U of Cers predict financial future


The first of the suits to arrive, Joel Stern, MBA’64, joked with reporters gathered at the Chicago Marriott Downtown Wednesday for the Graduate School of Business’s 43rd annual financial forecast. “I’ll try to be controversial, try to make it valuable,” laughed Stern, managing partner and chief executive officer of Stern Stewart & Company.

But neither he nor economics professor Randall Kroszner’s predictions for the upcoming year would rock the business world that morning, or at an afternoon luncheon with some 900 alumni and executives. With guesstimates including that the U.S. gross domestic product (GDP) would grow about 3.8 or 3.9 percent and consumer spending 2.9 or 3.1 percent, they painted a rosy picture.

“The economic statistics are very strong,” said Kroszner, who served on President Bush’s Council of Economic Advisers from 2001 to 2003. Dismissing negative media reports, he argued, “I think we should show the economy a little bit of respect.”

Stern agreed. Criticizing the Kerry-Edwards campaign’s claim of a sluggish economy, he noted that as of September 30 the 2004 GDP had increased about 4.5 percent. “It turns out we were very lucky this year,” despite such obstacles as soaring oil costs, which he sees dropping in 2005.

Tempering Kroszner and Stern’s good news, Marvin Zonis, professor emeritus of business administration, offered a political perspective on the financial climate. “U.S. economic competitiveness has been declining,” Zonis noted. With the country off track in Iraq and facing conflicts over nuclear proliferation in Iran and elsewhere, he argued, an even lower dollar value and slower growth seem likely.

By M.L.

Photo (top): Kroszner, Stern, Zonis (from left).

Photos by Dan Dry.

December 3, 2004