Students of The Anderson School at UCLA and business
professionals from across Southern California converged Friday on
downtown Los Angeles to see business and political leaders from
around the world give their take on the current events.
Anderson School senior economist Edward Leamer was joined by
notables such as Earvin “Magic” Johnson and former
Secretary of State James Baker, who spoke on topics ranging from
inner-city business management to how a potential war with Iraq
would affect the economy.
The West Coast Business Leadership Conference, held at the
Staples Center and partly sponsored by The Anderson School, drew
thousands of attendees.
Leamer provided an overview of this quarter’s Forecast,
which was first released last month. Leamer’s contribution to
the Forecast focused on national issues, while other analysts
concentrated on trends affecting California and Los Angeles.
Leamer’s remarks at the conference for the most part related
to the national economy as a whole.
Future recovery will depend on business, Leamer said. His
analysis shows that consumers have carried the economy long enough,
and the government does not have the buying power to pump enough
money into the economy since many states, including California, are
suffering from major budget problems.
“Business will have to ramp up investment significantly,
otherwise we’re going to have that second dip,” he
said.
The term “second dip” refers to the possibility that
recovery would halt and the economy would enter another
downturn.
The Anderson Forecast has repeatedly stressed business’
role in the current recession, emphasizing that unlike most
recessions, caused by declining rates of consumer spending, causes
of the present downturn can be pinned on reduced business
investment.
The Forecast predicts a two-phased recovery until mid-2003. The
economy is still in the first, slower phase, Leamer said.
The economy will continue toward the second, stronger stage of
recovery, avoiding another dip unless investment remains low or the
Federal Reserve makes a “major error” and raises
interests rates, Leamer said.
Most speakers at the event focused on management, advising the
attendees on topics such as running urban businesses, and brand
management. Others placed financial matters within the larger
backdrop of national and world politics, often turning to the
prospects of war against Iraq.
Former Secretary of State Baker, along with former Prime
Minister of Israel Ehud Barak both cast Iraqi dictator Saddam
Hussein as a threat the United States should eliminate, through
force if necessary.
Baker said America cannot afford to ignore dangers posed by
international terrorism and rogue states like Iraq.
“We can’t meet our economic goals unless we can go
to work everyday without being afraid of being shot or poisoned or
blown to bits,” Baker said.
Barak was straightforward about his views on Iraq: that a war to
remove any weapons of mass destruction from Iraq is necessary.
“No one knows how close Saddam Hussein is to a crude
nuclear device, and it was a crude nuclear device that destroyed
Nagasaki and Hiroshima,” Barak said.
President Bush signed a Congressional resolution to use force
against Iraq last Wednesday, and the United Nations Security
Council is presently debating resolutions demanding the
unconditional return of weapons inspectors to Iraq. Bush has
threatened war, with or without UN approval, if Hussein refuses to
disarm his weapons of mass destruction.
A potential strike against Iraq has been more controversial than
the military campaign against terrorist organization al-Qaeda.
Several academics have spoken out against war, and mass
demonstrations have been launched across the country.
Some of those opposed to war with Iraq argue the administration
has not sufficiently proved Iraq has developed nuclear arms or ties
to al-Qaeda. Another point of controversy is Bush’s new
national security strategy, which allows greater leeway for the
United States to launch preemptive strikes against Iraq and other
potential threats.