While Economy Quakes, Andover Feels Tremors

#Econ. Instructor Carroll Perry ##How long do you think it will take the economy to recover? If we do a lot of things right and get to work on some of these problems, then I think the downturn can be much milder than it would be otherwise. On the other hand, if little is done right, it’ll be steeper. I think that there’s a reasonable hope that we can get through with scenario number one where we have a slump for 18 months or so and then we get back on our feet. ##How will the bailout affect the economy? [The bailout] is really needed to reestablish confidence. In my opinion, we will still have downturn, and the economy will still technically go into a recession for a couple of quarters. However, that downturn could be more like a normal downturn and recover rather quickly. ##What economic advice would you want to give to the next president? You know, I think that if I have a complaint about the last eight years, it’s been that it has been absolutely absent in imagination. It is also a potentially enormous source of employment if we take our resources, declining though they may be, and apply these resources in those industries, which are almost certain to be the growth industries of the future. In addition, we have tremendous strengths in our educated populace, our very strong university system, our very considerable research capability and our ability to attract people from all over the world who are very bright to help us with this. If we can get ourselves organized and headed in those new directions, number one, I think we can have the economy recover and number two, I think we can recapture a position in the world which is more envied than despised. ##Will students here at Andover feel any effects from this situation? I think you kids are kind of lucky, even the Seniors, because they have four years to sort this out. Students have to go to college, and the country has to sort this out anyway and the two could conveniently coincide. I think many of you will sense pressure through your home communities [and] families. I mean if this thing goes badly you certainly will. And if badly, the school will have to be much more careful about the way it spends money. I don’t think it will affect our basic educational mission in any way, but we’ll all have a sense that something is going on.” ##What can students take away from this? For you students, I really hope it is just a period of learning. We really must learn these lessons. We had one Great Depression; we really just have to be smart and take from that what we know we learned and use it. #Econ. Instructor Aneesa Sayall ’03 ##How will the current economic situation affect college students interested in pursuing jobs on Wall Street? The interesting thing is when I went through college, many of the students majoring in economics would spend their entire senior year looking for investment banking jobs, going to New York every weekend and interviewing all the time for these big investment firms. Since that has basically vanished over the past two weeks and you don’t have these investment banks anymore, what’s going to happen in my opinion is two-fold. First, you’re definitely going to see some restructuring on Wall Street, especially for those people who have held jobs with investment firms. Some of them are going to be kept on by the companies that have bought them out, but others are not necessarily going to have that option. What new markets these people are going to go into, whether it is consumer banking, think tanks, the government, or academia, you’re going to have much more competition for a lot of other jobs. Now that people are coming out of college and you do have these investment banks being the big pull, the real question will be: ‘What is the next big pull going to be?’ ##What are some alternatives to investment banking? In the financial realm, consumer banks are still huge. Both Goldman Sachs and Morgan Stanley are now these big consumer banks and so they are going to continue with a lot of what they’re doing, but under a little more regulation. They haven’t disappeared, but the idea of being involved in investment banking has kind of disappeared. You still have a lot of big, financial institutions out there. They are all just going through a bit of a change. ##Do you think the economy should influence students’ decisions to pursue economics or business in college? I don’t think this should deter people from going into economics and business. While things are bad right now, they are not always going to be bad and it is a good time to ask yourself ‘what can I do as a young person, what is my perspective, and how can it be different? How can I bring knowledge of the past and my ideas as a young person to model this present ideology in a different way?’ As a nation, we’re moving into a new economic relationship. It’s not going to be based solely on whether people believe in a small government or a large government; it’s going to be a hybrid of the two. For a lot of young people who are not limited to a particular mindset, this could be something they’re more inclined to comprehend. I really think it should be a call to action for young people to say ‘How can I help make this better? How can I stop this from happening again?’ ##What about student loans? Honestly, there is no reason a student loan shouldn’t be occurring. Loaning money to someone for his or her human capital to grow is something that can’t necessarily ever depreciate. Putting an education into someone is different than a car loan and that’s different than a housing loan. The money has literally stopped and one of the biggest problems is that it’s stopped in areas of the economy that are the very places that it needs to go. These are the very areas that need to be generated to fix the economy, which is troubling. #Hist. Instructor Vic Henningsen ’69 Vic Henningsen, Instructor in History, claimed that “historians do not like talking about the present” at Monday’s panel discussion, but he did just that to examine America’s current financial crisis. Henningsen used his background in history to help explain why the United States’ House of Representatives rejected the $700 billion bailout proposal on Monday. At Monday night’s panel, Henningsen said he thought the initial bailout proposal failed because of philosophical, professional and personal fears of radicals in both political parties. According to Henningsen, Republicans were reserved for philosophical reasons because they saw the rescue bill as a move towards socialism. On the other hand, Democrats opposed the bill because they did not want to grant any more power to the Bush Administration. Henningsen believed that the professional reservations stemmed from congressmen trying to comply with their constituencies, with close re-election races approaching in only five weeks. “Anyone in a tight race voted against it,” said Henningsen. Henningsen said the personal reasons for rejecting the bailout proposal were rooted in the Republicans’ and Democrats’ shared dislike for Wall Street and President Bush. Republicans were also upset by a speech that Speaker of the House Nancy Pelosi delivered before the vote, which they claimed to be partisan. Henningsen said, “[Congress] cannot be partisan. There can’t be another speech like Pelosi’s on Monday.” Additionally, Henningsen believed the term “bailout bill” was a misnomer. “It sounds like we’re bailing out Wall Street,” said Henningsen, “That’s part of the problem.” Henningsen said Congressional leadership must make a public gesture to those who voted down on the bailout on Monday in order to swing the 12-vote difference towards the bill’s success. “If you’re going to round up more votes, [the bill] will need more protection for taxpayers, more punishment for Wall Street and more oversight for the administrators of the federal government,” continued Henningsen. Henningsen also said each congressman would need to be able to explain their support to an unhappy constituency that, by and large, objects the Wall Street bailout. However, Henningsen added that plunging markets helped to sway public opinion in favor of the rescue plan. “I really do believe there is a political resolution to this [crisis],” said Henningsen, but he added that if a resolution was passed before the weekend, he “would be pleased but surprised.”