Excerpts from a Monitor breakfast on the economic recovery.
John Snow got his start in the world of business operating a Mr. Softee ice cream truck and rose to become chairman and CEO of CSX Corporation. He has a Phd in economics from the University of Virginia and a law degree from George Washington University. He served as chairman of the Business Roundtable from 1994 through 1996.
"However you look at it there is a recovery underway, a recovery with some muscle to it and sustainability to it ... There is no such thing as a jobless recovery ... We are beginning to see some brighter notes in the labor markets."
"So I think you are going to see, will see, and are seeing ... a rebound in the manufacturing sector [that] will lead to more jobs in the manufacturing sector. The last couple of quarters, particularly the third quarter showed a sizeable pickup in manufacturing in the the United States and a pickup in exports in the United States."
"It is pretty clear we are serious ... I think they know we are serious ... The market is responding with the lowest interest rates in 40 years. If the market thought these deficits were becoming unmanageable - and they are not and the market knows they are not - but if the market thought they were we wouldn't have the lowest interest rates in 40 years."
"At the beginning of last year we had proposals for enhanced savings - so called LSA lifetime savings accounts and RSA's retirement savings accounts. Good policy. Eliminating a lot of the restrictions in the current savings accounts, streamlining them, making them less complex, raising the savings levels. Proposals that will enhance, if adopted, savings in the country. We are now reviewing whether to include them, and that is the president's decision of course whether to include them in the '05 budget. They are consistent with our objective to promote this idea of an investor society where individuals are encouraged to save and rewarded for saving."
"There is another deficit that I would like to see more attention brought to and that is the global growth deficit. Japan for a decade hardly [had] any growth at all, and [it's] the second largest economy in the world. Germany, the third largest economy in the world? Negative growth rates for the last five quarters. That is troublesome. It is troublesome because of what it means for the standards of living and prosperity and well-being of the people of those countries. It is important for what it means to the developing world because, with these economies in these large industrialized countries, the prospects for the developing world are much less promising. And it is troublesome [for] us because our well-being and our prosperity depend on what happens in the rest of the world."
"We want to see them move on the peg [of the Chinese currency]. We want to see them move to a system of fluctuating exchange rates, market-based exchange rates. I must say I was encouraged by the response I got [talking to Chinese officials. They want to move to a fluctuating exchange rate. They recognize their own economic interests lie in having a fluctuating exchange rate but that they have to take a series of interim steps to deal with a fragile financial system before they can get there. And we are urging them on in taking those steps... If they moved to a fluctuating exchange rate we would have a market test, and that is what we want. And a market test will validate the appropriateness of the exchange rate regimes. If, as many suspect, the [Chinese currency] is being artificially suppressed through the exchange rate mechanism and you go to freely fluctuating exchange rates certainly that would give us a world ... structured against a backdrop of market prices and that would be helpful. That would be helpful to us. That would be helpful to them. That would be helpful to the whole world trading system."