Notes and Reflections from Millsaps Economic Forum
On Tuesday, October 7, the Millsaps College Else School of Management held its Fall Forum. Presenters were Thomas Cunningham, VP and Associate Director of Research at the Atlanta Federal Reserve, John Turner, Director of Economic Development for Entergy Mississippi and Ben Allen, President of Downtown Jackson Partners. Each offered their perspective on “What does our economic future hold?”
Cunningham said that this recession is different. One of the main reasons is that subprime debt has been widely distributed among a variety of investors. Trading ultimately broke down because many investors did not understand the instruments. What brought on the recession was “pervasive financial distrust.” He pointed out that steep recessions will be usually followed by steep recoveries. That is not going to happen this time. The Fed does not think that consumers will go back to running up debt because banks are not going to let them do that. Consumers are going to “deleverage,” i.e. pay down debt. The consequesnce is that consumption will not snap back. He said that this recovery, like all recoveries, is a “jobless recovery.” Companies don’t hire first when the economy turns around; they wait. In short, we will see a slow rate of growth coming out of this recession. He also said that we will not see an inflation problem in the near term. We will see falling prices.
John Turner said that energy will be a critical factor going forward. Reliability is replacing affordability as the primary concern for major users. Capacity is a big factor. He said that if cap and trade goes through that it will raise electricity prices in the Southeast. Entergy Mississippi is seeing a lot of interest by prospects in north Mississippi, especially near Memphis.
Ben Allen, effervescent promoter of downtown, said that people are finally “getting it.” It being the urban lifestyle. He pointed out Jackson is a little late with downtown redevelopment, especially when compared to Little Rock and Birmingham. He pointed out that right now every downtown apartment has a waiting list, and that there are 4,000 downtown apartments planned.