Last week Chief Economist Dr. Lynn Reaser and Director of the Fermanian Business Center Randy Ataide were interviewed by the Union Tribune and the article was featured in the paper on September 14th. See the article featured below, as well as on the Union Tribune website.
Point Loma Nazarene sharpens economic team
University’s new hire, a BofA veteran, wants to ‘apply theories to real-world problems’ as the country prepares to enter a new era
Union-Tribune Staff Writer
2:00 a.m. September 13, 2009
For 160 years, economics has been not-so-jokingly referred to as “the dismal science,” ever since historian Thomas Carlyle complained that economic theories were often “dreary, stolid, dismal, without hope for this world or the next.”
But after the most dismal recession since the Great Depression, economics teams at several local universities are focusing a little less on producing dreary or stolid forecasts and a lot more on providing advice for how to respond to the economy’s ebbs and flows.
Early this year, San Diego’s National University System acquired the Institute for Policy Research, an economics team that combines monthly economic reports with policy papers on tax policy, government transparency and cross-border relations.
Last month, economists at the University of San Diego — long known for its monthly index of leading economic indicators — joined with the San Diego World Trade Center to launch a program designed to help local businesses gain a foothold overseas.
The latest move comes at Point Loma Nazarene University, which hopes to build an economics advisory center based around its newest hire: Lynn Reaser, a high-profile economist who has spent the past 15 years at Bank of America.
Point Loma’s goal, said Randy Ataide, director of the university’s Fermanian Business Center, is to build a team around Reaser that will focus on producing localized economic forecasts as well as providing “actionable steps” for how to cope with changes to the economy.
“We’re not interested in creating one more forecast that debates over whether San Diego’s unemployment rate is going to be 10.31 percent or 10.29 percent,” Ataide said. “If we conclude that the unemployment rate is going to be that high, we’ll focus on the question of ‘Now what? What businesses, institutions, organizations and individuals need to come together to address that unemployment rate?’ ”
Reaser said that though the economy seems to be in recovery mode, there will be major challenges in the near future.
“This recession has been extremely unforgiving for all kinds of industries. There have been no safe havens,” she said. “As the nation recovers, San Diego will be lifted by that tide. But we’ll also have continued high unemployment, high vacancy rates in commercial real estate, and strains on state and local governments. So I want to help organizations and individuals understand the economic outlook and apply economics to real-world problems.”
For more than a decade, Reaser has developed a national reputation for providing economic analyses. While at BofA, she did 200 to 500 interviews per year with CNN, CNBC, Bloomberg News and Business Week. She serves as vice president of the National Association for Business Economics and is past chairwoman of the American Bankers Association’s economic advisory council.
“She brings an important dimension because of her experience in state and national economic forecasting, while having a good perspective on San Diego as well,” said Julie Meier Wright, executive director of the San Diego Regional Economic Development Corp.
The two women met in the early 1990s, when Wright was chairing then-Gov. Pete Wilson’s economic strategy panel, which included Reaser.
“Our idea was to take a hard-nosed, objective look at the economic base of each region in California, look at the industries in each region and analyze their needs,” Wright said. “She has a very good ability to present analyses in a clearly understandable way.”
Reaser was in San Diego for several speaking engagements in January when Ataide asked her if she would be interested in heading a new economics team. After several conversations, Reaser joined the university last month.
“We had very common interests,” Ataide said. “Her passion is to reduce economics to actual take-aways that people and companies can latch onto, so they can say, ‘This is economics at work — something that can help my family and company.’ ”
Ataide and Reaser are now working with a six-person advisory panel to develop an outline for the economics team. They are scheduled to produce a detailed plan by November.
Erik Bruvold, who heads the Institution for Policy Research, said there’s plenty of room for more voices on the local economy.
“If San Diego was on its own, it would be among the top 30 economies in the world,” he said. “We dwarf the economies of many states. So it only makes sense to focus on ways in which the economy can improve, especially when we’re going through the kind of fundamental shift that’s occurring right now. It’s an opportune time to do this kind of research.”
Reaser agrees that the economy might be entering “a brand-new era.” Her current recommendations for companies include:
•Locking in long-term financing, since interest rates are extremely low now but are likely to rise.
•Seeking out opportunities for investments and acquisitions, since “pricing like this may never be seen again in a lifetime.”
•Paying close attention to inventory management. During the recession, companies steadily lowered their inventories, but as the economy picks up, they might discover that they do not have enough goods on hand.
•Hedging against swift currency changes for companies that are involved in international trade because fluctuations are likely to be much more volatile as the economy improves.
•Taking care of employees. “Companies have given a great deal of work to their employees during the recession,” she said. “They have to let them know how much they’re valued.”
Most of all, Reaser said, companies need to focus on the long term.
“Right now, there’s a lot of debate over what the recovery’s going to be shaped like: a V, an L, a U or a W,” she said. “But beyond the short-term outlook, we have to face the question of whether we’re entering a period of economic reset, where we’ll have to find out what constitutes a sustainable economy and how to balance economic growth with environmental and social needs.”
That’s precisely the kind of question that she hopes to focus on at Point Loma.
In the Union-Tribune on Page A2