lot better than last year,” he said.