Scott Latham, assistant management professor at Bentley University, said it's going to be a "long slog" before the end of the current economic slide. Latham and three other professors dissected the global financial mess during a panel discussion held at the university Tuesday.
Scott Latham, assistant management professor at Bentley University, said it's going to be a "long slog" before the end of the current economic slide.
Latham and three other professors dissected the global financial mess during a panel discussion held at the university Tuesday.
"This is about as good as it's going to get for the next year or two," Latham said.
Atul Gupta, a finance professor at Bentley, said government bailouts of banks, lenders, the auto industry and individuals who just borrowed too much should not be looked at as the solution.
"The problem is that the government will not get out of the way," Gupta said. "The government will not allow people to take a loss."
Gupta said the auto industry, for instance, would restructure itself, if the government didn't bail them out.
Gupta said the same people who are angry now about the economic mess are the same people "who borrowed up to the hilt" and helped contribute to the problem.
Juliet Gainsborough, an assistant professor of international studies, said legislators face an uphill battle when it comes to trying to come up with solutions. That's because much of the public doesn't want to see help given to banks and other institutions they felt helped cause the crisis, she said.
"I think as a political matter that complicates what the government tries to do," Gainsborough said.
Scott Sumner, an economics professor at the university, primarily blamed the economic woes on the collapse of "aggregate demand" around the world, caused by a failure in monetary policy.
Sumner doesn't believe government can be asked for more financial Band-aids.
"Anything else has to come from the Federal Reserve at this point," Sumner said. "I don't think you can go to Congress and ask for more."
Latham said aggregate demand won't rise until people are enthusiastic about investing again, and he doesn't see that happening anytime soon.
"You hear stories about people pulling all of their money out of 401(k)s, and that is the absolute worse thing that can happen," he said.
Talking about increased regulatory oversight, Gupta said ethics laws set up to prevent the kind of business practices that helped contribute to the financial conundrum, also would not be a cure-all.
"In a free market system, people will find ways to get around these rules," Gupta said.
Latham said investments in the biotech field, and alternative energies could help stem the economic tide.
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