At any given moment, some economist somewhere is weighing in on the state of the economy, although just like Mark Twain said about the weather, for all that talk nothing much seems to be happening. So, perhaps figuring that the time was ripe for a fresh survey of Harvard Business School graduates, Zenais Marketing polled these highly educated folks to get their spin on the economy.
(I suppose your interpretation of these findings will depend on whether or not you think Harvard MBAs are the smartest people in the room, or if in fact you think they and their ilk went a long way toward causing our economic meltdown in the first place.)
In a poll of HBS grads who have been in the workforce for at least 20 years, the consensus opinion is that it'll take at least another five years before the U.S. economy shows any kind of noticeable improvement. That would put us almost up to 2016, which would be an presidential election yeareither the end of Pres. Obama's second term, or the end of Pres. Palin's first term, both of which are chilling thoughts no matter which end of the political spectrum you lean toward.
Why such pessimism? As the Harvard grads see it, the major factors that contributed to the recession were: poor underwriting of mortgages (according to 57% of the respondents); lack of proper regulation of the banking sector (44%); sub-prime borrowers over-reaching on home purchases (37%); and insufficient controls on securitization (35%). And, so far, there hasn't been much evidence that these problems have been adequately addressed.
So what should we be doing to grow the U.S. economy, the 900 Harvard grads were asked. They said: more private sector hiring (78%); reduce the federal deficit (54%); and lower taxes (45%). An overall improvement in the global economy would help, too (42%).
They weren't exactly brimming with confidence at the government's ability to clean up the mess. Coming in at the bottom of the list of effective solutions were: government incentives (15%); federal stimulus spending (13%); and state and local spending (10%). What about President Obama's federal stimulus program? More than half (54%) say the stimulus didn't have much impact on the economy at all.
"Clearly, we are nowhere near an uncork the champagne moment,'" says Paul Feldman, president of Zenais Marketing. "Rather, the raw data and anecdotal feedback from this group of business leaders emphasize that debt levels at all junctures of the U.S. economy household, municipal, city, state, corporate and federal are excessive. Further, the study suggests that without a concrete plan to reduce spending and broaden the manufacturing sector, sustained growth may be capped."