By Doug Rainey
Business Bulletin writer
A blend of optimism and concern over gridlock on budget issues were apparent at the annual economic forecast last week sponsored by Lyons Companies and the University of Delaware.
Lyons is an insurance, benefits and risk management firm with offices in north Wilmington and Rehoboth Beach.
Former Ohio Congressman Michael Oxley told those in attendance that he is an optimist, but did caution that “the debt bomb is still out there” and must be addressed.
Oxley is best known as the co-sponsor of the Sarbanes-Oxley bill that requires more disclosure of financial information at publicly traded companies.
In making the case for a more upbeat outlook, Oxley pointed to the boom in oil and gas production, thanks to advanced technologies, such as hydraulic fracturing or “fracking.”
The energy boom is believed to generated 18,000 jobs in Pennsylvania. Lower energy costs, brought on by oil and gas discoveries, are helping to bring back manufacturing to the nation and region, Oxley said.
Oxley said it is possible the “stars are in alignment” on immigration legislation.
While the focus has been on the 11 to 12 million undocumented aliens having a path to citizenship, Oxley and others hope the bill can make it easier for potential entrepreneurs who get their education in the U.S. To stay and start businesses.
Oxley did take a swipe at presidential leadership and mentioned the success of President Ronald Reagan in helping the economy recover from a previous recession. Wall Street Journal columnist John Hisenrath said the economic recovery remains fragile with the financial crisis of 2008 replaced by an “unemployment crisis,” with the jobless rate running around 8 percent.
A more normal figure would be 5 to 6 percent. In a wide-ranging presentation on the Federal Reserve Board Hilsenrath said the central bank has pumped vast amounts of money into the financial system.
Of late, two sectors of the economy affected by access to credit, the auto industry and housing have shown signs of improvement. However, Hilsenrath would not rule out the risk of a financial bubble bursting in a situation akin to 2008.
Michael Farr, author, contributor to financial cable network CNBC and head of a Washington, D.C.-area investment firm, said the debt crisis facing the nation remains a serious concern.
On the plus side, Farr says the middle class is beginning to re-emerge from the downturn, but warned that debt by households and the government remains a concern.