CEOs: Economy has been worse

By Michael E. Kanell

The Atlanta Journal-Constitution

Asked to judge the economy, the five men on the podium seemed to agree: “Bad is not good until worse happens.”

That perspective, suggested by Frank Blake, Home Depot’s chief executive, summed up the notion that while the economy is still struggling, the outlook is not as grimly uncertain as a year ago.

Blake and four other heavyweights appeared before about 700 people at Emory’s Goizueta Business School on Wednesday. The discussion wasn’t as downbeat as it might have been a few months ago, but optimism was tepid.

“In all likelihood, we are in the beginnings of a recovery, a technical recovery, which means that there will be some growth,” said Dennis Lockhart, president of the Federal Reserve Bank of Atlanta. “We think the recovery will be subdued.”

While Lockhart said that the next year should see unemployment stop rising, “Unemployment will still be frustratingly high.”

Daniel Amos, chief executive of Columbus insurance giant Aflac, said, “I think we’re off the bottom. I’m not sure we are back where we want to be.”

The discussion was moderated by Susan Lisovicz of CNN and Duncan Niederauer, CEO of co-sponsor NYSE Euronext, which runs the New York Stock Exchange.

Modest hopes are in order, said Niederauer, who holds an Emory MBA degree. Market cheerleaders should not expect a speedy return to the 14,000 peak the Dow Jones Industrial Average reached two years ago, he said.

After a decent summer run the Dow has been hovering below 10,000 — and that is a more realistic goal, said Niederauer.

“If we could just get back to that and stabilize, we’d be fine.”

U.S. Sen. Saxby Chambliss (R-Ga.), another panelist, said economic advance depends on a federal retreat: “If things are going to improve dramatically, we will have to get government spending under control.”

Other panel members agreed the government’s dive into debt is troubling. But of more concern, they suggested, is that the usual engine of recovery, consumer spending, is sputtering. Consumers now represent about 70 percent of the economy, but after massive job losses and imposing household bills, they are trying now to pay off debts and save money, Lockhart said.

“It’s a short-term problem for the U.S. economy, but it’s a long-term virtue,” he said. “Retail sales give you a sense of how the consumer is behaving. The consumer has been traumatized.”

Consumer attitudes are key, Blake said. “Do people look at a new countertop as an investment or as an expense?”